04/19/11 Work Session - Laserfiche WebLink

Home

HRA BUSINESS Case #1: Update on Financing for The Residence at the COR — Flaherty and Collins Deputy City Administrator Nelson reviewed the staff report. Development Manager Lazan reviewed the history of the project. He noted the latest extension pushed the project to a June start. However, the hard loan may be able to slide, and the struggle for financing continues. David Flaherty, Flaherty and Collins, stated he is still excited about this deal. He said they have been working on financing for 1.5 years. He reviewed the projects they have done in the past, and noted they are doing well. He stated when discussions first began regarding this project; it was well received because it is on a train stop. The fact that the train stop is not here is an issue to deal with. While there still seems to be some excitement, there are discouraging and frustrating speed bumps. He noted there is a concern whether this market can absorb that many units. He said they have worked harder to get construction financing on this deal than any other. His company has offered to put in $1 million of its money to expedite the search for financing. If loans cannot be paid, he will be at risk of losing everything personally. He emphasized his belief in this project. Development Manager Lazan pointed out a lot of options have been considered and exercised. It is a question now of how urgent it is that this starts in June. He requested opinions on the project. Commissioner Backous expressed concern regarding the idea that the City should be credited for being on the rail stop. He questioned whether anyone would want to spend a lot on a luxury apartment next to the train due to the noise. Mr. Flaherty stated being on a rail stop is universally thought of as a good thing as gas prices go up and population grows. This would be the only project of theirs in the metro area where the tenant could walk out of their apartment under a covering to the rail stop. He said their construction of the building would keep the sound of the train out. Executive Director Nelson clarified the June 30 date on the TIF legislation provided the greatest flexibility. If it turns out that has to be the deadline, those involved believe it can be reached. Mr. Flaherty indicated they have a set of rules to follow if they have to close by June 30. If it is not June 30, and the TIF and the ramp are still in motion, the next threshold is whether it can still be started this year. If that doesn't happen, they may look at starting a year from now. He stated the longer the wait, the lesser amount of financing help they would need. However, if they have to wait until next year, he could not say for sure it would get done. He stated if the TIF, ramp or rail were lost, it would mean their project would be lost. Housing and Redevelopment Authority / April 19, 2011 Page 2 of 5