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HomeMy WebLinkAboutItem 04 Blue Mckenzie Project UpdateAGENDA ITEM SUMMARY Meeting Date: 6/13/2022 Meeting Type: Regular Meeting Department: CMO Staff Contact: Niel Laudati, CMO Nathan Bell, FIN S P R I N G F I E LD ECONOMIC Staff Phone No: 541-726-3700 DEVELOPMENT AGENCY Estimated Time: 30 Minutes ITEM TITLE: BLUE MCKENZIE PROJECT UPDATE ACTION No formal action requested at this time. REQUESTED: ISSUE The SEDA Board authorized during Spring of 2021 the issuance of a $2,000,000 STATEMENT: land acquisition and predevelopment loan to Blue McKenzie LLC for the support of a Downtown, mixed-use, market -rate project referred to as the "Blue McKenzie" development. As of May 2022, the loan is approximately 78% expended and the authorized predevelopment tasks 83% complete. This agenda item is intended to provide project and progress updates and reflections on market conditions which are impacting the timeline of the project and terms of the SEDA loan contract. ATTACHMENTS: 1. Blue McKenzie Project Update Board Memorandum 2. Executed SEDA/Blue McKenzie LLC Memorandum of Understanding 3. Executed SEDA/Blue McKenzie LLC Predevelopment Loan Document DISCUSSION/ In April of 2021, the SEDA Board authorized spending of existing tax increment FINANCIAL financing (TIF) dollars of the Downtown urban renewal area to support the Blue IMPACT: McKenzie project, a Downtown mixed use market rate structure. The project includes an 8 -story, mass timber construction type, project with ground floor commercial and 75 +/- residential units above. Key Project Goals 1. Create a Proof of Concept to Communicate Viability and Profitability of a New Construction Type/Height in Springfield 2. Provide a Market Rate High Density Housing Project to Serve as Comparable to Financial Institutions Approving Similar Projects and Requiring Comps 3. Create a Dense Development in Downtown that Spurs Subsequent Private, Taxable, Development and Housing The attached Board Briefing Memo provides additional detail related to updates of the project. Those details include: (a) A status update of the loan and phased tasks including Schematic Design, Design Development, and Construction Documents, (b) The market conditions impacting the project and lessons learned to date including project budget and design refinements, rising wages and costs of labor, and inflation of materials, and (c) Next steps No action is requested of the Board at this time. MEMORANDUM Springfield Economic Development Agency Date: 6/13/2022 To: Nancy Newton BOARD From: Niel Laudati, CMO BRIEFING Courtney Griesel Subject: Blue McKenzie Project Terms MEMORANDUM ISSUE: The SEDA Board authorized during Spring of 2021 the issuance of a $2,000,000 land acquisition and predevelopment loan to Blue McKenzie LLC for the support a Downtown mixed-use market -rate project referred to as the "Blue McKenzie" development. As of May 2022, the loan is approximately 78% expended and the authorized predevelopment tasks 83% complete. This memo outlines project updates and progress and reflects on market conditions which impact the timeline of the project, structure of the SEDA loan contract and financing mechanisms used by SEDA. BACKGROUND: In April of 2021, the SEDA Board authorized spending of existing tax increment financing (TIF) dollars of the Downtown urban renewal area to support the Blue McKenzie project, a Downtown mixed use market rate structure. The project includes an 8 -story, mass timber construction type, project with ground floor commercial and 75 +/- residential units above. Key Project Goals 1. Create a Proof of Concept to Communicate Viability and Profitability of a New Construction Type/Height in Springfield 2. Provide a Market Rate High Density Housing Project to Serve as Comparable to Financial Institutions Approving Similar Projects and Requiring Comps 3. Create a Dense Development in Downtown that Spurs Subsequent Private, Taxable, Development and Housing Updated Design Development (DD) images. Attachment 1, Page 1 of 4 Loan Structure. The TIF loan is structed in two parts; (a) a $2,000,000 loan for property acquisition and predevelopment costs and (b) an MOU outlining a subsequent $10,000,000 loan to repay the predevelopment loan and fund $8,000,000 in construction costs. Terms of the predevelopment loan and potential construction loan are outlined in an MOU dated April 16, 2021 between SEDA and Blue McKenzie, LLC. At this time, only funds for the predevelopment activities have been formally authorized by the Board or spent. Approval to enter into the $10,000,000 loan is dependent on subsequent board approval. To date project progress matches loan draws with $1,554,898.06 of the $2M SEDA loan submitted for SEDA payment and approximately 83% of project tasks complete. This spending includes the $424,000 attributed to the initial property purchase and is reflected in pre -development project phases/tasks 1, 2, and 3 described below. Phase/Task 1— Schematic Design. The Schematic Design (SD) phase includes creation and analysis of preliminary architectural concepts, programming, and systems engineering, to allow the design team to refine goals into a preferred design solution. This phase was completed on time per the existing Loan Agreement. Phase/Task 2 — Design Development. Design Development (DD) acts as the interim check between SD and construction phases. During this phase, the selected design concept is refined, developed in detail, including evaluation of materials, finishes and initial cost estimates. This phase was completed on time per the existing Loan Agreement. Phase/Task 3 — Construction Documents. The Construction Document (CD) phase brings the outcomes of SD and DD together into the creation of biddable construction drawings and specifications. This phase is underway within a modified timeline in order to responsibly consider current market conditions. This will be discussed in greater detail in the 'Next Steps' section of this memorandum. Percent of Budgeted Loan Funds Spent Percent of Task Complete ATTACHMENT 1, PAGE 2 OF 4 Attachment 1, Page 2 of 4 MARKET CONDITIONS AND LESSONS LEARNED TO DATE Early project cost estimates completed during SD and DD indicated the project would be negatively impacted by the global market conditions causing universal uncertainty and hyperinflation patterns. Original April 2021 Project Hard Cost Estimate: $22M Updated 2022 Project Hard Cost Estimates Showing Instability: Fluctuates from $25M - $32M Standard Project Budget and Design Refinement— As with all construction projects, the first estimates provided an initial look at areas of need of design and budget refinement. Value engineering will provide opportunities to refine project elements which might offer opportunity for cost savings without compromising overall goals (as listed above) of the project and value to the community. Rising Wages and Costs of Labor — With design and initial estimating occurring during the global pandemic, the rising labor costs and scarcity of supplies and contractors have caused uncertainty in timing, availability, and commitment of manufacturers and contractors to projects and project costs/bids. This uncertainty is anticipated to continue at some level and will cause delays and unanticipated impacts on costs. The uncertainty reinforces the need for confidence in forecasting the relationship between project construction and operation costs and forecasted rents, project valuation, and operating income. Extreme Inflation of Costs - The inflation experienced by the project team is indicative of extraordinary market conditions which were not anticipated in late 2020. These unanticipated conditions include the historic 2021 economic recovery and market pricing spike as well as the global shift in consumer and residential patterns. Refined estimates were planned at the end of the project's DD phase (Dec 2021). This timing coincided with the beginning of what would be the second highest market spike within the past five years, with the first highest occurring in May of 2021. The graph below illustrates the market volatility through a reflection of the lumber commodities markets which experienced a 38% increase between January 2021 and January 2022. Even more drastically, a 158% increase was seen from January 2020 to January 2022. 