Developer Of Rathbone Property In The Evansville Historic District Speaks Out Against APC

As Louis D. Brandeis, Supreme Court Justice, and founder of the law school I was privileged to attend on my spouse’s U.S. Military Post 9/11 GI Bill stated, “sunlight is the best disinfectant.”

Before I begin, I want to point out that the fight in moving this multi-million dollar project forward is related to just 15 parking spaces-APC is requiring 86 parking spaces and the Rathbone currently has 71 on premises.  Additionally, to help place the below statements in proper context, the Rathbone’s rough timeline is as follows; negotiations to purchase from October 2017 to September 2018, renovations from October 2018 to August 2019, and property lease up from April 2019 (with one tenant) to present.  The property was vacant and/or had only construction workers in it from October 2018 to April 2019. 

I want to reiterate something that I have stated repeatedly to all of City Counsel, local community members and elected representatives. The easiest path with the Rathbone would have been to leave it as an apartment complex (for which it was already zoned many years ago), do minimal low-end maintenance and repairs, and turn it into low end apartments just like many of the other complexes currently in the Historic Downtown area. 

We would have had these apartments rented and making money in one third the time, without any fights with APC over parking.  No permits would have been required because we wouldn’t have removed any of the cheap particle board cabinets and replaced them with granite countertops, installed smart technology and done many more upgrades throughout the property. We would not have invested the time and funds needed to remake the Rathbone into a Historic Downtown area showpiece that the neighborhood and City could be proud to display. No new businesses would have been added to the property. Instead, we kept our word, spent a year investing over $4M in the Evansville, In. local economy to upgrade the property, while taking care to preserve its historical appeal. We did all this before we even made a profit.  My lesson in this exhausting fight, as a developer, is not to redevelop in the Evansville historic downtown.  Do not try and make things better because it’s not worth the fight.

“The Site Review Committee met with the owner/developer in March of 2018 that our office had set up to help introduce the project, the ownership team, and the agencies that were involved in the permitting process.  At that time, the owner described the project and what their proposed uses were for the building.  Based on the information received, each agency laid out what items would be expected to be presented at the Site Review meeting for approval.  In addition, some of the main items discussed where the parking requirements, variances that could be requested, sewer/water/grease trap items, redevelopment approval, etc.  All agencies involved in the process were there to help this project through the necessary requirements along with providing detailed information from each agency.”

SOMEWHAT TRUE

I have continuously sought to be a partner with Evansville City Officials, Agencies and the Community; and, I think, have repeatedly proven this as fact.  To this effect, I initiated the mentioned March 2018 meeting with APC in good faith.  I fully disclosed my intended renovation plan out of a desire to be fully transparent.  During the time-period of the March 2018 meeting, we were very unsure if we would even purchase the property and said as much to APC.  It took us from October 2017 to September 2018 to negotiate terms, go through the underwriting process, perform due-diligence inspections and close on the Rathbone property.  The condition of the building and it’s continued degradation almost killed the deal more than once during this long process.  Our preliminary meetings with the city were an attempt to ascertain the difficulties we would encounter in redeveloping this failing asset to the level we felt it deserved.

“On October 29, 2018, 7 months later, the first set of plans were submitted for review by the Site Review Committee, i.e. Phase 1 of the project.  During a walkthrough by the Building Commission, Fire Department, and the Area Plan Commission, it was discovered that the owner had already done some extensive work without having any permits.  Even though this had happened, the Site Review Committee moved forward to try and keep this project on track.”

FALSE

Unfortunately, despite my best efforts to identify APC’s requirements back in March 2018, the project did not move smoothly forward.  We had multiple delays in obtaining much needed repair permits and APC even placed a stop-work order on the project that cost us time and over $30K in costs.

