TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Process Options for Use of Town Parking Lots 2 and 5
DATE: February 24 , 2003
This memorandum reports to the Town Council on process options for soliciting financially feasible development proposals for Parking Lots 2 and 5 in downtown Chapel Hill.
The accompanying memorandum from the Council Committee on Lots 2 and 5 transmits its list of recommended principles and priorities on issues such as uses, housing, parking, public space, urban design, and transit.
Background
At a Council Work Session on June 10, 2002, the Town Council reviewed concepts for Parking Lots 2 and 5 and other sites developed at the Downtown Design Workshop in February and March 2002. At that time the Council voted to adopt principles related to the future use of Parking Lots Number 2 and 5:
· To keep the properties in the Town’s ownership, as a basic principle.
· To consider both properties simultaneously.
· To consider the neighborhoods in any planning of the lots.
· Not to have a bus transfer station on Lot 5.
On June 10, the Council formed a subcommittee to review in greater detail options for proceeding, possibly leading to the issuance of a Request for Proposals to develop the two parking lots. Council members participating in the Committee meetings were Pat Evans, Ed Harrison, Mark Kleinschmidt, Bill Strom, Dorothy Verkerk, and Jim Ward.
The Committee held four meetings from September to November, recessing on November 11, 2002. The issues the Committee discussed included principles and priorities for Parking Lots 2 and 5, financial considerations such as leasing or selling the sites, the idea of a downtown transit transfer center, and whether to seek more input from the public or a panel of professionals.
On November 11, the Committee agreed it would report to the Council regarding:
1. What would be required if the Council wishes to invite the American Institute of Architects to provide an Urban Design Action Team; how long would it take to get a decision from the American Institute of Architects; and if a favorable response, how long would it be before the process could take place.
2. A master list of principles and priorities.
3. Process options for soliciting financially feasible development proposals.
This memorandum addresses the first and third items in the following section. The second item, the Committee’s proposed list of Principles and Priorities, is transmitted in the accompanying memorandum.
Options for PROCEEDING
Following are options for developing a process to solicit and review development proposals for Parking Lots 2 and 5.
1. Actions Resulting in Additional Planning
Urban Design Assistance Team: The Committee discussed the possibility of gathering additional input through a design competition or requesting the formation of a Regional/Urban Design Assistance Team, a program of the American Institute of Architects, and asked for additional input on the process. Attachment 1 discusses the process of applying to the national American Institute of Architects program or the state program of the North Carolina Chapter of the American Institute of Architects run by Peter Batchelor at N.C. State University.
Hosting a Regional/Urban Design Assistance Team through the national American Institute of Architects typically costs $35,000 to $40,000; however, in-kind and financial contributions from area businesses such as architecture firms and hotels sometimes help cover some of these costs. The program could provide the Town additional analysis on issues such as public space, architecture, financing, parking, the potential location of a transit transfer center, affordable housing, and pedestrian connections. Team members would be selected based on the community’s issues and could include, in addition to architects, developers and experts in the fields of housing, finance and transportation, for example.
Additional planning could provide the basis for creating a prospectus for developers, a process by which the Town would have a development plan written, and then send out a prospectus for potential developers to buy or lease the site and develop it according to the tenets of the plan. The City of Greensboro used this approach for the Southside redevelopment project adjacent to its downtown core; the City sold the property to the developer at a reduced price and is helping to pay for infrastructure and streetscape improvements.
Comment: This option would provide additional opportunity to gain outside, expert opinion for developing a program for the two sites, addressing issues that have not yet been examined in detail, such as public space design, parking, transit, and financing options. It also would create an opportunity to study the larger planning context within Downtown. The primary disadvantages of the option are that it would require additional time and would not result in development of options that had been tested for financial feasibility. Additional planning could precede any of the options listed under 2, Actions Resulting in Implementation (see following).
A prospectus for development would provide the Town with substantial control over the use of the sites by stipulating the conditions for development in detail. However it is uncertain whether an Urban Design Assistance Team project would generate ideas that the Council would support or form the basis for developing a realistic plan.
2. Actions That Could Result in More Immediate Implementation
There are multiple ways of soliciting development proposals. We outline four approaches here:
a) Request for Proposals for Retaining Economic Development Consultant
In order to move forward on the process of soliciting development proposals, the Town could retain the services of an economic development consultant who would provide the Town expertise for tasks such as writing a request for proposals for development, assisting the Council and staff in evaluating responses, and providing advice in negotiating any development agreement. This step would require the Town to issue a request for proposals for consultant services.
Comment: The Town has almost no experience in evaluating financial and legal issues related to public-private development agreements. Some of the factors an economic development consultant could be asked to evaluate in reviewing proposals include the developer’s financial capacity and commitment, the value of the offer in terms of lease and/or sales terms, the financial feasibility of the proposal, the financial feasibility of the parking component of the project, the strength of the developer’s tenants, and leasing/marketing strategies.
