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HomeMy WebLinkAbout09/22/15j� �p u�� �' �' 1 Ll J_11 Wheat Ridge Housing Authority AGENDA September 22, 2015 SECOND FLOOR CONFERENCE ROOM 4:00 P.M. A. Call Meeting to Order B. Roll Call C. Approval of Minutes: 1. April 28, 2015— regular meeting 2. August 18, 2015 — study session D. Officers Reports E. Public Forum F. New Business G. Old Business 1. Fruitdale School—Update from Hartman Ely Investments 2. Fruitdale School—NextSteps H. Other I. Adjournment Individuals with disabilities are encouraged to parficipate in all public meetings sponsored by the City of new Ridge. Call Heather Geyer, Public Information Officer of 303-235-2826at least one wek in advance ofa meeting if you are interested in participating and need inclusion assistance. Add� WRUA Wheat Ridge Housing Authority Minutes of Meeting April 28,2015 A. CALL THE MEETING TO ORDER Themeeting was called to order at 4:00 p.m. by Chair Thomson in the Second Floor Conference Room of the Municipal Building, 7500 West 29 Avenue, Wheat Ridge, Colorado. B. ROLL CALL OF MEMBERS Authority Members Resent: Thomas Abbott Chad Harr Tracy Langworthy Janice Thompson Jennifer Walter Authority Members Absent None Also Present: Lauren Mikulak, Senior Planner Kenneth Johnstone, Community Development Director Betty Maybin, Cornerstone Realty Larry Nelson, Comerstone Realty Henry Wehrdt, JCHA Kim Waggoner, Recording Secretary C. APPROVAL OFMINITPES: Februmy24,2015 It was moved by Mr. Abbott and seconded by Mr. Harr to approve the minutes of April 24,2015 as amended. Motion approved 40. D. OFFICERS REPORTS There were no officers' reports. Housing Authority Minutes April 28, 2015 E. PUBLIC FORUM No one wished to speak. F. NEW BUSINESS G. OLD BUSINESS 1. Update on Single Family Homes Rehab and Sales Mr. Wehrdt stated the last invoice for 44th Place was forwarded to Ms. Mikulak and the project is complete. He stated 50 homes had been rehabilitated through the program's duration. Jefferson County Housing Authority (JCHA) did the construction management on all but three. Ms. Langworthy arrived at 4:11 p.m. Ms. Thompson stated the Authority appreciates all that JCHA has done over the years. Mr. Nelson stated JCHA and Mr. Wehrdt made substantial contribution✓ to the community. He provided a list of the 50 homes that were purchased and sold over the years. He stated it has been a great working relationship between the Authority and Cornerstone Realty. Ms. Langworthy stated the City is a better place due to the work with JCHA and Cornerstone Realty. Mr. Nelson stated the closing for 44a' Place is scheduled for next week. Mr. Wehrdt, Mr. Nelson and Ms. Maybin left the meeting at 4:18 p.m. 2. Fruitdale School Ms. Mikulak summarized recent actions related to the Fruitdale RFI. She stated the Authority reviewed a preliminary proposal from Hartman Ely Investments (HEI) at the February meeting. At that time, the authority made a motion to allow a 60 -day exclusive period to allow HEI to provide a more refined proposal. The updated proposal was included in the agenda packet. HEI was present to explain the proposal. She introduced Jim Hartman. Mr. Hartman introduced his business partner Susan Ely. He stated they were both architects by training and they specialize in renovation of older buildings. Mr. Hartman introduced their proposal to reintroduce agricultural uses to the area and on the site and he introduced Sally Herbert, CEO of Altius Farms. Housing Authority Minutes April 28, 2015 Ms. Herbert gave her background and explained her passion for modern agricultural techniques. She explained the aeroponics technology that her company uses to grow plants in vertical containers within controlled greenhouse environments. There are three hundred farms using this technology model. Colorado is an agricultural state which currently imports 97% of its produce. Altius Farms has a focus on harvesting produce for restaurants and consumer sales. The company also has educational and training programs that benefit veterans and children. Mr. Hartman stated he had a personal connection with Temple Buell and met him many years ago. He explained that the Fruitdale site doesn't lend itself to many land uses due to the small size of site, the modest size of the building, and the location within Wheat Ridge; but an agricultural use is feasible. The facility will include solar power if possible. The site must include an educational component and this concept will satisfy the requirement. The redevelopment can be phased which lowers risk. Mr. Hartman stated that Fruitdale could be a great redevelopment on the 44th Avenue corridor. Mr. Abbott addressed HEI and Ms. Herbert and said he appreciated that they we not afraid of the condition of the building. He said he liked the proposal. District IV has a strong agricultural presence. Ms. Langworthy asked if they had seen the Fruitdale Subarea Plan. The orchard area district was lost over time to housing developments. The proposed orchard on the site complements the area's history. Mr. Hartman stated there would be community outreach as he would like the community to buy into the redevelopment ideas on the site. Chair Thompson spoke of the history of the apple orchards by Kullerstrand Elementary. Historically, the area also included celery growing. Mr. Hartman stated that the first phase of development would be start growing in the front of the site to create interest. Phase two would include renovation of the cafeteria and gym to allow for more vertical tower gardens indoors and the creation of a classroom for the educational operation. It could be called the Wheat Ridge Agricultural School. Phase three would include exterior greenhouses located in the front and back of the site. Future phases would be determined after the opening of the Gold Line as the market may dictate the uses; housing may be considered at that time. Ms. Ely stated the exterior of the school would be cleaned up during the second phase including removing the boards from the windows. Mr. Hartman stated a land swap with the school district for the rear parcel is a vital partof the plan. Greenhouses in this area are necessary to make the project financially viable. He provided a detailed budget and proforma which was confidential and very Housing Authority Minutes April 28, 2015 preliminary. He stated there was a contingency in the budget. The revenue comes primarily from fine dining restaurants that would pay Altius Farms for fresh greens. Ms. Herbert stated that restaurants are willing to pay a premium for the greens as they need local and reliable sources. Altius can do custom seasonal growing. She said Altius has met with five local restaurants and they are eager for this service. The growing cycle is 21 days so the greenhouses can adapt to buyers' needs. Mr. Hartman stated the challenges in the next step. HEI will need more time to complete their due diligence, refine the proforma, and confirm the land swap with the school district. Altius Farms needs to complete a project in Stapleton before the Wheat Ridge project can start. i Mr. Hartman agreed to Chair Thompson's suggestion that the facility include "Fruitdale" in the name. There was some discussion about the previous proposal from the Wheat Ridge Education Center for the Cultural Arts and discussion of whether they had proposed and funding streams or revenue sources. Mr. Johnstone stated that fundamentally, a purchaser or developer needs to be able to provide proforma with realistic revenue streams in order for the sale of the property to be a viable transaction; this had not been provided with the arts application. Chair Thompson suggested HEI investigate the irrigation rights and the operating well on site. Mr. Harr asked HEI about the funding gap in the proforma. Mr. Hartman stated they would look for grant opportunities and interested benefactors. The land swap with the school would allow for more revenue from additional greenhouses. Chair Thompson asked for an agreement that the property would revert back to the Authority if the plan was not successful. Ms. Mikulak stated a performance clause could be included in the purchase and sale agreement when the sale is negotiated in the future. Mr. Hartman stated he was open to such restriction. He is not in interested in flipping or scraping the property. He asked for some flexibility in terms of site usage as