Founders Landing project continues, by Matthew Williams

The City of Marquette continued to suffer growing pains with its Founders Landing project last month when a third proposed developer for the highly visible site on Marquette’s lakeshore was unable to procure the needed support from the city commission.
Founders Landing is a twenty-nine-acre parcel stretching from the ore dock next to Ellwood Mattson Lower Harbor Park to Genesee Street in South Marquette. It includes three-quarters of a mile of Lake Superior shoreline, the city’s bike path, Lakeshore Boulevard and land adjacent to US-41.
The city’s master plan calls for the shoreline, bike path and park-like space near the lake such as Gaines Rock to be preserved as public space. Property west of Lakeshore Boulevard is slated for various types of development.
Six of the commission’s seven members voted to sell a 3.1-acre parcel dubbed “Site 1” to The Landing Development Group LLC for the appraised price of $875,000. Commissioner Joe Lavey, who is in his final term on the city commission due to term limitations, was the dissenting vote.
The Landing Development Group—consisting of Marquette-area businessmen Joe Constance, Bill Hetrick, Barry Polzin and Ron Thorley—hoped to build between twenty-eight and thirty-four condominiums on the site in accordance with the city’s master plan and with a development plan created for Founders Landing through community meetings. The high-density residential units would not affect public access to the lakeshore or bike path.
Unless the city commission reverses itself—they were scheduled to meet July 28, after this publication’s press deadline—Founders Landing will head back to the city’s planning commission this month and that group likely will be asked to create yet another request for developer proposals. If the commission did reverse course, it no longer seems likely construction could begin this year.
“It’s very disappointing where we are,” said Marquette mayor Tom Tourville.
Tourville, in his third year as a city commissioner, has been involved with the project in some way since 1998 when he was a planning commissioner and Marquette was looking for ways to purchase what was then known as the South Rail Yards from Wisconsin Central Railroad. (Wisconsin Central Railroad later sold the property to the Canadian National Railroad, which then sold it to the city for $2.1 million in June 2002.)
Tourville said the city pays $22,000 each month on bonds that were sold by the city to help purchase and develop the Founders Landing area and he’d like to see that payment offset by either tax revenue or income from a property sale.
“We, as a city government, may essentially have to start over and what concerns me is that we’re doing a disservice to the citizens,” he said.
Tourville and commissioner Jon Kivela also voiced concern that quality developers may be reluctant to bid on the project given the fact that three groups have been recommended for approval and all three have been unable to close the purchase—one being The Urban Project, a developer who backed out of a signed deal and then attempted to renegotiate the sales price.
In the overall project, Marquette proposes to sell slightly more than fourteen acres in three parcels. Site 1, as described above; Site 2, a 7.6-acre parcel at the southernmost end of Founders Landing that under the latest plan calls for office and retail space as well as residential units; and Site 3, a four-acre parcel on land formerly known as the tank farm. Proposed development on Site 3 includes restaurants, retail space, banquet facilities and a hotel, as well as a boardwalk and marina. It also may include residential space.
The city’s original idea was to sell all three parcels at once and Marquette actually had a signed sales agreement last year with The Urban Project, a Minneapolis-based development group. That contract was terminated at the developer’s request in December.
The Urban Group attempted to renegotiate the terms this past winter until the commission, in May, voted to cease further negotiation. A majority of commissioners expressed concerns that the Urban Project was stringing the city along while trying to find financing. The Urban Project, however, said adverse site conditions, particularly soil stability were the reason they terminated the contract and wanted a different price.
After the city ceased contract negotiations, The Urban Project tried to reopen them by publicly stating they’d pay the $875,000 they’d originally offered, but by then the commission had asked city manager Judy Akkala to open negotiations with The Landing Development Group, which had been runner-up in the selection process.
Marquette Monthly attempted to contact the Urban Project for this article, but the phone number published on their Web site was disconnected and they did not return e-mail requests sent to their published e-mail address before deadline.
The reason that the Landing Development Group needed a unanimous vote is spelled out in City of Marquette real estate policy, Akkala said. When selling property to a developer who contacts the city directly with a plan, as the Landing Development Group (LDG) did after the Urban Project cancelled their agreement in December, all commissioners must agree on the sale.
