Hotel Developer Finds Wiggle Room
Despite the shelling he took from city staffers two weeks ago, which appears to have made his chance of building a hotel on Calder Plaza look similar to the likelihood that the Detroit Tigers will win the World Series, the CEO of Blue Bridge Ventures is continuing his crusade.
When Buchanan gets his time with city commissioners he must hurdle a lengthy list of objections they have about the project. He will have 90 minutes between today and the 29th of October to do that. One hurdle he has to overcome is what city staff said was his failure to meet six conditions contained in the option Blue Bridge bought last October to purchase City Hall, the Government Center parking ramp, and the plaza.
One of the six is that Blue Bridge and its partner in the hotel venture, Hines Interests LP of Houston, must buy the Kent County Administration Building. Some media reported that the county has flatly refused to participate in the deal and won't sell to Buchanan, period. But like the weapons of mass destruction story, that, too, may be a bit of an exaggeration.
It's true that a county facilities task force recommended that Kent reject a concept that Buchanan had proposed earlier. It's also true that a Kent County subcommittee made that recommendation official last month.
But County Administrator Daryl Delabbio told the Business Journal last week that the door of opportunity wasn't slammed shut permanently, and that if Buchanan made a solid offer on the three-story building the county would think about it.
"We never want to say never," he said. "But it would have to be a pretty attractive deal for us to consider."
Delabbio explained that the county's action meant it isn't interested in leaving the plaza building at this time because the 34-year-old structure has at least another 10 years, maybe more, of service left. But circumstances can change, he said, and the county would look at all reasonable offers for the building — even one from Buchanan.
County Chairman David Morren said as much after the subcommittee's vote. County Vice Chairman Roger Morgan and Deputy County Administrator Al Vanderberg echoed that same sentiment at a meeting with the Business Journal last month. In other words, Buchanan has some wiggle room — not much, but some
If so, then a key question becomes what would the county building be worth on the market? Well, no one knows exactly.
Two preliminary appraisals have been conducted on the building in the last six years. But Delabbio said the most recent, done a year ago, didn't include the HVAC system in City Hall that the county owns. He also remarked that the report credited the county for owning some of the parking spaces in the ramp, which it doesn't.
So the best number the county can offer at this time is a ballpark figure, in the neighborhood of $5 million.
"It could be more, it could be less," said Delabbio.
Delabbio added that the county needs to have a serious assessment of its building made, despite the degree of difficulty involved with doing that on a property that isn't on the tax roll. Then there is choosing which type of appraisal should be done. Should the building be valued on its potential for commercial income? By its comparative, fair-market value? Or should an approach be used based on its operating cost? How about some combination of the three?
One thing, however, is certain. Delabbio said any appraisal of the building would only establish the minimum bid the county would be willing to accept. Potential buyers would have to top it. An appraisal would also give county commissioners a base figure to work with if they ever have to vote on selling the building.
Second Ward City Commissioner Lynn Rabaut has been after the city to have its plaza holdings appraised for years for that same reason. After the luncheon meeting two weeks ago when commissioners heard why they shouldn't enter into a deal with Buchanan, Rabaut told the Business Journal that it would be helpful to commissioners if City Hall, the plaza and the ramp had an honestly appraised value for them to start from.
But, so far, Rabaut has had about as much luck getting an appraisal done as Buchanan has had in getting the city to move. And getting the city to move is what Buchanan must do to build the hotel across Monroe Avenue from the new convention center. But he has to do that at no cost to the city. City staff said he can't, and at least one commissioner solemnly vowed that city dollars wouldn't go into the hotel project.
"I will not let any developer build a hotel on the taxpayers' back," said Rick Tormala, 3rd Ward city commissioner.
As for the county, Buchanan said he hasn't made a serious offer on the building because officials told him to get his deal done with the city first. He said the talks he held with the county centered on the general concept, but didn't delve into specifics. Yet, the option says he has to come to terms with the county.
"Our proposal right now contemplates that the county stays. So all this stuff about how the county has to go, well, why? Let the county make their own decision. If they want to go, great. If they don't, then they don't," said Buchanan, who has invested millions and portions of eight years into the project.
"Do I think we can convince the county to move? I do because I know enough about the operating costs they gave us for that building," he added. "If they packed their bankers boxes and got out of there tomorrow into a brand new building, the cost of buying that building would be cheaper than staying right there."