Dearborn Council Considers ‘Preferred Developer’ Extension for Downtown Project
Sunday, December 6th, 2009
The Dearborn City Council could take a vote as early as this week on whether to extend a preferred developer’s agreement with local investor Hakim Fakhoury.
The preferred developer’s agreement is for a major development project on the block north of Michigan between Military and Howard. The agreement, which gives Fakhoury exclusive development rights to the city-owned parking lot, is set to expire at year’s end, according to the Dearborn Times Herald.
Fakhoury, who already owns many abutting properties, tells the Times Herald that the project would include an Emagine! movie theater, retail suites and condominiums or student housing.
We wrote about this proposed project here a few years ago, before the economy took a nosedive.
City Council President Thomas Tafelski tells the Times Herald he is concerned about how much Fakhoury’s proposal has changed since it was first introduced more than four years ago.
“If the project warrants additional time, then that’s something the council must consider,” Tafelski tells the Times Herald. “But I will also say if the project doesn’t have proper financing, proper direction or the proper modifications, then maybe we should shelve this project and seek new proposals or just let Mr. Fakhoury develop the properties he already owns along Michigan Avenue.”
One of the main sticking points is over parking, the Times Herald reports below.
When the agreement was first signed, city officials indicated they would be willing to build two parking decks to support the project. The tentative plan called for the city to build the structures and then recoup the costs through tax revenues generated by the accompanying developments.
The same model was used by the city in developer Burton-Katzman’s West Village Commons, directly across the street south of Fakhoury’s project, but has since shown that it exposes the city to too much liability. Since the WVC decks were built in 2005, the city has been forced to cover about $2.5 million in revenue shortfalls caused by Burton-Katzman’s failure to complete several portions of the project that would have been contributing to the bond payments.
But Fakhoury said he is unfairly being punished for Burton-Katzman’s misdeeds. Fakhoury said he purchased additional properties to help facilitate the project with the understanding that the city would build the decks. Now he’s stuck holding properties that he said are liabilities — without the help of the larger project to generate economic activity.
“I have done everything they’ve asked of me,” Fakhoury said.“I’ve brought them letters of intent (from prospective tenants), I bought the buildings, and now they don’t want to do what they’re supposed to.”
To read the entire Times Herald story, click here.