HomeMy WebLinkAboutagenda.council.worksession.20240708AGENDA
CITY COUNCIL WORK SESSION
July 8, 2024
4:00 PM, City Council Chambers
427 Rio Grande Place, Aspen
I.Work Session
I.A West Mountain Regional Housing Coalition
I.B Lumberyard Project Update
I.C Council Board Reports
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07082024 West Mountain Regional Housing Coalition.docx
City of Aspen - Memo for July 8 Work Session.docx
Work Session 8JULY2024 Lumberyard update memo and exhibits R1.pdf
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MEMORANDUM
TO:City Council
FROM:Jenn Ooton, Senior Project Manager
THROUGH:Diane Foster, Assistant City Manager
MEMO DATE:July 1, 2024
MEETING DATE:July 8, 2024
RE:West Mountain Regional Housing Coalition
_____________________________________________________________________
REQUEST OF COUNCIL:This is a work session presentation by the West Mountain
Regional Housing Coalition.
SUMMARY AND BACKGROUND: The City of Aspen is a founding member of the
West Mountain Regional Housing Coalition nonprofit organization, which has a mission
of increasing workforce housing in the Roaring Fork region with an emphasis on
development neutral strategies. During the development of the 2024 City of Aspen
Budget, Council set aside $450,000 for a contribution to the nonprofit’s deed restriction
purchase program. This pilot program will help to preserve middle income housing
through converting free market homes into deed restricted units in perpetuity.
At the time of the budget development, Council requested a presentation about the final
program details before contributing to the organization.
Regional collaboration is one of the actions identified within the approved 2022-2026
Affordable Housing Strategic Plan, and within the 2022-2028 Affordable Housing
Strategic Plan (set to be considered by Council on July 9).
FINANCIAL IMPACTS: There is $450,000 set aside within the 150 Fund for a
contribution to this deed restriction “buy down” pilot program.
ENVIRONMENTAL IMPACTS:Thousands of affordable housing units are needed in
the upper Roaring Fork Valley, according to the 2019 Greater Roaring Fork Regional
Housing study, a problem that has been exacerbated since the beginning of the COVID‐
19 pandemic. The deed restriction purchase program converts existing free market
housing into deed restricted housing, with the intent of creating additional workforce
housing so that people can live closer to where they work.
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RECOMMENDATIONS:This is a presentation only.
CITY MANAGER COMMENTS:
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MEMO
From:West Mountain Regional Housing Coalition
To:City of Aspen Mayor and Council
Re:WMRHC Update and Good Deeds Program Funding
Date:July 1, 2024
This memo provides an update on the Coalition’s work and request for funding of the WMRHC’s
Good Deeds Program.
BACKGROUND
The West Mountain Regional Housing Coalition (WMRHC or Coalition) formed in 2022 is a tax-
exempt non-profit with a mission to increase the availability and accessibility of affordable
community housing within the Roaring Fork and Middle Colorado River valleys: Aspen to
Parachute. We believe a regional approach that leverages the skills and resources of our
communities is the foundation for increasing affordable housing.
WMRHC is a member-based organization striving to support our members’ regional affordable
housing community interests and priorities. Our members, each of which have representation
on the WMRHC Board, currently include:
Pitkin County
Eagle County
City of Aspen
City of Glenwood Springs
Town of Snowmass Village
Town of Basalt
Town of Carbondale
Colorado Mountain Local College District
Roaring Fork Transportation Authority
The City of Aspen’s Board member representative is Diane Foster, Assistant City Manager, and
the alternate representative is Jenn Ooton, Senior Project Manager.
With $10,000 of initial investment from each of its eight members in 2022 and again in 2023,
the Coalition has held monthly meetings, completed a Strategic Operations Plan, successfully
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secured over $150,000 in state grants, and in fall of 2023, hired its first, part-time staff person.
The WMRHC Strategic Operations Plan identifies the Coalition’s values, target population,
approach, goals and strategies for the Coalition through 2026. Those goals, in general, are to:
increase the amount of housing available to local workforce through a development
neutral approach;
increase the number of households benefiting from housing assistance;
secure funding to provide housing programs; and
establish a strong, durable organization that supports the region.
