Redevelopment Commission of Greensboro

No. 1 Governmental Plaza - P.O. Box 3136 - Greensboro NC 27402-3136

Notice of Special Meeting

Notice is hereby given that a Special Meeting of the Commissioners of the Redevelopment Commission of Greensboro will be held in the Plaza Level Conference Room at 300 W. Washington Street, Greensboro, North Carolina, on Wednesday, September 19, 2012 at 5:00 pm for the purpose of:

1) Approval of the Minutes of August 8, 2012 Regular Meeting 2) South Elm Street Redevelopment Area Terms and Conditions of Master Development Agreement 3) College Hill Redevelopment Area - 919 Spring Garden Street 4) Staff Updates a) Eastside Park Activities b) Phillips Lombardy Activities 5) Draft RCG 2011-12 Annual Report 6) Additional Business No Additional Business shall be added to a Special Meeting Agenda.

PUBLIC ACCESS NOTICE: The Melvin Municipal Office Building closes at 5:00 P.M. and security oversees all entrances to the building. Visitors should not find entryways blocked; however, if this is the case, please proceed around the building to the next entrance. Any individual with a disability who needs an interpreter or other auxiliary aids or services for this meeting may contact Linda Kirkman at 373-2349 or 333-6930 (TDD). Servicios de traduccin disponibles en espaol. (Translation services are available in Spanish.)

Agenda Information
Redevelopment Commission September 19, 2012

Item 1: Approval of the Minutes of August 8, 2012 Regular Meeting

The draft of the minutes of August 8, 2012 is attached.

Item 2: South Elm Street Redevelopment Area The Developer will present their recommended terms and conditions for the Master Development Agreement. Commissioners will be asked to provide input on the presented terms and conditions and authorize staff to move forward with finalization of the Master Development Agreement, which will be presented for approval at the October meeting of the Commission. See attached Staff Memo. Item 3: College Hill Redevelopment Area The Commission will be asked to consider approval of the proposal submitted by Preservation Greensboro Development Fund, Inc for funds to aid in the acquisition of 919 Spring Garden Street with conditions. See attached Staff Memo. Item 4: Staff Updates a) Eastside Park b) Phillips Lombardy Item 5: Redevelopment Commission 2011-12 Annual Report Under separate email, staff will provide Commissioners with draft copies of the 2012 Annual Report for their review and subsequent approval at the September 19 special meeting. Item 6: Additional Business
No additional business may be added to a special meeting agenda.

Item 2: South Elm Street Redevelopment Master Development Agreement Terms and Conditions.

Planning & Community Development City of Greensboro September 19, 2012 TO: FROM: Redevelopment Commission of Greensboro Dyan Arkin, AICP SUBJECT: South Elm Street Redevelopment Master Development Agreement Terms and Conditions

Background
In January of 2012, the Commission selected the South Elm Development Group (SEDG) to begin negotiations for a Master Development Agreement to develop the South Elm Street Redevelopment site. SEDG recommended a three-step contract process: a Memorandum of Understanding (MOU) allowed SEDG exclusive rights to negotiate with the Commission; a Predevelopment Agreement (PDA) allows SEDG to continue exclusive negotiations as they prepare the groundwork for a binding Master Development Agreement, which will outline the scope and process for development of the site. At this time, SEDG is prepared to present their recommendations for terms and conditions for the Master Development Agreement (MDA). Terms and conditions are outlined in the attached memo from Bob Chapman, dated September 7, 2012, revised September 10, 2012.

Status
SEDG is currently operating under the PDA approved and executed by the Commission on July 11, 2012. The PDA shall remain in effect until December 31, 2012, or the execution of the MDA, unless terminated or extended by written agreement. Extensions shall be granted at the sole discretion of the Commission. The following activities from the PDA will be incorporated into the Master Development Agreement as needed. 1. Complete investigation and analysis of existing site conditions a. City is continuing to negotiate terms for a Brownfields Agreement with North Carolina Department of Environment and Natural Resources. b. SEDG is looking at revisions to the proposed site plan to allow for specific areas that would be cost-prohibitive to bring up to standards required for residential use. 2. Complete site and infrastructure planning a. Preliminary site and infrastructure plans are evolving, but finals are dependent on actual agreements with sub-developers of the various components. 3. Complete land use programming and Development Plan in concert with area stakeholders a. SEDG has continued to engage the Greensboro community and surrounding landowners in programming and planning discussions. 4. Identify and secure financing for development, including both public and private sources