they continue to refine their proposal. Ms. Langworthy stated she was impressed with the plan even though reuse of the building was not the first priority. The agricultural plan is tied to the roots of the community. Housing Authority Minutes April 28, 2015 Mr. Abbott asked for more details about the educational component. Ms. Herbert explained that Altius would like to have classroom space for trainings. Their Operation Victory Garden model includes the training of veterans in agricultural practices. Chair Thompson inquired about parking and asked if produce will be sold to the public orjust to restaurants. Ms. Herbert stated a market analysis has not been done to determine if it would be sold to the public as well as to restaurants. The facility would have five to six employees and minimal parking needs. Ms. Mikulak stated from a zoning standpoint, parking could be accommodated on site or an adjacent property. Employee parking can be located in the back. Ms. Herbert stated a retail store front could be placed on the property that would direct the community into a pick-up area and parking. In response to Mr. Harr's inquiry, Ms. Herbert stated the greenhouses bTould be a 12 -hour operation from 6:00 a.m. to 6:00 p.m. with deliveries from 11:00 a.m. to 2:00 p.m. The greenhouses would never include marijuana. Mr. Johnstone asked if greenhouses would be illuminated at night. Ms. Herbert replied that there are no plans to utilize supplemental lighting for the grow operation. There will be emergency lighting and some outdoor lighting for security purposes. Their intention is to utilize radiant floor heat and natural ventilation for the greenhouses along with an evaporative cooling system. The site will be a non-GMO, pesticide -free site. The water will need to be tested. Augmented light will be needed in the gymnasium for the growing of herbs and greens. Mr. Harr inquired about the number of facilities that Altius Farms operates. Ms. Herbert stated this would be the second in Colorado. Their goal is to have five sites in Colorado by 2018. She stated they like the agricultural roots of Wheat Ridge and this is a good location for the second site. She said Altius Farms has a large corporate investor that is interested in the second site. Mr. Harr inquired about the timeline. Ms. Herbert stated the goal is to break ground at the Stapleton location in late August and be operational by the end of 2015. The planning of the second site in Wheat Ridge can occur after Stapleton is complete. Housing Authority Minutes April 28, 2015 Mr. Hartman indicated HEI would like to close in March 2016 and greenhouse operations could begin mid -year. There was a short discussion about urban agriculture in Wheat Ridge. Chair Thompson asked about the proposal to include the City or WRHA as a minority owner. Mr. Johnstone indicated that the logistics or liability of this proposal has not been discussed further. There have been some preliminary discussions with the City Manager in regard to waiving fees. Mr. Hartman explained that this ownership structure was proposed to reduce property tax liability which is assumed to be zero in the proforma. Ms. Langworthy stated the citywide BDZ may be an option at the discretion of City Council. The property zoning was discussed. Ms. Mikulak stated the land swap with Jefferson County School is a critical element of the proposal. A pre -application meeting and discussion with City Council will be required. These have not yet occurred but would take place during the next due diligence period. There was some discussion about an appropriate time frame for a more detailed proposal and proforma to be presented. Mr. Hartman suggested they could provide more refined information by August or September. This would be contingent upon feedback from a variety of parties, including the school district, zoning, and the fire department. Mr. Hartman said there are other groups who could be tenants on the property if Altius Farms is unable to commit to the site for any reason. Ms. Herbert expressed her interest in expanding the operation onto the property to the west if that was viable in the future. It was moved by Ms. Langworthy and seconded by Mr. Abbott to provide an exclusive extended due diligence period to HEI with a report back in September 2015. Motion carried 5-0. Craig Horlacher 10720 W. 45th Ave. Mr. Horlacher stated he liked that the proposal was not a high school. His concerns about lighting and parking were addressed. Housing Authority Minutes April 28, 2015 f :! I. Chair Thompson thanked HEI and Ms. Herbert for the presentation. There was some discussion about previous agricultural uses and the ditch on the property. Ms. Mikulak stated she would provide ditch information to HEI. Mr. Hartman, Ms. Ely, and Ms. Herbert left the meeting at 5:42 p.m. OTHER Ms. Thompson was voted Chair. Mr. Harr was voted Vice Chair. There was some discussion about recognizing Larry Nelson and Betty Maybin of Cornerstone Realty and Henry Wehrdt of JCHA for their contributions and efforts of the housing program over the past years. ADJOURNMENT 16 It was moved by Ms. Langworthy and seconded by Mr. Harr to adjourn the meeting at 5:52 p.m. Motion carried 5-0. Neat meeting is scheduled for May 26, 2015. Janice Thompson, Chair Housing Authority Minutes April 28, 2015 Kim Waggoner, Recording Secretary 7 Add� WRUA Wheat Ridge Housing Authority Minutes of Hanning Session August 18, 2015 A. CALL THE MEETING TO ORDER Themeeting was called to order at 4:00 p.m. by Chair Thomson in the Second Floor Conference Room of the Municipal Building, 7500 West 29 Avenue, Wheat Ridge, Colorado. B. ROLL CALL OF MEMBERS Authority Members Resent: Thomas Abbott Chad Harr Janice Thompson Jennifer Walter Authority Members Absent Tracy Langworthy Also Present: Lauren Mikulak, Senior Planner Kenneth Johnstone, Community Development Director C. STRATEGIC PLANNING SESSION Ms. Mikulak provided a summary ofthe memo that had been included in the agenda packet She summarized the history of the Authority, the funding changes in recent years, and the reasons for strategic planning. Staff recommended three possible options for moving forward: A) continuing a single family rehab program, B) partnering with a developer to provide affordable housing, and C) providing grants or loans for low-income homeowners to complete repairs. Mr. Abbott suggested that option A not be considered because it is no longer a viable program. Option B could be a worthwhile investment Option C will requiremore information; Wheat Ridge 2020 has a similar program, but he expressed hesitance to partner with them before doing more due diligence. Housing Authority Minutes August 18, 2015 Mr. Harr inquired about creating a multi -family inspection program. There was some discussion about this type of program and whether it was more appropriate for WRHA or the City to create such a program. Mr. Johnstone indicated that Council has considered such a program several times in the past, and it would likely need to be the City that manages a registration and inspection program. There was general consensus that it is unlikely that WRHA has the authority or resources to execute such a program. dh� Ms. Walter asked for more details on the City's current neighborhood cleanup programs, and Ms. Mikulak described the role of the Community Services Unit. They frequently refer residents to entities who can help with repairs. Jefferson County Housing Authority (JCHA) and Brothers Redevelopment have funded home repair programs for low-income households. , Chair Thompson suggested it may be appropriate for the Authority to enter a period of reduced activity. She observed that there is no pressing need to determine a new direction at this time. This would allow the Board to focus on Fruitdale and consider all options. Mr. Abbott observed that the real estate market is cyclical and agreed that it may be appropriate to refrain from new programs immediately. There was some discussion of recent market changes and whether it would ever be realistic to renovate single family homes again. Chair Thompson asked why new multifamily units were necessary if the City already has a high rental rate. There was discussion of the lack of new multifamily units and the lack of new affordable products. There is a lack of modern housing options in the City, particularly near public transit, including Wadsworth, Kipling, and