HomeMy WebLinkAbout11-13-18 Special Joint Common Council-IURA Meeting AgendaOFFICIAL NOTICE OF MEETING
A Special Joint meeting of the Common Council and Ithaca Urban Renewal Agency
Board will be held on Tuesday, November 13, 2018, at 6:00 p.m. in the Common
Council Chambers at City Hall, 108 East Green Street, Ithaca, New York. Your
attendance is requested.
AGENDA
1. PLEDGE OF ALLEGIANCE:
2. SPECIAL ORDER OF BUSINESS:
2.1 Green Street Parking Garage Site Urban Renewal Project - Consultation on the
Ithaca Urban Renewal Agency’s two top-ranked redevelopment proposals.
3. ADJOURNMENT:
If you have a disability that will require special arrangements to be made in order for you
to fully participate in the meeting, please contact the City Clerk at 274-6570 at least 48
hours before the meeting.
Out of consideration for the health of other individuals, please refrain from using
perfume/cologne and other scented personal care products at City of Ithaca meetings.
Thank you for your cooperation and understanding.
______________________________
Julie Conley Holcomb, CMC
City Clerk
Date: November 9, 2018
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108 E. Green St.
Third Floor, City of Ithaca (City Hall)
Ithaca, NY 14850
Tel: (607) 274-6565 | Fax: (607) 274-6558
To: City of Ithaca Common Council & IURA members
From: Nels Bohn, Director of Community Development
RE: Green Street Garage Redevelopment Urban Renewal Project - IURA Consultation with
Common Council on Top-Ranked Proposals
Date: November 8, 2018
The IURA has ranked the Vecino and Visum/Newman proposals as the two top-ranked proposals for
redevelopment of the Green Street parking garage site. Please find attached the following information:
x IURA scoring sheet
x selection criteria from the Request for Proposal (RFP)
x summary comparison of proposals.
Additional detailed information about each proposal is available at the IURA web page at
www.IthacaURA.org. Please contact me if you prefer to review hard copies of any of the proposals.
Thee top-ranked developers have each been given an opportunity to revise their proposal to further
enhance public benefits with submission of their ‘final and best’ offer by 11/30/18. The IURA
anticipates selecting a single preferred developer in December.
The IURA seeks Common Council input whether the one or more of the two top-ranked projects is
conceptually acceptable for future Common Council endorsement. Additionally, identification of
requested project enhancements or concerns for each proposal will be helpful to developers as they
consider their ‘final and best offer’ and to the IURA as they make their decision to designate a preferred
developer.
If both proposals are acceptable, the IURA will continue to weigh out pros/cons of each proposal and
select one developer as a preferred developer to execute a 90-day Exclusive Negotiation Agreement
(ENA) for the purpose of finalizing detailed terms of proposed deal to sell and redevelop the site. The
ENA will define the financial and other obligations of the developer, the IURA and the City. The
proposed deal is termed the Disposition and Development Agreement (DDA) and will require a future
public hearing and Common Council approval.
If neither of the proposals is acceptable, then identification of the concerns from the Common Council
is critical for the IURA to address them with developers.
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Issues for Common Council consideration about the two top-ranked projects:
1. Housing – Is maximizing the amount affordable housing preferred over maximizing the range of
income bands served?
Comment: Vecino maximizes the number of affordable housing units while Visum/Newman
serves a broader range of incomes.
2. Parking – Is the city prepared to incur financial obligations for a $15 million investment in public
parking to construct and restore approximately 500 public parking spaces?
Comment: The annual cost to the city, before parking revenues, is likely to be about $1
million/year. Neither of the top-ranked projects proposes to significantly subsidize construction
of public parking.
3. Conference Center – Is inclusion of a conference center in the project essential?
Comment: Vecino includes a conference center on the lower two floors of their project, while
Visum/Newman programs the ground floor for retail use and does not include a conference
center.