West Mountain Regional Housing: Good Deeds
In 2022, the Coalition reviewed a suite of housing program options recommended in the
Housing Toolkit developed by Bohannon and Huston, supported by DOLA’s Recovery Roadmap
program. The Coalition board decided to focus its initial efforts on development-neutral
programs that support housing needs, strategies, or situations not currently addressed by other
housing programs in the region.
Problem Statement:
In a balanced housing market, households earning low to moderate income are typically renting
and households that earn above the median income begin to explore, and can achieve, home
ownership. The area median income (AMI) in Pitkin County is $91,000 for a 2-person
household. For that household to own a home and not be considered cost-burdened (i.e.
spending more than 30% of their income on housing), the home price would need to be about
$300,000. Based on a review of the most recent income, rental, and housing market data,
home ownership in the free market in our region is out of reach for even those earning 300% of
the median income. Therefore, moderate to high income households in the region have
incomes that are too low to participate in the private ownership market yet too high to be
eligible for most subsidized or assisted housing program requirements. And, therefore, the
housing market in our region is noticeably shifted from that of a balanced housing market,
forcing those higher-income earners to rent. This floods the rental market, driving rental rates
higher, and removing competition or options for movement within the market.
WMRHC’s Response:
Acknowledging these two issues – the lack of a home ownership market for moderate to high
income earners, and an extremely crowded rental market – WMRHC is launching a program to
bridge the gap between what is available on the open market and what is affordable to local
buyers by providing up-front funds towards the purchase of a deed restriction on a free market
home; thus converting existing free market homes to the affordable housing market in
perpetuity, creating a market for local workforce to own a home, and moving those that are
likely paying a very high rent into home ownership, freeing up space in the rental market.
Modeled after the successful Eagle County Good Deeds, this development-neutral approach
“buys down” a market rate home to a more affordable or attainable price for a local income
earner in exchange for a permanent deed restriction being added to the property.
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Pilot Program Details:
WMRHC has taken a regional and community-centered approach to eligibility (not an employer
approach) and therefore structured the requirements to allow anyone working full-time for an
employer principally or physically based in Pitkin, Eagle, or Garfield counties to be eligible.
There is no income cap. A qualified buyer must use the home as their primary residence, will
not be allowed to short-term rent the home, must maintain local employment, and own no
other residential property. They will be eligible for a 3% simple interest annual appreciation
and approved capital improvements that follow the Program’s Requirements. WMRHC will pay
30% of the purchase price of the home, up to a $1.5 million home price (varies geographically),
in exchange for a permanent price-capped deed restriction on the property.
The Coalition’s goal is to bring 30 homes into this program by 2026. The current construction
price for an affordable housing unit in Pitkin County is $800K - $1.2million. If it was possible to
acquire land and permits and also complete design and construction of 30 units by 2026, it
would cost approximately $30 million (not including the associated infrastructure and utilities).
WMRHC estimates the conversion cost of 30 free-market homes to affordable deed restricted
homes in Pitkin County at $13.5 million, which does not require any additional land, utilities,
infrastructure, or construction materials.
The Coalition has secured the following financial support:
City of Glenwood Springs -$200,000
Town of Snowmass Village - $250,000
Town of Carbondale -$100,000
Pitkin County - $1,000,000
Total to Date = $1,550,000
The Coalition is also exploring other funding strategies including philanthropic support,
donations, grants and a workforce investment trust.
With funding secured, Good Deeds is set to launch in August 2024 and has already received
interest from many working locals excited for the opportunity of homeownership in this
challenging market.
Request:
The Coalition respectively requests the Aspen City Council consider a contribution of $450,000
towards this program, raising the total amount to $2 million for the WMRHC Good Deeds
program. A significant funding contribution from the City of Aspen would not only acknowledge
this program’s direct benefit to the city’s workforce, but would also show regional leadership in
the housing innovations space and recognize the value that all local workforce individuals
provide to the regional economy and quality of life, regardless of jurisdiction boundaries. The
pilot program is relying on 100% buy-in from its members and financial support from across the
region to show a ‘proof of concept’ for other funders, such as philanthropic partners or state
agencies, and a contribution from the City of Aspen will set a high bar for others.
