HomeMy WebLinkAbout09-92MARCH 24, 2009
09 -92 RESOLUTION
(CARRIED 4 -2 LOST LAID OVER WITHDRAWN )
PURPOSE: AMEND DEVELOPMENT AGREEMENT TERMS WITH OSHKOSH
RIVER DEVELOPMENT, LLC — MARION ROAD /PEARL AVENUE
REDEVELOPMENT PROJECT AREA
INITIATED BY: OSHKOSH RIVER DEVELOPMENT LLC
REDEVELOPMENT AUTHORITY ACTION: Approved
WHEREAS, the Common Council and Redevelopment Authority (RDA)
previously approved a Development Agreement Term Sheet for disposition of the
Marion Road /Pearl Avenue Redevelopment Phase II Area to Oshkosh River
Development, LLC; and
WHEREAS, Oshkosh River Development, LLC has actively pursued its due
diligence of project activities for the Phase II Area; and
WHEREAS, based on the status of those efforts, Oshkosh River Development,
LLC has requested an extension of the due diligence period to June 30, 2009; and
WHEREAS, based on Oshkosh River Development, LLC's due diligence efforts,
Oshkosh River Development, LLC believes revisions need to be made in the
Development Agreement Terms for project implementation to proceed; and
WHEREAS, Oshkosh River Development is requesting the revisions to the
Development Agreement Terms be approved as set forth in attached.
NOW THEREFORE BE IT RESOLVED by the Common Council of the City of
Oshkosh that revisions to the Development Agreement as set forth in the attached are
hereby approved, and the proper City officials are authorized and directed to enter into
a modified agreement that includes these amendments.
Proposed Amendments to Development Agreement
with Oshkosh River Development, LLC
March, 2009
• Extending due diligence period to June 30, 2009.
• Give City /RDA the option of undertaking river edge /riverwalk improvements in
time frame to coincide with development projects in riverfront area, and give the
City /RDA discretion on when to construct public transient docking facilities.
Set six month time frame for RDA to solicit proposals for Development Area 2 for
hotel project. If City /RDA does not enter into an agreement with developer for
hotel project by September 30, 2009, Oshkosh River Development will have right
for conveyance of Development Area 2 under same terms and conditions as for
other Development Areas /parcels subject to Development Agreement. Oshkosh
River Development could then pursue a hotel project itself, a commercial or
residential project, or some combination of commercial /residential development
in Development Area 2.
• Modifying valuation threshold schedule:
FROM — Having Oshkosh River Development complete valuation of $12 million
by end of 2009, and total aggregate valuation of $27 million by end of 2012 (if
they exercise option on area north of Marion Road).
TO — Setting new overall aggregate valuation for Phase II Area (including
potential hotel site) of $28.3 million, to come on line in four time periods: $3
million by end of 2009; $10 million additional valuation by end of 2010; $5 million
additional valuation by end of 2011; and $10.3 million additional valuation by end
of 2012.
If City /RDA secures hotel development for Development Area 2 by 9/30/09,
projected valuation for hotel would be expected to be completed in 2010/2011,
and valuation attributable to Oshkosh River Development would be adjusted
accordingly.
Further revision would lower valuation threshold schedule if City /RDA receives
grant funds that could reduce borrowing needs for Lease Revenue Bond (LRB)
for river edge /riverwalk improvements in Phase II Area. If grant funds were
received, this could lower amount of valuation needed in 2012 (i.e., noted $10.3
million figure).
Dropping option provision that gave Oshkosh River Development until December
31, 2012 to exercise option and proceed with project implementation in area
north of Marion Road TO having area north of Marion Road included in
conveyance of parcels under Development Agreement.
• Modifying Map Exhibit A to show four overall Development Areas and enabling
adjustments to be made in location of final parcel lines for Development Areas.
• Requiring enhanced public green space (with walkway and sitting areas)
between parcels in Development Areas 1 and 2, or Development Areas 2 and 3,
to connect sidewalks on Marion Road with the riverfront trail.
0
OlHK0fH
ON THE WATER
TO: Honorable Mayor and MembeX of the Common Council
FROM: Jackson Kinne r
Director of C unity e
DATE: March 19 9
RE: Amend Development Agreement Terms /Oshkosh River Development, LLC
BACKGROUND
A Resolution will be on Council's March 24 meeting agenda to authorize the City to enter into a
revised Development Agreement with Oshkosh River Development, LLC (the Dumke group) for the
Marion Road/Pearl Avenue Phase II Redevelopment Area.
