The city of Johnston is seeking over $3.8 million from Ignit Johnston LLC, the developer of a proposed youth sports complex, after the developer defaulted on its development agreement and failed to complete a land sale by February 1.
Project Faces Financial Hurdles
The proposed complex was planned for 30 acres north of Interstate Highway 80/35 on the west side of Merle Hay Road. Last fall, Lincoln Savings Bank filed a foreclosure against Ignit Johnston LLC, alleging a mortgage default of more than $3.56 million as of October 23, plus accruing interest of over $1,600 per day. A trial scheduling conference in the foreclosure case is scheduled for February 18.
Further complicating matters, two investors have filed lawsuits against Ignit Johnston LLC in January, claiming the developer defaulted on promissory notes totaling $100,000.
City’s Response and Potential Outcomes
On December 1, the Johnston City Council found Ignit Johnston LLC in default and initiated remedies outlined in the development agreement. The city offered to repurchase the property for $1,440,375, but the developer did not arrange for the transfer by the February 1 deadline.
Ignit Johnston LLC now has 30 days from February 1 to reimburse the city more than $3.5 million in predevelopment grants and up to $300,000 in related costs, including legal and engineering fees.
Chad O’Meara, co-founder of Ignit Johnston LLC, stated the company “continue[s] to work with the city of Johnston, our lenders, creditors and investors on the best paths forward,” and that “completion of the project is in the best interest of all parties involved.”
Future of the Site
The city has not yet determined the future of the site if the project is not completed. Josh Laraby, the city’s director of economic development, noted the area is part of the Merle Hay Gateway Plan, envisioned as an “entrance to a vibrant retail and experience-based corridor.”
Frequently Asked Questions
What is the current status of the Ignit Sports Complex project?
The project is currently facing foreclosure and the developer has defaulted on its development agreement with the city of Johnston.
How much money is the city seeking from Ignit Johnston LLC?
The city is seeking reimbursement of more than $3.5 million in predevelopment grants and up to $300,000 in related costs.
What happens if Ignit Johnston LLC does not reimburse the city?
The source does not specify what will happen if the developer fails to reimburse the city, only that the city is pursuing remedies outlined in the development agreement.
Given the financial challenges facing the project, what role might the city play in the future development of this land?