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MEMORANDUM
TO: Mayor and City Council
FROM: Chris Everson, Affordable Housing Development Project Mgr.
Ben Levenson, Capital Asset Project Manager
THROUGH: Rob Schober, Capital Asset Director
Tyler Christoff, Public Works Director
MEMO DATE: July 1, 2024
MEETING DATE: July 8, 2024
RE: Lumberyard Affordable Housing Development Project Update
REQUEST OF COUNCIL:
Update and request for input regarding private developer RFP
BACKGROUND AND PREVIOUS COUNCIL ACTION:
Aspen City Council approved entitlements for the Lumberyard affordable housing project
in Ordinance 10 of 2023.
Under Ordinance 10 of 2023, the project is approved to be implemented in as many as
four phases, with phase 0 including demolition and recycling of the existing facilities and
implementation of the utility and access infrastructure to support the vertical development
of the project.
During the fall 2023 City Council budget review and approval process, Aspen City Council
approved the 2024 project budget amount of $14,250,000 to support the City’s
implementation of the Lumberyard phase 0 project infrastructure.
Staff transmitted an information only update memo to Council on February 13, 2024.
DISCUSSION:
Planned Development (PD) Documentation
In accordance with Ordinance 10 of 2023, the required PD documentation, including a
PD plan set, agreement and subdivision plats, were submitted to the Community
Development department on March 20, 2024. Community Development provided
comments, and those documents are nearing completion for final rev iew and recording.
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Community Development requires final approval and recording of the subdivision plat
prior to submission of Phase 0 building permit applications. This effort is currently moving
forward, and staff anticipates completion within a few weeks, which will enable building
permit application submittal upon concurrent completion of construction documents.
Preparation for Phase 0 Demolition and Construction
The Lumberyard project team is working toward completion of the construction
documents for the Phase 0 demolition and infrastructure construction project.
Construction documents are anticipated to be 90% complete by the end of July. At that
time, staff plans to issue an RFP for phase 0 construction contractor services and to
submit building permit applications for the phase 0 demolition and infrastructure
construction project. Due to the nature of the work, there are three pertinent building
permit jurisdictions for the project, including City of Aspen, Pitkin County and Colorado
Dept. of Transportation (CDOT).
Staff anticipates returning to Council in September to seek approval of a phase 0
construction contract, upon completion of evaluation of bids received in response to the
RFP for phase 0 construction contractor services. Staff is currently aiming toward the start
of the demolition and recycling portion of the phase 0 work to begin in October 2024 with
infrastructure construction to begin in 2025 and continuing into 2026.
Per direction from Council, the City of Aspen is acting as developer of the phase 0
horizontal infrastructure work to prepare the site for follow-on private vertical development
of the housing facilities as part of phases 1 (building 1), 2 (building 2), an d 3 (building 3).
Vertical Developer RFQ/RFP Process:
For over a year now, staff have been marketing the Lumberyard project to private
developers of affordable housing in Colorado and nationally. Marketing efforts have
included direct correspondence and networking with developers as well as presentations
at the 2023 Housing Colorado Conference held in Keystone in October 2023 and the
Colorado Real Estate Journal (CREJ) Affordable Housing Summit and Expo held in
Denver in April 2024.
Recently, a private developer (Pinnacle Real Estate Group) presented the attached
Exhibit A slide in a larger presentation about public private partnerships at the June 2024
CML (Colorado Municipal League) annual conference in Loveland, CO. In the slide, t he
City of Aspen’s efforts to make the Lumberyard a successful public private partnership
are highlighted as a model which can result in shorter timeframes and reduced costs.
On May 30, 2024, the City of Aspen received 16 responses to a Request for Qualifications
(RFQ) for vertical development services related to the future vertical development of
phases 1, 2 and 3.
