Battle Creek development group might be in danger of losing two downtown buildings after falling behind on requirements of its agreement with the Calhoun County Land Bank Authority.
Executive Director Krista Trout-Edwards said Thursday the land bank is considering taking back 64 W. Michigan Ave. and 119-121 W. Michigan Ave., which were sold to 180Urban Development and Management LLC earlier this year. Trout-Edwards said the development firm, led by David Sciacca and Alexa Smolinski, has not hit several previously agreed upon benchmarks including a major one tied to project funding.
The discussions come after Sciacca requested an extension to chase funding from the Michigan Economic Development Corp. — a process that could take at least six months — for another building included in the deal at 15 Carlyle St. With 180Urban reportedly behind on its agreement, Trout-Edwards offered Sciacca a deal to grant the extension while returning the other two properties to the land bank, a deal which since has been rejected.
“We don’t believe a full extension is appropriate at this time because the agreement is not in full compliance,” Trout-Edwards said during Thursday’s land bank meeting. “We feel it’s a reasonable position. We believe it’s in the best interest of the community and taxpayers to work through the Carlyle property and get that to be a successful redevelopment.”
Reached Friday, Sciacca disputed that, saying many facts had been distorted or were otherwise false. He said 180Urban continues to have discussions with community leaders and financial partners to get the proposed projects done.
Sciacca said 180Urban has had hurdles tied to funding in recent months. Even with the group reportedly approved by its primary lender, he said during the meeting 180Urban has had to replace funding pulled away by the Battle Creek Community Foundation.
He told the land bank board 180Urban has said “absolutely not” to any deal that would take away two of its properties and threatened litigation if that decision were to be made.
“We don’t want this to go any further,” Sciacca said. “We want to resolve the issue. We want to complete the projects. We have tenants for the other buildings and there’s no way I’m going to back out of our agreements with those tenants. Too many people are counting on us. I just want the board to consider that. We’ve put a lot of time, a lot of effort into this.”
The board did not render a verdict on the proposed deal during Thursday’s meeting. Ultimately, the decision to take back the buildings, or to work out a variation of the deal, falls to Trout-Edwards, Calhoun County Treasurer Christine Schauer said.
Schauer, in her final meeting as the land bank’s board chair as her term as treasurer comes to an end, said the land bank initially had “a bit of reticence” about going forward with the sale of three buildings instead of starting with one. She said the development agreement, with its specific benchmarks and a reverter clause as a safeguard, gave confidence to everyone involved, especially if the first project at Carlyle could not get off the ground in a timely manner.
Sciacca, who has no known experience developing downtown housing and commercial properties, has told the Enquirer he requested three buildings in an effort to jumpstart Battle Creek’s downtown area with business and residential living options not currently available there.
“To continue to hold those other two off with the hope the Carlyle will actually come to fruition feels like another gamble, another roll of the dice for an unlimited or an unknown amount of time,” Schauer said. “I know there’s no easy answer and I know they are difficult. I really, really would like to be able to come to some compromise that is some sort of win-win or at least is palatable for all parties.”
Sciacca and Smolinski signed the purchase and development agreement with the land bank in October 2015 with terms of the sale going into effect in March. The couple purchased the properties for $1 apiece, considered a significant incentive for the purpose of redeveloping three of the area’s long-vacant downtown buildings.
180Urban also acquired the former Shrank’s Cafeteria building at 85-87 W. Michigan Ave. from Southern Michigan Bank & Trust in a separate deal.
With the land bank deal, 180Urban was required to provide seller site plans and survey information, applications for permits and approvals, engineering and architectural studies, and financial information including project specifications, scope of work and cost estimates, among about a dozen performance requirements.
Sciacca said Friday the original deadline was an arbitrary one made by the land bank. He said it does not accurately take into account the amount of time it takes to redevelop three major properties, particularly as it pertains to lining up appropriate funding to complete the projects.
Despite the tenor of Thursday’s meeting, Sciacca said 180Urban is undeterred, still planning to move ahead with the projects.
Calhoun County Board of Commissioners Chairman Derek King and land bank board member Patrick McLean both questioned the precedent it sets for the land bank to offer an extension to 180Urban for any of the buildings.
“The devil’s-advocate side is that it’s had a number of wrenches thrown into it, but the other end, from the land bank’s standpoint, you can put your blinders on and it really doesn’t matter what wrenches are thrown into it,” King said. “The letter of the agreement is the letter of the agreement. With that being said, if you deviate from that agreement, it sets a precedence for other development opportunities for other folks, you know?”
Battle Creek Downtown Development Director and land bank board member John Hart said there may be a compromise between the two sides that encourages development while keeping both out of a litigation process. Hart said it seems “counterproductive” to risk the completion of the projects because of unforeseen changes to the project’s funding.
“It is something the board does have to sort of look at with eyes wide open up to now and considering Dave’s investment and also your own staff’s investment,” he said. “It’s not an easy decision to make.”
Source: Battle Creek Enquirer