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Machinery Row Developer In DefaultBlackwell, owner of Iowa-based development firm Financial District Properties, MR LLC, received a notice of default on the development agreement and right to cure the default last week from the city. He owns Azarian Marina at 900 and 820 Water Street, but the city gave Blackwell a bridge loan to purchase the property. He promised to pay the money back to the city, but he’s now in default. “Rodney has a period of time to cure this… but he’s got to bring in another developer, with financing… otherwise everything comes back to us,” Dickert said. “It will be out of Rodney’s hands after the right to cure period is over. Rodney will walk away with no money. Everyone thinks we gave Rodney $4.5 million. We didn’t. We paid the landowners for that property… now one of the pieces we paid for, we just got a contract with General Capital Group.” General Capital Group bought 615 S. Marquette St., the building next to Blackwell’s property, from the city. The developer plans to build affordable and market-rate apartments.
820 and 900 Water Street Could Be Parsed OutBut the part of the project Blackwell owns could become the city’s if he doesn’t bring in another developer and financing. To prepare for the possible default, Dickert and his staff have been talking with other developers for months about the viability of developing the 820 and 900 Water street properties. “There’s a reason why Rodney had problems developing this site. It’s a very difficult site. It’s 24 acres of contaminated buildings and grounds,” Dickert said. But Dickert worries that the federal tax credits businesses can use to clean up contaminated properties may dry up with President-elect Donald Trump taking office in January. The projects included in Machinery Row rely heavily on brownfield clean-up grants. And with the city having more than 100 contaminated properties, this could kill development in the city. “It could put a complete halt on redeveloping brownfield sites… and that’s the part that we’re hoping President Elect (Trump) looks at,” Dickert said. “We didn’t contaminate these sites. We didn’t make it dirty… but yet we’ve got to clean it up.” One of the other challenges: The city’s rental costs are much lower compared with other cities and it’s difficult for developers to make money off of rentals.
What’s NextAfter talking with other developers, the city’s strategy around the property has changed. They are open to looking at doing smaller developments on the Blackwell sites or one large one. But the market needs to decide what needs to go on the site, Dickert said. “That’s what we’ve decided is the best strategy… to look at this from different angles,” Dickert said. “All we know is that we’re not going to say to a developer that they have to take the whole thing. We’re going to leave it wide open to what the market is.”
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