Council discusses lease timeline, $250,000 pledge and possible medical use for 445 Central Avenue

Scott Cannell, the developer and owner of the redeveloped Highland Park Theater property at 445 Central Avenue, told the Committee of the Whole on Oct. 6 that he is proposing a two‑year timetable to secure tenants for the ground floor and has offered the city $250,000 if specific leasing milestones are not met.

The matter grew out of a development agreement that requires ground‑floor restaurant or retail at the Central Avenue site; staff presented a suggested enforcement timeline and a letter of credit option and asked the council for feedback after Cannell offered an alternative schedule and financial pledge.

The staff proposal presented at the meeting suggested 10 months for submission of complete building permit sets; if that deadline were missed the city would retain $200,000 of the pledged amount, followed by an additional milestone tied to tenants opening that would make the remaining $50,000 available to the city if not met. Staff also proposed a $250,000 letter of credit to guarantee compliance. Cannell said he preferred providing the pledge backed by his signature rather than a letter of credit and asked the council for time to secure leases and complete buildout.

Cannell described physical constraints in the east‑end ground‑floor unit that he said make a restaurant build‑out difficult, including a narrow service corridor and an emergency egress that limit deliveries and trash handling. He also described his financial stake in the project: "I have 10 and a half million or $11,000,000 in it. I do have a $4,000,000 3 net $3,700,000 mortgage on it," and that the First Floor would require an additional "2 and a half or $3,000,000 to build out" to be fully functional for restaurant or retail. He said he is willing to invest further and to back the city’s security with a written pledge: "If I haven't delivered by 01/02/1928, I'm giving the city a quarter million dollars," (date as stated on the record; timing to be clarified in any draft agreement).

A dermatologist (identified in the meeting materials and present at the meeting) has applied to occupy about 3,245 square feet of the center ground‑floor space, leaving roughly 2,100–2,200 square feet on the east end for retail or a small bakery concept Cannell described as a possible opportunity for his daughter. Cannell said the proposed medical tenant would generate foot traffic and retail sales but acknowledged the space would not provide 100% of the retail/restaurant program called for in the 2018 planned development agreement.

Council members repeatedly returned to two themes: (1) the development agreement and sales contract that accompanied the property's redevelopment required retail/restaurant at street level, and (2) the downtown business community and residents have been frustrated by a long vacancy at the site. "You made a commitment at that time," Council member Constance Bloomberg said, referencing the 2016 sales contract and the 2017–2018 development agreement. Bloomberg and others said the council must weigh the original contractual expectation against the practical difficulties Cannell described.

Several council members said they were willing to consider Cannell’s offer and allow the dermatologist to open if the city can secure protections and milestones. Council member Littlemore said she was "energized" that Cannell was focusing resources on the project and suggested an upfront grant tied to economic development as one option; other members requested milestone reporting on leasing activity and clear recourse if the 24‑month timetable fails to produce substantial progress. Council member Tapia emphasized that trust and ongoing communication would be essential after years of perceived poor responsiveness from the property owner to staff and council inquiries.

Mayor Rotering asked staff to gather council feedback and indicated that, if there is concurrence, staff would consult with corporation counsel and negotiate a written agreement reflecting the council’s direction. Staff said any negotiated agreement would be brought to a city council agenda for formal consideration. No formal motion or final council vote was recorded at the Committee of the Whole meeting.

Discussion only: the council’s conversation produced conditional support from several members for allowing the medical tenant to occupy the space while the owner pursues leases for the remainder, provided staff negotiates a binding agreement that includes milestones, reporting, and financial security or equivalent assurances. Council members stressed that any deviation from the planned development covenant should include explicit recourse and measurable timelines so the city can return the property to the original requirement if milestones are not met.

Next steps: staff will consult corporation counsel, negotiate terms with Cannell (including clarifying the pledge mechanism, timing, and specific milestones), and present a formal agreement for council consideration. The city will also continue outreach to prospective restaurant and retail tenants for the property.

Ending

The Committee of the Whole did not adopt a final agreement on Oct. 6. Council members expressed a mix of frustration and willingness to support a negotiated, documented compromise to end a long vacancy in the central business district; staff will return with a proposed written agreement for formal action at a future council meeting.