The renovation of downtown Durham's Chesterfield building, which was originally expected to begin back in April, has been delayed again.
Josh Parker, the developer behind the project, said in an email today that the closing of the $63 million in stimulus bonds being used to finance much of project won't occur until Sept. 30.
Chesterfield Partners, Parker's company, can't take ownership of the building until the closing occurs and the bonds are sold to investors as long-term notes with a fixed interest rate.
Parker said the delay wasn't caused by the company's inability to get the terms it wanted for the bonds.
"There were some things going on outside of our control that caused a last minute delay despite most everything being ready for a closing on June 30," he said. "The September 30 date is the next best date we could get with efficiency to get all the pieces ready on the same day and steer clear of how summer affects Wall Street."
Chesterfield Partners rolled bonds in to a new escrow period with an interest rate of .40 percent, Parker said.
"This is a low interest rate that doesn't materially change the overall budget and a cost we can absorb," he said.
The fixed interest rate on the bonds will dictate how profitable the deal ends up being for Chesterfield Partners.
Parker has said he expects to be able get a long-term interest rate of between 6 percent and 8 percent. The rate reflects the over demand for the bonds among investors -- the greater the demand the lower the interest rate.
Chesterfield Partners issued $63 million in Recovery Zone Facility Bonds in late December. The bonds will cover most of the $90 million cost of converting the former Liggett & Myers Tobacco Co. warehouse into a mix of retail spaces, offices and apartments.
The bonds were originally expected to remain in escrow until April 14.
The closing was first delayed until today in part, Parker said, because the underwriting team handling the sale moved to a new firm.
The Chesterfield is the third and final phase of the West Village redevelopment project started by Christian Laettner and Brian Davis' Blue Devil Ventures.
Blue Devil Ventures owned the building before it was forced to turn it over to Select Capital Management to avoid foreclosure. Parker, who once worked for Blue Devil Ventures, reached an agreement with Select Capital last fall.
The 360,000-square-foot, six-story Chesterfield building has sat empty since Liggett & Myers moved its operations to Mebane in 2000.
Redevelopment plans for the building call for about 10,000 square feet of retail space, 50,000 square feet of office space and 152 loft apartments.
The building's core will be turned into 28,000 square feet of climate-controlled storage units.