Add another item to the list of things city of Dunkirk officials need to do.
City officials will be looking for a new preferred developer for the former Bertges auto dealership property located at 18 Lake Shore Drive W. Development Director Steve Neratko broke the news Wednesday at a meeting of the Dunkirk Local Development Corporation Board of Directors meeting.
Neratko said he spoke with Krog Corp. President Paul Neureuter Monday.
OBSERVER Photo by Gib Snyder
This site — the former home of an auto dealership and later a fitness center — will remain vacant for now. Krog Corp. has informed the city it no longer wishes to be the preferred developer for the site at 18 Lake Shore Drive W.
"It was discussed that they are interested in not being the preferred developer any longer, along with Benchmark and Turnkey, who is their partner on this site," Neratko said. "Basically they stated they did an in-house, informal market survey, and with the economics as they are, with the site and just in general in the region right now, they couldn't come up with much that they saw as feasible as a project at this time."
Neratko said Krog has done $8,000 worth of work on the site and according to Krog, they were eligible for up to $10,000 in reimbursement from the DLDC for the work. He added he has not had time to check the documentation to see if proper procedure was followed.
"I also asked them for some supportive documentation regarding that, invoices for the work done. (I) told them that we did have a meeting today if they did want to have some sort of answer from us on how we would like to proceed. I have not received that documentation as of yet, so it's kind of hard to proceed or make any sort of decision."
The site is currently in the Brownfield opportunity program which Krog, as well as Benchmark Turnkey, applied for on the DLDC's behalf.
"They have been making progress on that. Unfortunately, there is a deadline for a next step," Neratko explained. "I found out Monday that that deadline for that next step is August 1, but they were confident they were going to be able to get an extension to at least mid August. The work is the environmental remediation work plan. I again reached out to them for some supportive documentation regarding that to see what would be involved."
Neratko said he hadn't heard back on that work but was told the price tag was an additional $5,000.
"This program would fund the cleanup of the site. If we decide not to proceed I was informed we should expect a letter from the DEC since that it is already in the program stating what are our plans, when are going to clean up the site?"
Neratko said there was not a lot the DLDC could do until more information was available.
"It is tough with the fact that this work might be due mid August and really ... we don't really have the money to spend anyway," he added. "So, we're in a tough spot."
Board member Richard Halas called for a contract to be presented by the company proving their claim.
"I asked them for an invoice, a proposal for the work to be done and any supportive documentation, such as contracts," Neratko replied. "We talked Monday, I sent a follow-up email Monday and haven't heard back from them."
Board member Rosemary Banach asked what else Krog Corp. told Neratko.
"They told us the reason was they did an informal, in-house market study, did not find any feasible, economically feasible projects that they could utilize the site for," Neratko replied. "They talked about at one point it was thought of as a Boardwalk 2. They said that really was not feasible at all. They talked about mixed use, about condos.
"They didn't think the price points were there for that for it to be profitable for them."
Fourth Ward councilwoman Stacy Szukala asked if the city received a copy of the market study.
"We asked the for that as well. Again, I haven't heard back," Neratko replied.
Board member James Muscato said Krog Corp. was involved in three projects in the city - the Graf Building, Bertges building and a proposed refrigerated warehouse project originally involving the former Cliffstar, now Cott, corporation.
"They are still involved in that," Neratko said, adding that was also talked about with Krog on Monday.
"They have a new potential user," he stated. "They said they're close to signing an agreement with them. ... They are still the developer on the site. They still do have credits.
"It is a county project. It has been back and forth. I know the original project the Cott/Cliffstar refrigeration warehouse isn't going to happen. That deal isn't happening but they are working on other potential projects."
Third Ward Councilman Adelino Gonzalez asked if there was a contract naming Krog the preferred developer for the Bertges site.
"I've looked through the DLDC paperwork; it wasn't there," Neratko replied. "I've looked through some of our electronic files. I've not come across anything yet. There are still some I have not taken a look through yet.
"They have also mentioned they would be more than willing to sign over any of the tax credits or anything in regards to the brownfield program if another developer was interested in the property. It may be time to start thinking about whether we want to put out another (Request for Proposals) and how we want to go about doing that. It's probably something we should think about now and discuss at the special meeting in mid-August."
Krog Corp. was named the preferred developer in December 2010 after the DLDC sought RFPs. The DLDC Real Property LLC purchased the Bertges property for $525,000 in 2010. The property is now a 100 by 210.5-foot lot.
In November 2011, Krog and the city released an artist's rendering of the proposed project. The "Newport Rhode Island Style" building was proposed to house a mix of lakefront residential units and commercial space.
For now, the property will remain vacant.
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