Since its early planning, the Empire Garage has been designed as a unit ownership, or condominium.  The Northern Hotel and Alley Cat (Honaker) sold the property to the City and want replacement parking in the new garage, which they plan to purchase.  There will be ground-floor retail space and the City plans to sell that space.  The Council will consider approving the documents that complete that transaction.  The Declaration of Unit Ownership and the Owners Association Bylaws are attached.  The Articles of Incorporation will be prepared for signature and submittal if the Council approves the other documents and the project. 

The City Council may approve or disapprove any or all of the documents.  Legal staff for the City and the Partnership spent hundreds of hours over the past 2 months negotiating with Zootist (Northern Hotel) and Honaker and preparing the documents.  They are ready for adoption if the Council chooses to proceed with the garage construction.

The City is financing the garage construction through the issuance of approximately $12 million of 20 or 25 year tax increment bonds.  The annual debt service will be over $1 million and will use 1/2 - 2/3 of the annual increment, so there will be limited funds remaining to conduct other activities and projects until the increment grows through additional private investment or value appreciation.

The City purchased the property for the Empire Garage in April, 2011.  The land owners were willing to sell only if they would be able to acquire replacement parking in the new garage.  This requires that the City participate in a unit ownership or condominium.  The Declaration of Unit Ownership, Bylaws and Articles of Incorporation accomplish that step.  The documents create four (4) units: the City/public parking unit, the Zootist (Northern Hotel)parking unit, the Alley Cat (Honaker) parking unit and the retail space.  The retail space may be split into 6-8 stores, but it is still treated as one unit in the condominium.  The City has the largest unit at 54.4% of the total, followed by Zootist at 31%, retail 9.2% and Alley Cat 5.3%.  That means that the City will pay the largest percent of common element maintenance but it also controls most of the board of directors voting except large budget expenditures, which require other directors' consent.  Limited common elements exist for other combinations of owners. 

The Declaration restricts the parties' ability to split and transfer the parking units.  Since the Alley Cat and Zootist parking has always been viewed as benefiting the Northern Hotel, the Securities Building and the retail space, the parking units can be used only for those purposes and if transfered to other parties, their use has to stay the same.  Both of the private parking units can lease a small number of spaces to people who are not owners or tenants of the three buildings.  Each unit owner is responsible for maintaining their own parking or retail areas.  The agreements require insurance and mutual indemnification.   

Stakeholders include the City and owners of property within the tax increment district.  The project was officially designated as an urban renewal project in 2011 and public hearings were conducted at that time.

The project is consistent with the N. 27th Sreet Urban Renewal District plan.