Change In Plans for City Gateway Property Draws Opposition, Reveals Insider Dealings

It looks like there will be a battle over the development of a piece of property in the heart of downtown Tallahassee. On Tuesday night, the Leon County-Tallahassee Planning voted to move ahead with the project, but not until a challenge from a local developer was heard and will likely resurface over the coming weeks.

The argument against the development, as articulated by David Theriaque, who was at the meeting representing TM Street LLC, was presented as one of fairness.

“If my client has to follow certain rules with regard to mixed use,  then everyone should follow the same rules,” said Mr. Theriaque.  His client, TM Street LLC, is developing the mixed-use Gateway project across the street from the proposed development.

Mr. Theriaqu was referring to the Mckibbon Hotel Group’s (MHG) request before the Planning Commission to change the land use designation on the City owned  property from office and retail to hotel, so the company can build a Hampton Inn next to the Aloft Hotel.

While some members of the Planning Commission voiced concern over the change, ultimately the Commission voted to move ahead and accept the staff recommendation.  The next stop for the project is the City Commission meeting on October 24th.

Tallahassee Reports has been told that TM Street LLC will continue to fight the proposed development.

How did this project get to the point where developers are fighting against developers?

Back into 2006, City planners envisioned a mixed-use development at the corner of Tennessee and Monroe Streets that would add to the 18 hour downtown idea by creating pedestrian activity around a hotel, office and retail space.

However things changed. The developer, MGH, decided it would be best to build the hotel first and then proceed with the office and retail part of the project later. The City agreed. And to facilitate this change, the City Commission approved a 3-year option agreement for sale and purchase with the MHG to purchase the .63 acre parcel on the southwest corner of the intersection of Tennessee and Monroe Streets. The agreement allowed MHG to purchase the parcel for $1,303,448.

In 2008 construction of what is now the Aloft Hotel began and was completed in 2009.

However, MHG was unable to begin the second part of the project which included office and retail space before the expiration of their option to buy the remaining part of the City owned land. So on April 27, 2011 MHG asked for, and the City Commission granted, a 2-year extension of the purchase agreement, expiring on April 30, 2013.

This extension was not enough time for MHG to get the project under way. MHG for the second time requested a 2-year extension of the agreement to extend the deadline to April 30, 2015. The developer also indicated that Downtown real estate conditions do not support the original development concept for the mixed use parcel. MHG subsequently announced, that in addition to the option extension, they would pursue a change in the current land use of the property  that would allow for the construction of another hotel.

Now it gets interesting.

On April 24, 2013, with little fanfare, the City Commission voted to grant a second two year extension.

Since that vote, Tallahassee Reports has been contacted by a number of individuals that wondered how a developer could secure three different options over a period of seven years to buy a prime piece of City owned property without a change in sale price.

Also, how could a developer secure a change in land use – which was inconsistent with the original development plan – without the City seeking other bids that might meet these requirements?

One caller, upset that a Hampton Inn would be located at the historic corner in downtown Tallahassee, said that “Scott Maddox has sold out to a ***** Hampton Inn!”

This is what Tallahassee Reports has been able to verify.

Governance, a local government consultant group, represented MHG and helped secure the original mixed use development deal. On their website, Governance states they “assisted the McKibbon Hotel Group by navigating the RFP process and facilitating the discussions between the city, county and community redevelopment agency (CRA). The result was McKibbon Hotels gaining the sole right to build a grand hotel and office complex.”

Commissioner Scott Maddox lists Governance as a source of income on his 2012 financial statement and recently revealed that he sold his residence to Governance and is now leasing the residence from the consulting firm.

Tallahassee Reports has also learned that Gary Yordon, an employee of Governance, has met with at least two high level City staffers this year to discuss the MHG project.

These relationships between Commissioner Maddox,  Governance and MHG  raises the question, how did Commissioner Scott Maddox vote on the MHG option extension on April 24, 2013?

Tallahassee Reports obtained and reviewed a video of the meeting.  Just before the vote on April 24, 2013,  Commissioner Scott Maddox got up and left the Commission Chambers.

Tallahassee Reports is still waiting on the release of additional information and will publish any new findings.

  aloft, Governance, Maddox, McKibbon Hotel Group, Theriaque, Yordon