Item A: URA - Review of Responses to the 10th & Charnelton Request for Proposals

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th the Library. Additional retail/commercial space, particularly on the corner of 10 Avenue and Olive Street may be possible given initial discussions with TK Partners. A limited amount of public space is proposed. Sustainable Development TK Partners is proposing to incorporate LEED standards. Sun shading with roof overhangs, green roof components, low E windows, insulation exceeding code requirements, central hot water facility, and energy efficient appliances are cited as potential sustainable building features. Timeliness TK Partners is anticipating a project completion date of 2009. Given the developers experience in more complex projects, and their relatively simple financing strategy for this project, it appears that it may be possible for the project to move forward in accordance with the proposed timeline. Financial Feasibility TK Partners is proposing a financing structure which includes 20% equity and conventional construction financing through Bank of America. Equity would be provided by KemperCo -10% and ScanlanKemperBard Company (SKB)-90%. SKB is a major real estate investment banking firm located in Portland and originally co-founded by Thomas Kemper. Although Kemper is no longer a principal, SKB has been a primary source of equity for several of Kemper’s projects. SKB has significant real estate holdings throughout the West Coast. Net Financial Cost/Benefit Income: TK Partners has proposed a purchase price of $192,000. Assuming 10-years of property tax exemption would be available for a majority of the project, urban renewal tax increment revenue from the project would likely be limited to the 3,575 square feet of retail use. Cost: TK Partners is proposing that URA contribute land value of approximately $778,000 to the project. TK Partners has also indicated that they would seek property tax exemptions under the Multi- Unit Property Tax Exemption (MUPTE) or Vertical Housing Development Zone. Proposal Strengths • Developer experience with similar projects • Dense housing use which incorporates ownership and mix of unit types • Desirable urban design features • Timeliness • Financial capacity and feasibility • Potential to stimulate other investment • Subsidy limited to land write-down and tax exemption • Sustainable building features proposed • Overall responsiveness to the RFP objectives Proposal Weaknesses • Demand/marketability of proposed ownership housing is unknown • Quality of design is not fully known at this time L:\CMO\2006 Council Agendas\M061016\S0610161-URASpecMeet.doc