Council to consider amended Heer’s agreement today

Under the amended agreement, St. Louis-based Blue Urban LLC would no longer be able to require the city to repurchase the dilapidated former department store downtown under certain circumstances, namely the city’s failure to start Park Central Square renovations by Aug. 1. According to a “put option” in the original agreement, the buyback price would have been the $3 million purchase price plus direct and indirect developer costs as well as overhead and markup equal to 15 percent of direct and indirect costs.

In return, the city has agreed to remove a personal guaranty of up to $250,000 that Blue Urban President and CEO Kevin McGowan consented to in the original agreement.

Blue Urban is now required to start construction on Heer’s no later than Feb. 1, 2009, five months later than the original Sept. 1 deadline. McGowan closed the Heer’s purchase in November, and he announced in December that Blue Urban would renovate the downtown landmark as 38 upscale condos above a Mike Shannon’s Steaks and Seafood Restaurant. The project’s price tag is $26 million to $30 million.

New deadlines in the amended agreement are tied to a recent decision by the State Historic Preservation Office that the inner portion of the square is eligible for historic listing, according to a city news release.

Under the revised schedule, the city has until Oct. 1 to finalize its planned square improvements. Streetscape work on the square’s outer perimeter is expected to start that month, and low bidder Rensch Construction will start removing the last section of canopy in the square’s northeast corner next week, according to the release.

For its part, Blue Urban must submit a final list of requested incentives to the city no later than Sept. 30. Also of note is a Sept. 1 deadline for the developer to provide the city with a letter of intent from Mike Shannon’s – a contractual obligation that was supposed to have been met by Sept. 27, 2007.

Shannon’s owner Mike Shannon and daughter Pat, the restaurant’s manager, have both publicly stated their commitment to the Heer’s project – most recently at a news conference on the square in late March.

“The City of Springfield and Blue Urban continue in their commitment to the Heer’s project,” McGowan said in the release. “Every obstacle that has presented itself to us, we have and will continue to overcome. Blue Urban looks forward to the start and completion of this very special project. One day soon, we will all be dining at Shannon’s.”

See SBJ’s July 28 issue for more about the amended Heer’s redevelopment agreement.[[In-content Ad]]