REDEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION:

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1 DATE: September 15, 2011 ITEM: RE: 7.C. CONSIDERATION AND ADOPTION OF A RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING THE REQUEST FOR PROPOSALS TERM SHEET FOR THE PROPERTY LOCATED AT 868 SOUTH JEFFERSON STREET AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF THE REQUEST FOR PROPOSALS. PROJECT AREA: West Temple Gateway Project Area PREPARED BY: Kort Utley EXECUTIVE SUMMARY: Staff is preparing to market the RDA-owned property located at 868 S. Jefferson Street (the Property ) for development. Please see the attached Request for Proposals Term Sheet for the Property, which allows for either renovation of the existing house or construction of a new house on the Property. RDA Board approval of the term sheet will enable staff to proceed with marketing the Property. REDEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION: Staff presented two term sheets for the Property at the September 7 th Redevelopment Advisory Committee (RAC) meeting: one term sheet for construction of a new home; and one for renovation of the existing home. RAC recommended combining the term sheets into a single term sheet, thereby giving developers freedom to submit proposals for renovation or new construction on the Property. ALTERNATIVES: 1) Recommend approval of the term sheet. 2) Do not recommend approval of the term sheet. 3) Recommend approval of the term sheet with changes. BACKGROUND AND CONTEXT: The Property consists of a vacant and deteriorating, onebedroom, single-family home sited on a 0.10 acre lot. The neighboring parcels on the north and south are both single-family homes. Staff discussed demolition of the structure on the Property at the August Board meeting, and the Board requested a tour of the Property before making a decision. On August 16 th, several Board members and RDA staff toured the Property and surrounding neighborhood. The Board members in attendance asked staff to prepare options for the Property for discussion at the September RAC and Board meetings. Per the Board members request, staff prepared an option for constructing a new home on the Property and another for renovating the structure. These options are now combined into a single term sheet per RAC s recommendation.

2 ANALYSIS AND ISSUES: What is our goal for the Property? The goal for this Property is to create a high quality, single-family home suitable for a family or other long-term resident that will own and occupy the Property, and to execute the project so the house and yard are long-term assets to the neighborhood. What incentives are necessary to achieve our goal? The West Temple Gateway and Granary District Strategy suggests the need to discount RDA-owned property in the project areas in order to spur development. Furthermore, additional incentives are necessary to ensure a high quality project and to achieve the above-stated goals. The incentives are intended to help the future homeowner design and construct a high-quality home that will be a model of infill development. The attached term sheet for the Property includes the following RDA incentives: A write-down of the Property sales price and reimbursement of the sales price once the project is completed. Staff is proposing a sales price of $10,000, regardless of which option is chosen. The assessed value of the land is $65,300. An RDA grant to reimburse architecture and engineering fees up to $15,000. Careful design and engineering is critical to ensure the project is successfully integrated into the neighborhood. In addition to the two incentives listed above, the RDA would provide a $15,000 grant to help cover the hard costs of renovation if the developer proposes to renovate the house. This $15,000 grant would equal the estimated amount the RDA would spend to demolish the structure on the Property. An incentive of the same value would be available to someone proposing new construction, either through the RDA s demolition of the house, or a grant to cover those costs. PROCESS: The RFP will be advertised in the local market for a period of 60 days. Responses to the RFP will include written and graphic descriptions of the proposed development, as well as background information on the proposer. A Selection Committee comprised of the RDA, Planning, City Council staff, as well as representatives of the West Temple Gateway neighborhood and RAC, will review and recommend a first- and second-ranked developer from among the proposals. The RDA Board will make the final selection of the developer. The RDA staff may establish and present to the Board a set of guidelines for the design of the Page 2 of 12

3 home and/or renovation, including details such as siding materials and window types. ATTACHMENTS: - Resolution Approving the RFP Term Sheet - Request For Proposals Term Sheet - Map of Property and Surrounding Neighborhood - Photo of Property Page 3 of 12

