Updates on Paradise Valley development, developer asks for more time to lease building and forgive unpaid interest
Today’s meeting is scheduled to start at 4pm and is being held remotely on Zoom. You can find the meeting info, link to join and agenda here: https://2nq1rd1ofg7sy5ck73amt9qv-wpengine.netdna-ssl.com/wp-content/uploads/2021/03/03-29-21-DDA-Finance-Committee-Meeting-Notice-and-Agenda.pdf
“The Downtown Development Authority (DDA) supports private investments and business growth through loans, sponsorships and grants, capital improvements to public infrastructure and additional programs designed to increase economic activity.” https://www.degc.org/DDA/
All committee members are present and the meeting has just begun. Minutes from the last meeting on Nov 20, 2020 have been approved.
The one project being discussed today is a part of the Paradise Valley Cultural and Entertainment District, currently under development. https://paradisevalleydetroit.org
The Paradise Valley development was first announced in 2016. https://www.detroitnews.com/story/business/2016/06/28/detroit-paradise-valley/86492244/
Specifically they are discussing the Randolph Centre Building, a 36k-sq-ft building at 1435 Randolph St which is getting renovated, and the adjacent parking lot at 1455 Centre St where a new building will be built.
The Hamilton Development Corp, led by Rainy Hamilton Jr, is leading this develpment. Mr Hamilton’s firm, Hamilton Anderson Associates, currently occupies 1435 Randolph St. http://www.hamilton-anderson.com https://t.co/HtIhhkl26T
At issue today is an amendment allowing for more time for the developer to lease the building, and forgiving interest on the loan. Covid-19 and other issues have delayed the project. https://t.co/0PHMyLXPAx
Committee member Dave Blaszkiewicz is asking if the current budget has been affected by rising construction costs. Rainy Hamilton, Jr. answered that he has worked with contractors to lock in costs, but also they have had to reduce the scope of the project.
Hamilton, Jr is clarifying to the committee that his firm is in good financial shape, all things considered, to continue moving the project forward. They took advantage of some PPP loans, and Blackstar, his primary lender, are still on board and in fact requested the ammendments
Committee member Steve Ogden is stating that they will continue working with Hamilton but wants to know what “skin in the game” Hamilton has. Hamilton answered that he’s already spent $500k on architecture and planning. He expected this project would already be done by now.
Committee member Melvin Hollowell acknowledges that after 6 years, the elephant in the room is “is this ever going to happen?” The questions from committee members reflect this concern. Regardless, Hamilton still has the support of the DDA.
Hamilton replied that many of the delays were not of their doing. Apparently, they have decided over the last year or so to scrap the additional expansion, given the surplus of office space available, and he stated the committee should be thankful. He asks they approve ammndment
Ogden stated that every time Hamilton has asked for amendments, they have been granted. Ogden supports this but wants to know if Flagstar approves this loan, will that be it until the ribbon cutting or will Hamilton be back for more amendments.
Hamilton doesn’t want to return before the committee, but needs these amendments to secure the loan with Flagstar so he can get the project done. Member Sonya Delley asked if he has approached other banks, and he replied he didn’t think that would be helpful. Flagstar wants this.
Hollowell made a motion to defer this deliberation to a later meeting where they can hear from Flagstar on this topic, and whether they remain committed. Hamilton says delaying this further will jeopardize the project.
The concern of the committee members is how they justify this to the public, as they continue to subsidize this development. Ogden suggested earlier in the meeting that this may just be “bad money”. Hollowell said he simply needs more then basic assurances.
Rebecca Navin, General Council, suggested tabling the motion and amendment consideration to be considered after they get more information. Chair John Naglick agrees. Hamilton asks: haven’t they already received a letter of intent from Flagstar?
They have a letter, but until they pass these amendments the bank cannot submit a formal term sheet. Ms Navin stated they need a term sheet before supporting these amendments. The committee simply needs more assurance before approving this.
They have tabled this for now, and hope to schedule a special meeting to address this before their next regularly scheduled DDA meeting. With no admin issues to discuss and no public comments, this meeting is adjourned at 5:04pm.
The next DDA meeting will be a special meeting of the Board of Directors this Wednesday, Mar 31 at 3pm. As always, for more info on this meeting please check out http://Documenters.org.