April 17, 2020
Friday, April 17, 2020
4:00pm
Since taking office on January 1, 2020, my administration has been focused on redeveloping the former Lakewood Hospital site into an asset for our community. The prior administration entered into a Development and Use Agreement (“DUA”) with Carnegie Management and Development Corporation (“Carnegie”) to develop this site. My administration has faithfully fulfilled its obligations under the DUA, including completing the demolition and site preparation work contemplated by the DUA.
The work was completed, and, on February 7th, the City delivered the final certification letter to Carnegie verifying completion of the City’s work at the Lakewood Hospital site. Additionally, the City obtained a No Further Action (NFA) letter from a certified environmental professional confirming abatement at the Lakewood Hospital site in accordance with standards under Ohio’s Voluntary Action Program (VAP). Additionally, the City was willing to support obtaining a Covenant Not to Sue from the Ohio E.P.A., but could not obtain Carnegie’s approval to proceed.
While the City performed its obligations, Carnegie has struggled to put together a financing approach that supported the project. Over the course of many months, including face-to-face meeting with me, the City engaged in negotiations with Carnegie in an effort to address the financial gap. Although some progress seemed to be made, as I communicated on the Council Docket on March 16, 2020, the financial gap posed a serious challenge for the project. On March 10, 2020, my administration submitted detailed deal points to Carnegie to continue negotiations. To date, Carnegie has not responded to the deal points from that letter.
Instead of engaging in negotiations, Carnegie has taken the position, articulated in letters to the City on April 3rd and April 10th, that Carnegie has terminated the DUA. Even though this termination is a default by Carnegie, Carnegie has laid blame on the City, citing an alleged failure by the City to timely satisfy the site work conditions in the DUA. Carnegie has provided no evidence to support this allegation or its unfounded claim that Carnegie is entitled to reimbursement. These claims are inappropriate and unjustified, and a violation of the trust of the people of Lakewood. While I had hoped for an amicable parting of the ways with Carnegie, I will not be intimidated by Carnegie’s illegitimate claims.
The termination by Carnegie has not changed my commitment to redeveloping the former Lakewood Hospital site into an asset for our community. We know that the site, centrally located in the heart of Lakewood and with demolition, abatement and site work completed, is one of the most attractive sites for development in all of Northeast Ohio. No community can rival our density and vibrancy. I am encouraged because I have already received new interest in this site from other developers. We will move forward on this site in a safe and thoughtful manner. We have an opportunity to bring to Lakewood the right project from the right team and are eager to get this underway.
...