Electric Works developers ask city for fourth extension thanks to COVID-19
Electric Works developers are seeking a fourth extension of their agreement with the city because of the financial disruption and uncertainty caused by the coronavirus.
“As is painfully obvious to everyone, the COVID-19 pandemic has created extreme difficulties for the commercial workd and has brought much of business to a standstill. Not surprisingly…the pandemic has affected the developer’s ability to maintain communications with key financial partners and to continue the progress that had been made,” Peter Mallers, attorney for RTM Ventures, wrote this month in a letter to city Redevelopment Director Nancy Townsend.
According to Mallers, it will take RTM at least 60 additional days to “re-engage” with potential funders and other key parties. But the pandemic’s timeline is unpredictable, Mallers cautioned, noting that “This is something the developer has no control over.”
For that reason, he contends, RTM’s request for another extension is permitted under its development agreement with the city.
“The big picture is, we were on track and now we’re on hold,” said RTM partner Josh Parker. “A couple of things got scrambled but we’ll get them worked out. Now more than ever we need to get this done. We’re so close.”
In addition to disruption of financial markets, Mallers wrote that “the priorities and attention of governmental entities, including some that are critical to the advancement of the Electric Works project, have been diverted to those other needs and priorities.” Most government offices are closed to the public, with many employees working from home.
In February the Redevelopment Commission, Capital Improvement Board and the Allen County Commissioners — which together have pledged $65 million toward the $250 million redevelopment of the General Electric Campus — agreed to push the deadline for leasing and funding benchmarks and construction documents back to April 30, and to June 30 for closing. Although the April 30 deadline is no longer plausible, Parker still hopes to close this summer.
The News-Sentinel raised the possibility that COVID-19 could complicate Electric Works last month. At that time, Parker said “We’re still in good shape, but the world has changed around us in the last 10 days and we’re watching everything cautiously.”
Last month Parker said none of the 19 or so prospective tenants announced so far had backed out, but one small tenant has since withdrawn. Parker also acknowledged the possibility that financial markets would become more reluctant to invest huge sums of money, even if it is backed by millions of public dollars. If would-be investors are not sufficiently “liquid,” he said, that could affect the planned sale of a bond that would be backed by $45 million in food and beverages taxes pledged by the Capital Improvement Board.
Construction is still expected to start this year, Parker said.
As The News-Sentinel first reported, Do it Best, the international hardware distributor now based in New Haven, plans to be Electric Works’ anchor tenant, filling 200,000 square feet with 450 employees,