Fifth & Walnut Parking Garage Redevelopment Competitive Proposal Review. Council Work Session Friday, March 24, 2017

Transcription

1 Fifth & Walnut Parking Garage Redevelopment Competitive Proposal Review Council Work Session Friday, March 24, 2017

2 Timeline February 13, 2017 By Roll Call No , City Council approved the competitive bid process for sale and redevelopment of the Fifth and Walnut Parking Garage, the receipt of redevelopment proposal from 5 th & Walnut Parking, LLC (represented by Justin Mandelbaum) and set the date of hearing for March 20 th. March 17, 2017 Blackbird Investments submitted a competitive proposal that met the requirements set forth in Roll Call March 20, 2017 Resolution approved to receive competitive proposal and continue hearings on the sale of property to April 3,

3 Project Summary Project Cost: $136.8M 200,000SF Co-Operative Housing tower on Walnut 35-stories planned (minimum of 26 in development agreement) Ground floor restaurant and retail space on Walnut 700-stall parking garage facing 5 th 150-room hotel on Court Indoor/outdoor music venue on Court 3

4 Phase 1: Parking Garage Parking Garage $42M privately financed Price includes: Demolition of existing parking facility New 700 stall garage constructed to allow for future conversion Re-establishing former skywalk connections and vertical access facility Pedestrian pathway that links the skywalk to hotel building on Court Avenue 4

5 Phase 1: Parking Garage continued Up to $500,000 for intersection improvements at 5 th & Mulberry Up to $500,000 for intersection improvements at 5 th & Court Architectural façade along 5 th Street at a cost not to exceed $2M Developer will work with the Des Moines Public Art Foundation for design recommendations Additional private participation in the repayment of the shortfall loan: $1M plus interest from sale of land to the Hotel Approximately $6.5M plus interest for the estimated 100 parking spaces within the podium parcel that the co-operative will purchase at the full stipulated price per stall Funds shall be paid to the City prior to the expiration of the Permanent Loan (year 20) upon the approval of the bond holder s and the City Sustainability Elements: Storm water collection system & LED lighting Stores and redistributes water to green roof, with overflow to storm water system at a reduced rate Prevailing wage or higher requirement on labor for garage construction Completion Date: November 1,

6 Hotel Cost: $21.7M Approximately 150 lodging rooms Shall contain indoor/outdoor music venue on Court 2 nd vertical access facility linking the hotel, pedestrian pathway to the skywalk and the parking garage Commence construction June 1, 2018 Complete construction August 1,

7 Tower Cost: $69M Cooperative Housing Co-Op Minimum LEED Certification or equivalent Minimum 200,000SF above the podium The Co-Op shall purchase the podium parking spaces at the full Stipulated Price per stall 20% of final unit configuration allocated for affordable housing through a partnership with Polk County Housing Trust Fund Prevailing wage or higher requirement on labor for tower construction Commence Construction: December 1, 2019 Complete Construction: December 1,

8 Additional items in Development Proposal Garage podium shall have parking on the 3 rd, 4 th, 5 th, and 6 th floor Ground level shall have a restaurant space in the northwest corner, and a retail space in the northeast corner. The 2 nd level shall have the skywalk and a stair accessing the main lobby on the ground level Office space for Operation Downtown and the Des Moines Farmer s Market shall also be provided. All expenses associated with the space (rent, utilities, taxes, etc.) shall be provided by the developer at no cost to the user for the duration of the agreement 8

9 Selection Criteria Roll Call No H. If a competing proposal is received, the following Selection Criteria shall be applied to judge the relative merits of the proposals: 1. The extent to which the project will advance and encourage further private investment to advance the redevelopment of the Court Avenue Area in conformance with the Metro Center Urban Renewal Plan, the Des Moines comprehensive plan titled PlanDSM: Creating our Tomorrow, and the Court Avenue Design Standards. 2. The potential return on investment to the City over a 40 year period from the project and from further private investments anticipated to be attracted by the project. 3. The extent to which the Applicant has demonstrated the experience and capacity to successfully complete its plans for the redevelopment of the Property. 9

