HomeMy WebLinkAbout2014-11-17 TranscriptionNovember 17, 2014 Iowa City City Council Special Work Session Page 1
Council Present:
Staff Present:
Others Present:
Botchway, Dickens, Dobyns (5:02), Hayek, Mims, Payne, Throgmorton
Markus, Fruin, Dilkes, Karr, Davidson, Boothroy, Yapp, Bockenstedt
McCarthy (UISG)
Presentations by the Court / Linn RFP Finalists:
Hayek/ Okay, it's uh... 5:00, according to my i -pad. So, uh, we'll go ahead and get started. I
want to welcome everyone to our November 17, 2014, work session, where we will hear
the finalist presentations regarding the Court / Linn redevelopment site. Um, Council
Member Botchway may or may not be here. I'm not sure about that, but Council
Member Dickens should be here in the next 10 or 15 minutes. (several talking) Or
Dobyns! Yeah! (laughter and several talking) ...even notice! (laughter) Dr. Dobyns
will be here in the next 10 or 15 minutes. So what I'm going to do briefly is turn it over
to, uh, our economic development team, uh, Jeff Davidson's going to provide some
prefatory, uh, introductory remarks, uh, introduce the ... the participants, and uh, MC the
event, but we're glad to have you all here and look forward to some presentations this
evening.
Davidson/ Thank you, Mr. Mayor. I'm Jeff Davidson, the Economic Development
Administrator for the City of Iowa City and my remarks will be brief. We have a, uh,
four presentations ahead of us this evening, which we're looking forward to. Uh,
welcome everyone to this, uh, presentation of the finalist proposals for the Court / Linn
site, and we welcome everyone. Uh, we have four proposals ahead of us. They are in
order. Uh, Core Campus, CA Ventures, Sherman Associates, and CG Hanson. Uh, the
format that we will follow this evening is we will allow for a 15 -minute presentation
from each group and then a 20 -minute Q&A between the group and the City Council.
Uh, there'll be a brief wrap-up then of a couple of minutes and we should ... we should
have 10, 12 minutes in between, uh, each presentation and we will follow that. Uh, if any
of the proposers feel a nudge that will be me indicating that we need to be moving on,
and so, uh, we will do that. Uh, our first group, as I indicated, is Core Campus from
Chicago, Illinois. Uh, they will be represented this evening by Tom Harrington, Director
of Acquisitions. Tom Harrington, Jr., excuse me. Ben Angelo, Senior Vice President of
Development. Scott Stager, Senior Vice President of Property Operations. Mitch Dalton,
Associate Development Manager, and then two people from Ware Malcolm — Grant
Brandenburg and Cameron Brandenburg Trefry. Uh, welcome Core Campus!
Core Campus:
Harrington/ Thank you, Mayor and Council (clears throat) As Jeff indicated, I'm Tom
Harrington, uh, Director of Acquisitions for Core Campus, and he, uh, mentioned, uh, our
team members that are here, but I thought I would ask them just to actually, uh, all repeat
their names and ask them just to raise their hand. Uh, several of them will be presenting
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some to you, and then we're all here to ... to answer the questions. We really appreciate
this opportunity to be here and to elaborate further on our proposal and, uh, most
importantly to answer the questions that ... that you might have. So, um, I'll just go
through ... Ben Angelo, Scott Stager, Grant Brandenburg, (mumbled) and Mitch Dalton.
So ... thank you. We're, uh, very happy to be here and uh, talk about our project. We
believe that, uh, Core Campus, uh, is uniquely, uh, qualified to pursue this opportunity.
We are currently, um ... building projects in downtown Madison, uh, and also in
downtown Eugene, Oregon, and we completed this fall a major project in, um, Columbia,
South Carolina, which, uh, we'll talk a little bit more about, uh, in a minute. Uh, so we
do have the experience in ... in this type of product and you'll get a, uh, good description
of...of what we build, that it is a very high-quality, high-end, highly amenitized, uh,
project. You'll also notice, uh, in our, um ... original presentation, uh, I noticed that the,
uh, staff provided a fairly wide range of the estimate of the value of our project, which
we, uh, inadvertently left out and right now our project budget is at $93 million. So I
think it's important that, uh, that you know that. In addition, uh, we've, uh, added to our
project a component for, uh, hospitality. One of our partners operates a number of stand-
alone, uh, hotel products and uh, had done significant market research here and feels...
and uh, determined that there was a ... there was market here for that type of a use. Um,
we had not, to our knowledge, seen a, uh, a housing project, student oriented and young
professional oriented, uh, in the same building as a, uh, as a hotel operation and um, so
uh... we didn't initially include that, but actually, uh, we're waiting ... we completed the
project, uh, in Columbia, South Carolina, where there, uh, is a Marriott Hotel actually
attached to the same building, and we, uh, operate under a partnership with the Marriott
and uh, the city actually... there's a city -owned parking garage attached, which, uh, our,
um ... we share the parking with the Marriott and the, uh... and our building and the city,
and the, uh, our outdoor amenities center is on the top deck of the city -owned parking
garage. So it was a ... it was a public/private partnership that was very interesting, and
you'll see some materials, uh, on that here, but uh, we think that that's a ... a very good
opportunity and we wanted to just wait until that project opened this fall and see how it
functioned before we wanted to determine if we thought those things would function
together, and it's been a huge success down there. So we're real, uh... very excited about
it and ... and encouraged that that could work well. And with that I'll, uh, turn it over to
Grant!
Brandenburg/ Here we have three major components of the project. Um, the hospitality which
Tom mentioned in the yellow. The office component in the blue, and the housing in the
green there. (mumbled) overview of square footage breakdown for each component.
Residential is approximately 325 units, which equate to 629 beds of a mixture of one -
bedroom, two-bedroom, and three-bedroom units. Uh, approximately 170 suites in the
hotel. Parking for the entire development (mumbled) and then, uh, common amenity
space for all of the uses. Brief video here to run through the architectural features of the
building. Uh, our site is located in the Riverfront Crossings South Downtown District,
uh, within the Iowa City Master Plan. The architectural concept is a puzzle -like massing
element of projected elements and recessed balconies, with contrasting textures and...
Hayek/ You may need to step in a little bit more to the mic.
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Davidson/ ... speak into there so we can pick you up on the audio.
Brandenburg/ Sure! Um, on the lower levels we have the, uh, uses that activate the building to
the pedestrians and... and crosswalk areas along the Linn and Court Streets. At the corner
of the building we have some, um, larger massing to create more prominent entries for all
of the three uses of the building. And this site in particular has some significant... grade
variations along Court Street. So we were able to use that as an amenity for the office
building and create an outdoor courtyard area, and some basement parking for the entire
structure. And then along the alleyway, we have these screened... parking structure with
green walls, and up above the parking is the amenity area for the residential... use with
outdoor activity areas and panoramic views of the surrounding downtown and ... and
campus area. Here's a brief overview of the ground floor plan. We have the office
located on the corner, with Court Street being on the left and Linn Street being on the top,
with the amenity areas that activate the Linn Street, with the fitness center club and spa
areas. On the second floor there's also the office along the street corner, with the row of
residential surrounding the internal parking structure. On the third floor the hotel,
hospitality use begins with ... where the building sets back from the street. And the fourth
and fifth floors are similar as well with the hotel and ... and hosp ... hospitality use. On the
sixth floor we begin this e -shaped plan that creates two outdoor amenity spaces, that
create panoramic views of the surrounding area. Here's some more in-depth, uh, items
about the hotel use. 82,000 square feet, 170 suites. There's rooftop amenity decks with
amazing views of the downtown area. Full lounge and bar. Uh, private rooftop fitness
center and spa. Some... some more detail about the class -A office space located on the
lower two floors. Um, high-quality finishes. Except... exceptional accessibility and a
definite market presence. More detail about the housing use. Top quality residences. A
mix of studio, one, two, and three -bedrooms. Fully furnished, designer fixtures, open
floor plans with available upgrades. One of the main features of the Core Campus
developments are unparalleled amenities, with 24/7 on-site management, which we'll get
into in a second. Uh, controlled access, rooftop view, full gym and spa, a club and
lounge, and a professional business center.
Stager/ I wanted to speak to you today about the, uh, management (both talking)
Karr/ I'm sorry! Could you give me your name, please?
Stager/ Scott Stager.
Karr/ Thank you!
Stager/ Yep! Wanted to speak today about the management and operations side of the
developments. So what happens once these buildings are done with construction. This is
where the management and day-to-day operations will ... will come into play. Uh, for us
at Core Campus, it... it starts with the design of the building. We put a lot of thought and
effort into designing these buildings, with management and long-term operations in mind.
Um, so what happens is Core Campus Development and Core Campus Management
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teams, they meet on a regular basis, usually at least on a quarterly basis to go over every
inch of the building in detail. Um, some prime examples of this are accessed control.
We go over every single door within the building and determine, hey, is this something
that needs access control on the building? Does this hallway need security cameras in it?
We design these buildings with long-term management in mind. Uh, another item that
we go over is the building layout. Does it make sense for us to have a trash shoot on this
room? Does it make sense for us to have the student bike cage on this floor? So again,
just really thinking long-term and how the tenants and how the management are going to
run and use this building. Um, the other thing that we look at is the purpose for that
particular market, and so before we go into any project we look and do heavy market
research. We ... we analyze markets; we survey the students; uh, we survey what they're
going to be using; and we build that ... that building specifically around that particular
market. Some prime examples, um, as Tom mentioned, we have a building opening up in
Madison, Wisconsin. There's a heavy base there for, uh, for music majors. So we
incorporated that into our building. We have specifically, uh, soundproof band rooms
within our building, and we take that same approach into every single market that we go
to. A lot of our projects are going to be close to campus and so a lot of students aren't
necessarily going to want to bring a... a vehicle, so we build extra bike storage within the
units, and within the building themselves. Um, the next thing, um, we're ... we're
primarily student housing and we take ... we ... we try to get an understanding of our
students. As I mentioned before, we do heavy market surveys in every new market we go
to. We also survey our current tenant base. Um, we hire a third -party company to go out
and actually survey all of our tenants. We want to find out what amenities are we
building that work great. Which ones are they not using? What is management doing
right? What is management doing wrong? We want to hear all of that and actually
incorporate that into our buildings. Um, and some of the things that we found is ... is, you
can see within our buildings, and especially the amenity package that we offer. We try to
cater our amenity package around our students and around their well-balanced lifestyle.
We know that they're going to obviously be focused on their academic, but they're also
going ... uh, there for a social aspect as well, and we build our buildings around that sort
of environment. Um, for the academic side of things, we'll do individual study rooms,
usually on every single floor. Uh, we do, uh, group study rooms where there's
conference tables and there's TVs, projectors, white boards, that sort of thing. Uh, we
also do business centers with, um ... the ... that have computers and printers. There's free
Wi-Fi throughout the entire building. On the social side of things, by far the biggest, uh,
amenity that we offer is our... is our fitness center. Our fitner... our fitness centers are
usually 3,000 to 4,000 square feet. Uh, they're... they're comparable to the ones usually
found on campus. Uh, on top of that we usually have yoga rooms. We have, uh, saunas,
steam rooms, uh, Jacuzzis, that sort of thing. Um, the final part to ... to our management
is we have a hands-on management approach. So, um, what we do is when we go into a
...a project, we'll come up with a comprehensive management plan, specific to that
market. We'll then incorporate that. We explain to our tenants how, uh, how we expect
them to behave, that they're responsible young adults, and we're gonna treat them as such
and we're gonna hold them to that sort of standards. Um, if ..if we need to, we are a
small company and are able to change gears very quickly. Um, a... a recent example is
in, uh, our project that just opened in Tucson, Arizona. We have a little...we have an
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active tenant base there, and they're a little more active than what we thought they were
going to be when we first went in there. Uh, we received an email from our manager,
saying we are having some issues here. Uh, that same day I got on a phone call with, uh,
her, with the regional manager, and the head of our third -party security company. We
talked about it. We came up with a plan, and actually implemented it. So within a matter
of days we're able to change gears and actually implement and see the changes, uh,
immediately. Um, finally for us ... we pride ourselves in ... in forming long-lasting
relationships with our city, uh, that we're ... that we're developing in, with the University,
as well as the neighbors and... and their retail tenants, either in our building or around us.
Uh, we'll get into some se ... uh, specifics here, um, but one that I have from a
management perspective is ... uh, it...it becomes a logistical nightmare trying to move this
many students into a building all at once. Um, so this past year in Tucson and South
Carolina we actually took it upon ourselves and went proactive and met with both cities
to talk about how we can improve that process because we're in the downtown setting,
and as you can imagine, traffic is a nightmare. So we actually went through the city and
came up with a great plan and... and both of them came back and said it was the
smoothest move -ins that they've ever done for that area, or in ... in particular in South
Carolina, they've never encountered that but they ... they went through flawlessly.
So ... uh, and we're actually going to have Tom speak a little more about, um ... about
our ... our project in South Carolina.
Harrington/ Thank you, yes, uh, there ... that project just opened that I ... I, uh, talked briefly about
it before, but there is in your materials there's a letter from the Mayor of, uh, Columbia
who we worked with closely on that project, and it was truly a collaborate effort, and it
was a, uh, the building was a 21 -story empty office building. Um, with the, uh, attached
city parking garage and a ... an attached Marriott Hotel that ... that shared some common
entrances, and we formed a partnership with all ... with all three parties and delivered a
really exciting project for downtown, uh, Columbia. It's got ... it's got 850 beds, and
besides the move -in, the, uh, project is functioning in a, uh, in an excellent manner. It's
very well received there. It's been a huge boost to their downtown. There's also a letter
from the, uh, general manager of the Marriott, um, as to how that's functioning, and
um ... there's been a number of articles of which, uh (mumbled) several of `em that, uh,
are available to you that demonstrates the success of a, uh, of a joint -use project. In
addition to that, the tenant that had moved out, uh, has a... on the 20th floor, a
communication center that they maintained and that they lease, and we had to do ... we
operate the student housing underneath that, uh... and had to do all of the renovation with
that there. In fact they told us that if that went dark, then Verizon would go dark from,
uh, Florida to North Carolina, and uh, all the law enforcement, uh, communication in the
state flows through that, so, uh, we're used to operating complex, uh, complex multi -use
buildings and um, thing we could add quite a lot to, uh, to downtown Iowa City and look
forward to the opportunity to exploring that. And that's really, I think, um, what we have
to add. Happy to answer any questions.
Davidson/ Yeah, let's go ahead with the Q&A portion then. If you have any questions at all for
any member of the development team, uh... go right ahead!
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Hayek/ Jim, do you... (mumbled)
Throgmorton/ I ... I gather some of what you just presented is a little bit different from what was
originally included in your proposal. Could you, uh, state precisely what differs between
the original proposal and what we have before us tonight?
Harrington/ I think the major difference is the, uh, addition of the ... of the hotel component. And
that...
Throgmorton/' Yeah, that ... that's what I ... I just wanted to be clear about that, and the number
of, uh ... residential units decreases substantially as well, I take it.
Harrington/ To some extent, yes, and uh, yeah, and that was ... that was really a timing issue.
Um, I think this ... this was due prior to our opening the South Carolina project and so we
had some hesitancy to put it forth, um, but uh, you know, we now have operated that for
four months and as you can see from some of the, uh, the feedback, it's been very
successful and we're very confident in that combination of uses at this time.
Throgmorton/ Yeah. Thanks.
Dickens/ You are going to use a hotel though. You said you were gonna wait and see how that
one went before you ... would consider doing this, or are you actually going to put that
component into this one?
Harrington/ We're now going to put it in here. We were reluctant when this was due to include it
until we saw...
Dickens/ How that one (both talking)
Harrington/ ...how that ... that worked because, you know, it's, uh, they're... they're kind of...
they're very different uses but um, it has really worked out, uh, very, very well and
there's (both talking)
Dickens/ Who ... who were the hotels? I saw Hyatt and you said you've used Marriott. Who
were (mumbled) (both talking)
Harrington/ Well Marriott is the ... is the partner down there (both talking) and um, the uh... our
partner, DRW, is ... operates the hotel division, and they had several of those brands, and
they listed several of `em in there that are possibilities here. But that's not determined
yet.
Hayek/ Can you talk a little bit ... just about your history, your ownership structure, and ... and
then also, urn ... uh, you know ... with respect to your portfolio, are you a firm that ... that
buys and holds, have you sold projects, that sort of thing.
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Harrington/ Sure. Yeah, that ... I'd be happy to talk about that. Um, Core Campus is a relatively
new firm in that we're, um, about four years old, but the, uh, principals have a number of
years of experience in ... in the development and management of, uh, of student housing.
Um, many thousands and thousands of beds all ... all across the country. So, the
experience is there, and we really do emphasize the management component, and uh,
that's really the first ... first thing that we go through and uh, we ... we've built that
management team, uh, really in advance of, uh, of ... of our product delivery. And uh,
with respect to our ... the long-term goal for Core Campus is to, uh, build a portfolio
and ... and hold properties. However, we have, uh... sold, uh... uh, couple of them ear...
early on here, um, part of that is just, uh, to ... some internal capital structure reasons, um,
and ... but we ... I get that question quite a bit and uh, one of the um ... positives about it w
...the buyers for this type of a ... of a ... product and ... and the size of the investment really
limits the number of buyers that are out there. So if someone is going to ... if we're going
to invest $93 million, um, you know, someone's going to have to pay us something
substantially more than that if they want to own it, and those are ... those are institutional,
uh, investors that operate multiple properties. So ... in many cases we, uh, would retain
management, but uh... in any event it would be seamless to protect that type of
investment. Those are knowledgeable buyers.
Hayek/ Okay.
Harrington/ Does that answer your question?
Hayek/ Yes it does. Thank you!
Throgmorton/ If I could, as you probably know we adopted a form -based code, uh, I don't know,
a year ago, Jeff? Um, and uh, according to the form -based code, which I assume this
particular development would have to comply with, there'd have to be rezoning and so
on, but uh, according to it, uh, the maximum permissible height by right would be eight
stories, but you can get more, up to I think a total of 15, uh, with density bonuses. So,
what I'm wondering about is how specifically you imagine your project would ... earn
density bonuses to be able to go from eight to 15 stories. (unable to hear person speaking
away from mic) (several talking)
Brandenburg/ The class -A office feature would give us a bonus of a couple stories, as well. The
student housing use, and there's also potential for, um, LEED accreditation for the
building as well, and I think with the combination of all those different bonuses, we get
up to the maximum of 15 stories.
Throgmorton/ Okay. Thanks.