1,500,00 1.250.00 1,0oo oo 750.00 250,00 2018 2014 2020 2021 2022 FIGURE 1- LUMBER SPOT PRICE; MI INDICATOR (JUNE 5, 2022). ATTACHMENT 1, PAGE 3 OF 4 Attachment 1, Page 3 of 4 NEXT STEPS Wait for More Preferrable Timing to Re -Estimate and Bid Project for Construction Based analysis of market variables and in consultation with SEDA staff, the project team determined in January to: (a) maintain the mass timber structure design as originally approved by the SEDA Board, (b) proceed through design phases per the loan agreement in order to be construction ready, and (c) slow cost estimating and bidding. This decision to slow the timing for bidding the project was determined a necessary strategy to avoid bidding materials at the height of the market (Spring 2022), causing the project cost gap to increase and feasibility of financing and maintaining reasonable rents to decrease. It was determined to hold for an improved cost environment. Timeline Amendment to Loan Contract Staff will need to request approval from SEDA to deviate from certain requirements within the Loan Agreement. The needed deviations are specific to project schedule and completion timeframes only and include: • Project Schedule and Completion — The Loan Agreement currently states all predevelopment tasks must be complete within 18 months of the signed agreement (5/25/21). • Repayment Terms — Repayment terms are currently set to begin within 18 months of the Loan Agreement signing date (5/25/21). SEDA may determine to support alignment of repayment to a mutually agreed upon timeline which is coordinated with the project schedule and completion. • Construction Loan Negotiation — Per the current Loan Agreement, negotiations of a Construction Loan agreement is set to begin within 6 months of the predevelopment Loan Agreement signing (5/25/21). While this negotiation is underway, key elements of the agreement, including bank interest rates and overall project construction estimates, are yet to be determined. Final Construction Loan terms will be dependent on this information and negotiation of terms should align to adjusted and SEDA approved timeframes associated with the project schedule and completion. Continued Market Analysis In addition to ongoing evaluation of construction costs and a favorable bidding environment, the project team has determined the importance of detailed market information. Springfield -Eugene rent rates are believed to have increased at rate faster than standard inflation. The stability of the current market rates and any forecasted future rates may be in question by financial and development institutions. For this reason, the developer has determined that in-depth qualitative and quantitative market analysis to understand these conditions will be critical. ATTACHMENT 1, PAGE 4 OF 4 Attachment 1, Page 4 of 4 r MEMORANDUM OF UNDERSTANDING Dated; April i✓ , 2021 Parties: Springfield Economic Development Agency, the urban renewal agency of the City of Springfield, Oregon E'L 9 Blue McKenzie, LLC an Oregon limited liability company BACKGROUND (the "Effective Date") ("SEDA") ("Owner") A. Owner is a newly formed single asset entity formed for the purpose of acquiring and redeveloping a portion of the site located east of Ph Street and north of A Street in Springfield, Map dumber 17-03-35-42, Tax lot 2300 (the "Pro e "). B. Owner plans to construct a new eight -story mixed-use building with seven stories of market rate residential units and ground floor commercial uses (collectively, the "Project"j. Owner intends to construct the Project with cross laminated timber, which Owner believes both represent the ethos of the Springfield community and a modern and energy-efficient building style that promotes healthy, eco -friendly, and livable space. Another goal of the project is to prove the financial feasibility of market rate multifamily construction in Springfield, making the city more attractive for subsequent multifamily construction projects, and increasing housing supply. it is the expressed goal of SEDA and Owner (each, a "Par�rt ," and collectively, the "Parties') that the Project will energize Downtown Springfield, attracting more density and active; uses, while solving part of the City of Springfield's (the"Ci_�'s") current housing crisis. C. To assist Owner with the development of the Project, Owner has requested financial assistance from SEDA, including one or more loans, including a subordinate construction loan, and use of SEDA's Systems Development Charge ("SDC") grant program. On March 8, 2021, the SEDA Board authorized SEDA to enter into this Memorandum of Understanding (MOU) including the following key terms: SEDA expects to loan to Owner up to $10 million at a minimum (estimated) interest rate of 3.211/o over 10 years, to be repaid in the 101h year or thereafter over a_period of five to seven years. SEDA will agree to subordinate its loan to Owner's senior debt lender and to a portion of anticipated profit projected to be paid to the Owner's equity investors. {00017995:101 Page 1 of 10 Attachment 2, Page 1 of 11 D. On or before June 30, 2021, or earlier if possible, SEDA pians to loan up to $2 million for predevelopment costs, which amount includes up to $400,000 for Owner's acquisition of the Property. If the Project moves forward to construction, SEDA will loan to Owner (the „predevelopment loan") a maximum amount of the difference between $10 million and the amount of the predevelopment and acquisition loan, as necessary to fill any gap between total Project costs as reflected in a final budget approved by SEDA and an executed guaranteed maximum price construction contract and Owner's equity and debt financing (the "Construction Loan Amount'), Total Project costs are currently anticipated to be approximately $27 million. If the Project does not proceed to construction and if Owner (a) assigns and delivers to SEDA at no cost to SEDA all architectural designs and drawings for the Project and all third -party reports, studies and other work product, and (b) pravi es SEDA With a deed to the Property in lieu of foreclosure, then SEDA will not exercise any other remedies under the documents evidencing the predevelopment loan. E. SEDA is authorized to provide financial loans to entities in the Downtown Urban Renewal Plan area that are consistent with the Downtown Urban Renewal Plan. This activity is consistent with Section 600B of the plan, which authorizes SEDA to "provide