Title
Lease and Development Agreements for Phoenix Central Station at 300 N. Central Ave. (Ordinance S-45566)
Description
Request to authorize the City Manager, or his designee, to enter into a development agreement, ground lease, easements and other agreements as necessary (collectively, the Agreements) with Electric Red Ventures, LLC, a wholly owned subsidiary of Medistar Corporation or its City-approved designee (Developer), for a transit-oriented development project at the City-owned Public Transit Phoenix Central Station transit center, located at 300 N. Central Ave. (Site).
Report
Summary
On April 18, 2018, City Council authorized release of the Central Station Request for Proposals (RFP) to lease and redevelop the Site. Staff worked with various City, transit and community stakeholders to seek input on this solicitation, and included their feedback in developing the RFP requirements and evaluation criteria.
The RFP was issued on June 25, 2018 with proposals due in September 2018. The City received four proposals, one of which was deemed non-responsive. The three responsive proposals were evaluated by a panel comprised of representatives from the City's Citizens Transportation Commission, Downtown Voices Coalition, the development community, and City staff from the Public Transit, Planning and Development, and Community and Economic Development departments on Oct. 8, 2018. Electric Red Ventures, LLC was the recommended proposer and the panel recommended proceeding with negotiations.
The proposed project submitted by the Developer includes two towers, replacement of the transit center, underground parking and amenities. The first tower is a 30-story high-rise tower with 300 apartments, a 150-room Intercontinental Hotel and 35,000 square feet (SF) of office space on the southeast portion of the Site. A second tower is an 18-story tower that includes student housing and 9,000 SF of space for the replacement of the current Public Transit Department office space on the west side of the Site. The project features 45,000 SF of ground floor restaurant, retail and grocery uses. Both towers sit on top of three floors of underground parking. The total project features approximately 1.1 million SF of development with an estimated investment of $231 million (Project).
The Developer has agreed to retain features of the transit center, including the Polk Street alignment and the bus drive aisle through the Site from Van Buren Street to the Polk Street alignment. The Developer has also agreed to improve the pedestrian and transit user access throughout the Site by designing a porous ground floor with multiple access points and walkable, pedestrian-oriented corridors. The proposed design allows for all current bus and light rail routes, or any proposed changes approved by the Public Transit Department, to be retained on site after construction, and an interim construction plan is being negotiated with the Developer to minimize bus and light rail impacts.
Subject to City Council approval, the following major business terms have been negotiated with the Developer and will be implemented through the Agreements:
- Developer will enter into agreements with the City within eight months of City Council authorization.
- Developer will commence construction within 24 months of City Council authorization.
- Developer will complete construction within 42 months of the construction commencement.
- Developer will enter into a 99-year ground lease with the City and make annual rent payments to the City.
- Developer will provide a 9,000 SF Public Transit office with at least 3,000 SF on the ground floor.
- Developer will replace bus bays after construction and mitigate impacts to light rail operations during construction.
The Agreements will include other terms and conditions as the City Manager or his designee determine are necessary or appropriate to implement the contracts. All deadlines for performance benchmarks can be modified at the City's sole discretion.
In addition, due to the use of federal funds disbursed by the Federal Transit Administration (FTA) for the property and construction of Central Station, all Agreements are subject to the review and approval of the FTA.
Financial Impact
The Project will have no financial impact to the General Fund. The Project will generate annual lease revenue dedicated to transit operations per the FTA, beginning upon completion of construction.
Concurrence/Previous Council Action
This item was recommended for approval by the Citizens Transportation Commission on Dec. 13, 2018 by a vote of 12-0, and at the Aviation and Transportation Subcommittee meeting on March 26, 2019, by a vote of 3-0.
This item was heard for information and discussion at the Planning and Economic Development Subcommittee meeting on April 2, 2019.
Public Outreach
Staff presented details of the Project to several adjacent property owners, and to the Downtown Voices Coalition on Nov. 10, 2018, the Downtown Neighborhood Alliance on Nov. 13, 2018, the Evans Churchill Community Association on Nov. 14, 2018, the Roosevelt Action Association on Nov. 20, 2018, and the Phoenix Community Alliance Multi-Modal Subcommittee on Nov. 27, 2018.
Location
300 N. Central Ave.
Council District: 7
Department
Responsible Department
This item is submitted by Assistant City Manager Deanna Jonovich, Deputy City Manager Mario Paniagua, and the Community and Economic Development and Public Transit departments.