TOWER— City officials here have raised a new potential hurdle for the town home project at the city’s harbor, suggesting the city may seek a $750,000 letter of credit from Tower Vision 2025, …
TOWER— City officials here have raised a new potential hurdle for the town home project at the city’s harbor, suggesting the city may seek a $750,000 letter of credit from Tower Vision 2025, before the city agrees to finance its portion of a development agreement with the company.
It’s not clear whether the request— if the council approves it— will create an impasse for the project, but Tower Vision’s master developer Jeremy Schoenfelder said such an arrangement was never part of the development agreement signed by the city and representatives of Tower Vision.
“We aren’t looking to post a letter of credit. We’re looking at pre-sales to fund the project,” he said. Schoenfelder said he felt he was clear with the city from the beginning on how the project could proceed. “Our thought from the beginning was to fund the design of the town homes, and then presell the units in order to finance the project.”
It’s not clear how set city officials are in their latest demand. No reporter from the Timberjay was present at the March 29 meeting because city officials failed to notify the newspaper of the special in apparent violation of the Open Meeting Law. The newspaper’s written request for notification of harbor committee meetings was refiled with the city in February. Under state law, the city is required to notify anyone who is on record requesting notice of special meetings. The harbor committee had not met since September.
In response to an emailed question, City Clerk-Treasurer Linda Keith said the harbor committee was providing Tower Vision advanced warning. “It is not unusual or unlikely for a city council to request a [letter of credit] so this was a heads up to TV 2025 to be ready for such council request,” Keith wrote.
Schoenfelder, who has extensive experience as a developer, said it was unlikely that any financial institution would be willing to invest in the project purely on speculation, particularly in a remote market where such a project has not been done before. Financing the project based on pre-sales helped to limit the risk for all the parties involved, said Schoenfelder. “If they’re asking us to take on more risk, we’re not interested,” he said.
Delays in the project have proven costly, as updated construction figures for this year showed a sizable jump from last year. “As time goes on, particularly in a time like now, everything gets more expensive,” he said. “So, we’re exploring other options to keep a better price point for buyers.”
Despite the delays, Schoenfelder said he’s not going to point fingers, and he remains confident that the project will be ready to move forward once the final permits are in place. He said the city’s engineer now anticipates having the final wetlands permit in hand by July. Tower Vision CEO Orlyn Kringstad said he had hoped to start construction in May, but work on the project can’t begin, said Schoenfelder, until all the permits are in place.
While city officials did not respond, the city’s commitment to extend roads and utilities to the town home is expected to be costly. The city has obtained some funding to cover a portion of the cost, but not as much as city officials had originally hoped. That raises the stakes for the city as well.
Schoenfelder acknowledged the challenges, particularly as the city and the developers try to negotiate the multiple jurisdictions, wetland issues, and poor soils in some cases. “There is a lot going on from an integration perspective to make it all happen,” he said. “I am certainly still optimistic. There are challenges, but that’s nothing new. You can usually work thru the challenges.”
Schoenfelder said he remains determined to bring the project to fruition. “We’re still pushing as hard as we can to get there by July. Everything is starting to come together now. We do get closer all the time.”