below-market interest rate and market rate loans and provide such other forms of financial assistance to property owners and those desiring to redevelop, rehabilitation, and acquire property." F. This Memorandum of Understanding ("MOU') summarizes the Parties' present understandings, expectations, and intentions with respect to the Project and SEDA's participation in the Project. The Parties will work together in good faith to negotiate and execute definitive development and loan agreements within the term of this MOU. In addition, the Parties will work in good faith toward completion of each task included in this MOU. in some cases, completion of a task may occur after execution of definitive loan documents (e.g., after the predevelopment loan), but such tasks are included in this MOU as an expression of the Parties' desired outcomes. Now, THEREFORE, the Parties hereby agree as follows: AGREEMENT 1. Non -Binding Effect of MOU. This MOU is a statement of the current intent of the Parties, and except for Sections 5.5 through 5.11., which shall be binding on the Parties, this MOU is not a binding legal agreement. The MOU will serve as the framework for negotiations of one or more definitive development and loan agreements. Except for Sections 5.5 through 5.11, this MOU may not be relied upon as a basis for contract by estoppel or serve as the basis for a claim based on detrimental reliance or any other theory. Each Party should seek its own legal counsel related to signing this MOU and through further discussions and negotiations related to the Project and definitive agreements. {00017995:10} Page 2 of 10 Attachment 2, Page 2 of 11 2. Ne otiation of Loan Agreements. Over the next 30 days, the Parties, in good faith, will negotiate terms of the predevelopment and acquisition loan agreement. Over the 12 months following execution of the predevelopment and acquisition loan agreement, the Parties, in good faith, will negotiate the terms of a construction loan and development agreement, In those negotiations, each Party shall be free, in its respective good faith discretion, to agree or not agree on proposed terms for each agreement. The Parties intend that the development and loan agreements will be consistent with the terms and conditions of this MOU and that the documentation evidencing such loans will include, without limitation, a promissory nate and deed of trust. If additional time is required for negotiations, the Parties may extend the term of this MOU to allow for such negotiations, but neither Party shall be required to do so. The Parties understand that despite the Parties' good faith efforts reflected in this MOU, there is a possibility that they will not reach agreement on binding agreements. 3. Owner's Tasks. The following tasks will be completed by the dates set forth in the attached Project Schedule (Attachment 1) 3.1. Development of Project Concept and_Scope. Owner agrees to refine the Project concept and scope for a mixed-use development that is consistent with the following attributes ("Conceptual Desi n'): (a) eight -story mixed-use building; (b) seven stories of market rate residential development providing approximately 84 units; (c) approximately 5,000 square feet of ground floor commercial retail; and (c) CLT construction. Owner's Conceptual Design will include at least the following; (i) a site plan that shows the location of the structure, streets, any parking areas and open spaces; (ii) a program showing all proposed uses for the Project; (iii) the location of uses within the Project; (iv) the approximate square footage of each use; (v) building envelopes that show the approximate scale and massing of the proposed buildings; and (vi) illustrative sketches depicting the character of the overall Project, including public spaces. SEDA will have the right to review and approve or disapprove of the Conceptual Design, which approval shall not be unreasonably withheld. 3.2. Land Use Due Diligence. Owner agrees to review the planning and zoning requirements, ascertain the impact of such requirements on the Project, and develop a schedule for complying with such requirements. Owner understands that it will be responsible to seek any variances in existing land use parameters for the Project as necessary to comply with the Owner's Project Concept and Scope or as otherwise desired by Owner. Owner will be responsible for costs and fees associated with the permitting requirements. 3.3. Schematic DeaL n, Owner will prepare schematic level architectural design drawings ("Schematic Design"}, and engineering drawings and specifications of the Project, which shall be consistent with the Conceptual Design approved by SEDA. The drawings will include a site plan, floor plans, elevation views and renderings, and SNDA will have the right to review and approve or disapprove of the Schematic Design, which approval shall not be unreasonably withheld. Upon completion of Schematic Design, Owner will prepare and provide {00017995;10} Page 3 of 10 Attachment 2, Page 3 of 11 to SEDA a preliminary cost estimate and construction schedule for the Project, which cost estimate and schedule shall be subject to SEDA's review and approval. 3.4. Design Development Drawings and Specifications. Owner will prepare the design development level architectural and engineering drawings and specifications of the structures ("Design Development Drawings'l. The dimensioned drawings, details and the specifications will be sufficiently detailed to allow subcontractor pricing and for the contractor to prepare cost estimates, a schedule, construction contract, and to obtain a building permit. SEDA will have the right to review and approve or disapprove of the 50% and 90% Design Development Drawings, which approval shall not be unreasonably withheld. Upon completion of Design Development Drawings, Owner will prepare and provide to SEDA an updated cost estimate and construction schedule for the Project, which updated cost estimate and schedule shall be subject to SEDA's reasonable review and approval. 3.5. Construction Documents. Owner will prepare construction documents for the Project sufficient to allow the City to review and issue a building permit for all vertical construction other than site work ("Construction Documents). SEDA will have the right to review and approve or disapprove of 50% and 100% Construction Documents, which approval shall not be unreasonably withheld. Upon completion of Construction Documents, Owner will prepare and provide to SEDA an updated cost estimate and construction schedule for the Project, which updated cost estimate and schedules shall be subject to SEDA's reasonable review and approval. After completion of a competitive subcontractor bid process for the construction of the Project, Owner shall provide to SEDA an updated Project budget and timeline. The final Project budget and timeline is subject to reasonable review and approval by the SEDA. 3.5. Building Permits and Other Required Permits. After execution of the development and construction loan agreements, Owner will submit all required documents and fees for permit review and approval by the City of Springfield and all other jurisdictions having authority over the Project, and will modify such documents as necessary to achieve timely approval. 