75A - PH FOR CARIBOU INDUSTRIES - Laserfiche WebLink

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ER No. 2019-85/DBA No. 2020-01/SPR No. 2020-01/SPR No. 2020-02/DDA November 17, 2020 Page 5 The next step in the process is to enter into a Disposition and Development Agreement (DDA) with Caribou Industries. A DDA is a contract between a developer and the City that involves the sale of City -owned land to the developer. The DDA will fully detail the final terms of the transaction, including a schedule of completion with milestones for the developer to achieve, the method of conveyance of the property, parking structure operational agreements, and all City participation options if the project is sold in the future (Exhibit 6). The City will not convey the site, nor will the existing parking be demolished, until the developer has met all obligations defined in the DDA, obtained all approved permits and entitlements, and provided proof of financing for construction of the project. Below is a summary of the transaction business terms. Summary of Business Terms Proposed Project: 3'd & Broadway Mixed -Use Development Land Use: Mixed -Use Residential units: 171 apartments with 19 very -low income units Residential Only Parking: 196 spaces Retail: 13,419 sq. ft. Public Parking: 211 spaces Hotel: 75 keys with 83 parking spaces City Responsibilities: The City will fund the costs for public improvements to ready the site for development. This will include the demolition of the existing parking structure, preparation of the site for development, the construction of Sycamore Street reconnection, and construction of 211 public parking spaces to replace the existing parking currently provided at the 3'd and Broadway parking structure. The estimated cost for public improvements is $7 million for the construction of the 211 public parking spaces and $6 million for the additional public improvements. The estimated debt service (at an interest rate of 4%) for the public improvements would be $750,000 per year for 30 years. Developer Responsibilities: The developer's obligations for the project include providing funding to finance the over $100 million development project, processing all entitlements, construction of the public improvements, designing and operating a hotel, and managing and operating the public parking for the project. The developer will also have the option to submit an application to convert the hotel to residential after three years of operation if certain revenues per available room thresholds are not reached. This would indicate the hotel is not financially sustainable after those first three years to continue operations. The developer will guarantee that the anticipated revenues from the parking will cover the City's estimated annual debt service of $750,000. There will be no out-of-pocket costs to the City. Community Workforce Agreement The DDA requires that the developer shall be subject to the City's Community Workforce Agreement policy adopted by the City Council in 2017. This project labor agreement establishes local hiring requirements for construction projects and requires using unionized labor for the work. 75A-5