MASON CITY  — The City Council in Mason City tonight will discuss amending the development agreement that it has with the developer of a downtown hotel and conference center on the Southbridge Mall site so it could take control of the mall property and terminate the development agreement if the developer does not meet a deadline next month to prove that he has the financing for the project.

The city has been pursuing the construction for several years with MCCCH LLC and SBMC LLC, both headed by developer David Rachie, as part of the River City Renaissance Reinvestment District project. The city previously approved development agreements and amendments to incentivize the construction of the hotel and conference center, but Rachie has failed to show proof of financing the project.

The city this past December was required to make a $42,600 payment of a bank loan on the mall due to non-payment by SBMC, which was a portion of the larger guaranty of the total loan on the mall committed to by the city to facilitate the transfer of the property and to secure the ownership of the Multipurpose Arena.

The payment of any amount on the loan by the city triggered provisions including the ability to take over ownership of the mall and claim a deed in escrow. After discussion with legal counsel, it was decided by the city to move towards a period of forbearance in conjunction with the bank to provide clarity on the situation, execute appropriate amendments to allow for a clean ending of the city’s relationship with Rachie, as well as provide a final chance for Rachie to perform on the development agreements.

That forbearance period expires on May 11th, and should Rachie fail to complete the required actions to prove financing of the project and bring the property back into compliance, the city would take ownership of the mall property, break ties with Rachie and bring a new development group to the council for consideration.

The council will consider passing the amendment to the agreement at their meeting tonight, which starts at 7 o’clock in the Mason City Room of the Public Library.