Botchway/ Can you (clears throat) I can't remember your name, sir. Can you elaborate on the
LEED, uh, accreditations you're talking about? Uh, you know, what are some of the
environmental efficiencies, I mean, have you thought about that? Have you looked into,
uh, cause such a, you know, a beautiful building, but, um, with that obviously comes
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some possible... possible environmental costs and whether or not that's something that
you've talked about.
Brandenburg/ I'll let Cameron elaborate on (mumbled)
Trefry/ Thanks, Grant! Um, so my name is Cameron Trefry. I'm actually Regional Director
with Ware Malcolm. Um, and we've done numerous, uh, LEED-accredited buildings and
with the help of Core Campus we ... we'd love to do that in this instance, as well. There's
all kinds of different things that we can do to, um, earn a LEED accreditation here.
Mostly we're going to get, uh, the majority of the points for that through the energy -
efficiency of the building. So that's primarily the ... the HVAC systems and the ... the
electrical components that we're putting into the building. Um, there's also things that
we do with finishes that are going inside the building. So low VLC materials, things like
that, um, that make the environment, you know, a healthier place for you to live and
work. Um, you know, another big component is recycled materials, as well as, uh,
regional materials that are used in the construction of the project, and then you know we
could look at things like green roofs and uh, we do show currently a green wall on the
garage side, uh, but that's all, you know, it all depends on the budget of the project and
how that works out.
Botchway/ You said you had numerously, uh, I mean, accreditations, certifications. What were
those standards like, you know, silver, platinum?
Trefry/ Uh, this weekend, I'm pleased to announce, that we just got a gold certification for a
project in ... in, uh, McCook, Illinois. Um, that's my second gold project, and then as a
company, we've probably had 40 to 50 various level certified buildings.
McCarthy/ Do you manage your own buildings or is that outsourced to other firms?
Trefry/ In terms of the LEED submittal process?
McCarthy/ In terms ... just the management of the buildings.
Trefry/ Physical management of the building.
McCarthy/ Yeah.
Trefry/ That one I'm gonna let Core Campus answer.
Harrington/ Uh, no, uh, Scott is with the management company and he can come up and
elaborate, but we do not use any third -party management. That's one of the real keys, uh,
so, uh, every, uh, site has a general manager, an assistant manager, several leasing staff.
We use, um, we call `em Community Assistants, but they're trained. So we're ... we're
staffed 24/7. And it's ... and it's all, uh, self -managed. So ... um, the, uh, Ben,
the ... Madison is going to be ... (unable to hear response; away from mic) Minimum
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silver LEED certified (unable to hear person speaking; away from mic) Eugene'll be
either gold or silver, and Tucson is... silver.
Throgmorton/ It ... it's not too hard to get, uh, silver certification, given the location of this
particular development. So, you know, it does make me wonder ... what enhancements
would be included, and I know ... I know you already mentioned some, but you know, I'd
want to feel confident that the enhancements would really, uh, achieve, uh, a meaningful,
uh... uh, efficiencies with regard to energy use and ... and so on, rather than, uh, simply
get LEED certification because it's located so close to the downtown. It's got bus transit
service and so on.
Harrington/ Uh, and ... and, yeah, why don't you speak to that.
Trefry/ So, I ... I really want to go back to the energy efficiency credits, that's where the most
points are available ... in the LEED certification process. So, um, that's what we'd focus
on, you know, when we're come ... when it comes to the MEP, um, components of the
building. We really have to address that up front and make sure we're putting in the most
efficient equipment possible. Um, that's how we're able to achieve those LEED gold
certifications on the buildings that we've done in the past, um, and LEED is only going to
make it more difficult to get the certifications. We all know that LEED version 4 is
coming out now. Um, currently I think we would be able to submit this still under LEED
3.0 but, uh, those ... those standards are getting more and more stringent, as well as the...
the energy codes that we're held to. That ... answer your question?
Throgmorton/ Yeah, sure! Thanks!
Dobyns/ Most of the other projects, um, were at this scale. Can you explain why your proposal
did not include a request for tax increment financing?
Harrington/ None of our projects, uh, have ... have, um, really have had tax, uh, increment
financing. So we have, uh, we have a ... in-house dedicated sources of equity and
financing. So, um, we don't need to go raise equity and um, we, uh, our ... our model just
doesn't require ... TIF financing.
Dobyns/ So either the other projects have unusual avarice, or you guys work magic, I'm not sure
which is which (laughter) um ... um, so it's ... this is ... this is a large-scale, um, project. I
mean, is there a sense ... is that, um, it just confuses me how you, I mean ... my ... my sense
is looking at it is that ... the quality! Um, are you going to put the quality into it? I mean,
you're not asking as much money and that... in some ways that makes me reassured, but
in some ways it also makes me nervous, is that the quality of the project won't be that
good. I mean, can you explain to me, I mean, most of your other areas I assume are
area... areas that have a, um, fairly reasonable student market, um...
Harrington/ Yes, and we ... we see that here. In fact we see a ... a strong need here for this type of,
uh, product, and uh, our buildings are, uh, and um, and certainly some, you know, you
could go look at, uh, you know the ones that are complete, but uh, they are built to a very
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high standard. Um, and you can ... uh, be ... we also can provide you references from
where we're under construction in Madison and Eugene, and we know ... we know what
the materials that are, for instance, going on on there, and we know what is in Tucson.
South Carolina, you know, was a ... was a rehab, so it's a little bit of a ... of a combination,
but uh, also at Arizona State. Um, those are projects you can ... touch and feel and it's
there. So the economics make it ... make it work. Um, Madison is a slightly more
expensive project, over $100 million, and it has no public, um, inputs.
Dobyns/ Okay. The one in Columbus, the one you ... you, uh, cited some awards. Uh, is that
near an academic, uh, or a area of education as well, the one in Colum ... I think you cited
Columbia as (both talking)
Harrington/ I think there's... there was some accolades from ... from local, like the mayor.
Dobyns/ Right.
Harrington/ ...um, just ... just, uh, endorsements of it.
Dobyns/ But is there a similar market where you cater to a student population with the...
Harrington/ Absolutely!
Dobyns/ Okay. All right. (unable to hear person responding from audience) Okay, that's
where ... okay.
Harrington/ Yeah, I'm sorry!
Dobyns/ All right. I'm not familiar with Dixie so thank you (laughter)
Harrington/ But if you are insistent on handing money out then... (laughter) we could probably
take some money.
Throgmorton/ You should get around more! (laughter)
Dickens/ can you tell me a little bit about, uh, the construction company that you use? Is it one
that you use on all your projects or is it ... one specifically for this project?
Harrington/ Typically we have used local general contractors. Um, we go and negotiate, um...
uh, cause that's generally what ... what's happened.
McCarthy/ I'd like to go back to management for a second. You have a ... do you have a
development in Tempe, Arizona, as well?
Harrington/ Yes.
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McCarthy/ So, when I went online to do some research on these there was an overwhelming
amount of very negative reviews of the management of that property.
Harrington/ I'll let Scott speak to this.
Stager/ (laughter) We actually sold that building. So we have never actually managed that
building. So we built it and from day one it was managed by a different company. So
that...
McCarthy/ And in this plan it wouldn't be (both talking)
Stager/ Correct, it would be our in-house management doing that.
McCarthy/ Okay. I had another quick question. The average cost I think, um ... again in the
Tucson, this was just from what I could see on-line, the Tucson average cost for a two-
bedroom unit would be $1,000 to $1,200. Do you think that would hold through the Iowa
City market as well?
Stager/ I don't think so off the top of my head. Uh, no. Uh (both talking) it's just a different
market. Do you know what the market (unable to hear response from audience) Yeah, it
...it varies from market to market. So I ... I don't have it. Um, we can get you those
answers in terms of what it would be, but it would not be in comparison to the Tucson
market.
McCarthy/ Do you have an off-the-cuff idea of what the average cost of a ... say a two-bedroom
unit would be throughout maybe a median of the developments that you've done? Not to
put you on the spot but...
Stager/ Yeah, um, I would say probably close to 800 to 900.
McCarthy/ Okay.
Hayek/ So, uh, can you talk to us about how you arrived at this mixture of residential, hotel,
office, you know, what was the analysis you went through? You dropped your ... your
residential by I think 25% or so when you added the hotel. Walk us through what
brought you to that particular mix for this particular market ... if you would, please.
Harrington/ Yeah, uh, first of all the, uh, amount of office space was prescribed really. It was
...it was a ... a goal of...of the City. So that defined that element, and then the ... the hotel,
I think, was largely a function of, um, there's a minimum size that you really need to
operate, actually either of these type of properties, but um ... that size is ... is a ... is a good
size for this market and it has to be a certain size in order to function, um ... so I think that
dictated then the result of a reduction in the residential side.
Hayek/ Yeah. Okay, and then the balance being residential.
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Harrington/ Right.
Hayek/ Got it.
Dobyns/ Why did you have the whole ... most of the upstairs area as, um ... studio apartments,
study areas more conducive to students — why did you, um, decide to even put the hotel
in there? Why did you decide even to put the hotel in there and ... rather than just have
the majority or all the residential space for, um ... uh, student primarily?
Harrington/ Uh, we ... we liked the ... the look, uh, the research that we had done, we liked what
the demand would be for the hotel and thought it was a... a good combination of uses.
And then... resulting size of the residential is ... is, uh, plenty large enough for our
management function.
Dobyns/ So you thought that the ... if the market for the hotel was good, that perhaps the market
incrementally for student was probably not what the market would bear?
Harrington/ No, not necessarily. Um, we, you know, we would build more beds here. We think
there's going to be demand for it. We just like the mixed used in this down ... in this
location, and um ... uh, it ... just liked the project, uh, better in ... in that regard.
McCarthy/ I have one more question. You'd mentioned that there was some unique design
elements in the Madison development, uh, to where ... cater toward that student
population. Are there any aspects of this development that cater specifically to the Iowa
population as you understand it?
Harrington/ We, uh... Ben?
Angelo/ (unable to hear, walking toward mic) ... given the, where we're at in this process, and
still in the RFP phase, we haven't really gotten in-depth market research on the Iowa
market, where we've actually implemented what the full amenity package would be on
this project. You know, should we be selected, you know, through this process, then...
then it would trigger the real in-depth look at the amenities and how would we cater it to
this market, uh, Iowa City specifically. So, I can't give you specifically today that there's
something in this project that is unique to ... to Iowa City and to the University.
Karr/ For the record, sir, can I have your name?
Angelo/ Oh, Ben Angelo.
Botchway/ I can't remember, what's your name? Can you come up real quick? You know,
Jim ... Jim, uh, had mentioned, you know, obviously you know LEED certification is one
of those things where I think currently kind of... some of (mumbled) LEED certified and,
you know, I'm not even sure what that means from that standpoint other than, you know,
the HVAC system and a lot of energy efficiency things that you talked about, but I guess
my question is, and maybe this is another RFP question later on in the process, getting
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down to the nitty gritty, you know, is there the possibility of looking, you know, above
and beyond, you know, possibly at solar panels, possibly at, you know, a wide range of
aspects to really bring this building ... you know it's ... it's a ... it's an old site, you know,
and, uh, obviously something that is very important to us and so from that standpoint, it'd
be interesting if we could get something that is, you know, unique not only to Iowa City,
but unique, you know, to the entire state. So I guess, have you all thought of that or is
that coming... coming (mumbled) parts of the discussion?
Trefry/ I think we'd really need to do the full analysis of the LEED scorecard and find out, you
know, where could we get the most, uh, bang for the buck and the most impact, and ... and
the most Points. I think that, uh, photovoltaics and ... and wind generation, you know, on-
site renewable power sources, things like that, um, are great for image, and they don't
always get you the ... the most points that you need for the ... for the project, but um, we're
open to exploring all those options. I think it's something that, uh, we really need to get
into that analysis, that ... have that next level, uh, study. But, uh, you know, I've always
wanted to implement some things like that on a building, and you know, this might be the
opportunity.
Throgmorton/ If...if I could, I'd like to explore the hypothetical with you, probably Tom, but
may ... whoever else needs to respond. Um ... the ... the project you've proposed is 15
stories, correct? So that's large for existing buildings in Iowa City, and especially in that
general vicinity. I think the tallest building immediately nearby is four stories. So 15 is,
uh, a pretty dramatically different scale. Uh, and ... and, uh, the mass of the building
looks pretty substantial, when I ... just looked at your drawings and so on. So just as a
hypothetical, I ... I'm wondering, uh, how ... reducing the height ... total size basically, of
the project would influence your interest in the site. In ... in other words, if we said to
you, and I'm not saying anybody up here really is going to say this to you, but just a
hypothetical. If we said to you we ... we don't want anything taller than say, I don't
know, 12 stories. Would some ... would some reduction like that kind of make ... make
you lose interest?
Trefry/ I'll let Tom answer this question but I would just like to say the topography of the site,
um, actually lends itself to...
Throgmorton/ Oh sure!
Trefry/ ...kind of...kind of stealing two extra stories out of the development, um, that won't give
you the impression of that extra height. Um, so we ... we do have that working in our
favor.
Throgmorton/ Well, depends on where... depends on where your (both talking)
Harrington/ Um (clears throat) no, I think that, uh, you now, we would have to, you know, revisit
our model and ... and see ... see what it was. Ob ... you know, we have built 10 story
buildings, and it's a function of the size of the lot, and ... and the ... and the cost that, you
know, in this proposal there's a ... there's a purchase price to the City that ... that's
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included. So, it would just be a ... a revisiting of the model so you know we're ... we're
always open to ... we believe and ... and have thought quite a bit about, uh, I know there's
some other larger buildings under construction and um, we had some discussions on ... on
the context of the size of this building, and we actually think it's gonna work and be
pretty spectacular and, you know, there ... you know, think there could be some additional
buildings similar, which is what the form -based code I think envisioned. So, um, we felt
like it would ... it would, uh, function well in the context here.
Throgmorton/ Okay. Thanks!
Hayek/ Uh, I've got a couple of questions. Does your, um, does your ownership include, uh,
institutional or (can't hear) backing? Is there a ... is that the partnership you described
earlier?
Harrington/ No, um...
Hayek/ ... it's all...
Harrington/ (clears throat) There's one that's, uh, mostly an individual...
Hayek/ Uh huh.
Harrington/ ...provides all of our equity.
Hayek/ Okay. Second question is, um, the ... there's a $4.5 million price tag proposed on the sale
of the dirt. Is that, um, I ... that's similar to the $5 million one of the other applicants
has ... has dropped, or has ... has offered. Uh, I guess ... I mean, how did you arrive at that,
I guess is my question, obviously.
Harrington/ Com... combination of, uh, you know, we ... we tried to, uh, in the discussions with a
broker that we work here through we tried to ... to have an understanding of what, um...
of what the property was worth, and then you ... you kind of work through you model and
solve for ... for a land price that works, that is hopefully consistent with what fair, uh, land
values are in the area.
Hayek/ Okay.
Mims/ While you're there, Tom, um, question about the ... the facility in Tempe. You said that
was sold right away and was never under your management. Was that the intent when...
when that was built?
Harrington/ No.
Mims/ Wh... what happened and why was that sold so quickly?
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Harrington/ Uh, the ... an unsolicited offer. And..and the market is just, uh, there's very high
valuations right now, and as I said early on, Core Campus relatively new. It was helpful
to the, uh, to the capital structure.
Mims /And which other one have you sold? You said you'd sold a couple (both talking)
Harrington/ Uh... old ... Old Miss.
Mims/ Okay.
Harrington/ Now we're retaining management there, which would be our preference.
Mims/ Okay. Thank you.
Hayek/ We may be running out of questions here. Anybody have anything else?
Botchway/ I had one more question. You mentioned, uh.... using local general contractors. Do
you have any ... uh, kind of information on, you know, those particular agreements? I
mean, do you use PLAs? I mean, or ... I mean what ... are there any basis by how you pick
those local, I mean, general contractors?
Harrington/ Yes, and I'll ask, uh, Ben to ... to speak to that. He's in ... he's involved with that
process.
Angelo/ Uh, you know our process it ... it's different in every, uh, market we go into. Um, I
already have begun talks with, um, a company I know operates quite heavily here with
the University, um, and so generally when we go into a market, you know, we're new to,
um, you know, the relationship starts a lot with Tom and the brokers through the land, but
that's when we start the conversation of, you know, who ... who are the local general
contractors. Who, you know, who do we think's right to build the project, um, and we
start the conversations very early on and we usually, you know, we'll meet and interview
three, four, or five contractors and ... and kind of narrow that search down. Um, and then
you just stay involved with that and ... and work through budgets and conceptual pricing
until you ... you find the right ... the right person, but so far in every market we've gone
into as Core Campus we've hired a... a local, or you know, regional general contractor to
the area. So, we've never brought someone say from Chicago with us to go in and ... and
build something for us. Um, but it's all negotiated, um, contracts. So it's not ... we don't
open it up to like a ... like a public bid, like if the City goes out to do a ... a project, they
open it up to ... to public bidding. We don't. We don't do that process. Did that ... answer
your question?
Hayek/ Okay! Gentlemen, we thank you for making the trip out here. We ... I'd apologize for
the cold weather but I don't suspect it's any warmer back in, uh, Chicago. So, uh, Jeff?
Davidson/ Tom, did you want to have a final wrap-up?
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Harrington/ I ... I think we're, uh, at the end of our time, uh, and we want to be respectful of that.
We really very much appreciate the opportunity to be here and ... and share our vision for
this and ... and, uh, very excited about, uh, the opportunity and uh, look forward to
hearing more! Thank you.
Hayek/ Appreciate it!
Davidson/ Mr. Mayor, shall we plan on about five of then for the next presentation or do you
want to wait til 6:00? What's your pleasure?
Hayek/ Do people want to wait at all? (both talking) ...break?
Davidson/ (both talking) ... anybody need a break?
Hayek/ (both talking) the next one's ready to go we might as well (both talking) We usually go
for three hours before we take a break at regular, uh (several talking and laughing)
Davidson/ In that case, thank you, gentlemen! (several talking) We'll have a ... just a brief
interlude while we change over here.
Hayek/ Sure. Yeah, yeah! (several talking)
CA Ventures:
Davidson/ Mr. Mayor, if we're all set to get then again, uh, one thing I neglected to mention, uh,
earlier was that, and for the benefit of everyone here, the City Council is scheduled to
begin their discussion of the presentations this evening, and uh, work towards their
selection of a preferred developer. That will begin on December 2nd at the scheduled City
Council work session, which is, uh, 5:00 P.M., open to the public meeting in this room.
