City Council clarifies negotiating points with HUD - KPLC 7 News, Lake Charles, Louisiana

City Council clarifies negotiating points with HUD

LAKE CHARLES, LA (KPLC) -

The Cypress Group's proposed Lakeside development is still tied up in the HUD application process. Though it's up for review any day now, the Lake Charles City Council is going one step further to make it very clear what it is willing to negotiate.

In an indirect email, HUD asked the lender if the City would be willing to negotiate the following four points.

Item #1: HUD's need for an unambiguous lease for 99 years. Failure to meet construction schedule would not be an allowable default.

Item #2: HUD cannot allow the City to be named on the performance and payment bonds.

Item #3: HUD cannot grant defacto right of first refusal if mortgage or defaults. (If company, in this case Cypress Group, defaults - HUD takes over the property and City has no say).

Item #4: HUD will not grant the City the right to set construction schedule.

After hearing the requests, several council members said they're not willing to negotiate.

"And we're saying that the mortgage or default we want first option to buy the property back for the City of Lake Charles. We don't want it to turn into a HUD owned property," said Dana Carl Jackson, LC City Councilman.

"We've seen what can happen. HUD can change it's rules and we end up with something we don't want on the Lakefront. Maybe we do need to clear that up right now before we get to the finish line with this," said Marshall Simien, Jr., LC City Councilman.   

Addressing the city council via web cam, Roger Landry with Lakeside Development, LLC, "But as the guaranteer - HUD wants to be and have the ability to protect the public's money." 

"All we are asking for is we want to be protected as landlord as the owner of the property. We want to protect ourselves and I don't want to count on HUD to protect the interest of the City. I want the City to protect the interest of the City," said Stuart Weatherford. "I think we should clarify what we mean. Because we don't want to tie up this process for the lender, HUD and the tax payers. We need to let them know where we stand right now. We're not saying this isn't a good project or they shouldn't approve, but we are letting them know this is what we want." 

Others on the council feel it's premature to take action, since HUD hasn't even ruled on a conditional agreement yet.

"It seems to be putting the cart before the horse and everything else. It's dragging stuff up and really and totally uncalled for at this time," said Mark Eckard, LC City Councilman.  

"All I'm trying to say is lets consider this. Lets consider what we are doing and lets move on let the process run out and then we can make some decisions," said Luvertha August, LC City Councilwoman.  

After further discussion the Council voted as follows on whether they would be willing to negotiate each of the conditions.

Item #1
Negotiable: Eckard, Ieyoub, Jackson, Simien, Weatherford
Non-negotiable: August, Geyen

Item #2
Negotiable: Eckard
Non-negotiable: August, Ieyoub, Geyen, Jackson, Simien, Weatherford

Item #3
Negotiable: Eckard
Non-negotiable: August, Ieyoub, Geyen, Jackson, Simien, Weatherford

Item #4
Negotiable: August, Eckard, Ieyoub, Jackson, Simien, Weatherford
Non-negotiable: Geyen

According to officials, at this time the Cypress Group is 3rd or 4th in line to be reviewed by HUD.

Copyright 2011 KPLC. All rights reserved.

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