Simplified: The city will pay a $500,000 settlement to end three years of legal limbo between the city and Village River Group, LLC, the now-former developer of the unfinished parking ramp at 10th Street and Mall Avenue downtown.
Why it matters
- The city has already spent more than $22 million on this parking ramp project, plus the cost of hiring outside legal counsel and the $500,000 settlement ($150,000 of which is a refund of money the developer had paid the city previously.)
- This settlement means the project is no longer stuck in an unfinished limbo. Mayor Paul TenHaken said Friday, "It's time to move forward."
- The process moving forward will look different than it has in past attempts to bring a mixed-use parking ramp development to downtown, TenHaken said. And he wants to wait until it's the right project for the ramp – which is built to support a hotel on top of it.
"We want to maximize that site," TenHaken said. "We have the ability to have really a hallmark signature development there."
How did we get here?
*Note: I could probably do an entire Serial-style podcast season about everything that led to this settlement. We're talking eight years, multiple projects, two different mayors, ties to the 2016 building collapse and more.
- It's a lot, to say the least. I'll give you the quick skim here, but if you want to really get into it, I recommend checking out the Argus Leader's comprehensive timeline here.
The city has been talking about bringing a mixed-use development centered on a parking ramp to downtown since about 2014.
- The first iteration of that – "The Banks"– was announced in 2015, but by the spring of 2016 plans for the project had fallen apart.
The city then decided to try again a few months later in 2016, putting out a call for developer proposals for the then-surface lot at 10th Street and Mall Avenue.
In early 2017, the city named Legacy Developments as its partner, and in the following months the vision for Village on the River was born. An agreement between the city and Village River Group formalized in December 2017.
Construction began on the project, but by April 2019 the city provided the developer and project guarantors a Notice of Default saying the developer had defaulted on various obligations set forth in the development agreement.
- This (and info to follow) comes directly from the settlement agreement.*
On May 14, 2019, the city terminated the agreement with Village River Group.
Village River Group denied they were in default of the agreement, then filed a lawsuit against the city.
That lawsuit – delayed by the pandemic – came to a close after nearly three years when the settlement was reached on Friday.
*I'd be remiss if I didn't mention that this agreement might never have seen the light of day if not for a relatively recent court battle and subsequent law change led by the Argus Leader. Now, settlements between governments and private developers are open records.
What do we know about what happens next?
TenHaken said the city will not use the same process that landed Village River Group the project years ago under then-Mayor Mike Huether.
- That process involved using a Request for Qualifications to select a developer.
Instead, TenHaken said he plans to use a negotiated sale process, the same process used to sell two parcels of rail yard development land and one downtown surface lot.
The finish line.
With the lawsuit resolved, the city can focus on finding a plan and a partner to bring new development to the property that has for years sat unfinished.
"Ultimately, we will select a partner to use this site to add to the exciting growth that is already taking place in downtown," TenHaken said.
What don't we know about what happens next?
TenHaken said he'd rather see the city do things right than quickly.
But, it's very possible the mayor and councilors elected in the April 12 election will be making the decision on the future of the parking ramp property.
- What that means for you is you have a say in who's got a seat at the table in deciding future partnerships.
The development itself.
We also don't know what the future development might look like. It's fair to say it'll be mixed-use, but what goes into the mix – whether it's retail, housing, hotels, restaurants, etc. – is unknown.
"Our administration has had zero conversations with anyone else in the industry about that site," TenHaken said.
It's not clear if the city will be asked to invest further into whatever the future development may be – either directly or in the form of tax-increment financing.