Loading...
Transmittal - 11/2/2022ERIN MENDENHALL DEPARTMENT of COMMUNITY Mayor and NEIGHBORHOODS Blake Thomas Director SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 404 WWW.SLC.GOV P.O. BOX 145486, SALT LAKE CITY, UTAH 84114-5486 TEL 801.535.6230 FAX 801.535.6005 CITY COUNCIL TRANSMITTAL ________________________ Date Received: _________________ Lisa Shaffer, Chief Administrative Office Date sent to Council: _________________ ______________________________________________________________________________ TO: Salt Lake City Council DATE: November 2, 2022 Dan Dugan, Chair FROM: Blake Thomas, Director, Department of Community and Neighborhoods (CAN) __________________________ SUBJECT: Update on the status and disposition strategy for 8.75-acres of city-owned property located between 300 and 400 West and between 800 and 900 South, also known as the Fleet Block. STAFF CONTACT: Blake Thomas, Director, Community and Neighborhoods 385-270-4638, blake.thomas@slcgov.com Tammy Hunsaker, Deputy Director, Community and Neighborhoods 801-535-7244, tammy.hunsaker@slcgov.com DOCUMENT TYPE: Informational Item RECOMMENDATION: Informational; however, the Council may wish to provide feedback due to related policy and budget considerations. BUDGET IMPACT: N/A BACKGROUND/DISCUSSION: On April 12, 2022, the Department of Community and Neighborhoods (“CAN”) and Mayor’s Office staff presented a briefing to the Council on the status of the Fleet Block. The City’s goal is to transform this underutilized 8.75-acres of City- owned property located between 300 and 400 West and 800 and 900 South (“Property”) into a community asset that will contribute to the economic, social, and environmental betterment of the city. During the briefing, CAN staff provided an update on the rezone process, development constraints, and community-driven considerations for development of the property. The Mayor’s Office provided an update on community outreach efforts with the families tied to the murals located on the property. Subsequently, the Council provided feedback to the Administration, emphasizing the importance of equity and inclusion. Lisa Shaffer (Nov 2, 2022 15:42 MDT)11/02/2022 11/02/2022 Since the April briefing, the Administration has considered ways to not only infuse equity into the resulting development, providing affordable housing, affordable commercial space, and public space, but to also market and develop the property in a way that is more accessible to an inclusive group of partners. In consideration of the Council’s feedback, master plan polices, responses from the Request for Information (“RFI”), and development constraints, the Administration has developed an approach to create multiple development sites to be offered through a phased request for proposal (“RFP”) process. Dividing up the Fleet Block into multiple property offerings will be conducive for involving multiple development teams of varying scale and experience. RFP Strategy Update & Policy Considerations While it is in the Administration’s authority to dispose of property, such as through an RFP process, it is in the Council’s authority to rezone the property and approve any forthcoming discounts to the fair market value. A portion of the Fleet Block land area is contemplated to remain in the City’s ownership as park and public space, and capital and maintenance costs must be considered for these improvements. Exhibit A: Hypothetical Development Scenario provides a hypothetical scenario of how the Property could be subdivided to establish three separate development sites, midblock connections, and park space. This hypothetical scenario is intended to provide a platform for the Council to provide policy direction, particularly on the following components: • Midblock Connections - Ownership and maintenance • Park/Public Space – Location; forthcoming community engagement process • Zoning – Rezone approval timing 1) MIDBLOCK CONNECTIONS The Downtown Plan, the master plan for the area, provides that a midblock connection be established bisecting the block north-south and east-west – Refer to Exhibit B: Midblock Map. Dividing up the block would require identification of the land area to be designated as midblock connections through the subdivision process and prior to issuing RFPs. Policy considerations are as follows: o Ownership and Maintenance. The City could retain ownership of the midblock connections, or the land could be included in the property offerings and incorporated into the RFPs. § City-owned: If the City retained long-term ownership of the midblock connections, public accessibility and oversite would be maximized. This would require considerable upfront capital to develop the improvements in addition to annual general fund for maintenance. § Privately-owned: If the City included segments of the midblock connections in the RFP property offerings, they would be privately- owned, developed, and maintained by the future property owners/leasees. This would require a development agreement to ensure that improvements are built to designated standards and to provide cohesiveness between the segments of midblock connections under different control. In addition, a public easement to ensure public accessibility, as well as some form of maintenance agreement to establish maintenance standards would be required. The cost to construct the midblock improvements would ultimately be the responsibility of the development team, however the City could provide a reduced land lease rate or sales price to incentive the publicly accessible improvements. 