posted by Mike Madison at 8:08 AM /
First there was this:
More in the Post-GazetteThe economy might well be showing signs of resuscitation, but at least one major project in Mt. Lebanon appears to be going nowhere.
A year ago, the developers of Washington Park, a proposed development of high-end condominiums, businesses and green space, were granted a 12-month extension on the construction deadline.
At the time, Michael Heins, Zamagias Properties chief financial officer and project manager for Washington Park, said "the overall condominium market in the region has virtually dried up."
On Monday, he returned to a discussion meeting of Mt. Lebanon commissioners to say that Zamagias will be requesting an 18-month extension.
"The markets still aren't anywhere they need to be to support that kind of development," Mr. Heins said.
He added that there has been "some activity" but there are no contracts signed to purchase any of the proposed units priced between $300,000 and $1 million.
[I've deleted the continuation of this post that suggested that the Commission has approved the request, because in my haste I was looking at news from a year ago. But stay tuned.]
Labels: washington park, zamagias properties
11 Comments:
I was a huge proponent of this project and on their side with getting a TIF plan approved. New development with new tax-generating residences = more tax dollars to Mt. Lebo's bottom line and a definite improvement to the look and feel of those two acres of land. However, if this isn't going to happen Zamagias should take it's fence down, remove the trailer and do some sort of grading and landscaping. It is ridiculous to have it sitting there like that.
Bob, I fully expected you to argue in favor of St. B's acquiring the land and paving it!!!
One school director told me Bill Matthews and I were the only two people she had heard from that opposed the TIF.
See what happens when you “count noses” instead of using good business judgment.
I suspect that since an extension would be free, why wouldn't Zamagias ask for it? But in the meantime Mt. Lebanon has a chainlink-fenced eyesore surrounding a billboard with a sadly out-of-date message at the entrance to its main business district.
It's instructive that not one of these (probably) overpriced units sold, even in the go-go market of two years ago. Now I suspect the plan for this property involves a big component of "Then a miracle happens..." How long do we wait for that?
I should have signed the comment just sent. I'm
Frank Kelly
Based on the lines at Pamela's, they could probably make good use of that space!
What happens if we deny the extension and take the property back? What happens if we open it back up to other bidders?
It seems like the current developers just told us that they don't have a prayer of developing it for the next several months. Would it be too costly for the community to move on to someone else?
The Mt. Lebanon Economic Development Council (EDC..a muni. advisory board) & Parking Authority (MLPA..owner of the key parcel of original property), with full muni. support, specified in the late 2004 Request For Proposal (RFP)sent to numerous prospective developers that a project must be residential, not commercial/retail. When the only 2 proposals submitted were for a condo project and the other a rental apartment project, the EDC & MLPA selected the condo proposal submitted by Zamagias.
There were three (3) things terribly wrong with this entire affair at what was only the beginning stage :
1)the independent appraisal of the MLPA property by a certified appraiser determined at the front of the appraisal that for a residential condominium project, the property had a market value of $500,000. In the second part of the appraisal, the property's highest and best use was for a commercial (ie. retail related) development for which the property value would be $800,000...the MLPA never openly divulged this.
2)the then Vice Chairman of the MLPA..the entity that owned the property and selected Zamagias as the developer....also happened to be a corporate officer of Zamagias and their designated Project Manager for the development. Even though the muni. had veto power over any/all MLPA decisions/actions, they intervened after several members of the public cried "foul" only to ask the MLPA solicitor to render an opinion on conflict of interest....the response, of course , was no conflict and the muni. accepted it without question !
3)the Zamagias proposal was submitted after the specified due date, and was incomplete (ie. did not conform to the RFP information requirements) ... both of which otherwise disqualifications were waived by the MLPA & EDC. One of the specified requirements in the RFP was that a developer have proven experience in the type of project being proposed...Zamagias had absolutely no...zero...experience in residential condominium development !
