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City Council action slows down development projects


Jan. 25, 2013
<b>Actions taken by the City Council will now send this building back into the city's real estate portfolio, instead of being redeveloped.</b><br>Reminder Publications photo by G. Michael Dobbs

Actions taken by the City Council will now send this building back into the city's real estate portfolio, instead of being redeveloped.
Reminder Publications photo by G. Michael Dobbs

By G. Michael Dobbs

news@thereminder.com

SPRINGFIELD — Actions taken by City Council Vice President Bud Williams have slowed two redevelopment projects in the city.

A recent vote taken by the City Council will prevent a developer from improving a commercial building in Mason Square and send that building back into the city's real estate portfolio.

Based on a committee recommendation, the City Council affirmed William's motion to approve the purchase of 886 State St. for $140,000 but reject the $10,000 purchase price for 870-884 State St.

The action left developer Lorilee Development LLC with half of its proposed plan, according to Christopher Spaghnoli, a managing member of the company.

Brian Connors, the deputy director of Economic Development, told Reminder Publications that due to the council's actions there are now no set plans for the property. It may be sold through auction, although Connors said the city prefers the Request for Proposal (RFP) process as it supplies greater detail about a developer and his or her plans.

The two buildings are across State Street from the Indian Motocycle complex, which city officials announced would be the subject of a $25 million renovation. Spaghnoli explained the project in question would have complemented the Indian Motocycle renovation. He expressed concerned the apartment building would not be as desirable a location for people since it is next to a run-down commercial building.

Williams told Reminder Publications he would like to see the building go out to bid again. He said his objection was based on the assessed value of the building of $200,00 to $300,000. The building is currently unused with the exception of a small restaurant.

"The taxpayers could have got a better deal for the property. I think the taxpayers could do better," Williams asserted.

Spaghnoli's proposal received high marks from the committee that reviewed the RFPs. Documents obtained by Reminder Publications show that RFPs were submitted by seven developers: Anwar Properties LLC, Chester & Chester Inc./Entrepreneurs in Action for Change Inc., Develop Springfield Corp./Better Homes Inc. James Fiore, Lorilee Development LLC, W & I Construction and Yellow Brick Property LLC.

Lorilee Development LLC has a considerable track record in the city, as it is the developer that took over three troubled apartment buildings on Belmont Avenue. The company renovated the buildings as well as marketed them to new tenants. It currently manages the buildings.

The company has also renovated housing on Leyford Terrace and Locust Street.

The evaluation committee wrote of the company, "Developer has experience with large multi-family projects and has experience with clustered redevelopment."

The committee added, "[The] budget is defined and realistic. Plan in place for project to move forward expeditiously."

The proposal from Spaghnoli's Lorilee Development LLC was to renovate the housing at 886 State St. and to create a "retail condo" at 870-884 State St. The offer of $150,000 to the city would clear most of the back taxes on the two properties.

Spaghnoli explained the $10,000 offer on the retail building was due to the condition of the structure. He said that $200,000 would need to spent on a new roof, air conditioning and heating and the façade alone.

Williams had also invoked Rule 20 on the Indian Motocycle project, a development that has been in the planning stages for the better part of three years. Rule 20 allows a city councilor to ask the city comptroller to evaluate the financial details on a project under consideration by the council.

American International College and First Resource Company offered the city $10,000 in payment for the Indian Motocycle "B" building and the former Mason Square Fire Station involved in the redevelopment. Originally in the RFP, the city was offering both buildings for sale for $1 each.

According to the report filed on Jan. 22 by City Comptroller Patrick Burns, the sale "will result in $10,000 of revenue to the city's General Fund," eliminate the $2,500 in annual maintenance to the properties as well as potential liabilities for environmental cleanups and result in future property tax revenue.

Burns concluded, "The cost esitmates and the city's ability to meet these estmates in my professional opinion are both reasonable and attainable."

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