Downtown housing: Project adds fourth developer, public funds

by Eric Olson

SBJ Reporter

eolson@sbj.net

What started as a competitive bidding process aimed at redeveloping underused city-owned land a block west of Park Central Square appears to be headed toward a public/private partnership involving multiple developers.

While three development teams have agreed to collaborate for a housing, parking and office/retail project for the land at Market Avenue and College Street per the city's request additional pieces of the puzzle have surfaced.

City Council members learned at a Sept. 16 luncheon that the city intends to generate funding for the parking garage and streetscape improvement segments of the project. City Manager Tom Finnie said the city plans to contribute one-third of the total project cost, with private developers covering two-thirds.

It is estimated to be a $30 million project, including $10 million for new housing and office/retail space in the Market Avenue redevelopment area and a newly included $10 million renovation of the Heer's building by Warren Davis Properties, which is set to begin early next year.

Included in the city's $10 million investment is two parking garages one for the new housing and the other for users of the Heer's building. The Heer's garage will be constructed on a vacant parking lot at the southeast corner of Campbell Avenue and Olive Street, which is currently owned by Warren Davis Properties.

Scaling back

The developers' willingness to sacrifice elements of their proposals is what makes this new plan possible, city officials said at the luncheon.

It also helps that city officials did not select one of the three proposals as initially planned. Instead, city staff offered the developers alternative parcels of city land available for development. But the options didn't have the appeal of the west central area, the developers say.

"Each of us agreed to pick our areas of expertise," and combine projects rather than build on separate locations, said Scott Tillman of Tillman Redevelopment.

Tillman, whose original proposal was the only one to incorporate a parking garage, ditched his 50-plus living units. Now the parking garage he planned is expected to receive public funding.

Tillman still intends to create about 20,000 square feet of storefront space in the first level of the parking garage, but the extent of his investment is not known.

Tillman plans to divide the lease space into storefronts comprising 1,500 square feet or more.

He said interest is high for smaller spaces downtown. "That size space is not available downtown," Tillman said, adding that adding this space "doesn't compete with older building renovations."

Recess Properties will be responsible for the largest housing portion of the development: an apartment complex of about 75 units. Recess Properties representative Matt Miller said the units are planned for two buildings along College Street.

The third development team, Place Makers LLC, will provide a residential ownership aspect for the development, but on a smaller scale than first planned. Place Makers, comprising partners of the architectural firm Pellham Phillips Hagerman, has reduced the number of townhouses planned along College Street from 34 to about 20, said Bo Hagerman. That decreases their planned investment from about $7 million to about $4 million.

The two-story townhouses with two-car garages are expected to sell for $125,000 to $200,000, Hagerman said.

Davis Properties' Heer's building renovations represent the latest piece of this downtown redevelopment puzzle.

Davis Properties' Ron Shepherd said the Davis team always intended to find some additional parking for Heer's tenants, so they're delighted the city is financing a parking deck.

The 500-space deck could be used by nearby residents, businesses or the general public, but Shepherd said parking rates and who would be charged is unknown at this time.

"The details of all of this have not been worked out. I think there is a little more due diligence time here by everybody," he said.

Details

Where the public funding will come from is another detail yet to be worked out.

City officials are not ready to discuss funding details, according to Louise Whall, Springfield's director of public information.

"(Parking) revenue would logically be a source," she said. "But there's a big question of whether people who live there will have to pay to park, as opposed to people using the offices."

City staff is looking at available state and federal transportation grant money, Whall added, but the city has not filed applications. A special taxing district may also be in the works, according to Shepherd.

While details are cloudy, city officials are certainly optimistic about the impact this development will have on the western half of Jordan Valley Park. Mayor Tom Carlson told council members he sees a "real need and desire for this sort of urban living."

With the go ahead to pursue these plans, city staff will work to meet a spring groundbreaking deadline set forth at the meeting last week, Whall said. There is no specific timeline for the next council action, though.

"Council will have to approve any number of parts and pieces of it," Whall said. For instance, creation of a planned development, center city district or funding source approvals would go through City Council.

Mary Lilly Smith, Springfield's economic development coordinator, expects a groundbreaking in March or April. From there, it's a 12-month to 18-month project.

The area should be transformed in two years, Smith said.