4. Financial Terms – How important is generation of city revenues from the project?
Comment: Neither developer proposes any payment to acquire the project site in recognition of
public benefits provided by the project.
Both proposals seek either a PILOT or deep tax abatement. Annual property tax revenue to the
City from Vecino is approximately $35K/year and indexed for inflation. Property tax revenue
from Visum/Newman increases as the requested tax abatement declines over 30 years. City
revenues in 2018 dollars from this project are estimated as follows: Year #1: $35K; Year #10:
$100K; Year #20: $167K; Year #30: $200K (end of tax abatement).
The conference center is projected to generate $86K in city sales tax. The Visum/Newman
project is projected to generate similar sales tax from ground floor retail uses.
Following is deeper comparison of Housing, Parking and Conference Center components for the top-
ranked proposals.
Housing
Vecino offers 209 affordable rental housing units, the vast majority priced to serve households earning
50-60% of the Area Median Income (AMI). As points of reference, Breckenridge Place is a 50-unit
project and West Village Apartments contains 217 units.
Visum/Newman offers 192 rental housing units at a mix of income levels. 41 units will serve households
earning 30% to 60% of AMI, 10 units for households earning between 61%-80% of AMI, 127 units at
81%-100% AMI, and 14 at market rate. The developer has offered to increase the affordable housing
count to 75 units, which would bring the total housing count to 217 units.
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To put these figures into some context, following is a chart identifying incomes and rent limits for a one-
bedroom apartment by income band:
Area Median
Income
2018
2-person household
Wage Required if one
full-time worker
1-Bedroom Rent Limits
(includes utilities)
30% AMI $21,360 $10.30/hour $500
50% AMI $35,600 $17.10/hour $834
60% AMI $42,720 $20.50/hour $1,001
80% AMI $56,960 $27.40/hour $1,335
100% AMI $71,200 $34.20/hour $1,557
Market Rate $2,000
Parking
Both Vecino and Visum/Newman projects include over 500 parking spaces at the Green Garage site, an
increase from the 341 spaces currently available. Both projects offer full city control of parking
operations, but require the city to accept financial responsibility for the cost of parking construction.
Each offers to conduct restoration work on the existing 149 parking spaces in the eastern section, retain
existing parking in the center section and construct 230-250 new parking spaces in the center and/or
western sections.
Vecino proposes to construct 365 new parking spaces in the western two-thirds of the garage subject to
the city entering into a 30-year lease to pay off a commercial loan secured to finance construction.
Vecino has additionally offered to restore the 149 spaces in the eastern section of the garage under a
similar financing model to raise the total public parking count to 504 spaces. The new parking will
create a sort of parking ‘sandwich’ at levels #3 and #4 with a conference center below the parking and
housing located above the parking.
Vecino estimates an annual rent rate to the city of $1,900/space, or $693,000 per year for newly
constructed parking, assuming $5 million of proposed grant funding is awarded to the project. The
overall rent rate would be reduced to about $1,800/space if the city elects to accept the option to have
Vecino restore the eastern section as well. If only 50% of the grant funding requested is awarded ($2.5
million), then the rent rate increases to approximately $2,350/space or $1,180,000 per year for 514
spaces.
Visum/Newman proposes to add four levels to the center section of the garage to yield a total of 532
parking spaces. Parking will be financed with tax-exempt bonds using the Cayuga Green financing
model. Ultimately the City will be responsible to ensure that bond holders are paid in full. The annual
debt service is expected to be about $900,000 per year or about $1,700 per parking space. The
Visum/Newman proposal appears to offer some cost savings on parking due to lower tax-exempt
financing versus bank financing and focusing all their parking on the center section, which was built to
accommodate four additional levels. Vecino’s parking design offers some space efficiencies and
customer convenience for parkers by constructing parking across both the western and center sections
of the garage at levels #3 and #4, thereby minimizing the amount of turn lanes and “corkscrewing”.
