To lease or not to lease?
Council approves agreement with developer for temporary parking
A downtown developer asking for parking space on city property drew discussion at Monday’s meeting of Warren City Council.
HIY, Inc., whose president is Ruzhdi Bakalli, petitioned the city for parking on a city-owned gravel parcel at the base of Liberty Street in between the parking garage and the former Loranger building.
City Manager Nancy Freenock told council on Monday that HIY, Inc. has obtained part of the building “to facilitate development.”
She said that Bakalli asked for a lease agreement to the parcel “for tenants and customers” and said the agreement was initially brought before council in July but tabled when council expressed concern about the terms.
“I have two issues,” Mayor Maurice Cashman said. “One, it’s not paved,” raising concerns about its use in inclement weather. ” Two, it’s only temporary. What’s going to happen when we take the lease away… (We will) have people used to parking there. Where are they going to go?”
Freenock suggested the parking garage as well as the lot adjacent to the building.
“If we are going to be developing down there, (I) want to keep the city’s options open,” she said. “At this point, he doesn’t have anyone that would park across the street.”
She noted that the city would not be plowing the lot and Department of Public Works Director Mike Holtz said that “if it gets busy and it gets plowed, it’s not going to survive the winter.”
Solicitor Andrea Stapleford suggested that there may be a new agreement in place by then.
“Instead of trying to anticipate every single situation that could come up, (we) have the right to terminate,” she said.
Councilman Phil Gilbert noted that the lease termination notice is four months.
Freenock acknowledged the concerns that said that “it’s a little too far down the road.”
“It’s a concern of council,” Cashman said. “Whether it’s a concern of him matters less.”
“We’re kind of putting the cart before the horse,” Councilwoman Elissa Davis said. “In the future, we have many options as far as developing that area.
Freenock noted that the zoning ordinance requires parking lots to be paved.
“If council determined (it is) going to be a permanent parking lot, the rent we’re charging wouldn’t justify the city paving or re-graveling the lot.
“I’m not sure it’s usable now,” she added. “He’s going to have some construction equipment coming in and out of there
Councilman Gregory Fraser noted that a four month termination notice is “fairly short.”
“He did was a longer lease and I said no,” Freenock said.
“That’s our way of controlling the future of the lot,” Fraser added.
Cashman suggested there should be a maintenance element to the lease.
Gilbert asked whether the lot would be torn up and Holtz said that the water company used it as a staging area for a six-month project but said that was during the summer months.
“We’re just creating ourselves a problem by passing that as is,” Cashman said.
Fraser noted it was a short-term problem that the city can extricate itself from and Cashman argued it would be “better to do it right at the beginning.”
“His intent seems to be to use it as a construction lot for the next six months to a year,” Fraser said, explaining that it doesn’t appear the intent is to use the lot for customers.
Options to repair the lot – including tar and chip – were discussed.
Freenock noted that the funding streams the developer has utilized would not permit him to use those funds for rehabilitation of the lot. He “would have to come up with the capital on his own.”
The lease agreement was then passed 6-1 with Cashman voting in opposition.
Freenock previously told council that she had a letter from the Commonwealth Finance Agency who is “prepared to loan HIY, Inc. over $2 million for rehabilitation of the building.” She said that also includes a grant amount of $455,000.
“This is a prime piece of real estate,” Freenock said. “I would have to say, dealing with Mr. Bakalli, he is right on the development he has done in Warren. (He) has a plan to fully develop this building (and) put it in a shape to rent out various spaces, put it in a shape to rent out various spaces (and is) in conversations with a number of agencies to do rentals. He has a vision for it. The state wants this project to happen.”
“For this project, the state approached me and asked ‘can I develop the project?'” Bakalli previously told council. “We are, I think by the end of the year, will close on a $2.2 million loan.”
Bakalli said that once completed, the building “will be a prime commercial space” as well as offer office, hospitality and retail space.
He said completing the project will “make a big difference to the downtown area of Warren (and) a big benefit for the City of Warren.”