The City/RDA entered into a Development Agreement with Oshkosh River Development in October
2008. The agreement provided the development group with the ability to undertake due diligence
efforts to determine if they would proceed with a redevelopment project in the Phase 11 Area.
The current due diligence period will expire March 31, 2009. Oshkosh River Development is
requesting a number of refinements to the Development Agreement (see Resolution attachment),
including the extension of the due diligence period to June 30, 2009.
Attached to this communication is the Memo that went to the RDA last week (a copy of which
went to Council), which discussed the revisions to the Development Agreement. In this Memo I
will focus on what we see as the two key changes to the Agreement:
• Removing the option provision from the agreement and including the
conveyance of the area north of Marion Road as part of Oshkosh River
Development's overall redevelopment project
• Modifying the valuation threshold schedule
1) Removing Option Provision
In carrying out their due diligence efforts to date, Oshkosh River Development has been able to
generate interest in the area north of Marion Road, and as a result they want to remove the option
provision, so they can pursue redevelopment opportunities both north and south of Marion Road.
3/24/09 Council Meeting
From the City/RDA's perspective this is a positive result of the due diligence process. Under the
current agreement, if Oshkosh River Development moves forward with a redevelopment project, they
would only need to do so in the riverfront area, with the group having until 2012 to decide whether to
exercise the option north of Marion Road. Having Oshkosh River Development state its interest in
tackling the overall area puts the City in a better position to see a redevelopment effort undertaken
and completed in the Phase II Area over the next three to four years.
2) Modifying Valuation Threshold Schedule
Valuation projections are the result of two different elements: project costs and valuation
assumptions /needs.
Project Costs
Project costs in the Phase II Area relate to the $6.3 million Lease Revenue Bond (LRB) the City/
RDA issued in 2006 to provide funds to prepare the riverfront area of TID #21 for development and
future funding needs to cover costs of the riverwalk project in that area.
Relative to the proposed riverwalk project, it appears the City/RDA will be able to realize significant
cost savings in that project, and this will result in the City/RDA needing to borrow fewer funds for
that project.
Cost savings have come about from DNR's review of a Chapter 30 docking facilities permit request
for the proposed public improvements along the Fox River. The improvement plan had called for a
steel sheet pile wall and a railing system along the river's edge. In their review of the project, DNR
has stipulated that rip rap be included in the river edge design, and as a result the design plan is being
changed to eliminate the steel sheet pile wall, which has a higher cost than rip rap. The change will
also eliminate the railing system (that will not be needed with a rip rap river edge treatment).
Attached to this Memorandum is an illustration showing the sheet pile /railing system design and rip
rap river edge design.
It was always assumed implementation of the Fox River Corridor Riverwalk Plan would include
several river edge design scenarios (as reflected in the Plan's Guidelines), and given that, we do not
see a problem with moving forward with the rip rap river edge design in this area of Marion Road —
and as noted, the stipulation by DNR has resulted in a cost savings for the project, which is a very
desirable outcome at this point.
With the preparation of detailed design plans that were required for submittal of permit requests to
DNR, the RDA's planning/engineering design firm (JJR) developed updated and refined cost
estimates for the project, with the steel sheet pile /riverwalk design at $3,383,500, and the rip rap river
edge /riverwalk design at $2,806,258.. This reflects a potential savings of $577,242.
The financing plan for the riverwalk project will entail use of currently available RDA escrow funds
and remaining 2006 LRB proceeds (in the amount of $1,406,258), and funds derived from a new
LRB to be issued in 2010.
3/24/09 Council Meeting
Valuation Assumptions/Needs
Valuation from new development is needed to cover the costs of the $6.3 million LRB issued in 2006
as well as covering costs of the LRB to be issued in 2010.
When new valuation is created in the TID #21 Area, it will generate property taxes that include
payments on the pre- existing tax base in the district ($1,954,900) and tax increments the City can use
to cover debt service obligations of the 2006 LRB and the anticipated 2010 LRB.
Attached to this Memo is a spreadsheet prepared by the City/RDA's financial advisor, Springsted Inc,
in consultation with Finance Director Peggy Steeno. The spreadsheet shows valuations from
development created in TID #21 to date (the first of two 50 unit Morgan Crossing apartment
buildings on Parcel G), and new development projected to be completed by Oshkosh River
Development ($28.3 million in aggregate valuation by the end of 2012, if Development Area 2 ends
up being included in their project). The second Morgan Crossing apartment building is projected to
be completed in 2011.