at the future TOD area. Mr. Abbott expressed interest in Option C. There was discussion of how liens can be placed on a property to ensure a loan is repaid. Mr. Harr asked for more explanation of Option B. Mr. Johnstone explained that funding gaps are common in affordable housing projects. A few hundred thousand dollars can make or break a project. There was further discussion of Option B. Chair Thompson expressed reservations about spending the Authority's remaining funds without any way to replenish the funds. Housing Authority Minutes August 18, 2015 Mr. Harr expressed interest in partnering on a development and referenced other interesting projects such as Town Center North the age and income restricted project by Wazee Partners and development near RMCAD in Lakewood. Mr. Harr also indicated that Britta Fisher, Executive Director of Wheat Ridge 2020, may be a good resource as she also sits on the State Housing Board. There was additional discussion of Option B and C. There was consensus to ask Britta Fisher for her ideas related to Option B and to the Authority's strategic planning in general. There was consensus to explore Option C and to understand how similar programs are operated, such as those run by JCHA, Habitat for Humanity, and Brothers redevelopment. It was agreed that a follow-up to the strategic planning session could occur later this year or in early 2016. Fruitdale would be the focus of the September meeting. D. ADJOURNMENT It was moved by Ms. Walters and seconded by Mr. Harr to adjourn the meeting at 5:45 p.m. Motion carried 4-0. Next regular meeting is scheduled for September 22, 2015. Janice Thompson, Chair Lauren Mikulak, Recording Secretary Housing Authority Minutes August 18, 2015 'Ao"%hg� WRHA 750129 th Ave. Wheat Ridge, CO 303-335-2896 To: Chair and Members of the Wheat Ridge Housing Authority From: Lauren Mikulak, Senior Plarmer/WRHA Staff Liaison Ken Johnstone, Community Development Directm/WRHA Executive Director Subject: Troutdale School— HE[ Redevelopment Update Date: September 18 (for September 22 WRHA meeting) Background At the February 24, 2015 meeting of the Wheat Ridge Housing Authority, board members made a motion to provide an exclusive 60 days to Hartman Ely Investments (HEI) for delivery of a refined proposal for the reuse of Fruitdale School. At the April 28, 2015 meeting, the Authority met Jim Hartman and Susan Ely of HEI, as well as Sally Herbert of Altius Farms. HEI presented their refined proposal which included afocus on urban agriculture and utilized a phased approach. Phase one entailed construction of greenhousesforthepuuposeofverticalf=ing. Phase two did not have a definitive schedule, but would have included renovation and reuse of the historic school building. At the conclusion of the April 28 meeting, the Authority made a motion to provide an extended due diligence period to HEI with a request form update in September. Updated Proposal Since April, a significant amount of weds has been completed by HEI and by staff to better understand the feasibility of repurposing the Fruitdale School building. This has included several meetings with building officials, fire marshals, City staff, private contractors and architects, and potential lenders. HEI and staff have also met several times with the school district to discuss a land swap; at the beginning the month the Jefferson County Board of Education authorized their staff to negotiate the land swap. Over the last several months, HEI's proposal has evolved in an effort to maximize community benefit and financial feasibility. It still retains a food/agricultural component, but the phasing plan has changed such that the 1920s and 1950s buildings will be renovated in phase one The project now includes the following: • Artisanal meat production by a well-established Denver-based restaurant group in the 1950s portion of the building (Fruitdale Artisanal Meat Company), • Up to 12 affordable residential lofts and at least 1 market rate apartment in the 1920s portion of the building, • A community room for education and public uses, • A small retail storefront for the artisanal meat company, • An orchard and courtyard in the front of the property, • Rooftop solar facilities, and • Greenhouses for vertical farming as part of phase two at the rear of the property. Enclosed is an updated and thorough proposal provided by HEI. Representatives from HEI will be in attendance at the September 22°d meeting to present their proposal and to answer questions. As the Authority is aware and as two market studies have indicated, reuse of the property is particularly challenging because of the negative valuation associated with renovation costs for any reuse (residential, office, industrial, retail, or educational). With HEI's expanded phase one scope, comes an expanded cost and financing gap. The proposed redevelopment is currently estimated at $6 million dollars with an estimated $640,000 funding gap in the project proforma. If the Authority sought to recover all expenses associated with the property, the project gap would reach nearly $1million. For this reason HEI is requesting and staff is recommending that the property be sold for a nominal $10 amount. HEI and staff are exploring a variety of financing options to cover the remaining gap including grants, loans and subsidies. Both the City and the Housing Authority may be asked to help fill this gap in order to make the redevelopment feasible. If gap financing is not identified by November, it is unlikely that HEI will be able to move forward with the project. HEI has already invested significant pro bono resources into the project feasibility process to date. The tenant, Fruitdale Artisanal Meat Company, is associated with five highly -regarded restaurants and businesses already in the metro area, and they will need to open as soon as possible to meet existing demand. Both HEI and the tenant are reaching a point where a business decision needs to be made whether or not to move forward. Recommended Motion Based on the due diligence that has been completed and the project timeline associated with closing and redevelopment, staff is recommending the following motion: "I move to authorize staff to negotiate and execute a purchase contract with Hartman Ely Investments for the sale of the Fruitdale School property at 10803 W. 44a' Avenue for a purchase price of $10.00 and further to limit closing costs incurred by the Wheat Ridge Housing Authority." If the recommended motion is passed, several related motions will be necessary. These are summarized in a second memo provided with the meeting packet and are related to the land swap with the school district, necessary land use entitlements, and removal of the reverter clause. Letter of Intent to Create the Fruitdale Artisanal Meat Company and Revitalize Temple Buell's Historic Fruitdale School HEI HaNnen Ely Invest n,nls LLC 2120 Bluebell Avenue Boulder CO 80302 720-333-0110 September 15, 2015 Mr. Kenneth Johnstone City of Wheat Ridge Wheat Ridge Housing Authority 7500 West 29' Avenue Wheat Ridge, CO 80033 Re: Fruitdale School Redevelopment, 10803 West 40 Avenue, Wheat Ridge Status/Budget Update and Property Purchase Letter of Intent (LOH Dear Ken, I am writing to follow up our recent discussions regarding a status and budget update for the Fmildale School Redevelopment, to summarize our request for the City's financial assistance to make this redevelopment a reality and provide this property purchase LOI that updates our original Mash 19, 2015 LOI. Since our meetings on July 30th, we have worked intensively with the rest of our team to refine our design and budget. A summary of important issues and our additional investigations is: 1. We have updated the enclosed Schematic Design (SD) drawings for the Fmitdale Artisanal Meat Company's (FAM's) tenant improvements in the 1950s part of the existing building. Our team has also produced a detailed construction cost estimate (by our contractor, Growling Bear Construction and engineering team, BCER Engineering), as well as the enclosed, updated redevelopment budget/pro forma for FAM. 1.1 The good news is we think that the FAM budget and pro forma will work. 1.2 The additional good news is that our preferred financing, a loan from the Small Business Administration (SBA), requires that we also renovate the original 1920s; Temple Buell Building (TBB) with a use(s) that supports FAM. As a result, we have created the enclosed exciting re -use plan for the TBB and the south side of the site. That plan provides housing for FAM staff and apprentices, a FAM retail store, several nicely -designed, up to twelve long -tern affordable housing units and community event/meeting space (to maintain the School's historical role as a community gathering place). Also, rather than the existing SW comer house being left as-is/vacant and the south side of the site having no significant improvements, that entire area of the property will be re -vitalized with our initial phase of redevelopment. The rear portion of the overall site would still be reserved for an Altius Farms greenhouse in a future phase. Fruitdale School, Update Letter and Property Purchase L01 Page 1 13 The TB13 renovation achieves what many people in the Wheat Ridge community have been looking for since this building was saved from demolition several years ago -a creative, economically viable re -use of this important historic property. 