November 29, 2012

Outlot 2 back to square one

Outlot 2 back to square one
By Jerry W. Kram

The New Town City Council decided to start over with the process of finding a developer to build homes on Outlot 2, a 14 acre parcel east of the Northern Lights Building.
The council had awarded development rights to a group called New Town City Development LLC that was put together by an out of state developer named Steve Kovacs. Kovacs had engaged Eagle Rock Timber as the general contractor to build the project. That group ran into rocky going as Kovacs wasn’t able to arrange financing for the project. The council voted to terminate its agreement with Kovacs in mid-October after giving him an extension to try and find alternative financing.
Holland Dredge and Rick Gokey of Eagle Rock Timber attempted to salvage the project, telling the council they were in contact with some investors who were willing to put money into the project immediately. The council had hoped that some construction work could begin before freeze up. However, at a special meeting on Oct. 26, Gokey and Dredge told the council they needed looser bonding requirements from the city in order to finalize the funding. The council was unwilling to put more risk on the city by lowering the bond requirements.
At the council’s regular meeting on Nov. 20, the council reviewed a letter from Gokey stating that Eagle Rock Timber would still like to proceed with the project. However, the council members were of the opinion that the city had made its decision not to continue with Eagle Rock Timber leading the project at the previous meeting. The council voted to formally end its agreement with Eagle Rock Timber and to put the project out for a new round of bids. The council also took note of the fact that the area, known as Sand Hill, hasn’t been tested for stability. The council instructed City Engineer Steve Ike to arrange for the proper testing.

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