So that is when you will begin those discussions. Uh, our next, uh, presentation will be
from CA Ventures of Chicago, Illinois, and they are represented by J. J. Smith, Dan
HranKowsky, Michael Yeagle, and Jim Plunkard of H.P. Architecture. Welcome,
gentlemen!
Smith/Thank you for having us. I am J. J. Smith. I am a principal and Chief Operating Officer
of CA Ventures. Um, with me tonight is Dan HranKowsky, our Director of Design; uh,
Jim Plunkard of Hartsure and Plunkard Architecture; and Michael Yeagle, with our
property management company with NCA. We prepared a brief table of contents, uh,
just to give you an overview of our proposal. Uh, there's an image of...an aerial image
of the project on the right and tonight we're gonna talk about our in ... our team, uh, in
greater detail, including CA, uh, HPA recently completed projects, as well as our national
portfolio. We will also talk about the project itself, which we have now, uh, branded, uh,
Rise at River ... Riverfront Crossings, and we will go into detail each of the mixed use
components of that project because there's several components, uh, actually now quite
similar to the Hub, uh, proposal in terms of, uh, mixed use components. Uh, we'll talk
about the design features, how it's compliant with the RFP, uh, some of its
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responsiveness to the planning guidelines, including the Riverfront Crossing guidelines.
We will talk about the LEED features and give you an idea of what those will include,
and we will also talk about the amenities, uh, life safety (mumbled) features, and then
some additional benefits that our project we ... we feel brings to the table. Um, those will
include items such as open space, uh, public use of a plaza, uh, neighborhood benefits of
retail and market space, and then we close with, um, an economic benefit's comparison,
um, just to give you an idea of the project, uh, it's total cost, um, what we're talking
about in terms of purchase price, how we make that work. Um, we talk about taxes, and
we will talk about job creation, and then give you the questions and answers after that.
HranKowsky/ My name is Dan HranKowsky and I think just cause it came up with the first
presentation I'll say it now, just so when you guys are seeing images for the first time we
all have the same understanding of what's going on. Um, number one, you guys see
we've uh, developed the conceptual design of this, substantially, uh, you know,
progressed from what you guys saw initially. The form is essentially the same, but just
you'll see more detail there and just the key thing I wanted to point out, uh, is the location
of our hotel component. We had that with the original design, uh, previously it was what
was in the front right of this image here, along Court Street, and now we've put it in the
stand-alone piece to the east, which is actually to the left over there. Couple reasons
behind that that we'll get into as we make the presentation, but having that distinct use
being a separate stand-alone structure makes it much easier from a safety, security
operation standpoint.
Smith/ So CA Ventures is a multi -disciplined real estate company that was founded roughly 10
years ago in Chicago as Campus Acquisitions. We were solely student housing based
company and over the course of 10 years, we've expanded our asset classes in real estate
to multi -family, uh, office, uh, student housing of course, hotel, and senior housing. Um,
we did not include senior housing in our proposal, um, we have four projects that we're
working on in the Chicago -land area for senior housing, and right now we're sticking to
the Chicago area for those specific asset types. Our portfolio is given here on the pie
chart on the right. Um, roughly 70% of our assets are student apartments. Another 19%
in red is multi -family. So, we're really 90% apartments, um, that ... is comprised on the
student side of close to 12,000 bedrooms developed in 10 years, uh, that spans I believe
now about 27 different campuses. Uh, we're a fully integrated real estate company. So
we do investment management, development management, and construction
management. Uh, we also do property management and leasing, uh, much ... much
similar to the ... the last presentation you saw. Um, to date, um, we now have, uh, you'll
see the smaller pies on the chart. Um, those are our office components and our
hospitality, as well as senior housing. Um, in aggregate right now we have 12 properties
under construction for the fall of next semes... or the fall of 2015, which'll be delivered at
a ... a variety of different campuses across the country. Um, on the left hand side in the
table ... gives you an idea of our lending relationships, as well as our equity partners. Uh,
we have several institutional equity partners that we work with. Um, to give you an idea
of why we're not asking for incentives, a lot of it is the capitalization structure. Um, we
you know have four, uh, equity groups that basically bid against each other to provide
equity for our projects, and that allows us to negotiate very favorable terms, in terms of
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return on equity. Uh, we also have great (mumbled) relationships, five of which are
listed here, that have loaned us nearly $500 million in the last seven years. Uh, the next
chart ... will give you an idea of recently completed projects. Um, we just opened 10
buildings last August. I'm just featuring a couple here that I thought were most relevant.
Uh, the one on the left is, uh, Level in Tucson. Um, that is a 588 -bed property. Um, you
get an idea of the quality of the interiors and the amenities. Uh, the one on the right is
Landmark in Ann Arbor. Um, that is a... a very prominent corner in downtown Ann
Arbor, on the South University area. That's a 14 -story building, 606 beds. Um, West
Lafayette is a property we just opened in August. Um, that is a 489 -bedroom property,
with a ground floor, uh, re ... grocery tenant, uh, which has been very rel..well received by
the tenants and the neighborhood alike. Um, we've been talking with that same grocer
potentially about this project and if it's desirable to have, uh, another grocer in town, we
...we think we have the tenant in mind, um, knowing that New Pioneer also was
proposed to ... to go into the project. That's being worked out, um, we have talked to
New Pioneer as well. Um, right now our ... our plans call for about 6,000 square feet of
what we're calling market space. Uh, that could end up being retail. Uh, the property on
the right is in Eugene, Oregon. Uh, that's a LEED gold building. We're finalizing the
LEED status of it right now. Um, we just got confirmation that it will be LEED gold.
Um, the next slide is our first hotel that we actually built and opened, uh, so this is in
Champaign, Illinois. It's a 142 -key Hyatt Place. Hyatt's one of the potential brand flags
that we mentioned in our proposal that has interest. Um, this property opened in June of
this past year and is doing very well for us. Um, it's operated by First Hospitality Group,
which is one of the hospitality operators that we've provided in your packet. Um, we
have our second Hyatt Place under construction in a town called Bloomington -Normal,
which is home to Illinois State. Um, that one is largely similar to this property. Um, it
will also have a multi -family component to it though, so this one is a stand-alone hotel.
Uh, the one under construction, which will open in about 10 months, in... in Normal,
Illinois, right on the circle, um, will actually have about 40 market -rate apartments
attached to it. Uh, the one on the right is our multi -family tower in Chicago. This is
known as Arcadia Tower. Uh, this is a 33 -story, 350 -unit market rate apartment building.
Uh, this will open in March, believe it or not. Uh, that's... that's an actual view of the...
the property today with the water rendered in for completion purposes. Uh, this is just a
section of images of...of buildings opened this past August. So Eugene is up on the
upper left and then the remaining three images are in one of our Tucson properties. And
this gives you a ... a map perspective of where we've been and where we're going. Um,
so Ann Arbor was one of our early projects. Um, more recently the Eugene project. Uh,
the Champaign, Illinois Hyatt Place. Uh, a high-rise in Tucson, as well as a high-rise in
Chicago. And, we're breaking ground next year on this new project in Lawrence,
Kansas, uh, near the football stadium. And I'm going to let Jim Plunkard introduce HPA
and his firm quickly. Um, he's our architect. Many of the buildings that we showed you,
uh, Jim was the architect of, as well.
Plunkard/ Great, thank you. Good evening. Uh, we're a multi -disciplined architectural firm in...
based in Chicago, and um, we've worked with a number of people across the country, uh,
in hotel work and student housing work and multi -family work and it's funny how it all
sort of, um, blends together and cross-pollinates, um, each of the ... each of those types of
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projects. This is a project, uh, in, uh, Chicago where we took an old, uh, outdate hotel
and, uh, updated it, and we're also, uh, the interior architects for this, as well. These are
some projects that we've worked on recently, um, you know, uh, buildings that are under
construction or being proposed, um, across the country. Uh, we not only work with ... we
work with a number of different developers, but um, most of these projects ... all these
projects here are with, um, with ... with Rise and CA Ventures. These are some ... just
some more images of shots we've done, both interiors and exteriors on a number of
different building types, um ... from high-end hotels to, um, what's now becoming pretty
common, even on small-scale hotels where they become very boutique.
HranKowsky/ Okay, I'll jump back in. I think, uh, rather than speculating either on the images
that you've seen and/or reading the original proposal that we sent in, I think this is a good
opportunity to really describe our concept to you and the approach that you guys took...
or that, uh, we took to the project itself. Uh, so this is a quick summary sheet that you see
here. Gross square footage just under a half million square feet. I think one of the key
things, and we've highlighted here, is the lot coverage. Um, I'll talk more about the
specific site planning here momentarily, but we're really only covering 46% of the say
Court Street elevation area, as it covers the site, which is ... highly unusual, um, so ... and
part of that is that our primary concept was to draw the public right-of-way into park
space onto our site. Uh, the metrics of the bed counts you see there, 302 units, 524 beds,
144 keys in the hotel, uh, 20,000 of office and/or convention space, as mentioned in the
RFP, some retail space as J. J. mentioned, and then parking space to support all of that.
So this image here shows our site, the Court and Linn site, in context of Riverfront
Crossings district, as well as downtown and proximity to campus. Uh, the key thing that
I find here is it's just, you know, one block removed from the south edge of downtown,
and I think that you know although Burlington is a real primary access going on there that
some of the buildings just to the north of us are a bit of a boundary right now, and there
really isn't a w hole lot of contextual thought, I think, given to those projects. So that led
to the inspiration for the way to treat the site plan on our own site. So, this is actually an
excerpt from the Riverfront Crossings... Crossings, uh, form -based zoning code. Um,
you see the particular district that we're in, and the white space in the center of the page
is the ... the site that we have here, and you can see that we'd actually be at the south end
of the more urban sub -district within Riverfront Crossings. So highlighting here you see
a lot of the urban infill that exists just to the north of us, like I was saying, kind of turning
its back on the public right-of-way. Those buildings are considered an extension
downtown to the south, which I think was what we were looking to do on our own site, as
well, in a different way. Um, from a zoning standpoint, we came out and referenced the
Court Street elevation here, and then at Linn, also referred to that edge. But instead of
filling the entire site with a big block building that was impenetrable, and not open to the
public right-of-way, we've created this corridor down the middle of our site, which draws
public space, views, sunlight, ventilation, um, and green space all throughout (mumbled).
Some of the other criteria within the form -based code are highlighted here, and how those
are accommodated. This drops our original site plan into the site so you can see the
buildings and the context of the green space. And then this dashed line towards the
bottom there, we ... we propose that that's almost a perception of the new south edge of
downtown, and I think the ... the geography of the site in particular lends itself well to
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that, with the tremendous drop-off from north to south. So if we continue that elevation
of Court Street down to the south, then we have, you know, a wall at the end and we're
creating a green space out of all of this and, uh, it does not blend itself right into the much
lesser dense residential neighborhood that's right there. So it's a logical boundary.
Plunkard/ I first ... I still have to say I've done a few dozen of these projects and I really just want
to go back 30 years and become a student again. I remember fondly my concrete painted
block walls. (laughter) But, uh, you know, ta... getting, you know, this is a little ... little
bit integrated with the disc..previous discussion. When you talk about open space and...
and sustainability and height and density and economics, you know, and then you get a
site that's this large, and this complex, um, I think, you know, we took a step back and
tried to view it from a different perspective. So I think what you would normally do,
what a normal architect might do, is just fill the block and, you know, create some private
space, that was the amenity space, and ... and we've done that, and I think in this case,
combined with the ... the, um, severity of the slope, uh, of the site, I think what we've
tried to do is look at this in a differ ... in a different light and look at the building, take
advantage of the height bonuses, so we wouldn't lose any density and wouldn't lose any
of the economic, uh, advantages that, you know, obviously we want here, but also to kind
of split the building up, and we did this originally. I think somehow we just felt like the
hotel should be up towards the street, where we could have it connected, but in this case,
this is the one shift we moved the hotel over to Linn, and allowed our ... allowed that,
which is really the mixed use aspect of this. That building is a mixed-use building. It's
going to have office and it's going to front Linn and it's going to be active, and it'll be,
um, a 24/7, year-round piece with a hotel, um, and then put the residential in the back,
where we can front it on a private, um, private, you know, green space or ... or a
courtyard, a green courtyard, but the idea was that we would carve these into quadrants
and, um, you know, we would have as Dan said a ... about 50% of the site would be open
space, and we view the open space as building. So that open space, uh, which is alluded
to in your master plan, is something that we think people can gr ... go to. There can be,
uh, a market there. Uh, there could be a little art exhibit. There could ... it could be a
place where the public comes, people walk their dogs, but a nice interaction between
what's happening on this site, and what's happening with it as the ... as the development
of the ... of your plan gets implemented. Um, basically we've done the same ... I think
we've done some intuitive things that anyone would do. We've buried the garage. Um,
we've used the slope to enter it and make as efficient as possible. Um, we don't want to
overbuild the garage becau... you know, we want to try to keep that to a minimum. This
is going to be a walkable site. We want it to ... to continue to ... to be sustainable, um...
this is another, this is another, just a breakout of what we said before. So we have this
green space that covers 50% of our site. The remainder of the 50% of the site is
essentially amenity space. It's activity space. It's congregal space. It's where the
students can come and either work out or hang out in a cafe, interact with someone
outside. The amenity and lobby is, uh, on the street side, um, on Linn side, and the
marketplace is up, pushed towards Court Street. So the entire ... if...we've kind of
elevated our program above grade, and everything at grade is a ... is accessible. Um, here.
and I'm excited about that concept. When this is going to be one of the first major pieces
in this down ... in this ... in this master plan that you ... that, uh, you guys have, um,
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prepared. So, this is a ... it's pretty simple. We're, um, got 302 units, 524 beds, about
130, um, hotel, um, rooms. Gives you an idea here at the top. We've, um, we've also
staggered the height of the building. I think to, again, for us it's about scale. So along
Linn we've got ... it keeps bopping around, but we've got 12 stories on Linn. We've got
11 stories up on Court. We've got 15 stories, sort of the back portion of the site to get
that density that we need, and then on top of the roof deck on Court Street we have, um,
we have a little pool and terrace, um, for the students, so that, um, you know, it's
another ... you know, obviously we don't have the greatest climate in the world. So
maybe there's times where they just need to stay indoors. So it was expanded to common
area space. This is a simple section showing how we're really keeping... certain, um,
avenues, vistas open, and the main vista between the two buildings. I think this helps
with ventilation, so you don't use as much, um, cooling in the summer. Uh, the green
space, obviously, we're looking at trying to maintain and we're going to store rainwater
to, uh, to water the green space.
HranKowsky/ Some of the concepts that you see in this slide tie back into the conceptual site
design that I presented earlier. So, um, you know the zoning, form -based zoning talks
about stepping back the building, setting back buildings, and so some of these indicators
that we've done that here on Court Street. Stepping down both from north to south and
east to west with the ... the two structures. And I just highlighted the ... couple floors of
office use that we have in there, as well. Um, thought that this ... this view was key to the
concept. I think not just from a diagrammatic standpoint but actually put yourself in this
space that's being created. Whereas, you know, normally you would fill maybe corner to
corner. We've opened up this corner of the site to the public space and what would it
actually be perceived like? So this is kind of the mouth of the development you see here,
where you can get drawn in from a pedestrian standpoint. There's also the curb cut up on
Court, which leads you in and you guys probably saw, there's a portico share drop-off
that's covered by the hotel building. So you actually drive underneath the building, like
is typical in a ... in an urban setting. Um, secure drop-off point like that, and it keeps the
traffic away from the residential building. So, anyway, we have a heavily landscaped
kind of promenade cutting through the site. There's some modern light fixtures that you
see their defining the way and you'll see a couple other renderings that, uh, indicate this
from other views.
Plunkard/ Again, the scale of the exterior of the building. It's about breaking down the
massiveness of.. of the structure. Uh, so for us it's creating a variation in the ... in the
glass fenestration. Um, we're talking about textured, um, cementitious panels on the
outside to give it... give it, uh, a warmth and um, and... and... and creating an area in each
floor where we can build panels, uh, and uh, meet all of the ... all of the sustainability
requirements to make this an energy efficient building.
HranKowsky/ I think this view here is also a good indicator, um, you know cranked around
looking more due south, where you get to actually see between the two buildings into that
more unique courtyard that actually exists between the two uses, the two structures that
are there. So, this whole green space is going to, uh, transition say from a public to a
semi-public to a semi -private space, but once it gets back, uh, between the buildings.
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Plunkard/ And ... and you can't see it on these plans but the idea back by Harrison and the back of
this site is that we create a pedestrian walkway or a staircase that leads up the hill so that
Harrison doesn't get completely cut off from a pedestrian standpoint. The idea, again, is
not ... is to ... is to not disturb the, you know, existing urban fabric here and sort of to
maintain that, um, and not create a mega block.
HranKowsky/ So again, getting back to the overall aerial view of the development, you see a
number of the components all in one image that you saw in the floor plans coming up, the
metrics in some of these tabs here. Uh, a nighttime view of the same, just highlights
some of the areas of activity that exist on the site and on the rooftop of the residential
building, the amenity space that you see in the front. Some of the data's in here. We just
put it in the slides cause it is in your handout. Don't want to bore you with it during the
presentation, but up to 524 beds. Uh, getting into the LEED sustainability, you know,
there's nothing top secret about that. Very similar to what we heard in the first
presentation. I think a lot of the same criteria applies for us here. Uh, I think that some
things that weren't mentioned there maybe, you know, bicycle parking is a good one.
Um, you know, the, of course, the mechanical systems that go in the building, that's a
typical... typical approach there, but we fully intend to ... to make the most of those
initiatives as well, both, you know, to improve the management efficiency of the building
but also, uh, the community as well.
