The Warren Sentinel

Article date: November 18, 2004

EDA recommends marketer of Avtex property

By: Roger Bianchini

Following a nearly two-hour closed session to discuss the presentations of two companies that want to market the Avtex business Park - North American Reality Advisory Services and Vita Nuova, both with backgrounds at the Avtex Superfund site - North American’s familiarity with the EDA’s mixed - use business park scenario won out.

Following North American’s presentation during a break in Friday’s meeting, EDA Vice Chairman Rick Novak’s comment, “It sounded like he was throwing back what we have done at us,” reflected some initial negativity North American official Spiros Antoniadis’s presentation.

But later that afternoon EDA Executive Director Paul Carroll pointed out, “The mixed use plan for redevelopment of an Avtex Business Park that we are working from was originally developed by North American.”

Board questions about the familiar ring of Antoniadis’s presentation were answered during the work session by examining the level of involvement North American had in setting the groundwork for the EDA’s work to date on that redevelopment plan.

“Also the Vita Nuova presentation dealt more with turning the property over to a consortium of investors for development.  We have better flexibility, more leverage and control with North American,” EDA Board Chairman John LaBarca explained of a second major factor in the board’s decision.

Signs of concern with the latter factor surfaced during Vita Nuova’s dual marketing and investment presentation when EDA Board member Bill Barnett commented,  ”I wouldn’t sign an agreement that didn’t give us final say on approval of a plan.”

Michael Taylor, president of Vita Nuova, began by explaining his company’s experience with the redevelopment of environmentally impacted properties and the role of Smart Growth Investors (SGI) in his company’s work.  Taylor noted Vita Nuova had worked with the Avtex Redevelopment Advisory Committee (ARAC) on development of a plan incorporating a Conservancy Park and Soccer Plex into the overall redevelopment plan.

Taylor and Gene Lynch, a partner with former Maryland Governor Parris Glendening in SGI, then elaborated on the investment network SGI brings to the mix.  Taylor pointed out that Glendening and Lynch have assembled “over 20 of the largest and most financially secure developer/owners on the east coast.”

Questioned on the cost of his company’s marketing work, Taylor estimated $100,000 “to get my proposal done and get [SGI] on board.  If additional funds are needed at that point we would get SGI to put in what is necessary, say $150,000 to $200,000 to get where we need to be.”

LaBarca later pointed out that the Vita Nuova proposal did not carry a guarantee that SGI would ultimately decide to invest in the project.  “We still had to do this and this before they considered investing in the project after we would have spent the first $100,000.”

While Lynch tried to ease such concerns by telling the board, “We wouldn’t be here if we weren’t interested,” the potential of the marketer’s investment branch not being contractually committed from the outset seemed an ongoing concern to the EDA.

“With North American we have $120,000 locked in to complete the marketing of the property,” LaBarca said.  The EDA chairman pointed out the North American’s projected $200,000 cost for the marketing project was structured into three payments.  The EDA would pay North American 30 percent ($60,000) at the time a marketing contract was signed, another 30 percent at launching the marketing plant in 7 to 12 months, followed by the final 40 percent ($80,000) being paid only at the project’s completion to the EDA’s satisfaction.

Carroll explained that point as the time the EDA would be poised to select an investor group attracted by North American’s marketing of the business park property.