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Home My WebLink About0618_Town Council MemoTo: Vail Town Council From: Stan Zemler Date: June 18, 2013 Subject: Redevelopment of the Eastern Half of Timber Ridge Village Apartments TIMBER RIDGE VILLAGE APARTMENTS REFINANCING As part of the 2013 Town of Vail budget the Vail Town Council authorized the refinancing of outstanding Timber Ridge bonds. $17 million in bonds were redeemed on February 4, 2013. The objectives of refinancing were: Gain operational control over the property Provide flexibility for future redevelopment Reduce financing costs Secure fixed rate financing Preserve deed restricted rental units EASTERN HALF REDEVELOPMENT PROPOSAL TIME LINE June 19, 2012 The Vail Town Council authorized the Town Manager to work exclusively with Wright & Company, Inc. and Gorman & Company, Inc. (hereinafter W&G) on a proposal to redevelop the eastern half of Timber Ridge Village Apartments. February 5, 2013 Jen Wright and Gary Gorman made a presentation at the Town Council work session on the proposed redevelopment concepts. Evaluating the eastern half only Structured parking is not financially viable What physically can fit on the property 850 square foot modules that can be divided into a variety of unit types A market study will be completed Proposed a land lease structure with improvements reverting to the Town at lease end February 19, 2013 The Town Manager provided clarification on the redevelopment process with W&G. It was reiterated that three previous Request For Proposal processes had not yielded successful redevelopment at Timber Ridge and the Town Council had previously authorized working exclusively with W&G. The Town Council asked questions about the next steps in the process with W&G. A market study, pro-forma and retaining an owner’s representative in the process with W&G would provide the Town with the necessary information to make informed decisions about moving forward in the redevelopment process. The Town Council gave support for continuing to work with W&G on the proposed redevelopment. Consensus was expressed around the market study determining the types of units that should be built. Requests were made for the market study to address the needs of year-round employees as well as identify how many units are needed for seasonal employees. There will be an exit strategy for both the Town and W&G once the market study and pro-forma have been finalized. EASTERN HALF REDEVELOPMENT PROPOSAL Based on nearly one year of work the Town of Vail has received a preliminary proposal from W&G to redevelop the eastern half of Timber Ridge Village Apartments. The Development 70% of the units will be deed restricted per the Housing Zone District 106 +/- units 161 parking spaces 4 buildings ranging from three to four stories tall Single phase of construction Construction begins April 2014 Preliminary Deal Concepts for the Town of Vail Provide a 35-year land lease with no annual payment Receive the land and improvements free-and-clear at the end of the lease term Waive certain fees the Town would otherwise collect Participate in the costs associated with rock fall mitigation and any C-DOT required turn lanes Preliminary Deal Concepts for Wright & Company and Gorman & Company Responsible for all aspects of design, development, construction and management of the development Procure debt and equity to fund the construction of the development Provide an “open book” process regarding costs, financing arrangements, contracts, fees and budgets Comply with the developer fee limitations established by the Colorado Housing and Finance Authority for its affordable housing (Section 42) projects. Fund a replacement reserve such that the development will be physically and financially viable at the end of the lease term ACTION REQUESTED OF TOWN COUNCIL Listen to the presentation and ask questions about the redevelopment proposal. STAFF RECOMMENDATION Staff recommends the Vail Town Council requests Wright & Company, Inc. and Gorman & Company, Inc. move forward with a site specific market study for the proposed development and the Town of Vail pay for one-half of the cost and that Staff begins work on a Contract to Lease for the redevelopment of the eastern half of Timber Ridge Village Apartments. NEXT STEPS Town Council recommends pursuing this proposal with Wright & Company, Inc. and Gorman & Company, Inc. Work with W&G to commence a site specific market study Cost of the market study should be shared between W&G and the Town of Vail as part of a collaborative process. Are there any specific items the Town Council would like to see addressed in the market study? A motion authorizing the Town Manager to participate in the cost of a site specific market study for the proposed redevelopment of the eastern half of Timber Ridge Village Apartments. Work with W&G to prepare a Contract to Lease the eastern half of the Timber Ridge property A motion authorizing the Town Manager to pay for the costs associated with the preparation of a Contract to Lease with W&G. Town Council does not recommend pursuing this proposal with Wright & Company, Inc. and Gorman & Company, Inc. Provide Staff direction to cease working with Wright & Company, Inc. and Gorman & Company, Inc. on this proposal. ATTACHMENT Wright & Company, Inc. and Gorman & Company, Inc.’s Timber Ridge Redevelopment Submittal dated June 7, 2013.