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TO: Mayor Richard C. Irvin
FROM: David Dibo, Director of Economic Development
DATE: August 24, 2021
SUBJECT:
A Resolution Authorizing the Execution of an Amendment for the Previously Approved RDA for the Keystone Building (30 S Stolp Avenue).
PURPOSE:
This amendment will enable Urban Equity to be compensated for the unforeseen cost increases that resulted from material and construction costs dramatically going up due to COVID 19, complete the project lien free, preserve the tax credits that facilitated the original transaction and strike a balance between the developer's and the City's risks and potential rewards.
BACKGROUND:
Legistar item #21-0678 discussed the overall goal of a number of things financial restructuring recommendations.
The following is a summary of what has occurred since the Keystone building project was approved on February 26, 2019 with resolution R2019-055 and the rationale for staff's restructuring recommendation. The development was approved in mid-2019 and construction started on late 2019 and was in full gear by the first quarter of 2020 when the pandemic hit. At that point, the give and take between the Developer and the Federal Park service ( who is the ultimate arbiter of what constitutes what is historically acceptable) became extremely slow so issues that needed to be addressed became bogged down and once resolved the custom made materials were unavailable or delayed for many months. These in turn caused labor increases and increases of other carrying and administrative costs. Once the communication chain reopened issues were resolved and Keystone is scheduled to be completed by the end of September 2021.
Keystone was one of the first two historic projects approved in this administration. As they near completion both will be almost 40% higher than originally anticipated.
DISCUSSION:
Historic tax credit renovations (like many affordable housing developments) have financial structures that are complex and sometimes cou...
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