As of October 2018, my team only had control of the property for a little over a month (purchased early September 2018) and immediately had to perform critical maintenance and repair to stabilize the existing structure.  No remodel work and no change in use were being performed at this time.  We pre-emptively invited APC and other City Officials out to the property in a gesture of good faith.  We wanted to encourage open dialogue that would enable us to get ahead of possible problems and ensure we complied with city requirements.  When APC and City Officials visited the Rathbone, we were stabilizing the property’s roof that was caving in and causing water infiltration, repairing busted pipes due to frost damage, and performing a myriad of other minor maintenance-related repairs critical for any property that had sat vacant and derelict for over a year.  We also informed APC of the need for this course of action during our March 2018 meeting.

Further, as to the assertion that APC attempted to help move the project forward, I am frankly flabbergasted.  APC placed a stop-work order on the Rathbone in November 2018 (after our October 29, 2018 meeting), that cost us over a month of renovation and repair time, and pushed the project scheduling into the Christmas and New Years holidays.  This delay alone is estimated to have caused the Rathbone project over $30K in lost revenue due to a delayed opening/leasing. The delay also hurt local contractors during the holidays, and ultimately led to our first series of discussions with the Mayor (via e-mail) in late November of 2018.  The primary reason for the delay was a need to verify that we had sufficient parking before APC would sign off on our plans.  We could not receive building permits to replace the worn-out cabinetry unless we first received APC’s sign-off.  This, despite the fact that we were months away from opening the Rathbone apartments for rent.  We were already working to obtain variances, which could not be done before we owned the building but were ultimately granted in December 2018.  However, since parking variances take months to obtain, we agreed with APC to split the project up into stages.  APC reluctantly agreeing that we had enough parking to redo the first 32 units.  Thus began the division of the project into artificial stages and the need to remit multiple plans to APC.  I wish to point out that APC’s requirements and our desire to find a working solution to move the project forward resulted in the multiple “confusing” plans mentioned by Mr. London.  We also began working vociferously to obtain a shared use parking agreement so that we could conceivably continue work on the remainder of the building.  A version of this agreement was agreed to by the school board in early December 2018.  It was sent to APC and we received multiple rounds of comments.  We officially signed the shared use agreement in March of 2019.  APC stated it was still was not sufficient and they wanted modifications.  We took this back before the school board, received approval and re-signed the agreement in July 2019.  At which time the agreement was also publicly recorded in Vanderburgh County and copy was hand delivered by me to APC so that we could get permission to open a portion of our commercial property.  Again, all this effort over 15 parking spaces.

Finally, this part of Mr. London’s email statement is also confusing to me.  Is it Vanderburgh County policy to require commercial property owners to pull permits for routine maintenance and repair of an existing structure (i.e.,roof shingle repair by replacement, pipe repair, broken window repair)?  I am not talking about property rezoning or a building’s change of use, but simple maintenance and repair of a facility.  If this is Vanderburgh County policy, it would have saved me much time and expense if APC had mentioned this point to me during our March 2018 meeting. Additionally, if this is the standard, then I come back to my initial question as to why it is being arbitrarily enforced upon us.  I know of several projects in town who do routine maintenance without going through the same level of scrutiny that we have endured.  A great example of said scrutiny pertains to the issue with resurfacing and restriping the Rathbone’s parking area.  We had initially intended to complete this task in the fall of 2018 because it was faded; however, we were delayed due to weather-paint does not stick well in freezing temperatures.  I explained this fact to Mr. London in a March 2019 email. In turn, he responded that the project would be “automatically fined” in 30 calendar days if we did not complete this task. Multiple emails later and valuable time spent by my team to relay the temperature properties of paint and the fact that we could not control the weather, fines were not levied against the property. This task was then quickly completed by a local contractor when the temperature was conducive to paint bonding. However, the adjacent multi-family housing facility to the Rathbone sits, with a crumbling parking lot, no directional signage and fading parking lines. I am unaware of any similar demands being made upon them for the condition of the facility’s parking.

“On November 7, 2018, an Improvement Location Permit was issued for the project so that it could continue to move forward.  At that time, several items were discussed with the owner including parking requirements for future Phases along with items required by the Evansville Water & Sewer Utility since the facility did not have easements for the sanitary sewer system…..”

