7.7.
CC Regular Session
- Meeting Date:
- 07/14/2015
- Submitted For:
- Patrick Brama
- By:
- Patrick Brama, Administrative Services
Information
Title:
Continue Discussion Related to Dominium Development & Acquisitions, LLC's Potential Purchase of City Owned Property (portions may be closed to the public)
Purpose/Background:
PURPOSE:
Continue discussion related to Dominium Development & Acquisitions, LLC's potential purchase of City owned property located within The COR. Specifically, consider a counter proposal from Dominium. Representatives from Dominium will be at this meeting to introduce themselves, provide background on their proposal, and answer questions.
BACKGROUND:
Please see City Council regular session case dated June 09, 2015 for detailed background information on Dominium, the proposed project, the draft Letter of Intent (LOI), and background on this case. At the June 09, 2015 City Council meeting staff was provided the following general direction/ counter offer to Dominium:
Continue discussion related to Dominium Development & Acquisitions, LLC's potential purchase of City owned property located within The COR. Specifically, consider a counter proposal from Dominium. Representatives from Dominium will be at this meeting to introduce themselves, provide background on their proposal, and answer questions.
BACKGROUND:
Please see City Council regular session case dated June 09, 2015 for detailed background information on Dominium, the proposed project, the draft Letter of Intent (LOI), and background on this case. At the June 09, 2015 City Council meeting staff was provided the following general direction/ counter offer to Dominium:
1. City assistance request needs to be in-line/ more consistent with other comparable projects before the City considers executing a LOI. Generally, the Council would like to limit TIF to about 15 years max.
2. The Council would like to see the project location slightly shifted to the northeast, to the COR-1 zoning district.
3. The Council will need to see equity in the project; not including other forms of government assistance.
4. The Council desires to see a mix of uses; which could include office, retail, etc.
2. The Council would like to see the project location slightly shifted to the northeast, to the COR-1 zoning district.
3. The Council will need to see equity in the project; not including other forms of government assistance.
4. The Council desires to see a mix of uses; which could include office, retail, etc.
Since the June 09 Council meeting, Staff has had multiple discussions/ meetings with Dominium representatives. Below is Staff summarized feedback from Dominium on each of the Council requests:
1. Dominium is willing to adjust the LOI to include a request for 15 years of TIF; and then let Ehler's underwrite the project and determine a recommendation for Council/ Dominium consideration. Dominium would offer $4.50 per square foot ($5.00 per square foot asking price).
2. Working with City staff, and various consultants, Dominium did spend considerable time reviewing alternative locations (within The COR-1 zoning district). At this point in time, Dominium is not comfortable with a project located in the COR-1 zoning district. Dominium feels it is a priority to be located within walking distance to Coborn's and to have visibility from U.S. Highway 10. Dominium has adjusted their original offer in an attempt to compromise/ meet-half-way. Please see attached. In summary, Dominium is proposing to utilize the originally targeted lot. However, they would only use half (about 2.5-3 acres of the 5 acre lot), to be located further away from Coborn's, and to leave the remaining portion of land for commercial development.
3. Dominium is aware of the City's request; and has indicated they would be willing to add owner equity to the project. Dominium is aware of the City's policy for 10% owner equity.
4. Dominum has indicated they have tried to meet the request for a mixed use building in the past, in other communities. Unfortunately, they've repeatedly had bad experiences with this practice. Dominium is not comfortable with including this request in their model. Dominium has noted, if the Council accepted the request in item 2 above, a mix of uses would naturally occur within a specific block. If the desire of the Council is to require a mixed-use building if financial assistance is granted, than the Developer should focus on parcels within the COR-4c district which allows for the desired density, but has a vision of exclusive residential uses (not a primary vision of a vertically mixed-use building).
2. Working with City staff, and various consultants, Dominium did spend considerable time reviewing alternative locations (within The COR-1 zoning district). At this point in time, Dominium is not comfortable with a project located in the COR-1 zoning district. Dominium feels it is a priority to be located within walking distance to Coborn's and to have visibility from U.S. Highway 10. Dominium has adjusted their original offer in an attempt to compromise/ meet-half-way. Please see attached. In summary, Dominium is proposing to utilize the originally targeted lot. However, they would only use half (about 2.5-3 acres of the 5 acre lot), to be located further away from Coborn's, and to leave the remaining portion of land for commercial development.
