|The deadline to submit bids to acquire the VA homes in Tower Park was Monday./FTM file|
The VA homes redevelopment project hit a major snag, and city officials were left puzzled, when not a single developer offered a bid to acquire and rehabilitate the residential properties located in Tower Park.
According to the city's own timeline for the project, the deadline to submit a bid was Monday by 2 p.m. -- a deadline no one chose to meet.
The city received approval last August from the Dept. of Veterans' Affairs to go ahead and sell the properties to a developer, after spending nearly a decade working with the federal agency to hammer out terms and conditions for the sale.
But when it finally came time to put the homes to market, no one showed.
As recently as last summer's approval, developers were still expressing hesitation at the project's viability, and, for many, that's because any developer would be required, per federal regulations, to preserve the homes' historical accuracy. The homes are currently listed on the National Registry of Historic Places.
Throughout the process, beyond federal requirements, the city has also remained steadfast in its commitment to the buildings' history. "We are most interested in keeping the integrity of the homes. When people walk by, we want them to see what visitors saw 100 years ago," said Debbie Buckley, Fort Thomas Economic Development Manager, to FTM shortly after the agreement was reached.
Multiple factors have been working against the VA homes as seeming like a worthwhile investment. The value of the properties has diminished from nearly $3 million in 2007 to just over $500,000 this past year, according to figures FTM has acquired from the city.
City Administrator Don Martin has also estimated the historical restoration costs at just over $900,000, which does not include the installation of new utility lines and other infrastructural necessities that re-populating the homes will require.
Currently, the city has the minimum bid set at $900,000.
In 2011, when bids were solicited and nothing was returned, the city talked to developers about why that occurred at they said the biggest barrier was price, specifically getting under the $1 million mark.
"We were surprised that the city did not receive any bids this time. Setting the minimum bid under a million dollars was something that we felt would have developers lined up for - and quality contractors at that," Martin said.
"We are not to the point where we are ready to wash our hands of this and we have to be close to the point where this is still going to be profitable for someone."
The next step, Martin said, will be to call developers and start identifying the obstacles that prevented potential bidders from taking action.
When asked when it would be time for the city to walk away from the VA homes, Martin responded, "When it becomes something that takes a big chunk of the taxpayers money and even then there may be too many unknowns."
But the commitment to preservation, at least for now, seems to be the biggest factor keeping would-be developers at bay.
"With any historical development, there are going to be hurdles," Bill Kreutzjans, of Ashley Developers, told FTM shortly after the approval was granted. Ashley had initially expressed interest in developing the project back in 2011.
"Back (in 2011) the abatement required and those historical guidelines, as well as the price, made it very difficult to work out. We'd like to pursue if the city were in a position to incentivize the deal," he said.
Mick Kennedy, President of Kennedy Homes, was also one of the developers to submit a letter of interest three years ago. For him, the VA homes is starting to feel like a charity case. "Unless you have someone like Bill Gates that's going to come in and see this project through, there's just no way," he told FTM last fall.
Mark Ramler, owner of Mansion Hill Properties, said he is disappointed but not surprised the city did not receive any bids. "It's a huge project, and an incredible amount of risk for any single developer to take on," he said. "Unless the city is willing to structure the deal differently, and work with multiple developers, then I fear they’ll never find anyone to touch those houses."
Ramler also mentioned that having to develop all ten properties at once -- which the city currently requires of any agreement -- could be posing an obstacle to developers.
"If the city wants to see these homes saved, then they need to assume some more of the risk. The city's ideal scenario to find a single developer to take on this project has not panned out, so its time to get creative and look at alternative options to save these homes," Ramler added.
Martin said he hopes to have a revised bidding plan to present city council next month.
Story written by Pat Lafleur and Mark Collier