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Page 3 of 6
RFQ packages were received from the following 16 respondents:
• Aspen Housing Partners (Stratford Capital Group & Berkshire Lane Development)
• Baker Tilly
• Bond Brookside (Bond Companies and Brookside Companies)
• Cohen-Esrey & Shanahan (Cohen-Esrey & Shanahan Development)
• Columbia Ventures
• Continuum Partners
• Corum Real Estate Group
• Fairfield Residential
• Gorman & Company
• NHP Foundation (NHPF)
• Pennrose
• Pinnacle Real Estate Development Group
• Realty Capital Residential
• Servitas (with Habitat for Humanity, Roaring Fork Valley)
• The Michaels Organization (Michaels Development Company)
• Ulysses Romero (Ulysses Development Group and Romero Group)
An evaluation committee has been established to review the qualifications packages,
including staff from the City of Aspen Capital Asset Department and Aspen Pitkin County
Housing Authority (APCHA). The evaluation committee also includes third -party
representation from Dynamic Program Management, who are acting as the City’s owners
rep on the Lumberyard project, and also a third-party consultant, Rodger Hara with
Community Builders Realty Services. Mr. Hara is a highly respected Denver -area
affordable housing and finance expert with experience working for many year s at the
Colorado Housing and Finance Authority (CHFA) and at the United States Department of
Housing and Urban Development (HUD).
While the qualifications packages are still in review, staff cannot comment on any
potential outcome of the RFQ process. At a recent team conference, however, Mr. Hara
said that this appears to be a “strong field of responses”. Staff anticipates completion of
the RFQ evaluation process shortly and are planning to transmit a Request for Proposals
(RFP) to qualified developers by the end of July, with hopes of selecting a development
partner by end of 2024.
Consistent with the City of Aspen’s procurement code and best practices, the evaluation
committee reviewed all material submitted, and provided quantitative scoring for each
submission. Per the terms of the RFQ, scoring was based on the following outline, which
was included in the RFQ:
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60% Section 4.1 Cover Letter, Qualifications, Experience, Project & Professional
References
30% Highly qualified developer with a demonstrated successful track record of
similar partnerships and developments and in comparable circumstances and
development environments. In particular, similar design, build, finance, own,
operate and maintain affordable housing developments on long term agreements.
Results of project reference checks and past performance for reference
developments.
30% Demonstrated exceptional ability to develop and maintain lasting
professional relationships through effective communication, coordination, team
building and integrity, with a proven track record of healthy collaboration, including
support of public entities and/or in a public-facing environment. Results of
professional relationship reference checks based on feedback from professional
relationship contacts provided.
40% Section 4.2 Approach to Project Financing
20% Proven understanding of the Project and goals, demonstrated through the
quality, clarity, creativity and reasonableness of the submitted project structure,
collaborative process description, initially submitted financial model(s), and/or any
other initial conceptual information submitted to achieve the desired goals of the
project.
20% Demonstrated earnest commitment to transparently partner with the City of
Aspen in a process to further work and hone the project vision from an initial high -
level concept model into a detailed, achievable initiative, and to diligently work
together to realize the project’s full potential for the Aspen community.
On June 25, 2024, the evaluation committee spent two hours discussing the scoring and
established an initial ranking. The evaluation team also noted that there was a high
degree of consistency throughout all of the scoring submitted by those on the evaluation
team. Given the volume of material, it is estimated that members of the evaluation team
have spent some 16-24 hours each on this evaluation process to this point.
In addition to developer qualifications, many of the RFQ packages submitted also include
conceptual/initial development financing models and recommended financing tools and
arrangements, and most also anticipate a funding gap which will require City funds to
complete the capital stack.
While the RFQ focused on developer qualifications, references and initial project
financing considerations, staff is currently planning that the RFP will solicit a narrowed
group of qualified developers to submit a specific base proposal consisting of what they
see as their best offer, including financing sources which they see as most appropriate
for the project, and understanding that the City of Aspen has expressed interest in trying
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to develop as much of the project as possible at one time, given available resources. Staff
also sees the RFP as additionally soliciting any alternate proposals which developers see
as viable for the City to consider.
