Talks for a city center extended while project management changes

By: | Royal Oak Review | Published April 19, 2017 | Updated April 18, 2017 1:54pm

ROYAL OAK — City commissioners last week unanimously supported extending an agreement with developers interested in creating a Royal Oak city center at a time when the project experienced some key changes.

The April 10 approval granted a fifth extension to the Central Park Development Group’s  preferred-developer exclusivity period, passed control of many of the civic campus structures to the city and left the development group solely in charge of its proposed seven-story office building.

When plans for a city center project began in 2014, the Surnow Group  — followed by the Central Park Development Group under the leadership of Sam Surnow and Ron Boji — would initially manage the entire $100 million downtown project in a public-private partnership with the city of Royal Oak.

File photo

“As originally proposed, CPDG would manage the construction of a new office building, downtown park, police station, city hall and parking deck,” Economic Development Manager Todd Fenton wrote in a memo to the commission. “While working to cement the details of a term sheet encapsulating this arrangement, city staff, in consultation with its consultants for this project, proposed an alternative management structure that would place the city in total control of the city-owned portions of the project, thus minimizing both legal and financial risk.”

Fenton said Central Park Development Group decision-makers agreed to the new management structure.

“This marks a substantial divergence from the initial proposed transaction, as the city is no longer contemplating contracting with CPDG to perform the master development obligations for the related city-owned projects,” Fenton said.

Fenton said Central Park Development Group’s sole responsibility would be construction of its proposed office building, and the city would be responsible for the construction of the new police station, City Hall, parking deck and central park.

“Changing that management structure has a domino effect with the rest of the terms of the project, and as such, that is why we would need additional time to finalize the term sheet and the financial plan for this project,” Fenton said.

City Commissioner Kyle DuBuc said the commission is still moving forward in good faith.

“And I’m personally optimistic that we are really on the right track,” he said.

City commissioners started backing away from the public-private partnership aspects of the project when they made the unanimous decision Jan. 23 to move forward with design plans no longer showing City Hall as a condominium occupying two floors within a mixed-use office building owned by the developers.

Mayor Michael Fournier said city officials and members of the commission have spent many hours looking in depth at this project and agreed that the city is working in good faith with the Central Park Development Group.

“It is a very complicated project that has a number of moving parts,” he said.

Fournier said he hopes the community sees this as a positive result and that city officials and commissioners are not dragging their heels.

“We’re working diligently, we’re working intelligently and we’re turning over every stone before we make a critical decision coming down the pike sometime soon,” Fournier said.