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| 1/12/2009 12:19:00 PM | Email this article • Print this article |
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| AT HAWTHORNE PLAZA, a business development on Missouri Route 13 about a quarter mile north of U.S. 50, Warrensburg, construction continues Friday afternoon. Further work at the retail and recreational center is threatened financially. The developer seeks a compromise with the City Council to allow work to progress. From left, Odessa-based Dowell Construction employees Tim Parsons, Odessa, and Lynn Borland, Oak Grove, lift sheet metal for a job at the center. J.C. VENTIMIGLIA/Star-Journal photo |
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Hawthorne in fiscal limbo
Developer, council fail to compromise on financial issues
Jack Miles
Editor
Warrensburg - Anguished to say no, but resolved to do so, City Council members rejected what amounted to funding help for Hawthorne Plaza.
Warrensburg bond counsel Sid Douglas III of Gilmore and Bell, Kansas City, suggested that city leaders reject Hawthorne's request.
"Does the city of Warrensburg want to be a bank for developers? ... That's the bottom line," Douglas said.
The City Coun- cil voted unanimously during a special meeting Friday to reject a change in the city's agreement governing the 200-acre development on Missouri Route 13 about a quarter mile north of U.S. 50.
Hawthorne Development partner David Edwards argued for the change, which would have provided more time to improve Northern Hills Road and add streetlights. The developer, under the standing agreement, should have completed the work in April 2007.
If the work had been finished on time, then the city would have taken responsibility for project-related bonds and annual payments of $150,000. Payments would have been made based on land assessments coming from the development.
Hawthorne Development wanted the city to back financial notes owed by the developer before completing the road work. If the city extended the notes long enough to complete improvements, the annual debt service cost could have quadrupled, based on a scenario outlined by City Manager Jeff Hancock.
"I am concerned about increasing the city's financial obligation and risk from an original, agreed-to debt of $1,875,000 - or roughly $150,000 in annual debt payments from land assessment - to an annual debt payment of $490,000 to $600,000 that also includes anticipated developer financial pledges and future transportation district sales tax revenues from Hawthorne commercial development," he wrote.
If Hawthorne must handle the debt in a cash-strapped economy, Edwards said, then further work on the project is doubtful.
"That will stop construction out there. ... We have a choice we have to make. We have to choose either to finish the construction on the project," he said, or fund other, non-construction elements related to the project. "We're looking for help. We want to continue to develop out there. We still believe in Warrensburg, we still believe in the project."
Project plans include building a 10-screen cinema, a 24-lane bowling alley and a retail business center.
Councilman Curt Dyer asked, "Has the city fulfilled all its obligations on this project?"
Edwards said the city did so.
Douglas said the law requires Hawthorne to satisfy the agreement with the city. Changing the agreement and extending the timeline for work amounted to helping to fund the project, he said.
"He wants you to be his bank for the next three years to fund this development ... and have the city's credit at risk," Douglas said.
Edwards rejected that phrasing: "We're not asking the city to be a bank and I don't think that's a fair characterization."
Councilwoman Deborah Arwood asked whether some compromise could be reached, but nothing arose at the meeting.
Mayor Donna DeFrain left the door open for Hawthorne Development to return with a new plan to tonight's council meeting, but joined the council in rejecting Friday's proposal.
"We have to protect the citizens and their confidence in what we can do," DeFrain said.
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