Committee Minutes

MINUTES/FINANCE-DEV.COMM.
Saturday, January 15, 2005 - 9:30 p.m.

Roll call: Christensen, Glassheim, Hamerlik, Greg Hoover, Keith Lund, Lonnie Laffen, Jim Kobetsky, Patsy Dombovy-Vasquez (realtor from Greenberg Realty)

1. Downtown Housing Project.

Information was provided by Greg Hoover, Director, relating to the Downtown Housing RFQ/RFP drafts which offer slightly different approach toward accomplishing the same result of building housing downtown; and there was considerable discussion relative to the differences between Request for Qualifications and Request for Proposals, that the RFQ was to take applications and try to find the most qualified developer but doesn't have to come in with a proposal - pick best team and then sit down and determine what going to do, RFQ gets someone on board quicker. It was noted that with an RFP it is an exact proposal as what they are going to do and how look.

It was noted that an RFQ was making more sense and have more input, that with an RFP have to take the proposal as it come in, then work with the developer and RFP might allow more favorable things - and noted that no reason couldn't get more than one proposal to act on at one time and still have feedback - that an RFP is a faster process as have the proposal in front of you and could break ground perhaps this summer - an RFQ takes longer because of design process, etc. Christensen stated it was noted that one of the requirements in the RFP is what are your sources of funding - if come in with proposal, we only have x dollars and where is the rest of the money coming from - otherwise interview 3 or 5 knowns for qualifications and what are your two big projects - will we get people from Fargo, etc. our issue is do we want to do it in '05 or '06. Hamerlik stated he was willing to wait for 2006 if we can get a better product. It was also stated that if something downtown, better be right project - whether ask for request for ideas or have to see projects they have done. Mr. Hoover stated on RFQ do require them to provided two samples of similar scope - It was noted that they would like with no limitations - the RFQ allows someone to negotiate contract with the City and then with private property owner -

Glassheim asked what the City is offering and how much City money to help out with this - primarily a private sector project or what you think we have to offer - Christensen stated that in an RFQ will pick someone with qualifications and have same question - but with an RFQ may get a developer from out of town that wants to do large project and not cost you a dime - that one thing that an RFP process will get you to what the developers will need real quick, they will come in and say this is what I need from you - why couldn't ask for proposals at the same time and match the proposals with the qualifications - do them both - just a different process - request for qualifications is to get some help to do what we want to do - Glassheim stated he would want City to know what it wanted and to ask for it - that we want some low income housing - but if we are going to look for the private sector to and up to the private sector to propose what they want to do - provide 70-80% of cost
Laffen stated they have put proposals together and doing one now in Fargo and have looked at Grand Forks very hard, the only thing is they don't know everything out there, hoping that if it went qualifications that whoever did it was going to utilize the city in the best possible way to make it the biggest, best project - good for the developer, that he has a lot of investment downtown and lot of sq. footage in this area and wants to see a good project and in order to do that it is going to be working with the team - thinks in long term lot smarter to develop it out with the City - and still thinks RFQ - leans toward RFP for different reasons because number of developers wanting to do something this summer and want to bring very nice project to show you what they want to do, but confidential at this point. He stated he also likes the RFP process in that it allows multiple entities to do the same thing - if none need financing from the City could have multiple projects going on. Mr. Hoover stated to do that they would have to adjust their RFP to say they are looking for projects in the B-4 district and could i.d. the properties the City owns. It was stated that in the RFQ the developer preparing a project to bring it to the City is that the developer would initiate a market study to determine what would be successful in downtown GF, that there might have to be some negotiation between the developer and the City after the proposal was successful (they have to prepare plans and specifications, and sources and use and cash flow to justify their request from the City), and also a market study. Mr. Lund stated a market study is needed, Laffen stated has developers chomping at the bit and Kobetsky has done his market study. Christensen stated whoever gets it, would have to i.d. those - it was noted that the City would not have to accept any of these projects.

Glassheim stated on what the City has to offer could do several projects, Ren Zone not limited, tax increment financing not limited, property tax abatement not limited unless council doesn't want to do that, CDBG programs are limited funds and limited activities, but some things could do, Home Program same as CDBG and Growth Fund not limited but would be harder sell because intended to create permanent jobs - Hamerlik stated that either the RFP or the RFQ needs to be approved by the council, Mr. Hoover stated he didn't believe so. Glassheim stated they cannot commit the council to anything, the final plans would have to go through council, and proposers selected would have to go through council and that he didn't believe that staff needs approval to go out for an RFP or RFQ, and what he has is more directed to the RFP that not restrict to the City-owned properties but take in the B-4 dist and ask people to bring those forth and include property north of the City Hall - B-4 is more restrictive than the Ren.Zone, and ask for tech. assistance that if on the RFQ, page 4, should we, if get this out on the 21st, if April 1 is too long a time - Laffen stated he has developers who want to do this, Kobetsky stated need more time and if open up that entire area -

Christensen stated that if we are committed as a City to do this, - would rather lose a month to make sure someone from out of town makes a bid - that with this timeline might be able to build in August - probably next spring would be to our advantage to have a May date rather than an April date - Hoover stated where do we want to go for solicitation - Mpls., Bismarck, Winnipeg - how far out want to go. Kobetsky stated they have an office in Mpls. and do lot of work in Iowa - it was stated wouldn't think any interest outside of Fargo, Mps. - committee suggested to include 4 major cities in ND and Mpls. and Winnipeg - Christensen stated spend most ads out of town - and put in proposal projects in Ren.Zone with multiple sites. He stated they should have a combined request for proposal and as part want qualifications and projects if have them.

Lund asked who is going to review and rank proposals and make recommendations to the city council - development review committee - have suggested a development team and have some names - Eliot Glassheim, ward rep., Hal Gershman, council president and businessman, city assessor, city auditor, rep from the Downtown Review Bd., and downtown property owner, Jim Halley - Christensen asked that they discuss that later - get notices out - have staff and committee and approved by city council - and then suggested ward rep, himself as chair of the committee, Mr. Gershman and not sure about city engineer or assessor because will get that information and will get info from the downtown people as to the impact of these projects - Glassheim stated they would want Historical people here and assessor because one of the reasons we are doing this is because of how much it is going to increase the valuations - assessor will look at the project - and want their input but not have a vote. Hamerlik suggested the president of the council, 2 standby committee and chairs and ward rep. be on that review committee.

Lund asked if he could have Jim and Lonnie look at the RFP for submission require-ments for developers. Laffen suggested adding proposed completion schedule.