1.4 The challenging news is that there is a substantial funding gap of approximately $640,000 to implement the above -noted redevelopment plan, even with the desirable SBA financing and a property tax abatement. That gap results primarily from the small economies of scale that every redevelopment concept for this property has struggled with over the years. It also results from FAM having more intensive water, power and gas requirements than our original March 19, 2015 greenhouse proposal; the estimated raw cost of utility service fees is much higher than initially assumed in our original proposal (approximately $395,000 instead of $89,000). We would like to confirm a variety of potential reasons and ways for the City to fund this $640,000. Those include: • Blighted property redevelopment subsidy(s) • Affordable housing unit subsidy • Community event space subsidy • Job creation subsidy • Subsidy for Jeffco shared parking • Business Development Zone (BDZ) sales tax give -back or ESTI' • Split of potential form grant and/or historic tax credit net revenue. We look forward to working out the best mutually agreeable plan with you and other City representatives. 1.5 As a related issue, please note that all of the above -noted financial assistance that we are requesting from the City is a much more positive scenario than was estimated in the City's Valuation Consulting Assessment, provided in December 2013 by the Butler Burgher Group. That Assessment estimated a negative value of the property between ($1,430,000) and ($1,750,000). In addition, that Assessment assumed that the educational deed restriction would be removed. 1.6 Please note that ultimately making this redevelopment work will require a more detailed analysis of several key assumptions over the next several months, including some creative financing and more detailed cash Flow modeling with our construction lender and our tax consultants. 1.7 However, if the City commits to the assistance requested in this letter, we will be able to move forward with this valuable redevelopment for the Wheat Ridge and Jeffco community. 2. We also still plan to investigate other funding sources to help with the financing gap and provide additional revenue/tax credits (State Historical Fund, State or National Historic Tax Credits, Temple Buell Foundation, etc). However, a decision on potential funding from those other sources will likely take much longer than our current plan for Phase One implementation. So, we propose to proceed with the initial phase of redevelopment with only the City assistance noted above, so that we are not substantially delayed and do not lose FAM as an essential part of this redevelopment opportunity to another site. If any of Fruitdale School, Update Letter and Property Purchase LOI Page 2 that additional revenue is received, we propose to split that with the City in a mutually agreeable way as follows: • The City's portion would be the majority of that additional net revenue, in trade for the providing the initial subsidy to allow this redevelopment to move forward. • HEI and its development partners/equity investors would receive some of that net revenue, as an incentive to seek out and receive that additional potential funding. • The City's portion would not be distributable until after the equity investors achieve at least their 15% cash -on -cash return. • The City's portion would be capped at the amount of the initial subsidy and have a mutually agreeable "sunset date" after which the City would no longer have a right for subsidy repayment. As a related issue, we had an initial on-site meeting with Joe Saldibm of the Colorado Historical Society on September 15, 2015 to begin discussing historic tax credit details and he was very positive about our proposed redevelopment plans. 3. The proposed redevelopment will be a total cost of approximately $5,939,000 (equity of approximately $891,000 and a loan of approximately $5,048,000), in addition to the requested $640,000 City subsidy. Also, FAM will initially provide 5-6 local jobs and will have an annual estimated stabilized sales volume of approximately $2,280,000. This redevelopment and operation of an important local foods business will provide significant economic development benefits for Wheat Ridge and the surrounding area. FAM will also provide significant community education benefits through their butchery classes, charouterie school, an apprenticeship program with local schools (primarily Warren Tech) and a proposed scholarship program with Johnson and Wales University. 4. In addition, our redevelopment plan includes several innovative energy solutions, to reduce long-term operational costs. These solutions include a solar power system (as well as a potential battery storage system), all provided at discounted costs by experienced energy companies that we are working with. The building will also have a super -insulated exterior enclosure, daylight/motion-controlled lighting systems, solar tubes for interior space daylighting and high -efficiency mechanical systems and meat equipment. These innovative solutions will be highlighted on our Fmitdale School website and identified to people that visit and work at this property, providing additional community education benefits. 5. As a related issue, please note that HEI is continuing to provide conceptual design and development management services for $0, as well as Tenant SD design services for $0, all as our contribution to try and find a workable redevelopment solution for this very challenging property. In addition, the duration and overall magnitude of these $0 services have been much longer than originally anticipated (we have now been working intensively for over six months and analyzed several potential redevelopment schemes prior to the current scheme, all to try and make this redevelopment a reality). However, since the scope of the redevelopment has increased dramatically since our initial March 19, 2015 proposal (current total cost of approximately $5,939,000 vs initial total cost of approximately $439,000), we have included a modest development management fee in the current total cost for the approximately thirteen additional months of effort that will be required to make this redevelopment a reality after the mutually agreeable Land Purchase and Sale Agreement is executed, Fruitdale School, Update Letter and Property Purchase L01 Page 3 6. We have refined the design of key site utilities with the utility service providers (Valley Water, Fruitdale Sanitation District and Xcel Energy) and our engineering team. There are still many issues to be worked out in more detail for those utility services but the current budget reflects everyone's best estimate at this point. Our research at the Jeffco Archives to find the original drawings for the 1950s Building and important drawings for the adjacent Preschool have helped us refine the most cost effective design for these new utility services. Those refinements have included the conceptual design of Phase One water/sewer services, as well as the conceptual design of mechanical/electrical loads for both Phases One and Two. We have also submitted a formal gas and electric service application to Xcel Energy and have received their initial estimate of gas and electric development fees. 7. We have had positive preliminary meetings with