City ‘disappointed’ in developer’s missed deadline

Developer Vaughn Prost missed today’s deadline to close financing for the Heer’s Tower redevelopment project, though he said in a letter to the city that he continues to work toward securing the loan. Prost could not be reached for comment.

“We were disappointed,” said city Economic Developer Director Mary Lilly Smith. “His position has not significantly changed since the April deadline, and we’re disappointed in that.”

With the passing of the deadline, the city now could decide to terminate Prost’s development rights for the project. The city has chosen not to exercise that right today but will review the situation further before making a final decision.

The city will, however, continue discussing the Heer’s project with other developers, as permitted by Prost’s failure to meet the April 17 deadline for financing. Smith said other developers have come forward in the last two months.

“They have expressed interest in it, and we continue to talk to them about what their potential uses would be, what kind of financing they would have, what kind of assistance they would need from the city or participation from the city,” Smith said.

Smith would not disclose the names of interested developers.

Both Prost and his funding group, Dougherty Funding LLC, submitted letters to the city today, saying Prost has restructured his initial construction-funding loan. In the letter, Prost said he anticipates having financing secured within 30 days.

Prost also said design and construction work is moving forward on tenant infill, site preparation and brownfield remediation.

In April, Prost told Springfield Business Journal that the cost of the Heer’s project had escalated to approximately $32 million, including $5 million invested in the renovation so far.

Prost’s deadline originally was set for last August, was extended to Feb. 17 and was moved again to April 17, when the city began taking inquiries from other developers.

Prost has until Aug. 17 to present a signed financing commitment before the contract is automatically terminated.[[In-content Ad]]