Title
Resolution authorizing an Urban Development Investment Forgivable Loan, not to exceed $150,000.00 in total, to AZ Development, LLC for the redevelopment of properties at 120 W Lewis St and 215 W Lewis St
Body
Department: Executive
Council District: 1 and 2
Public Hearing: 11/17/15
Advertising Date/By:
Contact 1 and Phone: Jim Westmoreland, City Manager - 373-2002
Contact 2 and Phone: Kathi Dubel, Manager - EDBS - 373-4579
PURPOSE: The City of Greensboro has been requested to consider a Downtown Urban Development project forgivable loan not to exceed $150,000.00 to AZ Development, LLC for the redevelopment of properties at 120 W. Lewis St and 215 W. Lewis St. This forgivable loan will be used for the purposes of assisting in the demolition, renovation, and upfit of the building at 120 W. Lewis St and for site improvements at 215 W. Lewis St. This assistance will enable both a long-term blighted property and a property with a pattern of problematic use to be renovated and upgraded to productive service that is complimentary to projects already completed and underway in the Lewis Street Corridor, thereby furthering the revitalization of Greensboro and the commercial prospects of the Central Business District.
BACKGROUND:
The planned revitalization of the buildings at 215 W Lewis St and 120 W Lewis St are critical parts of a catalytic vision for the Lewis Street Corridor undertaken by AZ Development that includes four (4) contiguous properties and one additional building in close proximity, all with proposed complimentary uses. AZ Development, LLC intends to invest $700,000.00 of private capital for the purchase and up-fit of 215 W Lewis St and $1,400,000.00 of private capital for the purchase and upfit of 120 W Lewis St for a total minimum new investment pledged along the Lewis St corridor of $2,100,000.00 spread across these two properties, inclusive of the City’s $150,000.00 loan. At least 3 new full-time equivalent jobs will be created by AZ Development, LLC.
This investment is contingent upon receiving public participation from the City of Greensboro in the amount of a $150,000.00 forgivable loan to assist with the redevelopment of the two properties at 120 W. Lewis St and 215 W. Lewis St. The forgivable loan will be funded in FY15/16 and will be repaid with the incremental tax revenues associated with the increase in the tax assessed value over a period of approximately seventeen (17) years. AZ Development, LLC will have to confirm sustained creation of 3 new jobs over the full repayment term. AZ Development, LLC will be liable for repaying the outstanding balance of the loan if the terms and conditions of the loan are not fulfilled.
The goal for the cohesive revitalization plan of all five (5) properties to be acquired by AZ Development within the Lewis St vicinity is to bring a suitable life back to the historic buildings that will complement the community, increase the tax base, and enhance the overall South End neighborhood. $3,300,000.00 of investments have already been made in the repurposing of derelict buildings at 117 & 109 W Lewis over the preceding two years and ongoing restoration of 532 S Elm St, a building located at the corner of S Elm St and W Lewis St, will ultimately account for an additional investment of over $1,500,000.00 within Central Business District and Lewis Street Corridor. Completed AZ Development projects are now home to HQ Greensboro, an entrepreneurial incubator that currently houses start-up companies, small headquarters for regional firms and student from local universities, the Forge Makerspace where local entrepreneurs can put their unique skills to use and make ideas come to fruition, and Gibbs Hundred, a homegrown brewery and popular downtown destination.
The revitalized 10,000 square foot building at 215 W Lewis St will serve as the new location for the relocation and expansion of the Forge Makerspace and will also become the home of UNCG Studio 19. $35,000.00 of the forgivable loan funds will be used for streetscaping and landscaping improvements at this property, which is situated at the critical intersection of Gate City Blvd and Eugene St, to create an attractive gateway entry point into downtown.
The revitalized 13,000 square foot building at 120 W Lewis St will be upfit for mixed-use commercial/office users that could include some combination of a public market, restaurants, music venues, and workspaces. $115,000.00 of the forgivable loan funds will be used for interior demo and renovation as well as a new exterior and patio addition to the building.
This project meets the criteria of the Urban Development Investment Guidelines for Downtown projects. An independent financial analysis prepared by an independent economic development professional or economist was not submitted for this project due to the fact that revenue streams related to tenancy at 120 W Lewis St are still not finalized. The risk that this project is ultimately not a success is mitigated by the developer’s high amount of equity in the project and strong track record of redevelopment within the downtown area, as well as security to be provided to repay the loan, if necessary.
BUDGET IMPACT:
A forgivable loan of $150,000.00 will be funded in FY 15/16 from the Economic Development Fund- account 208.0205.15-5931.
RECOMMENDATION / ACTION REQUESTED:
In accordance with the City’s Urban Development Investment Guidelines and GS § 160A-458.3 and other urban development authority, it is recommended that City Council approve the request for a $150,000 forgivable loan. The conditions of the public participation will be contained in a performance agreement between the City of Greensboro and AZ Development, LLC.