City still waiting for hotel developer to buy land; deal could 'fall apart,' mayor says
Butler officials are still waiting for the developer of the proposed downtown hotel to buy the land for the project.
Mayor Tom Donaldson said he was expecting Jeff Schmitz, owner of J.S. Capitol, to finalize the deal to buy the land for the project on Tuesday from the city redevelopment authority.
“He wasn’t even there,” Donaldson said. “I’m very frustrated. It’s unbelievable things like this keep going on.”
J.S. Capitol is to be the majority owner of the 76-room Marriott Springhill Suites hotel. The city redevelopment authority is to own 36 percent of the structure.
However, city officials said the developer is attempting to get more stake in the property before finalizing a deal to buy the land.
“The developer is trying to leverage us in a mistaken belief that the city is in a disadvantage,” Donaldson said. “That’s not going to fly.”
The hotel is expected to join the city’s proposed 239-space parking garage as part of the Centre City project.
Donaldson said the hotel needs to finalize its deal with the authority before the city will move forward with its proposed parking garage to eliminate the risk of the city building a garage and then having the hotel project fall through.
The hotel is to be the primary tenant of the parking garage and pay for at least 50 spaces every night.
“We can’t take any chances,” the mayor said about the garage. “We can’t put the city at risk.”
The city’s deadline to award contracts on the project is quickly approaching. Donaldson said the city has until Sunday to award contracts before those bidders are able to withdraw their offers.
“They (J.S. Capitol)have until Friday or this project will fall apart,” Donaldson said.
Schmitz said in a phone call Tuesday that he was not aware he was supposed to attend a meeting on Tuesday.
“Nobody told me anything about it,” he said.
Schmitz said he has been in talks with Don Graham, the solicitor for the authority, about the purchase agreement.
“I’d like to buy the land,” he said. “We’re working through it.”
When asked if he thinks a deal can be done this week, Schmitz said, “I don’t see why not.”
Art Cordwell, executive director of the authority, agreed that a deal is possible this week.
“Everything just needs to fall into place,” he said this morning. “I think it will go.”
Cordwell said the redevelopment authority is in negotiations with the developer on the ownership stake.
“They want us to take a lesser percentage of ownership,” he said. “It’s something that is part of the board’s consideration.”
Cordwell said he was aware of the mayor’s deadline for the project, but said he did not think the developer necessarily was going to close Tuesday on the purchase agreement.
Donaldson said he believes it is time for the developer to begin moving forward with the hotel.
“In my mind, he needs to start taking this seriously,” he said.
The developer is expected pay about $300,000 for the property at the corner of East Jefferson and South McKean streets.
The authority owes about $296,000 on the property, so it will break even on the sale.
Donaldson said the hotel is a chance for the city and the authority to revitalize downtown.
It’s also an important project for the authority, which has lost money on its Penn Theater and Kelly Automotive Park projects in the past decade.
“This is a chance to help turn the redevelopment authority around,” Donaldson said. “This is a chance for them to generate income.”
Donaldson said city and authority officials have worked to make great strides on the project during the past year. However, he said the developer has not been moving fast enough.
“I’m tired of having meetings that don’t yield any results,” he said.
City council was to have a special meeting this morning that was intended for the awarding of contracts for the $4.6 million garage and to give the go-ahead for the sale of bonds to finance the work.
Donaldson said he will discuss the project with council, then will ask council to recess the meeting. Council can reconvene later to award contracts.
