City sets deadline for developer to sign new agreement

TUESDAY, AUGUST 28, 2018 — The Tower City Council, at its regular Monday, August 27, meeting set a deadline of September 24 for Orlyn Kringsted, Tower Vision 2025, L.L.C., to sign a new development agreement with the city to build his proposed 20 unit town home project on the East Two River harbor. The city and Tower Vision 2025 have been without any working agreement since the original agreement expired in October of last year.

Over the past 10 months, since their original agreement expired, the city’s Tower Harbor committee and Kringsted have been negotiating a new agreement but the parties have been at a lengthy impasse. Kringsted has maintained that the city significantly changed the agreement when it sought to have the developer present a letter of credit to assure that the project would actually move forward before it spent upwards of three-quarters of a million dollars on infrastructure necessary to make the project a reality. He said that the city should agree to simply change the dates of the agreement and forgo any letter of credit, however he would agree to a newly proposed pay-as-you-go tax abatement plan which would have the developer finance the infrastructure work privately.

During continued and lengthy discussion at the city council meeting it became obvious that the city council was loosing confidence in Kringsted’s ability to develop a town house project at the harbor. The developer maintained that pre-sales have always been necessary to fund the project and said the delays were unavoidable and due to unfavorable soil conditions at the building site. He maintained that city was still working on developing the plat until recentlyNow that the plat has been finalized Tower Vision 2025 can enter into purchase agreements with its customers wanting to buy the town homes. There are three firm pending purchase agreements Kringsted told the city council and “our realtor has a list of 20 to 30 people interested,” he said when questioned by the council.

“Why has there been no agreement since October 2017?” Alderman Lance Dougherty asked Kringsted, and then questioned if there was that kind of demand for the units. “If you have 20 to 30 names I would think you would be pushing and pushing to renew the agreement,” Dougherty maintained. Instead it seemed obvious to the city council that the project had languished for the better part of a year. Dougherty expressed his frustration with the project and reported that he was tired of hearing that Tower Vision 2025 was doing the city a favor, and that the delays were due to inaction on the city’s part.

The city has born the brunt of the costs on this project to date, however, Kringsted explained that he has had considerable expenses as well. City Clerk-Treasurer Linda Keith said, “All site work engineering has been paid by the city,” Keith said while agreeing that the developer did have his own expences with architects and promotions.

Alderman Kevin Fitton said that he basically agreed with Dougherty. He reminded the council that it has already changed the terms of a $125,000 city loan to the developer which the city made intended to jump start the project a year ago. Changes in the loan agreement terms included postponing principle payments and extending the amortization schedule to meet the developers need for funding. Fitton cautioned that he was becoming concerned that eventually the developer would ask the city to put up construction costs for the project.

The city council also noted that Kringsted would experience a serious conflict of interest should he be successful in his bid to be the next mayor for the city of Tower. The city council questioned how serious Kringsted’s interest actually is in building town homes giving that he has said that he will divest himself of the development should he be elected.

The developer maintained that he would not provide a letter of credit but would agree to the pay-as-you-go tax abatement costs to obtain the necessary infrastructure improvements and that he would be ready to sign an agreement in mid September when his business partner traveled to Minnesota.

Mayor Josh Carlson maintained that the city was firm on what it needed—a letter of credit or agreement on the developer funded pay-as-you-go tax abatement agreement. “The ball is on the developer’s court,” Carlson said, ”And it has been for quite some time.” The city council agreed and unanimously approved setting a late September deadline to receive a signed copy of the agreement from Tower Vision 2025.