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EDA Agenda 05-12-2021 (Workshop Meeting) AGENDA WORKSHOP MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, May 12th, 2021—5:30 p.m. Academy Room, Monticello Community Center Participants can choose to attend in-person or remotely via Go-To: Web: https://global.gotomeeting.com/join/141784861 or Phone: (646) 749-3122 1 Access Code: 141-784-861 Commissioners: President Steve Johnson, Vice President Bill Tapper, Treasurer Jon Morphew, Tracy Hinz, 011ie Koropchak-White and Councilmembers Lloyd Hilgart and Jim Davidson City Council: Mayor Lloyd Hilgart, Jim Davidson, Charlotte Gabler, Sam Murdoff, Brian Hudgins Staff: Executive Director Jim Thares, Angela Schumann, Sarah Rathlisberger and Jacob Thunander 1. Call to Order 2. Roll Call 3. Consideration of Review-Discussion Block 52 Redevelopment RFQ (Request for Qualifications) Submittals and Next Steps 4. Adjournment EDA Agenda: 05/12/21 3. Consideration of Review-Discussion Block 52 RFQ(Request for Qualifications) Submittals and next steps in process (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to review and discuss the Block 52 Redevelopment RFQ submittal information and further offer guidance to staff regarding next steps in the Block 52 redevelopment process. The information in the staff report is provided as context and options regarding potential next steps for the EDA to choose from. At the April EDA's discussion at the April 14, 2021 meeting, the EDA endorsed following the outlined process. Step 1. A questionnaire regarding the pertinent critical design features and challenges would be provided to each of the developers. Step 2. EDA workshop to review the responses to the submitted RFQs. Step 3. EDA workshop with preferred developer candidate(s) to evaluate whether stated goals and ideas are mutually shared and discuss realistic project design and task delivery. Step 4. EDA enters into a Preliminary Development Agreement with selected developer reflecting workshop discussion points Step 5. Other steps as identified by staff or EDA during discussion and feedback session. below. The RFQ packet with the questionnaire was sent to the following developers for consideration of submitting responses and possible further involvement with the EDA in its Block 52 redevelopment efforts. 1. Alliance Building-INH Property Partnership 2. Anderson Development 3. Boser-Inventure Properties, LLC 4. Briggs Companies, Inc. 5. Buchholz-PRG 6. Good Neighbor Properties, LLC 7. Titanium Partners, LLC Responses (emails and/or phone calls) were received from five of the developers with only one of them following through and returning a completed questionnaire. EDA Agenda: 05/12/21 Using the process outline, steps 1 and 2 are now completed. Steps 3 and 4 should be considered as next steps as well as any other not yet identified process. Al. STAFF IMPACT: The staff impacts in reviewing the Block 52 Redevelopment RFQ submittal are fairly modest. A2. BUDGET IMPACT: There is a minimal cost involved in the Block 52 Redevelopment RFQ submittal and developer selection process. The minimal cost includes staff time and minor copying expenses. A3. STRATEGIC IMPACT: The Block 52 Redevelopment efforts are part of the City of Monticello's strategic goals as identified in the City Council's recent 2021 strategic planning session In addition, the Downtown Small Area Study (SAS), adopted by the EDA and City Council in late 2017 focuses on redevelopment of Block 52 as a key strategy to revitalize the downtown area. The SAS plan calls for adding residential units (with associated purchasing power) in the core city and specifically in Block 52. The specific Block 52 plan calls for ground floor entertainment, dining and retail uses, as well as public amenities. The SAS was adopted and incorporated into the Monticello 2040 Vision + Plan. The 2040 Plan reinforces continued efforts within the downtown and Block 52. B. ALTERNATIVE ACTIONS: 1. Staff will defer to the EDA regarding motions related to the developer selection process. 2. Motion of other as determined by the EDA. C. STAFF RECOMMENDATION: No motion is needed. If a motion is deemed necessary or helpful, staff will defer to the EDA. D. SUPPORTING DATA: a. Bucholz-Muldoon/PRG Block 52 RFQ Questionnaire Submittal b. Block 52 Redevelopment Vision Packet with RFQ Questionnaire 1) What is the developers previous experience in working in downtown or urbanized redevelopment projects? Dale Buchholz Construction has extensive construction experience. Our most notable redevelopment project consisted of 135 class A multifamily units (approx $15M current value) in downtown Moorhead (MN). We worked as a team with the City, Braun Intertec, and the EDA to secure a substantial grant and coupled the grant with TIF. This project was a runner up for the Re-Scape awards and proved to be a catalyst for growth and development in Downtown Moorhead that continues today. 