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CONSIDERATION OF A REAL ESTATE DEVELOPMENT ACCELERTOR (REDA) APPLICATION AND TERM SHEET/LETTER OF INTENT BETWEEN THE CRA AND CP OLD TOWN SQUARE, LLC.
(Fiscal Impact: N/A)
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(Staff Contact: Nguyen Tran, Director)
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Summary Explanation/Background:
In 2016, the CRA Board approved the Real Estate Development Accelerator (REDA) which is a performance based, tax incentive program for projects greater than $5,000,000 to expedite development in the Northwest CRA. The program is targeted to developers who bring projects to the area in the early stages with an understanding they are accepting more risk and their projects are generally higher in cost due to a lenders ability to mitigate risk by charging higher interest rates or require more upfront equity effecting the developer’s pro forma. A clearly defined need must exist and be proven by each development initiative before funding under the REDA is considered.
Old Town, is a transitional area void of market rate residential, mixed-use development activity The CP Old Town Square, LLC site located at 212 NE 1st Avenue/101 NE 2nd Street, is a planned development of 282 Class A, residential high-rise, located on approximately 1.90 acres of land with a 300-car structured parking garage and approximately 5,433 square feet of ground floor commercial space in Old Town. The project amenities include a resort style, 5th floor swimming pool, sun deck, yoga area, gazebo, clubhouse, state of the art fitness facility and recreational area. The property will feature a focal point on the southwest corner with a public plaza, colonnade, fountain and benches. On street public parking will be provided along the two streets. The Developer received site plan application approval and is finalizing construction drawings at this time. As a pioneer project in the area, it cannot generate sufficient income to cover the debt service and provide a return satisfactory to the developer considering the risk therefore the developer is requesting assistance of Tax Increment Financinig under the REDA program to meet the pro forma gap.
Origin of request for this action: Staff
Fiscal impact and source of funding: N/A
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