Christensen stated one more agenda item - brought up by Glassheim, developing apartments in existing buildings downtown. Christensen asked what are the properties that are currently available to do something with our existing money as done in the past to fill up apartments - Lund stated unfinished apartment space didn't i.d. first floors as good candidates and if existing commercial building with several offices and two vacant, didn't think that was a good fit for residential - Laffen stated that on the Met the first floor could have apartments on 3/4ths of the first floor to the back and that's where the lion's share of the apartments could go in that building - Christensen stated that in looking at Laffen's building, Silverman building, if Kim couldn't build out some apts. and old telephone building - Lund stated owners not want to do anything with that building - Hoover stated they have some money from Rental Rehab program in the past that they are going to be bringing forward that could be used for low income apts. Christensen stated they have about a half million dollars that isn't going to be burned up this year and why not put out notice that we have funds available for renovation of downtown apartments and solicit aps. - and why not try to move that forward this spring, helpful for Glassheim's ward and downtown. Lund stated they have documents they could run through and have committee look at the program - Christensen asked if they could bring that back after get back from D.C. so they can move on this and people have opportunity to do something this year. Lund stated they could have staff look at this week and get it going. Christensen stated they should be visiting rule about allowing apartments in the main floor downtown; Hoover stated that the council asked for a task force to be set up and that has been tasked to them and one of the things in City Code is only housing you can put in a B-4 is apartments, not condos. Christensen stated he didn't know if really want housing on your main floor in what you have left of your downtown - that they are going to change some of those issues - Glassheim stated there was an interest in changing that and allowing condos downtown - but not on the main floor. Laffen stated his office in Mps. is in old warehouse district and million dollars of housing projects going up in their downtown as of now and all have housing on the first floor - it was noted that our downtown isn't like the warehouse district, we have to be honest with ourselves as to what we have left downtown - Laffen stated he sees tons of storefronts they can't occupy or filled up and thinks good design, none of the housing that would be on first floor would be windows on the street level - would be walk-up - architects, etc. would creatively find ways to put housing on the first floor without looking in the bedroom windows in new construction - Christensen stated what do you end up with in downtown, with a few people living downtown with restaurants and bars - Laffen stated if get the density of housing down there the retail stores that are there will fill, won't fill every empty site in town overnight and as soon as the density is there, the service and retail they want on first floor will come in demand will go in as well - enough space and if not, tear old buildings down and build new ones - let the market drive what we can put downtown - Hamerlik stated that if we allow putting apartments on the first floor they use up all the space we would want for retail. Laffen stated they aren't going to have any apartments go into the retail spaces that are currently there, none of them were designed to have retail on the first floor, too big storefront and nobody sleep in front of a window like that, existing retail is empty is going to stay retail and retail would go back in there is had more housing density downtown to help fill up those, is talking about new construction, don't limit new construction to say you can't have housing on first floor, you could place a limit on existing buildings if wanted but don't limit the new stuff because it will wipe out 3/4ths of the projects that people will want to build. Hamerlik stated if limit it without tearing down the old - Glassheim stated there is 100,000 sq.ft. of first floor that is vacant (97,000) and if took 20,000 out for first floor apartments, no problem. Laffen stated that if you did enact or did an ordinance, no residential on first floor of existing buildings. He stated on the Opera House, the best use for that is residential on the first floor, right on grade but in back section - some exceptions to rule - Christensen stated don't have to change the ordinance for everybody, but give applicant a variance. Glassheim stated he didn't think you could vary a use specifically prohibited. Lund asked if there was a difference between street level and first level but that takes Met out. Hoover stated it is really concern that you have apartments taking over the storefronts so prohibition you have is no apartments on the first floor that front the street in same elevation - Christensen stated how much of a downtown do you really have, we don't really have a downtown after the flood in the downtown area - Laffen stated that architecturally our downtown is more than Bismarck or Minot, etc. but small compared to theirs - 8 blocks - Laffen stated that those towns have more vitality in their downtowns than we do - more happening and more people living there, but have good core to work with. - flood really hurt our downtown - have seen where developers are back to the strip mall concept - we have a parking problem to attract business downtown - storefronts on DeMers are bottlenecked because traffic is bad and no place to park. Parking ramps didn't work and issue is changing the use of your space and having a service area with parking.
Christensen stated our Ren.Zone and if want to expand it - sold originally as downtown and now including Highway 2 - people had total blocks and done a dev. plan, allow them to opt out and how much start clock on another 15-year study and whether we want to expend pol. capital pursuing that and may have to spend more money on entitlement - Glassheim stated not a crucial issue - Hamerlik stated review at next Leg. comm. meeting. Glassheim asked if someone is going to draft something or need to come to decision on condos. Hoover stated we have a task force (putting one together), chair of comm. putting together and have to go through the mayor. Glassheim stated we want condos and new construction to have off-grade; and have housing as long as not at street level. Lund stated that in the past Rental Rehab Program was City could contribute so much per unit and programming applied. The committee noted not to give grants, get money back when loan comes due - a program deal and if want to do project come to us - all loans, taxes up to date. Christensen suggested tax abatement for the new construction, for apts. - Hoover stated they have tax exemption for new construction.

Meeting adjourned.