Rochester, N.Y. - City Council voted unanimously Thursday, to sell two parcels, including Midtown Tower, to Christa/Morgan Development for $1 each. The land amounts to 1.6 acres.
Christa/Morgan plans to rehabilitate the tower. The council legislation says the company, operating as "80 South Clinton LLC", will build 176 residential apartments, 24 luxury condominiums, and 94,000 square feet of office, retail and restaurant space.
The project is expected to take up 436 spaces in the Midtown underground garage.
“This will revitalize the entire center city. I think it also benefits the entire city,” said Christa Chief Operating Officer Brian McKinnon.
The cost of the development is $70 million, to be funded by $12.6 million in tax credits, a $1.2 million state grant, $1.5 million from the City of Rochester, $5.7 million equity, and $37.5 million HUD loan.
The HUD loan is the reason the legislation was quickly introduced on Monday for a Thursday vote. According to city officials, the agency is restricting rules on October 1, which would make the loan not feasible.
Two council members expressed frustration at the last-minute request for approval.
“We’re being asked at the last moment to scurry around and sign off on something and I think we should have been better prepared,” said Carolee Conklin, who called the city’s preparation “sloppy.”
“I’m saying as a warning to the administration, we’ve got to get our act together,” said Adam McFadden, who also questioned why the developers got “expedited service,” when some small business owners wait years for assistance.
The sale is contingent on approval of all of the project's funding, including the city grant and the finalization of terms regarding the parking spaces.
The city and state are tearing down Midtown Plaza, at a cost of $55 million, to make way for development, including this project.
Midtown Tower is a shell, stripped of its siding, windows, drywall, electrical fixtures and plumbing. It’s a scar on the city skyline, and could remain so if the deal doesn’t go through.
“Sure there's risk. But what do you think the risk would be the risk would be if we ignored Midtown? What would be the risk to downtown?” said City Corporation Counsel Tom Richards. He said downtown would continue to deteriorate, along with surrounding property values. The city tried for years – and failed – to revitalize Midtown, leading to the decision to demolish everything but the tower.
“There's no risk-free solution here. And there's no question the city is taking some risk here,” said Richards. “But we tried the other method, which was to have a plan, do nothing and hope it worked out. And it didn't.”
The developers are optimistic the deal will go through. They say there’s only one thing that would delay or derail the project.
“Financing. At the end of the day as you well know without access to credit especially today projects don't happen,” said McKinnon.
If the developer doesn’t come with financing, the tower would remain in city hands. The city hopes to close on the sale in April. Construction would start in July and the project would be finished in January 2013.
