What’s going on with the proposals on the 700 and 800 blocks of East Washington Avenue/Don Miller properties . . . here’s the latest on the sham of a process.
MEETING TONIGHT
WHAT : Learn more about the recommended proposals for the 700 & 800 blocks of East Washington Avenue in our Stakeholder Meeting this month. Developers will present recommended proposals, with area Alders and City staff available to answer questions and receive comments.
WHEN: Tonight!
Thursday, August 25
6–8 p.m.
WHERE:
Christ Presbyterian Church—Fellowship Hall
944 E. Gorham Street, Madison
WHAT HAS ALREADY BEEN DECIDED?
The “Secret Committee” that wasn’t really a staff committee has already decided their recommendations, so I don’t understand what the purpose of the meeting is if the decision is already made.
The Selection Committee reviewed six proposals, and is recommending the following course of action. The sites identified below are highlighted within the map located at the end of this summary.
800 South Site
The Selection Committee is recommending that City staff begin negotiating the terms of a Purchase and Sale Agreement, which will require City of Madison Common Council approval, with The Rifken Group Proposal for the development of their 800 South Site proposal. The Rifken Group proposal provides an opportunity for desired employment space within a development of a density generally consistent with the Capitol Gateway Corridor BUILD Plan.700 North Site
The Selection Committee is recommending that City staff begin negotiating the terms of a Purchase and Sale Agreement, which will require City of Madison Common Council approval, with The Gebhardt Development/Bark Design Proposal for the development of the western half of their 800 North Site proposal to be located on the 700 North Site. The Gebhardt Development/Bark Design proposal included two elements within the original proposal, a Gebhardt Development/Bark Design element on the western half of the 800 North Site, and a Hovde Properties element on the eastern half of the 800 North Site. Hovde Properties withdrew their proposal, leaving only the western segment of the proposal remaining.The Selection Committee supported the uses and density of the proposed development; however, questioned if it could not be located on the 700 North Site in the context of other opportunities for the 800 North Site. Gebhardt Development/Bark Design has agreed to modify the design of their proposal for the 700 North Site.
The Selection Committee has not made a final recommendation regarding the 800 North Site; however, they have requested The Urban Land Interest (ULI) Proposal to present a revised version of their proposal for the Selection Committee’s consideration. The Selection Committee was very interested in the proposed office development along E. Washington Avenue and is supportive of housing along Mifflin Street as part of a whole-block concept; however, the Committee had concerns about other aspects of the ULI proposal. ULI proposed a phasing plan that included use of all of the Sites. In the context of the other proposals, the Selection Committee was not comfortable with this approach. The Committee also had some concern about the proposed building design.
Despite these concerns, the Selection Committee is very interested in the opportunity that may be available to attract ULI’s prospective office users to the Capitol East District. As such, the Selection Committee is recommending to provide ULI with 45-60 days to return with a revised proposal utilizing only the 800 North Site.
Remaining Proposals
The Selection Committee is not recommending that the following three proposals continue forward at this time.Stone House Development – 800 South Site – Ale Asylum
The Selection Committee and City of Madison desire to see Ale Asylum grow within the City of Madison. The Committee; however, did not believe that this proposal provided the level of density desired by the City as outlined within the Capitol Gateway Corridor BUILD Plan.Stone House Development – 800 North Site – Residential
The Selection Committee appreciated the quality and benefits of the Stone House Development 800 North Site residential proposal; however, the Committee was not comfortable recommending the proposal as an initial phase absent exploring an integrated master development plan for the entire block that includes both employment and housing.The LaFollette
The Selection Committee supports the goals of The Lafollette proposal; however, they thought additional work was needed on the plan before they would be able to provide a firm recommendation in support.
The rest of the staff memo is here.
The RFP for the proposals is here, along with the addendum.
OTHER ITEMS OF INTEREST
Info from city staff summary.
