Burnham developer pulls out

Burnham developer pulls out

CHAMPAIGN - When The Atkins Group came in second in the running to be the developer for the Burnham Hospital redevelopment project in October 2001, Mike Martin, Atkins project manager, had only one thing to say:

"It's kind of like being a Miss America runner-up. You never get to do anything."

Except in this case, Miss America has surrendered her crown.

The Burnham Redevelopment Group on Thursday announced that it has been unable to come to terms with the city and is backing out of its proposal to build Stone Arch Village on the 7-acre central city site of the old Burnham City Hospital on Springfield Avenue.

"We and the city jointly agreed we're going to have to disagree," said Joseph Petry, one of the principals involved in negotiations that have been going on now for more than a year.

Negotiations broke down over the extent and timing of construction of student apartments that were to be part of the complex. Petry said the Burnham Redevelopment Group wanted to build more student apartments in the early stages of the project.

"For us to do this financially, doing the student apartments generated more income early on, and that was critical," he said. "Even if it's only 20 percent of the whole project, the way that 20 percent is figured in is crucial. There are certainly no hard feelings. We bent and they bent, and we finally figured out it wasn't going to work out for either party."

Whether The Atkins Group is still interested remains to be seen.

When four proposals for the area were evaluated in October 2001, the Stone Arch proposal and The Atkins Group proposal were rated the top two and very close.

Both proposals received high marks for their design and incorporation of open space and integration of uses with the surrounding area. The only questions about Stone Arch Village dealt with the high cost of the covered parking proposed and the developers' lack of experience with such large-scale projects.

A drawback identified in the Atkins proposal involved the lack of office space anticipated, a deliberate exclusion on the developers' part because of the current glut of space on the market.

Martin said Thursday that he has "absolutely no idea" if developer Clint Atkins will pursue the opportunity.

"We haven't heard anything official from the city," Martin said. "It's an interesting time right now. I've talked to Clint a little about it. I think he's going to take a look at it."

City officials said they planned to open negotiations with Atkins. They plan to proceed with demolition and clearance of the Burnham property in any case, hopefully this year.

"In terms of timing, I don't know where The Atkins Group is," said City Manager Steve Carter. "But it's still an attractive project, and the kind of project that can really make a difference."

Just last October, the council authorized the city to begin formal negotiations with the Burnham Redevelopment Group. The intent was to redevelop the Burnham site, which has been vacant and/or underused since the hospital's closing 10 years ago.

Stone Arch Village was the centerpiece for redeveloping a broader and recently created tax increment financing district that comprises some 13 blocks of land.

Stone Arch Village was to be a mix of retail, office and residential uses built with an urban-style architecture. It was hailed as part of a reversal of the 30-year trend in Champaign that has sent office buildings and apartment complexes to the edges of town.

The investment was expected to create property values of $31 million in its first phase alone.

The first phase was slated to include 231,000 square feet of mainly retail space, with apartments above, in eight-story brick-and-limestone buildings along Springfield Avenue. The developers wanted to have the first phase completed by fall 2004.

The corner of Fourth Street and Springfield Avenue would feature a plaza and fountain fronting a stone archway, similar in design to the nearby historic Stone Arch Bridge, that would lead to an interior courtyard area.

On the Springfield side, building setbacks would allow for outdoor seating along a row of cafes, bistros and special retail shops. Amenities like 18-foot-high ceilings for the first-floor uses, architectural detailing, wrought-iron railings and decorative streetlights accented the appeal.

The city had agreed to build a 500-space underground parking structure, plus demolish and clear the site at an estimated cost of $9.1 million, paid for by proceeds from the TIF district.

Kane McKenna Inc., tax increment financing specialists hired by the city, determined that tax revenues from the district would generate more than enough money to build the parking structure. The more ambitious of two Atkins concepts proposed building 528,000 square feet of new space - apartments, condos and retail space - within three years.

In a letter to Burnham Redevelopment Group representatives, the city underscored its concern about building more four-bedroom student apartments on a site already surrounded by student apartments.

"The potential for this project to evolve into a student-oriented environment is high unless its character is unquestionably different than the surrounding buildings," said the letter from Bruce Knight, the city plan director, and Craig Rost, the deputy city manager for development. "The original concept for the site was for high technology-oriented, high-quality, residential, retail and office development that would enhance and support the research parks and build on the recent development of urban apartments and venues downtown."

The letter also notes the city was unwilling to acquire additional properties sought by The Burnham Redevelopment Group for the project.

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