At the appropriate time we believe that the Town Attorney would need to arrange for independent legal counsel for assistance in reviewing long-term financial options available to the Town and other legal issues raised by development proposals submitted.
b) Request for Qualifications
A Request for Qualifications is a two-step process beginning with a request for letters of interest and qualifications from firms interested in a specified project. The Council would establish a deadline to respond to the Request for Qualifications, and then decide on a short list at a later date based on the responses received. The second step involves inviting the “finalists” on the short-list to respond to the Town’s Request for Proposals.
Comment: A Request for Qualifications could help the Town select the strongest development teams based on a set of criteria such as financial capacity, related experience, and quality of past projects, without requiring the submittal of a development proposal as part of the first step. A Request for Qualifications would help establish the capacity of the development teams to develop creative solutions and secure financing. The finalists might be willing to invest more time and resources in proposing a development package because of the knowledge that they would be competing against a limited field.
c) Request for Preliminary Proposals
The Council could request development teams to submit, in addition to demonstrating their qualifications, a preliminary proposal responding to a set of basic criteria. An example of this approach is in Pueblo, Colorado, where the City and a redevelopment authority asked that respondents to their Preliminary Request for Proposals include information on the development team, their experience with similar projects, and a narrative and illustrative description of their proposed development program. The initial submittal did not require schematic design plans. Based on the quality of responses, the City and authority short-listed finalists who were asked to submit more detailed plans.
Comment: The additional step requiring “preliminary proposals” to be submitted would help illustrate respondents’ capacity to respond to the Council’s criteria without requiring the time-consuming development of detailed plans at an early stage. As a result the Town might receive more responses, and be in a position to consider a team’s ideas and creativity as well as their experience.
d) Request for Proposals
A Request for Proposals is a specification of requirements that is sent out to developers who reply with proposals. Issuing a Request for Proposals would require prospective development teams to submit detailed development proposals based on the Council’s criteria. The Council would review submittals and choose a finalist with whom to negotiate a development agreement.
Comment: We do not have the staff expertise to develop criteria to be used in reviewing Requests for Proposals or experience in preparing and evaluating Requests for Proposals for economic development projects.
RECOMMENDATION
If desired, the Council could select actions resulting in additional planning, or actions resulting in more immediate implementation. At this time, we believe the Town is not prepared to issue a Request for Qualifications, Request for Preliminary Proposals, or Request for Proposals.
If the Council wishes to pursue any of the implementation options, we recommend that the Council adopt the attached resolution authorizing the Manager to develop a Request for Proposals for economic development consultant services. The Council would be in a position to discuss the required budget for consultant services after consultants’ proposals are submitted for consideration.
We recommend the Council adopt Resolution A that would authorize the Town Manager to develop a request for proposals for services of an economic development consultant. We would expect to present a draft for consideration by the Council in April.
Resolution B would offer the Council an opportunity to select any of the other options reviewed in this memorandum.
ATTACHMENT
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO DEVELOP A REQUEST FOR PROPOSALS FOR SERVICES OF AN ECONOMIC DEVELOPMENT CONSULTANT (2003-02-24/R-13a)
WHEREAS, the Comprehensive Plan and Downtown Small Area Plan identify Town Parking Lots 2 and 5 as key redevelopment sites; and
WHEREAS, more than 100 people have participated in design workshops which provided opportunities for public input on the future use of Parking Lots 2 and 5 in the spring of 2002; and
WHEREAS, the Council has established principles and priorities for development of Town Parking Lots 2 and 5; and,
WHEREAS, the Town would require the assistance of an economic development consultant to help plan and manage the options for proceeding with the development of Town Parking Lots 2 and 5 and help represent the Town’s interests in any development agreement;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to develop a Request for Proposals for Consultant Services to retain the services of an economic development consultant for consideration by the Town Council.
This the 24th day of February, 2003.
RESOLUTION B
A RESOLUTION AUTHORIZING [INSERT DESIRED OPTION] FOR PROCEEDING WITH THE DEVELOPMENT OF TOWN PARKING LOTS 2 AND 5 (2003-02-24/R-13b)
WHEREAS, the Comprehensive Plan and Downtown Small Area Plan identify Town Parking Lots 2 and 5 as key redevelopment sites; and
WHEREAS, more than 100 people have participated in design workshops which provided opportunities for public input on the future use of Parking Lots 2 and 5 in the spring of 2002; and,
WHEREAS, the Council has established principles and priorities for development of Town Parking Lots 2 and 5;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes
[Insert desired option]
for proceeding with the development of Town Parking Lots 2 and 5.
This the 24th day of February, 2003.