Smith/ Uh, this is just a ... a slide, kind of giving you an idea of the ... the brands that we've talked
to on the hotel side. Uh, the Hyatt Place, obviously, we've now done two of them, so
they were a logical choice for us. Um, Starwood's Aloft brand, we think would be a nice
fit, in particular with, uh, in... in conjunction with a... an apartment building, and then the
Hilton Garden Inn, as well. Um, there were others that were interested, but those were
kind of our ... our favorite out of the bunch. Um, financial overview, uh, this is a five-
year pro forma, if you will, um, giving you a snapshot of total project costs. It's about a
$97 million project, so it's... substantial. Um, we have included a $5 million purchase
price for the land, um, we've also similar to the last, uh, respondent, um, it was through
broker dialogue that we derived that number, as well as, um, really backing into it based
on our program. Uh, we can pay typically a certain amount per bed for land, so to your
question as the project gets scaled down or if stories were, you know, reduced from the
project, you know we would probably look to adjust land price acc... you know,
accordingly. Um, the ... project would be based off of, you know, um, one of our equity
sources, which is, um, a couple that I listed prior. Um, we envision 65% construction
loan, uh, a very ... on par with the rest of our projects. Um, that would be about a $63
million loan. Um, the common equity would be just under $34 million. That would be
comprised of our own equity, as well as an institutional equity partner. Um, the total
construction costs, um, was $75.5 million, um, we've talked to local contractors, as well,
um, actually one out of Des Moines has built high-rise construction for us, um, multiple
times. Um, in fact we've taken that contractor to places as far as Gainesville, Florida,
um, we have a great working relationship with them. Um, so we have talked with that
firm, as well as Mortenson locally, as well. Um, we know Mortenson's quite busy in
town, so we had a couple options. Um, on this slide, this is kind of a summary of
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economic benefits. Um, this is just a CA Ventures' estimate. Um, we basically valued
the four proposals that were short-listed, in terms of the program that had been provided
you. Now one of those should have an asterisk on it because it has changed since then.
Um, so the ... the second proposal, the numbers will be slightly different, but in terms of,
um, total economic value, we basically built a picture here, um, over a 15 -year period that
would show, um, you know, what would ... what we would calculate as the assessed value
for each of the projects based on the program described to you in the responses. Um, our
project on the apartment side, um, we estimate based on several other, um, assessed
comps that, you know, the apartments would be roughly $1.5 million in terms of, uh,
taxes, property taxes paid on our ... on our program here. Um, additionally to that, um...
we've also shown the, uh, commercial property taxes, uh, which were part of that 1.5 and
that includes the hotel and the office, and the retail. Um, below that would be est... an
estimation of logging taxes from the hotel use. So um, you know, in year one we expect,
you know, roughly $2.2 million to be generated from our proposal. Uh, we also are
requesting no gap financing, no TIF increment at this time. Uh, we really, um, don't see
the need for it, unless there's material changes to the program, i.e., reduced height,
reduced units, uh, reduced beds, increased parking, if that might be something, um, that
would be contemplated. Um ... the next slide is just, uh, and then ... Dan, if you can go
back one, um ... I'm just kind of building a picture over 15 years, um, you know, and I
just took a 3% CPI increase for ... for our calculation, but we expect that, you know, our
tax contribution over 15 years is close to $41 million; uh, without the gap financing you
can see the deviation across the proposals there, um, pretty plainly. Uh, the next slide...
um, we've talked about purchase price and job creation. So, our purchase price remains,
you know, $5 million, um, we assume that that will help retire debt and have some cash
excess. We'd be willing to put a deposit down while ... and the agreement could be
negotiated. Um, through the construction process, um, we expect, you know, roughly
400 to 450 jobs over the course of the 20 -month period. Um, once the property is
complete, um, we expect a breakdown of permanent jobs shown here, 12 to 15 on the
apartments, 10 to 12 in the market and retail, 30 to 40 in the hotel, and then the office
space, using just a general 200 square foot per person, you know, that could be another
100 permanent jobs on site. So, uh, close with a ... just a couple images of our existing,
uh, built projects, give you an idea of the interiors. Um, our units are fully furnished, as
you can see in the upper right, and the upper left. Um, and we thank you for your time
and look forward to the questions.
Hayek/ Thank you. Uh, I've got just a couple of questions to ... to start out. First, the ... the, your
Ann Arbor property, it's on South University. Do you know what the cross street is
there?
Smith/ It's at Forest, South Forest. So it's the southwest corner. It's kitty-corner to University
Tower. (several talking) It was the old, um, bagel shop and Village Corner.
Hayek/ Oh, yeah!
Smith/ So a lot of people that went there know that place and unfortunately it's no longer in
existence, but um...
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Markus/ Not the bagel shop! (laughter)
Smith/ Gary's Bagels!
Payne/ That was probably long before (several talking)
Hayek/ ...the Village Corner is what I remember (both talking)
Smith/ Village Corner, the ... the wine and liquor store that every student knew (laughter)
Hayek/ That's why I remember it! (laughter) Okay, so it's on the south, uh, southeast corner.
Smith/ Southeast corner, yes.
Hayek/ All right. Second question is, uh, this tax number is interesting, um ... uh, is ... are you
aware of the commercial property tax reform from last year and... and some of the limbo
that we see with respect to new multi -use classifications and Iowa Department of
Revenue rulings, I mean, this is...
Smith/ Yes!
Hayek/ Okay!
Smith/ We are...
Hayek/ Do you factor those in I guess is my question?
Smith/ Um, we factor ... we basically built this off of existing in place comps rather than where it
was going, cause we weren't quite sure where it was going. We did own property in
Ames for several years, so ... in the state of Iowa we understand the rollback and the
condominiumization of units that, uh, you know, is prevalent, um, so we've kind of
assessed based on that same theory that's happening on properties like Telluride across
the street.
Hayek/ So I mean ... upshot is, all these changes are great for people like you and bad for people
like us, or cities, local governments like us, and so, uh, it's interesting information and I
just want to make sure, and maybe we can vet that internally whether... whether this
would bear out, given what's occurring or has occurred at the state level.
Smith/ Right. Well, any time we're trying to gather intel on how other properties are assessed,
it's a little bit of a guessing game, as you can imagine, um, so you know we ... we
basically did this based of our ... off of our internal research and, um, you know the few
comps that, you know, it was difficult to find certain comps in the price range that we're
talking about, you know, with a $95 million project it's ... it's, uh, it's quite different from
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some of the existing stuff. So we've had to kind of use an internal factor, if you will, uh,
to build up to what we've shown here.
Hayek/ Thank you.
Payne/ You mentioned that the units are fully furnished. So students have to ... don't have to
move stuff in and out other than their personal belongings?
Smith/ That's right, yes. So we, uh, we typically furnish all of our units and, um, given the
hybrid that we think this will be ... this is just really apartments to us in this instance. It's
not 100% specifically targeted at students. We know that it'll naturally get students, but
um, we will offer, uh, storage space; if the ... if the resident doesn't want furniture we'll
keep it in the building; and use it for the next time we turn over that unit. But all of our
units are fully furnished, uh, sofas, beds, mattresses, desks, coffee tables, TVs in the
living rooms, um, and that really, um, you know, Core Campus made a nice point. You
know, the ... the move -ins can be a nightmare with these properties, especially the ... the
size of the prod ... property that we're talking about. So the furnished units definitely
helps a lot, and then staggering move -ins over several days in an organized fashion also
helps. Um, but yeah, we envision mostly ... the clothes on your, you know, your clothes
and your books and, um, some people will ... want to bring their old ... their own 60 -inch
TV if we're providing 42, but, um, those things we can work around.
Dobyns/ The previous, uh, building by having one building, all the rooms, at least for the upper
floors, look out either to the, uh, outside or to a courtyard. You all by having two
buildings, by definition they're going to be looking in on one another. Um, I know you
mentioned this to a sense, but could you go over for me again the architectural and
aesthetic reasons for doing that.
Smith/ Sure, um, to me it was, you know, I should let our architect speak, but from a... an owner
perspective is quite simple. We wanted to draw people in and create this open space with
additional, uh, courtyard or e ... egress space at the ground level, um, you know to .... sep
... separating it to two buildings allowed us to have the hotel now stand alone. Um, we
thought that was better from a number of different reasons, uh, you know, mixing the two
uses on the site is okay we felt, but when they were integrated into the same structure,
same lobby, same stairwells we felt that that could be a bit of a challenge. So, for that
reason we broke it into two separate physical structures. Um, the parking now will be,
you know, integrated and intertwined, but we'll have control mechanisms to ... to work...
work with that management -wise.
HranKowsky/ And I would just make a quick comment too. I think ... the first scheme that we
saw, you know, from the Core Campus guys too. Similar situation, I mean just because
theirs was connected, you know, they still have private courtyards there that you're, you
know, looking across. So with that dimension you're talking about from phase to phase
of building is ... is going to be similar. So just because they're disjointed into two
separate structures doesn't make that scenario any different.
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Plunkard/ I ... I just like the idea of when you get a large site like this — it's a 150 -foot deep, and
you think about it in a scale and you break the scale down, essentially we're creating this
...this street, this residen... this kind of, this street where people can congregate. So a ... a
typical public right-of-way is somewhere around 60 to 66 -feet from the face of a building
to a face of a building on a public street. In here we're about ... 58, almost 60 feet in
between there, creating a green space and a ... a walkable street. So, it is true you have...
you have people that will look across at each other and you'll have different uses that'll
look across each other, but that kind of, uh, integration, that kind of, you know, is part of
what ... when you create a ... a community like this, it's ... it's urban, it's ... it's exciting.
So, we ... I don't think we have any issues with it and as Dan said, the other version is to
create a big donut and hide that space.
Throgmorton/ So ... so maybe I can follow up on that. I think the question would be directed
toward you. Uh, when ... when I look at the ... the two buildings, I think street canyon. I
think to ... what ... what you've come up with are two tall buildings, pretty close to one
another, with the ... the, uh... I'll call it a street, with the street separating them, uh, facing
north, north and south. So, I ... I would expect substantial winds to be created by that
juxtaposition of the two buildings. So I wonder from an architectural point of view if
there are things that can be done to inhibit that, uh, so that it doesn't become a problem
and ... and distract people and, you know, divert `em away from actually using the area.
Plunkard/ No, that's a good point. I mean every street where, you know, we ... we're all from
Chicago, where there are 15 -story buildings everywhere. So, um, and it's the windy city,
I'm not sure for that reason. But we do, you know, there will ... there is, uh, the idea here
is that we would be planting this, um, we ... we're creating angles on the building to sort
of catch the wind, I mean, the whole idea is to ... is to kind of, I mean, is to create a street
that's just a normal street and to try to allow fresh air to go through there. So if you have
a very windy day, you're not going to stop the wind from blowing through there, but... in
the middle of summer, you're going to have a kid opening up his window and it's going
to cool off the unit, it's going to be a great way to produce energy. So, I don't know how
to, you know, it's kind of a balance we're trying to play. But I don't think we're creating
any excessive wind that you don't have in any urban area.
Throgmorton/ Okay.
Plunkard/ We always do, you know, we always try to do, if there's a concern for it and we do it
in downtown Chicago, we'll create .... uh, we'll do little wind ... wind tunnel studies,
which ... is not an issue for us.
Throgmorton/ Okay. I'll ... on ... on a different topic, urn ... I ... I haven't heard you say anything
about the management of the residential building and ... and the inhabitants of the
building. Could you speak to that, please?
Yeagle/ Sure, uh, Mike Yeagle, uh, I have worked in our management company for the last 11
years and uh, we're a fully integrated group. So, um, we start with great design with
a ... with a, you know, a plaza here, which is what we would want to do anyway with this
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type of site and this type of density, but we worked through the entire process of
understanding that this is going to be primarily 18 to 25 -year-olds living here, and... and
how do we design the approach to the building, the lobbies, the elevators, the security
system. As Scott mentioned before for Core Campus, we're doing all that, and then
we're really focused on the environmental design. Uh, what colors are we using, um,
where are we using transparency and bright light, how do we use our ADA ramps to try
to create, uh, an orderly procession to the front desk. Uh, we've, um ... developed our
own proprietary smart phone app with how residents get their guests in. Uh, so every
student in our building is either ... a resident or a registered guest. Uh, we write a security
protocol for ever site, um, so we're fully integrated, actually my entire job is basically
working with the design team. I actually no longer have to manage these buildings any
more but ... I, uh, work with the design team up front to think about the environmental
design and how do we create the behavior that we want. We're even taking this a step
further now and so ... what do college kids do with too much time? Party, right? So,
we're focused now on integrating art, food, and music and other things in our buildings,
where it's just about occupying time. Because if you don't ... if you give them
alternatives, they'll try it, and not in a ... a way that is, um, sometimes people think of
residence life which is sort of...the kids don't really want to do it. We're trying to create
spaces and programming that's mature activities that students would actually want to do.
Um, so ... we start with, uh, what are we actually designing. What are our policies and
procedures — all that stuff is almost a given. We're really trying to take it is with
technology and with ... with additional thinking, um, to try to create the behavior that we
want. This also goes into our marketing approach. We don't market the party. Um, we
don't ... we don't, you know, sort of in the way we create our renderings in everything we
do we try to set the right tone. If you set the right tone and the right expec... uh,
expectations from day one, it tends to work. To that end we like students to stay for
multiple years, you know, that don't come to our facility their sophomore year and then
they're gone by their junior year because they had too much time doing the wrong things.
So, um ... it's a little bit of the philosophy of how we think, but we have a full in-house
management team. Um, you know, we ... we work together to try to create the right
environment for students. That's what we've done for the last decade, uh, and that
experience of doing these high-density buildings has led to the new initiatives and the
new way of thinking, to try to continue to create the most ideal place for a student, and I
think we're going to have parents staying at the hotel (laughter) on football game
weekends, just making sure Johnny and Susie stay in line (several talking)
Dobyns/ Looking across to there (several talking)
Yeagle/ There's an advantage to looking across that area (several talking)
Dickens/ Do you have 24-hour on-site management?
Yeagle/ Yeah we do, so urn ... uh, that oftentimes referred to in the private sector and the ... and
the institutional world, it's a `resident assistant' and the private sector it's a, um,
`community assistant.' Um, they're the big brothers/big sisters of the community. We
find that peer-to-peer interactions, uh, you can't tell an 18 -year-old male to do anything,
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but if his buddy tells him to do something, then he's much more likely to listen. So, we
spend a lot of time on that peer-to-peer mentoring and interaction, um, and trying to
groom the behavior that we want through the peer-to-peer interaction. So we'll also use,
uh, courtesy patrol, uh, when necessary. I think the Iowa/ Iowa Stage game would
probably warrant that, but we don't necessary ... we found that through these other
initiatives and trying to create the environment that we want in the first place, some of the
things that you wouldn't actually think about as intuitive, uh... we don't necessarily have
to have an overzealous sort of security presence. Um, if it's not necessary. But there are
the times, certainly, at a Big Ten school during football season, there are the times we
need to bring in the reinforcements and plan for the worst.
Botchway/ So one of the things you mentioned was that, um, the market's kind of looking
towards 18 to 25 -year-olds, and recently there's been kind of a huge community push in
regards to senior living. You know, if you do your market analysis and the community,
you know, kind of, um, pushes back and, you know, wants it to be more senior living,
is ... is, are you going to be flexible in your approach here to, um, incorporate those ideas?
Yeagle/ Um, into senior housing? I guess my notion of senior housing is a pretty specific
program that I don't see these two, um, I don't see what we're doing here as being able to
integrate that type of... of facility.
Botchway/ Another question I have was where is the parking for the hotel?
HranKowsky/ So what you see here, this is the curb cut off of Court here, um, there is like a two
and a half level grade change before you get to the bottom curb cut we have coming off
of, uh, Linn. Um, so pretty much all the parking is encapsulated beneath, starting beneath
the park here, and then going back through the site. So it's like a parking podium, but
because of the grade change, it's buried underground in the front.
Botchway/ So run the numbers by me. How many, I mean, how many parking spaces did you
have?
HranKowsky/ Uh, 370. It is. So what ... what we did, you'll see, um, there's a calculation in
here ... uh... so in the left hand column, if you find this page here, uh, the code requires in
the right. So, because of our bed count and the types of units that we have there based on
the number of beds in those units, 274 is the required residential parking, and then what
we did on top of that is we just added one parking stall per hotel room, and I know that
that's the ratio that shows up. It's apparently not required per the RFP and within this
zone district for non-residential uses; however, for the viability of the hotel, we have it
penciled in there for now.
Botchway/ I missed that!
HranKowsky/ That's okay! So, yeah, total's at 370 (both talking)
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Smith/ We actually also, um, if you refer back to the original proposal, I believe there are 279
stalls. So this is about a 90, uh, parking increase from what we had previous... previously
showed you. Um, the reason for that was, urn ... you know, two things. One the RFP, uh,
specifically mentions that, um, parking is not required for commercial and retail uses.
Um, it didn't mention hotel use, so we, um, you know, basically underwrote the original
proposal for just the residential, based on the RFP. Um, in discussing with our flags that
we're talking to, we think that a one ... one per one, uh, parking stall to key ratio was more
appropriate, so the increase has been, uh, for that reason. Um, they're in the, you know,
the underground here as shown, uh, will have control measures. It'll most likely be a
gate and FOB system to segregate the hotel users from the apartment users.
Botchway/ One more question, and I don't know who's going to answer this. So I was looking
through the, uh, developed, acquired, and managed properties, um, in all of `em, and
again it was just like kind of a quick look, seemed to have different names. (mumbled)
Rise at Texas A&M ... University have the same name. Is there a reason why you came
up with the same name for this project?
Smith/ Um, you know, we ... we typically brand each project as a stand-alone, which is, uh, so
this is a bit of a departure for us to repeat the same name. Usually the buildings are so
unique and individual and we don't have a single project that I could say it is cookie -
cutter. They're all very unique and, um, tailored toward the site dimensions and contexts
and ne.... neighborhood context, uh, so they've all be kind of branded individually. Um,
the property that we had at Texas A&M, um, was the first time we used that name, and
we had really good feedback from, you know, not only tenants, but just the recognition
that that name, uh, resonated well with people. Um, so we thought it went well,
specifically with the Riverfront Crossings area, um, we liked, you know, the Rise is a
little bit of a ... notion to the verticality of the building, of course. Um, also it could, you
know, have some undertones to the former life of the site, uh, with respect to St.
Patrick's. So we, uh, you know, there were a couple different reasons for that, but um,
you know, we ... we liked that name in particular and we thought it worked well here.
Um, there's really no connection between th... this property and the one at, uh, in College
Station, other than the ... the same name.
McCarthy/ Is there any prior experience or maybe case studies where there's a hotel and the
residential unit as close proximity? I'm just ... I'm thinking that if I were to stay in a
hotel, I wouldn't want to necessarily stay next to student housing because the perception
of partying time use, as you mentioned. So is there any indication that this is actually a
successful model?
Smith/ Um, we're staying at the hotel Vetro today, and I think that that's a little bit like this.
Um, you know, with the shared uses, with ... within close proximity. Um, there's several
other projects, um, that I could probably point you to, um, that would integrate, you
know, multi -family apartments with hotels. Um, one that we have under construction is
in, uh, Normal, Illinois. It's not operating yet. Um, but ... what we like to do from a
planning perspective and a management perspective up front is really, you know, create
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separate entrances, separate lobbies, separate amenities, and um, keep them divided in
that manner.
McCarthy/ Right. Is there anything with specifically student housing though?
