OLD BUSINESS  4.

COMMITTEE MEMORANDUM

HISTORY:

On January 17, 2018, the City Commission adopted Resolution No. 2018-30145, authorizing the City Administration to conduct a community charrette to obtain public input regarding the future use or redevelopment of the Byron Carlyle Theater (“Theater”), and further authorizing the Administration to obtain market feedback with respect to potential redevelopment of the site. Attachment 1 (LTC 150-2018)

City staff conducted a community charrette on March 13, 2018, at the North Shore Youth Center, engaging residents to share their ideas on how the City should use and/or redevelop the Byron Carlyle site. Subsequently, City staff used the feedback generated from the charrette to guide the drafting of a Request for Letters of Interest (“RFLI”), issued on April 10, 2018. The RFLI was disseminated to 450 firms, with 59 firms downloading the document for viewing. Nevertheless, no responses to the RFLI were received. Attachment 2 (LTC 377-2018). The lack of responses may have been, at least in part, due to the fact that the RFLI stated that no offers to consider developing the site would be considered as a result of the RFLI. Rather, the RFLI stipulated that the City had an opportunity to consider various uses that the site may support and then we would later put out a formal solicitation. The Administration, therefore, recommended the issuance of a specific RFP to allow award for redevelopment of the Byron Carlyle

This item was referred to the Finance and Citywide Projects Committee (“FCWPC”) by the City Commission on July 25, 2018, to consider reissuing a revised solicitation as an RFP and to solicit guidance from the Committee on the proposed redevelopment.  

September 14 Finance and Citywide Projects Committee

On September 14, 2018, the Committee received public input and directed the Administration on several elements affecting the development site and surrounding neighborhood:

Parking Lot P80 - Adjacent to the Byron Carlyle Site at the NE Corner of Byron and 71^st Street

A proposal to develop this parcel with a developer was discussed at the July 27, 2018 FCWPC meeting, and the Administration has been in discussions with the developer since that time.  On September 14, the Committee directed staff to include Parking Lot P80 as a potential option within the scope of the RFP. In addition to the base proposal, developers will be permitted to propose an alternative project that factors P80 in some context; however, the RFP will note that the decision to include P80 in the redevelopment of Byron Carlyle rests exclusively with the City in its sole discretion.

North Beach Town Center Overlay

The North Beach Town Center rezoning process was finalized on November 14, 2018. The rezoning dramatically alters development standards for the affected properties. Among these are increased building height relative to lot size, which better accommodates the 3.5 FAR in the Town Center adopted last year, and reduced parking requirements. The new regulations impact the design and development potential of the project, and therefore also developer interest in the project. For example, given its lot size, the project could be built to a taller height of 165 feet, but in order to qualify for the height increase, the developer would have to participate in the public benefits program or qualify for exemption by completing the project within an expedited timeframe. Given the implications of the rezoning, the FCWPC directed on September 14 to bring back the RFP in November following the conclusion of the rezoning process. First reading for the zoning ordinance occurred September 12, 2018 and the ordinance was approved on second reading on November 14, 2018. The RFP can incorporate these zoning incentives once the zoning regulations take effect 10 days after adoption.

Cultural Component

The 10,000 sf cultural component of the proposed RFP, consistent with the size of the current O Cinema space, was based on the community desire to maintain a theatre/cultural space. However, the financial impact may impact the financial feasibility of the project. Based on $400 per sf, inclusive of soft cost, the financial impact to the project is estimated at $4,000,000 and 10% of the project cost.  At the September 14 meeting, the FCWPC indicated a desire to include a theater component in the proposed redevelopment. The Committee suggested using certain mechanisms to ensure the redeveloped site always features a theater component, such as a restrictive covenant recorded by the developer, or benefits for the theatrical tenant like rent control or rent subsidy.   

ANALYSIS:

Based on the direction received at the September 14, 2018 FCWPC, the Administration recommends the following proposed key terms for the Byron Carlyle RFP:

PURPOSE & BACKGROUND

The Byron Carlyle Theater complex is located at 500 71^st Street, between Byron Avenue and Carlyle Avenue. The City purchased and partially renovated the Theater in the early 2000s, to spur economic development and bolster North Beach arts and culture. Redevelopment of this location may play a significant role in the revitalization of the 71^st Street corridor.  The property is considered an important piece of the North Beach Town Center redevelopment strategy given its location and relative size. Public ownership of the Site ensures that the property continues to serve as a cultural anchor in North Beach. Public input regarding redevelopment of the Theater site was solicited through the community charrette process (03-13-18) and a public procurement solicitation earlier this year (RFI 2018-220-KB).

Development Site

The City is seeking proposals involving redevelopment of the Theater property (28,000 sf) with the adjacent City-owned surface parking lot located at 6977 Carlyle Ave (6,250 sf). (Attachment 3 Aerial Image).  Through this solicitation, the City seeks to retain land ownership and execute a long-term land lease with a private developer for the development of a mixed-use building that incorporates a theatre component.

