05/14/2006

No builder, no start date for condo project in city

Petoskey Pointe development was upheld a year ago

BY CRAIG McCOOL

mccoolrecordeagle@sbcglobal.net

Record-Eagle/Craig McCool
Peter Lambeth owns Coffee & Connect in downtown Petoskey, adjacent to the planned development site.

PETOSKEY — A construction start-date for a $60 million, downtown condo development has again been delayed, the second postponement in as many months.

Two years have passed since the public-private project was introduced at city hall — and one year since it was upheld by voters in a referendum — yet solid construction timelines for Petoskey Pointe remain elusive.

Developers pledge to begin razing buildings in the coming weeks to make way for a 160-unit condominium-hotel, but acknowledge they haven't inked a builder. Nor do they officially own all of the land needed for the project.

National City bank approved financing just this month, based on the number of condo units marketers managed to pre-sale, said David Jankowski, a partner in the Farmington Hills-based developer, Lake Street Petoskey Associates.

"National City is financing all of it," Jankowski said last week. "We just received information that (pre-sales) number is sufficient to procure the loan."

Petoskey real-estate agent Wally Kidd, who is handling much of the marketing, would not confirm the loan-approval. Kidd said the "magic number" was 70 units.

"But that's a moving target" because some units are more expensive than others, he said. As of this week, about 45 condominiums have been sold, he said.

In December, Jankowski told the Record-Eagle about 35 condos had been spoken for.

Asked last week who would serve as the head contractor, Jankowski said: "We're not completely sure."

As planned, Petoskey Pointe will take up an entire city block, bordered by U.S. 31 and Petoskey, Lake and Mitchell streets. There are nine parcels in all. The developers currently hold deeds to just four of them.

Two belong to the city of Petoskey. Three, including two of the largest, still belong to Northwestern Bank, county records show.

Jankowski said the developers have a purchase agreement for the Northwestern Bank parcels predicated on project financing approval.

"Part of our agreement with (Northwestern Bank) was that we would achieve the financing, which we have done, then we would move forward," Jankowski said. "We're probably looking to close within 30 to 45 days."

Once Northwestern Bank hands over it's property, the city will follow suit, said city planner Amy Tweeten.

"It's in the development agreement (that) the city land transfers when all of the other properties are transferred," said Tweeten.

Before construction begins in earnest, five existing buildings must be razed. Developers first announced that demolition would begin in April, then said May. City officials Wednesday said demolition would not likely take place before June.

"There was a tentative schedule, but it's been pushed back," Tweeten said. "Likely it will be after Memorial Day."

Meanwhile, downtown business owners are getting antsy. Some worry how the construction — expected to take two years start-to-finish — will affect business. They hope the heavy construction might be put off until after the busy summer tourist season.

"It's going to be dusty, and trucks and construction noise," said Kathy Goodwin, who manages a retail shop downtown. "I believe it will affect business to some degree."

Others, like coffee shop owner Peter Lambeth, plan on catering to construction workers and would like as much notice as possible, in case they need to alter ordering patterns or hire additional help.

"It'd be nice to have more than one or two weeks notice," Lambeth said. "We've heard up to 100 construction workers there at certain hours during the project. It'd be nice to able to plan for it."