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Mile High Greyhound Park redevelopment project update
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Summary and Background Information:
On August 3, 2011, the Commerce City Urban Renewal Authority purchased the Mile High Greyhound Park with a loan from the City of Commerce City. The purpose of this Council Communication is to provide an update on the project in the form of a presentation with follow-up discussion. Detailed information about the project is included in the background information section of this memorandum.
Since the purchase of the subject site, several City Departments have been meeting to manage the asset, conduct public outreach, and plan the redevelopment strategies on behalf of the Urban Renewal Authority. All of the activities are under the direction of the Urban Renewal Authority Executive Director, Brian McBroom. Staff is continuing to meet bi-weekly on Wednesdays at 1:30pm with a multi-departmental team. There are several elements of the presentation and the following is written summary of the information to be presented on October 21, 2013.
General Project Update
The following is a update on the various project elements and progress since the last update on July 1, 2013:
· Review of developer RFQ template from Ricker-Cunningham
Document drafted - Released to public on October 14, 2013
· Development of Vision Book and PUD Concept Schematic
The Mile High Greyhound Park Redevelopment Vision Book was completed in September, 2013 after several months of refinement by an internal multi-departmental team. Hard copies of the vision book were provided to City Council and the URA Board. The PUD Concept Schematic is on hold pending further discussions with the development community and potential selection of a development partner in 2014.
· Continue to meet with developers formally (ICSC) and informally through local contacts
Staff developed a list of over fifty (50) developers and major construction companies locally and through a network of contacts nationally. Seven (7) individual developer meetings were held over a three week period ending October 9, 2013. The purpose of the preliminary interviews were to present the project formally to a developer, and to share information about the merits of the project, market realities, financing options, and the overall vision for the site.
The RFQ was released to the public and several developer trade groups on October 14, 2013, formally announcing the intent of the URA to partner with a developer on the project.
The Deputy City Manager and Economic Development team will be presenting the project at the ICSC Alliance meeting on October 24, 2013 in Denver to further promote the project.
On November 8, 2013, the City will be hosting a kick-off event presenting the project to the development community. The attendees will have an opportunity to ask questions verbally, and in writing. If necessary, an addendum to the RFQ will be issued by November 15, 2013.
The developer presentation is attached for reference purposes.
· Develop formal strategy for the RFQ and interview process
Staff has completed the Request for Qualifications (RFQ) and released the RFQ on October 14, 2013.
· Development of Work Plan to pursue education partner(s)
Ongoing
· Continue financial analysis and sources
Citywide Banks (through its Community Development Entity) requested an allocation of New Market Tax Credits from the U.S. Treasury for 2013 and Colorado did not receive an allocation this year. The application was refreshed for 2014 and the MHGP was one of only two projects highlighted in their application. Staff met with their attorney on October 4, 2013 to understand the latest request and will continue to evaluate NMTC as a viable funding option for the project. A formal decision on the allocation is not expected until April, 2014, the timing of the decision is in line with the preliminary schedule for the project next year.
· Infrastructure analysis
Ongoing
· Continue to reach out to business, retail, and office end users for the site
Ongoing
EDA Grant
The Economic Development Administration (EDA) grant was finalized this summer and a draft of the feasibility study was presented to City Council in January, 2013. The project budget was $100,000 and $70,000 was paid by the grant with the balance paid by URA matching funds and in-kind staff time. Final documents were received in May, 2013 and staff finalized the requirements and received a letter closing the grant on September 16, 2013. Staff believes the City has a good working relationship with the EDA and will continue to monitor grant opportunities in the future.
Boys and Girls Club
Fundraising for the new facility on the southeast corner of the property are underway. As of May, 2013 approximately 50% of the funds have been raised with a goal of 80% raised to commence construction. Staff requested an update on the fundraising efforts and will provide new information as soon as it is available. A formal application for development permit has not been submitted, and staff will continue to work with BGC on the schedule and integrating the concepts into the larger plan for the site.
Building Abatement / Demolition
The City contracted with Stephen P. DiNardo Consulting to be the City's project manager to assist the City with the demolition of the dog track site. The contract is broken down into multiple phases. The first phase of assessing the building and finalizing abatement and demolition costs was completed in May, 2012. All structures were demolished as of May, 2013 and final clean up and contract resolution was to be completed by 3rd quarter, 2013. Unfortunately, there were additional issues identified that delayed the final clean-up, but all remediation should be completed within the next several weeks.