Revisions to the Development Agreement provide changes to the valuation threshold schedule as
reflected in the attached spreadsheet, where the new aggregate valuation figure of $28.3 million for
Oshkosh River Development has been divided into four periods: new valuation of $3 million to be
completed by the end of 2009; additional new valuation of $10 million to be completed by the end of
2010; additional new valuation of $5 million to be completed by the end of 2011; and additional new
valuation of $10.3 million to be completed by the end of 2012.
City/RDA staff reviewed these new valuation thresholds with Oshkosh River Development and based
on the land use plan for the Phase II Area and the potential valuations that can result from
development consistent with the land use plan, they are comfortable with the thresholds, and they are
requesting the Development Agreement be modified to include these new figures, which reflect a
reduction in valuation from the current agreement.
Note: the new $28.3 million aggregate valuation figure includes the potential riverfront hotel site
(Development Area 2). If the City/RDA secures a hotel development for the site, valuation
attributable to Oshkosh River Development would be adjusted per new valuation created from a hotel
project.
As noted in the attached memo to the RDA, the current Development Agreement had stipulated that
Oshkosh River Development complete new valuation of $12 million by the end of 2009, and it had
provided a total aggregate valuation threshold of $27 million for the group by the end of 2012 (if they
exercised the option on the area north of Marion Road). The current agreement had also assumed
that the potential hotel site could generate a valuation of $6 million, and this relates to the previous
Development Agreement between the City/RDA and Akcess Acquisition Group, where $33 million
of new valuation was to have been completed by the end of 2012.
3/24/09 Council Meeting
The previous $33 million total valuation need was identified in order to cover debt obligations of the
$6.3 million 2006 LRB, and it was also based on the need for a new $4.315 million LRB to cover
costs of a possible $4 million riverwalk project. As has been noted, since that time cost estimates for
the riverwalk project have been reduced for the rip rap /riverwalk design, and this has resulted in a
need for a smaller new LRB. And this smaller LRB need is able to be translated into a need for less
valuations being completed over the course of the next three to four years.
Alternatives to Approving Revised Agreement
As noted in the attached memo to the RDA, the City Manager asked me to identify other options the
City/RDA could take that have been considered previously or could be considered in terms of
development alternatives for this redevelopment area. These alternatives included:
• Waiting for economy to improve, and then solicit proposals for redevelopment
• Converting the Phase II Area to park/green space
• Pursuing development of an active recreation area (possibly modeled after Bay Beach in
Green Bay
• Seeking another developer for the Phase II Area
FISCAL IMPACT
One element all of the noted alternatives have in common is a need for the City to cover debt service
obligations associated with the 2006 $6.3 million LRB. That LRB included capitalized interest that
will be used with other available funds to cover debt service requirements through 2011. If no tax
increments are generated from new development in the area subject to the Development Agreement,
the City will still need to cover the 2006 LRB annual debt service payments with general funds, or
with donor TIF funds.
Under the proposed revision to the Development Agreement, the City/RDA is projecting that new
development taking place in the period 2009 through 2012 will generate sufficient tax increments to
meet debt service obligations in the 2006 LRB in 2012 and thereafter, as well as debt service
obligations from the anticipated 2010 LRB. With completion of projects meeting the proposed
valuation threshold schedule, the City/RDA would be in a position to address these debt service
obligations.
3/24/09 Council Meeting
RECOMMENDATION
Based on progress Oshkosh River Development has made in pursuing project implementation and the
change in assumptions in project costs, and tax increment projections, the Department of Community
Development recommends Council give approval to the proposed revisions in the Development
Agreement.
The RDA met on March 18 and approved a Resolution on the modification to the Development
Agreement.
Approved,
"-'Kzw�
City Manager
3/24/09 Council Meeting
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O.IHKUH
ON THE WATM
TO: Redevelopment Authority
cc: Mark Rohloff, City Manager
Common Council
FROM: Jackson Ki
Director of
DATE: March 10,
RE: Amend Development Agreement Terms /Oshkosh River Development, LLC
BACKGROUND
A Resolution will be on the Redevelopment Authority's March 18 agenda and the Council's
March 24 meeting agenda to authorize the City to enter into a revised Development Agreement
with Oshkosh River Development, LLC (the Dumke group) for the Marion Road/Pearl Avenue
Phase II Redevelopment Area. Revisions to the agreement are shown in the attachment to the
Resolutions that will be before the and Council
The City/RDA entered into a Development Agreement with Oshkosh River Development in
October 2008. The. agreement provided the development group with the ability to undertake due
diligence efforts to determine if they would proceed with a redevelopment project in the Phase Il
Area.