Smith/ Um ... not in our portfolio there's not. Um...
HranKowsky/ But to, I kind of address ... I see where your question is coming from. I think
we're ...we're not specifically saying that this project is specifically student housing
either, but um...
McCarthy/ Right. Acknowledging that (both talking)
HranKowsky/ Yeah, yeah (both talking) Absolutely! So I would say that the example he
brought up in Bloomington -Normal is very much parallel then because it's the same
thing. It's a combination market (mumbled) (both talking) there as well.
Smith/ It's really a combination Illinois State University students and ... and, you know, young
professionals working at State Farm headquarters, um, so, urn ... we can try and find more
for ya, urn ... you know, there's several in Chicago that I can think of. Um, you know,
there's actually a Hyatt Place, an Aloft, and a... another hotel all under the same roof, uh,
adjacent ... in close proximity to, um, apartment. Uh, they're not specifically student
though.
HranKowsky/ But I think specific to student, I mean, that was a large piece of what Tom focused
on with the Core Campus presentation too is their University of South Carolina
development in Columbia where it's ... the two uses, right on top of each other, as well.
So...
McCarthy/ I had one more quick question. Um, just the price range again, the same sort of
question. The estimates I found range from about $1,129 to about $6,000 in previous
developments that you've done.
Yeagle/ I think we have a much wider range. That...
McCarthy/ Okay.
Yeagle/ ...probably 700 bucks to 2,000 a unit.
McCarthy/ Okay, and you think that sort of price would hold (both talking)
Yeagle/ Uh, yeah, so we'll take a building like this and um, we'll create a pretty wide price...
price range through segregating floors (both talking)
HranKowsky/ Per bed were those numbers.
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Yeagle/ ...we can segregate floors. We add some bells and whistles to some units that don't...
that don't apply to others. So we try to create a whole range, so that the property's
accessible to others. To that end our employees live for free, right, so we start, uh,
diversify, uh, who the property's accessible to. There's several... several means. So right
now, um, similar to the question was about, you know, specifics to the Iowa, um, campus.
Like at this stage in the game we're not ... we don't have the exact plan mapped out. We
just know we're at kind of schematic design. From there if we're awarded, we'll get into
the full detail and create a full price spectrum. One other thing I just wanted to add
with ... I think the hotel component adds a massive advantage to the student housing piece
because hotels 24/7, fully real 24/7. So it give you extra, um, it gives ... it gives ... this site
will always have people around it, where if you're running just a stand-alone student
housing building, yes you have 24/7, um, staffing there, but you necessarily don't have
coverage all the time of somebody walking around and kind of eyes on everything. So I
think that, um, the hotel gives you pretty big advantage of just more staff on site and we
can shape the behavior of the students. I know that there, you know, we know if the
students are acting in a certain way it's going to impact the hotel. We just don't tolerate
it. So, depends where you set your bar of tolerance, and if you don't tolerate it, then
you'll attract the students that want a nice place to live, um, and the party kids will go
elsewhere. And that's a little bit of how we approach that too.
Hayek/ We want to be consistent on time so why don't we take one or two more questions, um,
and ... and then move on. If anybody has any.
Throgmorton/ Well I ... I'd like to follow up on Evan's question. I ... I never really liked the idea
of including the hotel so that ... that's fine, but ... but when I think about the site itself,
and ... and where you're proposing to put the hotel on Linn Street, on south Linn Street, I
think right across south Linn, on the east side of that street, is student housing. A whole
bunch of it. And ... then right behind the proposed hotel would also be your new building
that has student housing in it, and I mean I love students — I'm not being critical of...of
them directly here. Uh, but that does sandwich, uh, the hotel within ... two rows of...of
student housing. So I ... I wonder about that as, um, as a ... as the best possible solution to
where the hotel could go.
Smith/ Sure, yeah, I ... I can understand and appreciate the question. Um, in talking to the flag
that we've talked to, uh, specifically the ... the Hyatt Place and the Starwood Aloft brand,
they actually like being around those students, um, that's a lot of, um, ancillary, uh,
income that's being spent, you know, in the lobby bars or in the restaurants, in the grab -
and -go section so ... uh, the few that we have talked, uh, specifically about this property to
you, um, like the context of it and the placement, um, you know, this was a, you know, an
early ... early plan with no dialogue, uh, really from ... from a planning perspective really,
um, on the City's part. So, you know, we would be open for change, uh, but you know
right now we ... we know that the two, uh, you know, frontrunners for the operation of
that hotel piece liked its location.
Botchway/ I had one more question. Uh, so from an accessibility standpoint, you know, I didn't
get a chance to ask this question last time, I mean ... what kind of architectural features do
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you allow for, you know, for anyone to use the building. I mean we're specifically (both
talking) Again, this is a new building for me. I mean most of the building that I were in
didn't have, you know, elevators or anything like that, and so I hurt my leg playing ball,
whatever the case may be. It was just one of those things I'd have to crawl my way up
the stairs, and so what other like kind of accessibility features, uh, do you plan for or did
you plan for in this particular location.
Smith/ Sure. Well, these ... all of our projects, not just this one, will comply with Fair Housing
guidelines and ADA accessibility guidelines, as well as ANSE codes. Um...
Botchway/ I guess beyond that, because you know a lot of times accessibility guidelines, you
know, speak to, urn ... you know, pushing a particular button on a door and it opens...
Smith/ Uh huh.
Botchway/ ...a certain way, but at times ... and I'm actually thinking of a University building
right now, the ... the width of that doorframe isn't large enough...
Smith/ Right.
Botchway/ ...I mean, so I guess...
Smith/ We ... um, I can ... I guess I can address where that's, um, we have operated buildings of
this size and scale and magnitude, so it's .... it's 10 years of history of building these
properties and ... and operating them, where we come up with, uh, the egress points to all
the buildings. So, um, you know, they vary by cold weather climates on whether or not
they'll have, you know, a double door entry. Uh, we certainly would here. Um, we
would have a roundabout entry, um, which would be a larger six-foot roundabout door,
um, you know, full accessible buttons, um, and mechanisms to enter the property. Um,
you know, all of our properties will have ramp ... as you can see here given the challenge
of the site and the slope, you know, there will be considerable ramps, um, to get around.
Um, you know, we'll probably also, um, you know, as we turn the corner to that parking
lot, you know, there'll be a specific two ... two-level shuttle elevator to get ya up to the
plaza level. So, um, you know, egress is a big issue. You, you know, the number of
people that come into a building with 524 students could be in the thousands on the
weekend, um, so really, you know, we've studied that and you know sized doorways, uh,
appropriately for the egress.
HranKowsky/ Yeah, and I ... I like that question, going beyond code minimum you're saying,
because you can't get away with not doing it, period these days. I mean us from the
development side, Jim from the architectural side, we get it ever time. We hire our own
outside consultants, you know, to weigh in on the accessible design of the properties, but
light bulb went off for me when you asked that question, cause the way that I see it here —
not just meeting the code, don't say okay if you're either confined to a wheelchair or
ambulatory handicapped, you know, don't make someone maybe go through an
accessible route that happens to go through the hotel lobby, get circled around, come out
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through the back door to get to the terrace, right? If we give a conscience, accessible
design thought about, hey, let's give these folks the same opportunity that every...
everyone else does to experience this outdoor space the same way, I think that's probably
where that exists here. Interior space, you know, you are confined more to doorways and
such that J. J. was mentioning, but I think outside it would be giving special consideration
to that plaza space, and making sure that from the point of entry, all the way through to
the back side of that, that that's fully accessible and at grade.
Hayek/ Okay, uh, thanks, gentlemen, for coming in. Um, why don't we do this. Let's reconvene
at 10 of. That gives us about seven minutes, plenty of time I think for a quick break and
we'll, uh, move on to number three, but we appreciate your time (several talking) Have a
safe trip back! (BREAK) Okay, we're back on the record and we, uh, we'll move on to
our third of four proposals this evening. Jeff!
Sherman Associates:
Davidson/ Thank you, Mr. Mayor. Our next presentation will be from Sherman Associates of
Minneapolis, Minnesota. They are represented by George Sherman, uh, President and
Owner; Bob Loken of Elness Swenson Graham Architects, and Brad Johnson of Knutson
Construction. Welcome, gentlemen!
Sherman/ Good evening.
Sherman/ Good evening, Mayor, and Council Members. I'm George Sherman with Sherman and
Associates. Um, and we are excited and uh, about presenting our proposal for the Linn -
Court redevelopment. Uh, I ... we're gonna start off just, uh, briefly and give you a little
bit of a... identification of our qualifications and our team members. Uh, with me tonight
is ... was mentioned, is Elness Swenson Graham (ESG) and Knutson Construction.
Particularly this partnership has worked together o ... over the last 25 years in developing
hotels and, um, multi -family housing throughout the Midwest, and this is a team that is
tremendously experienced and has worked together, uh, successfully on numerous
projects. We'll go over our project design, our project financing, and provide some, uh,
time for questions and answers. Um, Sherman and Associates is a company that's been
in business since 1978. I'm the founder, and our company to date has completed over
$2.5 billion in, uh, urban redevelopment. We specializes in urban development, in doing
unique projects that are, uh, create, uh, strong public-private partnerships. We are long-
term owners. Uh, we invest our own capital, not other (mumbled) or other investors. We
continue to own our properties for 20, 30, 40 years. Our commitment to the community,
our commitment to our properties and to our residents is long-term. Uh, we've
completed over 8,500 multi -family housing units, including, uh, over 1,500 for -sale
housing units, and we manage over 7,000 multi -family housing units that we own. We
are the managers. We are the owners. We ... the employees are our employees. Um, we
own and manage, uh, specialty commercial space and hotels. Our strengths are that we
are long-term public-private part ... we do long-term public-private partnerships. We've
been involved in many cities for 25 years. We have strong relationships with them. We
stay with our properties, uh, and we maintain our properties, and we know that the
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partnership doesn't just start with day one with our interview today. It goes on for the
next 25 years. We're good at (mumbled)... complex financing from a variety of sources
and we specialize in design and quality construction. We have won a number of national
awards for our design, and we don't, uh, we provide absolutely the top quality
construction. Since we own it, we are long-term ... we are concerned about the long-term,
uh, capital it ... or the long-term investment it takes to maintain a high-quality project.
And we make a community impact; wherever we go we stay with the project; we make
sure that it is as good in 20 years or 30 years as it is today. Um, we think we're uniquely
qualified to, uh, provide you with a proposal that we're outlining. We have done hotels.
We own them. We manage them. Uh, the employees at the hotel are our employees. We
know how to attain some of the highest guest scores and highest satisfaction. Our hotels
maintain over 88% occupancy and across the brands we're involved in, we are at the top
10% in guest satisfaction. Uh, we've developed some, uh, high-end condominiums.
We've developed the Aloft hotel he was talking about. We actually own and manage one
of the very first ones. Uh, we, uh, have been involved in Iowa for over 15 years,
developing, uh, condominiums, apartments, uh, and... and hotels. Uh, we've been
involved in both Des Moines, Waterloo, Cedar Rapids, and uh, Dubuque. We've done
some very complex and unique projects that have won national awards for design and uh,
nei... neighborhood and community, uh, preservation. And we do, um, numerous mixed-
use projects. We know what makes `em work. They don't ... you can't just keep ... you
can't put, uh, anything together. You have to be thoughtful about what type of housing
you put next to what type of hotels. Uh, a particular project that we are proud of is, uh, a
Sheraton Hotel with condominiums and apartments, uh, in Duluth, Minnesota, that have
really changed the whole dynamics of downtown Duluth. It involves the, uh, renovation
of 200 units of apartments, 40, uh, high-end condos above a Sheraton Hotel. This is one
of the top-rated Sheraton Hotels in their whole brand of 250 as far as guest satisfaction.
We own it. We manage it. We built it. In Minneapolis we've been, uh, premiere
developers for the last 35 years along the riverfront in Minneapolis, developing almost a
thousand condominium units, and what we are proposing, uh, in Iowa City here is to
develop a market -rate apartment building that gives you condominium finish levels. We
are targeting our product to that age between 25 and 80, who want to live in downtown
Iowa City, who want a product that is of a condominium finish, but have decided that
rental is their ... their option in their particular lifestyle at this particular point in time.
Some 10 years ago, about 70% of the people wanted to be in home ownership, um, for a
variety of reasons — demographically, economically mortgage changes. Over 50% of the,
uh, population in Iowa now chooses to have rental. That same group of people who were
homeowners have shifted ov... many of them have shifted over to rental as their option,
both in their lifestyle, but they expect to have condominium finishes, they expect to have
the quality of lifestyle that they had in homeownership. So I mentioned that Aloft is a
brand that may be popular here. We built one of the very first Alofts in Minneapolis. We
own it. We manage it. It is the number one Aloft in the, uh, chain of, uh, Sheraton
Hotels. Uh, it's a Starwood product. Um, we've been involved in Iowa for over 15
years, developing, uh, housing in downtown Des Moines, both market -rate rental, for -sale
condos, and now hotels. Uh, we've[e been involved in some of the complex projects
around, developing, uh, housing and this is a project in Minneapolis that has a hotel, for -
sale housing, market -rate apartments, and rental. It won the nat... National Historic
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Preservation Award in 2005. In St. Louis we developed a historic building with, um,
retail, market -rate apartments, condos, and uh, a grocery store. Um, we've partnered, as I
said, with ESG and Knutson for over 25 years. We know what we're doing. We know
how to deliver a quality product, and we know how to maintain, uh, a product that will
last a long time. I'd like to introduce our architect and then Knutson Construction and
then we'll get into our project.
Loken/ Good evening, I'm, uh, Bob Loken with ESG Architects. Um, we're here because
we're ... we're uniquely qualified for this project. Uh, over the past 20 years we've
designed 60,000 units of housing and hotel rooms. Um, our .... our passion is really on
urban in -fill. Um, we like projects with a little hair on them. Um, the... complicated
projects get us excited. They get our creative juices flowing. Um, I'm gonna flip
through some lists of projects, um, all..each... each one of these is unique, um, and I wish
I had time to talk about all of them, but ... um, we're just trying to give you a ... a ... an idea
of our experience. Some restaurants; um, we've done all types of hotels, full service,
limited service, uh, extended stay, resort hotels. Here are a few projects, um, the Westin
in Minneapolis, this was a historic renovation of the Farmers and Merchants Bank. Uh,
this is a renovation of the ... the Foshay Building into a ... a W Hotel. This is the Radisson
Blue at the Mall of America, um, did both the exterior and the interior architecture.
Here's an example of a combined, uh, for -sale housing and hotel project, vertically
integrated, uh, that we did about 10 years ago. Um, it was one of the first in the area and
there was a lot of skepticism but it...it was really, uh, stunningly successful. One of the
things that's nice about combining these two uses is that there is cross-pollination and
efficiency between the services. So for instance, the hotel concierge can provide services
to the residents that, uh, a ... a residential project like this may not normally be able to
sus ... to sustain. Um, also the amenities — fitness room, swimming pool — can be shared
between the two users. This is the AC Marriott. This is on the Boards, uh, similar, uh,
scale and size and construction type to the hotel we're proposing for this site. Another
example of a hotel that's, uh, under construction in downtown Minneapolis. Uh, multi-
family housing is another one of our strengths. Uh, we focus on urban in -fill housing.
Um, really we start, um, each project with analyzing the site, um, it's really an intuitive
approach that we use. Um, we ... we really like cities. We like to read cities, um, and
...and it's ... and we start with intuition. Uh, some of the ... some of the features you'll see
that are common across all of our projects are, um, high quality materials, um,
maximizing transparency. Really the most important part of a building for us is how it
touches the ground. This is where people experience a building. Um, so again, high-
quality materials, transparency, active uses, visual interests. This is an example of a
project in a first -ring suburb of Minneapolis, uh, that really, um, transformed the whole
neighborhood. It created a... a community out of whole cloth, uh, into a greater variety of
uses, for -sale housing, rental housing, uh, a Trader Joe's grocery store, retail, restaurants.
Um, it's ... it's 10 years old and it's still, uh, quite successful. Again, high-quality
materials, stone cladding, large windows. Same features here. This is an example of a
project on a... in a historic site, really, uh, quite... quite sensitively situated in a... in a
historic district. Um, basically where we start from in terms of building massing and
urban design is ... is drawing from, uh, traditional time -tested urban design and
techniques, but without sentimentality. So, things like scale, transparency, active uses.
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This is an example of a recent, uh, market -rate housing project. Um, increasingly
amenities, uh, both indoor and outdoor amenities are becoming very important, uh,
amenities really help create a sense of community, and community really helps people,
uh... creates ... creates a stable neighborhood and a stable development. And, um ... uh,
brick, uh, metal panel, large windows, uh, sensitivity in how it meets the street. This is a
project that's just finishing up construction. Uh, where the entire ground floor is retail.
So, now, uh, Brad Johnson from Knutson.
Johnson/ Thank you, Bob. (clears throat) We're, uh, very proud to be part of the Sherman
Associates' team. We've, uh... been in Iowa City for over 40 years. Um, company's
been in business for over 103 years. Uh, very involved in the community, being ... having
an impact in the communities we, uh, live in and we work in is very important to our
organization. Um, we have over 125 employees that come from the Linn and Johnson
County area. Uh, we have over 400, uh, nationally, uh, we have five offices. I'm mainly
responsible for both our ... our Iowa offices. Um, we're a very well funded company.
We, uh, have all the financial qualifications necessary to complete this project — bonding
and whatever is necessary for that. Uh, as many of you know we're a self -performing
contractor here in Iowa. We self -perform concrete, uh, steel erection, uh, interior
finishes, uh, specialties, those types of things. Um, our goal is to deliver a quality project
no matter what delivery method it is. Um, some of our owners include yourselves, um,
both the University, uh, local developers, uh, we're very proud to be, uh, partners with,
uh, many local developers in the city of Iowa City, as well. Uh, some current projects
we're working on right now is, uh, the University of Iowa Children's Hospital project.
We have both the, uh, we have the ... over $57 million worth of contracts over here at the
University right now. Uh, included over $44 million of self -performed concrete work.
We're doing the, uh, concrete for the, uh, structure of the Children's Tower as well as
parking ramp 2. Uh, we did the original, uh, Carver Hawkeye Arena back in the 80s, and
we also did the renovation recently that, uh, opened in 2012. Excuse me. Uh, a
facilitating project for the Children's Hospital project, uh, was completed in 2012. The
West Campus, uh, Transportation Center. This won an AIA Award. Uh, and also
worked at the Iowa, uh, Memorial Union project, as well. And, excuse me ... we're hung
up here. (both talking) And also, I'm sorry ... um, the ... we're very proud that, uh,
building very close here was the Iowa City Public Library project, which we completed,
uh, many years ago. Uh, I'd like to introduce George to continue to talk about our local
representatives.
