Schostak Trying City's Patience in $55M Project

City Commissioner Chris Lyon said he's had it with extending developmentplans, a process that's taken more than a year to get through."We've given them plenty of extensions," Lyon told GlobeSt.com. "I'm notsatisfied this is a viable project. I want the developer to commit to thedeal we originally agreed to, or fold up his tents and go home."

The company is working with the Downtown Development Authority tobuild a 180,000-sf, seven-story office complex, a 75,000-sf to 100,000-sfhotel with about 125 rooms and a four-level, 625-space parking garage. Thecurrent deal has the company paying $2 million to build the office, retailand parking deck on the publicly owned land. They can then bring in a hotelfirm within three years, or the company will build another office buildingof the same size. Schostak will then pay another $2 million to the city forthe property.

However, late last year, the company switched gears and asked the city formore time to consider building the hotel and garage first, instead. Cityleaders balked at the idea, but gave the company more time to negotiate.

Currently, the latest extension given to the company has expired, butnegotiations continue, said City Planning Director Tim Thwing. He said the DDA and the commission is trying to set up a meeting for Monday,April 7 to discuss another extension that would last until July 1.

"My understanding is that the company has put down $135,000, with about$50,000 of that non-refundable," Thwing said. "Now, the company wants tomake another extension, and has agreed to put another $20,000 of the depositas non-refundable."

Schostak also wants to work a different payment plan for the project asprotection, he noted."If they pay the full $4 million up front, they want $1.5 million of thatmoney available as a loan. If they haven't reached the required tenancy forthe office building, they want to draw money out to pay their mortgage. Ifthey borrow against our money, they will pay it back once business isbetter," Thwing said.

The city has been struggling for decades to put a development on the corner,which also backs up to the south end of Main Street, one of Oakland County'smost hopping nightspots. Schostak beat out four other developers in order towin a possible contract with the city two years ago.The property used to be a car dealership and retail stores until it wasleveled more than 20 years ago.

Lyon said he's against the loan idea."They've not shown us enough progress in terms of leasing," he said.Schostak did not return phone calls for comment.