The City of Lakeland is addressing infrastructure concerns at The Lake District as the $450 million project makes its way through bankruptcy.

On Thursday, Dec. 21, the Lakeland Board of Commissioners heard an update on the 160-acre mixed-use project south of the Interstate 40 and Canada Road interchange. Developer Yehuda Netanel filed bankruptcy in March.

Economic planning consultant Dexter Muller, who has worked closely with Netanel and the city on the project, asked the board to consider renewing the TIF (tax increment financing) development agreement for one year. Netanel recently reached out to Mayor Josh Roman about the possibility.

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“He’s been working with a new lender. They now have an agreement,” Muller said. The agreement would clear the debt with the previous lender and cover tenant improvements at the project. “You really would probably know in February whether all of this is going to take place.”

The next court date for the project is Feb. 5.

The Lake District, unveiled in April 2016, was touted as a huge mixed-use development on the old Belz Factory Outlet Mall site. Not only would it fill the vacant shopping center, but it was also destined to have housing, commercial businesses, lakes, amenities and make Lakeland more urban.

But over time, the project has suffered a number of financial problems as some of the planned commercial property never materialized.

While the bankruptcy was proceeding, the court did grant the sale of a Lake District parcel to Chick-fil-A.

“Why you see development going on for the Chick-fil-A is because the developer doesn’t own that lot anymore,” city manager Michael Walker said.

A Phase 1 development contract at The Lake District that had a four-year window for completion, including infrastructure, has expired.

The bankruptcy proceedings have left several other problems, said Emily Harrell, Lakeland city engineer.

“Obviously the traffic signal needs to be installed,” Harrell said. “It will be installed because we’ve taken that project on. That cost should’ve been a burden by the developer.”

The streetlights also have not been installed yet.

“The erosion and sediment control on the property is severely out of compliance to the point that we requested that the State of Tennessee come in,” Harrell said, noting the site is not stabilized with grass or mulch to avoid filling the sediment basin.

Roman stressed while all of the city’s elected officials support the project and the businesses there, they have an obligation to make sure development stays on track. He said he thinks he would have a hard time moving forward with an extension right now.

City attorney Will Patterson noted Netanel’s lack of liquidity right now is presenting a big hurdle to completing some of the items.

“Out of the Chick-fil-A sale, there was $300,000 that was put into escrow specifically for the traffic signal,” he said. That will cover half of the $600,000 cost of installing the signal, which came in much higher than originally expected. The remaining cost of the signal could end up coming out of the developer’s security deposit.

Patterson says Netanel, who did not attend Thursday’s meeting, hopes to have another plan approved from the Feb. 5 hearing so he can “leverage that into some additional financing to remain in possession of the property.”

The board did not take any action Thursday related to the development agreement but did unanimously approve a temporary traffic signal installation at Canada Road and Lake District Drive in advance of Chick-fil-A’s planned opening in March. A temporary signal will go up while the city waits for materials to arrive for the permanent signal, which could take well into the second half of next year.

“We were heading toward mass chaos and a terrible situation,” Commissioner Jim Atkinson said of the possibility of not having some sort of traffic signal there by March. “That traffic light is critical for the Chick-fil-A opening.”

This is not the first time The Lake District has tried to survive financial challenges. It went into foreclosure in 2017, but Netanel was able to restructure the financing before it went to court.

Since then, many commercial ventures have opened there, including Starbucks, Villa Castrioti, Lakeland Wine and Liquors and Frost Bake Shop. But a couple of big-name possibilities that had been announced, Malco Theatres and Mike Miller’s Let It Fly, ended up not happening for various reasons. Netanel says Marshall Steakhouse will likely still be coming to the project.