4 RESOLUTION NO September 20, 2011 RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING THE REQUEST FOR PROPOSALS TERM SHEET FOR THE PROPERTY LOCATED AT 868 SOUTH JEFFERSON STREET AND AUTHORIZING THE PREPARATION AND DISTRIBUTION OF THE REQUEST FOR PROPOSALS. WHEREAS, the Redevelopment Agency of Salt Lake City ( Agency ) was created to transact the business and exercise the powers provided for in the Utah Community Development and Renewal Agencies Act; and WHEREAS, the Agency adopted the West Temple Gateway Neighborhood Development Plan on August 1, 1987; and WHEREAS, the Salt Lake City Council adopted the Central Community Master Plan on November 1, 2005; and WHEREAS, the Agency adopted the West Temple Gateway and Granary District Redevelopment Strategy on June 7, 2011; and WHEREAS, the Agency owns property located at 868 South Jefferson Street (the Property ) in the West Temple Gateway Project Area; and WHEREAS, the Agency plans to redevelop its property in the West Temple Gateway Project Area in accordance with objectives set forth in the West Temple Gateway Neighborhood Plan, Central Community Master Plan, and West Temple Gateway and Granary District Redevelopment Strategy; and WHEREAS, the Agency intends to market the Property for redevelopment through a Request for Proposals (RFP). NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, that we do hereby approve the Request for Proposals Term Sheet (the Term Sheet ) attached hereto. BE IT FURTHER RESOLVED, that we do hereby authorize the Chief Administrative Officer and the Executive Director to prepare and distribute an RFP incorporating the terms in the Term Sheet. The Term Sheet shall also incorporate such other terms as recommended by Agency legal counsel. Page 4 of 12

5 Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this 20 th day of September, Luke Garrott, Chairperson ATTEST: D.J. Baxter, Executive Director Transmitted to the Chief Administrative Officer on. The Chief Administrative Officer does not request reconsideration requests reconsideration at the next regular Agency meeting. Ralph Becker, Chief Administrative Officer ATTEST: D.J. Baxter, Executive Director Approved as to legal form: Page 5 of 12

6 868 South Jefferson Street Request for Proposals Term Sheet Property Description: Property Address: 868 South Jefferson Street Purchase Price: $10,000 Property Size: 0.10 Acres (4,356 square feet) Current Condition: Vacant Single-Family Home RDA Incentives: The RDA is providing the following incentives to assist in the development of the Property: 1. Discounted purchase price. 2. Full reimbursement of the purchase price upon issuance of a Certificate of Completion by the RDA. 3. A grant of up to $15,000 for architecture and engineering fees to be reimbursed upon issuance of the Certificate of Completion. 4. If the developer proposes to renovate the property, the RDA will provide a grant in the amount of $15,000 to cover a portion of the hard costs of the renovation. 5. If the developer proposes new construction, the RDA would either demolish the home and provide the property in vacant condition, or reimburse the developer for up to $15,000 of demolition and abatement costs. RDA Financing: Down Payment: RDA financing is available in the form of a new construction loan or renovation loan. Proposals must indicate whether the developer will seek RDA financing and, if so, an estimate of the request amount. Each proposal must include a deposit of $1,000 that is refundable only if the developer is not selected. The developer selected by the Board must submit an additional $1,000 down payment in the form of a certified or cashier s check within 10 days of being notified they have been selected to develop the property. If the developer fails to submit the down payment, the RDA will begin negotiations with the second-ranked developer. The down payment is only refundable if the developer cannot obtain Planning Commission approval, if needed. Page 6 of 12

7 The deposit and down payment will be applied to the purchase price at closing. Scope of Development: 1. Proposals must include all offered property. 2. The land use will be single-family residential, with allowance of an accessory dwelling unit to the extent permitted by City ordinance. 3. The proposed project should complement the neighborhood s character, including building scale and massing, setbacks, and building materials. 4. Overall design, materials, and construction should incorporate best practices for new, single-family, infill development. 5. All proposed development must incorporate the West Temple Gateway and Granary District Design Guidelines. 6. If the developer proposes to construct a new home on the Property, the project must be built to LEED for Homes Certified status, but actual certification will not be required. See the U.S. Green Building Council website for more information ( 7. If the proposed project is to renovate the existing home, the renovation shall preserve the existing masonry structure. 8. Parking access is from the alley located in the rear of the Property. 9. The dwelling must be owner-occupied. Preference will be given to proposals which identify the Property owner/occupier at the time of submittal. 10. The construction or renovation must be completed and the home occupied within 18 months of the developer closing on the Property with the RDA. Page 7 of 12

