City puts pressure on developer

INDEPENDENCE -- Independence leaders may take legal action against the owner of the largely unfinished Independence Station.

INDEPENDENCE -- Independence leaders may take legal action against the owner of the largely unfinished Independence Station.

The potential move is prompted by roughly $470,000 in system development charges (SDCs) the city has been waiting on from Steven Ribeiro of Salem, said Interim City Manager Ross Schultz.

"We've been nice," Mayor John McArdle said. "Now we're ... trying to exert the power the city has under statute to make sure our interests are taken care of."

Ribeiro entered into a SDC payment plan with Independence when he broke ground on the 57,000-square-foot complex, envisioned and designed to be the world's most environmentally friendly.

Those payments stopped coming in several months ago, Schultz said.

Complicating matters is what appears to be a dispute between Ribeiro and Johnson Controls, his contractor and a loan guarantor, over who actually controls the building, Schultz said.

Ribeiro, in an Aug. 12 e-mail to the Itemizer-Observer, said he has not defaulted on any loans to Johnson Controls and that there is "no issue of a potential change of ownership."

He did, however, note that there were "sensitive negotiations" taking place, but wouldn't explicitly say who or what those talks involved.

Dan Maxwell, a manager for Johnson Controls, said he was unable to

comment on the situation.

The City Council may decide at its Tuesday, Aug. 24, meeting to proceed with a collection action that exists under Oregon statute regarding SDCs against Independence Station's parties.

SDCs are one-time fees charged to help fund public infrastructure capacity to accommodate new development.

Ribeiro -- or Johnson Controls -- would be given notice; if no payment was made, a lawsuit could be filed in circuit court and a lien placed against the building, Schultz said.

Ribeiro said no city official had contacted him as of last week about a legal threat.

"I have no doubt that this is what they have decided to do," he said. "I certainly will sit down with them and discuss this."

The city actually ending up with the structure is "unlikely," Schultz said.

"There's already a lot of money invested in it and I don't think anybody is going to let it go for half a million," he said.

As a private project, the city hasn't had much input into the building's lack of progress, but the lapse in payments presented an opening.

Schultz said a hope is that the possibility of a collection action against the parties could force them to reach some type of resolution and resume work.

"Or we may not move the building forward, but at least we have the $470,000," he said. "And lets face it, our first duty is as stewards of that money."

Officials -- and citizens -- have been highly critical of the numerous on-site delays that have occurred with the downtown property since 2004.

Most recently, Johnson Controls suspended work in September 2009 so Ribeiro could seek more money to finish the $15 million building.

In his e-mail, Ribeiro said that the city's SDCs are sitting in an escrow account, and that Independence is in no danger of not being paid.

Ribeiro blamed the construction delay on the commercial credit crisis, but added "we expect to have this behind us soon as we finally have, in hand, two live offers from lenders to finish the project.

"We will have crews back on the jobsite as soon as possible," he added. "This is my life's work and I will not give up due to any challenges."


Use the comment form below to begin a discussion about this content.

Sign in to comment