Uptown Delray developer addresses split from general contractor

1586

Staff report

Delray’s West Atlantic neighborhood, recently rebranded “The Set,” has a project headed its way that could pave the way for more development.

But there could be a bump in the road in the project known as Uptown Delray, which plans to bring places to live, shops and restaurants to 6 acres on the south side of West Atlantic Ave.

Part of the deal between the developer and the community, which was outlined in an agreement that didn’t involve the city, stated the developer would hire local general contractor Randolph and Dewdney, RDC to do the work. The developer has parted ways with RDC due to issues the developer states it can’t resolve, which has caused contention among some community members.

The project has been in the works since Oct. 2013 when the Community Redevelopment Agency selected the developer Equity to redevelop the site between Southwest Sixth and Ninth avenues.

When Equity was selected by the agency, it told board members of its plans to hire RDC as the general contractor.

News of that promise being broken surfaced during a recent CRA board meeting where residents and local officials including Commissioner Al Jacquet and former commissioner Mack Bernard asked the agency board to look into the topic.

They demanded the agency and the city hold the developer accountable for promises made to the residents.

The promise of hiring RDC was outlined in a “Community Benefits Agreement.” The city and the CRA are not parties to the document, which outlines commitments the developer plans to provide the community in exchange for the development.

Now, in a letter responding to questions from Commissioner Jordana Jarjura dated Oct. 31, John Flynn of Equity states why the two companies have parted ways.

In the 10-page letter, he states that Equity has had “insurmountable problems” with RDC. He states that Equity has “used good faith efforts to reach commercially reasonable terms with RDC for the construction of the project.”

But due to several reasons, Equity has to part ways in order to fulfill other obligations to city, CRA and lender, the letter states.

Flynn states that RDC has been unable to provide Equity a comprehensive estimate package to present to its lenders, which has caused delays in receiving a financing commitment. He also states that RDC has indicated it is unable to provide a bond for the project, which is a requirement of the lender of the purchase and sale agreement Equity has with the CRA.

He quotes a part of the community benefits agreement that states the project is for profit and that the agreement shouldn’t hinder commercial feasibility. He said that working with RDC will negatively impact the commercial feasibility and profitability of the project.

Flynn’s letter addresses other concerns raised by Commissioner Jarjura including Equity’s promise to hire three local subcontractors and 15 local residents, add a grocery store and fulfill other requirements of the community benefits agreement.

A phone call to RDC was not returned.

Equity is scheduled to close on its purchase and sale agreement with the CRA by the end of November. Flynn states the project is on track to close.