One Governmental Plaza, PO Box 3136, Greensboro, NC 27402-3136 336-373-CITY (2489)

a. Funding and financing sources are being researched and discussed; the MDA will include anticipated sources for each phase, but each component will need to be evaluated as it becomes ready for development. b. Private funding could include developers equity, grants and low-interest loans through philanthropic organizations, and investor financing, among others. c. Public funding could include state Powell Bill funds, state Low-Income Housing Tax Credits, Tax Increment or Certificate of Participation Financing, EB-5 funds (Employment Based Immigration through the federal Immigration Department), among others. 5. Establish and secure entitlements for development a. Calculations based on prior uses are being prepared for a request to reduce Capacity Use Fees. A vested rights determination will be requested at the appropriate point. 6. Survey and metes and bounds of property known as the Gray property, for Exchange of Real Estate as approved by the Commission and City Council a. Survey is in progress and staff will move forward with closing on the exchange as soon as it is finalized. 7. Demolition of existing buildings located at 724 and 734 South Elm Street a. Bids will be received later this month. If bids are low enough to be feasibly done under the current year budget, staff will move forward with demolition. If not, funds will be budgeted for the 2013-14 fiscal year and demolition will occur in July 2013.

Summary of Developers Memo with Staff Comments

1. Description of pricing mechanism for the land with target land price by use - SEDG has provided a breakdown of possible land revenue by component; actual values will need to be determined at the time of conveyance. 2. Description of take-down mechanism for the land: a. RCG will sell parcels directly to component sub-developers; proceeds will be disbursed at a ratio of 60% to SEDG and 40% to RCG until RCG has received $3 million, then at 80% SEDG, 20% RCG for any additional revenue. 3. Description of the anticipated phases SEDG anticipates a seven-year, four-phased project, to begin spring/summer 2013 and complete by or before the end of calendar year 2020. a. Phase 1A: Site infrastructure improvements b. Phase 1B: First parking deck construction c. Phase 1C: Apartment development d. Phase 2: Adaptable-use (commercial, educational) space development e. Phase 3: Second parking deck construction f. Phase 4: Hotel development 4. HUB/MWBE/DBE/Local participation goals SEDG has set a minimum participation goal of 10%, to be measured by dollar volume to be calculated cumulatively over the life of the project. Minimum participation of 20% is required for components funded in whole or partially with public funding.

One Governmental Plaza, PO Box 3136, Greensboro, NC 27402-3136 336-373-CITY (2489)

5. Developer contingencies or conditions a. RCG endorsement and support for efforts to negotiate funding agreements for infrastructure improvements and financing mechanisms with the City Typically RCG supports allocating funds appropriately so development can occur. b. Execution of environmental indemnification agreements required by lenders Typically RCG provides environmental representation in the master development agreement. c. Explicit authorization to represent the project to potential partners, sub-developers, buyers, users, and the public. d. RCG negotiations for Brownfield and Residual Petroleum Agreements yielding the best outcome for development based on developer recommendations Revisions to the draft Brownfields Agreement are being done with assistance from the appropriate state agencies. The final document will come before the Commission for review and approval prior to submission. e. RCG support of developers plans to acquire additional developable acreage from the RCG, the City, and the Greensboro Housing Authority The developer has indicated their interest in expanding the South Elm Street project site to include city-, RCG-, and GHAowned land along Eugene Street. f. Land payments exceeding project obligations will be allocated to additional support of the South Elm project. It is anticipated that funds will be budgeted through the city budgeting process annually as necessary.

Additional Terms and Conditions

The MDA will also include various terms and conditions related to the oversight of the Redevelopment Commission. 1. RCG will approve all component developers and all terms of the contracts. 2. RCG will have approval of all site and building plans, whether development is being done by SEDG or by component developers. 3. SEDG will be required to provide oversight of component developers to assure that what has been approved is what is actually being developed. 4. Community Engagement and HUB/MWBE/DBE/Local Plans will be attached as exhibits to the MDA. 5. SEDG will provide green development goals, which will be attached as exhibits. 6. SEDG and sub-developers will be required to comply with all local and state regulations governing development and construction. 7. SEDG and sub-developers will be required to comply with federal regulations as appropriate, including HOME Program, Davis-Bacon and Section 3 compliance.

One Governmental Plaza, PO Box 3136, Greensboro, NC 27402-3136 336-373-CITY (2489)

8. City financial participation will be governed by individual funding agreements, contingent on review and recommendation from RCG, and City Council approval.

Requested Action
Commissioners will be asked to provide input on the presented terms and conditions and authorize staff to move forward with finalization of the Master Development Agreement, which will be presented for approval at the October meeting of the Commission.

One Governmental Plaza, PO Box 3136, Greensboro, NC 27402-3136 336-373-CITY (2489)

REVISED DRAFT MEMORANDUM

Date: To:

September 7, 2012, revised September 10, 2012 Redevelopment Commission of Greensboro c/o Ms. Dyan Arkin Robert L. Chapman South Elm Development Group, LLC South Elm Street Master Development Agreement

From:

Subject:

We are pleased to present the following recommendations for consideration by the Commission: 1. Description of pricing mechanism for the land with target land price by use.

