TO: Urban Renewal Agency Board
THROUGH: Keith Stahley, Executive Director
FROM: Kristin Retherford, Community Planning and Development Director
SUBJECT:
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Riverfront-Downtown Urban Renewal Capital Improvement Grant Program Exception for 285 Liberty LLC.
Ward(s): 1
Councilor(s): Stapleton
Neighborhood(s): CANDO
Result Area(s): Strong and Diverse Economy.
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SUMMARY:
summary
Agency Board action is needed to approve a grant in the amount of $600,000 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 rehabilitate the exterior façade of the building and reconfigure and repurpose the interior tenant space. The building is currently known as Liberty Plaza located at 285 Liberty Street NE, but is scheduled to be rebranded as The Forge.
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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 for a total grant award of $600,000 for rehabilitation of the interior and exterior of a mostly vacant building located at 285 Liberty Street NE?
RECOMMENDATION:
recommendation
Approve an exception to the maximum grant amount from the Riverfront-Downtown Urban Renewal Area Capital Improvement Grant Program for a total grant award of $600,000 for rehabilitation of the interior and exterior of a primarily vacant building located at 285 Liberty Street NE.
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FACTS AND FINDINGS:
285 Liberty LLC submitted a letter on March 5, 2024 (Attachment 1), requesting an exception to the Riverfront-Downtown Capital Improvement Grant Program maximum grant amount. The proposed project is an entire reconfiguration of a 73,500 square foot, three-story building into multiple tenant spaces. Renovations will include upgrading the basement to event/meeting space and partitioning space into twenty-seven (27) beauty style suites on the second floor along with space for a bar/cafeteria. Work on the third floor will demolish existing walls to create commercial office for a CPA/Wealth Consulting firm. Exterior building upgrades include the removal of the existing tile, replacing it with a masonry siding and new cornice. Roll-up doors in the main entrance area will open up first floor space to attract food and beverage tenants.
The total project costs are estimated to be $4.8M. The grant funds are requested because of increased construction costs, significant tenant improvements, and to address the poor condition of the property due to long-term deferred building maintenance and vacancy.
Chris and Sean Blackburn are primary members of 285 Liberty LLC, who have developed and own multiple properties in Salem. They are local residents who are interested in investing in Salem to support job creation, economic vibrancy and overall success of downtown Salem.
The Riverfront-Downtown Urban Renewal Plan, Section 1105, Core Area Redevelopment, identifies grants as an eligible project for funding.
285 Liberty LLC 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 2024 Capital Improvement Grant Program Budget of $5.9M will be reduced $600,000.
BACKGROUND:
The building located at 285 Liberty Street NE has been entirely vacant, with the exception of one small business on the second floor, for more than seven years. It is located at one of four key corner sites at Liberty and Chemeketa Streets. With the closure of JC Penney and the vacant, fenced lot across the street at 280 Liberty Street, the properties at this corner and north of Chemeketa have experienced challenges in attracting and retaining tenants due to the significant amount of vacancy which has contributed to increased property crimes and sidewalk camping.
Multiple Letters of Interests for a variety of uses are in negotiation for the building, that will contribute to the food/beverage, retail and office options in downtown. The employees of these businesses will help support other downtown businesses and provide additional shopping and dining options for residents.
On May 8, 2017, the Agency Board approved the “Exception Criteria” (Attachment 2) to determine the eligibility for grant requests greater than $300,000. 285 Liberty LLC’s 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.
285 Liberty LLC satisfies this requirement through their project meeting the following two Capital Improvement Grant Program Objectives:
• Recruitment/Expansion of a Business
• Upper Floor Renovations
2) 4:1 Leverage of Private Public Funds
285 Liberty LLC satisfies the 4:1 Leverage of Private/Public Funds based on the following analysis:
Estimated Total Project Costs: $4.8M
City Funding Request: $600,000
Leverage: 8:1
3) Project must meet one of the “Other Criteria”
• Adaptive Reuse of existing building where grant eligible project costs are in excess of $3M
285 Liberty LLC 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 re-energize a highly visible and underutilized building on a highly visible corner in downtown Salem. All grants are conditioned upon a qualified contractor and meeting all City of Salem’s building requirements.
Sheri Wahrgren
Assistant Director, UD Division of Community Planning and Development Department
Attachments:
1. Attachment 1, 285 Liberty LLC grant exception letter
2. Attachment 2, Capital Improvement Grant Program Exception Guidelines