The Jefferson City Council on Monday approved a resolution to extend the deadline for creating a redevelopment agreement for Missouri State Penitentiary.
When the council chose to move forward with the Chesterfield Hotels group for redevelopment of the site in June, the resolution passed gave a Dec. 31, 2020, deadline to finalize an agreement between the city and the developer.
However, progress on the agreement has not reached the point where it could meet that deadline, so the council approved an extension which will give them until Dec. 31, 2021.
Prior to discussing or approving the resolution, City Attorney Ryan Moehlman and members of the development team updated the council and the viewing public on progress that has been made on the project as well as what has delayed it.
The Chesterfield group proposed a large development at the site, which could come in four stages. The first would include a hotel and conference center as well as some infrastructure like roads and parking. Future stages could include a mixture of uses from a two-sheet ice arena to commercial and residential buildings, much of which would be developed by others.
Moehlman said the project has been slowed down by two things.
The first was a health issue that affected a key member of the development team.
"Really, we lost a couple of months out of that," Moehlman said. "That was an issue where we really just had to pause and wait for that to resolve itself. That cost us some time."
The other element, which had more of an impact, was a slowing of the credit market, he said.
"It's hard to meaningfully work with financial institutions to get a solid picture of what credit availability, interest rates and timing of any financing is going to look like," Moehlman said. "This is directly related to COVID."
The hospitality industry has been affected by the loss of group events and conferences because of the pandemic.
Moehlman said a municipal financial advisor told the city the large convention center business will come back fully in 2024, but small to medium markets like Jefferson City could come back sooner.
"Without that solid financial information, everything else is kind of in a holding pattern," he said. "There are some things that can be done in the interim, but we can't take this across the finish line until the financial environments improve."
Despite the delays on the development agreement, some progress has been made on the project over all.
Don Koster, principal architect with Arcturis, said several organizations have approached the development team about locating to the redevelopment area.
An administrative state agency approached the team with discussions about a 60,000-square-foot office building, and two nonprofit organizations already located in Jefferson City have discussed building a 30,000-square-foot joint facility.
Koster said those entities already have funding in place for their new facility and are attracted to the possibility of being closer to downtown and the MSP convention center.
A prominent Jefferson City housing developer has also been in touch with the group to discuss the prospect of building some townhomes or apartments on the site, Koster said.
Since June, progress has been made on the project from the city's side as well. The City Council has approved a community improvement district for the site, which will collect a 1 percent sales tax. A transportation development district has also been formed in the area, which will also collect taxes to fund transportation aspects of the project.
The next step to create the TDD is a sales tax election for the affected property owners, which would be ordered by the Cole County Circuit Court, Moehlman said.
The city is also seeking a disaster recovery grant of $1.5 million from the Economic Development Administration to be used for infrastructure work at the MSP site.
The Jefferson City Parks and Recreation Commission has also sent out a request for qualifications for a market feasibility study on the development of an ice arena on the site - an element of the Chesterfield proposal that was popular with the public.
David Parmely, with Chesterfield Hotels, said if you look at the big picture of the full phase one development - the hotel, conference center and parking garage - plus the ice arena and housing potentials, that would already cover about 60 percent of the redevelopment site.
Parmely also announced the development group has added general contractor Paric Corporation to the team.
Paric has previously worked with both Chesterfield Hotels and Arcturis.
Following the updates, the council approved the deadline extension for city staff and the development team to complete the redevelopment agreement.
Moehlman said they chose the Dec. 31, 2021, date as reasonable date that the project should be able to move forward by, given the uncertainty of the credit market.
When asked by a council member, Moehlman said the extension still complies with the deadline imposed by the state of Missouri when the land was transferred from the state to the city.
The state-imposed deadline to break ground on the project is July 2022. Even if the agreement is not completed until December 2021, the project will have six months to break ground.
If needed, the council can also request a one-year extension on the state's deadline.