Delayed millrace housing projects get timeline extensions

Feb. 8—GOSHEN — Goshen Redevelopment Commission members Tuesday granted timeline extensions for two multi-million dollar housing projects planned for the Goshen millrace following news that both projects have experienced significant delays due to COVID-19.

According to Becky Hutsell, redevelopment project manager for the city, architect Scott Sivan of the Mishawaka-based development firm InSite Development recently contacted her office requesting amendments to two previously approved agreements with the Redevelopment Commission for the planned River Art and Millrace Townhomes projects.

As originally proposed, the River Art project involved construction of a four-story, 40-unit upscale apartment building near the intersection of South Third and Jefferson streets at a cost of about $11 million.

As part of that project, the company also planned to redevelopment the north half of the nearby Hawks Building into apartments or condominiums, plus a common-space coffee/art gallery at a cost of about $3.6 million.

As for the Millrace Townhomes project, that project involved construction of approximately 16 townhomes, ranging in size from 2,500 to 3,000 square feet, at a site generally located north of Douglas Street and south of Purl Street between River Race Drive and the millrace.

As proposed, homes at the site would feature private garages, decks and courtyards. Total private investment had been projected to be about $4.2 million.


According to Hutsell, while the Hawks portion of the first agreement has been completed, the new apartment complex for the vacant lot at Third and Jefferson streets and the construction of the Millrace Townhomes project have experienced delays, primarily due to COVID and the resulting increase in construction prices.

Speaking first to the River Art/Hawks development, Hutsell noted that the original agreement for the project was executed back in March of 2018.

As part of that agreement, it was noted that InSite Development must invest a minimum of $5 million into the River Art project by Sept. 26, 2021, as one of the stipulations for the Redevelopment Commission agreeing to transfer the land's title to the developer.

However, Hutsell noted Tuesday that due to significant delays resulting from the onset of the COVID-19 pandemic, that timeline is no longer achievable, and needs to be extended.

"The agreement required an investment of $5 million into a four-story apartment building by Sept. 26, 2021 — the developer is requesting that this be extended through July 1, 2024," Hutsell told the commission. "The developer has provided a Gantt chart detailing the project timeline moving forward and has intentions of completing construction by the end of the first quarter of 2024, but is requesting additional time due to the uncertainty of the construction supply chain and availability of materials and labor."

In addition, Hutsell noted that InSite had requested that the next several months be spent evaluating the market to determine the exact number of apartments, pricing for the units and the possibility of incorporating condo units into a portion of the building to provide another housing option.

"Cost increases over the past two years have resulted in the previously approved plan being no longer financially viable," Hutsell said. "The developer intends to further refine the plan to allow for construction within reasonable rent and purchase rates."

As a stipulation of extending the agreement through July of 2024, Hutsell recommended that InSite be required to provide the commission with updated drawings and details regarding the project for approval no later than the commission's August meeting.

"If the developer in unable to commit to commencing construction by June 1, 2023, at that time, it is being recommended that the development agreement be terminated and that the property at Third and Jefferson be returned to the city," Hutsell said.

The commission's members agreed, and the River Art timeline extension was approved unanimously.


Speaking next to the Millrace Townhomes project, Hutsell noted that the original agreement for that project was executed back in June of 2019.

As part of that agreement, InSite had committed to purchasing the first two building lots at the site by Aug. 31, 2020, and having the first two townhomes constructed by Oct. 31, 2020, with the remaining 14 townhomes to be constructed by Dec. 31, 2024.

However, as with the River Art project, Hutsell explained that the onset of the COVID-19 pandemic resulted in significant delays for the townhomes project, requiring reevaluation of the overall project plan and timeline.

"Similar to what is being proposed for the River Art building, InSite is requesting the next several months to evaluate the market, desired unit sizes, price points and layout for the townhomes," Hutsell told the commission. "InSite began marketing the lots in January 2020, but no significant interest was shown due to the pandemic.

"With today's construction costs, the developer would like to reevaluate to confirm that what is constructed is within an affordable price point and what is desired by the community," Hutsell added. "An option of shifting the layout to single-family detached homes is being considered with smaller residential footprints to control pricing."

As such, Hutsell noted that InSite had requested the following adjustments to its timeline for the townhomes project:

—That the requirement for purchase of the first two building lots be extended from Aug. 31, 2020, to June 1, 2023;

—That the required building size be reduced from 3,000 square feet to 1,400 square feet;

—That the requirement for construction of the first two buildings be extended from Oct. 31, 2020, to Dec. 31, 2023;

—That the requirement to have all buildings constructed by Dec. 31, 2024, be extended to June 1, 2026; and,

—That the requirement to own all lots by June 1, 2024, be extended to Sept. 1, 2025.

"As with the River Art project, staff is recommending that the developer provide the Redevelopment Commission with updated drawings and detail regarding the project for approval no later than Aug. 9," Hutsell added of the request. "If the developer in unable to commit to commencing construction by June 1, 2023, at that time, it is being recommended that the development agreement be terminated."

The commission's members agreed, and the requested timeline extensions were approved unanimously.


In other business, commission members:

—Approved a request by Hutsell for permission to solicit proposals for construction inspection services related to the city's East College Avenue project.

—Authorized the Goshen Engineering Department to solicit quotes for the 2022 abandonment of downtown vaults. Quotes will be due March 7 at the Goshen Board of Public Works and Safety meeting, and will be put forward for approval during the March 8 Goshen Redevelopment Commission meeting.

—Approved a purchase agreement with Doug Dispennet authorizing the commission to purchase Dispennet's properties at 215 Pleasant Ave., 211 Pleasant Ave., 212 Pleasant Ave., 207 Pleasant Ave., 211 New Street and the vacant parcel immediately north of 215 Pleasant Ave. for a total cost of $501,000. Closing on the purchase will occur no later than April 30.