3.7. Project Financing and E ui investment. Owner will be responsible for securing a loan to finance the majority of the costs of construction. This loan will have priority over SEDA's construction loan as may be evidenced by a subordination agreement or intercreditor agreement in a form mutually acceptable to SEDA and Owner's senior lender. SEDA acknowledges that the senior lender will require Owner to use proceeds from SEDA's loan prior to disbursing proceeds from the senior loan. 3.8. Owner's Equi1y Investment. Owner's equity investment in the Project will be not less than $1 million. SEDA will subordinate its Construction loan to a portion of {00017995:10} Page 4 of 10 Attachment 2, Page 4 of 11 anticipated profit projected to be paid on the lesser of the amount of capital actually contributed to the Project by Owner or $1 million, talus not more than a 4% non -compounding annual return on such contributed capital (the 15First Position Equity"). If one or more third party investors also contribute capital to the Project, Owner may substitute all or a portion of the equity contributed by third party investors for Owner's First Position Equity, which shall result in Owner's contributed capital plus not more than a 4% non -compounding annual return on such capital becoming automatically subordinated to SEDA's Construction Loan in the amount of and to the extent of such substitution. 3.9. Development Team Roles. Owner will manage the development and construction of the Project utilizing a team of professionals whose skills, experience, and duties meet or exceed industry standards and sufficient to design, construct and complete the Project. Owner will provide prior written notice to SNDA of any changes in the development team, which changes shall be subject to SEDA's review and approval. Development team members include: Managing Principal: Jean-Pierre Veillet, Managing Member Blue Mckenzie LLC Development Manager: Jean-Pierre Veillet, Managing Member Northwest Sustainable Properties LLC Architect: LRS Architects & Lake Flato Architects General Contractor: TBD Legal Counsel: Brix Law 4. SEDA's Tasks. 4.1. Technical Assistance. SEDA will provide technical assistance and support to Owner to obtain zoning, design review, and building permit approvals through standard approval processes. SEDA does not represent or warrant that zoning and building permits for the Project will be approved by the City, and Owner shall be responsible obtaining any and all approvals required by City in accordance with the City's regulatory processes. SEDA has established contacts with City staff for Owner communication on specific topics, such as land use permitting, building permitting, transportation and infrastructure planning, system development charges, and communications. 4.2. Assistance with 5ystern Development Charge (SDC) Grant. SNDA will assist Owner with any required application for SEDA's SDC grant program to the extent that the Project meets the requirements of the program. 4.3. Predevelo ment & Acquisition Loan. SEDA will loan up to $400,000 to finance Owner's acquisition of the Property and up to $1.6 million for the following predevelopment costs: architecture; structural, civil, and mechanical engineering; survey; geotechnical; preconstruction estimating, predevelopment project management, and permitting fees. In consideration for this loan, Owner will assign all interest in predevelopment work {00017995:10) Page 5 of 10 Attachment 2, Page 5 of 11 product, including architectural drawings, to SEDA and the loan will be secured by a promissory note and first -position deed of trust on the Property. If the Project does not proceed to construction and if Owner (a) assigns and delivers to SEDA at no cost to SEDA all architectural designs and drawings for the Project and all third -party reports, studies and other work product, and (b) provides SEDA with a deed to the Property, then SEDA will not exercise any other remedies under the documents evidencing the predevelopment loan. 4.4. Construction and Development Loan. If the Project proceeds to construction, SEDA will loan Owner up to the Construction Loan Amount for capital construction costs associated with the Project. This construction and development loan will first be applied to repay the outstanding balance of the SEDA predevelopment and acquisition loan. At a minimum, the construction and development loan will bear interest at a rate of 10/0 over SEDA's bond rate (SEDA's bond rate is currently approximately 2.2%) for a period of 10 years. SEDA's loan rate may be higher or lower depending upon outcomes of the Parties' negotiations and SEDA's bond rate. The Parties expect the construction and development loan principal and interest will be repaid in a lump sum 10 years after initial loan disbursement, or over the following five to seven years. SEDA will agree to subordinate the construction and development loan principal and interest to Owner's senior construction lender, to the return of capital invested by members of the Owner, and to a set, non -compounding return of 4% per annum to the members who have invested capital in Owner. The construction and development loan will be secured by a subordinate deed of trust over the Property and all improvements and will be subject to Project -specific and market conditions precedent. 4.5. Progress Review Board Communication and Approvals. SEDA staff will be responsible for review and approval of predevelopment tasks and progress submittals as outlined in sections 3.3-3.5 above. It will be the responsibility of SEDA staff to communicate regularly with the SEDA Board, progress of the Project. 4.6. SEDA Team Roles. SEDA/City team members include: Economic Development Manager: Courtney Griesel Finance Director: Nathan Bell Assistant City Attorney: Kristina Kraaz Public Information Officer: Amber Fossen Economic Development Consultants: Abe Farkas and Nick Popenuk 5. Joint Tasks. 5.1. Loan Agreements. The Parties will regularly assess progress toward each of the progress tasks identified in this MOU and, unless a Party gives written notice to the other of its intent to terminate this MOU, the parties will continue negotiations under this MOU for a period of time sufficient to finalize and execute the required predevelopment and acquisition 10001799SAO) Page 6 of 10 Attachment 2, Page 6 of 11 loan agreement(s) and the construction and development loan agreement, which period shall not exceed 18 months from the Effective Date. 5.2. Develo ment of Project Financing Plan. SEDA and Owner will collaborate on a financing strategy for the Project with the understanding that the terms of private financing in connection with the Project shall be at Owner's discretion, except where SEDA and Owner have specified otherwise, The goal of the Parties is to provide the appropriate level of private and SEDA financing to reach the broader economic goals of the Project, while also assuring that any SEDA funds are incorporated in the Project funding to a level and of a nature absolutely necessary to assure the financial viability of the Project, The Parties anticipate that senior bank financing will be approximately $16 million for the total project cost of $27 million. Within thirty (30) days of the Effective Date, Owner agrees to develop a preliminary Project budget that includes costs for design, permitting, construction, leasing, marketing, and all other costs required to build the Project, as well as a schedule of sources and uses of capital for the Project. The Project budget and schedule will be subject to SEDA's reasonable review and approval and will be updated as appropriate as the tasks described in this MOU are completed. 