TO: Urban Renewal Agency Board
THROUGH: Krishna Namburi, Interim Executive Director
FROM: Kristin Retherford, Director, Community Planning and Development
SUBJECT:
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Riverfront-Downtown Urban Renewal Capital Improvement Grant Program Exception for Willow Mixed Use SPE, LLC.
Ward(s): 1
Councilor(s): Tigan
Neighborhood(s): CANDO
Result Area(s): Strong and Diverse Economy; Welcoming and Livable Community.
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SUMMARY:
summary
Urban Renewal Agency Board action is needed to approve a grant in the amount of $749,000 as an exception to the maximum grant amount of $300,000. The Director, under the Riverfront-Downtown Urban Renewal Area Capital Improvement Grant Program Guidelines, can approve grant requests up to $300,000. Grant funds will be used to partially fund the costs to construct a new mixed-use multi-family building on Willow Street NE.
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ISSUE:
Shall the Urban Renewal Agency approve an exception to the maximum grant amount from the Riverfront-Downtown Urban Renewal Capital Improvement Grant Program (RDURA Grant Program) for a total grant award of $749,000 for a new mixed-use multi-family building on Willow Street NE?
RECOMMENDATION:
recommendation
Approve an exception to the maximum grant amount from the RDURA Grant Program for a total grant award of $749,000 for a new mixed-use multi-family building on Willow Street NE.
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FACTS AND FINDINGS:
Willow Mixed Use SPE, LLC submitted a letter detailing the development plans, team qualifications, and request for an exception to the RDURA Grant Program maximum grant amount (Attachment 1). Located off of High Street NE and Willow Street NE (Attachment 2), the proposed project is to construct a new 41,000 square foot four story multi-family building with commercial retail space on the ground floor.
The total project costs are estimated to be over $12 million. The grant funds are requested because of increased construction costs and market volatility due to recent tariffs. The development team also notes the added costs of working through existing property blight conditions associated with former utility abandonment and demolition requiring asbestos surveying and abatement. The site has been undeveloped for several years.
Landon Hattan is the authorized agent of Willow Mixed Use SPE, LLC. The development team consists of LIFT Architecture from Salem, Seven Oaks Engineering from Silverton, Laurus Designs landscape architecture from Silverton, Creswell HLDGS land use consultants from Salem, and Skyline Builders from Salem. They are interested in investing in Salem to support job creation, economic vibrancy and overall success of downtown Salem.
The RDURA Plan, Section 1105, Core Area Redevelopment, identifies grants as an eligible project for funding.
The Willow Mixed Use project meets the Capital Improvement Grant Exception Criteria for projects requesting more than $300,000, which is the maximum grant allowed under the Director’s approval within the program guidelines. If approved, the FY 2026 RDURA Grant Program budget of $6 million will be reduced $749,000.
BACKGROUND:
The development site located off High Street NE and Willow Street NE has been vacant for over five years. The residents and employees that fill the proposed building will help support other downtown businesses and the range of apartment configurations will provide added housing options for the community.
On May 8, 2017, the Agency Board approved the “Exception Criteria” (Attachment 3) to determine the eligibility for grant requests greater than $300,000. The Willow Mixed Use project meets the following Capital Improvement Grant Program Exception Criteria.
Mandatory Requirements
1) Project must meet a minimum of two Capital Improvement Grant Program Objectives.
The Willow Mixed Use satisfies this requirement through their project meeting the following two RDURA Grant Program objectives:
• New construction
• Mixed-use, including housing
2) 4:1 Leverage of Private Public Funds
The project satisfies the 4:1 Leverage of Private/Public Funds based on the following analysis:
Estimated Total Project Costs: $12M
RDURA Funding Request: $749,000
Leverage: 16:1
3) Must meet one of the “Other Criteria”
• Blight; 1) raw land that has been vacant for more than five years
Willow Mixed Use will be required to provide funding commitments from lenders or investors to cover the costs not covered by the grant as a condition of grant disbursement. With approval of this grant exception, this project will add housing and commercial retail options for the community and eliminate blight. All grants are conditioned upon a qualified contractor and meeting all City of Salem zoning and building code requirements.
Tory Banford
Project Manager
Attachments:
1. Willow Mixed Use Request for Exception
2. Willow St NE Map
3. RDURA Grant Program Exception Criteria