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HomeMy WebLinkAboutEcon Dev Adv 2009-04-15 S ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES April 15, 2009 City of Kitchener The Economic Development Advisory Committee met this date, chaired by Adrian Conrad; the following members were in attendance: Jeremy Auger, Ian Cook, Bernie Nimer, Mark Bingeman, Councillor John Smola, Brian Bennett, Mayor Carl Zehr The following people sent their regrets: Mark Collins, Howie Budd, Alan Anderson, Bob Denton, Mark Collins, Rebecca Short, Steven Voll, Peter Benninger, Mary Alkerton, Dan Piedra, Brent Richardson The following people were absent: Staff in attendance: Rod Regier, Tracey DeVille, Terry Boutilier, Hans Gross, Councillor Berry Vrbanovic The Committee was called together for a special Economic Development Advisory Committee meeting to discuss the Centre Block Agreement and Sale. Rod Regier provided an overview of the agreement and the purpose of this discussion. He advised that this discussion will continue at the regular meeting on April 22, 2009; however, as directed by Council, a special meeting was called to obtain feedback from the Committee. The Committee members had the following questions / feedback: - Site developed on timely bases as outlined in the RFP is important - Staff and Council want to ensure that Andrin has an outline to ensure the development happens - Make sure that the process includes that the City and that the City has the ability to retain ownership of the land and start the process over again if necessary The agreement allows for that o - Does the City retain ownership of the parking garage? Yes, the city owned portion of the parking garage will be on a o different level and that it is completely separate servicing - What is the role of the developer and how do we ensure the commitment to the project? Their interest is very strong, they are starting their marketing this o summer, as well, the agreement is worded so the developer will receive title one the phase has been complete. The Committee asked for clarification on the phasing of the project: - This current agreement sets the stage for the final development agreement which is due to the City by November 30, 2009 - Once the agreement is complete, Andrin Homes will have 36 months to market, sell and complete drawings, obtain building permits, secure financing and put the shovel in the ground. If they fail to comply to these terms, the agreement will be void. They have a maximum development period for Phase 2 and Phase 3 of 5 and 6 years respectively they need to fulfill the requirements of Phase 1 before they start on Phase 2 etc., this is the max time allowed and given the conditions in the market place this is a reasonable amount of time. - We are aware of the current economic market and have allowed for reasonable timing for the developer; however, if the market does a shift and they are able to advance the development then we will encourage that as well. - Staging will be firmly identified in the final development agreement due at the end of November 2009. When will the sales centre be complete? This summer / fall a full sales office and model suite with frontage on King o Street is expected to open. Is there a penalty for the developer if any of the conditions of the agreement are not met? If construction hasn’t started at the end of the 36 months, then the deal is o void and the developer will loose the investments they have made to that date. The City would then be in a position to start the process over again. Is there any language in agreement that would contemplate further discussions at that point in time? Staff will monitor the sales process through the entire period and monitor o milestones. Staff will also stay closely involved in all aspects of the project. Can Andrin Homes pull out of the deal at any time before the 36 month period development start date? We do not anticipated that they will since there is a 36 month development o start date in the agreement, which should allow for stabilization of the markets. The committee advised they are in support of the 36 month development period as a means of understanding the current economic situation and the need for absorption. Generally, the Committee agreed that language around the commitment for the full 36 month period should be included. Does this development have any impact on other potential developments in the downtown, does it provide backlash, does it prevent other developments? This is a stand alone development, other building / property owners makes o decisions based on their own market assessments and if they feel confident the market can absorb their projects. This is designed to operate as any other development would and there are no special exemptions to this project. The public have provided a lot of positive comments and appear to want to just see the development happen, having a good plan and focus on the project is important as is learning from other cities with similar designs, how are you going to ensure that this development does this? We need to be clear that Centre Block is not going to save downtown it is o part of the overall vision for the downtown. Downtown Kitchener starts at Victoria and makes its way down. Centre Block is part of the entire redevelopment vision and the next 5 to 10 years will bring even more development. It is important to remember that Centre Block has been in the design and development stages for 3 years and if the Andrin needs to walk away then the city needs to be aware that compensation for staff time should be looked at, has that been discussed? That is something that could be discussed – some Committee members o felt that might be difficult to impose; rather, having the developer meet certain milestones may be a better way to monitor the development and the commitment the developer has to the project. With an estimated land value of $1.2M for Phase 1, could you just sell the land and have someone develop what they want? Staff had thought of that but this is more about encouraging development o than selling land. Through our public consultation process, we received input from close to 1000 people. The vision for the development is what we based the development on, for what citizens want Centre Block to turn into, Andrin was able to meet that criteria and now the time has come to fulfill the obligations of the development. The city has entered in the RFP process in good faith. The developer has delivered the project anticipated in the RFP and the city needs to proceed. A concern that come from the Downtown Building Owners Committee was the need to get this development going and the fact that the development could take up to 10 years to complete, which brings forward the question of whether Phase 3 should be included or removed as a separate development opportunity, it is an important corner and with the redevelopment of King Street, it should not be left until last. Downtown building owners agreed this morning that they wouldn’t pay the o city $1M per acre for the site and that it should proceed with Andrin The agreement lays out the maximum times for each phase to reach o completion, staff are interested in working with the developer to move Phase 3 faster, there are challenges with Phase 3 and if we can see that move forward then we support that. The $35,000 is a good price for the parking. How are the developers interests protected if we have a spike in inflation? The agreement allows for $35,000 per space guaranteed for one year o after the development agreement is put into place and reviewed annually rd after that with a 3 party consultant. What are the current development charge credits on the projects and when do they expire? The project is exempt from development charge right now at both the city o and regional level The 36 months is a reasonable time to give the developer. I’m glad you’ve o estimated absorption rates even if they are conservative There seems to be a trend towards boutique hotels right now, have any studies been done to ensure this is the market for it? Andrin is more of residential developer and we agreed as stakeholders to o offer support to review the plans for Phase 3, Andrin has made it clear they do not want to manage a hotel but will look for outside interests. This is a concept that was brought forward in the initial design, at this point there is room for other options for Phase 23 How different is phase 1 from phase 2 in unit numbers? Phase 1 has the taller tower, with at this point approximately 60% of the o total units to be developed on the site. This is the preliminary development and we will have more solid numbers with the final development agreement. As far as a streetscape standpoint and project phasing it would appear to make more sense for Phase 2 to be developed first due to size, it brings a project to King Street quicker and it might be what we want to see first. That has been an active debate with Andrin right now and there are some o reasons to do Phase 1 first as well the parking garage ramps are in Phase 1, and the sales office would not have to be relocated. Is the property going to be severed based of phases? Yes it will be. o Is the record of site conditions complete? Yes it is and it has been filed with the Ministry. o Have presentation centre on site by a certain time and put that in the agreement once that is there that will be a great vision of the commitment to the vision and the site. Do we have any ideas of the number of spots that may be lost due to the parking changes during construction and will anything be lost preconstruction? The sales office may take up to 8 spots; however, we are aware of that and o we will ensure that parking losses are covered. The meeting adjourned at 1:00 pm.