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Developer wants big New Port Richey loan to fix Main Street Landing

NEW PORT RICHEY — The developer of the stalled Main Street Landing project has sent the city a proposed contract promising to finish the exterior of the building in exchange for a loan and incentive package for potential commercial tenants.

The draft contract, the first circulated since the project shut down nearly three years ago, comes five months after the City Council first threatened legal action over the condition of the construction site at the gateway to the downtown.

Under the terms of the proposal, the city would loan developer Ken McGurn as much as $1.45-million, which would be disbursed only after he met certain construction milestones. The proposal would also require the city to provide up to $250,000 in matching grants to lure businesses to the project.

McGurn did not attach a proposed construction schedule to the contract. He could not be reached for comment on Thursday.

Officials, meanwhile, said they were glad to get something in writing but still had plenty of questions.

City Manager Tom O'Neill called it a "draft with talking points" but said "I consider it progress."

Back in December, O'Neill informed council members that their first legal step was to inform McGurn that he had defaulted on the 2004 contract that promises a $1.25-million city grant if he finished the project by March.

But McGurn took a pre-emptive response: He opted out of the 2004 contract, citing a clause that let him walk away from the deal if finishing the project became financially unfeasible.

Council members put off taking legal action to see if they could work things out with Main Street Landing. In March, McGurn presented council members with three proposals. They rejected two: Have the city buy the 3-acre property, or help McGurn with the costs of sealing off the unfinished commercial building and painting murals on it.

Council members were also cool to his proposal to loan him up to $1.45-million over two years to finish the shell, though they expressed some interest in a request to use the existing grant program to help entice new business tenants to the project.

McGurn's proposal does not require him to post a performance bond. The 2004 agreement had required him to post a bond, but he never did.

And city officials never followed up to enforce the requirement.

O'Neill, who was not city manager at the time, called it a "dead issue" since McGurn walked away from that 2004 agreement last year.

He said a key difference with McGurn's latest proposal is that the five-year loan is contingent on his meeting a certain construction schedule.

That schedule is what Mayor Scott McPherson said he's interested in seeing.

"A big issue for me is going to be the construction milestones," he said. "I don't want to give a lump sum and just cross our fingers."

The city has already budgeted $875,000 for Main Street Landing for its obligations under the earlier agreement. O'Neill said any public money that would now be spent on the project could come from that pot. He said the planned refinancing of a note used to pay for the Hacienda Hotel and the First Baptist Church could also free up some money.

Jodie Tillman can be reached at [email protected] or (727) 869-6247.

Developer wants big New Port Richey loan to fix Main Street Landing 05/14/09 [Last modified: Thursday, May 14, 2009 8:31pm]
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