mincow 04-11-22 - Laserfiche WebLink

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In response to a question, Mr. Sobczak explained the structure of the agreement with Roundstone, which is similar to a condo sale. Roundstone will own and control its space within its four walls. The developer will control all public-facing components and will maintain control of the ground floor. The City will consider including a first-right-of-refusal clause in the agreement so that if Roundstone decides to leave that they must first offer the space to CASTO. Mr. Simon of North Pointe Realty acknowledged that the future of office space in the post- COVID era is uncertain. However, he expressed confidence in the current relationship and arrangement with Roundstone, noting that this opportunity to partner is an important achievement that resolves what would otherwise be major challenges of the site. It was clarified that on Day I of project completion, Roundstone will own and occupy floors 3-4 of the office building. Roundstone will own and potentially sublease floor 2. Mr. Sobczak and Council discussed other contingencies and what would potentially happen if CASTO were no longer the site owner. Director Leininger added that the parties will work to codify all agreements into the development agreement so that today's expectations and standards will survive into the future. In response to a question, Ms. Nichols expressed confidence that the project's financial gap can realistically be filled with a TIFF and a grant. Councilmember Baker suggested a clause in the development agreement whereby if interest rates go down that the developer pass along any recaptured savings to the city. Ms. Nichols cautioned against this, stating that a developer may experience savings on interest rates but have other expenses go up due to the current market volatility. Councilmember Baker questioned why the city was using the market study from 2017 and asked about getting the study updated. Director Leininger provided additional context on the 2017 study and discussed trends and new developments that have happened since then, that he believes keep the 2017 findings relevant. Director Leininger shared a slide comparing the amount of office, retail, and residential space among the previous developer's plan, CASTO's 2017 proposal, and CASTO's current proposal. He provided additional commentary and context on the slide. He remarked that although collective intuition may suggest that a hotel or more office space would be successful at the site, that market studies do not support those intuitions. Councilmember Shachner asked questions, to which Mr. Sobczak responded, about different residential options. In response to a question, Mr. Sobczak discussed the rationale behind the proposed Curtis Block facade preservation. He explained that full-scale preservation would cost$6-$7 million and could not be financially justified, given the small and dimly lit spaces within the building for rent. He explained construction challenges that would make adding onto the building 3