Sherman/ Thank you! Our other partner here is Shive Hattery who is doing our, uh, civil and
landscape engineering... engine... engineering. Again, this team has done numerous
projects throughout Iowa and it's done projects together for over 25 years. Um, the
particular project we are proposing is a 124 -unit Marriott Hotel and 91 -units of upper -
end, uh, premium market -rate housing. Our market -rate housing is targeted little bit
differently from the first two. We're targeting be ... for those between 25 and 85, but
people who want to live in downtown Iowa City, who want prod ... a product of a
condominium finish, and in, uh, a high-quality building. We also are proposing a
Marriott Courtyard Hotel, 124 -units. Uh, we believe that there is a substantial, uh, you
know, uh, challenge between student housing and premium hotels. We ... we've built
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them. We know what ... that people living in, uh, premium housing want a premium hotel
and visa versa. We're also proposing 23,000 square foot of retail space, office space, and
300, uh, 320 units of underground parking. Our underground parking ratio is quite a bit
above per unit above what you've heard previously on the student housing. The ... the
market -rate, uh, rental housing people are going to have, uh, needs to park cars as, uh, are
the ... as is the hotel. Um, the, uh, site does have some shared structure facilities for
parking and office. The two buildings are separate. We have, uh, gone back and brought
a couple things to point out is that the building we believe are appropriate in height for
the neighborhood. They're in the five story, uh, height, which is, we think, is reflective
of the neighborhood, and we have brought the buildings up to the, uh, corner, up to the
street front, reflecting the, uh, building standards and the urban design that's along ... in
the neighborhood already. We believe both the street frontage... image and the height of
the buildings is appropriate for the neighborhood. Uh, the overall building along
southeast, uh, or along Linn, uh, has, uh, three ... the residential portion, uh, and um, the
office space comes off Linn. The hotel, um, comes off the Court Avenue. Court Street.
Again, we have substantial difference in architectural flavor. We're using brick exteriors,
uh, on the ... on the hotel and on ... uh, brick and, uh, substantial pieces, substantial glass
on the residential portion. Uh, the finishing levels are going to be, as we mentioned, uh,
condominium quality, uh, both in the lobby areas and in the units themselves. If we...
we are striving for long-term residency. People that will stay for two to 10 years. Um,
and we are ... we are, uh, both the hotel, we have a lot of experience with this for the hotel
can offer a variety of services for the residential, whether it be housekeeping, whether it
be food, whether it be, uh, concierge service, but we believe that, uh, again, that the
housing needs to have that kind of finishing level that will be supportive of the quality for
the hotel next door. Um, the office space, sorry... (mumbled) The office, uh, component
will have large glass windows in it. Will have, uh, open floor plates for it. Again a...
something that simulates the, uh, desire of the ... of the City to have incubator business
space. We think by having a quality hotel next to it, by having a quality housing, it will
be ... provide a, uh, a sustainable incubator space, um, in ... in a high-quality office. We
think there are people that will choose not to have offices next to student housing, but
would prefer it next to a, uh, a higher -quality housing option. We're spending a lot of
time on shared courtyard areas. Uh, you'll see that throughout all of our developments
right now where the common outdoor plaza areas have ... are highly, uh, finished with
both the swimming pools, the outdoor seating, the fire pits. Again, this is ... the unique
nature of having a higher quality hotel with a higher quality housing allows you to have
more shared exterior amenities, um, not as much of a... of a party atmosphere, but more
of a ... a, uh, a lifestyle atmosphere. So you'll have, uh, you'll see this on both ... all of our
hotel developments, where we have shared outdoor common areas that are used between
the condominiums or the market -rate apartments and the hotels. Quickly on the
demograph... uh, everybody has a little bit of a spreadsheet, um, we have 329 parking
spaces for this project, even though we have only 91 housing units. Uh, 140, excuse me,
146 guest rooms and 23,000 square feet of commercial. Have about 82,000 square ... or
82 parking spaces for the commercial, one-to-one parking for the hotel, and one-to-one
point one parking for the residential, but the residential can also be using some of the
office space in the evening for guest parking. Bob, do you have anything to go over in
architecture? Uh, comments have been made on, uh, financing. Um, the ... overall
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November 17, 2014 Iowa City City Council Special Work Session Page 38
development costs are approximately $67 million. Again, it...it reflects a building of, uh,
slightly, you know, more in the five and six story version, but it's a substantial... the
construction costs for the, uh, condom ... uh, for the housing is about, uh, $240,000 per
unit, and that reflects if you go around more of a construction cost, uh, of a al ... almost of
a condominium finish, where you have high-grade, uh, cabinets, high-grade appliances
inside, fireplaces, large windows, and great mechanical systems. Uh, we've talked, uh,
the, uh, developer equity number of about $10 million. This is our company equity Will
Cash. Uh, it comes ... we do not use investor money. So, when things, um, are
need ... when you put your own money in, you sign your own guarantees, you tend to stay
around the project, uh, for a long time and make sure it operates. We've identified that
there is a gap in this particular project. Uh, but we were ... the particular assistance that
we're looking for, and the City just for a correction is, uh, is in the $10 to $12 million
range. We point out that there is a construction cost savings. We ... we have provided
subsidy on the office front for the incubator space. We're charging $15 net square foot.
A space like this would normally go for $20, if that ... if there is not a desire to subsidize
the incubator space, that subsidy is not needed. Uh, and then we've identified non -City,
uh, sources of financing to help us, uh, address some of our gap. Our requested
assistance from the City is in the $10 to $12 million range, and it's all pay as you go type
of risk, where the developer puts the money up first, uh, and the City is not at risk until
the developer puts his money out and pays his taxes. So, uh, some of the focal points
again I would say is that we're ... we are, um, we believe that the market here is for long-
term residents, high-quality finish, that the best way to get a high-quality hotel is to have
high-quality housing next to it, and that the two can reinforce and support the
neighborhood, uh, and make a ... make ... and that the height is appropriate for the height
in the neighborhood.
Hayek/ Thank you! Questions?
Throgmorton/ Well what the heck, I'll start. Uh, so ... great deal of what you've presented, uh, is
appealing, to my eye. I ... I think it sounds completely appropriate. It looks completely
appropriate to the site. Architecturally, substantively, and all sorts of ways. But you see
our dilemma, do you not? In ... in terms of comparing your project with the two others
that we've just heard about. Where in your case, uh, we would be asked to provide a
substantial amount of, uh, financial assistance, whereas in the other cases, uh, we would
immediately receive, uh, large property tax revenues, get paid for the lot, uh, for the site,
and so on, and ... and their case, we ... we'd, uh, we'd see 300 and some odd residential
units, primarily for students, coupled with hotels, and in your case it's, uh, market -rate
condo -finish, 91 units and ... and hotel and so on. So, you see the dilemma, I mean, it's...
it couldn't be more obvious, I guess. I wonder if you could speak to it, and ... give us
your best sense of why ... we should resolve the dilemma in your direction?
Sherman/ Well number one I think you'll get student housing here in your ... in Iowa City, um, on
a different site. I don't think you'll get a high-quality hotel and market -rate apartments
on a different site. I think you will have to, if you want to do more market -rate a...
apartments, for your residents, um, be ... probably have to help, uh, assist that
development some... anywhere in the city. Mostly because the rents don't support the
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type of construction costs it would build, whether it's this site or anywhere. If the City
would like to see market -rate, uh, quality, uh, housing developed for residents in Iowa
City, you're going to probably have to assist it, whether it's on this site or somewhere
else. I believe that you will get student housing in Iowa City, whether it be on this site or
dozens of other sites, on their own, and you will get that tax benefit, uh, somewhere else
in the city. Um, that you'll get it whether it's on the site, uh, closer to the University or
some other site. So I think it's a question more do you want to ... not that you're going to
need to assist this site, um, or you would lose the benefit of student housing taxes. You'll
get those. The developers will come; the City... somewhere. So question is to whether
the City really wants to make a transitional statement in this neighborhood, help support
market -rate housing. I don't think, and the other developers can certainly contradict this,
but we own hotels. I don't think you're going to get a quality hotel next to student
housing. You'll get a different type of hotel. You know, you'll get something that when
the student housing is done for the seas ... you know, it's packed on the weekends.
You're not going to get a business traveler, um, to stay there. And we run `em, and I can
tell ya, uh, you know, talking to Marriott, they won't do a Marriott here if this is student
housing. They'll go some ... they'll probably go somewhere else, but it won't go to a
location right next to student housing. I think your choices are do you want a quality
hotel and do you want market -rate housing in Iowa City. You'll have to ... if you do,
you'll probably have to help somewhere, whether it's this site or somewhere else. I don't
think you're going to lose the student housing option or the tax benefits from the student
housing option. They will get built.
Botchway/ So ... that's a good question and great answer. Uh, one of the, uh ... interesting points I
think, uh, came up, and I guess our prior kind of initial discussions when we decided on
these particular groups was you'll be basically putting what I'm assuming is market -rate
residential in, uh, in just kind of a box square, around student housing. You know, have
you had experience on whether or not that attracts, you know, the ... the, uh, I can't
remember how you described it. The, you know, the premium, market -rate kind of
residential people that you're looking for, because again you know, if I'm remembering
this particular space right, there's literally student housing on every corner of that
particular site, and you're saying that this should not be student housing. And so I guess
I'm trying to figure out what experience do you have in that type of...environment where
you have student housing all around to put that type of market -rate residential in there.
Sherman/ Well we've done very successful market -rate housing in neighborhoods that have
predominantly, or have large amounts of student housing. We ... there's still professors.
There's still faculty staff. There's still doctors that live close to work and want to be next
to work. There ... their bigger question is the finishing of and the size of the unit. People
are ... people want to be in the urban environment. Um, they may not want to share the
same building with students, but they want... they... they certainly don't mind sharing the
neighborhood with students. I think you have to be ... provide them with the finishing
levels that they need, the parking that they need, the con ... the services, whether it be
concierge services or the hotel services that they need, but we've been developing condos
in areas that were all apartments. We've been developing apartments next to student
housing. We ... we've been at this business 35 years. We do know the one thing you
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have to do is give quality, and you have to give them the ... the amenities within their
space that they want, and you have to give them similar types of environment within their
hallways and the common area that they are expecting. But we've been some innovators
in developing some of the ... the, you know, I had that question asked 25 years ago, why
would I do for -sale housing down in warehouse districts. Who would live there? And
we did it, and they live there. They... some... some of our first housing units were in very
transitional areas. We've ... we've changed that now to doing housing in (mumbled)
rental housing, market -rate housing in areas that are highly rent ... or highly student areas,
because it's still a location that people want to be in. This is an area close to work for
people, close to the University. They want to be in those environments, that... in that
proximity. (unable to hear person away from mic)
Hayek/ You'll have to come up to the mic. Thank you!
Loken/ From a ... from an urban design standpoint, we really think of this site as close enough to
downtown that it really is an extension of the downtown fabric, and it really could
become a gateway to a new neighborhood. The fact that, uh, the building pushes out to
the edge on all sides of the streets, we think, uh, when approaching from downtown will
really help... this... this project could really help extend the feel of downtown and ... and
really when you think of student housing, it often, uh, occurs at kind of marginal sites.
Um ... uh, but we think that this project will help, uh, reinvigorate this area, um, and ... and
maybe really be a catalyst for a new kind of neighborhood.
Dickens/ I do have a question on the (clears throat) recent Des Moines' Register article
that ... you know, I had some questions about your projects in Des Moines and how ... how
will that affect Iowa City or how do you see that affecting I ... the project here in Iowa
City?
Sherman/ Well there were two that was mentioned in the article, one was a ... a historic
renovation of the Randolph Hotel, which is, uh, a building that goes back to about 1880s,
and uh, we purchased that about a year ago, to this date. Uh, in, uh, it was a flop house.
It had, you know, some of the highest, um, you know, number of felons in Des Moines
and we did a favor for the city, we bought it, we vacated it, and we were ready to close
with historic tax credits in January, and there was a very adverse IRS ruling that came out
across the whole country, and your staff can tell you about that, and basically set historic
tax credits back about nine months. And our investor Nationwide Life decided to take a
breather and we are, uh, found a new investor and we're closing next month with the
historic tax credits. We're still one of the first closing after that, uh, very, uh, famous
boardwalk case and IRS ruling, but it was particularly... had nothing to do with that
project, having... having to do with, uh, the impact on his ... federal historic tax credits and
we are, you know, we've ... we've lived up to all of our promises to the city on that
building and it is going to be a wonderful redevelopment project, and we're closing on it
in December. Uh, the other project was a 150 -acre brown field site in Des Moines. Uh,
we started to acquire it in 2007. It was highly ... it's the old Pittsburg -Des Moines Steel
site. It is, uh, has high levels of contamination. We've spent over $10 million of our own
money in, uh, cleaning it up, and we're having our ... we had our first, uh, hotel
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groundbreaking on it two weeks ago with the city and our... at our next office building,
groundbreaking in January. So, I ... all I can tell you is that even through a recession
cleanup, we've lived up to our commitments to the city and everybody. We have,
through this whole recession, you know, in 2000 ... I'll tell ya. In 2007, I owed my banks
$155 million. The music stopped. Every bank got paid back every dollar. Every city got
paid back every dollar. That's what I do. I don't walk. I don't leave communities. I
stand up ... and get it done.
Botchway/ One of the things that wasn't mentioned in the presentation, and I can't remember,
um, from the other things was, uh, particularly some of your other properties are, you
know, is there any particular LEED certification or you know, urn ... uh, any particular
standards that you hold when you're talking about energy efficiency?
Sherman/ Well almost all of our buildings right now are either LEED certified, or in Iowa there's
a, uh, comm .... a statewide green certification that, uh, applies more so to housing than to
commercial buildings. So, all of our buildings have LED lighting. We all have
underground water storage. We all have, uh, high -efficiency, uh, temperature control
systems and set -back systems. Uh, there ... there, uh, the ... the, actually now watch our
utility ... we have constant watching of utility usages. I'm talking 24/7. We meter how
much gas, electricity we are ... we're using in all of our buildings, live time, and so when
we start seeing spikes in energy usage, we immediately, you know, we address it. We do
water ... so, in this particular building, our ... our commercial building will be at least... the
commercial and hotel will be ... uh, LEED certified. The housing will probably be Iowa
green street certified, and meet some of the highest, uh, energy, uh, standards available
out there. Being we're long-term owners, we're very focused on energy. I mean, we pay
the bill. And it's ... and it pays. Most of the energy savings that you can put in built
properties can repay themselves in five to seven years if you ... if you invest up front, and
even more so when you factor in the higher ... the high cost of energy continuing to
increase. So, we ... we monitor all of our properties, you know, 24/7, both for security,
for utility usage, and for operations, and we, um, and we maintain some of the highest
standards in quality of both of our hotels. I can tell you across the board, our hotels are
considered ... we ... we get inspected all the time. And we maintain in the top 5 to 10% of
both energy efficiency and ... and ... and quality of our operations, for all the different
agencies that inspect us, and when you're in housing, and when you're in hotels, you get
inspected all the time.
Loken/ George, if I could (walking towards mic) if I could elaborate. Um, this type of project,
uh, high density, urban project on a brown field site, uh, is inherently green, and it's
taken a little while for LEED standards to actually acknowledge that, um, when it first...
when the rating system first came out, it really didn't, um, properly, um, assess urban
projects, but they finally caught up with it. So, simply by the site design and location of
this building, it's already half way there, it's LEED certification. So, um, I think it's
quite a ... uh, well situated to achieve that if...so...
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Hayek/ The, uh, your office component was I think described as `flex space.' There ... there
seemed to be some ... some room for ... for movement within that. Could you elaborate on
that, please?
Sherman/ We wanted, uh, we were ... uh, in addressing our request for proposal, there was a
desire to have, uh, some 23,000 square feet of incubator space and since the specific, uh,
design gui... guidelines were not set up, we decided to lay it out as flex space, which
means that this ... that you could ... that you put in a core of bathrooms towards the back,
and you can allow different types of office space to be built within it. You may have
open space, you may have some, uh, multiple, uh, offi... two or three offices built within
it, but it...it basically allows for a ... a open office arrangement that you could put ... do
subdivisions of the ... of the walls in it, uh, later on, but it ... the idea originally was, in the
request for proposal, was that there be some type of space for incubator space for, uh, for
small businesses... to get up and operating, um, and so we ... we're finishing it for those
types of design standards that would allow electrical to be pulled... electrical and
mechanical systems to be, um, come from the ceiling and down into the ... uh, cubicles so
that as you change the space you don't have to rewire everything. You don't have to
redistribute the mechanical systems.
Hayek/ If the RFP had not specified office, do you ... would you have come to us, or do you think
anyone else would have come to us, specifying office at 20,000 or more? For ... for this
site.
Sherman/ I would think that this site would probably favor itself for few... a little bit more
housing. Uh, and probably less office, but there was a desire for that, and we've outlined
it, uh, in the proposal, but you know if there, um, it is not ... directly in a high office area,
so it doesn't have a lot of other office users immediately around it. Um so I think there is
some discussion about, you know, we're certainly will ... we've done it. We, uh, do a lot
of specialty office for educational purposes, um, and we've been very successful at it, but
I would tell you I don't ... you would have to ... you'd want to sit down and really meet
with the, uh stakeholders to find out their demand and their need for that space.
Johnson/ George, if I may (walking towards mic) Uh, as ... as members of ICAD, one of the
things ... and having had meetings with, uh, Mark Nulty, the CEO of ICAD, one of the
things that, uh, is in short supply here is office space for start-up, uh, companies, and, uh,
we've met with him as recently as two weeks ago, and uh, that's the one thing that he has
said that we really need ... in ... in Iowa City. So, uh, in looking at the proposal, uh, that
Sherman and ESG had done, had ... had put together, the need seemed to fit very well
with, uh, what was, uh, being asked for by the community, as well.
Botchway/ So you have other projects, obviously with the University, that you had shown kind
of in the presentation. Uh, I guess, um ... would there be any potential situation where
you get started on this project and the Children's Hospital needs to get finished right
away and you pull away from this project for some reason?
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Sherman/ I would talk to Knutson about that. We're the developers and owners, but Knutson's
the contractor and we wouldn't let them do that, so... (laughter)
Johnson/ Are you talking from a construction standpoint?
Botchway/ Basically.
Johnson/ Uh, no, there's no...no chance of that happening! Our obligations for the University
are very solid and we're going to meet those obligations the same as we would for this
project, as well.