Under the current parking rate structure at the Green Garage each occupied parking space generates
approximately $1,700/space/year before operating costs. If the parking facility is managed to operate
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at 85% occupancy, then the net revenue per space is $1,445/space before any operating expense. New
parking will require an ongoing subsidy at current rates.
Conference Center
The Vecino project includes a conference center while the Visum/Newman project does not.
Visum/Newman dedicates ground floor space to retail uses.
Vecino proposes to construct a 33,000 square foot conference center on two lower floors and secure
financing for construction via a 30-year lease with a conference center operator. Vecino does not
expect the City to be financially responsible for rent payments. The lease is estimated to be priced at a
fixed $20/SF/year triple net if $5 million in grant funding requested is received. If only 50% of the grant
funds requested is received, then the lease rate would increase to about $26/SF triple net. It is not yet
clear what level of rent the conference center can support until the phase 2 feasibility analysis is
completed, which has been pre-funded is awaiting selection of project site to proceed.
Inclusion of a conference center in the project advances a preferred programmatic element identified in
the RFP, but also will require establishment of an organizational structure to manage the conference
center and adoption of a financing plan to cover the operating deficit and guarantee payment of the
lease before the project can secure financing and initiate construction. These pre-requisites could delay
project commencement. It should be noted that a potential alternative location for a 30,000 SF
conference center appears to remain available at the ground floor level in the Rothschild building below
the eastern section of the garage.
END
Enclosures
Cc: J. Cornish, Director of Planning & Development
S. Thayer, Controller
P. Messmer, Parking Director
T. Logue, Director of Engineering
M. Thorne, Superintendent of Public Works
A. Lavine, City Attorney
D. Cogan, Chief of Staff
J. Holcomb, Director of Public Information & Technology
T. Knipe, Deputy Director for Economic Development
Green Street Garage Site Redevelopment Proposal Scoring & Ranking - IURA Board (10/25/18)RFP Selection Criteria WeightHarold’s HoldingsVecinoIthaca-Peak (McKinley)Newman/ VisumCommunity Benefits 30% 7 16 5 12Project Concept 20% 6 16 9 9Financial Capacity & Project Feasibility 20% 5 13 13 9Developer Qualifications and Experience 15% YES YES YES YESFinancial Terms Proposed 15% 4 10 15 11Total (highest is best) 100% 49 121 81.5 88.5RANK 4132Note: The IURA EDC previously determined that each development team satisfied qualifications and experience to successfully undertake the redevelopment project and were designated as eligible "Sponsors". Assign a ranking score of #1-#4 for each criterion with a score of 4 signifying the proposal that best addresses the criterion. Each row should contain a "1", "2", "3" and "4" to provide a rank order for how proposals address each criterion.
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EVALUATION&SELECTIONCRITERIA
Developerswillbeevaluatedutilizingtheselectioncriterialistedbelow:
SELECTIONCRITERIAWEIGHT
CommunityBenefits30%
ProjectConcept20%
FinancialCapacity&ProjectFeasibility20%
DeveloperQualifications&Experience15%
FinancialTermsProposed15%
TOTAL100%
COMMUNITYBENEFITS:Calculationofsocial,economic,andphysicalcommunitybenefits
resultingfromtheproject.
Theprimarysocialbenefitsoughtisanincreaseinthesupplyofaffordableandworkforce
housing.TheextenttowhichtheprojectincludessuchbelowͲmarkethousingwillgreatly
impactcommunitybenefitscoring.Newhousingtargetedtoaddressotherhousinggaps
identifiedintheTompkinsCountyHousingStrategy,suchasseniorhousing,condominium
housing,andsupportivehousing,providesasecondaryhousingbenefit.Increasingthesupply
ofmarketͲratehousinginthedowntownisalsoencouraged,butaprojectlackingbelowͲmarket
housingwillscorepoorly.
Othersocialbenefitsmayincludecommitmentstoutilizelocallabor,constructahighenergy
performancebuilding,implementparkingdemandmanagementplan,andpayemployeesa
livingwage.
