News : City Council & Hobarts debate the future of Braille School Developer's Agreement

At a work session held with the Vinton City Council with Jim and Jimmy Hobart the representatives of Vinton Braille School, LLC and Hobart Historical Restoration (HHR) PM, LLC (Jointly referred to as "Hobart") the meeting opened with Tami Stark-Mahood leading the meeting.

On the agenda was to discuss the Developer's Agreement (DA) which Hobarts hold for the former Braille School property. The Hobarts were asked to share their plans for the requested extension of the agreement. They were requesting that the original agreement be extended. Unfortunately, they said that things hadn't been moving as quickly as they had hoped that it would and that the agreement was to be a living agreement as they worked on the project.

Hobarts said that the status of the project is that the roads should be completed by the first of January. There is a water main that has to be lowered.

Stark-Mahood said that there were several things that haven't been accomplished so far on the project and asked what was on Hobart's list of priorities. Hobarts shared that there is a contract coming down the road for a potential USDA building to be constructed in Lot 34. They said that with the opening of J Ave. this opens seven more lots for residential construction, subject to a subdivision approval, as well as open up commercial lots.

Problems that Hobarts have faced include the work beginning just as COVID-19 hit. This caused several delays in construction, supply chains were interrupted, and workers became scarce as well as the cost of the supplies increased. They stated that the company alone has paid $280,000 into the county in property taxes alone, and the homes will soon start paying taxes, as well as the Dollar Tree/Family Dollar.

City Attorney, Doug Herman said that according to the DA, Hobarts are supposed to complete minimum improvements which should include but are not limited to:

-residential lots to construct a four-plex units, 12 lots

-one commercial lot to be used for a gas station or strip mall

-Palmer is to be a senior housing center

-Renovation and rehab of:

Old Main

Rice

Cottage

Hospital

Barn

Maintenance Building

Rec Center

As part of the project Hobarts have received $2M in federal funds toward the project. The issue then becomes interpreting the agreement.

On the one hand, the city believes that the DA says that Hobarts will "invest" $9M of their own money into the project, while Hobarts believe that the DA says that they will "cause" $9M in improvements. 

Herman explained that the rebates are tied to the value increments added on the commercial lots..not the residential lots. Lots 30, 33,34,35,36, For example, if the lots bring in $100,000 in tax revenue, Hobarts would qualify for $50,000 for the year IF they spent the $9M by January 1, 2025. This would be paid out of the TIF (Tax Incremental Financing). Later during the meeting the attorney who drew up the agreement joined the meeting via phone and agreed with Herman's assessment that the DA laid out the $9M investment by Hobarts and that it was part of the quid pro quo.

Jimmy Hobart stated that nothing would have happened on the property if their company hadn't stepped in to take it over, subdivide it, and sell the lots. Jim Hobart believes that they have caused the value to increase to $9M stating that putting water, sewer and the streets in cost $2M.

Palmer Hall - When questioned if it had been converted to senior housing, the topic of Americorp came up. Americorp would like to stay in Palmer. Hobarts have tried to find companies that would turn the building into some sort of senior living but haven't been able to find anyone to take on the project. Right now the Federal Government is in a rental agreement for all of the buildings except the Old Hospital Pub and the Barn.

Rylie Pflughaupt asked if the company would be able to complete the list. Hobart indicated that they wouldn't. Hobarts had to perform around $400,000 in deferred maintenance projects within the buildings. They are trying to preserve the buildings.

Originally, drawings had been made to create an events space in the barn, but it is now storing equipment in it as a shop for Hobarts. When asked about the Old Hospital Pub, they said that they had been contacted by someone wanting to rent it, but Hobarts haven't found out what the business is so they aren't sure if they would want to rent it out. They said that they've had two groups look at the property in the last six months. In total HHR has spent $270,000 of their money into the hospital building as well as used demo government funds.

Stark-Mahood asked about the sidewalk installation where the housing has been built. Hobarts said that it is the requirement of the builder to have sidewalks installed according to their covenant agreement. According to the city ordinances, Ron Hessenius asked if they preclude a DA. They do. Herman explained that the DA makes sidewalks the responsibility of Hobart, but Hobart included it in the homeowners covenant so now it lies with the builder to install them.

As the discussion continued, a brief explanation was shared concerning the clean out that had to be done in the buildings. There were over 100 dumpsters full of leftover government property that was abandoned. The time and expense to dispose of the debris. 

The council returned to the DA and whether or not to extend the agreement for another three years. Andrew Elwick said that some of the wording in the agreement was clear. There were words underlined, in capital letters and used the word cost, c-o-s-t. But that he understood interpretation could be different. 

Herman explained that unless the council took action to terminate the agreement it would still be in effect. He went on to explain that the DA clearly says the "project cost" shall be $9M, and not "value caused."  The council will need to take all of this information and make a decision what they would like to do. However, it was clear that the contract may need to be further clarified.

The full discussion can be seen here.