Deadline nears as developer scrambles to save Cottage Grove Home Depot redevelopmentStonehenge USA, the development company whose plans for a long-vacant former Home Depot building the city approved earlier this year, is in a rush to resurrect the proposed redevelopment before a Dec. 31 deadline.
A commercial developer is scrambling to save a plan to redevelop Cottage Grove’s largest vacant retail property.
Stonehenge USA, the development company whose plans for a long-vacant former Home Depot building the city approved earlier this year, is in a rush to resurrect the proposed redevelopment before a Dec. 31 deadline. Missing that deadline could jeopardize special property tax revenue the company’s president says is critical to the project.
Cottage Grove Economic Development Authority members earlier this week approved the extension of a development agreement between the city and Stonehenge until later this month, as the company president expressed contrition for the halting pace of a project officials had expected to be completed before the end of 2012.
City officials — including Mayor Myron Bailey and City Council member Justin Olsen, both of whom sit on the city’s economic development board — have expressed frustration with the company and its plan to redevelop the property. Since the plan was quickly approved by the city earlier this year, the project has moved in fits and starts as the development group sought financial backing for the project.
Last month the project teetered on the brink of collapse as, according to the company’s president, Alan Dale, two partners who had brought the project to the city exited Stonehenge. That led Dale on Oct. 12 to back out of a purchase agreement for the property with Home Depot, he revealed Wednesday to the EDA.
Dale said he is now in the process of resurrecting that deal. Financing and letters of intent from prospective tenants are nearly finalized, he said.
“I apologize that this project has taken so long,” Dale told the EDA during a special meeting at Cottage Grove City Hall. Later, he added: “I accept full responsibility. We dropped the ball back in July [and] August.”
Redevelopment relies on expiring program
The company’s plan, OK’d by the City Council in June, is to redevelop the 68,000-square-foot building that has sat vacant since the home improvement chain closed the Cottage Grove store in 2008 into a multi-tenant retail site anchored by an LA Fitness gym.
To make the estimated $10.8 project economically viable, however, developers are relying on a provision included in a state job stimulus program that would allow the city to pool nearly $2 million in tax revenue from multiple redevelopment districts around the city to help cover build-out costs.
Without that funding, the “project does not make sense” for Stonehenge, Dale told city officials.
That program, though, expires at the end of the year. City Administrator Ryan Schroeder said if roughly $500,000 in work is not completed on the site by Dec. 31 the city would lose the ability to pool tax increment financing dollars for use in the Home Depot redevelopment.
“The project doesn’t have time to dawdle,” Schroeder said in an interview Friday.
Stonehenge is scheduled to meet with EDA members again at the board’s Nov. 13 meeting to show it has finalized financing for the project and lined up commitments from prospective tenants.
If those components aren’t in place by that date Bailey signaled it would be difficult to see the project coming to fruition.
The city “did everything [we could]. We've had all of our stuff lined up since day one,” Bailey said in an interview. “This has been solely in the developers lap, and getting their tenants lined up and financing in place."