10/04/2006

Deadline awaits city, developer

Land for project must be turned over by Thursday

By CRAIG McCOOL

mccoolrecordeagle@sbcglobal.net

PETOSKEY — Petoskey Pointe developers are a day away from a deadline to acquire all the land they need for a $60 million condo project.

Contamination concerns at the site have prevented some land acquisition and caused delays that likely will force city officials to take action when the Oct. 5 deadline passes.

Barring a resolution by Thursday, Petoskey Mayor Dale Meyer said the city council likely will hold a special meeting next week to discuss potential fallout.

Developers need two city-owned lots for their project. The city agreed to transfer the land only after all of the other parcels on the block have been acquired.

As of Tuesday, that hadn't happened. County records show land owned by Northwestern Bank has yet to be turned over to developers. Because of previously known contamination there, the property has a deed restriction limiting it to commercial uses.

That goes against Lake Street Petoskey Associates' proposed residential use and presents a financing hurdle.

"It specifically on the deed says 'No residential' (uses). Banks were getting kind of nervous," Elaine Pelc, DEQ project manager for Petoskey Pointe, said in a recent interview.

On May 16, records show, Rick Moffat, a consultant for the developers, wrote an e-mail to officials at AKT Peerless, the environmental firm handling the project, stating the commercial restriction was "putting the entire project at risk."

Developing partner Jim Wilson could not be reached for comment. Peerless principal Brian Eggers told county officials at a meeting Monday that environmental work needed to lift the restriction was completed Aug. 28 and 29.

Robert Wagner, DEQ Gaylord Field Office supervisor, said Tuesday his office has yet to receive such information. Once Peerless submits an official report, the state will have up to six months for review, Wagner said.