Memo - Block 64 Project-GPS Financial Group
I Economic Development I
MEMORANDUM
TO: Honorable Mayor and City Council
FROM: Jim Kerrigan, Director of Planning & Economic Development
DATE: January 5,2005
SUBJECT: Block 64 Project - GPS Financial Group
PURPOSE OF MEMO
At the January 10 work session, GPS Financial will be present to discuss the
status of their project between Fifth and Sixth Avenues, north of Mainstreet. In
response to this discussion, the Council needs to provide some direction on how
they wish to proceed with the development agreement for this project. Bob Deike
of Bradley & Deike and Sid Inman of Ehlers & Associates will also be at this
meeting.
OVERVIEW
GPS executed a development agreement for the subject project in July 2004. They are
proposing a mixed-use, owner-occupied, residential/retail project. The project would be
constructed in three phases.
Tax Increment District 1-3 was created to facilitate this project. There has since been a
legal challenge of this district. The outcome on this challenge has yet to be decided.
The development agreement requires GPS to complete a variety of activities over an
180-day period (see Sections 3.2 & 3.3 of the attached Contract for Private
Redevelopment), including securing financing for the first phase of construction. A
number of required actions have not been completed within the required period of the
agreement (see attached memo dated 12/19/05). Securing adequate pre-sales has
been part of the problem. As a result, the Council will need to take action at some time
in the near future to extend the development agreement.
Along with requesting an extension of the period for completion of developer actions,
GPS is also asking for a change in the scope of the project, removing the 55+ limitation
from the agreement.
Memo to Honorable Mayor, et aI., January 5, 2006 - Page 2
PRIMARY ISSUES
. In deciding how to proceed with this development agreement, the Council needs
to consider the following:
o The progress that has been made by GPS on this project and the comfort
level the Council has that they will be able to proceed with Phase I of the
project at some time in the reasonable future.
o The legal action challenging TIF District 1-3 and the impact of this action
on both the GPS and The Cornerstone projects.
. If the development agreement is extended, staff would recommend requiring the
following:
o The period for completion of the developer actions be extended for a
maximum of six months.
o 90 days after execution of the agreement, GPS will have executed
purchase agreements for 25 percent of the Phase I units (18 units).
o Parking will need to be shown to be adequate for any relaxation from the
55+ requirement.
CONCLUSION
Based on discussion at this work session, action on the development agreement will be
placed on a future agenda for consideration.
Attachment
I Economic Development I
MEMORANDUM
FROM: Jim Kerrigan, Director of Planning & Economic Development
DATE: December 19.2005
SUBJECT: Block 64 Project, Required Development Actions Per Redevelopment
Agreement
As part of the redevelopment agreement for GPS, Section 3.2 details eight
actions to be completed over 180 days. The following is the status of each of
these actions:
a) A financial plan was submitted based on preliminary sales projections,
which have not been met. This will need to be revised, based on when
and how the project proceeds forward.
b) Sid Inman of Ehlers & Associates, the City's financial consultant, has not
yet received the necessary information from GPS to complete a final
financial feasibility analysis of the project.
c) The site plan information has been submitted for all phases of the project.
d) Information has been submitted concerning a plan for completion of the
environmental due diligence process. An acceptable remediation plan has
not yet been completed.
I'
e) GPS has acquired title to only two of the properties in the project area.
f) A financing commitment has not yet been secured for construction of
Phase I.
g) The concept review process as required has been completed by the
developer. The determination of the feasibility of compliance of the
building plans with the state building code has not been completed.
h) Articles of incorporation and bylaws for the Sixth and Main Condominium
Association have been submitted to staff. They have not been reviewed
by legal counsel.
Memo to Bob Deike, et aI., December 15,2005 - Page 2
Besides the above, Section 3.3 (f) (ii) requires the following to be completed
by GPS.
1. Execution of a relocation contract.
2. Preparation of a relocation plan.
3. Provide HRA written reports every two weeks concerning the status of
relocation activities.
To date, item #1 has been executed, but nothing has been submitted as relates
to the other two items.