The wrecking ball is just days away from taking its first demolition strike to the Keller Building when a developer comes forward to try to halt the whole process. The developer states that halting wrecking balls at the eleventh hour is a common practice. The eleventh hour development might be practiced in some cities, but that is not how Sandusky should be operating. The city always suffers financially when it doesn’t do its due diligence when it comes to developers and their projects.
The following was the developer’s proposal for the Keller building:
• Upon agreement, the developer will make masonry and roof repairs within 90 days.
• Upon completion and within 30 days of the repairs, the city will provide the developer the ownership of the building and $400,000 from the Paper District TIF.
• Developer needs to achieve sufficient dedicated parking by using street parking directly contiguous to the building.
• Developer needs a 75% tax abatement based on the future value of the property for 15 years.
• The developer intends to apply for State Historic Tax Credits and Federal Historic Tax Credits by March 30, 2014. If successful, notice of award will not be announced until June 30, 2014 with completion of the development projected 18 months later. In the event the developer is unsuccessful in the March 2014 round, he will reapply in the September round.
Why the developer thinks he is entitled to $400,000 from the TIF money was not explained. If the Historical Society had done its homework, it would have known that the $400,000 of TIF money is restricted to debt pay down until 2019. Besides, even if the TIF money was available, I think the city would have a lot of explaining to do when handing over $400,000 to a developer while trying to deal with budget cuts.
There is no guarantee the developer would obtain the credits needed and the risk would be much too great leaving the city in a bad situation. Credits are not that easy to obtain when one other developer tried and was not successful. The process could take up to 2 years if the first attempt for credits should fail, all the while the building would continue to deteriorate. Another risk for the city would be the expense of breaching the contractor’s contract.
Within 30 days, the developer would take possession of the property and the $400,000 TIF money before the city would know the outcome of the historical credits. The situation could leave the city cleaning up private property due to the surrender of the title if the project did not work out. Does it make any sense for the city to spend an additional one million dollars or more trying to save a building on top of what has already been spent trying to moth ball it?
The commissioners’ common sense did prevail and the consensus was that they were not buying into the eleventh hour development.