City council holds work session on Cyprus Groves' proposal

By Ralph Pokorny

Nevada Daily Mail

Nevada City Council members went back to school Thursday afternoon.

Not in a classroom or the city council chambers but at the Walton Park Family Aquatics Center.

The council chambers were being used by another organization that had booked the room before the council decided to hold a work session to learn about the newest proposed agreement with Cypress Groves Apartments to turn the Ozark Building and its associated four acres of property, which is part of the former Nevada State Hospital, into a 56-unit senior apartment complex.

The previous agreement expired when the Missouri Housing Development Commission did not issue the tax credits that were to be used to finance a large part of the renovation project.

The council will tentatively be looking at the project during their June 1 meeting. They have requested that Cypress Groves repeat the presentation they gave the council in October 2002 so the three council members who have been elected since then can see what the proposed project would look like.

"They (Cypress Groves Apartments) say they need a new contract to show possession of the site for the next round of grants," Bill McCaffree, city attorney said.

McCaffree said that last fall when they applied for the tax credits the Development Commission staff approved the project and thought it should go forward, however, another development group from St. Louis that had some influence with the Lt. Governor, who, along with the Governor, is a member of the MHDC, got them to send the money to a St. Louis project.

"My understanding is that MHDC staff thinks this is a great project and should be resubmitted," he said.

McCaffree told the council that this contract proposed by Cypress Grove has a number of the same components as the original contract.

There are two major differences in this contract and the original one Craig Hubler, city manager, said.

The first is that Cypress Grove wants to apply for historic preservation tax credits to help offset some of the added costs incurred by the delay of the project.

This involves hiring a consultant to research the building and do the paperwork to get the building on the National Register of Historic Places.

Hubler told the council this contract requires the city to pay the cost of this work, since the city would still own the building and it could help to find another developer if this project falls through.

The council has indicated in the past they want to see the building renovated, he said.

In recent years the MHDC has placed a priority on renovating historic buildings for new uses. Once a building is on the Historic Register the project becomes eligible for a 20 percent federal historic tax credit and a 25 percent state tax credit, Hubler told the council.

The second major difference would be for the city to pay money that is owed to several subcontractors that were not paid for work they did for an architectural firm involved in the initial proposal.

In projects like this the principal companies involved usually do work on speculation with the assumption that if the project materializes they will recoup their costs.

These subcontractors may not have been aware of this and Hubler said that it only seems right to pay them what they are owed.

This would give the city ownership of the documents that were developed for the initial proposal, which could be of value in the future, he said.

A third change would be to sell the building and property for $250,000 instead of the original price of $10.

Hubler said that this would cover the expenses the city has incurred on this project, such as $50,000 in legal fees. It could also reimburse the cost of the historic preservation study and the payments going to the subcontractors.

The city currently has spent about $93,000 on this project.

This would leave about $150,000 above these expenses coming back to the city that can be used for other purposes, such as off setting the estimated $20,000 per year in property taxes this $6 million development would pay annually, he said.

If this project could have been started as originally planned it would have been completed by now and paying property taxes, Hubler said.

It could also be used for any other expenses incurred by this project.

Hopefully we will have some of the $150,000 left over to help the school district offset some of the tax revenue they have lost out on as well as build some walking trails to tie the Marmaduke Park area to Walton Park.