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Mark T. Burger, one of the principals of Pacific Development Partners, the developer at the center of a controversy over the troubled Valencia Business Park, showed up at tonight’s meeting of the Southeastern Economic Development Corp.’s board and made a brief presentation.
We have been following the Valencia Business Park saga for the last year. Burger has continually refused to talk to us about the story, so it was quite a surprise to see him at the meeting. He said he was there to dispel some myths about his company’s plans.
Burger said he wanted to explain why PDP initially proposed an industrial project for the land and then later changed its plans, opting instead to build a commercial project that would house a grocery store and a fast food restaurant.
He said PDP indeed initially planned to build an industrial park, but found it very difficult to find potential tenants for the industrial buildings. That, combined with spiraling construction costs, meant PDP had to reconfigure its plans for the project, he said.
“We had very limited interest, and the people who did have interest in coming here were not willing to pay the amount of dollars necessary to make it feasible to offset the incredible increase in costs over the last several years,” Burger said.
As we pointed out in this story, questions about Valencia Business Park began to arise after PDP reconfigured the project. The company had originally submitted a proposal based on SEDC’s strict guidelines for the land — that an industrial project be built. PDP had also proposed a purchase price for the land of $1.5 million, a price that reflected the plot’s value as an industrial site.
The morphing of the plans for the site had a dual effect: First, it negated the process by which PDP had won the development deal, because PDP had been chosen on the merits of its industrial proposal, not its commercial proposal. Second, as we pointed out in this story, the rezoning of the land would double or triple the value of the plot because commercial land is more valuable than industrial land. However, PDP’s purchase price for the land remained the same.
In March, under pressure from the City Attorney’s Office and Councilman Tony Young’s Office, SEDC dropped the deal with PDP and again asked developers to propose projects for the site. PDP’s proposal for Valencia Business Park was chosen by the SEDC board but the purchase price, rather than increasing to reflect the increased value of the commercial project, instead dropped by $1 million.
Burger addressed that price drop at Wednesday’s meeting.
“When we initially got into this redevelopment deal, there was the understanding that there would be no redevelopment fees. Typically, when you do a redevelopment deal, you’re not paying incredible fees for the privilege of doing it. They’re typically waived. The fees in this project are about $1,300,000,” he said.
Burger said that if the fees are waived by the city, his proposal states that the purchase price will go back up to $1.5 million, the same price PDP offered when they planned on building an industrial park.
Lastly, Burger addressed his relationship with former SEDC board Chairman Artie M. “Chip” Owen. As we have extensively reported, Owen has reported receiving thousands of dollars in delayed commissions from PDP and has an ongoing business relationship with the company.
In July, City Attorney Mike Aguirre opined that any deals inked between SEDC and PDP were null and void because Owen’s relationship with the developer constituted a conflict of interest.
Burger spoke tonight about his relationship with Owen.
“Chip Owen and I are friends. That’s true,” he said. “It’s my understanding he recused himself from every event that we would possibly be involved in while he was on the board.”
But Aguirre’s legal opinion states that merely abstaining from discussions involving PDP is not enough for Owen to avoid a conflict of interest. The opinion says Owen’s mere position at the agency creates the conflict.
In the end, the SEDC board voted Wednesday night to send the project back to its Projects Committee, where it will be considered anew.