Sherman/ Just, um, about 24 months ago we completed a ... almost $110 million project with
Knutson, and uh, we finished it, uh, it was a 22 -month project, and we had, uh, it was one
of the most complex construction projects I think anybody's undertaken. We had a
renovation of a 3 million square feet..foot building with 5,000 people living in it and we
did not miss a day. No one had to move out. We completed $100 million worth of
renovation and we finished it to the day. Uh, we have a great working relationship with
Knutson and, uh, they've completed a number of projects for us right. They would ... I
would not let them do that! Even though Children's Hospital is very good!
Hayek/ (laughter) Any other questions? Okay! We appreciate you making the trip down here.
And uh... to your partners who came with you and ... uh...
Sherman/ (mumbled) ...we have over 100 employees in Iowa so we, uh, it's a trip that I enjoy
seeing our staff and our, uh, in our operations. Thank you very much!
Hayek/ Thank you, sir!
Throgmorton/ Thank you.
Hayek/ If anyone needs to ... I think we can just go right to our fourth and final, uh, without a
break. Is that all right?
Davidson/ Let's just take a minute to change over here!
Hayek/ Sure!
CG Hanson:
Davidson/ Okay, if we're all set. I guess I'll wait for Marian to distribute there. Our final
presentation then, uh, will be Linn -Court Lofts, presented by CG Hanson of Iowa City.
And our two presenters this evening, uh, from CG Hanson will be Charlie Graves and Joe
Clark. Welcome, gentlemen!
Graves/ Hello! Thank you, Mayor Hayek, and uh... Iowa City Council Members. Uh, I'm
Charlie Graves. I'm the principal of CG Hanson located here in Iowa City, Iowa. Uh,
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we're a local developer here, uh, and we're excited to present Linn -Court Lofts as an
option for the proposal, um, in answer to the RFP. Um, sorry I'm going to have to do this
with the hard copies. We had a little technical difficult here so ... uh, the project, uh, has
evolved, uh, since we first submitted this proposal. Uh, we've generated some
excitement, which led potential investors, purchasers, and tenants to come forward and
uh, change the economic portion of our project. Um (clears throat) our project would
maintain a mixture of market -rate senior housing and potential workforce housing, along
with commercial, retail, uh, possible wellness, medical, and office space. The project
would incorporate a second tower that will focus on professionally managed high-quality
housing. Uh, the other change that happened since we proposed was the University had
announced plans to increase enrollment. So the second tower could address the market
needs of that, uh, of that announcement. We updated our drawing to reflect... some of the
potential, uh, partners that we've contacted. Um, we're in contact with some of the
national chains, uh, such as Target. Um, Target actually has a concept called Target
Express, um, that they've introduced into the University of Minnesota's, um, campus
adjacent and um ... it is been extremely, uh, successful in that market and uh, we're...
we're talking with them about the possibility of putting that here in Iowa City! So our
location, uh, would be near a number of amenities and new University of Iowa facilities
and existing buildings. Uh, also walking distance to amenities such as the new School of
Music, which'll have 300 performances a year. The University of Iowa Art Museum, the
Englert, the Bread Garden, and others. Also near the new Midwest one, uh, facility. Uh,
we think it's critical that we stabilize that area, as we see this as the gateway to the
Riverfront Crossings. We would be anchoring the block along with existing Capitol
House and Linn Street Place Condominiums to create a healthy balance of housing
options in that area. The summary of Linn -Court Lofts (clears throat) is that we would be
building two buildings with underground parking. It would be a mixed-use building with
market -rate and age in place residential component on the corner, along with commercial
and office space. We would have a mix of owner -occupied, as well as rental housing,
and we would have the potential for coordination with healthcare organizations to be
located on-site. There's also the potential for retail opportunities and then the second
building is all market -rated residential with the potential for workforce housing, with a
mix of efficiency, one and two-bedroom opportunities. These are some of the elements
that we would incorporate into the building. A sustainable focus, um, our architect has
that focus in mind when he ... he did our drawings, uh, and some of those, um, you can
see are the enhanced wall and roof insulation, green roof, uh, low -e glass, heating and
cooling efficiencies, LE do ... LED lighting, uh, high -efficiency elevators, photovoltaic
electrical generation, water conservation utilization, and we thought Zip cars as
transportation alternatives. One thing we wanted to note ... was that there is a concern
about the student population here in this community, but we feel like ... we chose this...
this concept because ... as you can see in the graph, uh, and this graph was supplied by
the, uh... uh, Dr. Kaskie, the head of the, uh, Center for Disease and Aging at the
University of Iowa, and the blue line, uh, at the top, or the purple line, uh, indicates
what ... the projections were for the growth in the population of folks 65 and older in
Johnson County. The bar graph represents the actual growth ... which you can see
exceeds the... proposed, uh, or I'm sorry, the projected growth. So we feel like this
translates into a real need for the focus on some senior housing here in Iowa City. We
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also thought that it would be important to incorporate green space. So although we do
have a second tower site, we do maintain green space between the two structures. We
also wanted to highlight the tax benefit to the City. Uh, we contacted Brad Kulmer at the
City Assessor's office and he provided this based on our plans and our space. The ... the
projected tax generation would be $1.4 million and that would be for the first tower. So
if we were to do the second tower, we'd estimate the tax generation would be between
2.5, 2.6, something like that. Significant. The team's experience, and our team is an all -
local team, made up of myself, uh, John Calacci with Calacci Construction; Rohrbach
and Associates; George Hollins, who's also with CG Hanson; Joe Clark, who's also with
CG Hanson; and HBK Engineering. This is an example of the project that Joe and I are
working on together, um, you folks are going to see this, uh, in a couple weeks I believe.
Uh, this is a planned, professionally managed student housing project at 316 Madison
Street. Directly across from the Wellness Center. Uh, John Calacci's been the, uh,
principal of, uh, Calacci Construction, but he's also been the principle of both Knutson
and Myron Construction in the area, and under his direction he has completed the, uh,
quite a bit of work actually, but the Levitt Center, Medical Education Research, uh,
which I believe is the Holden, uh, Cancer Research Center, the Blank Honors Building,
and the Linn Street Place, uh, which is at Linn and Court, as well. Rohrbach Group has
completed a number of projects as well. Uh, most notably the recent residence hall, uh,
the Mary Peterson, uh, for the University of Iowa; uh, Plaza on Fifth in Coralville; and
the University of Iowa's College of Public Health. Most of you probably know this guy,
George Hollins. Uh, as the recent, um, business manager for the University of Iowa.
Um, most don't know, and I didn't know, that previous to that he w ... held the position
that Rod Lehnertz now holds, which is the Director of Design and Construction Services.
He managed the Old Capitol Mall renovations, managed $500 million in capital projects
with the University of Iowa, managed 2.1 million gross square feet in new buildings at
the University, also managed 1.4 million in gross feet in building renovations,
responsible for 4.5 million in operating budget at the University of Iowa. He participated
in economic development and the research park activities, and also served as a principal
University representative to the Board of Regents' office, federal, state agencies, local
governments, businesses, and the Iowa City community. HBK Engineering, um ... uh, has
a multiple in -fill projects in 36 states, including Iowa City, Chicago, Philadelphia,
Boston, Florida, and New York City. They have parks and recreation master planning
experience in eastern Iowa, and downtown revitalization projects in eastern Iowa, uh, as
well as the Burlington Street dam and power plant repair project. So campus adjacent
senior housing, uh, we wanted to give some examples, uh, across the United States. First
one is the new bridge on the Charles at Harvard. And I believe most of these, if not all of
these, were referenced with Vic Ranear when he came to speak with the City of Iowa
City. Stanford University has the Classic Residence by Hyatt. Wellesley College has the
Goddard House. And UCLA has Belmont Village. The benefits of inter -generational
living opportunities, I think, are best expressed by first-hand accounts. And we, my wife
and I recently, uh, were watching 60 Minutes and, uh, this was one of the, uh, stories, uh,
that was showcased and briefly, it's about a 24 -year-old who answered an ad, uh, for free
room and board. She's a music student and um... she thought that, uh, she certainly was
getting the better end of the deal, um, by getting free room and board. Um, the story
really goes on to just say that all the benefits that not only were to the ... the residents, um,
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she o ... obviously traded the room and board for playing once a week, um, she ended up
playing a lot more than that, but I would encourage you to read, uh, or to visit this web
site. It's a ... excellent example of the benefits of young folks living within the same
communities as our aging population. Again, the team partners are all local, CG Hanson,
HBK Engineering, Rohrbach Associates, and Calacci Construction. And ... in conclusion,
I'd like to thank you for your time and I think Joe Clark would like to say a few words.
Clark/ Thank you, Charlie. Good evening, Council. My name is Joe Clark. I am a life-long
resident of Iowa City and I've owned real estate with my family in downtown Iowa City
for over 25 years. I'm a 1992 graduate from Regina High School, and a 1996 graduate
from the University of Wisconsin -Madison, with a degree in business and marketing
management. I have had an active real estate broker's license in the state of Iowa since
2004, and managed hundreds of rental properties within a one -mile radius of the
University of Iowa campus the past 17 years. My passion is to continue building
vertically, in both residential and commercial developments. These developments can
better serve our active seniors, students, faculty, people who work downtown and on
campus, and other professionals. I recently started working on my own and joined the
team of CG Hanson to address the changing market needs in Iowa City. Although you
may only know me in the field of student housing, I quickly realized through research
and many discussions that housing that allows seniors to age in place, in an area that is
walkable to many amenities, is a rapidly growing and underserved market in downtown
Iowa City. At this time, my intentions are not to build a five -story stick structure, but
rather type -1 construction of high-rise buildings. This will help to alleviate stress on the
neighborhoods close to downtown and the University of Iowa campus. Every effort will
be made to incorporate ideas from the University of Iowa, the City of Iowa City, and the
surrounding residents, to make the development beneficial to all. An emphasis will be
placed on professional management, environmental sustainability, and energy efficiency.
Quality instruction... quality construction and luxurious amenities in all of our projects.
The team we have put together has not only the experience in building, but the knack for
getting things done efficiently and economically in the local Iowa City market. Currently
our developers, general contractors, architects, engineers, management agency, legal
counsel, accountants, lending institutions, and financial investors are all from the Iowa
City and surrounding area. With estimates of our two -tower project nearing $90 million,
the property taxes generated from this property will increase from zero to an estimated
$2.6 million annually to benefit the City, the County, and the Schools. Also efforts will
be made to hire local workforce to complete our project, keeping the money at home.
This piece of land on Court -Linn... Court and Linn may very well be the defining piece
that either spurs new development in the Riverfront Crossing District, or stalls the
progress for future development. Our project is the right size, and targets the right
markets, to stand as a flagship development that propels the south side of downtown Iowa
City to new heights. I look forward to working with you on this project and many others
in the future. Thank you for your time.
Hayek/ Thank you. Okay, let's open it up for questions.
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Dickens/ Reading your original proposal, your construction time seemed to be a little bit longer
than most of the other projects. We ... we looked at, uh, close to 50 months total from
start to finish, uh, 36 months for construction. Is that still about what you're looking at
with this project for phase 1, or is that phase 1 and phase 2?
Graves/ That's phase 1 and phase 2 (clear throat) That also accounted for, um. ... a generous
amount of time for the City to, um ... work on the development agreement.
Payne/ Back on your very first slide that you had, the very first bullet said... something to the
effect of...how to reach zero TIF. That's how I interpreted it. Oop, that next one.
Graves/ Goal (both talking)
Payne/ ... goal of no TIF.
Graves/ You caught that! (laughter)
Payne/ Can you explain that? (laughter)
Graves/ Uh, yes, I can explain that! Um, initially, urn ... like I said, um ... previously there was a
lot of new news that came out after we proposed, and so that changed the landscape, um,
of the needs for Iowa City, and so, uh, under the first concept... concept, um, we had
considered the entire site for senior housing. So there was a considable ... considerable
amount of risk, um, involved in that type of concept as a whole. Uh, we did ghost in the
second structure to leave some flexibility for the market. I'm glad we did! Um, because
with some students, um, involvement in the ... in the back and ... and a little bit higher
density on that second building, um, that ... that would be something that we would
probably move forward on, sooner than later. Um, under the first scenario, um, we
weren't sure when we would put up a second tower, uh, but ... but uh, the other thing that
...that is probably more significant, um, was after we submitted, we got an overwhelming
amount of support and investors came forward, and so rather than carrying a lot of debt,
uh, we have the opportunity to accept equity partners. So that significantly decreases the
amount of stress, uh, financially for the developer. So ... that's the majority of the reason,
but yes, our ... our goal would be to work with the City, with the goal of no TIF. Um, so
no promises — it's conceptual, but ... yes, that would be our goal.
Payne/ Thank you.
Graves/ Uh huh.
McCarthy/ So would that development then be a two stage process with the primarily senior
housing tower going up first and then a student housing tower?
Graves/ Wouldn't have to be (both talking) (clears throat) Wouldn't have to be. We'd be
flexible with that. Um ... you know, our feeling is ... I know that ... that the news came out,
uh, that they're ... that the University was going to, uh, dramatically increase the
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enrollment, um ... but ... we feel like, uh, one, that hasn't been done yet, and ... and to build
that much housing, uh, on that entire block, without assurity that those students are going
to come here, uh, would be premature. So this would allow for the flexibility, but we
would be willing to build them, um, and accommodate not only undergraduate, but
graduate, uh, students, faculty, staff, uh, it would be professionally managed, but to
answer your question — no, it wouldn't have to be a two-stage. We could this in one
stage, if...if the need was there. We would want to do a market study to verify the need
first, but it could be a first -stage, uh, project, for sure.
McCarthy/ How many beds were you looking at for that sort of proposal?
Graves/ I would estimate (both talking) yeah, the back side. Yeah, 250, maybe 300, something
like that.
McCarthy/ Okay, consider (both talking)
Graves/ ...depends on how high you would go with it.
McCarthy/ Right. (mumbled) ... the Director of Admissions is a 500 -student stated increase.
Graves/ Uh huh.
Hayek/ So ... um ... I'm ... I need a way to contrast this to what was proposed originally.
Graves/ Sure!
Hayek/ I mean the ideas are intriguing. You have a great team, um ... uh, but ... but the numbers
don't seem to be formed up yet, and maybe this... there's... there's some flux that we just
need ... need to (both talking)
Graves/ Sure!
Hayek/ But .... if...if the difference between what you submitted and what you're thinking about
doing now is the back tower ... and let's assume that that's, uh, student -oriented, um,
residential, how do you get from ... and if...and if that's speculative based on us not
knowing whether the University in fact will boost enrollment, those ... those sorts of
things...
Graves/ Sure.
Hayek/ ...how do you get from the original request of, I think it was around $14 million in TIF,
and the land, uh, without, you know, not being purchased by you but... but... but part of a
development package, given, you know (mumbled) That's a $19 million spread from
my ... from where I sit.
Graves/ Yeah, actually my proposal proposed, uh, the purchase at an appraised value.
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Hayek/ Oh, you're right! I'm looking at ... I'm looking at the wrong one. So...
Graves/ Yeah, so we estimated the value between 7 and 9 million.
Hayek/ You're, yeah, I stand corrected. I'm sorry about that. Put aside the real estate, but how
do you ... how do you get from the ... the $14 million ask to potentially none. Does that
depend on the second tower ... which is speculative?
Graves/ Not ... not entirely, no. Um, so the spread's really 6...6 to 6.5 million.
Hayek/ Okay.
Graves/ Because like I said, we had planned on purchasing at...at a purchase price somewhere
between the 7.5 and 8.5 million mark is what we estimated market (both talking)
Hayek/ On the land?
Graves/ Based on ... based on current comps, yes.
Hayek/ Yeah.
Graves/ And so ... so that last spread, um ... is really not ... not hard to get at when you accept, uh,
major equity partners into it, and you've eliminated a lot of the debt. That eliminates a
lot of the carrying costs and things like that associated. So, the... so we could do the first
tower. Uh, the ... the other concern would be ... this is a very large site, and I think we
had, uh, put in three levels of parking underground. So there's... there's a lot of site work
on this, um, to do, but, urn .... uh, to answer your question, you know, we would want to
work with the City. This is all conceptual, you know, we're looking at it from a mile up
in the air without really too many details, but, um, there's also been, uh, inquiries from
local healthcare organizations. So now, again, a lot of the risk has shifted out of the
project. We feel like, uh, should we be awarded this project, um, we'll have, uh, major
tenants, um, involved in this project from the get -go. So, again, removing a lot of the risk
helps, but the biggest ... the biggest thing was taking on equity partners.
Markus/ Charlie, you... you indicated that you're going from 14 down to potentially zero.
Graves/ Potentially.
Markus/ Are you subtracting the 7 million?
Graves/ Yes!
Markus/ So you're... you're re ... you're reducing the TIF, using 7 million of what you originally
were going to pay the City for.
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Graves/ 7.5 to 8.5, yes is what we had estimated, uh, having to ... to use to purchase the ... the
property. So...
Clark/ Depending on the sale of the land, depending on what price we come up with there, that
gap will, urn ... get smaller and ... and we've also ... we've talked about the possibility —
we're going 12 stories, um ... I mean, we've talked about the possibility of going up a
couple more stories on the initial project, and then the sales on those, um, if we can do
the project. If we do it in two phases, um, we may be able to make up some of that
money on the sales of the condos on the front side to ... uh, the senior housing, and then
be able to do the back side. So it ... we may have to do that. We may not be able to do it
all at once. Um, but ... we are trying to cut the gap down as small as we can. It's not
going to be 14 million.
Markus/ Does the Council understand what ... how that ... how that's working?
Throgmorton/ Why don't you restate it?
Markus/ Well... initially their ... their TIF ask was 14. At the same time, they were proposing to
pay the City 7 million (both talking) market value, which I think you indicated was close
to 7. So now they're taking the 7 off the table, in terms of revenue, all right? So ... it's
...it's a pretty big swing ... to get to that point.
Mims/ So you're not really getting rid of the 17 million... 14 million gap. You're getting rid of a
7 million gap.
Markus/ Right.
Botchway/ So what is the ... what is the size of the senior ... I mean the senior marketed apartment
complex?
Graves/ Sure. Square footage (mumbled)
Botchway/ No, I mean as far as like height.
Graves/ Um, we've ... we've proposed 12 stories.
Botchway/ (both talking) So I guess ... so the next question would be then how ... how high are
you going to build the student, um, or possible mix -use building in the back?
Graves/ Well I guess that would be determined by the need, uh, the market study we'd have to
do. Um, and how many, uh, students actually start to come into the market place.
