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The single most difficult financial hurdle is the parking deck. The cost of the parking deck is currently estimated to be between $5 and $6 million – a significant sum. No developer could or would absorb that cost, as the deck is mostly a public amenity. The city and the DDA are currently exploring different avenues to fund the parking deck using a variety of different tools.
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Four projects are proposed or in development for city/DDA-owned properties:
These projects are consistent with the community-designed Downtown Master Plan that guides smart investments and development.
The advantages of these developments to the city are multi-faceted.
Thee projects are:
The Boutique Hotel:
The Public/Private Parking Deck:
In July of 2023, the DDA entered a memorandum of understanding (MOU) with developer Apsilon Hotels for the hotel and parking garage project. This four-month, non-binding agreement outlines the basic understanding of the proposed development and documentation necessary for the DDA to sign a binding development contract. During the MOU period, the DDA is committed not to seek or work with other potential suitors while working through the design and development details needed for both parties to sign a development contract. Both the DDA and the development team are still in an early conceptual phase, and the MOU does not guarantee that the project will prove to be viable.
The development team is talking to multiple hotel groups which are confidential at this point. Each hotel group has a boutique brand within its portfolio.
The development contracts would include approval of the specific brand, and although consistent with other boutique hotels, this one would be given an Avondale-specific name which has yet to be determined. The advantage of being associated with a particular brand is that it ties into a national reservation system making the development much more viable and secure.
The development contract for Project 1, the Town Green commercial development, was signed in January of 2023 with the development team of Fabric Developers, LLC and Healey Weatherholtz Properties. Construction is on track to begin in the last quarter of 2023 or early 2024.
Concept plans for Project 2, the Town Homes, are developed. Since the construction of these units is dependent upon and would follow the construction of a parking deck, a development contract has not been written or signed.
In July of 2023, the DDA entered a memorandum of understanding with developer Apsilon Hotels for Project 3, the hotel.
The city and the DDA are working with the development teams to determine the most cost-effective way to design, finance and stage the development of the parking deck.
These development proposals are still undergoing due diligence. We are unified in our excitement about these projects and remain cautiously optimistic.
Each of the proposed projects will be subject to Recommended Storefront Design Guidelines and Prohibited Use Restrictions set forth by the BOMC consistent with the Downtown Master Plan.
These projects are subject to design and architectural guidelines and restrictions critical to creating a sense of place. Using quality materials and tailoring a design for a specific community rather than pulling a generic "Everywhere USA" plan off the shelf is expensive. Getting the type and quality of development the city desires has a cost – but it will pay huge dividends for generations.
Fortunately, previous city and DDA leaders have provided the tools to invest in this placemaking initiative. The sale of a DDA-owned building often referred to as the Department of Juvenile Justice building created investable funds for the DDA. The Tax Allocation District (TAD) created years ago is anticipated to yield additional tax revenues from the downtown area to invest back into the city. Briefly speaking, in a TAD, county property taxes generated above a baseline level, which has now been exceeded, stay IN the city, and can be used on infrastructure investment back in the district.
The developer will pay market value for the land to build the live-work units, and there are no public loans for this project. The parking for those units will be absorbed into the parking deck.
The financing of the hotel is being studied now. It is unclear whether there will be any public investment needed to catalyze the capitalization of this project. A cost/benefit analysis of the hotel will factor in the timeline to recoup any investment and the anticipated increase in revenue long-term from real estate taxes, a hotel tax, and other fees. This analysis will be part of the decision on whether to move forward with the project or not.
STEP 1: An Inter-Governmental Agreement (IGA) adopted on May 11, 2022, between the BOMC and the DDA provides the DDA control of all the parcels mentioned above allowing the DDA to use its status as a development authority to engage with the developers. This agreement will outline the requirements set forth by the BOMC/DDA for these properties. It will include covenants for design guidelines, desired and prohibited uses of the properties, stipulations for the flow of funds, and ultimate ownership of key components of the parcels.
STEP 2: Memorandums of Understanding (MOUs) between the DDA and the respective developers are not binding but enable the development teams to confidently move forward with the design and financing of their projects. The MOUs will again be subject to discussion and a vote in a public meeting.
STEP 3: The DDA will contract with each of the development teams to execute these projects. These development contracts will form the basis of governance for the development projects' financing, design, construction, occupancy, and use.
Here is the development timetable with steps taken by the BOMC and DDA: