Developer questions city revisions to Reaser Pointe Crossing agreement

Attorneys for the proposed Reaser Pointe Crossing Development sent a letter on Thursday accusing Elyria and its attorneys of making unnecessary changes to an agreement between the city and the developer, DBR Commercial Realty. The letter came just days before Elyria City Council is set to hold a strategic planning meeting on Monday to discuss and possibly vote on the amended development agreement. Reaser Pointe Crossing is a proposed mixed-use development in southeast Elyria, with a planned 420 townhome units along with commercial development properties. DBR and its owner, Dan Reaser, are in negotiations with the city over a new amended development agreement that would allow the company to move forward with the project using the Lorain County Port Authority to provide public funding. DBR is also suing the city for allegedly failing to follow a prior agreement, but Reaser has said the lawsuit will be dropped if the project begins development. The funding would be provided through tax increment financing agreement, or TIF, which would see the Port Authority send bonds for money which would be used to provide all the public improvements for the project. Those bonds would be paid back by property owners in the development, who would pay into a TIF fund rather than pay normal property taxes, so DBR still needs approval from the city and the Elyria Schools to carry out the project. On Friday David Lum, an attorney for DBR, sent a letter to attorney Russ Balthis of Cleveland law firm Squire Patton Boggs, the firm representing Elyria in the negotiation, claiming that Balthis and the city had made unnecessary changes to the current amended development agreement, or ADA, which Lum said jeopardized the agreement. Lum pointed to a statement from Mayor Kevin Brubaker at a City Council meeting on June 2, in which he said that the new AMA was something that Finance Director Ted Pileski and Law Director Amanda Deery had said they could "live with," but that the city and its attorneys would need to make a few "tweaks" to the agreement. Deery said after the meeting that she had been referring only to the assignment language in the new ADA, which had previously been an issue in the negotiations. In his letter, Lum said that revisions to the ADA made by Balthis on June 19 exceeded the "minor tweaks" that he and DBR had expected. "I have had a chance to review your proposed revisions in depth, and I have to admit that I am quite frustrated," Lum wrote in the letter. "Based upon the revisions that you made to the ADA, it appears to me that the city has no interest in finding a resolution to this situation and moving the development forward. Moreover, it appears that the city is trying to set up additional roadblocks and hurdles for the project in the future." Lum said that the city made "numerous and significant, substantive changes," to the ADA which went beyond the date changes and addition of the Port Authority that he had expected. Balthis said he and the city were in receipt of the letter, but he was unable to comment on a pending negotiation. Deery said that she was also limited in her ability to respond due to the negotiations being ongoing, but she did say the city disagreed with Lum's reading of the revisions. "On behalf of the city, we disagree with those assertions," Deery said by phone on Friday. "I know that (Balthis) has had at least two phone conferences in the last 10 to 14 days to get the various pieces together. I can tell you the mayor and I had a face-to-face meeting with the director of the Lorain County Port Authority (Jim Miller). Clearly they feel and believe what they do, but we have put in a lot of effort and hours … to try and get this stuff together." She said that the Port Authority becoming a party to the deal had necessitated revisions to the ADA language. In his letter, Lum pointed to five specific changes he said he felt were likely to be issues for his client or could create additional "administrative hurdles" in the future. The first was the addition of a sentence saying that the city did not agree that remedial public improvements would be included under the development agreement. DBR has accused the city of constructing a connector road through the Reaser Pointe Crossing incorrectly, which caused flooding. In a 2024 continuation agreement, the city agreed to include any remediation needed for flooding in the TIF, but never agreed that the road was improperly built. Lum said if DBR's remedial plans were now an issue: "Let's solve that issue now." Later in his letter, Lum points out that the city had agreed in that previous statement to carry out certain remedial work on the property by March 31, 2024, but never had. "To date, the city has completed zero work towards those improvements — a breach of that settlement that the Mayor admitted to in his deposition," Lum wrote, near the end of the letter. "Why would we enter into another 'settlement' that sets up the same problem in the future?" Brubaker did say in a deposition given in the lawsuit by DBR against the city that Elyria had not carried out work it agreed to in the 2024 continuation agreement. Lum also complained of the deletion of a section of the agreement specifying that the TIF ordinances had already been passed, questioning whether the TIF ordinances the city would need to pass had been amended. Another statement that Lum said was deleted was one that stated that if DBR's final plat complied with the city's subdivision regulations and was approved by the Elyria Planning Commission, the city would approve it. "This clause has been in the ADA drafts for months and months," Lum said in the letter. "It was inserted specifically because my client was concerned about the city putting up further future roadblocks to the development. Is that the city's intention?" Elyria's attorneys also added a clause giving the city the right to as for "any additional support documentation reasonably requested by the City," in relation to reimbursement requests which Reaser may submit. "With the insertion of the Port Authority as the bond issuer (a concept that we both agreed was beneficial), why don't we let them be responsible for approving Cost Certificates and paying invoices?" Lum said in the letter. At the end of the letter Lum said it was his opinion that Balthis was "trying to set up the city and my client for future disagreements over things that are known and should be settled now." "If we can't get agreement on these basic kind of items now, then there is no reason the enter into this ADA only to be back in court months later," Lum said. "If that is the case then we can just let the current litigation take its course. I sincerely hope that is not the case because that doesn't help anyone — at least not my client or the City." Contact Owen MacMillan at (440) 329-7123 or omacmillan@chroniclet.com.