representatives of the Wheat Ridge Planning/Building Departments, Arvada Fire and the USDA. 8. In addition to the $640,000 of gap funding provided by the City or caused to be provided by the City, we would also like to confirm the other areas of City financial assistance from our March 19, 2015 proposal and our recent discussions: 8.1 Some form of property tax abatement, so that there is no on-going property tax cost for this property (that amount was estimated at approximately $32,000/year by the City's Valuation Consulting Assessment noted above). As we have discussed, the general rationale for that abatement is that we are providing community event/education space and affordable housing units, all as a public benefit. We will also be providing shared parking that will provide another public benefit, to the Jefferson County School District's adjacent preschool. The current educational deed restriction/reverter clause would be removed in order not to hinder our applications for grants, financing, etc. 8.2 The City will re -zone the property to an MU -N zone lot and remove the current deed restriction/reverter clause prior to our purchase of the property, at no cost to HEI. 8.3 Funding for an environmental Phase 1 report (and a Phase 2 report if deemed necessary by the results of the Phase I report). This report(s) will be provided prior to our purchase of the property. We understand that the City is still confirming eligibility to use its existing federal grant for this type of work on this project, and that it may become a project cost to be built into the pro forma 8.4 Land swap work with the Jefferson County School District to create one larger parcel of approximately 1.5 acres with one fee simple title for us to purchase for $1 at the land closing. The closing for us to purchase the property is currently scheduled to occur in early May 2016. Construction of the Phase One redevelopment would begin shortly after the closing. Completion of the Phase One redevelopment is currently scheduled to occur in early December 2016. Fruitdale School, Update Letter and Property Purchase LOI Page 4 The $640,000 plus these four items in item 8 would ultimately be part of the mutually agreeable Purchase and Sale Contract for the property. We propose that the Contract be executed by November 1, 2015. However, we ask that the City provide a preliminary written commitment to provide those items by approximately October 1, 2015, before we negotiate the Contract and move into the next phase of implementing the redevelopment with our team. As we have discussed, them will be substantial value created for all parties if we are able to implement this proposed Redevelopment. A summary of important issues is: 1. The redevelopment will revitalize the Fruitdale School property, turning a vacant and blighted important historic landmark into a vibrant local foods, community education and affordable housing facility. The original 1920s Fruitdale School is the fourth building designed by noted Denver architect Temple Buell. We believe that one or perhaps two of his first three buildings have been demolished, making the revitalization of this building even more important. Additionally, the 1950s gym, cafeteria and kitchen addition would be retained, renovated and re -used as tenant area for FAM, to operate a wholesale artisanal butchery and meat distribution facility. FAM would make charcuterie, sausage, deli meats and other custom meat products from locally raised animals and distribute those meat products primarily to local restaurants, This facility will support Wheat Ridge's history and focus on urban agriculture and food production. Our proposed redevelopment will also provide educational benefits to the Jeffco community. FAM will have an apprenticeship program, butchery classes and a chamuterie school. FAM would also work with Johnson and Wales University (JWU) to try and establish a scholarship program for JWU students to work at this facility and learn the artisanal meat business. We will also create the Temple Buell Events Terrace and renovate/restore the TBB into affordable housing (some of the apartments are planned for the people that work at FAM and the Altius Fauns greenhouses). Residential occupancy will provide even more activity and safety on this property. Community education and event space is also planned for the TBB, to host farm -to -table dinners and events that will provide specific learning opportunities for Jeffco's students and members of the surrounding community. In a future phase, we propose to build new greenhouses on the balance of the site that would be operated by Altius Farms and Operation Victory Gardens. 2. A revitalized Fruitdale School will enrich and involve the surrounding Wheat Ridge and Jeffco Community, as well as provide economic development benefits from the sales of meat products, fruit and vegetables produced by this site. The School has been vacant and blighted for many years. Although the Wheat Ridge Housing Authority (WRHA) has acted as a great owner of this vacant property, the community will receive substantial benefits from the Fruitdale School being vibrant and active. Converting this property from a vacant site to a vibrant mixed-use facility would improve the safety of all people that live, work and go to school in this area. Fruitdale School, Update Letter and Property Purchase LOI Page 5 I The adjacent Preschool's play area will remain a ,is. The Jefferson County School District (Jeffco) will benefit from owning the land for this improved part of their Pre -School and avoiding the cost and inconvenience of relocating the play area. 4. The land swap parcel at the northwest comer of the overall site would be used as a key part of our proposed redevelopment, with many benefits to the adjacent Pre - School property and its operations. This rear parcel provides an essential economy -of --scale for the Greenhouse facility to be economically viable. Our overall Fmitdale School Redevelopment proposal will be impossible to implement without this land swap parcel. A 15' wide shared access drive, a fire truck "hammerhead" turnaround area and a new fire hydrant will be provided at the NW site comer when the north side greenhouses are built. These substantial improvements will benefit the Pre -School. We have also provided room for a potential future addition to the existing Pre -School, as requested by Jeffco. The parking area and fruit orchard at the south side of the property will provide a visual amenity for the Pre -School's play area. 5. The Redevelopment will be implemented promptly. Our estimated completion timeline is noted below. We understand that the Jeffco School Board approved the land swap at their September 3, 2015 meeting and that now Jeffco, WRHA and HEI will implement the appropriate legal documents for the land swap. Please note that one pending issue that should be resolved in those documents is the exact location/configuration of the potential future Pre -School addition (our recommended configuration is shown on the attached site plan). Once the land Purchase and Sale Contract is executed between WRHA and HEI and the land swap documents are complete, we will complete the balance of our general due diligence for Phase One of the redevelopment, acquire the Fmitdale School property from WRHA and begin implementing our Redevelopment as soon as possible. 6. We agree with Jeffw's conditions for their approval of the land swap. 6.1 The property will be deed restricted to prohibit the growing and production of marijuana or other controlled substances by HEI and all future owners of the site. HEI will also prohibit loud noises and release of particulates or dust as part of the growing and production process. 6.2 As part of the greenhouse phase, HEI will construct the shared access road at the NW comer of the property as shown. Jeffco, HEI, HEI's tenants/agents/visitors, emergency vehicles and any future owner(s) of the Fmitdale School property will be able to use that access road in perpetuity via a shared access easement. Jeffco will allow construction of the access road and hammerhead turnaround on Jeffco's property (conforming to Jeffco's standards for construction). Fruitdale School, Update Letter and Property Purchase L01 Page 6 6.3 With mutually agreeable prior notice, Jeffco may use the proposed Fruitdale School parking lot for overflow parking events held at the Pre -School during Phase One redevelopment conditions. Parking lot use by the Pre -School after the greenhouse facility is built may be more limited but HEI will work with Jeffco to allow as much long-term Pre -School overflow parking as possible. HEI also requests that Jeffco consider some mutually agreeable use of the Pre -School parking area for overflow parking during Fruitdale School events when the Pre -School parking area is not being used for Jeffco operations. 