City And Developer Say They're Working To Finalize Produce Terminal Deal
A contract to redevelop the Strip District’s Produce Terminal building is close to being finalized, city officials said Wednesday.
Dan Gilman, the mayor’s chief of staff, said it’s a complex deal but the parties were working through some critical final details with developer Dan McCaffery of McCaffery Interests.
“And Dan has to get his numbers to work,” Gilman said. “We’re asking for a significant investment of his money and the public’s money into this.”
The project is expected to cost $62.6 million.
Gilman spoke after a meeting between McCaffery, Urban Redevelopment Authority Executive Director Rob Rubinstein and URA Board Chair Kevin Acklin. Mayor Bill Peduto was not in the meeting, but said afterward the city wants to preserve 100 percent of the historic building, and create a plan to improve Smallman Street where the building is located. McCaffery Interests has agreed to much of that, but Peduto said solving the finances has been time-consuming.
“It’s a lot easier to do what was proposed before, demolish 40 percent of it, and put big box retail and restaurant inside. That’s a much easier plan, and it makes much more financial sense,” he said. “But we’re not supportive of that. So that’s why it’s taken time.”
McCaffery said the company’s financing is in place and that he’s ready to go. But he said it’s really the city’s move.
“There is a need for a common understanding about some very basic principles on the ongoing tenancy and management on a project like this,” he said. “It’s just a matter of how you word that.”
Overall, the parties are getting closer to an agreement, McCaffery said.
“Between a politician doing a good job on behalf of their constituents and a developer doing a good job on behalf of ever-changing market conditions, there is a natural conflict of ideals,” he said. “But really not a conflict of interest. Both parties would be wanting the project to be appealing at all times and something to be proud of in their city.”
McCaffery Interests submitted a redevelopment proposal for the historic Produce Terminal nearly four years ago. In 2017, the company signed a memorandum of understanding with the city that laid out the basic tenets of an agreement, which included creating a food-centric public market with room for local businesses. McCaffery Interests agreed to lease the 1,553-foot long building from the URA, with an option to buy it after 15 years.
That option has since been removed, McCaffery said.
When asked why he’s stuck with the project, McCaffrey asked, “Have you ever known an Irishman to quit?”
“[We’ve] put in a superlative effort in trying to quell fears and be imaginative,” he said, adding that he believes in the potential of the project. “I am moving forward as everything is shifting, but there will be a point where it’s one shift too many.”
McCaffery declined to comment about whether he feels close to that place.
A $18.5 million plan to improve Smallman Street depends on redevelopment of the Produce Terminal, Peduto said.
A tax increment financing plan (TIF) is expected to fuel that work. Creating a TIF requires all three taxing bodies—the city, county, and school board—to first approve a study for a TIF and then vote on a proposed TIF. While a study was approved, no TIF has yet been sent for their approval.
Neither McCaffery nor city officials would speculate about when the Produce Terminal deal may close.