News and Tribune

June 19, 2013

The bigger plan chosen for 10th Street in Jeffersonville

Myriad unknowns remain

By BRADEN LAMMERS
braden.lammers@newsandtribune.com

JEFFERSONVILLE —

The Jeffersonville Redevelopment Commission opted for a larger development with no purchase price and a host of unknowns at the corner of 10th and Spring streets in Jeffersonville.

After receiving requests for proposal and hearing presentations from two developers to convert more than 4 acres of property into restaurants, hotels and retail space, the Jeffersonville Redevelopment Commission unanimously chose to go with the proposal offered by Lexington-based White Reach Development.

The other proposal up for consideration was by Jeffersonville-based API.

 

REJECTING REJECTION

At the outset of the meeting Redevelopment Executive Director Rob Waiz listed concerns that he said need to be addressed before development moves forward.

Waiz’s concerns and considerations included a claw-back agreement (which would revert the property to the redevelopment commission should the developer fail to complete the project), that the redevelopment commission grant final development approval, a timeline of completion for the project, conforming with the Environmental Protection Agency consent decree and the price of the property, among others.

“If these were that important, why were they not in the RFP?” asked Redevelopment Commissioner James Lake.

“These were things that I came up with 15 minutes ago, that I came up with just kind of by reviewing it, and I wrote it down to try and help you out,” Waiz said. “I’m disappointed that you didn’t bring this up earlier instead of bringing it up now and trying to make some issue out of it.”

He added that Lake voted to approve the RFP without offering his concerns.

It was suggested to, again, reject the proposals and wait 30 days to negotiate with the developers or issue a request for clarification to address some of the concerns Waiz raised. 

Rejecting the proposals was not an option for Lake.

“It is an issue ... what I think is completely unfair to the people that submitted the RFPs is the only way that you can come up with an agreement ... is to reject it and just negotiate carte blanche,” he said. “I think it’s a completely disingenuous situation. I’m not prepared to reject them. I’m actually prepared to approve one and move forward with it.”

But a sticking point from the start, at least for Lake, was the proposed purchase price of the property.

 

BUYING LAND

During a lengthy discussion, it was stated that the details of the proposals could be hammered out when working out the final development agreement between the redevelopment commission and the contractor.

Redevelopment Commission Attorney Les Merkley said the only issue that could not be negotiated if a proposal was chosen was the proposed purchase price.

“I think the only way you get around the purchase price issue is to reject and wait 30 days,” he said.

Jeffersonville-based API’s proposal offered to develop the 4.3 acre site by locating a Hilton franchise hotel with 2,300 square feet per floor and 150 total rooms. In addition, the plans call for three businesses — identified as Starbucks, Qdoba and Verizon — to locate in about 6,000 square feet of space. The businesses had signed letters of intent with API. 

The purchase price for the property that was offered was $1.

During the presentation of the RFP, API explained that the reason for the $1 purchase price is the amount of investment the developer will make in the property and pass the savings on the purchase price onto the tenant to incentivize them to locate at the site.

The White Reach plan called for two hotels, two stand-alone restaurants and a Starbucks. Letters of interest for potential tenants included Zaxby’s, McDonald’s, Cracker Barrel and hotel chains owned by Hilton. 

No purchase price was included in the RFP submitted by White Reach Development, but said price is “to be determined” if the proposal was accepted. 

Steve Reach, managing member of White Reach Development, said that the firm would seek incentives like New Market Tax Credits, and the breaks received by the developer would go back to the city by way of the property’s purchase price. The estimated  $24-$25 million development is contingent on receiving the tax credits.

Another consideration in the price would be property that extended beyond the RFP.

 

BUYING IN

According to the plans presented, the detention basin in the White Reach plan infringed on property that is not owned by the city. The property includes right of way owned by the state to build the new section of Interstate 65 associated with the Ohio River Bridges Project. In addition, it pushed back a planned retention basin on the site into state-owned property and closer to Seventh Street.

The cost of buying additional property would also be reflected in the purchase price White Reach Development ultimately offers to the city, Reach said.

But buying additional property was not a hurdle for some redevelopment commission members.

“Some of them involve property that we don’t own ... so I don’t care what property you buy,” Lake said, referring to White Reach’s plan. “The purpose of the RFP was so you could buy all of the property in downtown. I’m not going to fault anybody for buying more property. That’s the intent is to be a catalyst.”

Eric Goodman, vice president of development with API, said it was outside the scope of what the redevelopment commission asked for in the RFP.

“We submitted a realistic plan that fits within the confines, within the guidelines of the RFP,” he said. “The other group did not. We can masterplan out the entire city, is that realistic?” he asked rhetorically.

The redevelopment commission stated its preferences for the White Reach Development plan because it included two hotels, as opposed to one, the restaurants and proposed were stand-alone buildings and that the hotels were located farther from the 10th Street gateway to the city.

Michael Fulkerson, operating manager for FDA One LLC, White Reach Development’s local representative on the project, said that the developers knew the plan devised could change.

“We realized when we did that plan that we probably were going to have to move some things here and there to make everything work out for everybody,” he said. “We want to keep in mind whatever we do on this front end funnels all the way down. We want this development to go all the way through ... working its way back to the Big Four Bridge project.”