Farmington city council members narrowly approved a plan Monday to fix up the nearly vacant and blighted Drakeshire Plaza strip mall at Grand River and Drake.
In the 3-2 vote, council members JoAnne McShane and Bill Galvin remained unconvinced that DIC Properties LLC, which purchased the property earlier this year, can pay back the money within six years. Already, the city has adjusted the agreement so that the owners will pay interest-only for the first two years, while they get the center up and running.
City manager Vince Pastue explained that the city is protected, because if the property owner defaults, the property would go through a tax forfeiture process, so the city will recoup the money it invested. He stressed the purpose of the assessment is to ensure the property is brought up to code.
Construction plans will be reviewed by an architect, Pastue said, and the city's building inspector will be monitoring the project. The contractor will not be paid until construction is complete, and the city council will also review and approve it.
"We think we've built in enough areas to cover any problems with it," Pastue said.
McShane and Galvin both wanted more assurance there would be no problems. "Do we have proof of their ability to make these payments?" McShane asked.
"We didn't do what a bank would do," city attorney Thomas Schultz said. "This is essentially the city saying, we're going to get this property fixed up. I don't know whether you have to be 100 percent comfortable with the financing."
McShane pointed out that Plato's Coney Island has left the center and said people at the Subway restaurant have told her they intend to leave in the near future. That would leave only Hungry Howies, which opened in July. In addition, she said she was approached by people in the shopping center industry who had concerns about the precedent the city is setting.
Pastue said the agreement is only in place because of the property violations. "This has to be for a very specific public purpose," he said.
Galvin voted to table the agreement until the property owners could give officials a presentation to show their business plan and how they intend to fill the center and make the payments.
"If you were applying for a $400,000 loan you'd fill out gobs of paperwork," he said. His motion failed on a 2-3 vote, with McShane supporting and Mayor Tom Buck and council members Kristin Kuiken and Greg Cowley opposing.
Pastue said this is "truly the chicken and the egg" situation; property owners can't gauge filling the center at this point, because no business owners are willing to look at it in its present condition.
For Cowley, the decision came down to a simple question:
"If we won't invest in Farmington, who will?"