Staff does not yet have a draft of the RFP ready for Council review, and staff
recommends that Council consider discussing at this time whether the approach
described above should be the intended focus of the RFP and/or whether Council
wishes to direct staff to prioritize otherwise in the RFP.
Upcoming Project Milestone Targets
Below is a list of key upcoming project milestones toward which the project team is
currently aiming:
2024 July-August
• Issue RFP for vertical development partners
• Final approved and recorded subdivision plat
• 90% phase 0 construction documents
• Building permit applications submitted
• Phase 0 construction RFP issued
2024 September-October
• Phase 0 construction bids received and evaluated
• Phase 0 construction contract presented to/approved by City Council
• Issuance of demolition permit
• Start of abatement, demolition, recycling with project team management and oversight
• Receipt and initial evaluation of vertical development RFP responses
2024 November-December
• Complete evaluation of vertical development RFP responses
• Vertical development recommendation to City Council
2025 January – 2026 December
• Project team management and oversight of phase 0 infrastructure construction
• Vertical development partner agreements
• Vertical developer start pre-development activity
• Potential start of vertical development by development partner
FINANCIAL/BUDGET IMPACTS:
The 2024 Lumberyard phase 0 project budget of $14.25 million was based on a 2022
schematic design project estimate with an annual cost escalator of 5%. In recent
communications with local builders, staff has been warned of construction cost increases,
potentially far above 5% annually, which could significantly drive up the anticipated cost
of the phase 0 construction contract. With phase 0 construction bidding yet to occur, staff
recommends that this potential for higher-than-anticipated post-Covid increased cost
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escalation be considered within the larger context of cost escalation being seen
nationally, and to an even more severe degree, locally here in the Roaring Fork Valley –
rather than as an issue related specifically to the Lumberyard affordable housing
development project.
ENVIRONMENTAL IMPACTS:
As anticipated, some existing interior spaces will require abatement of limited areas of
asbestos containing materials prior to completion of demolition of the existing structures
on the project site. In addition, soil testing turned up limited areas of heightened lead
content which will also require abatement prior to completion of site grading.
These environmental abatement activities are considered by the project team to be
matters of due diligence rather than reasons for disproportionate concern. These
environmental abatement activities are currently being designed into the construction
documents and are planned to be handled in a routine manner by certified industry
professionals under the phase 0 construction contract and as regulated by the pertinent
jurisdictions.
ALTERNATIVES:
Staff recommends that Council consider discussing at this time whether the approach
described above should be the intended focus of the RFP and/or whether Council wishes
to direct staff to prioritize otherwise in the RFP.
RECOMMENDATIONS:
CITY MANAGER COMMENTS:
ATTACHMENTS:
Exhibit A – Lumberyard PPP case study slide
Exhibit B – Presentation slides
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The Problem: Some of the highest housing costs in the U.S. has pushed city
and resort employees and service workers far away from their place of work
•Extremely long and congested commutes
•Employees have to share homes or even rooms with others
The Solution: P3 with the City of Aspen for Workforce Housing
•Site identified – city has even done site studies and preliminary design plans
•Financial viability – city will assist with capital requirements
•Developer flexibility – for design and AMI restrictions
•Community buy-in – preapproved by city council and community
The Results: Flexible design, development, and finance options
allow developers to “think outside the box”, improving responses
•Shorter timeframe to delivery, with site studies complete
•Reduced costs with flexible financing options
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CASE STUDY FOR SUCCESSFUL P3:
ASPEN WORKFORCE HOUSING
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Aspen Lumberyard Affordable Housing
Project Update
July 8, 202414
Purpose
2 of 8
❖Lumberyard affordable housing development
project update
❖Request for Council Input on Developer RFP
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Background
3 of 8
❖Previous Council Action
~ Aspen City Council approved entitlements for the Lumberyard affordable housing project in
Ordinance 10 of 2023.
