COMMUNICATION URBAN DESIGN REVIEW BOARD CITY OF DES MOINES, IOWA NOVEMBER 1, 2016, 2016 MEETING

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1 COMMUNICATION URBAN DESIGN REVIEW BOARD CITY OF DES MOINES, IOWA NOVEMBER 1, 2016, 2016 MEETING Subject: Recommendation Prepared by: PRELIMINARY DESIGN AND FINANCIAL REVIEW 401 SE 6 TH STREET- CONNOLLY LOFTS X APPROVE DISAPPROVE NO ACTION OTHER RYAN MOFFATT, Attachment Listing: Summary: Market District One, LLC (Frank Levy, Partner, 3408 Woodland Avenue, Suite 504, West Des Moines, IA 50266) is proposing a multi-family residential project on.80 acres of vacant city-owned land 401 SE 6 th Street, to be called the Connolly Lofts. The proposed $10.7 million, 58-dwelling unit project will consist of a 4-story building in the emerging Market District, and at one of the gateways into the Historic East Village. Proposed resident amenities will include a rooftop commons/patio space with views of the State Capitol and downtown skyline, individual balconies and patios on many units, an outdoor park-like space, and 52 on-site surface parking spaces. The development will introduce a mix of one and two bedroom units at 50% market and 50% affordable rates. The building features private balconies or patio space for every dwelling unit, bike storage areas on the 2nd and 3rd floors, a shared rooftop patio amenity, and a shared community room space with kitchenette. The building materials palette includes a mix of full-dimension brick on the building and painted fiber cement board panels. Cast stone is used for decorative elements on the building. Balconies will be constructed with metal decking and railing. The project is also seeking to implement a portion of the Iowa Green Streets criteria. On October 10, 2016, City Council approved preliminary terms of agreement with Market District One, LLC for the project that proposed providing project-generated tax increment in years 9-15, following the conclusion of 100% residential tax abatement under the City s Second Restated Urban Revitalization Plan. Details of the project and the proposed financial assistance are provided below. The project design team consists of Simonson and Associates as the project architect and Bishop Engineering Company as the Civil Engineer. Construction is anticipated to begin in December 2016, with completion anticipated in the first quarter of Scope of Review Board to make recommendation to City Council on: Design review of renovation /remodeling/new construction for City-owned or leased project. Design review for urban renewal project with specific development requirements. Whether a proposed urban renewal project qualifies for funding from tax increment.

2 PAGE 2 Whether the level of financial assistance funded from tax increment revenues proposed for a specific individual project are reasonable and appropriate. The selection of urban renewal sites for clearance or rehabilitation and problems relating to acquisition, clearance or rehabilitation of property, relocation of displaced persons and disposition of acquired property. Skywalk System Other Urban Design Review Board Action: The Board is asked to provide recommendation to City Council on the proposed financial terms and review of the preliminary design for the project. Staff Recommendation: Approval of the preliminary design and financial assistance subject to addressing the following recommendations: 1. Examine provision of additional architectural detailing or window openings on the east façade of the building. 2. Study relationship between windows and exterior wall material so that windows are not flush-mounted with the exterior cladding material, including study of addition of window heads and sills as a possible option. 3. Provide additional design detail on the application methods and jointing of the fiber cement board panels. 4. Per Downtown Overlay District Design Guidelines, a minimum of 70% building frontage is required on primary streets (SE 6 th and E. MLK Jr. Parkway). The SE 6 th Street frontage does not meet this guideline as shown with the current proposal. 5. Per Downtown Overlay District Design Guidelines, buildings shall have a main pedestrian entrance oriented towards primary streets. The design as presented does not meet this guideline. 6. Incorporation of compliant Parkway Planting landscaping on the west, north and east street frontages. Background and Project Design: Market One, LLC originally approached the Office of Economic Development about the development of this parcel for a residential use in Since the original inquiry, the scope of the project has evolved into a development that is better-targeted towards current market trends. This project represents a pioneering effort to introduce new housing product in the Market District, which is a neighborhood that is envisioned to see a significant future change from the current, predominantly industrial uses, to a mixed-use neighborhood. The site was historically the home of the Curtis Elementary School until it was decommissioned in the late 1950 s. It was purchased in 1958 by the Irwin Chemical

3 PAGE 3 Company and Seidenfeld Scrap Metal, Inc. until the building was demolished in 2002 after a major fire and public nuisance action. Once the Martin Luther King Jr. Parkway project was constructed, this land was deemed as excess city-owned property that could be sold for appropriate redevelopment purposes. This remnant property is constrained by a shallow depth with existing street frontages on all sides of the property. Acknowledging these constraints has led to a challenge in finding an adequate solution for building, parking and site amenity layout. The developer, their design team and city staff have arrived at a recommended layout that best accomplishes many of the existing design guidelines in place for this district. Vacation and conveyance of portions of excess rights-of-way along Raccoon Street, SE 7th Street, East Martin Luther King Jr. Parkway will be necessary to accommodate the project. Additionally, an intervening platted but unimproved alley segment has previously been vacated, but will need to be conveyed. The developer group has met with the Historic East Village Neighborhood Association on several occasions, who has provided a letter of support for the project. The project will also be subject to the review and approval of the Plan and Zoning Commission for conformance with applicable design guidelines of the Downtown Overlay and C-3B zoning district. These guidelines will help to ensure proper urban form of the project, implement minimum landscaping standards, evaluate proper pedestrian connectivity, and focus on other site-related improvements. On March 15, 2016, the Urban Design Review Board saw this project during an informational review and offered the following design-related comments: View SE 6 th Street as being more prominent than SE 7 th Street. The current perspective feels more like a back door and not a prominent gateway facing SE 6 th Street. Consider opening the stair tower to make it feel more welcoming. Consider pedestrian connections to the walkway along MLK Jr. Parkway. Examine Opportunity to allow residents and their pets more of a transition area between entrance/exit of building and the adjacent dog park. Consider additional outdoor amenity space and additional features to the dog park. Encourage reshaping the building to fit the site better. Think of the building as more elastic, and consider squeezing the north to south dimension so it becomes a skinnier building. It may not need to be double-loaded for the entire length of the building. This could better solve the building s relationship to the street and having a presence at the gateway. The detention area may need to be heavily landscaped with well-defined landscape edges so as to feel like parkway amenity. It needs to look like the front and a gateway to the corner. Encourage moving the stair towers into the interior of the building and look at alternative exterior building materials. Encourage dense landscape plantings along Raccoon Street instead of decorative fencing. Since the Board s informational review of the project, the design team has worked closely with City staff to address many of the comments, including the following:

