revisits development agreement with Rock Garden Holdings

PATEROS – In a special meeting convened on Monday, Oct. 31, a quorum of Pateros City Council  members addressed a new proposed timeline from a client in default of development of a block of commercial property that is entering its third year of delays from its original 2019 projected completion date.

In September 2017 the city received an offer from Rock Garden Holdings, LLC, to purchase seven vacant lots in the downtown core that the city had wanted to see developed for many years. The property involved is described as Lots 56-63 of Block 7, Pateros replat #3 located along Commercial Avenue. The purchaser, Chris Anderson, advised council members the development called for three bottom floor commercial units and eight top floor residential rental apartments.

Each council member reviewed and commented on the conceptual design plan and the agreement was referred to the city attorney to draft a Real Estate Purchase and Sale Agreement with recommended changes.

In February 2020 Anderson appeared before the council regarding delayed development of property originally scheduled for completion by November 2019. Anderson requested a two-year extension to the agreement and offered to negotiate a penalty fee that was originally set at $1,000 a month during the default period. At that meeting council member George Brady expressed a past problem where purchasers of city property simply held the undeveloped parcels while the land value increased for a profitable resale.

Last August 1, city attorney Scott DeTro with council approval sent a letter to Rock Garden Holdings’ attorney with the following stipulations:

1. The lien amount plus interest and costs accrued to date will be paid to the city by the end of October 2022.

2. Client will provide a development timeline or schedule.

3. The structure will be completed by October 31, 2023, unless construction is delayed through no fault of the client.

4. Submission of monthly progress reports to city clerk advising project status.

5. Another default and the property will be conveyed back to the city.

Anderson submitted a letter to Mayor Kelly Hook together with his proposed timeline on Oct. 26, requesting a revised development agreement. Among the 23 new deadlines in Anderson’s timeline are:

• Good faith payment delivered by Dec. 15, 2022.

• Construction drawings submitted by May 22. 2023.

• Foundation completed by July 3, 2023.

• Building framing completed by July 24, 2023.

• Rough in plumbing/HVAC completed by Oct. 4, 2023.

• Rough in electrical completed by Oct. 25, 2023.

• Insulation completed by Nov. 1, 2023.

• Drywall completed by Nov. 22. 2023.

• Painting completed by Nov. 29, 2023.

• Site work completed by Nov. 22, 2023.

On the heels of the completed building, tenant leases are projected to begin on Jan. 1, 2024.

The council authorized the city attorney to continue working on the development agreement making necessary changes to conditions in the original August 1 letter. When completed by the attorney the amended development agreement will once again come before the council at its monthly November meeting for review and approval.