6.4 In Phase One, HEI will erect and maintain a 6 -foot tall chain link fence between Pre - School property and the newly defined Fmitdale School property, in the general location shown by the attached Phase One site plan. Fencing shall comply with Jeffco standards — fence height and final location to be determined. Please let me know if you have any questions or comments on this update. After working diligently and intensively over the past seven months on a variety of potential redevelopment analyses, we are now very excited and positive about the financial viability of implementing this redevelopment. If the City commits to the financial assistance requested in this letter and Jeffco approves the proposed land swap, we will be able to execute a mutually agreeable Purchase and Sale Contract with WRHA and move forward with the redevelopment. We look forward to working with WRHA, Jeffco, the surrounding community and the rest of our development team to make the revitalization of the Fruitdale School a resounding success for everyone involved. Sincerely, HARTMAN ELY INVESTMENTS LLC mes Hartman Manager Encl: Artists's rendering of the proposed redevelopment dated August 20, 2015 Fruitdale School Schematic Design drawings September 7, 2015 Pro forma, budget and schedule dated September 14, 2015 Fruitdale Artisanal Meat Company summary dated July 2015 Altius Farms and Operation Victory Gardens information Fruitdale School, Update Letter and Property Purchase LOT Page 7 u c v E a c t w c A E r x .- r 7 i t a T �. .. ,.�•; y � ♦l'r -C€ fITI-i � /�FVTTMt 5'+nQEo mfcr=S5_P-otp Ir���R -E PRf3oHcm-ADD Ino; T�RNdTE 44•(a(/T SNoWN 1 1� I I r ^ 1 ! 1 (-4 D 5u*e A1;r-h#L f V` IT eFL,4jARD'Abl 0 P+0VZKwF'A �3 ZPac�6 (f) TFW&5 7 `Z%/ 56NITARY � �I!/�'—T 4(-7kt>.✓�NU� SEWLR LI�Jt XrE gA6A EI.E- L 14 t-RUITDA1-� 6cHfloL a' p Dy _oH✓I NT-s.ITS r'L1+h1 Rlo' s' _r ---so Iw �______r �IaK7*/Gsrs E4v .ARCH-Irik�.rve�. 9.7-157 z fJ�W 1 I SIRE I I 1 � *dVaNT 1 'n9et 1 1 G 6w1 -C€ fITI-i � /�FVTTMt 5'+nQEo mfcr=S5_P-otp Ir���R -E PRf3oHcm-ADD Ino; T�RNdTE 44•(a(/T SNoWN 1 1� I I r ^ 1 ! 1 (-4 D 5u*e A1;r-h#L f V` IT eFL,4jARD'Abl 0 P+0VZKwF'A �3 ZPac�6 (f) TFW&5 7 `Z%/ 56NITARY � �I!/�'—T 4(-7kt>.✓�NU� SEWLR LI�Jt XrE gA6A EI.E- L 14 t-RUITDA1-� 6cHfloL a' p Dy _oH✓I NT-s.ITS r'L1+h1 Rlo' s' _r ---so Iw �______r �IaK7*/Gsrs E4v .ARCH-Irik�.rve�. 9.7-157 z v _ r WAI.I' I. up LAIR -/55 WALK ��s-T-�t-L'G, r4 A.e� f ' DRIIK l 1 wl ND A) Fx15TiNG Inas � 1 '?•X 3�GONG o - 1 UTILITY (L � + 'R1NN�L G P•eWL CcR,dv/L I � >LI i� 6 pL6 Suter! , �sr-n6 - 4hVZD.�hI L��L P W ni 1 N 6A- %iGl�l'-a"p 5r—z Ir �, F�rM0.µ �I.Y .+'�+1-r�im�� R•7. 15 Tr H 1 FAV 1r ys `a Wil/ ,v' M to 1-6 ,. 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We will sell our meats wholesale to restaurants (including our own), distributors, as well as direct to consumers. What We Will Produce: 1) Fresh Sausage 2) Deli Meats (Ham, Pastrami, Corned Beef, Roast Beef) 3) Dry-Cured/Aged Salami and other Charcuterie 4) Custom Grind Hamburger (meat and patties) 5) Custom cuts of steaks and pork chops, etc. Education Component 1) Butchery classes 2) Charcuterie school 3) Farm to Table dinners Our Current Restaurants/Businesses, 1) Old Major 2) Masterpiece Deli (two locations: LoHi, Uptown) 3) Masterpiece Kitchen (opening in Lowry late 2015) 4) Honor Society (opening in August 2015) 5) Denver Bacon Company 6) Monthly production for these ventures: 8000 LBs Distribution Business: 1) Sales of our own line of meats direct to customers 2) Sales of other high-end meats (e.g., Compart pork future producers of DBC Bacon) 3) Sales to wholesale distributors (Sysco, Loco Foods, etc.) Sales Channels: 1) Retail Brand (for stores) 2) Restaurants (custom grinds, our products) 3) CSA for Meat 4) On Site Retail Store Other Documents: 1) DBC launch press release 2) Old Major Bio for Justin 3) Masterpiece Kitchen press release 4) Masterpiece Deli Uptown press release 5) Bios for Justin and Eric ALTIUS FARMS, Inc. "• SEMPER VERT .• Fresh, clean and dependable greens and herbs, locally -grown, year round. Scaling local, nationally, with patented aeroponics. Employing our nation's Veterans and educating communities. Local Food Matters The return to a locally -sourced food economy is here to stay and it is growing (USDA). Locally -grown food is a mainstream trend altering the competitive landscape and opening doors to local farms that can reliably produce high-quality fruits and vegetables for restaurants, consumers and grocery stores. Most states are net importers of their food — Colorado imports 970/6 of its leafy greens -- and when long -traveled greens arrive, the nutritional value and freshness has been significantly degraded. Driven by consumer preferences, restaurants and grocers lament the lack of access to local produce. Industrial agriculture comes with inherent challenges and negative trade-offs such as land -water -soil degradation, chemical inputs, transportation costs and carbon footprint. The cultural food 1 evolution is natural, non-GMO, fresh, clean, and local, local, local. Our mission is sustaining and scaling locally grown food through an approach that is socially responsible, technologically advanced, and economically profitable. The Need There are social and environmental challenges — local, national, and global -- regarding local food. Restaurant and consumer demand far exceeds the supply of fresh, locally -grown food, produced and available rear -round. Urban agriculture has been ineffective in scaling locally -gown food to a meaningful level. Consumers are increasingly interested in food produced in their local communities, motivated by a variety of issues including support for local farmers, concern about "food miles", and improved freshness and quality. Colorado's potential consumption of produce exceeds S2.61I annually. There is a food -trade deficit and the economic benefit of creating enduring local food economies is not being realized. To put Colorado's supply-side deficit in perspective, if 25% of Colorado's annual food consumption were purchased in-state, it would create: more than 31,000 newjobs, an increase of $1.3B per year in wages and S2.2B/year in Colorado's GDP, and generate $198M per year in tax revenues (Transition Colorado's Local Food Shift report). By 2030, the global middle class is expected to grow by two-thirds, necessitating by 2050, a 50% higher yield from existing produce growers. Both conventional outdoor farming and traditional greenhouse farming rely upon an increasingly unpredictable environment and unlimited "horizontal" growing space. There is an aging rural farming population and farms are not often handed down within a family. Status -quo agricultural productivity will decline significantly in densely -populated areas. Thus, there is pressing demand for new, innovative solutions to address the needs of people, the planet and local profits (Svnnenta's report). Our Solution Altius Farms elevates people, planet and profit, with its triple bottom line business model. Altius Farms brings together a team of talented and committed partners along with patented green -growing and greenhouse farming technologies with sites located in urban communities hungry for fresh produce. Altius Farms delivers a healthy and meaningful ROI. Altius will deploy as follows: Greenhouse Features. Altius uses state-of-the-art, radiant -floor, energy efficient, roof -ventilated greenhouses with patented aeroponic vertical growing a technologies called Tower Gardens r- by Future Growing, LLC, the world leader in aeroponic food farms. (Aeroponics is the process of growing plants in an air or mist environment. Unlike hydroponics, which uses water/minerals a as growing medium to grow plants, aeroponics is conducted without a growing medium). The Tower Garden technoloov use, 90% less wars, 90% / space. and Produces /0 times the Yield ofcomenlional farmin farm'There are 300 a Tower