Given the potential for greater development and viability when additional parcels are assembled, the City will also consider alternative proposals aggregating other privately-owned abutting lots on the same block. In addition, Parking Lot P80 may also be considered in the proposer’s site plan. However, the decision to use P80 strictly rests solely with the City. Therefore, responders who propose a development which incorporates P80 are also required to submit a proposal in which P80 is not included.

SUBMITTAL REQUIREMENTS

• (a) Scope. Pursuant to a long-term lease agreement, the developer will design, finance, and build the project and the developer will continue to manage and operate the asset following initial development.

• (b) Consistency with Master Plan. The proposal must further the City’s objectives for North Beach in accordance with the key recommendations of the North Beach Master Plan (2016) . The Master Plan envisions a Town Center along 71st Street with new or revitalized buildings that help build enough critical mass of mixed-income residents and businesses to support new dining and shopping along 71st Street. The Town Center vision of more public uses and commercial amenities will enable the district to become a destination in itself, instead of a place people pass through to get somewhere else.

• (c) Zoning. Design standards are dictated by the City’s Town Center Central Core zoning classification, including 3.5 FAR, increased height allowance, reduced parking requirements, and requirement for ground floor commercial use. Any proposed site plan must undergo land use board approval at public hearing. Given the site’s Government Use (GU) zoning, any development standard may be waived by the City Commission.

• (d) Cultural Component. The proposed multi-use development must include approximately 10,000 sf allocated to a theater/cultural arts use. Legal restrictions will be recorded by the City and developer to ensure the project’s theater component is operated continuously as a cultural amenity or that the City retains control of the space.

• (e) Resiliency. Project shall be designed with the objective of meeting LEED Gold certification, in accordance with City Code Chapter 133. In addition, provide approach for meeting or exceeding the Resiliency Standards set forth in Appendix E, and specify how they are incorporated in the conceptual design in Section 7.1. To the fullest extent possible, the project design must complement its surroundings and minimize impact on the neighborhood.

• (f) Financial Returns to the City. Responsive bids will propose a significant public benefits package including public amenities/uses and significant financial return for the City based on a fair market rate leasehold.

• (g) Costs. The Developer shall be solely responsible for all costs and expenses associated with the design, construction, equipping, and installation of all improvements, furniture, fixtures, and equipment relating to the project, and its subsequent operation and use (including all ad valorem and other costs of expenses attributed to retail, commercial, or nongovernment components), and all alterations, repairs, or replacements thereof.

• (h) Lease Approval Process. The approval steps at public hearing for the successful proposer (pursuant to the award of contract and independent of any site design approvals) include (1) City Commission approval to negotiate (following award to the winning proposer), (2) Planning Board approval, and then (3) 6/7th approval by City Commission of the negotiated Lease terms.

• (i) Design Approval Process. Once the negotiated agreement for development/lease is approved by the City Commission, the project’s site design must be approved at public hearings pursuant to Chapter 118 of the City Code, including: Design Review Board, Planning Board, and/or Board of Adjustment approvals. In addition to required City permits from Building, Public Works, and other City departments, other local governmental approvals may be anticipated, as may be applicable to the property from time to time pursuant to the terms of the Lease, including but not limited to, restrictive covenants.

• (j) Development and Ground Lease Agreement. Following selection of the developer, the City and developer will execute a binding lease detailing minimum project requirements and addressing the following topics:

• (i)    Term: Fifty (50) year initial term, with two (2) renewals of twenty (20) years each, for a potential total of 90 years.

• (ii) Lease payments: Annual base rent and percentage share of gross revenues, at fair market value and CPI increases. 

• (iii)  Required private debt and equity financing

• (iv) Project design, development, and planning.

• (v) Construction scheduling.

• (vi) Identification of property uses and operators (including theater).

• (vii) Covenant to continuously operate 10,000 sf theater and limitations on developer's right to materially modify operations.

• (viii) Ancillary agreements, including easements and licenses.

• (ix) Other terms, such as: limitations on assignment by developer; representations, warranties, and covenants; defaults and remedies; insurance; and indemnification and release.

MINIMUM QUALIFICATIONS

• Proposer must identify a Design Team, with a lead architect who must have designed at least one (1) completed mixed-use projects within the last 15 years.
• Proposer must have developed or provided private financing (consisting of more than 50% private financing, such as private commercial loans and equity) for at least one (1) $20 million mixed-use project within the last 20 years.

CRITERIA FOR EVALUATION

TIMELINE

In order to maximize proposal responses, the Administration recommends that the RFP be issued after January 1, 2018 and that proposers be given at least 45 days to respond.

CONCLUSION:
The Administration seeks direction from the Committee regarding scheduling the issuance of the RFP, with specific direction regarding the previously identified discussion items.