5.3. Tenant Recruitment. Owner will be responsible for all tenant leases for the Project. At the request of the Owner, SEDA may provide technical assistance as appropriate in the identification and acquisition of ground -floor commercial tenants, up to but not including the negotiation of a tenant lease. Notwithstanding the foregoing, Owner will be the primary point of contact for the negotiation of ground -floor commercial tenant leases. SEDA will notify Owner of discussions with prospective ground -floor tenants. 5.4. Public Notification. Both Owner and the SEDA acknowledge that public notification is a required element of site plan approval for the Project by the City, and that a public hearing before the Springfield Planning Commission could be required for land use approval. Owner will be responsible for any public hearing presentation as the "applicant" and for payment of notice costs as required by the City of Springfield (but which costs may be paid with SEDA loan funds). 5.5. Project Communications. SEDA and Owner will coordinate Project communications such that all press releases and responses to media inquiries will be subject to reasonable prior review and approval by both Patties. Media requests for comments on behalf of SEDA will be coordinated through the SEDA Economic Development Manager and the City of Springfield Public information Officer. 5.6. Project Team Meetings. Regular and direct communication between the Parties is a necessary part of all the tasks contemplated by this MOU. Therefore, Owner has identified .dean -Pierre Velilet of Northwest Sustainable Properties as its project representative, and SEDA has identified Courtney Griesel, Economic Development Manager, as its project representative (each a "Project Representative" and collectively, the "Project Representatives"). 00017995:10) Page 7 of 10 Attachment 2, Page 7 of 11 Each Project Representative will call upon such staff or other consultants as each deems necessary to diligently complete the tasks each Party has agreed to perform in this MOU and agrees to perform in definitive documents. The Project Representatives (or their designees) will schedule regular Project team meetings, not less frequently than every other week, to address matters of mutual interest, keep each other informed on Project progress, including design, permitting and construction, and work toward the satisfactory negotiation of the definitive documents. Owner will participate in briefings of the SEDA Board over the course of the Project as requested by SEDA's Project Representative. 5.7. Prevailing.Wages. SEDA anticipates that the Project, if constructed with a $10 million loan from SEDA, will be deemed a "public improvement" project or a "public works„ project as those terms are defined in the Oregon Public Contracting Code, Therefore, Owner and SEDA recognize that the Project may be subject to state prevailing wage laws. Owner will include payment of prevailing wages in all construction estimates and Project budgets, as applicable. 5.8. Confidentiality. Neither Owner nor SEDA (nor their respective directors, officers, employees, representatives, agents or consultants) shall disclose to any person or entity any of the terms and conditions of any possible transaction which may arise from discussions or negotiations between Owner and SEDA concerning the contents of this MOU, except that Owner and SEDA may make such disclosures as required by law and may make any and all appropriate disclosures to consultants, attorneys, current and potential lenders, partners and investors. SEDA will notify Owner in writing of any Public Records Act request that it receives before complying with such request. Prior to disclosure of any records, Owner and SEDA will work together to determine if the request falls within an exemption to the Public Records Act. 5.9. Indemnification. To the greatest extent allowed under applicable law, Owner shall indemnify, hold harmless and, upon request, defend SEDA and the City and their elected officials, officers, agents and employees from and against any and all claims, damages, iosses and expenses arising out of or resulting from any negligent or intentional act or omission of Owner, its employees or its agents, including consultants and contractors, under this MOU. Likewise, to the greatest extent allowed under applicable law and subject to the Tort Claims Act, SEDA and City shall indemnify bold harmless and, upon Owner's request, defend Owner and its members, officers, agents and employees from and against any and all claims, damages, losses and expenses arising out of or resulting from any negligent act or omission of their respective representatives, agents, board members and employees, under this MOU. 5.10, Notices. All notices given under this MDU shall be in writing and may be delivered, with all applicable delivery and postage charges prepaid, by: (a) personal delivery or messenger; (b) nationally recognized overnight courier service; (c) certified U.S. mail, return receipt requested; or (d) e-mail, to a Party at the address set forth below: {00017995;10} Page 8 of 10 Attachment 2, Page 8 of 11 Agency: Urban Renewal Agency of the City of Springfield 225 Fifth Street Springfield, OR 97477 Attn: Courtney Griesel Email: cc riesel(d)sprin,gfield-or.gov Owner: Blue McKenzie, LLC 240 SE 2nd Ave Portland, OR 97214 Attn: Jean-Pierre Veillet Email: jp@nws-properties.com Notices shall be deemed received by the addressee upon the earlier of actual delivery or refusal of a party to accept delivery thereof; provided that notices sent by email shall be deemed given on the date received if and only if delivered prior to 5:00 p.m. Pacific Time and if concurrently sent by another means allowed hereunder. The addresses to which notices are to be delivered may be changed by giving notice of such change in address in accordance with this notice provision. Notices may be given by counsel to a Parry. 5.11. Miscellaneous. Each Party has reviewed this MOU and agrees that the rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this MOU. No provision of this MOU shall be deemed to have been waived by either Party unless the waiver is in writing and signed by that Party. As used in this MOU, (a) "shall" means mandatory and imperative, and (b) "including" means including without limitation. This MOU may be executed in one or more identical counterparts, each of which shall be deemed an original and all of which will collectively constitute one agreement. SPRINGFIELD ECONOMIC DEVELOPMENT BLUE MCKENZIE, LLC AGENCY V v4v��, By: By: Its: Its: / 711(�/tei Ion017995:101 Page 9 of 10 Attachment 2, Page 9 of 11 Attachment 2, Page 10 of 11 m c / / 2 y \ k � § \ O L2 \ 7 \� \ E � , V) ƒ 02 a/ §ro § CL 2 \ Ec E / \ k ECr / u k � / a 2 k C 2 CL § j ' a f d k-0 a k R 2 Attachment 2 Page 11 of 11 N3 � � � SEDA DOWNTOWN ACQUISITION AND PREDEVELOPMENT LOAN Contract #_2827 This SEDA Downtown Acquisition and Predevelopment Loan Contract ("Contract") is made and entered into this May 17 , 2021, by and between the Springfield Economic Development Agency, hereinafter referred to as "SEDA" and Blue McKenzie Apartments LLC, an Oregon limited liability