Emails obtained by Today’s News-Herald reveal the Havasu Riviera project is likely two to three years away from fully opening, and local developers blamed the state Attorney General’s office for the delay.
In conversations dating back to January, developers for the project feared that the Attorney General’s office wouldn’t allow a contract to be signed as planned.
“AG office attorneys have refused to sign the assignment of lease because they have ‘never done this before,’” Wrote Havasu Riviera developer in a list of concerns shared with the city. “... AG office will not offer concrete suggestions. Without the assignment, the bank will not fund the loan and the project will fail,” it said. As a result, the developer feared the city’s Riviera Road, which was already substantially completed by that time, would become a “road to nowhere.”
Havasu Riviera is a collaboration between Lake Havasu City, Arizona State Parks and Trails and Komick Development. The project will comprise 550 acres, and is estimated to be completed over the next decade. It will include a six-lane boat launch ramp, a 250-acre master planned community, a 300-room hotel, a 200-slip marina, a waterfront restaurant and day-use areas.
A press release sent out last week by Arizona State Parks and Trails announced the project was officially moving forward again after months of delays. The press release went through several revisions in back-and-forth emails between Desert Land Group, Mayor Cal Sheehy, State Parks and the Governor’s office.
In a draft version of the press release, Mychal Gorden of Desert Land Group had included a line that read, “The project is anticipated to complete Phase 1 and open to the public by the summer of 2020 with 2 additional phases over the following 18 months.”
However, Darla Cook, State Parks deputy director, expressed her concern about tagging a set completion date on the project. “We have not met on the updated timeline of development,” she wrote in an email. “I’d like to be optimistic, but concerned about announcing the opening the summer of 2020 which is less than 12 months from now.”
Gorden had also included in a draft version of the release a line that said, “There will be an update for the construction timeline within the next 60 days as we are working to refresh development and construction plans with the concessionaire. Once that is completed, we will be prepared to discuss the buildout and updated timeline of the project. Although you’re not seeing dirt moving on the site, the project is moving forward.”
State blamed for delay
Last week’s project update was months in the making. On Jan. 15, Jim Komick and his attorney, Dean Formanek, had a phone call with Nicole Colyer, deputy general counsel for Gov. Doug Ducey’s office, to discuss the concerns surrounding the project. A bulleted list of talking points was shared with city officials via email.
The list of talking points said, among other concerns, that “two separate banks provided letters detailing their requirements for leasehold financing that were provided as part of the Solicitation Response and communications. The communications were very clear about the need for financing and how that would be accomplished.”
The “developer applied for a loan from Horizon Community Bank for construction costs,” and “as expected, HCB requires an ‘assignment of lease’ as collateral for loan.” This ensures that if the developer was unable to operate the park, the bank can find a “qualified operator to help ensure loan repayment and operate park,” according to the memo.
“AZ State Parks has consented to the assignment of lease,” the document says, and Havasu has relied on that consent, investing roughly “$6.6 million in infrastructure costs in good faith.”
The consent agreement has been signed, according to the State Parks announcement last week. But the question of who signed the assignment of lease remains unanswered.
In an email sent to Sheehy and City Manager Jess Knudson on June 1, Komick wrote that Colyer was “again… tasked with getting our Loan consent document signed by Procurement according to Bob [Broscheid] at State Parks.” In the same email, he mentions their “on-going problem of the State not honoring our contract by signing the loan consent documents that were detailed out during the bid/negotiation process with State Procurement in Spring 2016.”
State parks tumult
In addition to the contract issues that have plagued the project, last year’s change in leadership at State Parks has played a large role in the Riviera project’s starts and stops. All State Parks projects were halted in 2018 after former Director Sue Black was fired by Ducey.
Ryan Anderson, director of communications for the Arizona Attorney General’s office, said that the investigation of Black is ongoing. The investigation is looking into the mistreatment of native archaeological sites among other allegations, and that includes areas in Lake Havasu City such as Lake Havasu State Park and the Riviera site. The Havasu Riviera project rests along the Colorado River, a common place for these native historical sites and artifacts to be found.
A request by the News-Herald to the State Procurement Office about who ultimately signed the assignment of the lease was referred to the State Parks Department, which has declined to provide a number of public records requested by the News-Herald over the past two months.
No answers to questions concerning the consent agreement have been answered by State Parks.
Calls to Mychal Gorden of Desert Land Group were not immediately returned, and Havasu Riviera developer Jim Komick of Komick Enterprises could not be reached after multiple attempts to contact.