Blanche: After a Vote of No Confidence Redevelopment Options Unwrapped, But Not Public
Posted September 29, 2017 07:50 am
September 2014:
the
Blanche Project will begin by Christmas.
See:
Time for Straight Talking in the Sunlight by City
Manager Johnson & IDP
LAKE CITY, FL – On September 5, 2017, after years of secret negotiations by City Manager Wendell Johnson with Integrity Development Partners (IDP) of Georgia, the City Council in a show of no confidence for the fruits of those negotiations, voted to table the Blanche agreement(s) with IDP. The deal to table appeared to have been made before the meeting and there were rumors and talk of other alternative Blanche plans.
September 5, 2017: post meeting
Councilman Jefferson
After the conclusion of the September 5 Council meeting, your reporter asked Councilman Eugene Jefferson about the explanation of his vote to table the Blanche agreements.
Mr. Jefferson said, "There has been some further discussion with someone, we didn't know who. Somebody met with IDP in reference to some other options with the Blanche. I don't have that information. I don't know what those options are. "I don't want nobody to tell me. I want you to give it to me, so I can read it."
September 26, 2017
City Manager Johnson had a chance to explain those options during the special City Council meeting this past Tuesday evening, September 26, when the Council met and in 3 minutes, without one word of discussion, approved the $160,000 purchase of a parking lot behind the Blanche to enhance downtown parking.
While the Blanche options were circulated to the City Council a few days after the September 5 meeting, none of the Council members mentioned them during Tuesday's special meeting. Councilman Hill was not in attendance.
Before the vote, citizen Barbara Lemley mentioned that she thought the purchase could wait until the Council decided how it was going to move forward on the Blanche project.
The Blanche Options
Circulated shortly after the September 5, 2017 meeting, these are the 3 options which were presented to the City Council members.
Option 1: City moves City Hall
• This is the current plan that has been in the works for almost 2 years
• City leases 34,086 sq. ft. for $423,500 per year ($35,292/mo), equal to $12.42/GSF
• City signs lease for 15 years with purchase option after year 6 of occupancy
• Developer builds out new City Hall for $4,316,174
• City waives construction / permitting fees
• City refunds city/county taxes for amount over current value
• City grants $1 million at closing to IDP affiliate to put into redevelopment
• City closes Veterans Street, does utility work, etc.
• Other items as outlined in current agreements.
• Closing would occur In September 2017 with work completed Dec 2018
Option 2: City does not move City Hall and guarantees payment
• Developer would have to redesign and re-price construction as well as work with investor and lenders to stay in the deal.
• City would fund $250,000 immediately to cover redesign costs, construction estimating costs, and legal costs
• Developer would add 10 residential units, in approximately 9,000 sq. ft., on the 2nd and 3rd floors of northern portion of main building.
• Southern portion of 2nd and 3rd floors would remain offices. City would guarantee payments for 15 years for this space.
• Sq. ft. is equal to approximately 9,000 sq. ft.
• Monthly rent would be equal to $9,000 ($108,000 annually)
• Center section of 1st and 2nd floors would be common area and rented out for events. City would guarantee payments for 15 years for this space.
• Sq. ft. is equal to approximately 11,500
• Monthly rent would be equal to $11,500 ($138,000 annually)
• 1st floor of main building, except center common area, would be leased out for retail. City would guarantee payments for 15 years for this space.
• Sq. ft. is equal to approximately 9,000 sq. ft.
• Monthly rent would be equal to $7500 ($90,000 annually)
•These spaces total 29,500 sq. ft. and $28,000 monthly payments, ($336,000 annually or $11.39/GSF). This is an annual savings over option 1 of $87,500.
• Developer would refund to City 60% of monthly base rental Income from these guaranteed spaces.
• City could receive approximately $200,000 back if fully leases at proposed leased rates, making the net out of pocket approx. $136,000 annually.
• City would not be purchasing building and would not have to move, nor worry about selling or leasing their building. City refunds city/county taxes for amount over current value
• City grants $2 million at closing to IDP affiliate to put into redevelopment (each $100,000 grant is reduced by would be an increase in guaranteed annual rent payment of $7500)
• City closes Veterans Street, does utility work, etc.
• Closing would occur in December 2017 (hopefully) with work completed March 2019
Option 3: City purchases building and reports, reimburses Developer
• City would purchase building for $850,000 (assessed value) plus reimburse Developer $1.53 million for its costs paid/incurred and overhead: totaling $2,380,000.
• Developer would turn over all plans, specs, third party reports, etc. to City.
• City must purchase and pay Developer by October 15, 2017.
• City can do whatever it wishes and community approves.
• Developer agrees to help City redevelop The Blanche in the future under a separate agreement at that time.
Epilogue
Monday night, October 2, 2017, is the next City Council meeting. It is not clear what City Manager Johnson and the City Council have up its sleeve.
