Finkbeiner letter threatened to terminate developer's role

12/4/2009

Toledo Mayor Carty Finkbeiner threatened to end the city's long-running relationship with developer Larry Dillin and said the city would pursue "other options" for the Marina District commercial development on the city's east side, according to a letter obtained yesterday.

The mayor sent Mr. Dillin the letter Oct. 27, giving the Perrysburg developer just 30 more days to close on a $3.6 million land purchase, which is a key component of the planned development and is needed by the city to match and secure millions in state funding.

But even with the 30-day time frame now expired, both sides say Mr. Dillin is still working to secure the $3.6 million from equity partners to buy 58 acres that the city is attempting to convert into a sprawling $320 million private development with a public park area along the Maumee River.

"A time frame was established with Larry Dillin for the closing on the Marina District property. The date of this time frame passed recently," Mr. Finkbeiner said last night.

"Though I un-derstand and respect the current financial circumstances facing developers both here and around the country, and I am delighted Larry Dillin is optimistic of obtaining financing soon, we thought it appropriate to remind Mr. Dillin of our time frame and the importance of this project to Toledoans," he said.

Still, Mr. Finkbeiner said he is optimistic the deal will close before the end of 2009, which would mean the outgoing mayor can leave office with that accomplishment.

Mr. Dillin yesterday said he respected the mayor's decision to send him the Oct. 27 letter, which was marked regarding "Marina District Notice of Termination."

"I told the city it was not in the best interest of the city to do so, but we understand they have that right and we respect it," Mr. Dillin said. "I think they have [now] chosen to do as we have suggested and be patient, because we are just about across the finish line with the equity group."

Mr. Dillin said the city would have to "start from zero" if he walked away from the project.

"I don't know what other options they would have," Mr. Dillin said. "My guess is they wouldn't have very good options - and we are not trying to be arrogant about that - we are just trying to stress that it's a very challenging economic environment."

Toledo City Council voted 9-2 on July 7 in favor of the latest development agreement with Dillin Riverfront Properties Inc., which requires him to pay $3.6 million for the property and begin erecting buildings by Dec. 31, 2010, to prevent forfeiting the propert to the city.

A month after council's vote, both sides had different stories as to why the city had not received its money within 30 days.

Mr. Dillin said the money was secured from equity partners and the holdup came from the city's end because it had not completed title issues and easements.

The mayor said Mr. Dillin had not secured the money.

Even with the disagreement, there was no official letter of termination - as was sent in October.

"On October 14 the city forwarded you a letter regarding its expectations regarding the timing of the deposit of purchase funds into escrow and ultimately closing on the Marina District property," Mr. Finkbeiner wrote to Mr. Dillin.

"The city, based in assurances that funding was near, extended this deadline until 2 p.m. on October 27," the letter also said.

It then gave him 30 days from the date of the Oct. 27 letter as the new deadline.

The Ohio Cultural Facilities Commission in July approved a $4.9 million grant to be used by the city for the development of the Riverfront Park portion of the Marina District.

The $3.6 million from Mr. Dillin functions as the required matching money for the grant. The money will be deposited into a capital improvement fund to be used for "reinvestment into the public portion of the Marina District," according to the agreement.

The park project will develop 22.58 acres of city-owned land along the Maumee River.

The project is to include a roadway, along with a planned boardwalk, public gathering space, and open-air performance spaces.

The mayor said this week that the project is also going to get an additional $2 million of federal stimulus funding funneled through the Ohio Environmental Protection Agency.

Toledo Councilman Mike Craig, whose district includes the Marina District, said he is fearful the mayor's letter could jeopardize those grants.

"I would like to see the closing on this - I would love to see the closing and move forward - but at this point in time, no work is going to take place," Mr. Craig said. "I am not an attorney, but if [the mayor] ended that relationship, Larry Dillin could come back and say, 'I want to do this, but I don't want to pay any money.'•"

The 125-acre district is bounded by the river, Front and Main streets, and I-280. The city has gone through several plans and more than one developer over the past decade to jump-start the project.

The planned development has cost taxpayers more than $43 million over the past decade or so, including cleanup of the once polluted land.

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.