company, hereinafter referred to as "Borrower." STATEMENT OF PURPOSE SEDA is authorized to provide financial loans to businesses in the Downtown Urban Renewal Plan area that are consistent with the Downtown Urban Renewal Plan. Borrower and SEDA have entered into a Memorandum of Understanding dated April 16, 2021 (the "MOU") regarding development of an eight -story mixed-use, market rate residential building located east of 7'h Street and north of A Street in Springfield (Map Number 17-03-35-42, Tax Lot 2300) (the "Property"). The purpose of this Contract is to set forth the terms under which the SEDA funds will be provided to Borrower. NOW, THEREFORE, in consideration of the promises contained herein, it is agreed as follows: 1. Purpose of Loan Funding. The purpose of this loan is to facilitate Borrower's acquisition of the Property and to fund predevelopment costs for a new development with the following attributes: (a) eight -story mixed-use building; (b) seven stories of market rate residential development providing approximately 84 units; (c) approximately 5,000 square feet of ground floor commercial retail; and (d) cross -laminated timber construction, more particularly described in the "Springfield Motors Development Report" in Exhibit A (the "Project"). 2. SEDA Agreement to Fund Loan. Subject to, and conditioned upon, Borrower's compliance with the terms of this Contract and the other Loan Documents and the representations contained in the Developer's Statement of Financial Capability (the "Application"), SEDA agrees to provide Borrower a loan in an amount not to exceed two million dollars ($2,000,000.00) at 0% interest. Notwithstanding any provision in this Contract, items eligible for the SEDA funds shall be limited to purchase of the Property and predevelopment costs associated with the permanent improvements to the Property identified in Exhibit B. Examples of items not eligible for the SEDA funds include: Ongoing administration costs or business operating costs. SEDA shall have final determination on items eligible for payment, provided SEDA's approval shall not be unreasonably withheld, conditioned, or delayed. 3. Security. This loan shall be evidenced by a Promissory Note executed by Borrower in favor of SEDA, and secured by (a) a Line of Credit Instrument Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing executed by Borrower in favor of SEDA placed on the Property (the "Deed of Trust"), and (b) an Assignment of Plans, Specifications, Reports and Permits (the "Assignment") executed by Borrower in favor of SEDA (collectively with this Contract, the "Loan Documents"). Borrower hereby authorizes SEDA to file or record any other documents Lender considers reasonably necessary to perfect Lender's security interest. 3.1. Subordination. This loan will be secured by a first position lien on the Property. SEDA will not agree to subordinate this loan. Page 1 of 7 Attachment 3, Page 1 of 19 4. Title Insurance. Title insurance will be required. The costs of a title search, title insurance and any endorsements thereto, and credit reports, and recording SEDA's security interest against the Property are considered eligible project expenses and shall be paid by the loan proceeds as the first or subsequent draws on the loan. Borrower will be responsible for reconveyance costs either through the remainder of loan proceeds or by making a separate payment to SEDA. 5. Credit Information Release. Borrower and its members each individually hereby authorize any person or consumer reporting agency to complete and furnish to SEDA's agents any information it may have or obtain in response to SEDA's credit inquiries. Borrower authorizes SEDA to provide information concerning Borrower's and Borrower's members' credit relationship to credit reporting agencies or other creditors. 6. Funding. Pursuant to Oregon Budget Law, SEDA's obligations are expressly made subject to the availability of uncommitted funds on all dates anticipated for SEDA payments. If funds are not available on the anticipated date, but are expected in the future, SEDA funding may be deferred until funds become available. 7. Disbursement of Loan Proceeds. 7.1. Acquisition Loan funds. Loan funds not greater than the purchase price of the Property or four hundred thousand dollars ($400,000), whichever is less, will be sent to escrow to acquire the Property, along with the Loan Documents. No loan funds may be disbursed unless all the Loan Documents are properly executed by Borrower. 7.2. Predevelopment Loan funds. SEDA shall segregate the loan proceeds to a specific SEDA account held for the use of Borrower's disbursement pursuant to the terms of this Contract. SEDA will disburse funds directly to the Borrower. Eligible expenses are only those expenses listed in the project budget in Exhibit B. SEDA will disburse loan funds no more frequently than once in any 30 -day period and within 15 days of SEDA's receipt of a disbursement request that meets the following requirements and is otherwise approved by SEDA: 7.2.1 Borrower will submit each disbursement application using the form in Exhibit C. 7.2.2 Borrower will provide SEDA and City staff with all invoices, proofs of payment, contracts and lien waivers associated with the Project with the disbursement application. 7.2.3 With the exception of the final loan draw, loan funds must be drawn in amounts of at least $10,000. 7.2.4 Borrower will provide SEDA and City staff with any other documentation reasonably requested by SEDA or City staff in connection with the disbursement, including without limitation, title endorsements. Loan Documents. 7.2.5 Borrower shall not be in default of any of its obligations under the Page 2 of 7 Attachment 3, Page 2 of 19 8. Borrower's Representations. Borrower represents, warrants and covenants to SEDA the following as of the date of this Contract, each disbursement date and during the term of this Agreement as follows: 8.1. Organization and Authority. Borrower is a limited liability company, duly and validly organized and in existence under the laws of the State of Oregon. Borrower has full legal right, power and authority, and all necessary licenses and permits required to (a) undertake and carry on the predevelopment work, (b) execute and deliver this Contract, the Note and the other Loan Documents, and (c) carry out and consummate all transactions contemplated by this Contract, the Note and the other Loan Documents. 8.2. No Violations or Default. Borrower is not in default under or in violation of any agreement to which it is a party or by which it is bound, nor any order, regulation, ruling or requirement of a court or other public body or authority. No creditor has given Borrower notice or threatened to give it any notice of default under any material agreement. At all times material to this Contract, Borrower shall remain fully able to perform all of its duties and obligations. 8.3. Litigation. No action, suit, investigation or proceeding is pending against Borrower or with respect to the Property or the Project before any court or administrative agency, (a) the outcome of which, by itself or taken together with any other litigation, might have a material adverse effect on the business, assets, operations, or financial condition of Borrower, or (b) which purports to affect the legality, enforceability or validity of any Loan Document. 