Quote:
Originally Posted by Young Gun
Has the council set a deadline on the bond? If the building isn't razed by a certain time when will the bond expire. Hopefully the $500k won't adversely effect their cashflow.
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Well, you've all gotten the good news about the approval of the proposed building. Here are some of the details not reported by the local media:
There are 11 conditions to the construction of this building. Unfortunately, I do not have all 11 conditions yet, but I'm working on that. I do know that condition #2 was this bond, which is correctly reported as $500,000. The brief history of the bond begins with a concern by Historic Harrisburg about the Dunlap Building and the effect of its destruction on the first block of Locust Street. Basically, this was driven by Councilman Dan Miller, who said that the goal was not to loose the building until the City was assured that the 18 story building would actually be constructed. To mitigate that concern, the developers suggested placing their demolition permits into 'escrow' until they were ready to go. Linda Thompson, Council President, supported this as did other members of Council. However, Mr. Miller seems to have rejected this idea and took advantage of the "fury" at losing the Dunlap building, whipped up by the Patriot News, to force a delay in the project. He basically rejected the escrow of the demolition permits, as proposed.
Then the developer suggested a $250,000 performance bond, payable to the City. The City did not -
and still does not - have an ordinance requiring the posting of such a bond. It is noteworthy that the developers proposed the posting of this bond
voluntarily. But again, certain Council members bulked at the bond amount, including Councilwoman Susan Wilson, despite the fact that the City had no ordinance requiring a bond payment if the project fell through. Apparently, the members of the Economic and Community Development Committee met and decided to raise the required bond amount. At the Council meeting at the end of March, with one Council Member absent, Council deadlocked on the project, voting 3-3 to require a bond in the amount of $1,000,000, far in excess of the value of the Dunlap building. This, in my view was too much and I wrote Council and told them they were being irresponsible in delaying this project.
Council again delayed approval at their April 1st meeting, tabling action on this proposal until the Economic and Community Development Committee could meet and decide this. At the next meeting of the Economic and Community Development Committee, the bond proposal was reviewed and the $500,000 figure was bandied about, eventually making it into the resolution voted on at the April 8th meeting. Council President Linda Thompson noted that the developer voluntarily agreed to the $500,000 bond, in order to rid the project of any further delays and to overcome the controversy created by the local media. In answer to your question, YoungGun, I don't think this will hurt their cashflow. Remember that a bond is usually secured for a fraction of its payable value, just like an insurance policy.
I do see Council's point in approving this bond, but it was - in my view - not very professional to hold these local developers to a standard that did not exist before. Basically, Council decided to change the game in the middle of an application. Frankly, in my view, Council only decided to approve this project after two events: the developers agreeing to the $500,000 bond and the Administration's Housing and Community Development Director, Dan Leppo, advising Council that they could not legally impose a change in the application requirements in the middle of the approval process. To do so, would have been a violation of PA State Law.
That said, these developers have been before Council three times before:
* In 2002, they proposed a 12-story building on this site;
* In 2004, they proposed a restaurant, which eventually became the current Tom Sawyer Diner;
* In 2008, they have proposed the 18-story building, as you've seen it outlined on this forum and in the local media.
So, you might understand Council's skepticism over the proposals from this developer.
And one more point: after all the controversy, delays and problems, the developers now say they will begin to lease this space to interested parties. I thought that they already
had interested tenants!
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And truth be told, I don't really like going back to HBG much (you could probably count on one hand how many times a year I go back since moving in mid-'06), so I don't get to see much firsthand anymore either...
until i am physically able to be back in harrisburg later this summer (the current plan) --- i am pleased that so many of you took the time to tell our elected officials that harrisburg wants "change" and we encourage development and investment! we need to continue telling the mayor and city council that progressive projects that expand the taxbase - and skyline - of harrisburg are not only desired, but critical, to the continued growth of our downtown. 
pipedream projects @ 210 N 2nd St
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