The collapse Friday of Brutger Equities' plans for a $63 million hotel project across from Saint Marys Hospital was a big deal. A lot of powerful forces came together to challenge the developer, the city's planning and zoning process, city administration, the Destination Medical Center bureaucracy, and eventually the City Council's competency, and developer Larry Brutger decided he'd had enough.
Here's my take on who won and who lost in the Holiday Inn debacle. There are many more losers than winners, but let's start with winners.
The biggest winner, at least for the moment, is the Imagine Kutzky neighborhood group, which is an offshoot of the Kutzky Park Neighborhood Association, and the city's neighborhood associations generally. Imagine Kutzky and people allied and associated with it, including City Council Member Michael Wojcik and council candidate and businessman Sean Allen, raised concerns about almost every aspect of the project, including its Holiday Inn brand, which apparently was too declasse for some.
Whether Imagine Kutzky was reflecting neighborhood concerns or imagining them is hard to know, in part because the top concerns weren't headline-grabbing. It's not as if the project involved demolition of a beloved landmark, major planning and zoning changes or whatever. There were concerns about its frontage on First Street, how well it fit with transit plans for the Second Street corridor, and of course tax-increment financing that would have been involved. But neighborhood activism about the project was in place before the TIF and Saint Marys tunnel angle emerged.
In any case, Kutzky Park activists helped put the brakes on the project. If delays in winning city and DMC EDA approval were the reason Brutger abandoned ship, Imagine Kutzky played an important part.
Neighborhood associations have become organizations to reckon with in Rochester, which generally is a good thing. That said, it's reasonable to wonder whether neighborhood leaders always act in a way that reflects neighborhood interests, and how that community input dovetails with the elective process of running a city.
That brings up another big winner: Politics. The Holiday Inn project got caught up in the gears of a much larger political debate involving City Council politics as well as concerns about DMC. Allen, co-owner of Forager Brewery and of what's described as a boutique real estate firm, Midwest Landing, plans to challenge City Council President Randy Staver this fall, and Wojcik, who's running for re-election, has made no secret of his wish for a new governing majority on the council, with two other seats up for grabs.
Both have commented extensively on their blogs and social media about this project and criticized just about every facet of the project and the process. Wojcik's postmortem comments on his blog were somewhat muted -- he sounds almost wistful about "what could have been" if the project had gone ahead, though he says, "I think the public will be excited to see some of the other projects being proposed in this area."
Wojcik blames the project's demise on city zoning issues, poor city staff work and communication, "high land acquisition costs," "lack of public benefit to justify high subsidies," the Holiday Inn brand and Larry Brutger's personality.
On that last point, I can't remember a time when a developer's personal qualities, his outreach and engagement with people involved, has been so closely analyzed. Regarding the Holiday Inn brand -- really? Are the other hotel brands within a few blocks either direction from that site any more prestigious? The "Holiday Inn brand" issue was absurd from the start.
And regarding TIF financing, we'll see how that plays out and what the record shows for Wojcik and other council members regarding TIF and "choosing winners and losers."
Allen, in the Post-Bulletin story today, is less wistful about the project's demise. He lays the blame on the developer and says, "This is not a huge loss for Rochester. We lost a $63 million project, but we're likely to gain a $90 million project that will be better."
We'll see how long it takes for that $90 million project to come along. As Staver says in the P-B story today, based on how this project was treated, that property might remain a parking lot for a while.
A few other winners might include other hotel owners along Second Street, especially Tom Torgerson and TPI Hospitality, which owns three other hotels within a few blocks of Saint Marys. Torgerson wrote an open letter to the council last month that publicly hammered the Holiday Inn project and its TIF request. That was a pivotal moment in the whole series of events that led to Brutger's announcement Friday.
Another winner might be the owner of the site, Oronoco businessman and Kahler executive Javon Bea, who presumably gets to keep some earnest money from Brutger, though one would assume he'd prefer to close the deal and move on.
Losers? There are many: The City Council, and Staver probably takes some extra lumps because of the political atmosphere. City Administrator Steven Kvenvold and city staff get some blame for how the project was handled, especially in the presentation to the DMC EDA. The DMC EDA, and by extension DMC, which is likely to come under more pressure to get moving or get out of the way so the city can move on projects of this kind. Brutger, who lost some time and money here but presumably has other fish to fry.
And the biggest loser? The city, which just lost a $63 million investment.
There'll be other developers and other projects, and that land across from Saint Marys won't sit vacant for long. But this wasn't Rochester's finest hour.