GNV staff recommends ending grocery store project

After a 90-day community engagement process and the holidays, the proposed east side grocery store will return to the Gainesville City Commission at its first regular meeting of 2022 on Thursday.

But after staying in a state of flux since August, the project might not proceed. City staff has recommended that the commission refuse to move forward with the project and developer after conducting its due diligence.

The project proposed to the commission would use $3.3 million in city money to build a Bravo supermarket as the anchor tenant to a plaza on SE Hawthorne Road. This funding would come in the form of a forgivable loan once the project fulfilled city goals, such as hiring a certain number of locals and remaining open for a set number of hours per year.

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The project first came to city staff last May as an unsolicited proposal. The commission decided to move forward with the project at its July 29 meeting. It also authorized the city manager to conduct due diligence on the proposal and developer, the city attorney to begin drafting a contract, and the city auditor to complete a review of the city manager’s due diligence process.

The city’s work went on pause at the end of August. According to city files, the developer, Fred Washington, decided to conduct a 90-day community engagement process after meeting with community members.

City staff stopped its work as well.

Toward the end of the 90-day period, Washington informed city staff that he wanted to move forward, and the due diligence process started back up.

The city auditor’s report on the due diligence process highlights several concerns with Washington’s experience and the project’s feasibility.

The following are some of those concerns:

  • Lack of documentation supporting developer success in a related project. The developer has one similar project in progress in another city.
  • Developer did not conduct his own due diligence study for property acquisition.
  • Developer misrepresented involvement from key management team. Two of three developer stakeholders told the city they do not have any involvement in the Gainesville project.
  • Several inconsistencies in corporate naming, formation and backing for the project. Staff identified no funding outside of the city’s contribution.
  • Developer’s local hiring goals and community engagement plans are tenuous and rely on a developer’s partner, who is not actually participating in the project.
  • Developer has no formal analysis or documentation of successful local hiring in similar projects.
  • No operational/feasibility studies were completed by the developer that would determine whether the proposed development would achieve its intent.

Backup documents include a letter from consulting company PFM that advises against moving forward.

City commissioners had concerns with the project during the summer as well.

At a June 17 meeting, multiple commissioners raised concerns about the way the unsolicited proposal passed through city staff to the commission. Those concerns prevented the commission from passing a motion to start finalizing the term sheet.

At the July 29 meeting, Commissioner Desmon Duncan-Walker said she had also heard community concerns over the type of grocery store―a Bravo supermarket. She voted against the motion to move forward.

Commissioner David Arreola and former commissioner Gail Johnson also expressed concern about the process but voted to move forward with due diligence.

The project now lands back in the hands of the commission, which will take it up again at Thursday’s meeting.

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