SOUTH BEND – South Bend leaders voted Thursday to give money back to a developer, now that a deal to turn a long vacant downtown building into high end apartments has fallen through.
The plan was to turn the former LaSalle Hotel into 60 apartments.
The building has been vacant for 12 years.
But after a misunderstanding between the city and the development company, the deal won't happen.
Mavcon Properties of Kalamazoo thought it would get a100% tax abatement for 10 years, because that's how it works in Michigan.
However, South Bend expected Mavcon to pay at least 50% of the taxes each year, which is out of the company's budget.
“That was ultimately a deal-breaker for us,” said Joe Agostinelli of Mavcon. “We don’t believe that the lease rates in the South Bend marker can support a large construction cost in addition to a six-figure property tax bill.”
“The levels of financing were particularly complex and required a whole other level of city support that we weren’t able to meet at this time, but it’s not to say we wouldn’t revisit that in the future,” said South Bend Economic Development Director Scott Ford.
Thursday morning, South Bend officials approved a measure to reimburse Mavcon $4,000 the company's invested in the building.