10 Summary Project Summary: Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Tower 200 premier market rate apartments + minimum 50 room hotel 200,000SF co-operative housing + street level commercial on Walnut Garage 564 stalls 700 stalls 2-story, 12,000SF each floor w/ 20,000SF for Approximately 150 room hotel Commercial use on Court Ave movie theater Total project cost estimates: $110,847,924 $136,771,398 10

11 Skywalk Reconstruction of Skywalk Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Conditions to construction Will be constructed in Phase 2 or Phase 3 as part of residential building. See conditions for construction on the residential building under Will be constructed in Phase 1 as part of the construction of the new garage / podium parcel "Housing" below Skywalk extending south to building on Court No Yes Deadline for completion February 19, 2025 if Phase II, and August 19, 2028 if Phase III. November 1,

12 Parking Garage Parking Garage Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Number of parking stalls 564 Stalls 700 Stalls Garage financing $39,345,946 privately financed bond w/ City Guarantee (land price inlcuded in bond financing) $46,029,969 Stipulated Price (includes land price that will not be financed as part of bond backed by the City) $42,029,969 privately financed bond w/ City Guarantee All in financed cost/stall $69,762 $60,043 Price adjustment for over/under promised spaces For each parking space in excess of of 564, the Stipulated Price shall be increased by $46,547. For each space less than 564, the Stipulated Price shall be reduced by $46,547 For each parking space in excess of of 700, the Stipulated Price shall be increased by $43,838. For each space less than 700, the Stipulated Price shall be reduced by $43,838 Deadline for completion August 19, 2020 November 1, 2018 TIF incentive 100% TIF / 20 years 100% TIF / 20 years 12

13 Parking Garage continued Parking Garage Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Developer's operating shortfall loan estimate (years 1-20) CASH basis: Developer's shortfall loan payoff estimate $26,574,712 ($196/stall/month) Year 33 $28,488,666 ($170/stall/month) Year 20 or a date prior that aligns with the elimination of non-appropriation risk to the bond holders Other garage incentives: 3 Hours free parking for Theater Customers None - all users pay full parking rates Shortfall loan repayment sources 80% Net Operating Revenues beginning year Paid off in year 20 (80% Net Op Revenues Shortfall loan repayment - debt forgiveness 21 $6,826,779 plus interest for extraordinary development costs in year 20 listed as backup) $6,826,779 plus interest for extraordinary development costs in year 20 13

14 Parking Garage continued Parking Garage Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Shortfall loan repayment sources $1,000,000 plus 1% interest from hotel land sale Shortfall loan repayment sources $6,575,710 plus 1% interest from podium conversion (a ratio of the total parking spaces removed from public use of the total Parking Garage parking stalls, multiplied by the Stipulated Price =100/700*46,029,969). Shortfall loan repayment sources Vertical Access Facilities (ADA Accessible) 1 total - 5th & Walnut If any parking spaces are converted to commercial or residential over the terms, the same forumula above applies to convert spaces. 2 total - 5th& Walnut and vicinity of 5th & Court (hotel/garage connection) 14

15 Parking Garage continued Parking Garage Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Option to convert from parking to TBD - none committed in development Yes commercial/residential agreement Public Improvements TBD - none committed in development agreement Project will pay up to $500k for 5th and Mulberry intersection Public Improvements TBD - none committed in development agreement Project will pay up to $500k for 5th and Court intersection Public Improvements TBD - none committed in development agreement Project will pay up to $2M for art façade on garage facing 5th Sustainability TBD - none committed in development agreement Robust storm water collection system (green roof) Sustainability TBD - none committed in development agreement Shall solely utilize LED lighting 15