SOMEWHAT TRUE

We did discuss multiple requirements, which my local team quickly moved to provide.  As previously mentioned, we moved quickly on obtaining the shared use agreement with the local school and were already in process of completing the other variance requests, which were ultimately granted in December 2018.  One sticking point was the “easements for the sanitary sewer system…..” This was a 100-year unrecorded easement by the City, which Evansville Water and Sewer (EWSU) was requiring us to record before lifting the November 2018 stop-work order.  We did so on the part of the easement that ran underneath the Rathbone parking lot.  Unfortunately, part of this previously unrecorded easement ran under the Hills (neighbors to the left of the Rathbone) property.  EWSU initially required me to get the Hills to sign the previously unrecorded easement waver (at risk to their property) before granting the Rathbone its authorization to proceed in renovations.  I pushed back on this requirement for multiple reasons, which I am happy to discuss in person.  Ultimately, we were able to come to an accommodation with EWSU and since that point have had smooth relations with this City agency.  I would like to point out here, that EWSU worked with us related to this issue, as we would expect from a city partnership.

“Since that time multiple sets of plans along with multiple different scenarios have been presented to the agencies that sit on Site Review.”

TRUE WITH CAVEATS

Our engineers presented several solutions to prove that we could and would put in all the parking APC required.  Instead of looking at the Rathbone as an entire project (57 apartments and two commercial sites), we had to break the project into separate sections to independently verify we met the requirements that would facilitate continued renovations.  The multiple plans mentioned by Mr. London was to obtain a workable solution to comply with APC’s required additional 15 parking spaces.  This process added professional architect and engineering time and cost to the project.  One of these scenarios required paving over the lovely back yard plus putting in additional parking in the front.  Partially due to voluntarily solicited neighborhood feedback in our stated goal to build community, we moved away from these courses of action.  The neighbors were adamant that they did not want more parking in front of the Rathbone, that they liked the feel and look of the building, and multiple were horrified at the thought of paving over the rear of the building.  This cost the scrapping of one set of plans.  All of which we discussed with APC, and all of which were done in an attempt to meet the missing 15 parking space required by APC.  Simultaneously, we worked with the Hills to purchase additional land to provide the troublesome missing 15 parking spaces.  The land purchase agreement was initially negotiated and signed off in February 2019.  Regardless of the land purchase, APC would not allow us to count the land because we had not closed on the property.  Instead, we had to present the multiple other plans as alternate courses of action to APC in order to obtain the needed approval to proceed with the project’s renovations.  Again, all this cost and time over 15 parking spaces, in a property that would remain mostly an apartment complex as it was zoned for many years ago.

“On February 25, 2019, Phase 2 of the project was submitted for Site Review Approval.  During the time between Phase 1 and Phase 2 a variance request was approved for parking on the project which would relax the number of required parking spaces from 122 to 86, which allowed for additional units to go in along with 4 hotel units and office space.  Based on the plans that were provided, which showed an additional parking lot to be built to meet the variance approval, a permit was issued on February 28, 2019.”

                                                     Also 

“The existing parking lot that is currently in place has a total of 71 parking spaces.  Based on the variance that the owner requested and showed on the plan that was provided and approved by the BZA and the Site Review Committee, the additional parking lot would provide the 86 spaces required.  To date, that parking lot has yet to be built and has been shown on several different locations on the site.  In addition, the shared parking agreement with Culver school that was recommended by the City government to help the owner in their future plans has yet to be provided for approval.”

                                                SOMEWHAT TRUE

Although the permit was issued that allowed us to move forward with renovations, creating the parking is an involved process.  This is especially true in a historic area, where presumably tearing down old buildings for parking is not desired.  Before we could purchase the Hill lot, we first had to survey it, record the survey and partition the property from the existing parcel.  This entire process took about 8 weeks with the city.  Even following purchase, we had to change the parcels use with the city, which took another 4-6 weeks.  This process added over $100,000.00 in cost to our bottom line – an amount that smaller projects could not support.  All required before we even moved in our first tenant.  Additionally, since we purchased the Hills lot, we haven’t changed our parking plan with APC.  In fact, the adjacent Hills lot purchase will provide an additional 70 plus parking spots, many more than APC’s required 15 additional spaces.