2) Is the developer open to purchasing land from private property owners in the target block? We have conducted/facilitated various land purchases throughout our many years of operating. We pride ourselves on relationships and believe we have a unique ability to work with others to find a "common goal" in acquisition. We would welcome the challenge and opportunity to work with private parties to achieve their goals, while also achieving goals for the city and community as a whole. 3) What is the developers previous experience in acting as the purchasing entity agent in redevelopment or vacant land development projects? We welcome the challenges that can come with pre development and acquisition. We have conducted purchases and negotiations on several occasions. 4) Is the developer comfortable with developing vertical mixed-use structures (ground floor commercial, upper floors residential)? Having extensive construction and development experience on our team we have a strong comfort level with being able to create, construct, and execute a development plan (with mixed use structures). We would work diligently to create a feasible plan that upon execution would lead to the opportunity for "spin off" development. 5) Is the developer interested in a long term commitment as an owner of a multifamily residential building in block 52? Our company and investment partners have a history of holding long term. We currently have over 1700 multifamily units under management as well as commercial properties. We see great value in the opportunity to execute a plan and to continue to build value with quality management. 6) Is the developer comfortable constructing high end multifamily buildings? We have constructed over $200M of value in residential and commercial property. Much of this construction has consisted of new multifamily buildings. We believe strongly that block 52 can support high end (Class A) properties and will commit to taking great care in detailing out a quality and unique design that the developer and community can be proud of. 7) What kind of finishes does the developer consider high end in multifamily buildings? Solid surface counter-tops, under-mount sinks, wood/LVP flooring, upgraded plumbing package, aluminum suspended balconies, designer chosen LED lighting package, underground parking, building amenities such as a collaborative work space, wifi lounges, rooftop patio, community space, outdoor programmable spaces, camera security system, we are very interested in embracing new integration of technology with-in our communities as well. 8) Is the developer open to partner investors in commercial stand alone (horizontal mixed us or side by side mixed use) buildings? We believe in collaboration and that it is important to listen to different perspectives and approaches. Strategic partnerships can make projects possible (that otherwise would not have been) and can be a difference maker to achieve success. 9) Does the developer typically hold commercial property or is there preference being a short term commercial owner? We typically approach investment/development with a long term vision. Although each project is different, we believe planning, management, and establishing partnerships is critical to long term success. 10) Is the developer open to entering into a Development Agreement with the EDA further defining block 52 steps? We are open and willing to enter into a development agreement. We would work in tandem with all parties to determine a feasible and fair agreement that achieves the desired benefits for all of the engaged groups. 11) Is the developer self funding of financing the redevelopment project? We have several quality banking relationships and would plan on financing the project (with the required cash injection from our private investment group). 12) What is the developers estimate regarding value of total investment in block 52? Does the developer feel comfortable in achieving 19-20M investment level in the block? As we continue to narrow the scope and work through goals, we can dial in a more exact value. We feel the block development cost could be $18M-$22M depending on several factors. 13) How many multifamily units does the developer believe would be possible in the block? 70-100 units seems to be possible depending on the final design. This will be impacted from unit mix, land acquisition, and building heights. 14) How much commercial square footage would the developer believe would be feasible? We feel Pine and Broadway provides a feasible commercial development opportunity and will be attractive to a wide range of users. We would commit to maintaining the commercial (where appropriate) and support the commercial with well designed and managed multifamily. 15) Would the developer want or need tax increment flow as a component of overall project financing? We expect that TIF (would need to be used) and would want to consider other projected financing opportunities to achieve project goals for the city and the developer. We would take a "creative and collaborative" approach to make the project a success. We believe it important to only ask for what is needed to meet our goals. 