ACTION REQUESTED:
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Communication from the City Manager with a Request to ADOPT an ORDINANCE Approving the 725 WASHINGTON LLC REDEVELOPMENT AGREEMENT. (Council District 1)
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BACKGROUND: Larry Winkler, of 725 WASHINGTON LLC, is seeking to redevelop 709 to 725 SW Washington Street (formerly Ingersoll Building Products) and an adjacent parking lot (which includes two City owned lots of 0.17 acre) on the northwest corner of State and Washington. The Project known as Winkler Place will convert the Ingersoll Building into a mixed-use facility of approximately 34,500 sf, consisting of 26 residential apartment units and 18,000 sf of commercial leasable space.
The Project's budget is estimated at $3.9 million and will predominantly be financed with debt and secured through other assets owned by Mr. Winkler. In order for Winkler Place to proceed two critical issues need to be resolved, which are: a) a tenancy of at least 33% to obtain the required financing, and b) sufficient parking in close proximity to attract commercial and residential tenants. To address these challenges a Redevelopment Agreement (RDA) was drafted to a) allow the landlord at least 6 months, but no more than a year to secure commercial tenants (Section 2.2.1) and b) provide for an expanded parking lot by adding City owned lots (Section 2.2.2) with conditions subject to project completion.
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.
725 Washington LLC presented their financials and while no funds where needed upfront, they did request City contribution of two adjacent parcels (Schedule 2). Those parcels were purchased by the City October 28, 2015 for $39,500. They also requested a 50% TIF rebate for the life of the TIF ending in 2030, shown in Schedule 3 of the RDA. City staff reviewe...
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