Economicbenefitsmayincludejobcreation,commitmenttoshoulderthecosttorepairor
replaceagedpublicparkingattheprojectsiteoranearbylocation,andprojectelementsthat
enhanceeconomicvitalityofthedowntownthroughtheattractionofnewresidents,workers
andvisitorstothedowntown.
Physicalbenefitsmayincludeprovisionofpublicopenspaces,developmentofstreetͲlevel
activeusesalongGreenStreet,strengtheningthepublicpedestrianconnection(s)between
GreenStreetandTheCommons,inclusionofpublicart,andaccommodationsindesignand
operationstomitigatepotentialadverseimpactsonadjacentbusinesses,buildingsandhistoric
resources.
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PROJECTCONCEPT:Theproposal’sabilitytoincorporatethepreferredprogrammaticelements
intheprojectinamannerthatwillimprovethesocial,economicandphysicalcharacteristicsof
thesiteandthesurroundingarea.Preferredprogrammaticelementsare:
o Housingunitsspecificallydesignedtoappealtoadiversedemographic,includinga
substantialnumberofunitstobeaffordabletolowand/ormiddleincomehouseholds;
o StreetͲlevelactiveusesalongGreenStreet;
o Atleast450parkingspacesopentothepublic,ofwhichatleast90willbeavailablefor
shortͲtermparking;
o RetentionoftheCinemapolismovietheatreandthepublicwalkwaybetweenGreenStreet
andTheCommons;and
o AconferenceCenter.
TheIURAisalsoopentoconsideralternativedevelopmentprogramsthatcreativelyaddress
communityhousingneedsandsatisfyexistingparkingdemandandprojectedparking
requirementsfromtheproposedproject.
Proposalsthatseektoacquireonlyaportionofthesiteareexpectedtohaveaproportionally
reducedprojectscope.
FINANCIALCAPACITY&PROJECTFEASIBILITY:Financialcapacityisthedemonstratedabilityof
thedevelopertofundpredevelopmentexpenses,secureprojectfinancingandmeetequity
investmentrequirementsfortheproposedproject.
Theextenttowhichthefollowingsubmissionsarecompleteandbasedonreasonableinputs
andassumptionsthatdemonstrateawellͲresearchedandfinanciallysuccessfulproject
increasesaproject’sfinancialfeasibility:
o Projectplan;
o Marketingplan;
o Financingplan,includingprojectbudgetandprojectsrevenuesandexpenses.
Inaddition,theproject’scompliancewithlanduseregulationsandbuildingcodesincreasesa
project’sfeasibilitytosecureentitlements.
DEVELOPERQUALIFICATIONS&EXPERIENCE:Thequalificationsandexperienceofthe
developerteam,includinginvestors,projectmanagers,andconstructionanddesignteams
involved.Ahighlyqualifieddevelopmentteamshoulddemonstrateexperienceinthe
successfuldevelopment,operationandmanagementofamixedͲuseprojectofcomparablesize
andscale.
FINANCIALTERMSPROPOSED:Theproject’sabilitytoachievefinancialbenefittotheCity
throughdirecteconomicbenefits.Directbenefitsmayincludethelandpurchasepriceoffered
bythedeveloper,generationofnewCitypropertytaxorrevenues,privatesectorcapital
investmentsinlieuofpublicinvestmentstoimproveexisting,orconstructnew,publicparking,
andfinancialsubsidytoconstructand/oroperateaconferencecenter.Indirecteconomic
benefits,suchasattractingnewresidentsorvisitorswhomayincreaserevenuesatdowntown
businesses,arenotconsideredunderthiscriterion.
