Tensions rise as South Bend Redevelopment Commission loses patience with local developer

 

SOUTH BEND, Ind. – The South Bend Redevelopment Commission is growing antsy toward one developer for taking, what they think, is too long on a project for South Bend’s East Bank.

Matthews, LLC owns The Commerce Center and apartment building at 300 East LaSalle, just east of the St. Joseph River.

Empty commercial space on the first floor of the apartment building is the future home of a grocery store.

Back in 2017, the commission gave Developer David Matthews $5 million in taxpayer dollars to complete the entire development. The original deadline was set for April of last year.

Now, the city is weighing legal action if the project at 300 East LaSalle is not finished by Dec. 31, which is a new, extended deadline given to Matthews back in May 2022.

Some are saying this is an unkept promise to South Bend, like resident Matt Barrett, who said Matthews is hampering the progress of the East Bank with unfulfilled commitments.

But Matthews maintains that all is well and on course.

He said the pandemic and supply chain issues are what slowed down construction, and said the grocery store and pharmacy are the last pieces of the puzzle to, what he calls, a successful project.

“We’re very close,” he said. “99.7% of the deliverables we need have been met, and we have like 3 and a half months or so to meet the last one. We have time, we’re working on it, we’re not dragging our feet, we’re making good effort.”

Matthews said if all goes as expected, this extended deadline will be no problem.

If he fails to meet this requirement, the city can come after Matthews for a “clawback repayment”— which is 150% the amount he was given for the whole project. In this case, it would be $7.5 million.

He refused to release the name of the lease, the person or group moving a grocery store into the space.

Matthews said he bought the property in 2015, and started planning to build the $50 million apartment building. After the tax abatement he was given runs out, he said, roughly $1 million will go back into the city as tax revenue.

“That’s the financial reason why this is a good investment for the city,” he said, “at least at the time we made it, 3 to 5 years ago.”

He claimed he couldn’t build above 60 feet until he got a county exemption, and said that process nearly took two years.

“The state has moved their deadline for us because of COVID and other delays,” he said, “and the city’s development agreement just mirrors whatever the state agreement says for us to do.”

Original construction was delayed, Matthews said, for a plethora of reasons. These include zoning issues, stormwater and sewer questions, the legal definition of a grocery store, then finally, the pandemic.

The pandemic, then, brought its own problems. For example, he said granite for some of the apartment units took eight months to arrive because of global supply chain issues.

But now, Matthews said things are moving smoothly.

“We’ve done all this work through a lot of difficult time. And we’re near the finish line, and we’re tracking well. We’re not there yet, but we don’t have to be,” he said.

In fact, he is frustrated with the redevelopment commission for implying he is sitting on tax dollars.

“We’ve built the building, people have moved in. We’re 99.7% done. And we have 3 months to finish it. That’s doable,” he said. “We’re not in trouble yet. We haven’t run out of time. We haven’t not built the building.”

He said after the past few years of supply chain disruptions and all the other surprises the pandemic brought, he is nervous to definitively say the development will be 100% complete by the end of the year. But, he confirmed, if there are no other extenuating circumstances, then everything will be completed well within deadline.