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Council transfers Platt pact

Members back motion allowing new owners of relinquished property in failed project to assume its development agreement.

November 07, 2007|By Jeremy Oberstein

CITY HALL — The City Council approved a motion Tuesday that would allow the new owners of a parcel once planned as the home of the ill-fated Platt Project to abide by terms of the previous owners’ development agreement with the city.

Last year, PW LLC, the project’s developer at the time, filed for bankruptcy after defaulting on a $28-million loan. In July, the lender, Fortress Credit Corp., acquired the property, where a mixed-use development with 220 residential units and more than 20,000 square feet of retail and restaurant space was once in the works for the 3400 block of Olive Avenue.

In 2006, the applicant, Rick Platt, and Burbank entered into a development agreement, which included a provision stating that project entitlements granted to Platt were specific to the project, Deputy City Planner Joy Forbes said.

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“This means there cannot be a voluntary or involuntary transfer [of the development agreement] until February 2008,” she said. “Because Fortress acquired properties in the development agreement through the bankruptcy proceedings, this is considered an involuntary transfer and not permitted under the development agreement.”

The council considered two options Tuesday night, one of which was canceling the development agreement.

“Fortress has the right to request a new agreement in substantially the same form as the existing development agreement should the city decide to terminate this development agreement,” Forbes said. “If the city terminates the development agreement, a new one will be executed with Fortress.”

That choice was dismissed.

“Invoking that default would be a silly thing to do,” Councilman Dave Golonski said.

The other option, which the council favored, consisted of transferring the current agreement to Fortress, where the lending company will be bound by the current timelines that had previously guided PW LLC.

Many of those dates are close to expiration, and the regulations inherent in each one will probably not be met, Forbes said.

For example, in February — which will mark three years since the original agreement was signed — the developer must request and receive approval from the City Council for the architecture and design of the buildings.

“The developer has not begun this process, and it is one that will take a significant amount of time to complete,” Forbes said.

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