Ozark engages second developer for Finley River project

The LCRA is now acting as master developer of the 47-acre area west of downtown after the city ended its nearly three-year relationship in March with Finley River Development LLC, led by Bo Hagerman of Springfield architecture firm Hagerman New Urbanism.

The two parted ways based on monetary issues; the city said the developer was unable to finance the project, which carried an estimated $30 million price tag.

A subsequent lawsuit filed by Hagerman seeks $850,000 from the city to cover his firm’s work on the project.

LCRA sent out a new request for proposals on March 21, and Kalamazoo, Mich.-based Plazacorp Realty Advisors Inc. has risen to the top as a subdeveloper.

“We previously had an all-encompassing agreement with Finley River Development, and … that didn’t work out,” said City Attorney David Collignon. “It appeared to the LCRA that a better approach to this might be to enter into a separate subdeveloper’s agreement for each (part of the) project.”

Collignon said it is possible that Plazacorp or another company could end up developing a large portion of the area, but each project in the area would be judged individually.

“We’re looking at it on a project-by-project basis and making sure there’s enough financial stability so that each one of those gets accomplished,” he said.

The original plan called for a mix of retail, entertainment and commercial space, as well as lofts, apartments, single-family homes and townhouses.

The next contestant

First on the development list is the area bounded by Church, Third and Brick streets, referred to as the New Hope Baptist block because the New Hope Baptist Church once stood there.

The city met with five companies that responded to the request for proposals for that property. Collignon said only Plazacorp proceeded with a follow-up meeting and began negotiations on a development agreement. The company has put together preliminary timelines and engineering plans for the 1.5-acre block.

Collignon said the initial plan is to develop the property for commercial use, along with the rest of the Third Street corridor. Exact plans for the property, however, are up in the air due to the uncertainty of the status of property still owned by Hagerman.

Plazacorp is not new to southwest Missouri; the company, which has developed and leased numerous retail properties in the northern Great Lakes region, is also developing a retail center in Chestnut Crossing at Chestnut Expressway and West Bypass in Springfield, as well as property at Chestnut and National Avenue.

The company has sent leasing and marketing agent Ben Yore to set up an Ozark office to handle both its work on the Finley River project and its Springfield properties. Yore was unavailable for comment, and Plazacorp President Jeff Nicholson did not return calls by press time.

Ozark, meanwhile, is working to secure a U.S. Department of Agriculture-backed $10 million loan to fund infrastructure improvements necessary to facilitate development.

Collignon said any city infrastructure work would be coordinated by the LCRA in conjunction with private development.

“You don’t want someone developing the commercial aspects and then have the city come along and rip up their frontage and disrupt the whole project,” he said. “That all needs to be coordinated. That’s where the LCRA comes in.”

Collignon said the loan also would fund planned improvements to Third Street, including two traffic circles and streetscape improvements, that are technically outside the scope of the Finley River Neighborhood redevelopment plan.

Legal debates

In Hagerman’s suit, originally filed May 13 in Christian County Circuit Court, the developer claims that Ozark is backing out of terms agreed upon in their development agreement.

“(It) clearly stated that if terminated, the city would pay the expenses we’ve incurred to date,” Hagerman said.

“Those expenses are crystal clear; they’re responsible for paying ($850,000).”

On May 27, Hagerman filed requests for a change of judge and a change of venue, and on July 14, the case was assigned a new judge by the state Supreme Court. Both sides now await a ruling on the change-of-venue request.

The city, meanwhile, has begun condemnation proceedings, using eminent domain in an effort to recover ownership of the roughly three acres of property owned by various Hagerman entities.

Hagerman said the city informally offered him $600,000 to both settle the lawsuit and buy the land he owns, which he said cost him about $450,000 to purchase; Hagerman rejected the offer.

“I hope we can work something out, because it’s an unfortunate situation for the city,” he added. “I know the (Plazacorp) guys who are probably going to take over that development, and I don’t want to see it turn into a huge mess for them.”