There's, you know, as we showed at 316 Madison, there are several sites, some of which
you know about today, some of which you don't, uh, with private developers. Private
developers are answering the need for student housing here in Iowa City. Um, I don't
think there's any question about that. Um ... but we ... I couldn't answer how high we
would go. We would potentially go up to 15 stories, if there was a need for it, and if the
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City was ... was, uh... you know, favorable for that, but that hasn't been defined as of
today.
Botchway/ I guess, and this might be going too far down the rabbit hole, but how are you going
to market this? I mean, you ... you threw out Stanford, you threw out Harvard, one, I
mean, and I haven't been to the one, but walked by the one at Harvard. I mean, how...
that's ... that to me is a different environment where, I guess, the senior living aspect of it
would be, I mean you brought up ... you brought up that particular location as being a
partic... of an anchor. An anchor and then, you know, those two other buildings that we
have there (mumbled) I mean, we have senior living incorporated. It just seems like
those examples were a little... different, um, than the ones you showed in the pictures. So
I guess I'm trying to figure out how ... how ex ... how exactly you're going to market it, I
guess is my question. I have a lot of questions, but I want to know that one first.
Graves/ Sure. You know when I was first introduced, um, to this concept by Dr. Kaskie, um,
like a lot of people I was thinking about my grandparents, you know, that age group.
When in fact the age groups, the target age group is 55 to 70. I myself I'm almost 50, so
I can already see in my, uh, lifestyle, I can start to see myself needing assistance, and so I
started to look into this concept and ... um, the concept really is about marketing to folks
who are active today. And who will need the things, and be able to adapt within their...
their home and not have to be displaced, and so the home is, um, obviously absent of all
the things that you would need, you know, should you break a hip or, uh, lose use of your
hands, things like that. Um, but would be adaptable as you age, and if you should ever
need those things. The other thing we ... we noted was, you know, couples don't age at
the same pace. And... and so you may... your partner may need something before you
would, but to answer your question, you market, um, very similar to, uh, market
apartments. Um, the average age, I think, uh, I spoke with a local developer who has a...
a (mumbled) here and the average purchaser was around 54, uh, years of age. Uh,
naturally. And so I think that, um, if we market these similarly, as a high-end, uh, highly
amenitized place, adjacent to a vibrant downtown area in a university town, I think
naturally we'll ... we'll, uh, attract that age group. Um, I think we'll just add, uh, to the,
um, demand, um, by having the ability to ... for those folks to stay in-place as they age.
Throgmorton/ I'd like to follow up on that, Charlie. I... you... you showed one graphic that
end ... that came from Brian, I guess. Brian Kaskie. Showing the ... the, uh, projected
increase in population 65 and older.
Graves/ Yes.
Throgmorton/ Okay, so ... growing ... population of...uh, of people who want to age in-place. Uh,
we've also received many emails and letters and so on from people supporting the
concept of university -based retirement communities. And, I personally have talked to
many people about precisely that, uh, desire that they have to be able to find a place
close -in to downtown that they could live in, so that they could walk to all the, uh,
amenities downtown and be able to stay in the place that they love. I mean, this is
literally what I hear from ... so, here's a hypothetical for you. Maybe this is the wrong site
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for this particular kind of development. Maybe there are better sites in other parts of the
...of the Iowa City area that are close -in to downtown, but not at this particular location.
Uh, I can think of a few (laughs) I'm not going to mention `em, but I can think of a few
and I'm sure other people here can as well. Uh, so ... I ... I would just want to say, I am an
enthusiastic supporter of university -based retirement community. That ... the university -
based retirement community concept. I'm an enthusiastic supporter of finding a way to
develop that kind of project here in Iowa City, close in to downtown. But ... three dots
follow after that. I'm not sure it's ... this is precisely the right site for that.
Dobyns/ I'd also want to echo, um, it is similar to what Jim and Kingsley were mentioning is that
my knowledge of university -associated, um ... retirement areas — Gainesville, Ann Arbor,
Notre Dame, uh, Purdue — is that they're more spread out, campus -like, um, not quite as
tall. Um, it'd be interesting to me if you were aware of university -affiliated retirement
centers that had a larger, sort of a higher density, uh, concept, which ... I ... I think appeals
to a different market. Um, like Kingsley was mentioning. Are you aware of any that
have that sort of style?
Graves/ I'm not today. Um, Dr. Kaskie, unfortunately, isn't here to answer that question. He's
pretty familiar. Oh, there he is! Sorry! Didn't see you come in! Brian, do you have an
answer for that (unable to hear person away from mic) Are you aware?
Hayek/ You'll have to come up to the, uh, podium, sir!
Kaskie/ (laughter) Uh, thanks for having me. Um, to answer your question, yes. Harvard, for
example, uh, has multiple sites located around Boston. So, um, in the Jamaica Plains area
they have a... a standing, uh, 14 -story unit. It's a... functions multiple services —
apartments, rehab, and academic offices actually. Uh, within the Beacon Hill area of
Boston, they have what's known as a `village,' in which it's apartment units that are
sharing services. So that's a high-density area. Uh, other colleges, uh, across the
country, uh, do have the sort of, uh, adjacent to the campus, but it's five acres off, way
off the campus, and that's what you're probably most familiar with, at Michigan. Florida
is on the campus, on the medical, uh, part of the campus down there, and just to echo, uh
the question about the market demand. Um, all these places have been growing. Uh,
Florida's started that's called Oak Hammock in 2004. Uh, the average age of people
moved in there was 65. Um, they're staying, and in fact the demands increasing so much
they're continuing to build around it, but they had a larger campus to start with, if you
will. More green space adjacent to it.
Hayek/ Are ... are these, uh, facilities at Wellesley, UCLA, Stanford, Harvard — I think those are
the four you mentioned, are ... are those university funded or owned or ... or is there, you
know, and ... and if the answer to that is yes, do you have a partner on this on the senior
component?
Kaskie/ Good question. There's essentially three models to this. There's, uh, model A, if you
will, would be the university -owns and operates, and treat it much like, uh, campus
housing or dorm. Um, a second model is more of a partnership, where the university will
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offer up, for example, property, um, or services, uh, a partnership agreement with the
developer. And then the third is a, um, a developer -driven model in which the university
plays a secondary role, and that is they make agreements, uh, with the developer to offer
access to campus programs and services, uh, conversely also populate the ... the units, uh,
with campus -based programs and services. Um, my work here, I don't know if they ... the
background, how I got interested in this is, uh, TIAA Cref, uh, is a, your largest real
estate developer, uh, going right now and they've started to develop an interest in this, as
an opportunity for the contributors into their own retirement plans. So that's... that's
where sort of the flashpoint for all this was is if I'm here at the University and I'm
contributing to a retirement savings plan, and I have some options of where I'm going to
park my investment, wouldn't it be nice if I could park my investment in my own REIT
that's specific to campuses. So that kernel of an idea has since grown, uh, to the point
where I've been working with a national developer on this ... these prototypes. So in ... in
some sense, this ... this could be, uh, one of the first times that we put this group together.
And, we're gonna be distinct from what's existing currently. I don't know if Charlie had
a chance to review it. In some of the partnerships with the U and the functionality of the
building. This ... this won't be like Michigan, cause Michigan's mapped out, what's
called the CCRC model and they've also mapped it out where it's ... it's not actually on
the campus. And these are some of the distinguishing features that, uh, the folks I've
been working with are... are... are driving on, and they've done a number of market
analyses in other college towns, uh, down south primarily is where they are, cause that's
where the aging population is relocating, um, and they've started to target college towns
down there, and I mentioned while Iowa City we're ... we're pretty unique here. Um, as
you're familiar, the demographics, our ... our aging population's actually booming and it's
not just people staying here. It's people relocating here, and people having their, uh,
parents move here. So this type of setting, I think, would be highly attractive to someone,
uh, as ... as I have, an adult children with parents who'd like to move here, but don't
necessarily want to move into a CCRC design.
Dobyns/ A CCRC's like Oaknoll?
Kaskie/ Correct. So a CCR ... sorry for the language! Um, CCRC consists of multiple occu... uh,
units where you can have what's called independent living, your own apartment. Uh,
then you can move into what's called assisted living, which is a, sort of a modified
apartment, and then you can move into a skilled, uh, room, or service. The challenge
with that, at least from the research side, is every time you move there's sort of a chicken
and an egg effect. Sometimes people move because they have to. Um, the frailty or
disability comes along and it necessitates that. They no longer, for example, uh, have a
step -over shower. They have to have an apartment where they can walk in. Um, other
times it's a clause. Uh, when people move at a ... at an older age, it's ... (mumbled) it
causes them to experience more frailty, more disability. What you want to do as you get
older is not move. So, the concept here is why not design a place where you don't have
to move if you don't want to.
Botchway/ I guess to, I guess going back to Matt's point, what particular model I guess are you
using, I mean, is ... do you have partnerships with the University already worked out or ... I
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mean I guess I'm a little ... it seems like ... this is a great concept, and I echo Jim's
concern, or kind of, uh, thoughts on the matter, but ... I'm a little worried about from it
being more of a kind of theoretical, new approach than being something that's, you
know, concrete, especially if you're talking about those three models, but you never went
back to explaining which particular model this one would be.
Kaskie/ Good catch! Um, here the ... in working through, again, I'm sorry I missed the start of
this. The University is interested in being not the leading partner on this. They do not
want to own and operate from my understanding in the meetings I've been in, but they
want to contribute to this. Uh, I think a number of faculty I've talked to are very
interested as this is a potential point of intersection. Uh, there's opportunities here to ... to
initiate programs that would be of interest to the University, um, that could house such,
uh, efforts like a .... a caregiver support program. Uh, another interest I have here is, um,
there's a ... a couple of these models actually already exist here in Iowa City. You may be
familiar with, uh, Emerson Pointe and Jefferson Pointe. Those were very innovative
approaches to assisted living that were created about 10 years ago, and they're called
market-based assisted living, and what happened there is, uh, National Community Bank,
I believe, came in with initial capital investment, and the model was we wanted to make
an affordable option for assisted living care, and the way to provide support services was
to partner, have a partnership between Mercy, uh, Home Health and Nursing Care and
Elder Services. So those two organizations will come in and provide support to the
residents so that they can continue to age in-place here. Um, so to be concrete, I'm ... I'm
not here to represent the University. I'm just here as an individual member of the
University. I think there's a tremendous amount of interest from several of my
colleagues at the University about trying to figure out how to make this work. But, I do
not think the University will be the owner/operator of this. That's... that's just not their
model. Thank you!
Hayek/ Thank you... Dr. Caskey.
Dickens/ You (clears throat) you had in your original proposal, uh, affordable housing, a
minimum of 20%. Is that still ... in your proposal or is that kind of...
Graves/ No, that's still (both talking)
Dickens/ It's still there.
Graves/ That's still available, sure.
Dickens/ Okay.
Dobyns/ For the affordable housing at 20%, I mean, would still be able to maintain some of the
smart -design, universal design, even though it was more affordable? Would that ... (both
talking) be maintained?
Graves/ Yes.
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Hayek/ Given the ... the shift in your project, I ... when we make our decisions we need to be able
to compare some relatively hard numbers between the four proposals, and ... what you've
brought in is more summary in ... in fashion. Do you intend to ... to, or would you be able
to ... update that so that we know what we're looking at with this project and have kind of
a ... objective way of comparing it to the other three?
Graves/ Yes! Yeah.
Hayek/ I mean, that's the thing I'm ... I'm ... I'm struggling to understand the numbers here.
Graves/ I apologize, um, you know, quite frankly we ... we didn't know we were going to be part
of this process, and then we were given a very short period of time to ... to prepare
(laughs)
Hayek/ Understood!
Graves/ So the answer is yes. We are still compiling that data.
Hayek/ Okay.
Graves/ Yeah, we could ... we could get that to you, sure.
Hayek/ Thank you!
Botchway/ On the, uh, one of the slides you were showing some of that ... some of the financials.
Were you incorporating ... I couldn't see it, or I guess I kind of paid attention to it late,
um ... you're incorporating the rollback?
Clark/ So this is ... this is actually... you're talking about this one here?
Botchway/ Yes!
Clark/ So, we actually contacted Brad Kulmer this morning and gave him the square footage of
our commercial and our residential, um, and he ... he's taking it, uh, based upon his
numbers and what, from commercial and residential, and he's coming up with the 1.45,
so that's directly from, uh, the ... the Assessor's office. So 1.45 million is ... is what we're
saying on the first tower is what would generate in taxes. Does that answer your
question, I'm sorry I...
Botchway/ I was looking at it in a different way. I didn't see the ... I thought you were showing
an incorporation of potential rollback, um, over the next, however many years, but I
didn't see the ... I wasn't looking at the entire slide. I just saw rollback and got excited.
Hayek/ Okay, other questions for the developer team?
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Botchway/ So, one of the things that ... um, that I'm interested, I guess partly in is the ... I guess
for lack of a better phrase, like kind of a disruption of, you know, student housing, and so
basically what I'm afraid of is, you know, we ... we ... we agree to put this particular
building there, and I think it also speaks to the prior proposal as well, and then you know
you have complaints that come up, you have issues that come up from the people that are
now living in this particular, um, building, because of the nature of the student population
surrounding it. I mean, I've been down ... I used to work on that street, walked it many
times, driven my car, fast or slow down that street. I mean, there's a lot of complaints I
can see be generated that would... probably come up to the city council in the future. I
guess, how ... how are ... how confident do you feel about that particular location and in
providing this particular, you know, amenity towards student ... or senior living?
Graves/ Personally, um ... having a couple kids that age group, my kids always act a little better
when they know some, um, adults are around. Um, I know that, um, I've talked to
building owners where both college students and elderly share the building. Those
buildings tend to be quieter, much less trouble. Um, I think the kids do know that they're
accountable when there's another age group around. Does that answer ... your question?
Botchway/ I mean kinda, yeah, I mean I guess it does. I'm ... again, I'm just ... the conceptual part
of it, you know, again it's interesting but it's just ... it's hard to ... it's hard to swallow.
Dobyns/ The older people may act younger, Kingsley. You never know! It just (laughter and
several talking)
McCarthy/ Related to that, it's ... since they wouldn't be in the same building. Isn't it a different
situation when it's, I mean, it is sort of in a sea of student housing. So ... I don't
necessarily see why it's the case that the same arguments for the people living in the
same building apply, when it's more of a... environmental factor... for the people living
there. So I think what Kingsley was getting at, I ... correct me if I'm wrong, was that it's
more people might feel out of place or ill at east because of the general population
surrounding them. What do you think that you could do to alleviate that, or do you think
that this would integrate well?
Graves/ I don't agree with that assessment first of all, um, our ... I guess I'd have to go to the two
examples that exist here, that are already in that neighborhood, and ... and I'm wondering
if there's an inordinate amount of complaints from those two existing, and I'm not aware
of that.
Clark/ So the Capitol House and Rothman's project across the street are both being sold ... well,
Rothman's is market housing, uh, and ... and Capitol House, obviously, is, um, you know,
55 and older, I believe. So they're there, and we're ... our hopes are that we can provide
more amenities for those two complexes, at our location, that will, uh, add to this, um,
well, the two sites that are there. There's more than that, but those are the two main ones,
that we can draw `em over to our site and we can utilize all three of these locations, uh,
on our new site. So ... I mean, the alternative is obviously putting student housing there,
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and ... there's plenty of that around it, um, we're looking to diversify the area a little bit
more.
Hayek/ Is, uh, the ... the two floors of retail and two floors of office, those are consistent from
your original to the current proposal... those haven't changed?
Graves/ No.
Hayek/ Okay.
Botchway/ And will you like have letters of, uh, you know, some of the other, um, groups have
brought like letters of recommendation or whatever the case may be, about like different
hotels and stuff like that. Do you have that from like Target and some of the other
businesses you're showing on site, like Starbucks and I couldn't tell the other...
Graves/ Those are just (clears throat) those are generalizations of...of the possibilities. Those
are groups though that we are in contact with. Yes. We don't have commitment letters,
um, it's kind of chicken or the egg. They want to see the project realized first or ... or
awarded first before they talk about it.
Hayek/ Yeah.
Graves/ Uh, there's a ... there's significant resources on their end that go into deciding whether
they're going to put a ... a store or location there, so ... the first question they always ask is,
do ... are you in control of the site? And so ... there is interest!
Hayek/ Oka. Any other... questions? I think we're runnin' out of steam here!
Graves/ Sure!
Hayek/ Uh, well, gentlemen, thank you.
Graves/ Thank you (both talking)
Hayek/ ...very good presentation. Appreciate your time. Don't have to wish you as safe a trip
back cause you're... you're more local! Okay, well that wraps up our ... our work session.
I would like ... I think there's one thing I'd like to ask of staff as we prepare for our
December 2nd conversation about this, and that is ... you know, as we've seen several over
the course of the evening, two or three tax projections in terms of what the City can
expect by way of...residential, or uh, by way of property tax generation from these
projects and ... appears fairly apples to oranges to me, but I'm ... my question is, is there a
way for staff to try to synthesize what we know, at least based on what we've received,
so that we can have some comparative...
Markus/ I think you have to look at the square footage and then use uniform...
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session of November 17, 2014.
November 17, 2014 Iowa City City Council Special Work Session Page 58
Hayek/ Yeah.
Markus/ ... uh... um, cost per square foot to get to any kind of apples to apples, and I
think ... there is a lot of, I think, speculation involved in that. We can go to ... we can to to
the City Assessor and talk about those things and try to get some uniformity to try and
balance it out but...
Hayek/ I think we need something, or ... be cognizant of the fact that we've received possibly
inconsistent information, not be design, but just because different people look at it
differently, and ... and take that into consideration and maybe discount it as we have our
dialogue, because frankly the numbers may not be an apples to apples comparison.
That's what concerns me.
Mims/ Well I think the combination of not being apples to apples, and also that we are at such a
preliminary stage, that any of the numbers they're giving us are very preliminary.
So ... we've got to be very cautious about this.
Hayek/ So...
Markus/ We'll try and put some sort of matrix together (several talking)
Davidson/ ...property tax generation estimate at the concept level stage will be just that, an
estimate. So...
Hayek/ Yeah, well and I ... and we may just need to recognize that there's not a lot we can do
to ... you know, to have strong information, at least at this point in the process. Recognize
that. So, that's my only thing. All right, well thank you, everyone. It's been a long
evening (laughs) We'll see you tomorrow night for ... those of you up here!
This represents only a reasonably accurate transcription of the Iowa City City Council special
work session of November 17, 2014.