Redevelopment agency denies request to subordinate reverter, halting developer—s financing plan for Oaks at Moores Creek

The Fort Pierce Redevelopment Agency on Tuesday voted unanimously to deny a developer—s request that would have subordinated the agency—s reverter rights and agreed to stand still while the developer sought additional predevelopment financing.

Developer Daniel Rosemond of East to West Development Corporation presented an update on Oaks at Moores Creek Phase 2 and asked the board for two items: (1) a subordination-and-standstill agreement to allow Florida Housing Finance Corporation—s predevelopment loan to be secured by the project and (2) direction on a proposal he presented for the FPRA to provide approximately $3.43 million to fund construction of the remaining 11 unsold single-family homes.

Why it matters: Rosemond said the project has four of 15 homes sold but market conditions, higher interest rates and lengthy delays in land conveyance and infrastructure have disrupted the project—s home-buyer pipeline. He told the board that without either an immediate construction financing source or buyers ready to close, the remaining units risked becoming infeasible to build. He said the FPRA funds would be repaid unit-by-unit at each sale.

Rosemond told the board the construction budget estimate for the remaining 11 units was about $3,400,000 and that the developer expected to repay an outstanding predevelopment loan to Florida Housing Finance Corporation of roughly $250,000 as part of any funding path. He said some additional subsidy programs (including a Home Ownership Program offering up to $25,000 per buyer) could be used if the developer and the city coordinated matching down-payment assistance.

Commissioners pressed for financial clarity and legal implications. Commissioner Broderick said the developer—s proposal created too much risk for taxpayers and argued for clear repayment terms and construction-ready drawings before the city provided capital. Commissioner Gaines asked what would happen if the FPRA said no; City Attorney Jennifer Hedges and staff said the property would revert to the FPRA under the development agreement if the developer defaulted, and the FPRA would then decide how to proceed with the parcels (rehabilitate, rebid, or otherwise). Hedges explained that the proposed subordination would place the FPRA below other lenders in priority and include a standstill provision preventing the FPRA from exercising its reverter rights while the lender enforced remedies.

Developer Rosemond said he had explored traditional lenders and a range of financing partners but that few institutional lenders will finance small portfolios of owner-occupied affordable homes; he described the option before the board as a last pivot to keep the project feasible. Nigel Austin, a recent buyer at the development, spoke briefly to praise the build quality and said his completed house had provided stability after long emergency shifts.

After extended discussion about commercial risk, past city involvement in infrastructure and the prospect of the FPRA acting as a bank for private construction, Commissioner Broderick moved to deny the request; the motion carried 4-0 with Commissioners Taylor, Broderick, Gaines and Chairwoman Hudson voting yes (Commissioner Johnson had been excused earlier in the meeting).

Ending: Staff and the developer left the meeting with direction to continue discussions outside the contractually required subordination and standstill request and to return with options. The board—s vote leaves the developer with existing financing commitments but without the subordinated security the lender sought; staff told the board that, if the board declines the subordination, staff will work with the developer on next steps, which could include termination of the development agreement and subsequent board consideration of the property.