2) PARK/PUBLIC SPACE Reimagine Nature, the City’s Public Lands Master Plan, calls for a “new Park in Granary District (Fleet Block!) at least 25% of the block or 3 acres on the corner.” Further, Reimagine Nature, as well as the Downtown Plan, contemplate a green loop to “reimagine the Downtown SLC’s wide streets in key locations to create a Green Loop with trees, a multi-use recreational trail, linear park space and places for outdoor seating,” refer to Exhibit C: Green Loop Map. To implement a park and green loop as identified in master plans, the Mayor and City Council have included funding for a new park to be located on the Property as part of the general obligation bond, with $6 million as part of the voter referendum. Dividing up the block would require identification of the land area to be designated as the park/public space through the subdivision process and prior to issuing RFPs. Policy considerations are as follows: o Location. There are tradeoffs for locating the park/public space on various quadrants of the Property. Policy considerations are as follows: § 900 South: The Fleet Block public space could be located along 900 South to take advantage of synergies with the 9 Line trail and forthcoming Green Loop. The most significant levels of groundwater contamination are in the southeastern quadrant of the Property. § 800 South: Locating the public space along 800 South, particularly on the 300 West 800 South quadrant, could be a tribute to the social justice movement that was first initiated on this corner with the community- initiated mural of George Floyd. Additionally, the park/public space would be more compatible than other land uses to the high voltage lines run along the north side of the Property on 800 South. o Alcohol Buffer. When considering the location of the park space, it is important to consider Utah Code 32B-1-202 of the Alcoholic Beverage Control Act in which alcoholic beverage licenses will not be granted within specific proximity measurements to a community location. A "community location" is defined as a church, public or private school, a public park, public playground, or a library. § Restaurants may not be located within 300 feet measured by ordinary pedestrian travel, or 200 feet measured in a straight line. § All other outlets, such as bars, may not be located within 600 feet measured by ordinary pedestrian travel, or 200 feet measured in a straight line. These distances are measured from the nearest patron entrance of the proposed outlet to the property boundary of the community location. If a community location is established after an outlet receives a license, the outlet may continue to operate. If there is a subsequent change in ownership of the property or outlet, the variance will remain in place unless there is a change in license type, or a gap in licensing where the premises is used for different purposes. Refer to Exhibit D: Alcohol Restriction Buffer for the hypothetical development scenario provided in Exhibit A. o Robust Community Engagement. Once the land area has been identified for the park/public space, the Administration is proposing to launch an extensive community engagement process that acknowledges the community meaning that has been placed on the Fleet Block and work to transform the site into a civic common that fosters inclusion. Engagement efforts could include a collaborative exploration to identify placemaking and art elements that recognize communities that have been structurally and systematically overlooked. Through the FY 2023 budget, the Mayor proposed and the Council approved a budget of $100,000 that could be used for this effort. 3) ZONING To ensure that the Council and Administration are in alignment, the Council should adopt and/or indicate support for the ultimate zoning prior to the RFP process. A zoning amendment has been proposed that would apply a modified version of the City's Form Based Urban Neighborhood-2 (FB-UN2) zone to the Property. The zone would be known as the Form Based Urban Neighborhood-3 (FB-UN3) zone. The zone would have similar regulations to the FB-UN2 zone, which is mapped on the blocks around 900 South and 200 West and allows for four to five story tall mixed-use development. The FB-UN3 zone would primarily differ in that it would include requirements for midblock walkways, allow more intense commercial land uses, such as light manufacturing and industrial assembly, and allow for greater height (up to 125') than the adjacent FB-UN2 zone. Policy considerations are as follows: o Timing. On