Title
Authorization to Enter into Sale and Redevelopment Agreement with Diana James Community Partners LC (Ordinance S-44384)
Description
Request to authorize the City Manager, or his designee, to enter into a Sale and Redevelopment Agreement, and other agreements as necessary, (collectively, the Agreements) with Diana James Community Partners LC, or its City-approved designee (Developer), for the sale and redevelopment of three vacant, City-owned lots in the Garfield Neighborhood Initiative Area (NIA) as single-family residences. Request authorization for the City Treasurer to accept all funds related to this item. This contract will result in income to the General Fund; funds from the purchase price will be distributed to the appropriate City accounts.
Report
Summary
On April 19, 2017, the Phoenix City Council authorized the Neighborhood Services Department (NSD) to issue a Request for Proposals (RFP) for the sale and development of 13 vacant, City-owned lots in the Garfield NIA located within the general boundaries of the Interstate 10 Freeway and Van Buren Street, and 7th and 16th streets. These lots were separated into two property packages to allow for increased development opportunity and flexibility: Package 1, with three larger assembled lots, and Package 2, with multiple scattered individual lots. This proposal pertains to Package 1.
Package 1 is approximately one acre in total area, and consists of properties that were acquired and assembled by the City through the Slum and Blight Program over the past 21 years to support the redevelopment strategies outlined in the Council approved Garfield Redevelopment and Garfield Neighborhood plans. The Developer's proposal is to redevelop the lots into six single-family, owner-occupied residential units - each with an accessory rental studio - and 18 total spaces of off-street parking. The primary residences will be approximately 1,450 square feet, and the accessory rental studios will be approximately 500 square feet. The homes will utilize sustainable construction and design, meet or exceed energy efficiency standards, and incorporate smart home systems and technology. The Developer will seek a mandatory Certificate of Appropriateness from the Historic Preservation Commission, as required, to ensure the homes fit the character of the Garfield neighborhood.
The Developer's proposal was reviewed for project feasibility and recommended to move forward to the negotiation of business terms. The proposed key business terms include:
- The Developer will enter into a Sale and Redevelopment Agreement, which will include development benchmarks for construction, within six months from the Phoenix City Council's Authorization Date.
- The Developer shall purchase the lots in Package 1 for a total price of $390,000.16 (approximately $8.48 per square foot).
- The Developer shall complete construction within 24 months of the first day of construction.
- The Agreements may include other terms and conditions deemed necessary by the City, including community outreach and development deed restrictions, as required.
This project will redevelop three vacant pieces of land into six single-family, owner-occupied homes with sustainable and historic design characteristics specified by the Garfield Redevelopment and Garfield Neighborhood plans. The project will also promote healthy living by providing an option for residential living and workforce housing, contributing to a walkable community, and reactivating the use of neighborhood alleyways. Furthermore, this project will bring an estimated value of investment of roughly $1.7 million to the Garfield neighborhood, generate approximately $216,000 in taxes and local revenue, and create 23 construction jobs.
Procurement Information
In June 2017, NSD issued a RFP for the Sale and Development of 13 vacant, City-owned lots in the Garfield NIA (RFP-NSD-GAR13). NSD received one responsive proposal for each of the property packages (Package 1 and Package 2) in the RFP. Staff verified the proposal received for Package 1, submitted by Diana James Community Partners LC, met the requirements and minimum qualifications of the RFP.
Contract Term
The term of the Agreement will be approximately two years.
Financial Impact
Package 1 will be purchased by the Developer for a total of $390,000.16, and is estimated to generate approximately $1.7 million in investment, $216,000 in taxes and other revenue, and create approximately 23 local jobs. Any applicable closing costs will be deducted from the sale proceeds at close of escrow. This contract will result in income to the General Fund; funds from the purchase price will be distributed to the appropriate City accounts.
Concurrence/Previous Council Action
This item was recommended for approval by the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on Feb. 20, 2018 by a vote of 3-0.
Public Outreach
Public meetings were held on Dec. 14, 2016 and Feb. 13, 2017 in the Garfield neighborhood prior to releasing the RFP. An outreach meeting was also held in the Garfield neighborhood regarding the review and approval of the Developer's proposal for Package 1 on Jan. 23, 2018. Additional outreach and community engagement regarding the project will be scheduled as required, and included in the Sale and Redevelopment Agreement.
Location
The Garfield lots in Package 1 are located at 1101 and 1109 E. Garfield St. and 1343 E. Pierce St. These properties include the distinct APNs: 116-27-185, 116-27-184, and 116-24-158 respectively.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Neighborhood Services Department.