The current due diligence period will expire on March 31, 2009. Oshkosh River Development is
requesting the Development Agreement be revised to provide for the following changes:
• Extending due diligence period to June 30, 2009.
• Give City/RDA the option of undertaking river edge /riverwalk improvements in time
frame to coincide with development projects in riverfront area, and give the City/RDA
discretion on when to construct public transient docking facilities.
Set six month time frame for RDA to solicit proposals for Development Area 2 for hotel
project. If City/RDA does not enter into an agreement with developer for hotel project by
September 30, 2009, Oshkosh River Development will have right for conveyance of
Development Area 2 under same terms and conditions as for other Development Areas/
parcels subject to Development Agreement. Oshkosh River Development could then
pursue a hotel project itself, a commercial or residential project, or some combination of
commercial/residential development in Development Area 2.
3 -18 -09 RDA Memo
• Modifying valuation threshold schedule:
FROM — Having Oshkosh River Development complete valuation of $12 million by end
of 2009, and total aggregate valuation of $27 million by end of 2012 (if they exercise
option on area north of Marion Road).
TO — Setting new overall aggregate valuation for Phase II Area (including potential hotel
site) of $28.3 million, to come on line in four time periods:, $3 million by end of 2009;
$10 million additional valuation by the end of 2010; $5 million additional valuation by
the end of 2011; and $10.3 million additional valuation by the end of 2012.
If City/RDA secures hotel development for Development Area 2 by 9/30/09, projected
valuation for hotel would be expected to be completed in 2010 /2011, and valuation
attributable to Oshkosh River Development would be adjusted accordingly.
Further revision would lower valuation threshold schedule if City/RDA receives grant
funds that could reduce borrowing needs for Lease Revenue Bond (LRB) for river
edge / riverwalk improvements in Phase II Area. If grant funds were received, this could
lower amount of valuation needed in 2012 (i.e., noted $10.3 million figure).
• Dropping option provision that gave Oshkosh River Development until December 31,
2012 to exercise option and proceed with project implementation in area north of Marion
Road TO having area north of Marion Road included in conveyance of parcels under
Development Agreement.
• Modifying Map Exhibit A to show four overall Development Areas and enabling
adjustments to be made in location of final parcel. lines for Development Areas.
• Requiring enhanced public green space (with walkway and sitting areas) between parcels
in Development Areas 1 and 2, or Development Areas 2 and 3, to connect sidewalks on
Marion Road with the riverfront trail.
ANALYSIS
The above changes should be considered as refinements to the Development Agreement. An
important point is the general land use framework for the Development Areas would remain by
and large the same. One important change, of a very positive nature, is the refinement that can be
made in the valuation threshold schedule made possible by cost savings in the riverwalk project.
The change provides a new overall valuation threshold amount of $28.3 million (which includes
the potential hotel site), versus the previously identified amount of $33 million - noting that the
current agreement does not actually cite the $33 million figure, it instead assumes that figure
based on the possibility of the hotel site having a valuation of $6 million).
Extending _Due Diligence Period to June 30, 2009. While the developer group has been
energetically undertaking its due diligence responsibilities, the current state of the economy has
presented challenges to the group in meeting time frames in the Development Agreement.
3 -18 -09 RDA Memo
A principal reason for the extension relates to Oshkosh River Development's submittal of a tax
credit request to the Wisconsin Housing & Economic Development Agency ( WHEDA) for a 3
story 60 -unit residential apartment project. The group will not hear from WHEDA until April
15 as to whether their application for tax credits has been approved, and if they receive
approval, they will still need to sell the tax credits for the project — thus the request for the
extension to June 30 Oshkosh River Development has tentatively identified the far west parcel
along the river for the location of the WHEDA supported apartment project, but they are also
looking at the possibility of locating the project on the northeast corner of Marion Road and the
future extension of Riverway Drive. If they proceed with the latter site, they still plan to develop
a multiple family residential project on the far west riverfront parcel.
Time Frame for Soliciting Hotel Project. Oshkosh River Development is supportive of efforts
by the RDA to determine if interest exists for development of a hotel on a 1.8 -acre parcel that
would be situated to the immediate east of the residential project the group is proposing on the
far west riverfront parcel. The group, however, would like the RDA to make a concerted effort
to solicit interest from prospective hotel developers over the next six months, and if as a result of
that solicitation effort the City/RDA does not enter into an agreement for a hotel project during
that time frame, they would like Development Area 2 included as part of the land conveyance
under the Development Agreement.
