Minutes 09/25/2012 - Laserfiche WebLink

Home Browse Search

September 25, 2012 "ORDINANCE ACCEPTING A GRANT IN THE AMOUNT OF $4,274 FROM THE U.S. DEPARTMENT OF TRANSPORTATION NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION THROUGH THE VIRGINIA HIGHWAY SAFETY OFFICE AND APPROPRIATING SAID FUNDS IN THE FY 2012-13 GRANTS FUND FOR USE BY THE POLICE DEPARTMENT FOR OFFICER OVERTIME PAYMENTS, TRAINING, AND EQUIPMENT PURCHASE TO RAISE SEATBELT USAGE AND TO REDUCE TRAFFIC ACCIDENTS." Ayes: Cherry, Edmonds, Heretick, Moody, Randall, Whitehurst, Wright Nays: None 12 - 394 -Adoption of a resolution authorizing a Cooperation Agreement between the City of Portsmouth and the Economic Development Authority of the City of Portsmouth pertaining to North Pier Site Development Costs. Vision Principles: Change and New Directions, A Robust Economy for Working Men and Women, Neighborhoods and a Sense of Community, and Quality of Life. Background: • The Economic Development Authority (EDA) has executed a contract with the Breeden Company (Breeden) for the development of the North Pier and Crawford Street Parcel (Desks Inc.). The properties will be developed as market-rate, multi-family buildings in accordance with the City's Downtown Development Plan and Waterfront Strategy. The purchase price for the properties is based on a per unit rate as follows: o North Pier- 124 units at $15,000 apiece = $1,860,000 o Desks Inc. - 110 units at $11,500 apiece = $1,265,000 • The total purchase price is $3,125,000. For each unit above or below the minimum, the unit price shall be multiplied by the actual number of units using this formula. For example, the developer currently anticipates the construction of 187 units on the North Pier increasing the purchase price of that site by $945,000. The unit count on the Desks Inc. property is also anticipated to increase, but that number is currently unknown. • Breeden estimates construction of the two projects will cost more than $45,000,000 and pay real estate taxes in excess of $550,000 annually. The two developments will add 297 residential units Downtown and accommodate an estimated 425 residents. • EDA had previously entered a Cooperation Agreement with the City for the development of the Desks Inc. property and Civic Center Parking Lot. The current Agreement modifies the prior one as it relates to the Desks Inc. property. • EDA and the Breeden Company have separately investigated the suitability of the North Pier for development. It has been determined by both parties that major reconstruction is necessary for its development. The cost is currently estimated at $6,255,000. Demolishing the structure and dredging the site for use as a marina was contemplated. That cost was estimated at $3,450,000. In its current condition the property is unusable. • The Agreement of Purchase and Sale requires that EDA contribute the cost of site development. It allows the use of sales proceeds and an annual cash grant to accomplish this. EDA does not have the resources to complete the transaction. The attached Cooperation Agreement provides for those resources. • To complete the transaction and provide for the allocation of resources, the Agreement of Purchase and Sale calls for an Economic Development Incentive Grant from EDA to Breeden as follows: o Site development costs will be capped at $6,255,000. This is the maximum public contribution to the development. Breeden is at risk for any amount in excess. Any amount less than this will reduce the public contribution. EDA will monitor construction and verify the actual cost of the reconstruction. o EDA will place the sales proceeds from both properties into an escrow account. Breeden will draw on this account to begin the reconstruction. Any difference between the amount of money in the escrow account and the actual site development cost will be paid for by Breeden. The difference becomes an obligation of the EDA bearing interest of 0.035.