Bastrop EDC ditches public-private partnership, seeks $1.8M loan to develop downtown lot

The Bastrop Economic Development Corporation is ditching its plans to redevelop the empty lot at 921 Main Street through a public-private partnership with development and financing group Stone Cobalt. Instead, the BEDC will seek a $1.8 million loan to design and construct the building itself, a decision that was approved by the BEDC’s board Monday. Stone Cobalt was tapped in 2017 to secure financing and develop a two-story building in exchange for ownership of the lot. But the development firm’s attempts over the last year to market the building to two tenants — a step needed before construction could begin — has been unsuccessful. BEDC Executive Director Mike Kamerlander has said since early this year that the biggest challenge in marketing the building is not having a physical space to show prospective tenants, and finding a tenant who would need to begin a lease at an approximate date in the future after construction. Kamerlander said Monday it would be easier to find tenants if the BEDC built the building on its own dime. “Trying to find a tenant that needs the square footage a year from now is pretty hard — it’s a pretty small pool to fish from,” he said. “So, once it’s built, we’d be able to properly deliver it to a tenant within 60 to 90 days.” Kamerlander also said that the BEDC only intends to own the property for a short term before selling it to a private owner. The BEDC’s ownership of the building in the early stage allows it to sign leases with tenants selectively. “We own the entire thing. We can be more selective about who goes in it and what tenant we want to see in the building, which means it could result in a bigger impact with us controlling it than the private sector, at least in the beginning,” Kamerlander said. The board’s approval of this plan means that the BEDC’s contract with Stone Cobalt, which expires at the end of May, will be replaced with a new agreement that will keep the firm as a general contractor for the project. Terms of the replacement contract have not yet been finalized, and the contract will need to be approved by the Bastrop City Council before it becomes effective. Last summer, the BEDC committed to leasing the upstairs space of the proposed building for its staff once the building was built. That meant that Stone Cobalt was left with only filling the 4,500-ground floor retail space. Although the firm came close — having at one point signed a letter of intent with a business and expected construction to begin in November of 2018 — no lease agreements were cemented. The lot at 921 Main St. has stood vacant for about 15 years after a fire burned down a shop at the site in 2003. Six years later, the city of Bastrop purchased the lot as part of a plan to expand downtown parking. The lot was used for special events until the city closed it in 2016 due to structural problems with the adjoining walls. Unwilling to spend money on repairs, the City Council sold the lot to the BEDC for $4 in 2016, when its appraised value was $176,901. For several months, the corporation engaged the community on what the future of the space should look like. Many groups had hoped for a pocket park — a gathering space that would draw visitors to the downtown square and encourage dining and shopping — and others preferred a new commercial building. A study conducted by the BEDC last year determined that the best and highest valued use of the property is to fill it with a building, which would thereby bring a new business downtown, create jobs and add a taxable property to the city’s tax rolls. On Monday, Kamerlander said that the BEDC is strictly tied to projects that contribute to economic development. A park, he said, falls outside of its legal scope. Bastrop Mayor and BEDC board member Connie Schroeder acknowledged how discussions of a pocket park after the city sold the property to the BEDC did not recognize that legal constriction. “The BEDC bought it from the city, a study was done and the park was one of the options,” Schroeder said. “It sounds like in hindsight that study should have been done before it was sold.” If the BEDC wanted to revive the option of a pocket park on the property, it would have to sell it back to the city. The BEDC board would have to approve that sale. On Monday, Bastrop residents Glenn and Deborah Johnson criticized the BEDC’s new plan and asked that the idea of a pocket park be revived. “It’s still a vacant lot, and the reason is there is a tremendous amount of property in downtown Bastrop that is vacant,” Glenn Johnson said. “I don’t know that we need another building.” “Now the citizens are going to pay for a $1.8 million loan to develop the property that the market doesn’t need or want,” he added. Deborah echoed his sentiments and asked the BEDC and city to find “creativity” in finding another solution. A pocket park, she said, “gives us the ability to have more family-oriented events. Right now, if you look at the events that happen downtown, most of them have to do with the bars and restaurants. You don’t have much for families to do because you don’t have space for them to do it in.” The BEDC board unanimously approved Kamerlander’s request for an $1.8 million loan with Roscoe State Bank, though terms of the loan have not been finalized and therefore not been made public. The matter will go before the City Council for a first reading on May 28. Source: Statesman