SOUTH BEND -- The Chicago-area developer who had planned to buy Chase Tower out of receivership and renovate the 25-story building said Monday night that he's no longer interested.
Satish "Sunny" Gabhawala, frustrated by the South Bend Common Council's decision to delay voting on his proposal, told reporters he's cutting his losses.
Gabhawala had proposed a $19 million rehabilitation of the downtown hotel and office building, but he wanted $5.7 million of that funding to come from the city.
Former Mayor Stephen Luecke asked the council to table the item last month so Gabhawala could answer questions about his business background. New Mayor Pete Buttigieg requested Monday that the council wait until Feb. 27 so other developers have time to submit plans and provide city officials with other options.
"I believe the city has more to gain than it has to lose by deferring this issue," Buttigieg told the council.
Gabhawala had a contract with Huntington National Bank to buy the note for the property, which previously was owned by Massachusetts-based Dillingham Hill Real Estate.
He said today would have been his final opportunity to complete the sale after persuading the bank to move its transaction deadline twice before in November and December. The bank raised the sale price $500,000 after extending those deadlines, he said.
Gabhawala said other developers have had nearly a year to come forward with a proposal for Chase Tower, but he still is the only one to have offered a commitment. He thinks the bank's next step will be to proceed with a public auction.
He added that he's the first minority to bring a major development proposal to South Bend city government, and he feels his race factored into officials' hesitation to approve the deal. "I look at this as a prejudicial decision," he said.
Buttigieg said his request was purely in the interest of finding potential alternatives so city leaders can make the best decision. "We can't go into negotiations with only one option and an artificial deadline and expect to get the best deal for the city," he said.
If businesses can make money owning Chase Tower, Buttigieg said, others will be interested in buying it.
The council barely approved Buttigieg's request to table the proposal Monday.
Council President Derek Dieter, D-at large, broke a tie vote in the Community and Economic Development Committee to send the mayor's request to the full council. The full council voted 5-4 in favor of it.
Those voting in favor were Dieter as well as council members Tim Scott, D-1st; Dr. Fred Ferlic, D-4th; Dr. David Varner, R-5th; and Gavin Ferlic, D-at large.
Council members Henry Davis Jr., D-2nd; Valerie Schey, D-3rd; Oliver Davis, D-6th; and Karen White, D-at large, voted against it.
Several city residents spoke in favor of Gabhawala's proposal during a public hearing at the meeting. They said he's willing to bring investment to South Bend, grow jobs and tax base downtown, and there's no guarantee someone else will come along with a better proposal.
Terry Miller, a local developer who served on the council in the 1970s, said Monday's decision on the Chase Tower would set a standard for the next four years.
"It is critical that we set the tone as a council and an administration that we're open for business," he said.
Council members Henry and Oliver Davis held a news conference in the Chase Tower lobby earlier Monday to push for council action on the building. They said the building's state of disrepair has caused many tenants to consider leaving it.
"The longer we delay," Oliver Davis said, "the more we encourage them to go somewhere else."
Staff writer Kevin Allen:
kallen@sbtinfo.com
574-235-6244
Satish "Sunny" Gabhawala, frustrated by the South Bend Common Council's decision to delay voting on his proposal, told reporters he's cutting his losses.
Gabhawala had proposed a $19 million rehabilitation of the downtown hotel and office building, but he wanted $5.7 million of that funding to come from the city.
Former Mayor Stephen Luecke asked the council to table the item last month so Gabhawala could answer questions about his business background. New Mayor Pete Buttigieg requested Monday that the council wait until Feb. 27 so other developers have time to submit plans and provide city officials with other options.
"I believe the city has more to gain than it has to lose by deferring this issue," Buttigieg told the council.
Gabhawala had a contract with Huntington National Bank to buy the note for the property, which previously was owned by Massachusetts-based Dillingham Hill Real Estate.
He said today would have been his final opportunity to complete the sale after persuading the bank to move its transaction deadline twice before in November and December. The bank raised the sale price $500,000 after extending those deadlines, he said.
Gabhawala said other developers have had nearly a year to come forward with a proposal for Chase Tower, but he still is the only one to have offered a commitment. He thinks the bank's next step will be to proceed with a public auction.
He added that he's the first minority to bring a major development proposal to South Bend city government, and he feels his race factored into officials' hesitation to approve the deal. "I look at this as a prejudicial decision," he said.
Buttigieg said his request was purely in the interest of finding potential alternatives so city leaders can make the best decision. "We can't go into negotiations with only one option and an artificial deadline and expect to get the best deal for the city," he said.
If businesses can make money owning Chase Tower, Buttigieg said, others will be interested in buying it.
The council barely approved Buttigieg's request to table the proposal Monday.
Council President Derek Dieter, D-at large, broke a tie vote in the Community and Economic Development Committee to send the mayor's request to the full council. The full council voted 5-4 in favor of it.
Those voting in favor were Dieter as well as council members Tim Scott, D-1st; Dr. Fred Ferlic, D-4th; Dr. David Varner, R-5th; and Gavin Ferlic, D-at large.
Council members Henry Davis Jr., D-2nd; Valerie Schey, D-3rd; Oliver Davis, D-6th; and Karen White, D-at large, voted against it.
Several city residents spoke in favor of Gabhawala's proposal during a public hearing at the meeting. They said he's willing to bring investment to South Bend, grow jobs and tax base downtown, and there's no guarantee someone else will come along with a better proposal.
Terry Miller, a local developer who served on the council in the 1970s, said Monday's decision on the Chase Tower would set a standard for the next four years.
"It is critical that we set the tone as a council and an administration that we're open for business," he said.
Council members Henry and Oliver Davis held a news conference in the Chase Tower lobby earlier Monday to push for council action on the building. They said the building's state of disrepair has caused many tenants to consider leaving it.
"The longer we delay," Oliver Davis said, "the more we encourage them to go somewhere else."
Staff writer Kevin Allen:
kallen@sbtinfo.com
574-235-6244