16 Housing Housing Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Housing type High-Rise Luxury Market Rate Apartments (rental) High-Rise Cooperative Housing (owner occupied) Number of stories Plans for 32 (agreed to a minimum of 25) Plans for 35 (agreed to a minimum of 26) Estimated number of units / SF 200 units 200,000 SF Conceputual Plan must include The fixtures, furnishings and common area amenities for the apartments and hotel must distinguish the apartments and hotel as being among the premier apartments and hotel in the Des Moines Metropolitan Area. Furnishings, fixtures and common area amenities shall allow for the attraction and support of a variety of housing options, including both luxury and entry-level units. 16

17 Housing continued Housing Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Deadlines to commence and complete construction Must commence construction by February 19, 2022 if built as Phase II and August 19, 2025 if Phase III. Complete construction February 19, 2025 if Phase II, and August 19, 2028 if Phase III. Must commence construction by December 1, 2019, Complete construction by December 1, 2021 Abatement Incentive 10-year Abatement (100% years 1-8, 60% year 9, 40% year 10) Developer will forego any tax abatement Percent of TIF years % TIF / 20 years 100% TIF / 20 years 17

18 Housing continued Housing Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Construction labor TBD - none committed in development agreement The residential building shall be constructed with all labor compensated at the prevailing wage or higher for their respective trades per Davis-Bacon Wage Act Sustainability TBD - none committed in development Shall pursue and make full effort to obtain a Affordability agreement TBD - none committed in development agreement minumum of LEED-Certification or equivalent The residential building shall have approximately 20% of final unit configuration allocated for affordable housing in collaboration with Polk County Housing Trust Fund 18

19 Hotel Hotel Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Hotel size and type/style minimum 50 lodging room botique style approxmiately 150 lodging room (upscale comparison to Hyatt Place) Deadlines to commence and complete construction Included in the residential building. Must commence construction by February 19, 2022 if built as Phase II and August 19, 2025 if Phase III. Complete construction February 19, 2025 if Phase II, and August 19, 2028 if Phase III. Must commence construction on hotel by June 1, 2018 and complete construction on the hotel by August 1, 2019 Additional items agreed to in Hotel shall have indoor/outdoor music venue development agreement on Court Percent of TIF years % TIF / 20 years 90% TIF / 20 years 19

20 Other Commercial Uses Other Commercial Uses Development Agreement Items: Mandelbaum Properties (5th and Walnut LLC) Blackbird Investments Use / SF Movie Theater Building: shall contain a multiscreen movie theater located on the southern portion of the Property. The Theater Building shall occupy at least 12,000 square feet on at Ground level shall have a restaurant space in the nortwest corner, and retail space in the northeast corner. Until Residentail Building is constructed, the retail space shall contain the least two floors. The Theater Building shall have pre-sale and model unit display for the a total height of at least 50 feet. At least Residential building. Office space for 20,000 square feet of the Theater Building shall 'Operation Downtown' and the 'Des Moines be devoted to a movie theater with multiple Farmer's Market' shall also be provided. screens. Deadlines to commence and complete construction Must commence construction by February 19, 2022 if built as Phase II and August 19, 2026 if Phase III. Complete construction February 19, 2024 if Phase II, and August 19, 2028 if Phase III. Commence construction 30 days after closing on the sale of land. Complete construction November 1, Percent of TIF years % TIF / 20 years 100% TIF / 20 years 20

21 Summary and Recommendation The staff recommendation is to proceed with the Blackbird Investments, LLC proposal for the following reasons: Tower and Hotel financial contributions towards parking shortfall; $4M Land sale is not included in the garage bond financing backed by the City; 150 room hotel versus minimum of 50 room hotel; Timing for hotel completion to maximize Reinvestment District benefits; 90% TIF on the hotel component versus 100% TIF; Financial contribution of up to $1M for intersection improvements; Timeframe for the re-engagement of the street level at Walnut; Timelines for the reconstruction of the permanent skywalk; Timelines for completing construction for the entire project. 21

22 Next steps: March 28, :30AM Recommendation from the Urban Design Review Board April 3, :00PM Public Hearing City Council Meeting 22