Doctors Building Next in Line for Covington Residential Development
The City of Covington reached a settlement with Bopper Properties associated with cost overrun at the new City Hall on Pike Street.
The city commission approved the complex settlement that involves unrelated loans that the Salyers Group (which operates Bopper Properties) have outstanding with the city.
Part of the announcement on Tuesday night involved the news that the Salyers Group will partner with Ashley Commercial Group to turn the mostly vacant Doctors Building at the corner of Seventh Street & Scott Boulevard into apartments.
The Salyers Group had announced a year and a half ago their intention to develop that building. Ashley is currently working on turning the Mutual Building into a luxury apartment and commercial retail space development.
Under subsidiary Bopper Properties, the Salyers Group redeveloped the former JC Penney (and Pike Place Bingo) building into a new home for the City of Covington so that it could turn the former City Hall at Seventh Street & Madison Avenue into The Hotel Covington. The city moved in November.
A lease was signed in the spring. The agreement between the city and the developer placed the budget at $360,000 on the part of Bopper and up to $400,000 on the city. The final project ended up being more than that.
"At the end of the day, rehab was about a million dollars, so that did include some overruns in the capital budget," assistant city manager Larisa Sims said. The two parties began negotiating a deal. With $342,000 in overrun, Bopper agreed to take on $156,000 while the city was agreeable to $187,000. $37,500 would be paid by the city in cash and the remaining $150,000 as credit to be applied to outstanding loans.
The Salyers Group has a pair of existing loans from the city worth $428,000. With $150,000 removed, the loan amount dropped to $278,000. Out of that amount, the city agreed at the time of the original Doctors Building announcement to provide upper floor residential rehab funding in the form of forgivable loans. Ultimately, all the Salyers Group would owe the city under the terms of the new deal is $50,000 that is to be paid back over two years at 5% interest.