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July 10, 2012

New Albany Redevelopment Commission rescinds agreement over River View property

New proposals will be accepted for developing city-owned lots

NEW ALBANY — Other developers will have an opportunity to purchase the land that had been planned for the $43 million River View project after the New Albany Redevelopment Commission voted Tuesday to rescind an option extension for Mainland Properties.

The commission asked the administration to prepare a new request-for-proposals, or RFP, document and present it to the body next month for review. Commission member Adam Dickey, who was not present when the latest extension was approved by the body in May, said the project is going into its third year without much progress since gaining the option from the city.

“I’m not convinced that we’re moving ahead to the degree that we should be,” he said.

On May 22, the commission agreed to prolong the purchase option on three pieces of city-owned property for Mainland Properties to 2014. Mainland Properties, headed by New Albany native Jack Bobo, first obtained the option in 2010 in order to construct River View adjacent to the Floyd County branch of the YMCA of Southern Indiana off Main Street.

River View is estimated to cost $43 million and include residential, commercial and office space. Bobo has also asked the city to foot a $12.5 million parking garage and plaza for the project with a bond that would be paid back with tax-increment financing revenue garnered from the development over several years.  

There has been lack of clarity on the terms of the initial option. Carl Malysz, director of community housing initiatives for the city, said redevelopment meeting minutes from 2010 showed there was an agreement for a one-year option with the caveat of one extension through May of 2012.

The developer believed they were entitled to a second extension through May of 2013 for a cost of $1,000, but Malysz said Tuesday “that wasn’t part of the original motion” approved by the commission in 2010.

He had stated in May the second extension through 2013 could be OK’d with the city and developer’s approval according to a deal agreed upon by the parties in 2010.

But he stated Tuesday he couldn’t explain why that stipulation had been included since it wasn’t part of the initial commission motion.

As for the resolution rescinded by the body Tuesday, the commission OK’d a deal in May potentially allowing two more extensions through 2014. If next year Mainland Properties elected to extend the option through May of 2014, the commission’s resolution stated it would have to pay the city $20,000.

Also, the commission required Mainland Properties to provide the city with the results of a geo-technicial survey performed recently on the lots valued at $15,000, and show tangible signs of progress on the development.

The extension deal was approved 3-1, and New Albany City Council President and commission member Diane McCartin-Benedetti said at the time Mayor Jeff Gahan backed the move.

The deal called for Gahan to sign-off on the extension, and though the mayor wasn’t present in May or during Tuesday’s meeting, commission president Irving Joshua said Gahan hadn’t approved the new deal.

Joshua said during recent conversations Gahan didn’t express to him that he disagreed with the River View proposal, only that he hadn’t signed off on the extension. Joshua said that differed from what he believed Gahan felt of the project in May.

Joshua agreed with Dickey Tuesday, as he said “I don’t think there’s been a lot of progress with this.”

He added — before voting in favor of separate motions by Dickey to rescind the May extension, request a new RFP document and to reject an amended deal with River View that was on the table Tuesday — he’s now inclined to open the property up for other projects.

“It’s our job to try and get what’s best for developing that riverfront area,” Joshua said.

Redevelopment attorney Shane Gibson said the commission could rescind the deal, as it was a verbal resolution and had not been signed off on by Gahan. Benedetti was the lone no vote on the measure to rescind the extension.

She read aloud portions of an e-mail she said that had been sent by a member of Gahan’s administration telling Mainland Properties in April it was OK for them to proceed with geo-technicial surveying at the site.

Benedetti said Mainland Properties footed the survey under the impression it had an agreement for another year option on the property. Malysz said the e-mail had been sent, but that the work occurred prior to the commission’s decision in May on the option agreement.

He did confirm the geo-technicial work was performed after May 1, when the initial deal expired according to the commission’s 2010 motion. Benedetti said the commission and city now have no authority to claim the results of the survey.

Dickey said since the commission voted to reject the May agreement, that it wasn’t operating under the assumption it would receive the test results.

Officials didn’t confirm whether there were potential developers waiting to make an offer on the property. Mainland Properties would be allowed to submit a new RFP once the document is dispersed, which could take up to 75 days.

The commission attempted to sell the lots for $1.1 million in 2010 before agreeing to the option-to-buy agreement with Mainland Properties. City officials said at the time Mainland Properties was the only developer to make an offer for the land.

Anita Massey, project manager for Mainland Properties, didn’t speak during the redevelopment meeting and declined to comment on the decision after the vote.

Councilman and commission member Kevin Zurschmiede was absent from the meeting.

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