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CRA to accept settlement of deficiency judgment

February 19, 2013
By CHUCK BALLARO (news@breezenewspapers.com) , Cape Coral Daily Breeze

The Community Redevelop-ment Agency decided to take its medicine from an financial move it made seven years ago and accept a partial settlement from Fifth-Third Bank for a property it agreed to mortgage to a now-defunct developer during its regular meeting Tuesday at City Hall.

The city will receive $46,000 from Fifth-Third Bank to resolve a deficiency judgment after the CRA board in 2006 granted developer AIA Properties a $600,000 mortgage for a boutique hotel that never got off the ground.

The city will also ask the bank to give the city property parking considerations, since the city-owned Haskell building only has two parking spaces, knowing it isn't dealing from a position of strength.

Board members John Sullivan and Chris Chulakes-Leetz were dumbfounded that the CRA, which is now run by the City Council as a result of its financial shortcomings, could have given so much money for such a project.

"We gave them a $600,000 mortgage? I don't want to do that again," Sullivan said. "Mortgages are not in the purview of the CRA. We shouldn't have touched that."

CRA consultant Frank Schnidman disagreed, saying, "The CRA's job is to foster development and assist the private sector."

He said the action taken was seven years ago and that the board "shouldn't look in the rearview mirror."

As for the judgment, the board agreed to take the money, since it will never be whole and since an attempt to get a bigger settlement could result in spending what it could get in settlement on legal costs and even result in getting nothing.

As for parking, Schnidman warned that imposing a condition could make the bank angry and inhibit its ability to sell the lot it owns, Unit 91.

The motion to accept the settlement, along with requesting the parking considerations, was passed 5-1. Chulakes-Leetz disagreed, saying there should have been two motions.

Chairpeople Lenny Nesta and Derrick Donnell were excused from the meeting because they were out of town.

In other business, the board also agreed to hold its future meetings at City Hall. CRA Chairperson Rana Erbrick said the city did its due diligence, but decided the cost of videotaping the meetings and bringing it to the people was cost prohibitive to hold meetings downtown.

"Keep it simple. The chamber is centrally located and it's fundamentally easier to hold them here," Chulakes-Leetz said.

The board also agreed to move ahead on its Stormwater Pilot Demonstration Project and streetscaping on Lafayette Street from Vincennes to Cape Coral Parkway.

The streetscaping would include replacing the sidewalks and curbs damaged from roots with broader sidewalks, new landscaping and road resurfacing, along with conduits for lighting, according to a presentation made by Public Works Director Steve Neff.

The plan would involve "bulb-outs" that extend the sidewalk into the parking lane to narrow the roadway and provide additional pedestrian space at key intersections, similar to what they have in downtown Fort Myers, which are decorated with palm trees.

Construction is expected to begin in July and end in December at a cost of just over $1 million, most of which comes from the Stormwater Pilot Demonstration Project.

The board also approved holding to its commitments to sponsorship to events and send a resolution to City Council concerning the establishment of a CRA Advisory Board, which could be put together by summer.

The next CRA meeting will be held Tuesday, March 26, at 5 p.m., in council chamber, moved from March 19 because several council members will be in Tallahassee.

 
 
 

 

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