8.4. Tax Returns. All federal, state, and other tax returns of Borrower required by law to be filed have been filed. 9. Project Schedule and Completion. The predevelopment work must be completed within eighteen (18) months of the date Borrower signs this Contract (for the avoidance of doubt, subject to extensions for events of force majeure as described in section 35). Each predevelopment task must be completed according to the project schedule in Exhibit B. Any deviations or adjustments to the project schedule that will materially delay the ultimate completion of the predevelopment work and/or Project completion must be approved by SEDA. 10. Review of Work Product. SEDA staff may review the work product as stated in Exhibit B to ensure that all elements have been satisfactorily completed. SEDA shall have reasonable discretion to determine whether or not Borrower has complied with Borrower's obligations herein. SEDA's determination on this matter shall be final and binding. 11. Standard of Work. Borrower shall ensure that all predevelopment activities, investigation and work product contemplated by this Contract in Exhibit B or subsequently approved in writing by SEDA, and undertaken by Borrower are of high quality and meet with the commonly accepted standards of persons performing such investigations or activities or producing such work product. If Borrower fails to take all reasonable steps of investigation, adequate contracting and monitoring typical of a borrower similarly situated to Borrower and in accordance with applicable industry standards, such failure shall be a breach of this Contract, subject to applicable cure periods. 12. Licenses; Maintenance of Business. Borrower will remain a limited liability company, validly existing under the laws of Oregon, and will keep in force all licenses and permits necessary to undertake and complete all predevelopment work. Page 3 of 7 Attachment 3, Page 3 of 19 13. Prior Expenses. Expenses incurred by Borrower or otherwise with respect to the Project prior to the date of the execution of this Contract are not eligible for reimbursement. 14. Third Party Contracts. All predevelopment contracts will be between Borrower and Borrower's contractors and suppliers as identified in Exhibit B. Borrower will provide copies of executed contracts with all contractors. Borrower will not enter into new contracts for predevelopment work with contractors or suppliers not described in Exhibit B, including yet to be identified contractors, without the consent of SEDA, which shall not be unreasonably withheld, conditioned, or delayed. The City of Springfield (the "City") and SEDA are not parties to these contracts by virtue of providing this financial assistance. 15. Final Disbursement. Five percent (5%) of the total SEDA funding, not including funds for acquisition of the Property, will be held back from the final draw and released only upon satisfactory completion of the predevelopment work as described in section 19, and receipt of documentation establishing that the total expenditures match the estimated cost outlined in the Exhibit B. 16. Remaining Loan Funds. SEDA's funding assumes that completion of the predevelopment work will require expenditure of all sums represented by the applicant as being necessary for the predevelopment work. If the total predevelopment work costs are less than the projected amount, SEDA's contribution is to be proportionately reduced. If, at the completion of the predevelopment work, or the deadline for completion of the predevelopment work set forth herein, any loan funds remaining undisbursed, the Borrower shall not be required to repay any undisbursed funds. 17. Repayment Terms. The disbursed principal amount is fully due and payable eighteen months (18) months from date of this Contract. 18. Consequences of Unauthorized Expenditure by Borrower. In the event that Borrower expends any loan funds for a purpose outside of, or beyond what is set forth in this Contract, SEDA may withhold any future loan funding and Borrower shall be immediately obligated to repay SEDA all loan funds which have been expended for a purpose outside or beyond that set forth in this Contract. Expenditures shall be subject to inspection annually by SEDA/City auditors. 19. Prosect Completion. Borrower agrees to complete the predevelopment work described in this Contract within the time schedule provided therein. The predevelopment work shall be deemed complete when all documents have been created to the extent described in Exhibits A and B and are otherwise ready to submit for required permits and construction lending requests, as reasonably determined by SEDA. If necessary, Borrower may request in writing, an extension to complete the work. This extension will be authorized by SEDA at its reasonable discretion. 20. Construction Loan Negotiation. During the 6 -month period commencing on the date of this Contract (the "Negotiation Period"), SEDA and Borrower shall exercise diligent and good faith efforts to agree in writing on the material terms (which shall include, without limitation, the loan term, interest rate, repayment terms, and required guarantors and loan collateral, as generally described in the MOU) of a subsequent approximately $10 million dollar construction loan from SEDA to Borrower for the construction of the Project (the "Construction Loan"), which loan is intended to pay off this Predevelopment and Acquisition Loan. The Negotiation Period may be extended if the parties mutually agree in writing to such extension. If the parties are unable to agree in writing on the material terms of the Construction Loan during the Negotiation Page 4 of 7 Attachment 3, Page 4 of 19 Period (as may be mutually extended), then, notwithstanding anything herein to the contrary, SEDA shall have no obligation to disburse additional funds to Borrower under this loan, except for disbursements for expenses actually and already incurred by Borrower under this agreement. Nothing in this paragraph shall be construed to create an obligation of SEDA to make the Construction Loan and no party shall be obligated with respect to the Construction Loan until binding loan documents are mutually executed by the parties. 21. Consequences of Failing to Complete Prosect or Other Breach of this Contract. In the event that the Borrower fails to complete the predevelopment work described in this Contract within the applicable time schedule (as the same may be extended pursuant to force majeure under section 35 of this Contract), or commits any other material breach of this Contract beyond all applicable notice and cure periods, all sums loaned or granted by the City shall then be immediately repaid to City by Borrower. 22. Loan Forgiveness. Notwithstanding anything in the Loan Documents to the contrary, in the event that Borrower and SEDA mutually agree that future construction of the Project is no longer feasible, this loan will be forgivable by SEDA. As a condition precedent to loan forgiveness, Borrower will deliver and assign to SEDA, at no cost to SEDA, all Borrower's right, title and interest in the architectural designs and drawings for the Project, third -party reports, studies, work product and other Collateral (as defined in the Assignment), and a deed to the Property in lieu of foreclosure, all in forms acceptable to SEDA. Following Borrower's delivery of the aforementioned documents to SEDA, Borrower shall be fully released from any and all obligations under this Contract or the Loan Documents. For the avoidance of doubt, the principals, members, managers, and other individuals associated with Borrower shall have no personal liability associated with this loan evidenced by this Contract, it being understood and agreed that all liability of Borrower shall be limited solely to Borrower's assets described in the Loan Documents, except for any indemnification obligations under this Contract or the Loan Documents. 