Not a Very Merry Christmas for Local Developer

Along with me, I am sure all of you have been watching the development of the Uptown Worthington project on Route 29.  This redevelopment project taken on by Brian O’Neill and O’Neill Properties Group on 100 acres of the former Worthington Steel factory was supposed to be a model for the planning concept ‘New Urbanism’.  The project had a price tag of $540 million, 1.6 million sq. ft and was supposed to include 753 luxury residences, nearly 800,000 sq. ft. of upscale retail and about 185,000 sq. ft. of office space.  Having Wegmans Market in our backyard was exciting news for a lot of us! 

Now it looks like Uptown Worthington may be a model for great projects falling to the woes of today’s economic crisis.  O’Neill Properties Group is in danger of having to give the keys back to Citizens Bank.  Citizens Bank has secured a $61 million judgment against the developer who borrowed money to build the project.  Court documents filed a couple of weeks ago show that the bank entered the judgment against Brian O’Neill, after the bank and the King of Prussia developer were unable to come to terms on the loan.  In researching the situation, I determined that O’Neill Properties originally arranged an $86 million loan with Citizens Bank through Malvern Hill Associates and other O’Neill-affiliations for the land acquisition and construction costs.  O’Neill guaranteed the loan, which was initially made in 2006 and amended in October 2008 when the financial markets worldwide were in turmoil. As of this date, Mr. O’Neill has not filed a petition to strike the judgment (the legal option when someone places a judgment against them.)  

The million dollar question (or rather $61 million question) – what does this news mean for the project? I am not sure what the timeline is for O’Neill Properties to resolve the loan issue . . . and what happens in the meantime, does the project continue with O’Neill Properties?  I’d like some of our developer, planners, and contractors to weigh in on this one.  Does my much anticipated Wegmans Market get completed?  Will Citizens Bank become the developer in this project?   

This turn of events for Brian O’Neill certainly must be causing pause for Peter Monaghan and Strategic Realty Investments (SRI).  Here we have SRI, the recently-named master developer of the Paoli Transit Center project which is to include multi-use development, just down the road from the current financial woes of the Uptown Worthington project.  I don’t personally know Brian O’Neill, but in the interest of the community, here’s hoping that some good news comes his way (in the form of $61 million!).  For Peter Monaghan, O’Neill Properties Group’s misfortune must be an eye-opening revelation, so here’s sending best wishes to Strategic Realty Investments for their success with the Paoli project!

Strategic Realty Investments to be Master Developer for Paoli Rail Yards

 I just received notice from State Rep Paul Drucker’s office with the following press release from Harrisburg.  Strategic Realty Investments has officially been named as the master developer for the Paoli rail yard redevelopment project.  I know Peter Monaghan personally, one of the principals of Strategic Realty Investments, and I appalud the choice.  Peter is a wonderful, community-spirited person and this project will be greatly helped with him at the helm!  This is good news for the community.

Developer chosen for Paoli rail yards

 HARRISBURG, Dec. 16 – State Rep. Paul Drucker, D-Chester/Montgomery, said today that Strategic Realty Investments has been selected as master developer for the Paoli rail yards, a 20-acre site located in Tredyffrin and Willistown townships.

 The developer will team with the Pennsylvania Department of Transportation, Amtrak, the Southeast Pennsylvania Transportation Authority, Tredyffrin and Willistown townships, the U.S Environmental Protection Agency and numerous stakeholders to create a new mixed-use development on the former brownfield.

 The site will be home to the new Paoli Transportation Center, which is expected to include a modern train station to accommodate hundreds of daily riders and a state-of-the-art garage.

 “I believe there is no more important initiative in the Paoli area that could simultaneously help business economic development as well as improve the quality of life for local residents, and it is encouraging to see progress is continuing,” said Drucker. “This announcement is the latest indication that all our hard work is paying off and that the new station and surrounding development will become a reality.”

 “Transportation infrastructure is the heart and soul of economic development and this project is a prime example of how public transportation is a vital part of local economies,” said state Rep. Joe Markosek, D-Allegheny, chairman of the House Transportation Committee. “My sincere thanks and congratulations go to Representative Drucker for bringing this important project to my attention, and for his enthusiastic support and persistence through the process.”

 Drucker said funding for the project is expected to come from private and public sources, including potential American Recovery and Reinvestment Act of 2009 funding.