A rendering of “Midtown Development,” a five-story commercial and residential building that would replace the parking lot on 12th and Laramie streets.
Courtesy photoThe developer for the new Midtown Aggieville building says the project is on hold after an investor pulled funding.
The $53.9-million, five-story commercial building, under construction at 12th and Laramie streets, was approved by the Manhattan City Commission in November. But TJ Vilkanskas of Back 9 Development said Friday that a portion of the funding has fallen through.
“When I moved forward with the Midtown Aggieville project, I believed we had the backing of an institutional investor, although they had not deposited funds,” he said. “Our verbal agreement was that they were depositing a sizable amount into the project during this time frame. This was the reason the project was put into motion.”
Vilkanskas declined to name the investor or the amount of money promised, but he said it amounts to half of the capital raised.
“I was recently notified they would not be making their deposit as expected,” Vilkanskas said. “They cited the final announcement of the K-State Foundation’s third office building as their main concern as well as macro-economic factors such as the banking crisis we are currently seeing unfold. I continue to be supportive of the Foundation’s third office building in their Edge Collaboration District. It will offer a great benefit to our community.”
Vilkanskas said he paused the project to find new funding sources.
“This is an unfortunate situation, but I pride myself on being transparent both good and bad,” he said. “All land, labor, and materials have been paid to date without the need to borrow money. To make sure that never becomes an issue I have decided to temporarily pause the project while we look at all aspects of the building including raising additional capital to replace what was lost. I greatly appreciate the hard work and attention to detail that has been executed to date by BHS and their preferred contractors. We will continue to work with BHS, Anderson Knight Architects and other project team members to get Midtown-Aggieville moving forward again in a timely manner.
Vilkanskas said crews are still doing a little construction to safely tie up the job site.
He said streets may reopen after that, until construction can resume. He has no timeline for that, but he said he hopes it will be soon.
“Our current investors, including myself, remain positive about the long-term viability of the project,” he said.
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