Lavey said he dissented because he preferred to continue working with The Urban Project rather than approve The Landing Development Group, even though he agreed their proposals for Site 1 were similar.
“Quite honestly, there is not a lot of distinction between the two proposals,” Lavey said. “I felt we were in fairly active negotiations with the Urban Project and close to terms when we voted to cease negotiations. Another concern I had was that the Landing Development Group seemed to be actively soliciting us while we were in negotiations with the Urban Project. I received phone calls and materials from them, but I didn’t return the calls or look at the materials because I wanted to remain above the fray.
“Could Urban Project have done things differently? Sure,” he said. “But they were negotiating and that’s their business. I’m satisfied they had the money and could build the project. I felt we could have concluded a deal with them with a take-it-or-leave-it offer.”
Since Lavey was the prevailing vote in the July 14 meeting, he is the only commissioner, according to city charter, who can bring the issue back to the table— something he had not ruled out as of mid-July.
“Do I think this commission, given another opportunity, would have the same result?” he said. “How long do I remain the lone dissenting vote? I’m confident with how I voted, but I have to consider that if none of my fellow commissioners felt there was anything untoward going on, if that’s the gold standard for doing business with the city, then, maybe…”
Tourville said what’s so frustrating is that if you look at the proposals side by side, they are very similar in construction, design and price.
“We had a group saying ‘We’ll pay full asking price, here’s a check.’ and we couldn’t come to agreement on that,” Tourville said.
Members of the Landing Development Group said they were not attempting to subvert the process and only got involved after The Urban Project had terminated its contract and it became obvious the company was not going to comply with the city’s requests for financial proof they could complete the project. The Landing Development Group was surprised the vote wasn’t unanimous, considering the project.
“The whole point is that we’re giving the city exactly what they want—no contingencies, no hedging—it’s exactly as the master plan shows,” said Polzin, who is a local architect also involved in other Downtown Marquette projects. “The city set the criteria. We met the criteria. There was really no reason to reject our proposal.”
If the city issues another request for proposals, Polzin said his group would again participate.
Last month’s meeting was not the first time a majority of commissioners supported a development proposal, yet it still failed. Three years ago, after the first round of solicitations for Founders Landing developers, Marquette-based Centrup Properties was chosen as the preferred company to develop all three sites. Centrup received support from the city’s planning commission and from four of seven commissioners.
In that circumstance, however, they needed a minimum of five commission votes.
Marquette’s real estate policy sets the five-vote minimum when a preferred developer participates in a competitive request for proposals as was the case in 2005. In that circumstance, three commissioners voted against Centrup’s plan expressing concern it would take customers away from existing downtown businesses. Local labor unions also voiced objection to Centrup’s plan to use Moyle Construction, a nonunion outfit, as a contractor. Centrup has since built a hotel in Marquette Township.
Since 2000, the City of Marquette has invested $11 million in the Founders Landing area including the property’s purchase price, site clean-up and infrastructure such as storm and sewer lines, water and power lines.
Eventually the city hopes to sell Sites 1, 2 and 3 for about $4 million and see upwards of $35 million in private investment. If that occurs, the resulting net increase in tax revenue to Marquette would be about $200,000 a year said assistant city manager Karl Zueger.
Akkala said when a parcel is sold, the proceeds will not actually pay down the bond as it has a minimum life of ten years. However, the proceeds can be set aside to make bond payments if the commission chooses to do so in its budget process.
In any case, the lakeshore, Gaines Rock, bike path and other park-like areas adjacent to the lake will remain open to the public—something that is unique, said former city commissioner Stu Bradley, who participated in the early planning of Founders Landing.
“There aren’t a lot of communities in the country that haven’t sold lakefront property to increase tax revenue,” Bradley said. “That’s such a neat thing about Founder’s Landing; the lakeshore is open to everybody.”
MM

Editor’s Note: Extensive documentation regarding the planning and development of Founders Landing can be found at www.mqtcty.org
Additionally, for a historical perspective of the site, check out Marquette Monthly’s May 2005 and June 2005 issues at www.mmnow.com

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