New sticking point in Elyria, DBR negotiations over Reaser Pointe Crossing

Nearly two months after a development agreement was ostensibly reached, there is a new sticking point in contract negotiations between Elyria and DBR Commercial Realty regarding the Reaser Pointe Crossing project. Now, negotiations seem to hinge on City Council's reluctance to cede its oversight authority regarding accepting public improvements, while DBR and the Lorain County Port Authority say they need assurance such improvements will be accepted before they can move forward. Council has invited DBR representatives to attend a Strategic Planning Committee meeting following its next regular Council meeting to hear its concerns. Reaser Pointe Crossing is a proposed mixed-use development seeks to bring more than 420 townhomes and several commercial properties to a lot surrounding the Reaser Pointe Crossing connector road in southeast Elyria. DBR is owned by developer Dan Reaser. On July 22, attorney Russ Balthis went before City Council to update the body on ongoing negotiations between DBR and the city regarding a development agreement which would allow the project to move forward with financing from the Port Authority. Balthis, of Cleveland law firm Squire Patton Boggs, is representing the city as outside legal counsel in the negotiations. He spoke with Council last week to inform it of a recent letter sent to him by DBR's attorney David Lum, which included an additional letter from the LCPA. The current sticking point in negotiations, Balthis said last week, is the stated reluctance of many on Council to contractually agree to accept public improvements which are planned to be built as a part of the project. DBR and the Port Authority, on the other hand, say that the city's Planning Commission has already approved those same improvements, and the project funding is contingent on the eventual acceptance of those improvements as city property. The current plan to help fund the project is for the Port Authority to enter into a tax increment financing, or TIF, agreement with DBR, wherein DBR would build a number of improvements to make way for the development, including roadways, water lines, sewers and sidewalks. In a TIF, these improvements would be funded by publicly issued bonds, which are then repaid by property owners on the property paying into a TIF fund, rather than paying normal property taxes. The issue, DBR's letter said, is that if the city does not accept the improvements as public improvements and take control of them, no money can flow into the TIF fund to repay the construction. Lum wrote that the Port Authority would need assurance of several items, including that the city would agree with DBR on the scope of the project to be included in the TIF, that the Port Authority would control the disposition of the funds and a commitment from Council to approve the final plat when the project is complete. "Without those assurances, it will be virtually impossible for the LCPA to issue and sell the bonds required to move this project forward," Lum said. Balthis said this concern was a reasonable one, and that without those same assurances it was unlikely that any parties would purchase the bonds to provide the funding in the first place. However, he said that several members of Council had expressed at a prior meeting on June 30 that they were uncomfortable with agreeing to contractually bind themselves to accept improvements they had not seen. "From our perspective, it's making sure that the Council has their rights to observe and to have their input on the final plat (a map outlining a project) and their approval process," Bathis said. "From DBR's perspective, without having the certainty of what that review would look like, it's hard for them to move forward with some of the steps that they need to take and, quite frankly, the money and the issuing bonds and all of those steps that would be important to do that." The public improvements that DBR plans to make were approved by Planning when it approved the project's preliminary plat in June 2024. The improvements will not go before Council for approval until after they are completed. "(DBR) would be operating under the authority of Planning Commission, they've been given approval to build this, but with a question mark hanging over their heads as to whether City Council is then going to accept these public improvements, because quite frankly, it's an unusual development," Assistant Law Director Erik Breunig said at the meeting. Last week, several on Council reiterated issues they had with signing a development agreement which would bind them to agree to accept future improvements. Councilman Kenny Oswald, D-4th Ward, has been vocal about his concerns regarding the project as a whole, and on July 22 he said he was opposed to Council giving up any of its rights to review public improvements before accepting them. "We don't know if the streets are the right size and all those particulars. We have not seen a new rendering, we have not seen a drawing, we don't have any information," Oswald said. "So I'm gonna stick my neck out and say that we were gonna approve all this. I think what has to be done, I'm sorry, it's square one. And do this process just like every other developer does." Road sizes specifically were a point of concern for some on Council, as the preliminary plat that the Planning Commission approved last summer contains more narrow roads than what the city typically allows. The plat approved by the commission last year includes alleys that are 30 feet wide and streets 22 feet wide, which were expected to be accepted by the city as public improvements. City ordinances normally require that roads be at least 28 feet wide and that any public right of way be at least 60 feet wide. "If we decide that we think the roads are too narrow from the start, we would address that in the beginning and say we want them to be X amount of feet wide and we want this, this, and this. And we would grant full approval if we wanted these changes ahead of time," Councilman Chad Schneider, D-at-Large. "Because (for) instance, I have a little bit of concern over some of the road widths and some of the parking issues there." Elyria has approved variances for streets narrower than 28 feet in the past, most recently such variances were made for subdivisions proposed by developer Bob Yost. But in Yost's subdivisions, the streets remain private, rather than being accepted as public streets. In both cases, Fire Marshall William Gall has expressed concerns that streets narrower than 28 feet make it more difficult for fire trucks and other emergency vehicles to access those in need. Law Director Amanda Deery suggested that if Council members had concerns they would like to address about the preliminary plat and proposed design, they should vote to invite DBR and its lawyers before Council to give a presentation on the development plan as it stands. Multiple members of Council said that they did not feel a presentation would change their minds, because the core issue would remain that pre-approval would strip the body of its right to review the final plat before accepting the improvements. However, a measure to set a future committee of the whole meeting and invite DBR and its representatives to make such a presentation still passed 7-3, with Oswald, Councilwoman Donna Mitchell, D-6th Ward and Council President Vic Stewart, D at-Large, voting against. "On June 30, (preapproval) was something this Council, or the majority of us, were not willing to give up on," Mitchell said before the vote. "My reason being, is how can we approve what we do not about? … I do not know why Planning Commission thought this was a good idea because that's not how we do things and I'm not going to give that up." Lum wrote in his letter that the city had copies of the preliminary plat for over a year and the plans had not changed. "If the plat were to change in any significant way, then we would certainly expect to go through the appropriate review process," Lum wrote. "However, neither my client, nor the LCPA can commit the millions of dollars necessary to move the project forward if there is a risk that City Council is not going to approve the final plat assuming it is consistent with the preliminary plat." Deery said on Monday that the plan is to hold a strategic planning meeting after the next regular Council meeting on Aug. 4, and that DBR has been informed about the meeting if representatives choose to attend. Contact Owen MacMillan at (440) 329-7123 or omacmillan@chroniclet.com.