A question posed previously by Magistrate Scotty Tracy at a Franklin County Fiscal Court meeting resurfaced last week when a reader asked: can the companies developing downtown Frankfort’s Parcels B and C sell the land once the city builds its planned $8.5 million parking garage?
The short answer is yes.
“Legally, there's really nothing to stop them from doing that if they so choose,” City Attorney Laura Ross said.
But for now, that isn’t a reality that either the city or the developers are pondering, they say.
The city, for its part, says it has received no indication that owner New Frankfort Development LLC, with developing partner CRM Companies has any intention to do so.
CRM Companies CEO Craig Turner, the main point of contact for the project, also says there is “no intention to enter into land sales.”
“From the beginning our plan has not changed,” Turner said. “We intend to develop Parcels B/C to create energy and opportunities downtown. There is no intention to enter into land sales. This project has evolved over the past year and a half and will compliment our Mayo-Underwood office complex.”
The plan, all contingent upon the city’s receipt of a $5.5 million Federal Transit Authority grant, is for New Frankfort to give the city the land needed to construct a parking garage and transit center. The land and the garage would then be owned by the city.
City leaders have asserted that the garage would be “100% public” with no dedicated spaces to any one establishment such as the nearby Capital Plaza Hotel.
One complicating factor if the owner decided to sell the Parcels B and C land is the master development agreement that all parties signed onto in April.
The agreement is legally binding, Ross said, and commits the owner/developer duo to building out the general “project vision.” In April, Ross estimated that to be a roughly $50 million vision.
But the tension between that commitment and the possibility of a sale, if it were to come to that, is unclear. Though she emphasized that the working relationship between the city and developers has been a good one, Ross said that legal action could be pursued if either party failed to hold up their end of the deal.
“If either party were to fail in its obligations under the agreement, then of course you'd have to look at each obligation individually, see how it's written and what exactly it requires — but there are consequences,” Ross said. “There are methods, you know, that in some circumstances, the agreement would terminate if certain occurrences happen. Each party would have the right to pursue any legal action that made sense in the circumstance, dependent on what occurred.”
Ross emphasized that this is the case for any contract between parties.
“Any contract is going to outline what each party is responsible for doing,” Ross said. “So we both outlined exactly what it is the developer intends to do on this project and exactly what it is the city intends to do. With any contract there's always the possibility that one party does not follow through.”
She also said that the agreement works as something of an assurance that the developer does have some “skin in the game,” as some elected officials have openly wondered about the tax increment financing (TIF) district in which both the city and county have agreed to participate.
Turner would not give a dollar amount for how much his company or New Frankfort has invested as of yet, but the companies have agreed to the mixed-use development vision, the extension of Washington Street two blocks north to Mero Street and to split the cost of an FTA-required parking study for the transit center grant.
“We have invested and committed to a substantial amount of money,” Turner said. “We continue to work collaboratively with the city to complete the necessary steps to start construction with our contractor DW Wilburn,” Turner said.”