16) Is the developer willing to pay the EDA for land that it has acquired to alleviate cost for the EDA? We would be appreciative of the opportunity to work collectively to develop a successful and feasible project. If acquisition is a necessary part, we would be ready, willing, and able assuming it is feasible for all parties. 17) Is the developer willing to be a collaborative partner and engage with the EDA and city staff to accomplish shared vision and objectives? Absolutely! We understand this project will come with a large city investment, thus should have city input. We have always believed in collaboration and working with others. Open, honest, and transparent communication will lead to all parties being "happy" with the business transaction. CITY OF PHONE:763-295-2711 Fax:763-295-4404 MonticeRo 505 Walnut Street Suite 1 Monticello, MN 55362 Part I City of Monticello - Block 52 Redevelopment Status And Invitation to Complete RFQ Questionnaire April 23,2021 Information contained in this summary status overview is being provided to prospective developers along with an invitation to complete Block 52 Questionnaire and return to City of Monticello staff and the EDA (Economic Development Authority). The collaborative redevelopment process led by the EDA is viewed as an opportunity to create a signature redevelopment project that will strengthen the vitality of the core downtown area in the City of Monticello. Block 52 is a 2.5053 full block land area in downtown Monticello, MN with high visibility and accessibility. It also has views of the Mississippi River and of West Bridge Park. Key facts regarding Block 52 are noted below: • Location: Downtown Monticello • Size: 2.5053 acres or 109,131 square feet +/- • Parcels: 16 separate and distinct parcels of various sizes • Land Area owned by City-EDA: Approximately 75 percent or 81,986 square feet +/- The EDA has been able to acquire a total of approximately 81,986 contiguous square feet or 75% of the entire Block 52 land area. In addition, there is high confidence that additional land acquisition through voluntary sales transactions are possible in the future and a contiguous land area of approximately 80 to 84 percent of Block 52 may be assembled. A realistic timeframe for the commencement of a Block 52 Redevelopment Project ranges from Fall of 2022 to the Summer-Fall of 2023. The EDA would prefer to engage with developers in the Summer of 2021 as it formulates shared objectives and responsibilities for 1 www.d.monticello.mn.us the Redevelopment. This developer selection time frame will allow the City to consider submitting a Redevelopment Grant Application to Minnesota DEED seeking funding assistance to offset a portion of the land acquisition and expected building-structure demolition costs. The City and EDA would ask the selected developer to cooperate in the application process by providing as much detail information as can be made available to the EDA regarding proposal concept renderings, projected job creation numbers, along with land purchase, excavation, site preparation, and development costs. The State of Minnesota Redevelopment Grant Program is a potential source of a modest amount of funding to support the efforts for the Block and has historically accepted applications in early February of each year. Staff have also analyzed data indicating that the land and improvement values and ratios in the Block will allow the formation of a new 25-year Redevelopment Tax Increment Financing (TIF) District for purposes of providing assistance for redevelopment costs. It is anticipated that when a Development Agreement is entered into with a prospective developer, a TIF District can be simultaneously established and therein create a public sector financing mechanism for eligible expenses such as land purchase costs, excavation, site preparation, underground parking structure(s), utility relocates and extensions, parking surface, and landscaping costs. Ideally, new finished development project tax values would be in a range of$19 to $23 million dollars. That value range would generate enough increment to support many of the EDA's objectives for the Block. If you have an interest in the Block 52 Redevelopment Project, please complete the attached RFQ(Request For Qualifications) Questionnaire and return to me by 4:30 p.m. May 4, 2021. If you have any questions regarding the Questionnaire, feel free to contact me to discuss and or clarify. Thank you for your time. Jim Thares, Economic Development Manager City of Monticello 505 Walnut Street, Suite 1 Monticello, MN 55362 Office Phone: 763-271-3254 Cell Phone: 612-219-8357 Email: jim.thares@ci.monticello.mn.us 2 Part II City of Monticello - Block 52 Horizontal Mixed-Use Redevelopment Vision Description Block 52 is one of the most visible blocks in Monticello. It is located near the State Highway 25 Mississippi River Bridge,the only river crossing in a 35-mile area, with over 36,500 vehicles traveling past it each day. The Block also borders River Street, offering views of West Bridge Park and the Mississippi River to the