4 PAGE 4 The building frontage has been located closer to SE 6 th Street to better frame the intersection and gateway into the East Village, and now features a shape that better fits onto the site, particularly the curvilinear nature of the existing right-ofway at the SE 6 th Street and MLK Jr. Parkway intersection. A 3-story addition with rooftop patio space has now been added, adjacent to SE 6 th Street. This addition will include a mix of 1 st floor amenity space and upper floor dwelling units. The building setback from the MLK Jr. Parkway right-of-way line has increased, to help maintain the landscaped parkway feel that is prevalent throughout much of the rest of the corridor. Pedestrian accesses have been included to all adjacent street frontages, including SE 6 th and MLK Jr. Parkway. The previously shown surface detention basin is now proposed as an underground detention system. By seeking the vacation of additional rights-of-way on the north, south and east sides of the project, the site was able to gain some additional land area to provide a more efficient double-loaded, head-in parking lot layout that still incorporates public sidewalks, parking setbacks and landscaping. Additional masonry has been added to the façade of the building, particularly on the east and west ends of the building. Financial Assistance: The financial assistance package for this $10.7 million project will consist of tax increment (TIF) revenues in two forms, one at project completion and one beginning in year 9 of the project. The project completion TIF grant in the amount of $125,000 will come from the Metro Center Urban Renewal Area TIF revenues, and is necessary to address a construction cost gap. Additionally, TIF assistance is proposed to be paid out over 7 years (years 9-15 of the project 6%= $327,060), and will consist of tax increment generated solely by the new value added as a result of the project being built. Total Project Cost: $10,708,867 Estimated TIF Assistance (up front and 9-13): $452,060 Land Sale Rebate $46,750 Total Assistance $498,810 Total Assistance as % of project cost: 4.7% The project will qualify for ten-year declining tax abatement in years 1-10 (8 100% 60% in year 9, 40% in year 10). The tax abatement program is in place to encourage continued investment in multi-family residential projects in downtown and several nearby corridors, following the City Council s goals to increase the downtown population and spur additional investment in retail and commercial development. This property will be sold to the developer at fair market value of $332,037. This value cannot be granted back to the developer due to restrictions placed on the property, as it

5 PAGE 5 was purchased with federal transportation funds for the Martin Luther King Jr. Parkway project. Soil boring tests (Phase I and II environmental reports) have been conducted on this land, which indicates that a small portion of the property contains lead contaminant levels that will require environmental remediation. The purchase price of the land will be lowered accordingly due to this encumbrance, and once the developer has provided the City with the lowest-bid price for this work. Additionally, there are small portions of the site (former alley, excess rights-of-way on SE 7 th and Raccoon Streets) that were platted as existing rights-of-way and not purchased with federal transportation funding. The value of this land will be granted back to the developer and carries an estimated appraised land value of $46,750. The Office of Economic Development has evaluated the developer s proposed sources and uses and pro forma with cash flow projections for the construction, operation, and debt service of the building, and recommends the financial assistance package to accommodate a project meeting the following criteria: The proposed project is located at the intersection of SE 6th and East Martin Luther King Jr. Parkway, which is the southern gateway into the Historic East Village Neighborhood. This project represents a pioneering effort to introduce the first residential project into the emerging Market District redevelopment area. It is contemplated that other future residential or mixed-use projects will develop in the Market District, but the current adjacent land uses to this project site are largely industrial in nature. Constructing the first residential project in this transitioning redevelopment district presents a market risk for the developer, who may see lower rents and rate of return until other more compatible uses can develop around the project. The inclusion of affordable housing in this project is noteworthy. Most downtown housing developments currently proposed or under construction are slated to be at market rates, leaving a need for more affordable units to be added to the downtown submarket. Environmental remediation costs will be necessary to clean up ground contamination (lead levels) on the northeast portion of this site. The developer is currently securing bids for this soil remediation work. The prior acquisition of property necessary for the completion of the East Martin Luther King Jr. Parkway project from SE 4th to SE 10th Street has left properties that are challenging to redevelop along the north side of the corridor. The properties are narrow in depth and wedged between various existing rights-ofway. Staff has spent considerable and mutually cooperative time working with the developer and their design team to provide a concept that can meet various urban design-related goals of the City. It is anticipated that the layout and form of this project could also be emulated on other adjoining blocks facing the same parcel size constraints. The PlanDSM Creating our Tomorrow comprehensive designates the subject property and surrounding properties as a Downtown Mixed Use, and the development is compatible with applicable design guidelines for the district. The project represents a step towards realizing the plan envisioned in the City s May 2010 Market District of East Village Urban Design Study.