LAKE CHARLES, LA (KPLC) - It's set to be the first phase to dramatically transform the Lake Charles Lakefront, but it's not a done deal. Monday night the Downtown Development Authority was dotting the i's and crossing the t's of their end of the lease and development agreement with the Cypress Group.
The lease would be for 55 years with the option of an additional 10 for a total of 65 years at 50-thousand dollars per month. While the Cypress Group has already unveiled a glimpse of what we can expect along Track 1A (the parking lot area just south of the Civic Center), they're set to deliver more details should they get the lease deal.
"A conceptual plan, sketches, and sort of what we've seen already - a refining of that - a commercial, retail, and residential make up the development," said Brian Arabie with the DDA.
Arabie explained the second part of the agreement would include a project milestone schedule: "They are bound to follow it. In other words that is the term of the agreement. They have to meet all of those deadlines," said Arabie.
Funding for the 25-to-30 million dollar project will also be on a schedule: a majority of the funding will be through a loan guarantee program through the Department of Housing and Urban Development.
Once a lease is secured, the developer has 120 days to submit application with HUD. Under normal circumstances, HUD gives indication of approval within 60 to 90 days, but the DDA is giving the Cypress Group up to 150 days to get their application approved. That's April of 2011. Which has some on the board concerned about taking the property off the market.
"The best case scenario is the construction can actually begin in one year and the worst case would be 18 months depending on what HUD does?," asked DDA Chairman Rick Richard. "What if somebody with a lot of money might want to come into our fair city and develop without HUD approval because HUD is a little bit designing our lakefront under this if we abide by their rules. And that raises a little bit of concern for me."
"This is just a small percentage of the pie. We are trying to get this percentage right because it's the first thing and it sets the example for other developers so I am very cautious that we play fair with the developer but the developer has to show good faith in playing fair with the city," said DDA President Adley Cormier.
After further discussion, the DDA unanimously approves the lease and development agreement with the Cypress Group. If HUD denies their application for funding, they would have the option of securing funding through conventional private investors, otherwise the agreement is off.
The resolution will be introduced to the Lake Charles City Council at their agenda meeting Tuesday night and be put up for final vote to move forward on July 7th.