Chelsea DDA picks Kadushin/Beal as 'most viable' to develop Longworth property
Lon Horwedel |AnnArbor.com
A proposal to redevelop the historic Longworth property on Jackson Street in downtown Chelsea remains alive for a group of residents and a development team trying to save the buildings.
The Chelsea Downtown Development Authority on Thursday unanimously approved a resolution supporting a mixed use proposal from 110 Longworth Building Company - which the DDA is now calling the Kadushin/Beal team - but the group must provide a bank letter of credit of $1 million.
The DDA put the property up for sale for $1, but required that the developer who buys it to invest at least $1 million and return the buildings back to the city’s tax rolls.
The proposal from the Kadushin/Beal team includes the purchase, adaptive reuse and redevelopment of the buildings into a mixed of retail, residential lofts, specialty food vendors, arts and crafts studios and a gallery.
It includes commitments from Red Hawk Grill and Revive+Replenish Cafe in Ann Arbor for a restaurant; The Art Pursuit of Chelsea, a non-profit art center focusing on ceramics; and Chelsea Farmers Supply, a business next door that would like to expand.
Involved in the plan are Alexander Pollack in association with Kadushin Associates Architects Planners, Inc., J. C. Beal Construction, Inc., and members of the Chelsea Connection, a group of Chelsea residents who have been fighting to save the building.
“I’m very encouraged by the outcome today,” said DDA member Palmer Morrel-Samuels. “I know there are many hurdles ahead, but I’m optimistic that the Longworth complex will be developed wisely, responsibly and in a timely manner.”
The other proposal was from developers who sought to build 20 loft-style apartments with geothermal heat and air conditioning, solar electric and solar thermal systems. A small commercial component was included, and 42 percent of the financing would have come from tax credits.
The DDA members on Thursday unanimously adopted a resolution that stated although “neither proposal has demonstrated the financial commitment as requested,” they favored the mixed use of the Kadushin/Beal group proposal and asked the principals to submit a draft agreement while stipulating several conditions.
See a PDF of the resolution. Resolution for Longworth 6.pdf
Several DDA members expressed concerns about the project’s lack of a firm financial commitment from a bank and they reiterated their desire that the process move along.
In fact, five members said they were not in favor of either proposal, while seven were more willing to consider one -- if the financial commitment was there.
Treasurer Mark Heydlauff also reminded DDA members that they need to protect the DDA's investment in the property as well.
The Longworth buildings at 110 Jackson St. include the old livery, which dates back to 1905; the Mack Building, which was built in 1901; and The Daniels Showroom, which once was home to an auto dealership. The DDA bought the three buildings in 2008 for $400,000.
With the resolution approved on Thursday, the DDA is asking the developer to provide “an irrevocable bank letter of credit for $1 million, or other security acceptable to the DDA, to secure improvements in the property and to cover any costs or damages incurred by the DDA and the city for site restoration or removal of incomplete improvements if the project fails.”
The group was given 90 days - until Sept. 7 - to close on the deal and complete its due diligence and other contingencies, including finalizing the financial commitments.
And although the original financial model for the project included tax abatements, the resolution adopted Thursday forbids them.
“We’ve never done it (given a tax abatement) for a new business,” said John Hanifan, Chelsea’s city manager.
Jan Bernath, one of the people listed as part of the 110 Longworth Company and a vocal proponent of saving the buildings, said her concern was the 90-day time frame.
“It might be too short (a time to get this done) and you might end up with a very expensive parking lot that pays no taxes,” she said.
Prior to the vote, several members of Preservation Chelsea, a citizens group that advocates Chelsea’s history, said that either proposal was something they could support.
John Frank, president of the group, said he hoped that the DDA would support the preservation of important historic values and buildings in the city and the group would be glad to provide knowledge and assistance.