Has anyone done anything like this? Laid out a package for a potential developer up front? We have an old truck stop on a state highway we are looking at trying this with.
Would like to hear anyone else's experience with something like this.
Has anyone done anything like this? Laid out a package for a potential developer up front? We have an old truck stop on a state highway we are looking at trying this with.
Would like to hear anyone else's experience with something like this.
An RFP in kind of predicated on the requester offering something in exchange for the proposer to complete the task. What's the incentive for any developer to play along with this instead of just buying the property and doing what they would otherwise do anyway? The only way I can see this working or being relevant is if the city/EDC (or whoever you represent) owns the property and is trying to find the best/most profitable/whatever use for the property. Then they can basically put out the RFP and say, "wow us and we can broker a deal."Originally posted by Hawkeye66
If you provide some more details on the situation maybe myself or others can offer some ideas for moving forward.
We are willing to use TIF in a rebate. There really isn't any infrastructure need. Its a good use of TIF in my mind as it is a redevelopment. I don't think a developer can make it work straight up. Its a property that is very visible and the community expresses a great interest in seeing it re-developed.
Do you have site control, either through ownership or an option to purchase? If so, an RFP approach can be effective. You will want to provide as much information as possible: civil engineering, environmental, etc. Include a market analysis if you have one. Indicate the kinds of uses you want and would be willing to accept, and what will not be considered. Identify the sources and uses of funds that you may make available, and under what conditions.
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The State of Oregon did it with respect to the former Dammasch State Hospital property in Wilsonville, Oregon, just south of Portland. The RFP contemplated establishment of "a new urban village." PM me with your email address and I will send ypu a pdf of the RFP.
Not yet.
We have some funds from the TIF district which the property is in. We are making a proposal to our ED Group and then the council to see if they are willing. The site is always listed as a priority by citizens and the council. At some point something has to give. Its an old truck stop that has asbestos. So a demo and re-build without some kind of assistance might make it unlikely that a developer could reach a decent ROI. In my mind, TIF is best suited for just this sort of project. Its a re-development, not greenfield.
Obtaining the property is one of the hurdles. I am thinking of using some TIF funds generated from the area as a whole and wrap this into a TIF Rebate.
Another question:
How often has your city or cities you know about acquired properties themselves to facilitate re-development of a property or properties? Is this a fairly common practice? Was it set up to re-coup the money the city spent in acquisition? I have seen it done on a larger scale once before, but this is more targeted.
Thanks.
We have done it several times. You can use TIF to purchase the property, but get the bond attorneys involved early since there are new TIF hurdles to jump, and it takes a while.
“As soon as public service ceases to be the chief business of the citizens, and they would rather serve with their money than with their persons, the State is not far from its fall”
Jean-Jacques Rousseau
and do you basically give the property to the developer as part of the incentive?
The RFP should require the developer to propose a project and provide a pro-forma which would become the basis for negotiation for a TIF incentive. There are people who know this better than I do, who have worked with TIF and economic development, but essentially a project will be feasible with a given profit margin for the developer, so a gap analysis should reveal this based on the exact configuration of the project, the market study, etc. You could do some work ahead of time - testing the site for capacity under the current zoning and any specific design features that the City can demand as part of a TIF agreement. In the state where I worked, TIF could fund not only infrastructure and property assembly, but also facade improvements & etc. to get a higher quality project. Once you know the final gap financing needed, and if it can be covered by TIF generated from the project area, this can be the basis for negotiation.and do you basically give the property to the developer as part of the incentive?
In my experience, unless you have in-house expertise it would be helpful to spend some money for help putting together the RFP.
I've seen this process done different ways. Certainly it may be clean for the City to purchase the site outright, but unless you are fairly certain it will develop, then the City may be stuck with a property. However, control of the property is key as you want to be sure the owner will not try to suddenly raise their price when they see interest - especially with the government's "deep pockets" involved. I can't speak to all of the legal aspects, but a sound option to purchase should work, I'd think.
A number of communities have done these deals, but as TIF laws vary state to state it may be best to find out within your state, which RFP's have succeeded and any lessons learned, as well as asking around to see which developers respond to RFP's in your area, how to reach them (i.e. real estate publications, ULI, etc.)
Good luck!
We have not done it that way, as Iowa Code states you have to sell city property at market value. We have sold the ground back at market value and used other incentives. It ends up being sort of a shell game though. There may be a work around to enable giving the ground as an economic development incentive. Do you guys use Dorsey or Ahlers for bond and TIF matters?
“As soon as public service ceases to be the chief business of the citizens, and they would rather serve with their money than with their persons, the State is not far from its fall”
Jean-Jacques Rousseau
We use Dorsey & Whitney.
I take it that I should contact them if we are really ready to go through with a project. I am going to make sure that the ED staff and Council are on board with the concept, then I will contact them.
Thanks all.
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