Over the last several months, staff and the contractor have been working through issues with the site work and reimbursement by the insurance company. A premium of $50,000 was paid at the start of the process to protect the URA against extreme costs related to the remediation of the site. This summer during the digging of additional test holes, several construction debris landfills were identified on the site. Some of the debris holes are related to the remodeling of the facility, while others are related to the fire district training activities when the former restaurant was burned down near 62nd and Dahlia Street.
Suspect surfacing materials, insulation, and illegally dumped solid waste were identified at depths between three and nine feet. The footprint of the old restaurant was used as a debris pit and the burned remains were simply pushed into the hole after the fire district training event back in the 1990s. Based on the age of construction of the former restaurant, the construction debris may contain asbestos, requiring removal. In order to full remediate the site, excavation down to native soils will be required, which increases the cost above the amount of the original contract.
The overall objective for the complete demolition, excavation, and remediation is to obtain a No Further Action (NFA) letter from the State of Colorado. In addition, a clean site will reduce risk for the URA and the future developer partner. The final clean up of the site will add value to the overall project and must be completed by either the URA or a future private entity. All of these issues will require a change order in the original contract, and the increased costs are outlined below. It is important to note, these costs are projected as of October 16 and the final costs will be determined in the next serveral weeks.
Original contract amount
(Consultant, contractor, insurance premium, and contingency): $2,252,587
Additional gross costs for excavation and remediation: $1,701,655
New Total gross cost for remediation: $3,954,242
(minus) Estimated amount paid by insurance (reimbursable): $1,185,441
Additional net costs for excavation and remediation (City/URA): $626,912
Total net costs (City/URA) for excavation and remediation: $2,768,801
Financial Analysis and Budgeting
Staff is continuing to evaluate options for gap financing needs outlined in the feasibility study.
The URA initially operated under a budget of $4 million for the redevelopment of the property after a loan from the City. This included land acquisition, property management, and preliminary planning expenditures. The contract for the demolition and abatement was estimated at an additional $2.5 million, which necessitated the need for an additional loan from the City to the URA. As of October 2, 2013, approximately $6.02 million has been paid or encumbered, with a high level summary outlined below.
Category Expenditure
Property Purchase/Taxes $3,443,727
NAIOP Sponsorship $40,000
Security $38,997
Outreach $10,685
Maintenance/Utilities $29,286
Outside Expertise/Consulting $181,143
Demolition $2,274,467
Total $6,018,307
There is a total of $481,693 remaining from the original loan amount, which is not sufficient to cover the unexpected and additional net costs for excavation and remediation of the project site. Staff is also recommending an operating balance of $100,000 for future surveying, engineering, and consultant services related to the project and urban renewal legislative issues. These future costs have not been contracted, but staff would like to allow for some flexibility with the project as more detailed information is obtained next year.
Therefore, staff will be recommending the City Council consider an amendment to the loan agreement to provide additional funds to the URA for the MHGP Redevelopment Project. Final costs will be determined in the next several weeks.
Conclusion / Future Actions
Staff continues to meet at least twice monthly to share information and refine the schedule and associated documents with the developer search process.
The following is a list of next steps for the project team:
Schedule
October 14, 2013: Release of Request for Qualifications (RFQ)
October 24, 2013: Presentation of project opportunity to ICSC Alliance (Denver)
November 8, 2013: Pre-Submission Meeting (7:30am)
November 15, 2013: RFQ Addendum (Innovation Hub)
December 5, 2013: RFQ Deadline
Attachments:
Mile High Greyhound Park Redevelopment Vision Book (hard copy provided separately)
Project Update presentation to City Council - October 21, 2013
Request for Qualifications (RFQ) - October 14, 2013
Project presentation to developers
Staff Responsible (Department Head): James Hayes,Deputy City Manager
Staff Member Presenting: James Hayes,Deputy City Manager
Financial Impact: See Financial Analysis and Budget section (above)
Funding Source: N/A
Staff Recommendation: Informational briefing and direction to staff on preparation of amendments to the loan documents.