MAYOR BEUTLER’S STATEMENT ON SYNERGY PROJECT
In January 2007, the City announced a plan to redevelop the block bound by “P,” “Q,” 13th and 14th streets. A vision for a new civic plaza, parking garage and a high-rise building was put forward to the people of the community. The Lincoln Synergy Group was chosen as the developer of record to make the vision a reality. The proposed mixed-use project – hotel, office, retail and University-linked retirement housing – became known as Synergy.
Unfortunately, financial and other market circumstances have dramatically changed, and I am jointly announcing with the developer the decision to end our negotiations on the Synergy project until the economy improves. Visionary projects are critical to Lincoln’s future. They create the opportunities that attract people and investment. However, our commitment to visionary projects must be based upon sound economic and market conditions so that the taxpayers’ interests are protected and wise public investments are made.
To date, the developer and the City have diligently worked together to formulate a viable public-private project that would be a win for the developer and a win for the City. Even as we tried to harmonize our respective visions into a single course of action, credit market conditions simply deteriorated around us. The original vision for three towers on two parking garages located on two adjoining blocks was scaled back, the City’s and the developer’s parking needs were analyzed and reconfigured.
Finding available capital and credit based on a critical level of market interest has proved elusive, and the short-term prospects do not seem to be pointing in the right direction. Finding charitable dollars to fund the plaza area was also proving difficult in light of other ongoing and worthwhile community fund-raising efforts. We will continue to seek funding for the plaza area. The plaza is an important component to the central downtown and will serve as a catalyst to these investors or other investors who may be attracted to a potential Synergy project in the future.
Together, the City and the developer have made tremendous efforts to make the project work, but we are unable to do so at this juncture. Furthermore, the City’s limited and finite resources need to be carefully managed in light of an economy faced with many uncertainties and the City’s other pressing priorities.
The City’s focus will now be on preserving our ability to develop the site in the future after credit markets have stabilized and the economy is on the road to recovery. I am moving to protect the site and the City’s investment to date. We will have to expend approximately $350,000 from parking funds to maintain our ability to build a new parking garage on the site as part of a future project. A request for new proposals will be issued at the appropriate time.
I am confident that in better economic times, the prior administration’s vision for the area could have been achieved. However, the City can not commit scarce public funds to projects where market conditions are so unsettled and the national credit markets are so tight. Meanwhile, road construction and a potential new arena will continue to be prioritized for our limited capital dollars. Roads are an immediate pressing need and the arena offers a long-term opportunity for community-wide benefits.
The Mayor’s job is to prioritize need and carefully assess the City’s capacity for new commitments. Lincoln’s taxpayers can be assured that I take that responsibility extremely seriously and will not let our dreams surpass our ability to responsibly finance them in light of such a challenging economy. That’s why the Synergy project will have to wait until more favorable times.