~ Under Ordinance 10 of 2023, the project is approved to be implemented in as many as four
phases
~ Phase 0 includes demolition and recycling of the existing facilities and implementation of the
utility and access infrastructure to support the vertical development of the project
~ Aspen City Council approved the 2024 project budget amount of $14,250,000 to support the
City’s implementation of the Lumberyard phase 0 project infrastructure
~ Staff transmitted an information only project update memo to Council on February 13, 2024
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Discussion
4 of 8
❖Planned Development Documentation
~ Required PD documents initially submitted to Community Development March 20, 2024
~ PD Documents are nearing completion for final review and recording
~ Community Development requires final approval and recording of the subdivision plat prior to
submission of Phase 0 building permit applications
~ Currently moving forward, staff anticipates completion within a few weeks
~ This will enable building permit application submittal upon concurrent completion of
construction documents
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Discussion
5 of 8
❖Preparation for Phase 0 Demolition and Construction
~ Project team is working toward completion of phase 0 construction documents - anticipated to
be 90% complete end of July
~ Then issue RFP for phase 0 construction and submit phase 0 building permit applications
~ Staff anticipates returning to Council in September to seek approval of a phase 0 construction
contract
~ Target start of demolition and recycling October 2024
~ Infrastructure construction to begin in 2025, continuing into 2026
Note: City of Aspen is acting as developer of the phase 0 horizontal infrastructure to prepare the
site for private vertical development of the housing facilities as part of phases 1, 2 & 3
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Discussion
6 of 8
❖Vertical Developer RFQ/RFP Process
~ Staff have been marketing the Lumberyard project to private developers
~ May 30, 2024, the City of Aspen received 16 responses to a Request for
Qualifications (RFQ) for vertical development services related to the
future vertical development of phases 1, 2 and 3
~ Staff anticipates completion of the RFQ evaluation process shortly and
are planning to transmit a Request for Proposals (RFP) to qualified
developers by the end of July
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Discussion
7 of 8
❖Vertical Developer RFQ/RFP Process
~ The RFQ focused on developer qualifications, references and initial
project financing considerations
~ Staff is planning that the RFP will solicit qualified developers to submit a
specific best offer base proposal, including proposed financing sources
~ And understanding that the City of Aspen has expressed interest in
trying to develop as much of the project as possible at one time, given
available resources
~ Staff also sees the RFP as additionally soliciting any alternate proposals
which developers see as viable for the City to consider.
~ Staff recommends Council consider discussing at this time whether the
approach described above should be the intended focus of the RFP 20
Thank You
8 of 8
❖Council Discussion, Questions, Feedback
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Optional Slides Follow
9 of 8
❖Council’s option whether to review the slides that follow in the
work session
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Lumberyard Project Site Plan
10 of
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City of Aspen purchased and annexed 11+ acres for $30 million
Phase 0 = Horizontal Infrastructure
Phase 1 = Vertical Building 1
Phase 2 = Vertical Building 2
Phase 3 = Vertical Building 3
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Phase 0 Infrastructure Scope of Work
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~ Abatement, demolition, recycling of existing facilities
~ Removal and relocation of many existing utilities
~ Lot line to lot line site grading
~ New electric main service feed from off-site
~ New City water service feed from off-site
~ New electric, communications distribution
~ New sanitary sewer & stormwater infrastructure
~ 1/2-mile water main and service stubs
~ 1/2-mile of new roadways, curb & gutter
~ New transit station
~ New underground multi-modal trail passage
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Upcoming Project Milestone Targets
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2024 July-August
• Issue RFP for vertical development partners
• Final approved and recorded subdivision plat
• 90% phase 0 construction documents
• Building permit applications submitted
• Phase 0 construction RFP issued
2024 September-October
• Phase 0 construction bids
• Phase 0 construction contract
• Issuance of demolition permit
• Start of abatement, demolition, recycling
• Vertical development RFP responses
2024 November-December
• Complete evaluation of developer responses
• Vertical development recommendation to City
Council
2025 January – 2026 December
• Phase 0 infrastructure construction
• Vertical development partner agreements
• Vertical developer pre-development activity
• Potential start of vertical development by
development partner
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