100 block project on city agenda — again

Potential buyer seeks changes to contract

Palatka city commissioners will hear a proposal for another change to the contract with Riverfront Development Group and the controversial 100 block development.

According to the city agenda, Charles and James Land LLC is listed as a prospective purchaser of one of Riverfront Development Group’s four buildings on South Second Street. 

Charles and James Land LLC is registered to Douglas Hedstrom Attorneys and St. Johns Asset Management co-founders Charlie Douglas and James P. Neshewat. The businesses share an office at 601 St. Johns Avenue.

The building on the agenda is the Moragne Building, 105 S. Second St. The building is the one closet to St. Johns Avenue.

According to city documents, Douglas and Neshewat are requesting “modification of use restrictions in contract between the city of Palatka and Riverfront Development Group to allow for residential or commercial uses in the 2nd and 3rd floors of the Moragne building.”

The contract between the city and Riverfront Development Group says the first floor can be commercial, while the second and third floors are residential. The change Douglas and Neshewat are requesting would allow for potential commercial use on all three floors.

Douglas said he and Neshewat are in preliminary talks about purchasing the building.

“We’re very early in the process,” Douglas said. “We don’t even have a contract.

“This is a fact-finding type of thing.”

When asked if the Douglas Hedstrom office could move to the Moragne building, Douglas said, “Potentially, yes.” Douglas Hedstrom has five offices in five cities, including its Palatka office.

According to an email from City Attorney Don Holmes to City Manager Terry Suggs, Mayor Terrill Hill, City Clerk Betsy Driggers and Planning Director Thad Crowe, Holmes said the request to allow commercial businesses on the second and third floor would require a contract “modification.”

“I am not offering an opinion in opposition to the requested change,” Holmes said. “I’m simply stating that I believe the change would constitute a substantial modification of the ‘conditional use’ that was just approved, necessitating Planning Board consideration. The contract issue could be taken directly to the City Commission.”

Revisions of the contract between the city and Riverfront Development Group are nothing new.

Less than a month ago, Riverfront Development Group asked for first-floor residential in one building and was denid by the city’s planning board and commission.

In the same meeting, city commissioners approved up to 16 residential units on the second and third floors of the four-building development.

The development project has been controversial for years.

The buildings and property were sold to the city in 1998, and many in the city lobbied to demolish the buildings in favor of parking or other uses.

In 2013, Riverfront Development Group purchased the buildings and property for $150,000, plus closing costs. Since then, the development group has gone before city commissioners requesting a requirement to post an irrevocable letter of credit be removed from the contract. That request was granted after the development group conceded to sell the building back to the city for $1 if certain financial concerns were not met.

When Riverfront Development Group purchased the property, Corky Diamond – the leader of the project – told commissioners he planned to build high-end condominiums on the second and third floors, while leaving the first floor available for retail space.

Earlier this year, Diamond said, the second and third floors would be apartments geared toward college-aged students.

Riverfront Development Group spokesman Tom Townsend sent a letter to Suggs about the proposed changes. The letter was added to the city commissioners’ agenda package Wednesday evening.

“We have a deep appreciation for the working partnerships that allows Riverfront Development Group to proceed with the design of up to 16 multi-family units,” Townsend wrote. “With that said, we heard clearly the preference of the city, Planning Board and respected citizens that fewer units would be more desirable.

“We share a working consensus to complete Riverfront Square promptly, and we continue construction as approved by the city. However, we do feel a sense of obligation, as a partner, to offer the city a chance to decide if the requested modification is in the city’s best interest.”

City commission meets at 6 p.m. today at City Hall, 201 N. Second St.

Palatka Daily News

1825 St. Johns Ave.
Palatka, FL 32177
(386) 312-5200

 

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