The old Habersham County Courthouse may remain idle for another 90 days if Parkside Partners gets its way. On September 12, the Atlanta-based development group met with the Habersham County Development Authority and asked to extend its due diligence period again. Parkside also requested a refund of a portion of the earnest money the company has paid to this point.
Parkside paid another $25,000 for a second 30-day extension in August. That extension ends on September 30.
Project hurdles
Habersham County Development Authority Executive Director Charlie Fiveash explained Parkside’s request to authority members. He told them he believes Parkside is the right partner for the project. The company is now fairly invested in the project, already having spent over $120,000 in legal, engineering, and architectural fees.
The roadblock that Parkside said it has encountered is the cost of construction. They received the cost of development for the project from two contractors that came in much higher than expected. Parkside wants to reduce some of the scope of the project in an effort to reduce construction costs.
Extension
Fiveash recommended that the Authority consider giving Parkside the additional 90-day due diligence period they requested. This would allow them more time to examine their construction costs more closely and receive more competitive bids on the project.
He told authority members that the new request would have to be voted on by all three entities named in the contract, including Habersham County and the city of Clarkesville.
Clarkesville City Council members discussed the project during their annual retreat. They “embraced” the idea of the extension, but the city council has not taken any action on the proposal, Fiveash told the authority. The Development Authority and the County Commission would also have to take action on the proposal.
According to the first amendment of the memorandum of understanding (MOU), Parkside Partners has made three payments of earnest money on the project that equal $100,000. The document outlines the requested 90-day extension and the requested refund of $25,000 of earnest money.
Fiveash clarified that it was two separate requests and that the authority could approve or reject one or both requests.
Authority member Mike Franklin explained his position to the authority. “Anytime you’re dealing with commercial property, you buy extensions,” he said. Fiveash agreed. “That’s what they’ve done in the past.”
Franklin added, ”For them to want $25,000 of earnest money back, would be in my mind, foolish for the county, foolish for us. That’s egregious.” He told the authority that he was fine with the 90-day extension, but it needed to cost Parkside something. “I’m fine with the 90-day extension, but I’m not fine with doing that without it costing them something,” he said.
Refund debate
Habersham County Commissioner Bruce Palmer gave his opinion during the discussion as a member of the commission.
“It’s easier to present to the citizens of the county, ‘Hey they’ve asked for an extension, we’re giving them an extension, but it’s costing them some money to get that extension,’” he said.
The authority members debated the request’s refund provision. Fiveash explained to the members that he had warned his contact at Parkside that he felt the request for a refund would not be received favorably among the development authority members.
During the debate, it became clear that the members were not in favor of the refund. Palmer told the members that even though we are a partner, it is also time to “hold their feet to the fire.”
Partnership Habersham President Rope Roberts participated in the discussion. He recommended to the authority members, “Give them the extension, but it costs them $10,000 in hard money. ”
Currently, the MOU states that $15,000 of the earnest money is non-refundable. Roberts’ recommendation would increase the non-refundable amount to $25,000 should Parkside withdraw from the project.
Franklin moved to grant the 90-day extension, but Parkside must pay an additional $10,000 in non-refundable funds. The authority approved the motion unanimously.
The Development Authority’s action must now be presented to the County Commission and Clarkesville City Council for their approval of the extension. Parkside Partners will also have to agree to the terms of the 90-day extension.