As to, “The shared parking agreement with Culver school that was recommended by the City government to help the owner in their future plans has yet to be provided for approval.”  I am truly baffled.  We have multiple rounds of comments on the agreement with APC and other city government agencies pertaining to this shared agreement, that span several months.  Also, as previously stated, I personally had that shared parking agreement publicly recorded then walked a copy over and turned it into APC.  They would not sign off on the last site review without this signed approval.

“By no means has any agency tried to slow this project down, and in fact, each agency has tried to help nail down a moving target.  To date, the Area Plan Commission has approved each request for a Certificate of Occupancy after the proper information has been submitted.”

                                                        FALSE

This entire round of discussion was precipitated by APC’s denial of a request for a temporary certificate of approval on Friday (July 26, 2019).  Only after our local engineers went back to APC and reminded them what they agreed to during the May 31, 2019 site review meeting did they issue temporary certificates of occupancy.  APC made the caveat that they would approve no more!  We haven’t made any changes to the location of parking since the purchase of the adjacent Hills lot because it will provide an additional 60 plus parking spots.  APC will not count the adjacent Hills lot purchase until it is fully developed so we are left with carefully counting out parking spaces and assigning them to the opening of apartment units in order to inch the project forward.  This is the only “moving target” as stated by Mr. London.  Again, all this trouble over 15 missing parking spaces for a building that had been previously been zoned for an apartment.

“If you would like to discuss this project in more detail, I would be happy to meet and pull all the information on the project along with the multiple sets of plans that we have had to work with.”

We also have plenty of documentation in the form of meeting transcripts, emails and detailed timelines that have previously been remitted to the city.  We can certainly meet to present/discuss all these items, should it become necessary.  However, I feel that this would do nothing except waste both our and the city’s time.  Degenerating into a “he said, she said” will not lead to a solution.  Ultimately, we are on the same team and want the same thing.  We want a vibrant historic downtown area.  My group is happy to be a part of the solution, not the problem.  Therefore, can we please stop wasting valuable resources and time fighting over 15 additional parking spaces when we have already purchased sufficient land to provide over 70 additional spots.  Can we start working on real, long lasting solutions?  The Certificates of occupancy are not event permanent but are temporary; therefore, the city can revoke them if we do not comply with our promises to APC.

“FYI – Since I have become the Area Plan Commission Director, the parking requirements in the downtown business district have been eliminated for all commercial developments and the residential component has been greatly reduced by the addition of the ability to share parking or to be within 300’ feet of a public parking area. Arts Overlay Zone, Jacobsville Overlay Zone, and West Franklin Street Overlay Zones have been created, have helped reduce parking requirements, and have been completed through a properly vetted process by the entire community.”

 The removal of the parking requirements sounds fantastic!  I wish that had been the discussion focal point during our March 2018 meeting.  I would love to see that extended to a historic downtown redevelopment.  It would prevent the need to tear down historic structures to put in more parking.  It would also allow for the redevelopment of several other apartment complexes in the area that are in deplorable condition but can’t be renovated/restored because they have insufficient parking.  I am willing to help in the discussion of the new code, wherever we can be of assistance!

“We have finally received funds this year by the County and City Councils to hire a consultant to update our antiquated codes (this has been something that has been pushed for the last several years). I could not agree more that this has needed to occur and we look forward to working with everyone through this process which should include our entire community since it will affect everyone!”

I would like to point out that APC has had at least one study done for Franklin street, which illustrated that the parking requirements in redevelopment areas were egregious.  Nonetheless, I congratulate them on commissioning further studies to ensure they do not make hasty changes.

I am looking forward to being a part of the solution!

Shannon

Shannon Huffer Esq.
Broker, Attorney, Investor, Entrepreneur

FOOTNOTE: This e-mail was posted without editing.