Chesapeake developers have concerns about marina

SANDUSKY Plans for a new marina in Sandusky's Paper District may remain docked as the city works to
Sandusky Register Staff
May 24, 2010

SANDUSKY

Plans for a new marina in Sandusky's Paper District may remain docked as the city works to resolve a funding issue with the developers of the Chesapeake Loft property.

In a letter to Interim City Manager Don Miears dated Dec.19, Charles Davis, president of Mid-States Development Corporation, wrote that the company had serious concerns about the viability of the Tricor marina project.

"Under the terms of the Development Agreement dated November 24, 2004, the interest rate, bond rate and maturity schedule of the (tax increment financing) bonds is to be agreed upon by the City and Mid-States. To date, we have not agreed on these material terms, and the interest rate and the bond amount have been subject to volatile changes," Davis wrote. "The City pursued two grants from the Ohio Department of Natural Resources to assist in the financing of the marina, but received only one. What was at one time a $500,000 shortfall in overall development funds has become well over a million dollars. This shortfall in funds, a total lack of urgency by the City in negotiating an agreement with Mid-States on the rate and term of the TIF, site design changes and the negative market forces and the uncertainty of the overall economy gives us serious doubts as to the viability of the marina project for Mid-States."

In a response letter to Davis dated Dec. 27, Miears wrote, "during our meeting in late August, we discussed both the shortfall on the marina and the TIF bond rate of 6.5 percent. At that time we clarified our bond counsel's position and those of us from the city were of the opinion we all agreed to 6.5 percent. Additionally, you agreed to the TIF covering added marina costs."

Neither Davis nor Miears could not be reached for comment Friday afternoon.

At last week's meeting, the Sandusky City Commission voted to approve $75,000 worth of continued mothballing efforts at the Keller building per the memorandum of agreement.

According to his letter, Davis said his father, the late Bob Davis, had agreed to give the city $100,000 to resolve the issue with the State Historic Preservation Office on the condition the city received the necessary permits from the Army Corps of Engineers.

"This was offered assuming that the Keller building would be preserved in an appealing manner," Davis wrote. "The building was mothballed in a totally unacceptable manner and has had a negative impact on the Chesapeake Lofts project, the Tricor property, and indeed, the surrounding area."

Following last week's commission meeting, Miears said he was confident the city would have no problems acquiring the agreed-upon funds for the mothballing efforts.

"My father's offer was made with the understanding that the permit would be issued shortly after the March 15, 2007, letter and that construction would proceed in 2007. The City's delays with the (Army Corps of Engineers) have adversely impacted the viability of the project and we must conditionally rescind this offer to provide $100,000 until resolution of the financing of the marina by the City and Mid-States and some resolution of the condition of the appearance of the Keller building," Davis wrote. "While we are not terminating the Development Agreement at this time, we are not overly anxious to proceed with the marina project ... It would not be prudent for Mid-States to invest any additional funds in this project until such issues are resolved."