A birdseye view shows the city-owned Brady Street lot, looking roughly northwest along the riverfront and out over the city. (Photo provided)

Brady Street lot plan now in works

City works on plan with ‘clawback,’ other assurances
Virginia Ransbottom, Staff Writer

The city of Allegan will be working exclusively with developer CL Real Estate over the next nine months to create a mutually beneficial plan to develop the vacant 101 Brady St. lot. After nine months, the city will decide whether to sell the lot to the developer or not.

The lot sits adjacent to the historic old iron bridge along the Kalamazoo riverfront. The city acquired the property in 2003 to develop a restaurant with the Wagners who own The Grill House, but an economic downturn in 2008 dashed those plans.

Working with the Michigan Economic Development Corporation and the Michigan Municipal League, city staff and the Downtown Development Authority created a new vision for the parcel and released a request for developers in December. CL Real Estate was the only developer that responded by the February deadline.

They pitched a mixed-use building to include ground-floor retail, a ground-floor restaurant, and lodging on the upper floors, including the possibility of a boutique hotel. Depending on a market study, the proposal could include at least four stories.

The “Due Diligence Agreement” the council passed Monday, March 11, includes the city working exclusively with the developer on a mutual plan that, if implemented, would result in “a quality development.”

Other highlights also include:

• CL Real Estate will deposit $5,000 with the city, which will be deducted from the final sale price if the city elects to sell them the lot to develop. If the city and the developer cannot come to an agreement, the deposit is nonrefundable.

• The city will utilize its U.S. Environmental Protection Agency Brownfield Development grants to conduct environmental studies on the lot.

• The developer will conduct a market study regarding proposed uses.

• CL Real Estate and the city will schedule a public input meeting and meet with the city’s downtown development authority as well as the economic development commission.

• CL Real Estate will develop a scalable site plan and elevation drawings for the site and building.

“That means it will be measurable—we’ll know how tall it is, how long the building is and how much green space it will have, etc.,” said city manager Joel Dye.

If the city decides the plan is mutually beneficial and allows an offer to be made to purchase and develop the property, a new purchase agreement will include a clawback clause so if something happens in which CL Real Estate doesn’t develop the lot in a certain timeframe, the city gets the property back.

“Right now you’re just approving a due diligence agreement,” Dye said. “So there’s several milestones the developer must meet within nine months before we agree to discuss selling it.”

Council member Mike Manning asked, “What if they get so far along, it’s starting to go, then we have a skeletal building—do they bring that back to where it was before?”

Dye said the city will not only have a clawback clause but if CL Real Estate invests in the property and walks away from it, the city will have some bonding they’ll have to submit to restore the property back to what it was.

A super majority vote was not needed because the council was not approving the sale of the property, just an agreement to work with CL Real Estate on a proposal.

Council members voted 4 to 1 to continue with the proposal while Mayor Rachel McKenzie and council member Patrick Morgan were absent. Nancy Ingalsbee was the “no” vote, saying she has been opposed to the development all along.

Council member Delora Andrus said she appreciated the parameters set.

“They are very decisive on what the agreement is for in the next nine months,” she said. ”There’s a clawback if sold and we could draw back if we don’t want it sold.”

Virginia Ransbottom can be contacted at vransbottom@allegannews.com or at (269) 673-5534.


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