December 11, 2019, the Planning Commission held a public hearing and unanimously passed a recommendation to the City Council to adopt the proposal with conditions/considerations. Subsequently, the Council held multiple briefings as well as public hearings on November 10 and November 17, 2020. At that time, the Council requested additional information, particularly regarding plans for a park and/or public space. Over the past 18 months, additional public outreach has been completed, and the Administration has provided the Council with additional detail on the anticipated size and scope of the park and public space. As such, the Council may want to consider adoption of the proposed zoning or provide further direction to the Administration. Other Considerations 1) ENVIRONMENTAL REMEDIATION The Property has various types and levels of environmental contaminants and groundwater intrusion from over 100 years of industrial uses. Based on estimates from 2017, cleanup costs may range from approximately $600,000 to $2,500,000, depending on the level of remediation and type of end uses. Undertaking a remediation process prior to the RFP process would be the costliest. The most cost effective and prudent approach may be a tailored approach that is determined by the planned locations of parking areas and buildings, along with the planned use for each building. This approach would entail working closely with regulators and the future development partners to minimize the volume of soil removal and remediation of groundwater. A phased development approach will allow the City to apply for funding that may be available for environmental mitigation of portions of the Property while concurrently moving forward with development of other portions of the block. The Administration is evaluating options for applying for grant funding through US EPA Brownfield Grants and other funding sources. Brownfield Grants are generally only available to public and nonprofit organizations that are not the party responsible for the contamination. The Administration believes that the City may be eligible for this funding for at least one large area of the Fleet Block, the northwest corner of the site where a historic coal yard was located. 2) LAND USES and VALUE As per an appraisal dated January 2022, the market value of the Property is $37,500,000, or $98 per square foot, as if no environmental remediation is required. The scope and scale of the park space and midblock connections will impact the developable land area, thereby affecting the land value that can be leveraged for other public benefits such as affordable housing and commercial space. Based on the hypothetical scenario provided as Exhibit A: Hypothetical Development Scenario, the land value breaks down as follows: Developable Area Midblock Connections Park Acres Value Size Value Size Value Site 1 1 $4,268,880 0.3 $1,280,664 0 $ - Site 2 1.5 $6,403,320 0.4 $1,707,552 0 $ - Site 3 1.6 $6,830,208 0.4 $1,707,552 0 $ - Park 0 $ - 0 $ - 3.6 $15,367,968 Total 4.1 $17,502,408 1.1 $4,695,768 3.6 $15,367,968 3) RFP EQUITY and INCLUSION The RFPs will include requirements to ensure that the forthcoming development provides economic opportunities, affordable living, and cultural expression for all residents, particularly communities of low- and moderate-income and minority people. After proposals are selected, the City will continue to involve underrepresented communities in the development process through the following: • Inclusive Selection Committees Establishment of selection committees that will be responsible for evaluating, ranking, and selecting proposals. These committees will include community representatives with diverse backgrounds along with City representatives. • Community Benefit Agreements Implementation of Community Benefits Agreements (CBAs) between the developers and community-based organizations representing residents’ interests. The agreements shall identify the benefits the community will receive in exchange for supporting the projects. • Metrics & Outcomes Identification of metrics to track and measure the developments’ outcomes to provide accountability for the City and developer. Potential metrics may measure indicators such as affordability, underrepresented populations, climate resiliency, community health, and social and economic justice. Next Steps and Timeframe Once the Council provides policy direction on the midblock connections, park space, zoning, and other considerations, the Administration will work to subdivide the property and develop design standards for the midblock connections. If the Council is supportive of the Administration’s proposed strategy, the first phase of the RFP process could begin by the first quarter of 2023. EXHIBITS: A. Hypothetical Development Plan B. Midblock Map C. Green Loop Map D. Alcohol Restriction Buffer EXHIBIT A: Hypothetical Development Plan EXHIBIT B: Midblock Map Source: Downtown Plan, adopted in 2016 EXHIBIT C: Green Loop Map Source: Reimagine Nature, adopted in 2022 EXHIBIT D: Alcohol Restriction Buffer