|By John Sharp, Journal Star, Peoria,
Ill.McClatchy-Tribune Regional News
Sept. 07, 2011--PEORIA -- City officials appeared initially unfazed Tuesday by a letter sent by an attorney representing the developer of the Marriott Hotel project threatening a lawsuit if a city-endorsed redevelopment agreement is not honored.
The letter, sent by St. Louis-based attorney David Richardson of Husch Blackwell, says City Manager Patrick Urich's Aug. 31 letter to Gary Matthews of EM Properties in East Peoria "does not constitute a lawful cancellation or termination of the redevelopment agreement" and Matthews is "prepared and will pursue all remedies" if it's terminated.
"I think without getting into the point-by-point they have, I think our letter clearly outlines the city's position," Urich said Tuesday, referring to the Aug. 31 document informing Matthews of the city's intent to cancel its obligations with developing the $102-million Marriott Hotel project where the Hotel Pere Marquette, Big Al's and adjoining businesses currently sit.
Mayor Jim Ardis, in an email statement, said he is simply looking forward to the City Council's discussion on the matter at its Sept. 13 meeting.
The council will vote on whether to terminate the agreement it approved in May 2010, dedicating $37 million in bonds to assist in the project's development.
"The bottom line is this has gone on far beyond the time it was supposed to end," at-large City Councilman Eric Turner, a previous proponent of the project, said. "We're at the point now where we have to make a decision and move on. (Matthews) wants to bring it back to the council. How long do you extend it? Do you hear him out one more time, etc? I think we're willing to do that. But if we extend (the agreement) or not, that will be up to the (council)."
Urich's letter expressed frustration with a lack of information the city received last month from Matthews about the banks involved in the project's financing, a lack of fees being paid, overstatements in tax credits the project is getting and a lack of disclosure on other people involved in the project's financing, among other things.
Richardson's letter rebuts Urich's on several points:
- He said EM Properties, according to the agreement with the city, does not have to secure a commitment letter from the chief lender in the project, National Real Estate Advisors. Urich's letter blasted Matthews for sending a letter from National Real Estate Advisors that was not a sufficient "evidence of financing."
- It is not necessary for EM Properties to provide the city with copies of term sheets disclosing other financial lenders involved in the project. Urich's letter said EM Properties had not disclosed the identity of the financial institutions involved, aside from National Real Estate.
- An inaccurate $96.6-million figure for the overall project's cost was provided by Urich. Richardson said the project should not be "unreasonably withheld" based upon faulty statements.
- Tax credit information provided by different organizations such as Chevron are "industry standard for any commitment lender from a tax credit investor" for a large-sized project. Urich's letter claimed the tax credit information did not provide the financial information he expected.
"The redeveloper reserves each and every equitable right to enforce the terms of the redevelopment agreement and to seek all damages and attorney's fees incurred by the redeveloper as a result of the city's material breach of the redevelopment agreement," Richardson concluded.
John Sharp can be reached at 686-3282 or firstname.lastname@example.org. Follow him on Twitter@JohnSharp99.
(c)2011 the Journal Star (Peoria, Ill.)
Visit the Journal Star (Peoria, Ill.) at www.PJStar.com
Distributed by MCT Information Services NYSE:MAR,NASDAQ:MATW,