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Brecksville may sign agreement with Independence firm to redevelop former Veterans Affairs hospital site
Sun Star Courier - 2/7/2018
BRECKSVILLE, Ohio - The city will likely choose an Independence firm to redevelop the 103-acre site that once held the U.S. Department of Veterans Affairs Hospital at Brecksville and Miller roads.
On Tuesday night, the city introduced a memorandum of understanding with DiGeronimo Development LLC. The firm would build a multiple-use development that might include stores, restaurants, apartments, hotels, hospitals, manufacturing plants, warehouses, offices and laboratories on the VA site.
Also, council introduced an agreement to accept the deed for the VA property from the federal government.
"We have cleared all hurdles to get the deed," Law Director David Matty said. "It's now before the Secretary (of Veterans Affairs David Shulkin) for his signature. We expect it to be signed in the latter part of this month."
Council placed both the memo of understanding with DiGeronimo and deed agreement on first reading Tuesday night. Matty advised council to read both documents carefully because they contain "very technical language."
"This will be a long process," Matty told council.
Under the proposed agreement with DiGeronimo Development - which Mayor Jerry Hruby said is not related to Brecksville Assistant Law Director Sergio DiGeronimo - the city would name DiGeronimo Development as exclusive developer of the VA site.
The city would retain ownership of the VA property. As each section of the site is developed, the city would have the option of transferring ownership of that section to DiGeronimo Development or other entity.
Jeff Appelbaum - an attorney with Thompson Hine LLC who is representing the city in this matter - said the memo of understanding is not binding. If council approves the document, the city and DiGeronimo Development would have 120 days to negotiate a formal, 10-year development agreement.
The city would not pay DiGeronimo to redevelop the site. DiGeronimo would cover the entire cost of demolishing old hospital buildings and preparing the VA property for redevelopment. Demolition alone would cost about $8 million and take about two years, Appelbaum said Tuesday.
Council would consider tax increment financing for some or all of the project. Under a TIF agreement, the developer would use new property taxes generated from the development on infrastructure improvements.
The project would include adding a northbound exit ramp off Interstate 77 at Miller and a southbound freeway entrance ramp at Miller. Now, the 77-Miller interchange has only a northbound freeway entrance and a southbound freeway exit.
Brecksville may ask Ohio Department of Transportation to add entrance, exit ramps at I-77 and Miller Road
The city and DiGeronimo would try to finish the 77-Miller improvements within five years of the execution of the formal development agreement.
At Tuesday's meeting, Appelbaum said the memo of understanding presents no risks to the city. The developer would bear all project costs. Also, DiGeronimo Development would share 50 percent of its return on investment with the city.
Councilman Dennis Rose expressed concern that without a formal development agreement upfront, the developer might walk away from the project if it finds more difficult environmental conditions than expected.
But Appelbaum said DiGeronimo is the "premier entity" when it comes to environmental remediation and abatement. He said the firm knows the VA property better than anyone.
"They've done significant due diligence and they know exactly what they're stepping into," Appelbaum said.
Hruby added that under federal rules, the U.S. government is responsible for any unexpected environmental problems found underground. He added that the city has studied the VA property for years and has considered every possible "what-if" scenario.
"I don't see how the city can limit its risks any more that it has limited its risks," Hruby said.
DiGeronimo Development, according to its website, builds retail, industrial, student-housing and mixed-use developments. It is helping to design and build Pinecrest, an upscale retail-residential-entertainment complex in Orange.
Also, DiGeronimo redeveloped the 167-acre site of the former Chrysler Stamping Plant in Twinsburg. The firm has prepared the former Warren Steel Mill in Warren for redevelopment, according to DiGeronimo's website.