After pulling plug on long-planned Heritage Park development, Sanford asks: What’s next?

After nearly a decade working with a developer to turn vacant land in the heart of downtown into a vibrant community of luxury apartments, restaurants, stores and offices, Sanford commissioners pulled the plug on the project — at a cost to taxpayers of at least $3.75 million.

The city will pay Sanford Waterfront Partners of Coral Gables (SWP) that amount for walking away from the planned Heritage Park development, commissioners decided unanimously on Aug. 12. But many more dollars — and many hours of time — have been spent on the failed endeavor over the years.

The Heritage Park development also raised questions over whether the city is competent to guide a private development — and whether it is sufficiently committed to affordable housing in its downtown, which SWP sought unsuccessfully to make part of the project.

Mayor Art Woodruff said it’s time for a fresh start.

“Ten years ago, the Heritage Park development was approved because the community agreed it was what downtown needed,” Woodruff said. “Now we get a second chance to decide what will be best for our downtown and community.”

Richard Heisenbottle, SWP’s executive manager, said Thursday he wished Sanford the best in future development of the site. “It was an amicable parting of the ways,” Heisenbottle said.

During last Monday’s meeting, commissioners decided to ask the public again for ideas on what’s arguably the most valuable piece of property in Sanford — 5.4 acres of city-owned land overlooking the Lake Monroe waterfront and marina. City staff also will put out a request for proposals from developers.

“We have some very talented people in our town and I would love to hear their opinions,” Commissioner Patty Mahany said. “We want the highest and best use of that property.”

But at the meeting, Commissioner Patrick Austin, first elected in 2016, blasted the city for entering into the development deal. Austin said Sanford should sell all or part of the land to a private developer.

“I dare to even imagine or ask how much money was spent through that whole process by the city and to get absolutely nothing out of it 10 years later,” he said. “I don’t think the government needs to be involved in this stuff.

“We need to get rid of some of that property. We need to let it go and let the market do what the market does.”

It’s unclear how much the city has spent on staff hours, attorney fees and other costs on the project over the years.

When originally envisioned in 2015, city officials hoped the $55 million Heritage Park development would enliven Sanford’s downtown and lure workers and residents into the city’s core. The city had decided against selling the property to retain influence over what would be built.

Plans showed three-story buildings filled with up to 235 apartments and townhouses on top floors with commercial and professional space on ground floors. The area — bordered by East Seminole Boulevard, Sanford Avenue, East First Street and Hood Avenue — has long been used as parking for downtown businesses and the nearby county courthouse.

But the project was plagued by setbacks almost from the start.

City leaders and SWP couldn’t agree on how many apartments would be deemed as affordable housing. There were also disagreements with development plans and hurdles with obtaining financing.

The COVID-19 pandemic and inflation stalled the project. And Jeff Triplett, former mayor and one of the project’s biggest proponents, died in February 2021 of cancer.

Anxious to get the empty lots developed, city commissioners in 2016 selected Torre Companies of South Florida , a predecessor to SWP, as developer.

The two parties signed a development agreement two years later. As part of the deal, the developer had the option to purchase the land for nearly $2.4 million. In return, Sanford would waive about $1.5 million in permitting fees and other city costs. The city also agreed to spend about $4 million in soil stabilization and planned for a $5 million streetscape project around the property.

After the apartment buildings were completed, the city would return the land purchase amount to the developer as an incentive to complete the project.

But last November, some city commissioners were shocked after SWP presented plans showing affordable studio apartments.

“I just don’t understand how we can put affordable housing in the very center of our downtown,” Mahany said at the Nov. 14 meeting. “When we are trying to create a catalyst for economic development, how does low-income housing help that?”

Commissioners then rejected a tax-exempt financing arrangement meant to speed up the project after SWP tried to secure $75 million in bonds that required city approval.

Woodruff said this week Sanford came out ahead because it never paid out many of the financial incentives.

“This decision does cost the city $3.75 million,” he said. “But given the overall circumstances, the commission agreed it was the best deal for the city at this time.”

Christina Hollerbach, chief executive officer of Hollerbach’s German Restaurant and president of the Sanford Main Street program, called the city’s involvement in developing the property “an absolute disaster.”

Hollerbach proposes Sanford strengthen its development rules for the land then offer some or all the property for sale.

“Government should not be involved in this,” she said. “They are too slow. They need to trust the private sector.”