By Joshua Winata
The Cove Herald
The expiration date has come and gone on a contract for the Copperas Cove Economic Development Corp.’s vacant speculative building, but the deal hasn’t soured yet.
The deadline on a contract extension with Austin-based investment company New Century Investment LLC passed on Sept. 30 with no official renewal, but CCEDC officials are still optimistic about closing on the purchase.
“We’re not concerned with the contract,” CCEDC Executive Director Jerry Conner said. “We know exactly what’s taking place here. We don’t need a contract to finish this deal.”
Conner said he has high hopes the deal will close within the next two weeks, which is why the EDC has chosen not to officially prolong the contract deadline. The extension process itself would take a month because it must be approved by both parties’ lawyers and the EDC board, and he expects to finalize the transaction before then.
New Century plans to expand the vacant 38,700-square-foot facility into a 65,000-square-foot entertainment venue that will include a 16-lane bowling alley, a 12-screen movie theater, a sports bar, concession areas, a major video arcade and party rooms. Engineering plans have already been completed and reviewed by the EDC.
In February. the company expressed an interest in developing the spec building, which has remained vacant for four years, and received a $700,000 infrastructure incentives package from the city in April as part of their contract with a contingency clause that the deal must close by June 30.
The project was originally conceived in two separate phases with the movie theater slated for completion by Thanksgiving and the remaining facilities due by 2008. However, the prospect of finishing the project in one sitting with the phases occurring in parallel led the EDC to extend the contract for an additional 90 days in order to allow the company to secure the necessary $6.7 million financing.
The first source of funding that New Century and the EDC pursued was a loan package with the Small Business Administration, which eventually proved to be too restrictive and “imposed negative sense of economy,” said Leo Sullivan, CCEDC business and development specialist.
“A few months ago, we worked with the SBA, which held us back for almost two and a half months, so we had start all over,” said Jennifer Tran, commercial specialist with New Century.
Since rejecting the SBA loan package on Aug. 1, the EDC has secured offers from five other funding sources from which to choose and is waiting to hear from three more. The EDC has been instrumental in finding investors, financial institutions and venture capitalists interested in financing the large-scale project.
“On Friday before the 30th had arrived, I had physically seen two offers, so we were most confident that they were moving in the right direction, using our counsel in securing the funding,” Sullivan said.
This week, New Century will review the parameters of the proposed loan packages, each of which have different terms, interest rates and payoffs. The funder will dictate the project timeline due to required logistics such as appraisals, surveys and title searches.
Once the company selects a lender, the deal will be ready to close and construction, scheduled for November following the approval of city permits, can begin. Until then, New Century is not legally locked into purchasing the building, but Tran said the company is committed to the project.
“We are 150 percent going to bring an entertainment center to Cove,” she said.
Conversely, the CCEDC is not obligated to sell the spec building to New Century, which Conner insists is a good thing because if a more lucrative offer happens to arise, the EDC will be free to pursue it.
“Business-wise, we wanted to leave ourselves open,” he said. “It’s just smart on our part not to have done another contract with them.”
But the EDC remains convinced that New Century will close on the deal and have taken the company’s financial and time commitment as signs of good faith.
“We don’t know what the future holds. I can’t guarantee you anything today, but I can tell you this looks very good,” Conner said. “We’re in great shape right now. There’s going to be nothing like it in this region at all. It’s another addition to making Copperas Cove the city built for family living.”
Contact Joshua Winata at email@example.com or call (254) 547-6481