DEPARTMENT: Planning and Community Development
DEPARTMENT HEAD: John Dugan
COUNCIL DISTRICTS IMPACTED: 1, 2 & 5
SUBJECT:
Pre-development Agreement and Right of Entry Agreement with the George Gervin Youth Center (GGYC) for due diligence on the proposed Echo East mixed use development located at 301 Spriggsdale.
SUMMARY:
City Council is being asked to consider and Ordinance authorizing the execution of a Pre-development Agreement a Right of Entry Agreement with the GGYC to conduct due diligence on the proposed Echo East mixed use development project on City owned property at 301 Spriggsdale, and authorize payment to the George Gervin Youth Center of $150,000 from the Inner City TIRZ Fund to fund the pre-development analysis
BACKGROUND INFORMATION:
On May 1, 2015, Barbara Hawkins, President and CEO of the George Gervin Youth Center (GGYC), made a request to the Inner City Tax Increment Reinvestment Zone (TIRZ) Board of Directors to utilize City owned property at 301 Spriggsdale for a future mixed use development. The proposed project, named Echo East, would combine the Spriggsdale property with ten acres owned by GGYC (see attached map) to develop 250 units of one and two bedroom apartments/condos; a specialty grocery store with pharmacy; ten to fifteen retail businesses; a Comfort Suites hotel; a 350-450 square foot banquet hall and related parking.
The Spriggsdale property was conveyed to the City through a deed in lieu of foreclosure resulting from default on a Grant and Loan Agreement between the Inner City TIRZ Board of Directors and MAUC Point East Housing LLC after that organization failed to meet the obligations of the agreement. The City and GGYC owned properties represent approximately 20 acres of vacant land. The City owned property is 9.889 acres and is valued at approximately $732,300.00. The property owned by GGYC is 9.99 Acres and is made up of five parcels valued at $492,930.00 by the Bexar Appraisal District.
The original request by GGYC sought site control of the City owned property for a period of one year to conduct due diligence on the proposed Echo East project. In addition, GGYC requested a pre-development grant of $150,000.00, from the Inner City TIRZ fund, for expenses related to that due diligence. The TIRZ Board, during their May 1, 2015 board meeting, after considerable deliberation, approved a motion directing staff to negotiate the terms of a Pre-development Agreement with GGYC, in an amount up to $150,000.00 for due diligence for the Echo East Project and to draft a “Right of Entry Agreement” allowing GGYC to have access to the property to conduct tests necessary to complete the due diligence. The Right of Entry Agreement would ensure that the City maintains ownership of the property during the due diligence period.
ISSUE:
On August 14, 2015 the Inner City TIRZ Board of Directors approved a Resolution (attached) authorizing the commitment of $150,000.00 to the George Gervin Youth Center (GGYC) from the Inner City TIRZ fund for pre-development activities associated with the proposed Echo East mixed use development. The Resolution also authorized staff to negotiate and execute a Pre-development Agreement and a Right of Entry Agreement which would allow GGYC to have access to the City owned property at 301 Spriggsdale.
TIF Staff and the City Attorney’s Office negotiated Pre-development and Right of Entry Agreements with GGYC with the following conditions:
• City will maintain ownership of the 301 Spriggsdale site but will allow due diligence to be conducted on the site
• Pre-development funds will be used to conduct a full site assessment, develop conceptual drawings, conduct a financial feasibility analysis and create a master plan for the development to include a financial plan
• The City will require a full market study by an independent real estate market research firm
• Deliverables Include: a Master Plan, conceptual drawings, financial feasibility schedule, associated civil engineering, legal requirements, financing plan and a full site assessment including a market study
• Developer shall provide to the City originals of any documents, professional services reports, studies and plans resulting from this Pre-development agreement, to include contracts executed for Pre-development services, surveys, master plans, conceptual drawings and design concepts, engineering and architectural documents, schematics, environmental studies and assessments, feasibility studies, demographic reports, market studies and financial documents
• All pre-development costs must be eligible in accordance with Chapter 311 of the Texas Property Tax Code
• The agreement will have a one year duration
During the term of the Pre-development and Right of Entry Agreements, if all parties determine that the proposed project is viable, GGYC and the Inner City TIRZ Board will enter into negotiations for the potential sale of the property to GGYC. If negotiations for sale are successful, the Echo East project may be added to the Inner City TIRZ Project and Finance Plans to promote development or redevelopment in the Zone.
ALTERNATIVES:
The City could issue a Request for Proposals to try to identify other developers for the property. While this option would allow the City to explore other options for the site, the GGYC proposal will be able to achieve a much larger impact because of the additional property owned by GGYC. A twenty acre site enables the development of a project with a large enough scale to create significant positive impact in the area. In addition, GGYC has a long history of community development activity and understands the area and has a wealth of development experience.
FISCAL IMPACT:
The $150,000 payment to the George Gervin Youth Center for due diligence will be paid from the Inner City TIRZ fund and will not have a direct impact on the City’s General Fund.
RECOMMENDATION:
Staff recommends approval of the Ordinance authorizing the execution of a Pre-development Agreement and Right of Entry Agreement with the George Gervin Youth Center/I.C.E. Construction Services, LLC for due diligence on the proposed Echo East mixed use development located at 301 Spriggsdale.