If interest develops for a quality hotel project through the RDA's solicitation efforts, this would
be a plus for the City/RDA and Oshkosh River Development. If interest is not forthcoming, it
would be desirable to have Oshkosh River Development be responsible for actively pursuing a
future hotel project, or some other commercial and/or commercial/residential project in this area.
Modifying Valuation Schedule. It appears the City/RDA will be able to realize cost savings in
the proposed river edge /riverwalk improvement project along the Fox River, and this will result
in the City/RDA needing to borrow less funds for that project. Since tax increments generated
from new development are needed to meet both debt service obligations from the 2006 LRB as
well as for borrowing for the river edge /riverwalk project, the reduced borrowing need on the
upcoming project can be translated into a lower overall valuation need for private improvements
in the Phase II Area.
Possible cost savings have come about from the DNR's review of a Chapter 30 /docking facilities
permit request for improvements along the Fox River. The improvement plan had called for a
steel sheet pile wall, and with the steel sheet pile wall the riverwalk plan included a railing
system along the river's edge. In their review of the project, the DNR has stipulated that rip rap
be included in the river edge design, and as a result the design plan is being changed to eliminate
the steel sheet pile wall, which has a higher cost than rip rap. The change will also eliminate the
need for the railing system (that will not be needed with a rip rap river edge treatment).
While the current Development Agreement included a requirement that $12 million of new
valuation be completed by the end of 2009, the revised agreement takes into consideration the
fact that the extension of the due diligence period to June 30, 2009, will mean Oshkosh River
Development will be starting project activities later in 2009 than originally anticipated, and as a
result the valuation threshold schedule has been adjusted to have some valuation completed by
the end of 2009 ($3 million), and an additional amount completed by the end of 2010 ($10
million).
3-18-09 RDA Memo
As noted above, a revision in the agreement is proposed to give the City/RDA an ability to lower
the valuation threshold schedule if the City/RDA receives grant(s) that lower borrowing needs
for the LRB that would cover costs for river edge / riverwalk improvements in the Phase II Area.
Any such reduction would affect new valuation needed in 2012, from that shown in the revised
valuation threshold schedule (i.e., the added $10.3 million in valuation). For example, the City
has requested Green Space Grant funds through DNR that could be used to help offset costs for
the riverfront trail, and the City is hoping to submit requests for Transportation Enhancement
funds as part of the Economic Recovery (stimulus) Program.
Modifying Map Exhibit A. As Oshkosh River Development has been working on site planning
for possible projects in the riverfront area it has become clear the identified parcel line locations
on Map Exhibit A do not provide a reasonable level of flexibility to adjust final parcel lines for
projects that may be developed in this area. The final size, configuration and location of parcels
depends on a variety of factors, including market demand, parking needs; green space needs; and
needs associated with meeting drainage plan requirements. An example would be Development
Area 1 where Oshkosh River Development has proposed two office buildings and an adjacent
restaurant. While the group is still looking at a two office building scenario, they have indicated
that if an opportunity presented itself for a larger single office building (where a restaurant could
possibly be included in the building), the current parcel lines on Map Exhibit A would present
problems for such a development scenario.
While revisions to the agreement would provide a needed level of flexibility for the size and the
exact location of final parcels within the Development Areas, the agreement will still require the
developer forward site plans for review and approval by the RDA, Plan Commission and Council
Schedule for River Edge /Rive rwalk Improvements. A revision is included to give the City/RDA
the option of constructing improvements on a schedule that coincides with development projects
in the riverfront area. Also, the revision would enable the City/RDA to decide when to construct
public transient docking facilities in the area.
Rather than having the Development Agreement stipulate that the City construct river edge and
riverwalk improvements in 2009 or 2010, the proposed revision gives the City/RDA the ability
to coordinate improvements with construction occurring on projects in the riverfront area. For
example, this would enable the City to install river edge improvements in riverfront areas where
projects may get underway in 2009, and complete riverwalk work in 2010.
Requiring Public Green Space. Requiring enhanced public green space (with walkway /sitting
area) between parcels in Development Area 1 and 2 or Development Areas 2 and 3, as part of the
privately financed development projects, eliminates the need for a separate park parcel in the
riverfront area. The "park" was always intended to serve as a passive green space area, and as
site planning has continued, it has become clear the green space envisioned can reasonably be
accommodated in the area between one of the development sites. This also recognizes that the
riverfront trail provides a significant linear park area that will receive greater public interest and
use.