3. Dominium is aware of the City's request; and has indicated they would be willing to add owner equity to the project. Dominium is aware of the City's policy for 10% owner equity.
4. Dominum has indicated they have tried to meet the request for a mixed use building in the past, in other communities. Unfortunately, they've repeatedly had bad experiences with this practice. Dominium is not comfortable with including this request in their model. Dominium has noted, if the Council accepted the request in item 2 above, a mix of uses would naturally occur within a specific block. If the desire of the Council is to require a mixed-use building if financial assistance is granted, than the Developer should focus on parcels within the COR-4c district which allows for the desired density, but has a vision of exclusive residential uses (not a primary vision of a vertically mixed-use building).
Observations/Alternatives:
Attached to this case is the original Letter of Intent (LOI). With the original LOI in mind, consideration of the June 09 Council counter-offer outlined in the background section of this case, and the Dominium responses outlined in the background section of this case, Staff is seeking direction from the City Council on how to proceed with negotiations. Listed below are alternatives:
1. Generally accept the Dominium offer, direct Dominium to draft an updated LOI
(+) sale of City owned land, $4.50 per square foot, tax exempt property back on the tax rolls
(+) roof tops, moderate level of discretionary income, drive retail and development momentum
(+) quality building, quality architecture
(+) hidden structured parking (first investor to-date to provide, helps meet original vision of The COR)
(+) #1 priority in City's Housing Subsidy Policy, provides senior independent (not assisted living) specific housing within The COR
(+) quality developer, quality long-term property manager, good references/ reputation
(+) helps achieve density and rooftops guided for The COR/ Ramsey Station
(+/-) compromise regarding location, still allows for mix of uses (see attached concept), COR-2 Zoning currently (can/ needs to be amended)
(-) requires assistance (about 15 years of TIF)
(-) low/moderate income project in close proximity to similar product The COR (senior independent living), where the City's housing goals desire to better mix income levels versus concentrate in single location
2. Generally oppose the Dominium offer, don't direct Dominium to draft an updated LOI
Benefits and drawbacks are opposite as outlined above.
3. Develop a counter offer
Council may wish to develop a counter offer. Please see background section for discussion points.
1. Generally accept the Dominium offer, direct Dominium to draft an updated LOI
(+) sale of City owned land, $4.50 per square foot, tax exempt property back on the tax rolls
(+) roof tops, moderate level of discretionary income, drive retail and development momentum
(+) quality building, quality architecture
(+) hidden structured parking (first investor to-date to provide, helps meet original vision of The COR)
(+) #1 priority in City's Housing Subsidy Policy, provides senior independent (not assisted living) specific housing within The COR
(+) quality developer, quality long-term property manager, good references/ reputation
(+) helps achieve density and rooftops guided for The COR/ Ramsey Station
(+/-) compromise regarding location, still allows for mix of uses (see attached concept), COR-2 Zoning currently (can/ needs to be amended)
(-) requires assistance (about 15 years of TIF)
(-) low/moderate income project in close proximity to similar product The COR (senior independent living), where the City's housing goals desire to better mix income levels versus concentrate in single location
2. Generally oppose the Dominium offer, don't direct Dominium to draft an updated LOI
Benefits and drawbacks are opposite as outlined above.
3. Develop a counter offer
Council may wish to develop a counter offer. Please see background section for discussion points.
Funding Source:
NA
Recommendation:
Please see alternatives section. Based on discussions with Dominium, the Council and the EDA, Staff believes the major remaining discussion point on this project is the location. Staff desires discussion, based on this previous feedback, if the proposed compromise that would allow a portion of the undeveloped lot to develop as retail in the future is an acceptable approach.
Action:
Provide staff general direction:
1. Generally accept the Dominium offer, direct Dominium to draft an updated LOI
2. Generally oppose the Dominium offer, don't direct Dominium to draft an updated LOI
3. Direct Staff to develop a counter offer
1. Generally accept the Dominium offer, direct Dominium to draft an updated LOI
2. Generally oppose the Dominium offer, don't direct Dominium to draft an updated LOI
3. Direct Staff to develop a counter offer
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Brian Hagen | Tim Gladhill | 07/08/2015 04:48 PM |
| Kurt Ulrich | Kurt Ulrich | 07/09/2015 01:29 PM |
- Form Started By:
- Patrick Brama
- Started On:
- 07/07/2015 05:13 PM
- Final Approval Date:
- 07/09/2015