Green Street Garage Site Redevelopment - Summary Comparison (updated 10/25/18) RFP Selection Criteria Weight Harold’s Holdings TOP-RANKED Vecino Ithaca-Peak (McKinley) TOP-RANKED Newman/Visum Community Benefits 30% 76 housing units: x36 affordable (0-50% AMI) x26 affordable (51-80% AMI) x10 moderate (81-100% AMI) x4 market rate -50’ x 100’ open air park Parking Strategy City encouraged to expand central section and repair eastern section 209 housing units): x186 affordable (50-60% AMI) x23 affordable (61-80% AMI) Parking Strategy Construct parking and lease parking to City for public use. 404 housing units: x60 affordable (80% AMI) x344 market rate Parking Strategy Construct parking and retain revenues. 171 spaces reserved for tenants and 240 available for public use. 192 housing units: x21 affordable (0-50% AMI) x30 affordable 51-80% AMI) *(may add 25 more affordable units) x127 moderate (81-100% AMI) x14 market rate - 25’ x 100’ open air park - $500,000 commitment for public amenities Parking Strategy Facilitate tax-exempt bond financing to construct/repair parking for public use. Project Concept Preferred Program: xHousing Units – diverse demographic including affordable xStreet-Level Active Use xPublic Parking (at least 450) xRetain Cinemapolis and Home Dairy Alley Extension to Green Street xConference Center (reduced scope expected for projects acquiring only portion of site) 20% Housing – YES Active Use – YES Parking – NO (none constructed) Project parking demand: not provided Cinemapolis/Home Dairy Alley – YES Conference Center - NO Housing – YES Active Use – YES Parking – YES (365, excl. east section-149) Project Parking demand: 42 Cinemapolis/Home Dairy Alley – YES Conference Center - YES Housing – YES? (diverse demographic?) Active Use – YES Parking – YES? (411, includes 60 lifts) Project parking demand: 250 Cinemapolis/Home Dairy Alley – YES Conference Center - YES Housing – YES Active Use – YES Parking – YES (532 spaces) Project parking demand: 100-120 Cinemapolis/Home Dairy Alley – YES Conference Center - NO Financial Capacity & Project Feasibility 20% Project requires successful competitive 9% Tax Credit allocation to secure project financing. Developer prepared to construct commercial space w/o tenant. Financing Plan and pro formas not as detailed as other proposals “by-right” 4% tax credit financing reduces risk to finance housing Assumes $10 million in grant funding to subsidize parking & conf. center lease rates. 10-year CIITAP tax abatement Plus 30%, 30-year supplemental IDA abatement on housing component proposed to offset provision of 15% affordable housing 30-Year, deep IDA tax abatement proposed declining by 3.3%/year $2 million grant funding assumed. Affordable housing requires a competitive 9% Tax Credit allocation. An alternative “by-right” 4% tax credit financing model is being explored for 75 affordable units. Developer Qualifications and Experience 15% YES YES YES YES Financial Terms Proposed 15% REVENUES Purchase price: $2 million Est. Annual City Property Taxes After PILOT: Year #1: $0 Year #10: $85K Years #20: $85K Est. Annual City Sales Taxes: $58K CITY EXPENSES - Construct/repair all public parking - Maintain open-air park REVENUES Purchase price: $0 Est. Annual City Property Taxes After PILOT: Year #1: $35K Year #10: $35K Years #20: $35K Est. Annual City Sales Taxes: $86K Developer Finances Construction of Parking CITY EXPENSES - Lease newly constructed parking from Developer ($1,900/space/year) - City responsible for Eastern parking REVENUES Purchase price: $0 Est. Annual City Property Taxes After PILOT: Year #1: $0 Year #10: $381K Years #20: $381K Est. Annual City Sales Taxes: $86K Developer Pays to Construct Parking CITY EXPENSES (foregone revenues) Parking revenues accrue to Developer rather than to City REVENUES Purchase price: $0 Est. Annual City Property Taxes After PILOT: Year #1: $35K Year #10: $100K Years #20: $167K Est. Annual City Sales Taxes: $97K Parking Construction/Repair funded by tax-exempt revenue bonds CITY EXPENSES - City responsible for financial shortfall on bonds issued to construct parking - City funding for City Hall atrium entrance Total 100%