8 Zoning Requirements: The Property is in the RMF-75 Zone. A complete description of the zoning requirements can be found on the Salt Lake City Planning Division website ( RFP Design Submittal Requirements: RFP submittals shall include: 1. A conceptual site plan showing the proposed layout of the lot, including all building footprints, hardscaping, fencing, and landscaping. 2. Elevation drawings of the proposed building(s), identifying façade materials, window and door placement, steps, porches, and any other design elements the applicant deems necessary to communicate the intent of their proposal. RFP Information Submittal Requirements: RFP submittals must include: 1. Statement of Qualifications: A description of the entity that will be the developer and the financial capacity of the entity to complete the project. 2. Project Description: A brief written description of the proposed house and landscaping. 3. Preliminary Project Proforma: A preliminary estimate of the project s design, engineering, and construction costs. 4. Preliminary Financing Statement: The proposal should include a brief description of how the developer anticipates funding the project. Proposal Selection: The proposals will be reviewed by a Selection Committee comprised of representatives of the Redevelopment Advisory Committee, Planning Division, RDA, City Council staff, and the West Temple Gateway Project Area. The Selection Page 8 of 12

9 Committee may select a first- and second-ranked developer, or no developers. The first- and second-ranked developers proposals will be reviewed by the Redevelopment Advisory Committee, with the RDA Board having the final approval of the first- and second-ranked developers. The RDA will enter into exclusive negotiations with the first-ranked developer. The RDA will enter into exclusive negotiations with the secondranked developer if the first-ranked developer is unable to close on the project. Design Review Process: The design review process begins once the RDA Board has selected the winning proposal and entered into exclusive negotiations with the developer. The design review process will require the selected developer to work with RDA staff throughout the schematic design, design development, and construction document phases of the project to ensure the RDA s goals are met. The developer must obtain approval from the Design Review Committee and the RDA Board of Directors for the final construction documents. The Design Review Committee will be comprised of three Redevelopment Advisory Committee members. The Final Construction Document submittal shall include all drawings, specifications, and related documents necessary for construction of the development. Legal Documents: Purchase and Sale Agreement: A summary of the Agency s standard legal requirements will be attached to the offering with a statement that the full documents are available upon request. The agreements will be negotiated and executed after the developer has been granted the exclusive right to negotiate. The Purchase and Sale Agreement will be negotiated during the period of exclusive negotiations and will be signed at such time as the Board approves the agreement s terms. The exclusive negotiation period shall not exceed four months. As a condition of the Agency s obligation to sell the property, the developer must demonstrate its financial ability to acquire and develop the property and the RDA Board must approve the proposed development. Page 9 of 12

10 Development Agreement: Licensed Professionals: Title: Closing: Schedule: Property Listing: At closing, the developer must enter into a standard Development Agreement with the RDA to construct the development. Design and construction of the project shall be performed by licensed professionals. RDA approval of the design and construction contracts will be required. The developer must accept a Special Warranty Deed subject to a right of reverter in favor of the RDA in the event of default, or a similar mechanism that would ensure the RDA could complete the project in the event of default. Closing shall be contingent on the developer receiving the requisite approvals of the final construction documents, a construction estimate, and a copy of the building permit. The Agency will close on the sale simultaneously with the developer s construction financing. The developer will prepare a development schedule in consultation with RDA staff, highlighting major milestones such as closing, start of construction, and project completion. The Request for Proposals (RFP) will be distributed free of charge to all interested parties. Notices of the RFP will be e- mailed to developers and architects with offices in Salt Lake City. The RDA will also place a notice of the RFP in the Salt Lake Tribune, the Deseret News, the RDA s website, and Salt Lake City s Purchasing and Contract Mangement Division Online Bidsystem. A sign declaring the property is available will be placed on the site and will remain in place until the RDA Board has selected a proposal. RFPs will be issued in October Proposals will be due two months after issue. If no offers are received on or before the RFP deadline, the RDA will continue to offer the property on a first come, first served basis. Miscellaneous: Such other terms as required by RDA attorney. Page 10 of 12

11 Jefferson St. 200 West MAP OF PROPERTY AND SURROUNDING NEIGHBORHOOD 900 South Map Key 868 S. Jefferson St. North Page 11 of 12

12 PHOTO OF PROPERTY Page 12 of 12