The Watermark is off.
Bluffton, S.C.-based The Foxfield Co., has backed out of a deal to buy six acres of city-owned riverfront property and develop a planned $100 million office-condominium-hotel-retail project.
Foxfield President Harry Kitchen said the deal unraveled after he asked the city to reimburse him for environmental cleanup. The Augusta Commission wanted to renegotiate his contract first.
Mr. Kitchen said that although he'd already lined up an anchor tenant for the office building, he decided not to invest any more time or money.
City Administrator Fred Russell said the decision to back out was mutual.
"This is as difficult a financial environment as I've ever seen," Mr. Kitchen said, "but we were still willing to move forward."
The Watermark was touted as a centerpiece of downtown redevelopment, the final piece of the city's 1982 master plan. Mr. Kitchen said it would have a 150-room hotel, a 62,000-square-foot office building, 100 condos, a four-story parking garage and the Reynolds Street train depot renovated into retail space.
Under the city's 2006 purchase agreement with Foxfield, the company was to pay $1.85 million for the former train yard, but the transaction stalled last year as the housing market tumbled and financing became scarce.
Though patient at first, commissioners and Mr. Russell become antsy when at least one other potential buyer expressed interest in the site.
Mr. Russell said Mr. Kitchen's request for a reimbursement gave them a chance to revisit the Foxfield agreement.
"He should have done something at this point," said Commissioner Betty Beard, whose district includes the riverfront, "and I think we were kind of calling him on it."
Mr. Russell said the city will reimburse Foxfield $476,000 for cleanup costs, which will come from unspent special-purpose sales tax funds.
When the $1.85 million purchase agreement was drawn up, the city didn't know how much environmental remediation would cost, Mr. Russell said. On top of Mr. Kitchen's nearly $500,000 expense, the city has paid an additional $2.5 million, $750,000 of which former property owner Norfolk Southern has agreed to pay.
Now the city has a contamination-free piece of prime real estate that can be sold for the cost of cleanup and then some, Mr. Russell said.
"I'm not sure that what we have now is a bad deal for the city," he said.
Mr. Russell wouldn't elaborate on the potential buyer.
Downtown Development Authority Executive Director Margaret Woodard said more than one party expressed interest in the pension property if the Foxfield deal fell through.
Mr. Kitchen said he invested an additional $300,000 paid to land planners, architects and engineers. Despite the loss, he said he has the utmost admiration for Mr. Russell, Mayor Deke Copenhaver, Augusta Tomorrow and the Downtown Development Authority.
"We did everything we could do," he said.
Ms. Woodard blamed the economy.
"I am disappointed, but I'm not surprised," she said. "Projects of that scale are just difficult in this market right now."
Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.
Comments
I think we all know who the potential buyer may be....it's going to be a combination nail salon/cellphone store/mexican restaurant/oil change station! Man, whoever struck up this deal is brilliant! That kind of place is EXACTLY what Augusta needs! LOL!
It's a valuable piece of land. Development of the riverfront can lead the way in the revitalization of downtown. Tear down the levee and you will increase land values around the river 10 fold. Visualize restaurants, entertainment and shops right on the waterfront.
Here is a novel idea, Give the property to the DDA, Let them renovate the Depot with TE funds and put in shops and an eatery and then turn the other 5.2 acres into an outdoor entertainment center such as Chastain Park in Atlanta. It is about the same size and would hold about 5,000 people for a concert. Think about Jimmy Buffet play while sittiing on a nice grassy area drinking you favorites beverage.
Well, now there is a site for the new baseball park!!!
My questions is yea the land needed the cleanup but would we have done it had we had question that he was going to back out. Would we have spent the money right now as tough as times are. There should be a portion of his fee I think the $400,000 that should not be refundable. How many programs didn't get funded because of money going to this site that is now not being developed and may have been put on hold at least temporarily.
Okay here we go again---let's see does the city give the land free and clear to Billy Morris or does MCG get it? Oh, we get some type of tax revenue back one day that never comes? I vote for just my opinion's idea at least a lowly business will pay taxes!
They'll probably give it away to Clay Boardman, WriterRick.
"City Administrator Fred Russell said the city will reimburse Foxfield $476,000 for cleanup costs." WHY, if Foxfield had a contract and THEY backed-out ??? IMO this is another example of the way the City Administrator wastes taxpayer money !!!
"When the property is sold, the $476,000 will be recovered, Mr. Russell said." IMO, if the property is not resold and the cleanup costs are not recovered, Fred Russell should be required to PERSONALLY pay it.
"Mr. Kitchen said he has the utmost admiration for Mr. Russell, Mayor Deke Copenhaver, Augusta Tomorrow and the Downtown Development Authority." Of course he does, they just gave him a $476,000 hand-out !
"... $476,000 for cleanup costs, which will come from unspent special-purpose sales tax funds." Where was this uncommitted money when the Augusta-Richmond County Government was trying to balance the budget?
This is perfect...just another reason why folks are not moving their IDEAS, PROJECTS, and BUSINESSES to this area. The DDA has truly blown this one...this was an ideal opportunity to bring something GOOD to this area and get more folks to come here. It has nothing to do with the Cleanup Costs...anyone who purchases a house or buys a lot to build on through a company knows that you have an inspection done or that the price includes clearing, grading, etc. I understand Mr. Kitchens point of view on this...he is making a huge investment...the least the City of Augusta could do is make sure this lot is suitable and clean for immediate building. Wouldn't that also create some jobs down there?? Oh...I forgot...we are not in a recession right now and EVERYONE has jobs!
db16, the first lesson in economics is that governments do not CREATE anything! Money taken in taxes keeps us consumers from creating REAL jobs by buying the things we really need and want.
