Developer awaits financing for Batavia's One Washington Place project

Bank loan officers hold the fate of Batavia's One Washington Place downtown redevelopment project in their hands.

Shodeen Construction President Dave Patzelt told Batavia aldermen Tuesday he expects approval of a $30 million loan by the end of the week.

If that happens, excavation for the six-level building could start before the end of the year, Patzelt said. If the loan is denied, the project will be dead.

Aldermen, frustrated by years of delay, grilled Patzelt on the Geneva-based firm's failure to submit construction drawings and apply for a building permit by a July 13 deadline specified in a redevelopment agreement.

Patzelt said the increased cost of materials and worldwide supply-chain problems caused by the pandemic were at the root of the problem.

The developer has not ordered construction drawings, at an estimated cost of $650,000, because financing is not yet in place, Patzelt said.

One Washington Place is a $50 million project which includes a 333-space parking garage, 186 apartments and commercial and office space. The project was announced in July 2016.

The building would cover most of a block bounded by Washington Avenue, Wilson, River and State streets.

The city has committed $16 million for the garage, which it will own and operate.

Patzelt said once financing is approved, Shodeen will seek a new timetable for submitting plans, getting a building permit and starting construction.

"I'm not asking for time to delay or kick the can down the road," Patzelt said.

However, Shodeen will seek a "comfort letter" from the city assuring the lender, Fifth Third Bank, that Batavia officials are not finding Shodeen in breach of the redevelopment agreement and are committed to the project.

Some aldermen bristled at that idea.

"How do we square this when there is a breach?" 4th Ward Alderman Joe Knopp said.

"We have to do something instead of letting this drag out," 7th Ward Alderman Keenan Miller said.

Second Ward Alderman Alan Wolff, one of the project's strongest supporters, threatened to ask for the council to terminate the redevelopment agreement next week if Shodeen does not have the financing in hand.

"Either we have an answer or we move on," Wolff said. "The frustration is real."

City Administrator Laura Newman said the first delay was Shodeen's fault because the firm miscalculated the cost of constructing the parking garage. Shodeen asked the city to pay $2 million more for the garage. It was further delayed when the city discovered lead in the soil on the city-owned site, and when it decided the time remaining on a tax-increment financing district that was to cover the city's costs was not sufficient. The city created a new TIF earlier this year.

"Not all of the blame lies at the feet of the developer," Newman said. "Consider what this means to downtown Batavia. If this project goes away, there will be another but not next year."

Knopp's 4th Ward colleague, Alderman Tony Malay, said the city should declare Shodeen in breach of the agreement.

Both Knopp and Malay, in whose ward the project is located, noted that time and again the redevelopment plan has survived on 7-7 votes that were decided by Mayor Jeff Schielke.

For his part, Schielke urged aldermen to be patient and keep their eyes on the goal.

"We should stay with Mr. Patzelt and see if we can get this done," Schielke said.