STRATEGIC PRIORITY: Economic Development
AGENDA DATE: August 28, 2024
COUNCIL DISTRICT(S): 8
DEPARTMENT: Office of Economic Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize an economic development incentive agreement with Onu Ventures, Inc. and/or its affiliates (“Developer/Grantee”), and The Adaline at Bonnie View, LLC, and/or its affiliates (“RP Owner”), to include: (1) a real property tax abatement (“RP Tax Abatement”) for a period of ten years in an amount equal to the City’s taxes assessed on ninety percent of the added taxable value of Property; and (2) a Chapter 380 Economic Development Grant (“Grant”) in an amount not to exceed $3,500,000.00, in consideration of The Adaline Mixed-Income Multi-Family Residential Project to be situated on approximately 10 acres currently addressed as 4343 and 4425 Riverside Road (“Property”) in accordance with the City’s Economic Development Incentive Policy - Not to exceed $3,500,000.00 - Financing: Public/Private Partnership Fund; Estimated Revenue Foregone: $3,972,780.00 over a ten-year period
Body
BACKGROUND
Over the past year, the Office of Economic Development staff, along with the City’s independent outside underwriter, have been extensively reviewing the proposed The Adaline Mixed-Income Multi-Family Residential Project “Project” and an associated incentive application submitted by the Developer/Grantee. In consultation with the City’s independent outside underwriter, staff structured the proposed incentive as gap financing to make the Project financially feasible and negotiated a detailed Letter of Intent (“LOI”) with the Developer/Grantee. On May 31, 2024, the Developer/Grantee accepted staff’s proposed incentive and executed the LOI. The Resolution accompanying this agenda item contains the detailed terms and conditions of the negotiated economic development incentive agreement.
The Adaline at Bonnie View, LLC, and/or its affiliates “RP Owner” owns the proposed Project site that consists of two vacant parcels totaling approximately 10 acres at the northeast corner of Bonnie View Road and Riverside Road. The properties are addressed as 4343 Riverside Road and 4425 Riverside Road. The Project will include a total of 238 residential units (24 studio units; 122 one-bedroom units; 84 two-bedroom units and 8 townhome style two-bedroom units). Of the 238 units, a minimum of 20% of the units are required to be set aside and leased solely to households earning at or below 80% of the Area Median Income for 15 years.
The Project includes the construction of seven residential buildings, approximately 333 surface parking spaces, a clubhouse, pool, fitness center and other amenities. At an estimated cost of $46.7 million, the Developer/Grantee will perform all necessary site improvements (including grading, utilities, paving, drainage, lighting, landscaping), and complete construction of the new residential buildings.
The economic development incentive negotiated by City staff and accepted by the Developer/Grantee and RP Owner includes the following two components:
1) A Grant in an amount not to exceed $3,500,000.00 payable upon substantial completion of the Project. The City funding source for the Grant is the Public/Private Partnership Fund.
2) A RP Tax Abatement for a period of ten years in an amount equal to the City’s taxes assessed on 90 percent of the added taxable value of the Property resulting from real property investment by the RP Owner and/or Developer/Grantee in the Project.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction December 2025
Complete Construction December 2027
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Economic Development Committee was briefed regarding this matter on August 5, 2024.
FISCAL INFORMATION
|
Fund |
FY 2024 |
FY 2025 |
Future Years |
|
Public/Private Partnership Fund |
$0.00 |
$0.00 |
$3,500,000.00 |
Estimated Revenue Foregone: RP Tax Abatement $3,972,780.00 over a ten-year period
DEVELOPER
Onu Ventures, Inc.
Mikial Onu, Chief Executive Officer
The Adaline at Bonnie View, LLC
Alicea Edison, Managing Member
MAP
Attached