Oh...Lamb...I understand that completely. Isn't it amazing how something so ridiculous could prevent something so wonderful from happening. One simple word sums up the mindset and direction of our society (i use that term loosely and don't want to blanket everybody) and that term is : GREED!
This is a prime example...looking out for ones own interests and spending anothers money...Just a way of life nowadays!
The lack of comprehension here is astounishing. The owner of a property is responsible for environmental clean-up period. It does not matter if they current owner was responsible for the contamination or not. When you make the purchase, you assume the liability. No developer with a clue would have bought the property without a clean-up. As for the decision not to move forward, projects of this nature are being cancelled nationwide. It's called a recession. BTW, for the totally clueless, the property was purchased through a pension fund initially and reimbursed through sales tax. The funds were not General fund operating monies and could not have been used for that purpose. If you are going to tell people how to run things, first get a clue as to how things work.
points...are you in agreeance that the City of Augusta should be responsible...your words are not clear?
The owner at this point is the City...Correct?
The deal was not made because of the 'unwillingness to reimburse?'
You DON'T MAKE PURCHASES, in any case, of this magnitude without your ducks in a row!
IIRC, the cost of cleanup is the city's responsibility as the current owner. The price to be paid for the property took that into account. Since the developer is not going to take title to the property, he is requesting to be reimbursed for out of pocket expenses. Whether or not Augusta should have purchased the property in the first place is another issue entirely. That decision was made before I moved here.
I gotcha...
No developer in there right mind was going to touch that property before it was cleaned up. Now that the site is clean im sure something will come up. Office/residential/retail is what downtown needs in a compact area. And please tear down the levee. Augusta metro population is 565,000 people. Developers want to build casinos, condos, entertainment, on the riverfront. Please lets help them.
Everybody needs to call their commissioner in their district. And demand the levee be tore down. We are wasting beautfiul riverfront property.
Sprintman, you are off base with your "tear down the levee" mantra. Any housing or retail development that is built on the six acres at the old depot property would be built up like Port Royal or like the Marriott hotel or like the Morris Museum of Art so that they have egress and ingress from the top of the levee. They would indeed have wonderful views of the river. The levee is not the impediment; money (lack of it) and fear (too much of it) are the impediments.
Augusta had to clean the riverfront property up in any case in order to provide marketable title to the new owner. It is too bad nothing was done to improve the place until a deal was signed, because the cleanup pushed the project into dither mode and finally into the financial takedown. At least we have something ready to serve up now. Hopefully we won't get in a money crunch and give it away to the first comer for (fill in your favorite undesirable use here).
I think all you na-sayer and finger pointers need to back off. Lossing the watermark could be a blessing in disguise. Does Augusta really need an additional 60,000sf of office space as well as another hotel. Let the DDA and the city study what would work best for the people of Augusta. I know that I have seen vast improvements in the downtown area and I have the upmost confidence in both the DDA and the city. All of you should too.
You mean the DDA and city did not study what Foxfield was going to do with this property before the original purchase agreement was signed?
Are they telling us that they have spent 3 Million Dollars and all they have to show for it is a vacant lot? What did they use for trucks, Mercedes limousines? BTW I am glad the previous owner agreed to pay 30% of the clean-up. Given our commission they probably could have gotten away with paying nothing.
IFQ1958 tell us where the great improvements are. By my count, we have spent hundreds of millions downtown in the past ten years and it looks the same as it did 30 years ago.
disssssssman, you are totally blind if you think downtown hasn't changed in 30 years. What's your source for the hundreds of million dollars figure?
dissman i think you need to visit downtown. Yes developers have spent hundreds of millions into the cardiac center going up at MCG. The whites building new condos/private parking/ and retail space. The lot on reynolds st was vacant before this project. Now the site has been cleaned up and looks better. And you must be blind because downtown definitely doesn't look the same. You haven't notice the woolworth building, emporium, green building, new library, new judicial center, construction going on downtown. The st. sebastian way has about 6 or 7 cranes itself downtown. Even ray charles could see it.
dissssssman-need I say more. When was the last time you were downtown? Sprintman and points are correct. A lot has changed over that last few years. Both the mayor and the DDA director have great vision for what we, as a city, can become. The loss of the Watermark project may be the beginning of something better. Redevelopment of any city/downtown takes time, as well as money and most important, leaders with vision. I believe that both mayor Deke and Ms. Woodard have that vision. I have been to the meetings, seen the plans. Will we achieve all the goals? Maybe, maybe not, but as a citizen of Augusta, and a patron of the downtown area, we are better today than we were last year and we will be better next year than we are today. Oh and by the way may name if jfg1958 not IFQ1958
The Augusta Riverfront is going to be very hard to develop as long as the levee is there obstructing the view of the river. The levee is no longer necessary with multiple dams upstream. This should be a priority of the city government. "Mr Copenhaver, tear down this wall."
The Augusta Chronicle ©2012. All Rights Reserved.
