A proposed extension for downtown developer Bay Plaza Cos. sailed closer to approval Tuesday after City Council members got assurances that Bay Plaza won't be able to grab city land and then leave town.
Several council members had worried that Bay Plaza soon would vacate First Avenue N between Beach Drive and Second Street, and own the street _ possibly selling it someday _ without ever putting up a building.
The current contract allows Bay Plaza to take over the street when it takes out building permits, according to community development administrator Rick Mussett. The intent is for Bay Plaza to create a pedestrian parkway. But City Attorney Mike Davis said that if the council wishes, he will negotiate with Bay Plaza to assure that the street stays in city control until new Bay Plaza construction starts.
"Unless that is clearly shown to us, I will vote against the agreement," said council member Paul Yingst.
The street and other considerations were discussed at a council work session held to clarify points of the new contract. Bay Plaza, which in 1989 signed a final contract to build an upscale shopping and entertainment district downtown, wants more time for the project's next phase, and the council is considering an 18-month extension.
The council voted after a public hearing last week to move forward with the extension request. The next and final step is a March 5 public hearing, after which the council is expected to approve Bay Plaza's request.
Bay Plaza, which is supposed to spend $160-million redeveloping the downtown over the course of 10 years, has built one building, called South Core, and demolished several vacant structures. But with South Core still vacant and the retail industry in turmoil, the developer wants more time before it must start phase two, called Mid Core. If the city, which is supposed to spend $40-million on the entire project, grants an 18-month extension, construction would not have to start until December 1993.
Bay Plaza attorney Robert Kaufman said he has been negotiating with two tenants who may rent space in the project, and said one was a "a little restaurant in town" that needs about 1,500 square feet. He would not identify either potential tenant. He also said that much of Bay Plaza executives' time has been diverted from business lately by the politics of getting an extension and by the press.
The political part appears to be ending. Council members said they were mostly satisfied that the city will be adequately protected by the contract extension. But Vice Mayor Connie Kone still had some points of concern.
One was about 10 property owners in the area who have been waiting for Bay Plaza to buy their land. Their position is precarious, she said, because they don't know when or whether Bay Plaza is going to come through. The uncertainty, they say, limits their ability to sign leases or find buyers.
"I believe that it is patently unfair to have that hanging over their head," Kone said.
Steve Kurcan, director of development and property management for the city, said the property owners always have had the right to sell, lease or develop, regardless of Bay Plaza. In fact, they even could develop their properties as part of the Bay Plaza plan, if Bay Plaza approved, Mussett said.
No property owners have stepped forward to inquire of that option, Kaufman said.