ing the possibilities, conducting the environmental remediation required for redevelopment, finding the right developer and working diligently to make the project financial feasible. The city has …
ing the possibilities, conducting the environmental remediation required for redevelopment, finding the right developer and working diligently to make the project financial feasible. The city has demonstrated the patience, effort and financial commitment required to make the complicated redevelopment projects a reality,” the city message states.
Confluence Development, LLC is working to develop the site.
Hinzman said developers are securing financing from a “historic tax credit investor” which means the development agreement with Confluence Development will need to be amended.
“The Confluence was obligated to finish, to have substantial completion, by December 2020 which has not occurred,” said Hinzman. “We’re looking to establish what that new completion date would be.”
“Confluence is going to be at the July meeting to provide an update,” Hinzman said. “They’re going to use that as a kickoff of more announcements of what’s going to happen at the building, the restaurant, hotel, those types of things.”
The announcements are going to be tied in with Hastings Rivertown Days, which will be held July 16-18 downtown.
“They’re hoping to make a splash there,” said Hinzman.
Overall, HEDRA packed some big topics into its meeting.
“There are a lot of positive news, things sound good,” said HEDRA President Dennis Peine.
Ground is set to be broken in coming weeks on the Schoolhouse Square Senior Housing project, which will provide affordable, below market-rate apartments. Real Estate Equities is development the project, which will feature 90 units, and the project is set for competition next summer.
Hinzman explained that a housing tax incremental district is being set up, where the developer will receive $1 million from the city based on tax revenue the project will generate. The total project cost is tabbed at $14-$15 million.
That financing will ensure the project has “affordable” units.
“It’s an injection to make the project happen,” said Hinzman.
Hinzman said that agreement with the developer will be for 15 years.
HEDRA and city councilmember Mark Vaughn questioned if the reduced rental rates would end after that 15-year period.
“On the 16th year, can the developer start charing market rate on all the apartments?” Vaughn asked.
Initially, Hinzman responded, “I don’t think there would be a prohibition against that.”
However, then he added that he didn’t think that would be possible, because the developer is also receiving tax credits from the state to develop the affordable housing.
“My belief is the use of that makes it affordable for the long term,” said Hinzman.
He said he would get clarification on that for the HEDRA Board.
Vaughn also commented that he wants to make sure if HEDRA is involved, there are guarantees the project comes to fruition in a timely manner.
“I don’t want to get caught like we did on The Confluence,” said Vaughn. “I hope we have some teeth in these agreements.”
Hinzman said that unlike The Confluence, HEDRA and the city didn’t have a multi-million dollar cash outlay to secure the site and then have to find a developer with a plan.
“Our position there (Schoolhouse Square) is much more safe,” he said.
The HEDRA Board voted to allow for the tax incremental financing documents to be finalized.
HEDRA Board member Margaret Horsch abstained, seeking clarification that the development remains affordable after the 15-year life of the TIF agreement.
“I’m for the project. I’m for the TIF district,” she said. “I would really like that questioned answered before I vote here.”
317 East 3rd Street Project
A public hearing was held on the sale of a downtown parking lot at 3rd Street and Tyler to developer Luke Siewert, River City Investments, to make way for a downtown apartment building.
No one attended the hearing on HEDRA’s plan to sell the parking lot to Siewert for $1 to allow him to tie it in with an adjacent property he owns to move ahead with the apartment building.
The parking lot has an assessed value of $55,800.
Siewert plans to develop a 32-unit market rate apartment building on the site.
Vaughn said he would like to see HEDRA in the future clarify its “land for a dollar” program, which prior to being utilized for this project was meant to spur industrial development.
HEDRA Boad members and city stsaff particpated in an online meeting last Thursday.