Garden Farms nationally. The efficiencies of this technology, coupled with the optimal growing environment, non-GMO, pesticide -free environment provide substantial community benefits. a National Training Center. Altius Farms has partnered with a not-for-profit 8.1' organization, Operation Victory Gardens (OpVG). OpVG will train America's military veterans in sustainable and scalable local food production. In 2 2.5' partnership with Altius Farms, OpVG will also host agrotourism and community education classes. The Altius greenhouse design maximizes the number of Tower Gardens for the space, will allow Altius to grow seedlings with which to populate the Tower Gardens after each harvest cycle, and produce seedlings to sell to Tower Garden's residential customers. Production "vital statistics" are: • Hundreds of Tower Gardens with thousands of plants growing concurrently • Approximately 15 to 18 growing cycles per year • Crops: Arugula, kale, mixed salad greens, basil, parsley, cilantro • Approximately 18,000 sq It of growing space will produce as much as —5 acres of conventional farmland • Natural gas and radiant Floor heat, no supplemental lighting for exterior greenhouses—hamessing the Colorado sunshine (solar powered lighting for interior grow areas) • Produce that has higher quality of phytonutrients and minerals, and that is higher yield than growing in and in perfect conditions (Tower Garden Yield Study, hno://www h'ndaw' colli Is/ aW2014/257x75/I Altius Farms' triple bottom line will supply healthy local food for consumers and restaurants, employment for veterans, students and others and provide sustainable agriculture for the 21" century. In the process we will create a model for profitable expansion of our business. The Opportunity The prime customer for Altius Farms' greens will be the restaurant community who will purchase up to 95% of production. Altius will make local, fresh, high-quality greens and herbs easily accessible to community restaurants without seasonal Fluctuations. Altius is working with key restaurants to understand their menu planning and will plant crops to meet the needs of their menus. All of Altius' target restaurant customers have local produce sourcing initiatives due to the variability in quality, waste, and carbon footprint of importing from other states. Consumer CSA sales are another potential market. Tower Garden -style farms of all sins across the nation are pre -selling to capacity, months before they open their doors for business. The Wheat Ridge market is ripe for the approach Altius Farms is planning to deploy. Operation Victory Gardens (OpVG) Operation Victory Gardens (OpVG) is a not-for-profit organization whose mission is train a new generation of farmers through sustainable and scalable local food production. OpVG is committed to helping veterans prepare to embark upon farming careers. A key tenet of OpVG services is recognition of the therapeutic role that agricultural work can play in helping veterans relieve the stress that often follows their release from duty. To support veterans seeking new opportunities in farming and in Controlled Environment Agriculture (CEA), OpVG has formed a working relationship with Altius Farms that will extend to Altius Fauns greenhouses and others around the U.S. OpVG will offer community education in the form of toms, hands-on education and formal training courses to students, families and potential employees. OpVG will be equipped to recruit and train a workforce of CEA technicians to grow, harvest, and distribute CEA produce. The two organizations will work together to produce and sell high volumes of fresh, greenhouse grown produce in Colorado communities. Execution The Altius Farm team has experience deep and broad experience in supply chain management, health and wellness, horticulture, start-ups, sales and marketing, risk management, community development, and business modeling. Collectively, we aim to transform the way local produce is grown and distributed. Sally A, Herbert (Co-founder and CEO) Most recently, Sally was President and CEO within GSI, the largest supply chain standards organization in the world, managing 3 subsidiaries with P&L responsibility for $19 M. Sally has a demonstrated track record of leadership, balancing technology development, customer service and marketing within U.S. and international markets in both early-stage and Fortune 100 companies. Sally served in the U.S. Air Force Reserve for over 12 years to include service during Desert Shield and Desert Storm Gulf War operations. She serves on the Boards of Executive Connect/Connect Denver Foundation, Operation Victory Gardens, and is a member of the Denver Southeast Rotary Club. www.linkedin.com/in/saherben. Jeff Olson (Co-founder and VP Business Development) co-founded Well Nourished Worldwide in 2000. Their mission is to deliver a new standard in health food and its business—his passion for the past 20 years. Jeff chairs the Jimmie Heap Center Endowment and serves on the philanthropic boards of the Tum the Tide Foundation and Operation Victory Gardens. Jeff was the co-founder of the Metro Denver Health and Wellness Commission (precursor to LiveWell Colorado). Prior to WNW, Jeff had careers in technology, money management and professional athletics. Jeff is a two-time Olympian, three time national champion and Pan American gold medalist. Jeff earned B.S. in finance from the University of Utah, www.linkedin.conilin/ieffolvolson. Tim Blank (Consultant/Collaborator) is the founder and CEO of Future Growing, LLC, the Tower Garden creator and 20 -year horticulturalist. Tim served as lead horticultumlist at Disneys EPCOT center for 12 years prior to forming Future Growing. wwwl'nkedin / uh/C -bl k, I 2/17a,68a. Don Dwyer (Comsltant/Lead Horticulturalist/Tramer) 35 -year horticultumlist specializing in global commercial and institutional (teaching, research, biotech, and conservatory) greenhouse facility design, development, and management. Don has recently returned to the US after working for the US govt. in Afghanistan on agricultural restoration projects over the past 5 years. w%vw.linkedinmmlouh/dur-dw�er_Mh7 'Ao"%hg� WRHA 750129 th Ave. Wheat Ridge, 00 303-335-2896 To: Chair and Members of the Wheat Ridge Housing Authority From: Lauren Mikulak, Senior PlarmedWRHA Staff Liaison Ken Johnstone, Community Development Directm/WRHA Executive Director Subject: Troutdale School — Lost Steps Date: October 22, 2014 (for October 28 WRHA meeting) In preparing Truitdale School for redevelopment, the Authority needs to consider several additional motions. These relate to execution of the land swap, necessary land use entitlements, and removal of the reverter clause Staff recommends that the Authority approve motions 1, 2 and 3 regardless of whether or not HEI is the ultimate developer of the property. These actions will be required to redevelop the property in almost any capacity. If the Authority moves to negotiate a purchase contract with Hartman Ely Investments (HEI) for the sale of Fmitdale School, motion 4 is recommended as well. Motion 1 —Land Swap Currently, a portion ofthe Noma Anderson playground is located on property owned by the Housing Authority. A revocable exclusive license agreement has allowed Jeffco Public Schools to continue using the playground. A land swap between the Housing Authority and school district would return the playground to Jeffco Schools and would provide the Truitdale property with additional land area to the north. Figure 1 shows the conceptual limits of the land swap areas. Staff, HEI and the school district have met several times since April, and on September 3 the Jefferson County Board of Education authorized their staff to negotiate the land swap. The school district staff have requested the following conditions on the land swap: 1. Prohibit the growing and production of marijuana or other controlled substances by the current developer and all future owners of the site 2. Prohibit loud noises and release of particulates or dust as part of any agricultural growing and production process. 3. Provide a shared access road and hammerhead turnaround at the northwest corner of property extending from W. 44a' Place. 4. Allow use of the Fruitdale School parking lot for overflow parking for events held at Norma Anderson Preschool. 