Staff already negotiating for the sale of the properties
Based on the recommendation of the Selection Committee, City staff will begin negotiating a Purchase and Sale Agreement with The Rifken Group and Gephardt Development/Bark Design for their respective proposals as outlined above. This Purchase and Sale Agreement will require approval by the City of Madison Common Council, and will provide the developers with a six-to-nine month period to finalize their development proposals. This will include finalizing building/site plans, receiving City development approvals, finalizing tenants, and securing financing.
TIF
The City has not received an application for Tax Increment Financing (TIF) from any of these developers for their respective projects, and the City has not made any commitment of TIF funds to date. Developers will be required to apply for TIF assistance, if appropriate, and will be subject to all standard TIF underwriting and approvals.
-Gephardt
The Gephardt proposal is asking for $4.3M for the Hovde part of the project and $4.8M for the Gephardt part of the project in TIF assistance, plus bonds in some amount, I think its lumped in with the Debt financing numbers. (see section 11 of the proposal)
Rifkin
The Rifkin proposal says this about financing ($14M in bonds, $2.2M in TIF:
Financing Methods. The proposer intends to secure primary funding for this project with a bond issuance through the City of Madison Community Development Authority (CDA). As contemplated in this proposal, the CDA would issue one bond offering with two series of bonds within this offering. The proceeds of the bond issuance would be used to fund the purchase of the land and the construction and development of the three buildings and parking structure. The first series of bonds would be Midwest Disaster Area (MDA) Bonds as offered under the authority of the Heartland Disaster Tax Relief Act of 2008. These bonds would be “conduit” debt for the CDA as the proposer would be responsible for the debt service and the credit enhancement (likely a letter of credit with a private lender). The proceeds of the MDA bonds would be used for the purchase of the land and the construction and development of the buildings.
The second series of bonds issued by the CDA would be used to construct and develop the parking structure. The CDA would own the parking structure and the proposer would lease the structure from the City. The cost of the parking structure would be financed through CDA Lease Revenue Bonds and any bond costs would be reimbursed to the City through the proposer’s lease payments. As part of the lease agreement, the proposer would be responsible for all repair and maintenance costs to the parking structure as well as the lease payment. In exchange, the proposer would receive all parking revenue generated by the structure. A development agreement shall include a promise by the City to use the TIF revenue generated by the project to pay off the bonds.
Finally the proposer is requesting TIF financing for the tax increment generated from the three buildings and other improvements associated with the project. The details of the financing can be found at Exhibit B at the end of this tab section.
-ULI
Urban Land Interests is suggesting Pay-As-You-Go TIF as a credit against the bond payments that will need to be approximately $300,000 per year (for 25 years?). Their total TIF request is as follows:
In addition to applying for these grants, TIF will need to be an integral source of funding the gap. The proposal is premised upon TIF assistance to support the various phases of the project. ULI will request the following:
• Reduce the initial base assessment of the parcels to land‐only, so that the increment created is as large as possible;
• Use of TIF increment generated by development of the property to reduce the cost of parking to $40 per stall per month. The TIF increment required to accomplish this goal will be a pay‐asyou‐ go credit against the debt service on the revenue bonds used to finance the ramp.
• A TIF grant for the office buildings required to be able to keep rent at $14.00 per rentable square foot net/net/net.
• TIF applied over the longest possible period, i.e. 2032; and • City amend TID 36 to include the 700 North Site.
• Amend TID 36 to restart the clock. It was established in 2005, and six years have run off with nothing having happened.
They are also asking for a $8M in bonds.
Land Use Proposals
In all cases, developers will be required to submit their proposals through the City’s standard development review process. This will include all customary neighborhood meetings, and approval by the Plan Commission and Urban Design Commission, as these sites fall within Urban Design District # 8.
So, stay tuned!
Wow, I see the plan includes using TIF to subsidize parking costs in the 800 North Proposal. Don’t the B.U.I.L.D. plan and other area plans call for shifting East Wash development away from car-centric uses? If so, subsidizing parking seems to be at odds with those plans.
I would love for the anti-transit folks on talk radio to discuss this one – to me, this is a prime example of a subsidy for automobiles that is required to spur development because there is nothing like commuter rail in the corridor that would eliminate the need for subsidized parking.