3 -18 -09 RDA Memo
Alternatives to Revising Development Agreement
As part of this analysis the City Manager asked me for background on this project, and other
options that have been considered previously or could be considered in terms of development
options for this redevelopment area. He asked that I share this information with the Council and
the RDA. These options could include the following:
Alternative # 1— Wait for Economy to Improve In this alternative the City and RDA would
essentially withhold taking any actions to solicit developer interest or undertake improvement
activities in the Phase II Area. This would possibly relate to a belief that the City and RDA
should wait until the state of the general economy improves, thinking that when that occurs the
City and RDA will be able to realize a significantly greater level of development than what has
been generally proposed by Oshkosh River Development.
If this alternative were taken, the City/RDA would still need to cover debt service obligations for
the $6.3 million 2006 LRB. The 2006 LRB included capitalized interest that will be used with
other available funds to cover debt service requirements through 2011. If no tax increments are
generated from development occurring in the area subject to the Development Agreement, in this
alternative the City will need to cover the 2006 LRB annual debt service payments with general
funds, or with donor TIF funds.
The City/RDA projected that new development taking place in the period 2009 through 2012
would generate sufficient tax increments to meet debt service obligations in the 2006 LRB in
2012 and thereafter, as well as debt service obligations from the anticipated 2010 LRB. With
completion of projects meeting the proposed valuation threshold schedule, the City/RDA would
be in a position to address these debt service obligations.
Obviously, there is a cost should the City adopt a "wait and see" approach with this alternative.
Alternative 92 — Convert Project Area to Park /Green Space: This alternative is somewhat
related to Alternative # 1, except in this alternative the City/RDA could use the vacant Phase II
Areas to create a park area and improved green space. This would provide a more aesthetically
pleasing appearance to the area (than the current vacant status of the area), and the City/RDA
could always consider in the future entertaining proposals for new development. This would
entail incurring costs for the preparation of a park/green space plan; for making park/green space
plan improvements; for covering increased maintenance costs by the Parks Department; and for
covering the $6.3 million in costs associated with the 2006 LRB.
Alternative #3 — Active Recreation Area. A suggestion has been made in the past that the City
pursue development of an active recreation area, possibly modeled after Bay Beach in Green
Bay. Bay Beach is an amusement park type facility owned and operated by the City of Green
Bay. It includes picnic areas, a beach area, pools, pavilions /park shelters, concessions and
amusement rides, with operations running from late May to late September.
3 -18 -09 RDA Memo 5
As with Alternatives 1 & 2, if the City pursued such an alternative the City would still need to
address the debt related to the 2006 LRB. In addition, if this alternative were to be pursued, it is
reasonable to assume this would require that the City undertake the preparation of an amusement
park plan (which would include a detailed business plan showing how the City could cover its
costs of improvements for the amusement park, maintenance of the facilities, and for operational
expenses associated with the amusement park). The cost of preparing an amusement park plan
would likely exceed $100,000.
The City could solicit proposals for a private development similar to Bay Beach, but this would
be based on interest in the market, and the City would still need to cover carrying costs until a
developer was selected.
Alternative #4 — Seek Another Developer. In this alternative the City/RDA would seek out new
developer interest in the Phase II Area. Since the City/RDA undertook redevelopment activities
in the Marion Road/Pearl Avenue area in order to transition the area from industrial use to other
uses (principally commercial and residential uses), as recommended in the community's adopted
Comprehensive Plan, it can be assumed a new request for proposals would involve an interest in
seeing proposals for a mix of commercial and residential development — as opposed to industrial
uses.
If this alternative were pursued, there is no guarantee the City/RDA would be successful in
finding a development group that would initiate project activities in the near term, or where
developer(s) would undertake activities with significantly higher valuations and an intensity of
development greater than those currently contemplated by Oshkosh River Development (or that
were thoroughly researched by Akcess Acquisition Group). Akcess Acquisition Group shared
information with Oshkosh River Development on tenant and project opportunities Akcess had
been exploring since the Fall of 2006.
Given both Oshkosh River Development's and Akcess's efforts, it is unlikely a new developer
would create any new tenant interest. Meanwhile, the City would continue to carry costs of the
$6.3 million LRB.
RECOMMENDATION
Based on progress the group has made in pursuing project implementation and the change in
assumptions in project costs, and tax increment projections, the Department of Community
Development recommends the RDA give approval to the proposed revisions in the Development
Agreement with Oshkosh River Development, LLC.
3 -18 -09 RDA Memo