Coon said the project needs a signed lease from the city so banks can release funds as part of a complicated financial arrangement to redevelop the building.
In addition to the 2,000 square feet of office space planned on the first floor, Coon is planning to develop 16 market-rate apartments ranging from 800 to 1,100 square feet inside the seven-story, Art Deco building. The building was constructed in 1930 by the Middletown Building and Deposit Association.
“We’ve got the bank approvals and we’re waiting for the lease from the city,” Coon said. “It doesn’t work without the lease.”
The project has been delayed due to various issues including water damage from a broken interior fire main on the building’s fourth floor on New Year’s Day 2018 with water running from the pipe for more than 48 hours. Earlier this year, a nearby Duke Energy transformer malfunctioned filling the building with black smoke. Coon said the building was without electricity for two months but there was no other damage to the building. He is targeting completion of the project for late 2020.
Vice Mayor Tal Moon asked what was “fair market value” for rent and wanted to know what the difference would be if the lease were for 10 years instead of five. Council asked Coon to come back with figures using a 10-year lease.
Councilwoman Ami Vitori asked if the city could sublease the first floor as an option. Coon and his partner Joe Parsons said that something could be worked out. He said the $28 per square foot was based on the total project cost.
“I wish I would have known this (could) be an issue six months ago and I wouldn’t have spent the month that we’ve spent up to now,” Coon said. “I really need to know if you want to be a part of this and help move forward with this or if we need to just shutter this and move on.”
Both Moon and Vitori told the Journal-News that they want to see the project completed but want the additional information before making a final decision.
“I want to see if there is a better way to finance this project,” Vitori said.
“It’s an important project and I want to see it completed,” Moon said. “I want to see if a longer-term lease would affect the the rental lease and I am also interested in a sublease. I’m still assessing the deal.”
Coon, who has redeveloped 12 buildings in Hamilton and is involved in the Spooky Nook Sports Champion Mill project, was optimistic after Tuesday’s meeting.
“I haven’t had a project that wasn’t successful,” Coon said. “We’re bullish about Middletown and we need Middletown to believe in itself.”
Council will consider final approval at its Dec. 3 meeting.