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$3.4M for affordable housing buys years of delays

By WILL VAN SANT
Published April 4, 2007

After nearly two years of delays, it looked Tuesday as if Pinellas County was about to get tough with a pair of developers who have failed to make good on their pledge to build affordable housing east of Largo despite a multimillion-dollar loan from the county.

But instead of foreclosing on the low-cost, $3.4-million loan, the County Commission agreed to give them two additional weeks to sort matters out.

Board members warned, however, that if nothing changes by that time, the parties will head to court.

"The county has gone far beyond reasonableness on this," County Commissioner Bob Stewart said shortly after the decision. "I'm not going to support any further extensions."

In October 2004, the county signed an agreement with Nick Kotaiche of Crest Capital LLP and George T. Farrell of Milmarson Development to create affordable housing and improve the Greater Ridgecrest area.

Using state affordable housing funds, the county loaned the men $3.4-million, which was used to purchase the former Terra Excavating site at the corner of Trotter Road and 134th Avenue. Kotaiche is a part owner of Terra Excavating.

About 200 housing units were to be built on the 18.5 acres. Forty of those units were to be set aside at below-market rates for those in need of affordable housing.

The agreement called for work to begin June 1, 2005. But the date passed without any construction having begun. Extensions were granted, five in all.

The last called for work to start by April 30, 2006. The deadline came and went without a spade hitting dirt.

Because construction debris has been dumped at the location for three decades, stabilizing the site and preparing it for building is complex and costly.

Shortly after the agreement was struck, a nationally known developer with experience on such projects backed out, leaving Farrell and Kotaiche to seek other partners.

Tuesday, Kotaiche said he had been unable to get financing from a bank because of a softening housing market and that the project had also been delayed by complications in shutting down Terra Excavating and opening the business at another location.

Kotaiche said he wishes he had never gotten involved in the deal and that he wants to return the county's money, but will be unable to do so for at least 60 days. Once the loan is satisfied, Kotaiche said, he wants to continue talks with the county to ensure that affordable housing gets built at the site.

"I promised affordable housing, gave my word of honor," he said. "It's just a question of integrity more than anything else."

County Community Development director Anthony Jones said he thinks the commission will stick to the two-week deadline and not give Kotaiche the 60 days he seeks.

But Jones pointed out that the foreclosure process allows for repayment to be made even after a lawsuit has been filed.

Once the issue is resolved, Jones said the county will look for another developer for the site, despite what he called Kotaiche's "good faith effort" to make the project succeed.

"I really think he really believes he can do this," Jones said. "That's been the problem all along."

Will Van Sant can be reached at vansant@sptimes.com or 445-4166.

[Last modified April 3, 2007, 20:39:22]