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Lake City News

The Blanche: A $1,000,000 'Technical Violation?' The City Will Be Counting Days & Decide

On March 4, 2019, IDP's ambassador Dennille Decker gave an upbeat presentation and announced the Blanche Project would be completed in about 90 days: "We are in our last 90 days of construction... They tell us that we are on schedule for an early May opening."

LAKE CITY, COLUMBIA COUNTY, FL – Beginning in 2009, the Blanche Hotel in downtown Lake City has been a matter of government and public concern and hope. After 11 years of debate, public record violations, and a split vote by the City Council to gift $1,000,000 to the Blanche Developers, the Blanche is back.


Beginning in 2009, Lake City's Blanche Hotel became a hot topic of conversation: the City wanted to buy it; the City wanted the County to buy it or chip in; a developer showed up and disappeared; City Manager Wendell Johnson found a Developer called Integrity Development Partners (IDP), who didn't like to answer questions; Wendell Johnson negotiated with IDP; Wendell Johnson also didn't like to answer questions; eventually, on February 1, 2018, after a split vote, Mayor Steve Witt, and Council members George Ward and Melinda Moses gave away the farm to IDP in return for a two year commitment to "complete the development of the Project."

On February 2, 2020, IDP was out of compliance with its contract to complete the Blanche Project in 24 months.

The City-IDP Agreement

The February 1, 2018 agreement between the City and IDP states that the owner/developer agrees "to complete the development of the Project within twenty-four (24) months from the date of closing the Owner Financing, unless the inability to complete within that period is due to an event constituting Force Majeure."

Feb. 2, 2020
$1 Million Dollars of Tax Payer Money on the Line

Rhett Holmes of IDP
"It will take about 15 to 18 months to do everything," IDP's Rhett Holmes in 2016.

On February 2, 2020, the developer of the Blanche, IDP, went out of compliance with its "Project Completion Guaranty." The project was not completed in 24 months.

According to its contract with the City, IDP has "(60) days after the City notifies Guarantor [IDP] of such noncompliance in writing (the "Non-Compliance Notice") and such non-compliance is continuing as the date such payment is due."

The contract goes on to state that IDP has 60 days to complete the project from the time it receives the City notice that it is out of compliance.

What's Going On?

Joe Helfenberger: Lake City's City ManagerAccording to City Manager Helfenberger, he initially sent a letter to IDP about a week after IDP went out of compliance. He told the Observer, "I wrote the letter myself."

It turned out the letter was returned because according to Mr. Helfenberger, "It was sent to the wrong address."

Your reporter asked why he just didn't go the City Attorney, Fred Koberlein, Jr., and ask him to send the letter.

City Manager Helfenberger said, "It takes time to go through the process with him."

However, after the letter was returned, Mr. Helfenberger had Mr. Koberlein's office send the letter. It is not clear if Mr. Koberlein also emailed a copy to IDP.

The City's letter, dated February 27, was received by IDP on February 27, and City Manager Helfenberger presented this second letter to the City Council for review in Monday's agenda packet, along with IDP's response and a separate explanation of the events by Mr. Helfenberger.

According to the City Manager's explanation, IDP sent an email attachment as its response to the non-compliance notice. It is not clear if IDP complied with the City/IDP Agreement and sent a response via personal delivery or "overnight courier designating early morning delivery."

The City Council Meeting

During Monday's virtual City Council meeting IDP President Rhett Holmes said, "We received a letter that we were in technical violation of our agreement with the City... The two spaces formerly known as Chastain's, as well as the corner office that we will be using as the Blanche operations office, those two spaces were not completed yet. We asked for an extension of time."

Steve Witt: Lake City Mayor
Mayor Steve Witt

City Manager Helfenberger never wrote that IDP was in technical violation. In relevant part Mr. Helfenberger wrote: "You are hereby notified that the Project is not in compliance with the terms of the Guaranty. You have sixty (60) days from the date of delivery of this notice to either complete the Project or pay the City of Lake City back the $1,000,000 grant."

According to the City/IDP Agreement there is no such thing as "partial" compliance or a "technical violation."

IDP's Holmes said IDP was asking for an extension of 100 days due to a hurricane and also asking for the time to be tolled due to the emergency declaration regarding the coronavirus.

He announced, "Work is underway" and that IDP "will reduce the rent."

The Blanche onsite representative, Dennille Decker, said that work had been suspended due to the coronavirus.

City Manger Helfenberger said, "I was not able to get the rain days or verify the hurricane time. I'd like a little time to get you the information."

Fred Koberlein, Jr.: Lake City's City AttorneyAttorney Koberlein weighed in with a legal definition of a Force Majeure. It is not clear if Mr. Koberlein was up on the contract which defined a Force Majeure for this contract: ""Force Majeure" means an event outside of the control of the Owner and the Developer that could not be evaded through the exercise of due care."

Mr. Koberlein went on to explain that it would be up to the City Council to determine the number of days of delay that were caused by events out of control of the contractor.

Sylvester Warren: Contractor and community activistContractor and community activist Sylvester Warren commented, "I think he bit off more than he could chew. He can't meet the deadline so he's scrambling to get more time to complete the project. I think it's time for the taxpayers to start winnin' on this deal."

City Manager Helfenberger asked the Council for time to research IDP's claims.

Mayor Witt said, "We need to be fair. If they're entitled to it, then we have to do it."

The City Council voted to give Mr. Helfenberger time to research the IDP claims.

All photos in this article are file photos

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