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The City of Ypsilanti’s RFP deadline for the Water Street Project ended on August 19th. The City has received three proposals for redevelopment.
Wait. Let me clarify that. The City has received letters from three companies who are interested in possibly redeveloping the area one day. Maybe.
The Finch Group of Boca Raton, Florida, Crosswinds Communities Inc. of Novi, Michigan, and Morningside Equities Groups Inc.of Chicago, Illinois all sent letters saying they had an interest.
If you remember all the way back to April 13th, when the City held a Town Hall-type meeting regarding Water Street, you will recall that the Planning Department was expecting these interested developers to submit concept plans. Stuff like the number of proposed units, materials, commercial space considerations, etc. They didn’t get any of that stuff. The City has already formed a board to review these, uh, letters. According to Megan Gibb, the Planning Department is looking to make a recommendation to City Manager Ed Koryzno by the end of September.
The City issued the following update on the RFP process:
Why was the RFP important?
The RFP was important because it reflected the full spectrum of goals and objectives that the City seeks to accomplish with the Water Street Project. The RFP and corresponding process provides an opportunity for a wide variety of interested developers and individuals to submit their ideas for redevelopment of the site. The goal of such a competitive process is to take advantage of the creativity and knowledge of the private sector, by providing an opportunity for them to demonstrate why their approach to the Cityâ€™s goals is the most desirable.
What did we learn from the RFP process?
That the competitive process that is so valuable to the City to measure proposals against one another is very cumbersome to the development community. The prospect of spending significant resources to learn about the site, evaluate potential development plans, and put together financial models that demonstrate the proposed project to be economically viable, is difficult for developers to justify without a reliable expectation of being able to carry out the project itself. The City also learned that the combination of the asked purchase price ($5 million), the Cityâ€™s reluctance to issue additional debt in support of the project, and market conditions that donâ€™t provide an adequate level of confidence that the project will sell at levels necessary for financial viability, converged to add a degree of risk that many developers were uninterested in accepting.
While no formal proposals were submitted, the City did receive 3 letters of interest from development companies that expressed the opportunity to discuss a direct negotiation for the redevelopment of the property. These companies are: Crosswinds Communities of Novi, Michigan, Morningside Group of Chicago, Illinois; and The Finch Group of Boca Raton, Florida. The Developer Selection Committee, which is comprised of various board and commission chairpersons and city staff members, will consider the qualifications of these three companies for the purposes of entertaining direct negotiations with them. It is anticipated that this review will involve the gathering of information over the coming 6-8 weeks. Concurrently, it may be necessary to begin to prioritize goals for the project to facilitate negotiations if the achievement of all goals becomes unattainable.
This update paints a rather grim look at the project and it’s prospects. Even so, that’s not the most disturbing thing in all of this. The thing that should be sending up red flags is the inclusion of a letter of interest from The Finch Group.
Wesley Finch and his cronies keep turning up in Ypsilanti like a bad penny. If you can remember the Parkview Apartments debacle, you’ll recall Mayor Farmer wanted to sell the Parkview Apartments to The Finch Group for $100. The City had hoped to get the property back on the tax roll so the it could begin generating $150K in tax revenue. The property later purchased at auction by Emmanuel Ku for $2.6M meaning he’ll be responsible for only $97K in property taxes should he actually be allowed to purchase it (of which, only about $40K will go into the City’s coffers because the rest is owed to the County, library, etc.). The $53K discrepency between the City’s numbers and the real numbers is something I cannot explain. Even as the Ypsilanti Housing Commission’s plan to buy Parkview was going down in flames, the City still wanted HUD to cancel the auction and give the property to The Finch Group.
For all the outrage residents of Ypsilanti have been showing lately, this one is just sliding under the radar.
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