CEDAR RAPIDS — The clock may soon be ticking on a flashy high-rise proposal as city officials wait for developers to firm up financing.
City staff are calling for a Nov. 27 deadline to see proof of financing for the proposed $103 million, 28-story One Park Place that would go at the corner of Third Avenue and First Street SE.
The concept wowed local officials with promises of a hotel, grocery store, rooftop restaurant, apartments, condos and parking when introduced in the spring of 2016. But progress has been slow since.
“I’ve always been a little impatient with it, but I’ve come to understand the complexity of a project like that,” said City Council member Scott Overland. “I’m told they have been making progress. (This deadline means) between now and the end of November, they have to pull everything together, or the city is done with it.”
The City Council will consider a resolution setting the November deadline during its meeting at 4 p.m. Tuesday at City Hall, 101 First St. SE. This would give developers Jesse Allen and Dave Zahradnik 90 days to submit “a letter from a lender or group of lenders committed to providing financing with conditional terms for the project debt.”
Messages left for Allen and Zahradnik were not returned.
“It provides a good update to the council and to the community on where we are at,” said Jennifer Pratt, director of the city’s community development department. “We are progressing and ready for the last piece.”
Deadlines are typical when working with the city on a development agreement, but this project has been managed on a more flexible basis, given the large scale and complex ownership structure, Pratt said.
She said the developers say they are confident they can get the deal done and have not discussed backing out.
If the developer can’t meet the deadline, the city could put out a new request for proposals or consider extending the deadline, she said.
In May 2016, the City Council unanimously selected One Park Place over two other proposals to redevelop downtown’s last major piece of city-owned land near the Paramount Theatre.
The other proposals were for a $33 million, 11-story project featuring housing, a grocery and a medical clinic, made by Steve Emerson. The 14-story Avalon Sky Lofts, also $33 million, came from Fred Timko.
In December, the City Council asked the One Park Place developers to complete market studies for parking, hotels, housing and other aspects of the concept, and provide proof of financing. Market studies have been completed, and results remain positive, but the financial piece has been more complicated than expected, Pratt said.
Proof of financing is the final piece needed before the city awards a public subsidy package worth $20 million. That would be paid out starting with a $5 million payment upon completion of the structure, and then the rest in reimbursement of new tax value.
Construction would presumably begin shortly thereafter.
“We want to make sure we are not being unreasonable on our time schedule, but it’s a big project and we want to make sure it keeps moving through the process,” Mayor Ron Corbett said, adding the developers have yet to sign a hotel operator.
He noted city support for the project hasn’t wavered, and council member Ann Poe agreed.
“It’s a big project, so we always knew it was going to take a while,” Poe said. “We don’t want it to drag on, but by the same token we want to give the developer enough time to get his financials in order.”
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