Developer blames city, banks for failed Main Street project Blaming the lack of financial support by the city of Louisville and local banks, Developer Richard Gardiner has given up on his plans for a $21.4 million office and retail project in the 600 block of West Main Street. Gardiner sold the property - an empty lot next to the Sixth Avenue Building and three adjoining vacant structures - to 620 W. Main Associates Ltd. The partnership, headed by Richard Fenley, paid $1.9 million for the property. Fenley, who owns a real estate company, was out of town and could not be reached for comment, but the group's attorney said the new owners are preparing a development plan of their own. Michael Fleishman, a partner with Greenebaum Doll & McDonald, said 620 W. Main Associates has retained architect Norman Berry as the designer for the renovation of the historic buildings at 618-622 W. Main St. He said most of the 65,000 square feet would be set aside for offices. Eventually, the partners hope to construct a new office building on the lot, which is now used for surface parking for city vehicles, he said. Fleishman said he didn't know when the restoration work would begin and no time table exists for proceeding with the second phase of the development. The Parking Authority of River City, which holds the mortgage on the empty tract, has the right to buy the land if the loan is not repaid or construction does not begin within three years, according to documents filed with the deed transfer. Under the terms of the sale, 620 W. Main Associates is assuming a $712,000 loan from PARC to Gardiner. PARC sold the property to Gardiner. He still owed about $500,000 on the note when he completed the sale to the Fenley partnership. Gardiner, who owns the Normandy complex at Seventh and Main streets, has been active in the Main Street Association. The group was formed in the mid-1980s to promote the rehabilitation of the cast-iron and brick buildings on Main from the Bourbon Stock Yards to Ninth Street. Gardiner unveiled the proposal for his holdings on the south side of the 600 block of Main at about the same time the association began taking shape. In addition to remodeling the existing buildings for offices and small shops, his Park Square Associates also proposed putting up a 10-story building on the vacant lot. In 1989, Gardiner announced that construction would begin before the end of the year. At the same time, he said, he had lined up additional investors and was negotiating a loan from a source whose identity he did not disclose. Gardiner, who said he lost more than $1.2 million on the unsuccessful venture, blamed local lenders and city officials, in part, for his inability to make those plans a reality. Although tight lending restrictions nationally contributed to his problems, Gardiner accused the administrations of Mayor Jerry Abramson and former Mayor Harvey Sloane of operating under a double standard. "Here I had millions of dollars committed. I put myself on the line, and I couldn't get any help," he said. The city "will give $1 million to a Michigan developer or give a Texas developer tenants, but won't help a local developer," Gardiner added. He was referring to loans and other commitments made to the Schneider Group of Ann Arbor, Mich., and Continental Development Corp. of Houston. Schneider is proposing to redevelop the old YWCA building at Third and Chestnut streets. Continental, which has now formed a joint venture with HFH Inc. of Louisville, wants to build a skyscraper on public-owned land on Sixth street north of City Hall. The city has agreed to lend money to Schneider and may build a parking structure nearby. City and county agencies would occupy about 120,000 square feet in Continental's Market Square tower. Both projects have encountered delays because the developers have not been able to negotiate loans from out-of-town financing sources. Gardiner said he, too, was turned down by lenders outside Louisville, but would have been able to tie down loans if local banks had agreed to participate in permanent financing arrangements. Bankers contacted by Business First said they could not discuss specific loan details, but they denied they were unwilling to work with Gardiner or other small Louisville developers. "It is fair to say that we, as well as all the other banks in town, have financed several projects in town based on the acceptable economics of the projects," said Kelly Downard, president and chief executive officer of Citizens Fidelity Mortgage Corp. Noting that Citizens and The Cumberland Federal Savings Bank lent money to Gardiner for his Main Street properties, Downard added, "That is a form of assistance in itself." David Hale, The Cumberland's chairman, agreed. "You can't say there was no support when money was loaned at one time." Abramson referred questions about Gardiner's projects to Barry Alberts, director of the Louisville Downtown Development Corp. Alberts also took exception to Gardiner's claims. "We are more than a little annoyed when someone says the city hasn't helped," Alberts said. Pointing to Gardiner's project, Alberts acknowledged the city was unable to do all that Gardiner had requested - such as guaranteeing tenants and providing construction loans or grants. Gardiner said he had commitments for 43 percent of the space in his proposed development, but Alberts said he could not produce signed pre-leasing agreements. At the same time, he said, steps were taken on Gardiner's behalf. As proof, Alberts pointed to the interest-free mortgage from PARC that has been assumed by the new owners. He also said "when it became clear that the project was in trouble," the Downtown Development Corp. loaned Gardiner $47,000 when he did not have enough money for a loanapplication fee required by a San Diego lender. Alberts also said Abramson intervened to ward off a foreclosure suit against Gardiner by The Cumberland. Speaking of The Cumberland loan, Alberts said Gardiner was in default and a lawsuit, which could have resulted in Gardiner losing control of the land and buildings, was imminent. He said, "The mayor personally called David Hale." Hale said he could not comment on actions taken by Abramson. Documents accompanying the title transfer from Gardiner to Fenley's group that are on file in the Jefferson County Court Clerk's office show that Gardiner was released from responsibility on the Cumberland loan when he paid $800,000. That was less than the amount owed, said Michael Ringswald, The Cumberland's general counsel. He would not disclose the size of the original loan, citing the thrift's policies on customer confidentiality. Asked why The Cumberland agreed to the settlement, he said: "There is a time value with money. If a lender were to get involved in foreclosure, extended litigation or bankruptcy . . . if any of those were to happen, it is often better to recoup less than is owed at an earlier date and put that money back to work." Gardiner acknowledged the city actions as outlined by Alberts, but he said: "That was not material help. There was no help in securing financing or other funds or in getting tenants. The city of Louisville did me no big favors." He also claimed that there was more involved in each of the items mentioned by Alberts, but he would not be specific. Although he has no other development plans in Louisville for now, Gardiner remains involved in a multiuse project in the Boston area. There, he is a partner in the planned restoration of an abandoned hat factory along the Merrimac River. The facility would be transformed into offices, stores and apartments, with a portion devoted to a co-generation energy plant. UNIT VII Research Paper Search the CSU Online Library and find a project that was not completed successfully. Write a three-page summary of the project, including the reasons why you think this project failed. Also, include project lessons learned and record how lessons learned were used to inform projects. How does this compare to what was discussed in this unit? Be sure to use APA format and cite your work. Your summary should be at least three pages in length and will include a title and reference page which are not included in the page count Article citation reference Kamuf, R. (1990, August 20). Developer blames city, banks for failed Main Street project. Business FirstLouisville, 7(3), 1+. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE %7CA8929330&v=2.1&u=oran95108&it=r&p=ITOF&sw=w&asid=ba8bfd4997b9e73414b32b7d8 ed233ac Course book citation reference Kloppenborg, T.J. (2015). Contemporary project management (3rd ed.). Stamford, CT: Cengage Learning