BRADENTON -- The deal to build a Save-A-Lot store near downtown Bradenton is dead, after the would-be developer missed a Dec. 31 deadline to close on $6 million in federal tax credits needed for the project.
The deadline was missed as Milwaukee-based developer Endeavor Corp. was making last-minute demands for more money, according to Planning and Community Development Director Tim Polk.
The city balked at the demands.
The Central Community Redevelopment Agency targeted the corner of 13th Avenue West and First Street for a potential grocery store and other retail in 2006 to fill an area considered to be a "food desert." Endeavor qualified for the credits in 2012, leading the city to conduct a ground-breaking ceremony later that year for the Minnie L. Rogers Plaza, with Rogers' descendants attending.
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That was the last time a shovel turned any dirt.
Though Endeavor qualified for the credits, it never closed in 2012 and delayed the start of the project to the point where rising construction costs surpassed the initial cost estimates. Endeavor came back to the city with more demands beginning in 2014.
Despite some city opposition, Endeavor owner Randy Roth successfully negotiated with the CCRA to obtain a $300,000 startup loan; payments of $45,000 a year for seven years; and for the CCRA to be the master lease holder, meaning it would be responsible for leasing out the remaining retail space in the plaza or pay the developer rent for the empty space.
The CCRA agreed and Endeavor's promised timeline to begin construction came and went again in June 2015, when construction costs rose to $7.5 million due to the continued delays. In November, hope resurfaced with the project taking on a new partner: Kansas City, Mo.-based Honor Capital, a veteran-owned business specializing in operating Save-A-Lot stores in underserved and distressed communities.
Marcus Scarborough, one of Honor Capital's vice presidents, said Friday he was aware that Endeavor was asking for more money, but was surprised to learn that Endeavor failed to close on the financing deal with U.S. Bank, which distributes credits authorized by the U.S. Treasury Department.
"Our role in this was to leverage our expertise in the model of retail business, especially Save-A-Lots, and going in and operating and training staff," he said. "We have been waiting to hear word of the closing, but it never came."
With Honor Capital as a new partner, Endeavor was able to secure $1.5 million in state tax credits. It was enough to fully fund the project, based on the last construction cost estimate, by the Dec. 31 deadline.
Polk said Endeavor's delays once again were followed by higher cost estimates, so it came back to the CCRA with more demands at the last minute.
Under the development agreement, Endeavor would have acquired the property at no cost, but Polk said Endeavor wanted more cash.
"That was unacceptable," Polk said.
"The main thing you want to do when you do a development agreement is to make sure there are no changes that are unreasonable to the CCRA or for the city to have to absorb costs," said Polk. "We are going through the agreement now to find the language that will outline their default on the agreement." At that time, the CCRA will end its tumultuous relationship with Endeavor.
Roth attended the November CCRA meeting, saying, "Everything is in position from the construction perspective and permit approval. We are literally ready to drop a shovel in the ground."
Roth did not return the Herald's call for comment Friday.
Polk said he is preparing a report for the CCRA board that will outline Endeavor's default on the development agreement and will put forward a "Plan B."
"This is still a high priority project for the CCRA and the community we serve," said Polk.
"Grocery store projects are difficult, especially in urban areas with minority populations. That's not just here, that's all over the country in food deserts. I hope the city will allow the CCRA staff to look at alternatives. This is a shovel-ready project. We have all the permits in place and all of the envrironmentals have been done and certified. The only problem we ran into is the developer running out the clock in getting everything prepared."
Though time has expired on the $7.5 million in federal and state tax credits, Polk said there are developers who have financing already available who may be willing to take on the project.
"We worked really hard on this project, and I know it's important to the community and the city," Polk said. "I'm still hopeful that an alternative plan can be developed and hopeful the city council will allow staff to make that happen and make sure we don't let this project fall by the wayside."
Mark Young, Herald urban affairs reporter, can be reached at 941-745-7041 or follow him on Twitter @urbanmark2014.