We're only at mid-2005 at this point...it only got worse over the years to the present time. This is a total screw-up affair and should result in a recall and firing of all responsible, including County government, whose principal representative was also a member of the EDC, who authorized and facilitated a very questionable TIF financing, which is also a fiasco because Zamagias has received and spent $1.4 million in TIF funds prior to breaking ground based on a condo project that is dead in the water. Zamagias is claiming that the current economy is responsible for their inability to successfully market their project; however, they started marketing this project in late 2005, hired Howard Hanna to do the marketing and sales and got nowhere in 2006 and 2007. Howard Hanna walked away and Zamagias hired Coldwell Banker, with zero results.
The current state of the overall site is the responsibility of Zamagias.....same as the Kossman site fiasco. The 18-month time extension of the development agreement being requested by Zamagias (the 3rd. or 4th. time extension since 2005) has a couple of interesting aspects to it : (a)if not extended by October, Zamagias would have to sell the former MLPA parcel back to the MLPA at the price they paid for it ($500,000)...problem here is that Zamagias has assembled and consolidated the property with two other parcels, which makes it a bit messy; and, the breakup would render none of the individual parcels developable in any significant sense; (b) developers are required by law to record an approved development plan via a "Declaration" with the county within a year of project approval...Zamagias has not done so. The muni. has already granted them at least one extension for recording.
This is another case study of what can happen when governments interfere with the competitive free market system.
Bill,
Thanks for the info in your post. I'm not completely there with you on your last point about government and free-markets interacting. It happens all the time without any problems. As I understand the history of this piece of land, no one in the free market would touch it unless the government sweetened the deal via a TIF.
But I agree with you that Zamagias appears to be in over their heads on this one.
So in order for the muni to get the property back, do we once again have to float a bond?
It seems like getting it back and once again trying to convert it into productive, or at least attractive space, would be preferable to an extension.
Tim,
The other development proposal you refer to was from National Development Corp. (N.D.C.),headquartered in Green Tree and whose development chief at the time was a Lebo resident living on Washington Road. Their proposal was based on rental apartments for middle income tenants, not higher income luxury units of the Zamagias type. Their proposal was not based on or require TIF financing ! When asked in a public meeting by EDC/MLPA representatives if a TIF was offered to them would NDC accept it, the NDC development chief responded "yes, but it would not be a condition of our going forward with the project". Because of the "yes" portion of the overall response, the EDC and MLPA in public and to the Commission subsequently characterized NDC as requiring TIF financing. Zamagias, in their proposal, indicated that TIF financing was absolutely necessary for them. NDC saw the handwriting on the wall, did not protest and quitely walked away.
How do I know this ? I was in attendance at all of the EDC, Planning Board and Commission meetings during the 2004 - 2005 period when all this was taking place (along with another *regular* on this blog); and, I have retained all of the relevant developers and government documents as well as newspaper accounts associated with this then and up to now.
About availability of funds to buy back the now Zamagias-owned property..... the MLPA received $500,000 from Zamagias, and all if not most of this should remain available for a repurchase. The MLPA owned the property free-and-clear, no mortgage. And, the MLPA has very recently received $450,000 for the sale of their North Lot property to Kratsas for a hotel. They should be awash in cash; however,the muni. (EDC and/or MLPA) will undoubtedly claim otherwise without providing proof.
Public, please take note : this is on the Commission agenda for the meeting on Tuesday, Sept. 29th...see the agenda on the muni. website and read the proposed Zamagias (Washington Park Condos.) action, item 6. Worded in a manner that denotes an already behind the scenes straw vote Commission approval.
This is leadership and fiscal responsibility ? I don't think so !
Not surprisingly, the Commission voted unanimously, 4-0,(Dan Miller absent, on vacation)to grant the full 18-month extension with an extremely weak citation of rational & justification.
Learned also last evening that Kossman has also submitted a request for an 18-month extension of their building permit -- for an office building no less, even though they are also supposedly planning to proceed with the L A Fitness development. Sounds strange, but true.
Neighbors observing Kossman now adding fill to prepare for construction of just a parking lot that could serve either office buildings or L A Fitness. Talk about hedging your bet !
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