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Amended and Restated ENA with Caribou <br />January 16, 2018 <br />Page 2 <br />During negotiations, it was mutually determined that several developer deliverables described in <br />the original Exclusive Negotiation Agreement (ENA) (such as submittal of a complete <br />development application and provision of a written commitment from a recognized hotel chain) <br />were not attainable at this point in the negotiation process. Staff and Caribou agreed that an <br />ENA incorporating modified business terms should be prepared and presented for City Council <br />consideration. <br />Kosmont Companies, a land economics consulting firm, was retained to provide a financial <br />feasibility analysis of the Caribou proposal. In their analysis, Kosmont has validated that the <br />proposed project, which requires the demolition of the current parking structure and replacement <br />of 253 public spaces and the reconnection of Sycamore Street, has a significant financial gap <br />and a subsidy is required. Below is a summary of the proposed transaction business terms. <br />Summary of Proposed Business Terms <br />Proposed Project: <br />Land Use: Mixed Use <br />Residential units: 160 apartments with 160 dedicated parking spaces <br />Office: 3,449 sq. ft. <br />Retail: 11,066 sq. ft. <br />Food and beverage: 4,309 sq. ft. <br />Public Parking: 253 spaces <br />Hotel: 106 keys with 99 stacker parking spaces <br />City Responsibilities <br />The City will fund the costs for public improvements to ready the site for development. This will <br />include the demolition of the existing parking structure, preparation of the site for development, <br />the construction of Sycamore Street reconnection and construction of 253 public parking spaces <br />to replace the existing parking currently provided at the 3rd and Broadway parking structure. The <br />estimated cost for public improvements is $7 million for the construction of the 253 public parking <br />spaces and $6 million for the additional public improvements. The estimated debt service (at an <br />interest rate of 4%) for the public improvements would be $750,000 per year for 30 years. <br />Developer Responsibilities <br />The developer's obligations for the project include providing funding to finance the over $100 <br />million dollar development project, processing all entitlements, construction of the public <br />improvements, designing and operating a boutique hotel, and managing and operating the public <br />parking for the project. The developer will guarantee that the anticipated revenues from the <br />parking will cover the City's annual debt service of $750,000. There will be no out of pocket costs <br />to the City. <br />ENA Extension and Next Steps <br />The ENA extends the term of the negotiation period to July 31, 2018. During this time, in addition <br />to negotiating more detailed business terms, the Developer will also apply for and process an <br />application for land use entitlements, including CEQA review. <br />20Ci-2 <br />