After months of negotiations, the agreement with 2XS Development, LLC regarding the Midtown District development has officially come to an abrupt end.
Midtown is officially back to square one.
For the past several months everyone in the city held their breath as they waited to see what 2XS Development, LLC would bring to the table in its plans to finally bring Midtown to life. The company was even granted an extension last month to finalize its initial development plan. Then, less than two weeks ago, the city was sent some unexpected news: 2XS was facing its own upheaval.
“Essentially what happened was 2XS split,” City Manger Bill McDaniel said. “They notified me that they were dissolving their partnership.”
2XS was owned by Sam Bauer and Steven Katz. According to McDaniel the duo decided to go their separate ways and thus the city had no choice but to terminate its agreement. The way the contract was written the city had promised to work with 2XS under the control of both Bauer and Katz. A split makes the contract null and void.
McDaniel said both Bauer and Katz have reached out to him and verbally acknowledged that they would like to continue with Midtown on their own. However, the city cannot simply pick one and continue going forward.
So now McDaniel is in the process of finalizing the new RFP, which he anticipates going live either the end of this week or the beginning of next.
“You’re disappointed, but you’re not defeated,” McDaniel said. “If you put this to scale, this is a $100 million deal and you have to expect some hurdles along the way. We are so much further down the road than we ever have been before. Our development agreement is very strong and we have learned so much along the way. When you think about it, this puts us in a great position. Now we can go back and tighten up the RFP.”
With the many changes that have come to the city over the course of the past year McDaniel said he believes that puts them in a better position this time around than they were before. The refined RFP will reflect that attitude. One of the alterations to the RFP this time around is there will be no vision concept included in the write-up.
Though McDaniel said initially the vision concept was there to show one example of what developers could bring to the table he now realizes it was more limiting than it was inspiring. He said he really wants to see the developer’s vision, not a mimic of one example the city has thrown on the table.
If someone hoping to apply wants more guidance or clarification on what the city is hoping to see than he said they will be more than happy to educate them on the overarching vision for the city, however, he wants those who submit proposals to do so with their own creativity shining through.
Technically the RFP is written so that if there is not a developer that wants to come in and tackle the entire 16 acre project, then they can do one section and another developer can be awarded the opportunity to handle another section. It’s not the city’s first choice, McDaniel said, but they’re open to it if that’s what is best for the district.
“I still would love someone to do the whole thing, but even people that want to do the entire area will phase it anyway,” McDaniel said. “No one wants to do all 16 acres at one time. That’s how we end up down the road with a minimum development agreement. We have to find that magic number that will have enough minimum development to justify us handing over the land. Then they will have to finish the rest to support what they did in the first phase.”
The RFP must be out for a minimum of 30 days. Then the responses will be evaluated and will go to the CRA for review. The firm the CRA is most comfortable with will b e choses to take the city down attempt number four to bringing Midtown to life.
Despite the fact that the first three times ended in a failure to launch McDaniel said the city is not disheartened. He said they’ve put too much time and effort into the project to simply walk away.
“We’re going to keep doing this until we get the right developer,” McDaniel said. “And in retrospect I’m happy that this happened at the stage it happened at rather than for us to have pushed it and realized much further down the road that we had the wrong developer or that there were external problems. I’m over disappointment and have moved on to optimism.”
If both Bauer and Katz do honor their verbal agreement and submit bids for the new RFP then there is a chance some time can be shaved off in the long run as the city starts down the process of getting everything in place to finally put a shovel int he ground.
McDaniel said Bauer and Katz have agreed they were willing to work within the original development agreement, which could shave off months of back-and-forth if one of those two firms are selected by the CRA as the best fit for future development. While there is always the chance they may not respond or may not sick to the verbal commitment, if those stars do align it could put the city well ahead the fourth time around.
“Our city and specifically this Midtown development project have a much higher profile now than they did when we first began this process,” McDaniel said. “It’s almost weird to say, but if you’re going to have to start over there really isn’t a better time to do that than now.”
