ACTION REQUESTED:
Title
Communication from the City Manager with a Request to ADOPT an ORDINANCE Approving the 1009 SW WASHINGTON LLC REDEVELOPMENT AGREEMENT. (Council District 1)
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BACKGROUND: 1009 SW Washington LLC, a development team led by Katie Kim of The Kim Group and constructed by BALDOVIN Construction, is seeking to redevelop 1009 SW Washington, a.k.a. THE BLOCK. The BLOCK is a multi-phased redevelopment of five interconnected commercial buildings that will create nearly 74,000 sf of leasable space including 17,000 sf of open event space, known as the Catina. The project’s budget is estimated at $5.0 million and will be financed with private equity of 20% and bank financing of 80%. Demolition and preliminary construction is underway to make space available for the first tenant, an event center operation. A “vision book” outlining the concepts, renderings and proposed floor plans for the project, is attached.
FINANCIAL IMPACT: Generally, developments in TIF districts are presented with a 50% rebate of incremental property taxes for the remaining life of the TIF, but can request more if they can demonstrate a need to close a financial gap.
1009 SW Washington LLC has presented their financials and while no funds where needed upfront, they have requested a rebate shown in Schedule 3 of the Redevelopment Agreement (RDA). The requested rebate is for eight (8) years rather than the remaining 12 year life of the Warehouse TIF and includes 100% for five years--2019 to 2023, 75% in 2024, 25% for two years-2025 and 2026, and thereafter 0%. City staff reviewed the project financials and agree this level of incentive, is warranted based on projected commercial occupancy levels, showing higher vacancies in the early years and less vacancies in later years, as the building becomes occupied.
The redevelopment project also cites in Schedule 8 of the RDA a Memorandum of Understanding on Parking Lot and Sidewalk Work to mutually address a “green solution” with the City and surrounding property owners. It is understood that the City and several property owners in the 1000 Block of SW Washington will work towards this green solution, but if no solution is reached by December 31, 2018 then Schedule 8 will be voided.
NEIGHBORHOOD CONCERNS: Redevelopment of buildings in the Warehouse District is a widely held community goal.
IMPACT IF APPROVED: The Redevelopment Agreement will be approved and the project will proceed.
IMPACT IF DENIED: The Redevelopment Agreement will not be approved and the project may be delayed or cancelled.
ALTERNATIVES: Council could direct staff to adjust the terms of the Redevelopment Agreement.
EEO CERTIFICATION NUMBER: Not applicable.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Vibrant Downtown: Riverfront/ Central Business District/ Warehouse District
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
DEPARTMENT: City Manager's Office