LAKE CHARLES, LA (KPLC) - The City of Lake Charles votes down entering into a new lease agreement with the Lakeside Development Company. Lakeside wanted to appeal their funding application with HUD, but needed a new agreement with the city to proceed with their multi-million dollar mixed-used development south of the Civic Center.
The new proposal had details most on the council couldn't agree with and therefore didn't get the votes needed to proceed. Under the new proposed agreement the city would have no control of the construction schedule and cannot restrict any subsidized housing programs in the language of the contract. If Lakeside were to default on the project, the city would also have to give up the right to control a successor for the development. However, in order to maintain limited control the city would be allowed to form an entity known as a "limited partner."
"Broadly speaking a limited partner is a partner in the project that would have a very limited role and very limited liability," explained Brian Arabie, with the city's legal department.
"I'm concerned about that because the Lakefront belongs to the people. Now you are saying remove the people out of the way so that HUD can have superior rights and that's the kind of why we put the lease together in the first place. I'm not ready to experiment on the Lakefront," said Marshall Simien, Lake Charles City Councilman.
"To me the old saying forewarned, forearmed. We've had a lot of red flags come up. I'm just not comfortable with this," said Luvertha August, Lake Charles City Councilwoman.
Developer Roger Landry heard their concerns and said he has an excellent track record. According to Landry he's went through the process with HUD on several of his projects and that HUD is designed to be the protector. Landry also said 18 months would be the maximum construction schedule.
"Everything in this contract is a worst-case scenario. I'm not going to say that it is not impossible not to default, but the possibilities are very low the probabilities are even less," said Landry.
Landry said the 30-million dollar mixed development of retail and residential would be top class and not have any subsidized housing and that restriction in the original agreement was one of the main reasons their application was denied by HUD.
"It's illegal to word that you can't have any subsidized housing. We're not proposing subsidized housing, but no lender would agree to that," said Landry. "Please, let the process work. We've got to this point we have shared enough information we need to get this thing down the road."
Senior council member Rodney Geyen said he knows there is risk involved, but he's ready to take a chance and start development.
"I would like to see this project go on and proceed because we need something to jump start us on this lakefront. And this could very well be it," said Geyen.
Others in the community weighed in:
"I agree with Mr. Geyen. It often takes that one large project as the jumping off point for small businesses to invest and to come," said Christi Clark, Lake Charles resident.
"My question is it a viable project. I think it looks nice but is there a need for more apartments downtown? We can't seem to fill the properties we already have," said Father Henry Mancuso.
Landry said their independent market study revealed their is a need. Their findings predict with the Mojito Pointe project there will be a demand for 877 new housing units.
Mancuso also took issue with Lakeside's partner the Cypress Group. According to Mancuso, Cypress did shotty work on some Katrina cottages in the Lake Area. The matter is still in litigation.
"They have not been good neighbors. If they agree to fix our problems then they should be considered for another project," said Mancuso.
Cypress Group's Chris Rinaudo pleads with the council to make this happen and even said he would walk away.
"We have done everything the city has asked us to do. We have bent over backwards. This is exactly the type of development the voters wanted. You will have to start this whole process over with someone else. I will walk away from the project if that's what it takes. I don't want to because I have a lot in this, but I will because Roger can handle it. He does good work," said Rinaudo.
After nearly two hours of discussion the council voted five to two to not proceed with the Lakeside Development. The following is the way council votes fell:
Luvertha August: No
Rodney Geyen: Yes
Mark Eckard: Yes
John Ieyoub: No
Dana Carl Jackson: No
Marshall Simien: No
Stuart Weatherford: No
Landry said after two years and more then $500,000 he was disappointed in the council's decision. He said had he received the vote to proceed he had plans in the works for the old Sears property downtown.