5. Erect and maintain a fence between Fruitdale School and the Jeffco School property, at the sole expense of the Fruitdale property owner. Fence height, design, and final location to be determined in cooperation with Jeffco Public Schools. While the land swap areas differ in size, the school district will be receiving an improved and completed playground. For this reason, Jeffco Schools will not be requesting any financial compensation, however the Authority will be responsible for preparing the required legal descriptions, exhibits, and deeds. Staff recommends the following motion to proceed with the land swap negotiations: "I move to authorize staff to negotiate and execute a land swap with Jefferson County Public Schools conveying the playground portion of the property to the school district and accepting additional vacant land to the north." Figure 1—The solid blue lines in the image above indicate the current land areas owned by Ieffm Public Schools and W RHA, respectively. The dashed lines indicate the approximate boundaries of the land swap parcels. Motion 2 — Land Use Entitlements In July 2015, HEI had a pre -application meeting with the City's Community Development and Public Works Departments. This meeting is a required first step prior to any redevelopment of property for commercial and multi -family use. Based on HEI's reuse proposal at least two land use applications will be required: a zone change and a consolidation plat. The Fruitdale property currently includes several zoning designations, including Agricultural - One (A-1), Residential -Three (R3), and Commercial -One (C-1). This patchwork zoning was inherited from Jefferson County when Wheat Ridge incorporated in 1969. Schools are permitted in all zone districts, so there was never a need to modify or consolidate the zoning. Figure 2a—The image above isan excerpt from the City's zoning map which shows that the FruRdale School property includes three d ifferent zoning designations. The Authority has been aware of the unusual zoning, and it was disclosed in the 2014 Request for Interest (RFI). Until now, it would have been premature for the Authority to speculatively rezone the property. Some uses (such as a school) would not have required a zone change, and other uses would have required a specific zoning designation or planned development. Staff is recommending that the Housing Authority apply to rezone the property to Mixed Use - Neighborhood (MU -N). This zone district is generally located along neighborhood main streets, such as 44' Avenue, is established to allow for residential uses as well as a limited range of commercial and retail uses. The MU -N zoning is flexible enough to accommodate HEI's proposal and would also be appropriate for most future development if for some reason HEI does not move forward. In addition to a zone change, the property will need to be consolidated through a platting process. The Fruitdale School site has never been platted, and it appears to be comprised of several parcels. A licensed surveyor will need to prepare a consolidation plat in order to disconnect the playground parcel for the Jeffco Schools land swap and to eliminate the existing internal property lines. Staff is currently obtaining cost estimates for this survey work. Figure 2b—The image above shows the proposed configuration oft he consolidation plat which would create a single lot for the Fruitdale School property and would create Tract A to be conveyed to leffco Public SchooIsfor the purpose oft he land swap transaction. Staff recommends the following motion to proceed with necessary land use entitlements: "I move to authorize staff to submit and process all necessary land use applications on behalf of the Wheat Ridge Housing Authority, and further to engage necessary professional services at a cost not to exceed 11 Motion 3 — Deed Restriction/Reverter Clause When the Fruitdale property was conveyed in 1883 to the Jefferson County School District, the deed included a reverter clause with the following language: "...the said land hereby conveyed being for school purposes and if at any time the same shall cease to be used for said purposes the land hereby conveyed shall revert to the Grantors, as in their first and former estate." As with the zoning, the Authority has been aware of the reverter clause, and it was disclosed in the 2014 Request for Interest (RFI). Although the HEI proposal includes a community space, apprenticeship program, and opportunities for partnership with local schools, it is unclear whether or not these fulfill the intent of the deed restriction. Furthermore, it is likely that the deed restriction will be a red flag for any lender. It is now the appropriate time for the Authority to address the reverter clause, and the City Attorney has recommended that the WRHA proceed with quiet title action instead of condemnation. Quiet title action clears the title on the property and can be completed within 3 to 4 months. Staff recommends the following motion to proceed with quiet title action: "I move to authorize staff to initiate quiet title action in order to remove the reverter clause and clear title for the Fruitdale School property." Motion/Consideration 4 — Subsidy The proposed redevelopment of Fruitdale School is currently estimated as a $6 million project, and it includes a funding gap of about $640,000. HEI needs commitments to fill this gap within two months in order to obtain both SBA and traditional loans. If gap financing is not identified by November, it is unlikely that HEI will be able to move forward with the project. Staff and HEI are actively exploring a variety of gap financing options including grants, loans and subsidies. This includes possible funding from HUD (HOME or CDBG grants), State Historic Fund grants, state and federal historic preservation tax credits, and possibly a waiver of use tax and building permit fees. Each of these sources of gap financing depends on a competitive proposal and demonstration of partnership and leveraging. Because of funding cycles, several of these options will not be available until next year, and HEI's lenders will require more certain commitments in the short term that cover the full amount of the gap with a high degree of certainty. If the Housing Authority decides to proceed with a purchase agreement, HEI and staff will be presenting the project to City Council at a study session on October 5. As part of this presentation, there will be a request for the City to commit to a subsidy by November. It is unlikely that Council will be willing to front the entire gap amount of $640,000. The Housing Authority board members will need to consider if they are willing to fill a portion of this gap in order to make the redevelopment feasible. With a nominal sale price on the property and some additional subsidy, the Housing Authority would be filling approximately one-third of the gap. It may be possible to structure a deal in which the City and/or Housing Authority recover a portion of their investment. If additional grants or tax credits are awarded the developer may be able to reimburse to initial investment from the City and WRHA. This would not be guaranteed, but is certainly a viable consideration. As is customary when the City is asked to participate in a public private partnership, staff has engaged a third party to review HEI's pro forma and to confirm the assumptions and funding gap. Economic & Planning Systems (EPS) will be providing this review, and if public funds are committed they will also be able to advise the City and Authority as to an appropriate deal structure. It is appropriate for the City and Housing Authority to share this cost. The City Manager's office has authorized an amount of $5,000 to pay for the first phase of this analysis in an effort to facilitate the redevelopment project. Staff recommends the following motion to proceed in a cost share with the City for the services provided by EPS: "I move to approve payment in an amount not exceed $5,000 for the services provided by Economic & Planning Systems." If the Authority is willing to commit funds for the Fruitdale redevelopment at this time, staff recommends the following motion. Alternatively, this commitment may be considered at the October 27 meeting. This would be one day after City Council may be asked to make a commitment at their October 26 meeting. "I move to commit funds in an amount not to exceed for the redevelopment of Fruitdale School."