South Elm Street Land Price Targets Land Price Per Unit or Per SF ($) 31,114 9,000 39 12,000 36 12,000

Component For-Sale Residential For-Rent Residential Retail Hotel Office - Education Parking Structures Total Project Cost Total Land Price Note: Calculations may

Units/SF/Sp aces

Hypothetical Project Cost

Total Land Price

0 273 15,000 150 100,000 1,081

515,716 17,172,598 1,759,049 15,000,000 28,210,129 12,967,080 75,624,572

0 2,457,000 586,350 1,800,000 2,821,013 1,296,708 8,961,071

not add due to rounding

HYPOTHETICAL Distribution

SEDG 60.0% 80.0%

RCG 40.0% 20.0%

Total 7,500,000 1,461,071 8,961,071

SEDG 4,500,000 1,168,856 5,668,856

RCG 3,000,000 292,214 3,292,214

Target Prices by Use

Use: For-Sale Residential For-Rent Residential Retail Hotel Office - Educational: Parking Structures:

Target Land Price: 17% of sales price of house $9,000 per pad (unit) One-third of project cost $12,000 per key 10% of project cost $1,200 per parking space

2. Description of take-down mechanism for the land: The land price received for land from sub-developers or other buyers will be disbursed by the closing attorney as follows: 60% to SEDG and 40% to RCG until RCG receives $3 million. After RCG receives $3 million, the split will change to 80% SEDG, 20% RCG. 3. Description of the anticipated phases: Phase 1A: Site Infrastructure, starts spring-summer 2013 Install stormwater management systems and BMPs Upgrade water distribution and wastewater collection systems as required Complete streetscape improvements including new granite curb, first lift of asphalt, sidewalks, curb cuts

Phase 1B: First parking deck construction Finalize ownership agreement with City of Greensboro and South Elm Property Owners Association Implement synthetic TIF financing plan Construct structure Phase 1C: Apartment construction Construct 165 to 273 apartments Phase 2: Adaptable-use space construction (commercial, educational) Select development partner(s) Finalize financing plan Negotiate commercial/educational leases Pre-Lease and construct ground floor retail Phase 3: Second parking deck construction Finalize ownership agreement with City of Greensboro and POA Implement synthetic TIF financing plan Construct structure Phase 4: Hotel, 150 rooms Select hotel owner/operator Construct hotel Final project completion, 2020 or earlier. 4. Developers HUB/MWBE/DBE/Local percentage goals, how it will be calculated, how it will be reported, what will be done to ensure the goals are met The minimum participation goal for HUB/MWBE/DBE/Local workforce, professional services, general contractors and subcontractors is 10%, to be measured by dollar volume. We will undertake the following activities to ensure this goal is exceeded:

a. Invite M/WBE to attend pre-bid meetings job fairs which our firm or the GCs host, encouraging them to attend, bid, or apply for work. b. Encourage GC to send requests for subcontractors to M/WBEs using a local directory of firms. c. Ensure GC provides a list of subcontracting opportunities a minimum of 10 days prior to the awarding of contracts. d. Advertise upcoming bid opportunities in plan rooms, and minority-focused media e. Encouraging GCs to break down or combine elements of work into economically feasible units to facilitate minority participation f. Encouraging GCs to work with minority businesses in order to increase opportunities for minority business participation on the project when possible g. Request GC post subcontracting opportunities on their website h. Publish and distribute estimator and construction management personnel contact information on the project website i. Provide informational/assistance meetings with M/WBEs and HUB businesses. j. To participate in networking opportunities with MWBE/HUB developers k. Buying locally Continue hosting community meetings (maintain open door policy for community to check in with SEDG at any time) and continue updating the website with our progress. 5. Developer contingencies or conditions:

A. RCG endorsement and support developer's efforts to funding from the City of Greensboro and other funding for infrastructure improvements.

B. RCG endorsement and support financing mechanisms for parking structures.

C. RCG will execute environmental indemnification agreements required by lenders, if any.

D. RCG explicitly authorizes developer to represent the project to potential development partners, sub-developers, buyers, users, and to the public.

E. RCG will negotiate with NCDENR for brownfield and residual petroleum agreements yielding the best outcome for development based on developer recommendations.

F. RCG will support developers plans to acquire additional developable acreage from the RCG, the City, and the Greensboro Housing Authority.

G. If land payments to RCG exceed South Elm project obligations of RCG, those funds will be allocated to additional support of the South Elm project. In other words, we propose that any net proceeds to RCG be reinvested in the project to add features, amenities, and ongoing program support.