north. Broadway Street, the community's traditional main street, fronts Block 52 to the south. Walnut Street, envisioned as a convertible street suitable for community festivals and events, borders the west side of the Block. Block 52 is located in the CCD (Central Community District). Utilization of Planned Unit Development (PUD) on this Block would allow mixed use and development density at higher levels. Block 52 Redevelopment Goal-Vision per 2017 Downtown Small Area Study: ✓ Horizontal commercial-residential mixed-use, multi-story redevelopment ✓ Residential multi-family— Desired number of units= approximately 110+/- market rate units ✓ Commercial Uses—Food-Beverage-Entertainment; Niche specialty retail ✓ Vertical mixed-use desired where possible - Retail-Service-Dining on ground Floor; Office or service uses on second floor ✓ Up to five (5) stories in height with city review Contemplated-Preferred Block 52 Development Scale: ➢ % block size or slightly larger=Ap proximately.50-acre, or ➢ % block size or slightly larger =Approximately 1 acre- Desirable ➢ The entire Block is approximately 2.5 acres (109,131 sq. ft.) Most desirable Expected Block 52 Parking: ❖ Underground parking structure(s) ❖ Grade drop from Block 52 to River Street may accommodate development of underground parking structures with entrance and exit points from River Street ❖ Mid-block or courtyard surface parking areas/lots Desired Block 52 Amenities and Site Enhancements: ✓ Gateway site - "gateway to the City" from the north; proposal will need to incorporate art and public and green space 3 ✓ Conscientious building design; required commercial architectural features, with a mixture of masonry, glass, and architectural accent metal ✓ Will serve as the signature development in Monticello area and riverfront Anticipated Block 52 Financial Assistance: ➢ Redevelopment Tax Increment Financing(TIF) ➢ TIF generation based on new development valuation—goal is to offset land costs and parking structure expenses Block 52 Site Control-Land Assembly: ❖ Monticello EDA and the City control 75 +/- percent of Block 52 ❖ The EDA envisions the ability to assemble additional parcels through a voluntary sale transaction process. The goal is acquire sufficient land to proceed with a meaningful and impactful redevelopment project. Jim Thares, Economic Development Manager City of Monticello 505 Walnut Street, Suite 1 Monticello, MN 55362 Office Phone: 763-271-3254 Cell Phone: 612-219-8357 Email: iim.thares@ci.monticello.mn.us 4 ems. 4F lm� .._ '� F 9 WV co 10 33. 66• 0t _ 8, , • s 3315 0 �e4j , 14° +� , 12Y Is r t a a ' r ti / t Block 52 Redevelopment Questionnaire 04-23-21 1. What is the developer's previous experience in working on downtown or urbanized redevelopment projects? 2. Is the developer open to purchasing land from private property owners in the target Block? 3. What is the developer's previous experience in acting as the land purchasing entity-agent in redevelopment or vacant land development projects? 4. Is the developer comfortable with developing vertical mixed-use structures (ground floor commercial; upper floors residential)? 5. Is the developer interested in a long-term commitment as an owner of multi-family residential property in Block 52? 6. Is the developer comfortable with constructing a higher-end multi-family building? 7. What kind of finishes does the developer consider high-end in multi-family buildings? 8. Is the developer open to partner investors in commercial stand alone (horizontal mixed use or side by side mixed use) buildings? 9. Does the developer typically hold commercial property or is their preference being a short-term commercial developer? 10. Is the developer open to entering into a Preliminary Development Agreement with the EDA further defining Block 52 steps? 11. Is the developer capable of self-funding or financing the redevelopment project? 12. What is the developer's estimate regarding value of total investment in Block 52? Does the developer feel comfortable in achieving a $19,000,000 to $22,000,000 investment level in the Block? 13. How many multi-family units does the developer believe would be necessary on the Block for financial feasibility? 14. How much commercial square footage does the developer believe would be feasible? Where is that commercial square footage most attractive on the block? 15. Would the developer want or need tax increment flow as a component of overall project financing? 16.What other financial assistance is the developer anticipating to support the redevelopment of Block 52? 17. Is the developer willing to pay the EDA for land that it has acquired to alleviate cost for the EDA? 18. Does the developer have experience with environmental or structural issues which may be common to downtown or urbanized development? 19. Is the developer willing to be a collaborative partner and engage with the EDA and City staff to accomplish shared vision and objectives? 20. Provide project examples which past development projects which are comparable examples of the type of development on this block.