Title
Authorization Amend to City Contract 149551, the Ellis Building Redevelopment and Purchase Agreement with Equus Ellis Limited Partnership (Ordinance S-52818) - District 7
Description
Authorize the City Manager, or his designee, to amend City Contract 149551, the Ellis Building Redevelopment and Purchase Agreement and other agreements as necessary (Agreements) with Equus Ellis Limited Partnership (Developer), to modify the allowed uses and project timing of the Ellis Building redevelopment project located at 135 N. 2nd Avenue.
Report
Summary
In March 2019, the City entered into the Disposition and Redevelopment Agreement (DRA) with the Developer for the sale and redevelopment of the former City-owned Ellis Building into a mixed-use office and retail project. The building is located in the downtown area at the southeast corner of 2nd Avenue and Monroe Street. The Developer performed their due diligence and closed on the sale of the building in April 2019 for $2,250,000. On December 4, 2019, the First Amendment to the Disposition and Redevelopment Agreement was executed to establish the standards for construction staging. The Developer commenced construction; however, demand for the office use was not sufficient to activate the building. To assist with this challenge, City Council authorized the addition of residential as an allowed use at their November 4, 2020, Formal meeting. On January 26, 2021, the Second Amendment to the Disposition and Redevelopment Agreement was executed to add residential as a permitted use and modify performance metrics. The Developer began to convert a portion of the building to the residential use, but unfortunately did not successfully complete the conversion.
The Developer is now working with a hotel developer and has asked the City to amend the DRA and other agreements as necessary to allow a 80-room, boutique hotel with ground floor retail. The following business terms have been negotiated:
- Amend the agreements to add hotel as an allowed use.
- Commencement of construction would occur within 24 months of the effective date of the Third Amendment to the DRA.
- Construction completion would occur within 24 months of construction commencement.
All other terms and conditions of the agreements shall remain in full force and effective.
Concurrence/Previous Council Action
- On November 7, 2018, City Council authorized business terms with the Developer for the sale and redevelopment of the building through Ordinance S-45119.
- On January 12, 2019, City Council approved a 90-day extension for due diligence through Ordinance S-45340.
- On November 4, 2020, City Council authorized the addition of residential as an allowed use and extended the time allowed for construction through Ordinance S-47052.
Location
135 N. 2nd Avenue
Council District: 7
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer and the Community and Economic Development Department.