23. Inspection and Regulatory Review. It is Borrower's responsibility to obtain all necessary regulatory reviews and approvals including but not limited to land -use review, and requisite permits. The Project must remain in compliance with all regulatory bodies and approval agencies. It will be Borrower's responsibility to resolve any regulatory issues. 24. Special Provisions. In addition to compliance with all representations made in the loan Application, this loan shall further be conditioned upon Borrower's compliance with the following special conditions: 24.1. Project Plan Amendment. Any material deviation from the predevelopment work detailed in Exhibit B must be preapproved in writing by SEDA to be eligible for reimbursement. 24.2. Design Review. The Project is subject to the City of Springfield Development Code and applicable building codes. If the Project is not approved by Springfield Development & Public Works Department, subsequent funding is hereby revoked. SEDA shall agree to loan forgiveness as provided in Section 22. 25. Discharge of Liens. Borrower will timely pay and discharge all indebtedness, taxes and other obligations for which it is liable or to which its income or property is subject, as well as all claims for labor, materials or supplies that, if unpaid, might become by law a lien upon the Property, subject to Borrower's right to contest any liens described in the Deed of Trust. If Borrower fails to discharge any such claim or lien, SEDA may, in its sole discretion and without Page 5 of 7 Attachment 3, Page 5 of 19 waiving the default, pay the same, which payment shall, at SEDA's option, be added to the amount outstanding under the Note. 26. Prevailing Wages. Borrower and its subcontractors shall comply with ORS 279C.840 requiring Borrower and its subcontractors to pay workers on the Project the prevailing rate of wage as established by the Oregon Bureau of Labor and Industries unless exempt therefrom. Borrower will be responsible for compliance and reporting under the Oregon Prevailing Wage Law and its implementing rules, ORS 279C.800 et. seq. Borrower will hold the City and SEDA harmless for all costs, fees and penalties that may be incurred, and for all reports, fines and/or litigation costs, including reasonable attorney fees, that may result from Borrower's application of the Oregon Prevailing Wage Law to the Project. 27. No Assignment. The obligations of Borrower hereunder and under any accompanying loan or personal obligations of Borrower are not assignable or transferable without written consent of SEDA, which shall not be unreasonably withheld, conditioned, or delayed. 28. Interest. In the event Borrower breaches any term of this Contract or any of the other Loan Documents, Borrower's obligation will bear interest at the rate of twelve percent (12%) per annum. 29. Attorney's Fees. Should suit or action be filed to enforce this Contract or seek damages for its breach, the prevailing party shall be entitled to an award of its reasonable attorney fees including those incurred upon appeal. 30. Indemnification and Regulatory Compliance. Borrower shall be responsible, and shall comply with, all requirements of law including, but not limited to, compliance with all applicable federal, state, and local regulations and hereby covenants and agrees to indemnify and hold harmless SEDA, from any claim, demand, or damage, resulting in any manner from the extension in loan funds from SEDA to Borrower and/or any use of SEDA funds by Borrower, this Contract, Borrower's actions in connection with the Project, including its agents and assignees, and from any use of SEDA funds except to the extent caused by SEDA's negligence or willful misconduct. 31. Insurance. Borrower will at all times carry a Comprehensive General Liability insurance policy for at least $2,000,000 combined single limits per occurrence for Bodily Injury, Property Damage, and Personal Injury and $3,000,000 aggregate. The City and SEDA, and their respective employees, officials, and agents will be named as an Additional Insured on the General Liability policy and a certificate evidencing the foregoing insurance requirements in a form acceptable to SEDA shall be delivered to SEDA prior to the initial loan disbursement. This insurance will be primary over any insurance the City may carry on its own. Borrower understands that the City of Springfield is a public entity subject to the requirements of the Oregon Governmental Tort Claims Act, ORS 30.260 et seq. 32. Tax Consequences. SEDA makes no representations concerning the tax consequences to the recipient of any agency grant or loan. Any questions in this regard should be resolved by the recipient with his/her own tax professional. 33. Legal Representation. This Contract was prepared by SEDA. Borrower has had the opportunity to have this Contract reviewed by its own legal counsel prior to its execution. Page 6 of 7 Attachment 3, Page 6 of 19 34. Venue. Venue for litigation concerning this Contract shall rest exclusively with the court of the State of Oregon for Lane County. 35. Force Maieure. If Borrower is delayed by reason of weather, fire, strikes, pandemic (other than the present conditions or restrictions associated with the COVID-19 pandemic), Acts of God, or other similar circumstances beyond Borrower's reasonable control, Borrower shall be entitled to additional time to complete the predevelopment work equal to that lost by any or all of the above causes, as reasonably determined by SEDA. 36. Obligations Binding on Trustees Successors and assign . The obligations of Borrower shall be binding upon Borrower, Borrower's successors and assigns, Borrower's estate, any trusts in which Borrower is a trustor or beneficiary, and any other entity or instrument owned or controlled by Borrower. SEDA: By: C _ Printed Nam6-" Title: Ci=g� 2=1Date: EXHIBITS: A — Springfield Motors Development Report B — Project Budget, Tasks and Timeline C — Disbursement Request Form BORROWER: BLUE MCKENZIE APARTMENTS, LLC By��–ted - — Name: 4�tLams Title: Date: S't� z Page 7 of 7 Attachment 3, Page 7 of 19 EXHIBIT A SPRINGFIELD MOTORS DEVELOPMENT REPORT - OCTOBER 2020 702 NORTH A STREET, SPRINGFIELD, OR 97477 f5. Y Al fp Y a r 4: i . Vit. T E 4 rt S r . :.{I. '•i � �. a •���t � � M1 { f f •.rte � � tr'�rt77' • � +a' - !' k • ;.ice.. y���::.�.� SITE LOCATION, CONTEXT & EXISTING CONDITIONS EXHIBIT A /! / C STREET Va]Iey Rei- Center a Eugene Country Club Skinner Burse Pa k L KEeAIIOn E.y Baker Park W10Ave Eugene n r tl s I the Shappes at Galeway a�a University , of Oregonssfe�ay If Glenwvnd Ll / 1 err Nonn - ou$pnngri4lD r 1 - 1 � 1 � � 1 MIM I I 1 B STREET 1 _; Waknen S mer T Lu y' r SITE LOCATI N /LuLLI Lu ' ' ' ' ' is ' 2 2 2 Sprinyfle�`{] Q Y 1 r' f °~° ' 1 •�` 1 ` A STREET 1 Y Dorris Ranch ` � 1 1%27 1 1 1 `— ♦ MAIN STREET Attachment 3, Page 9 of 19 SPRINGFIELD MOTORS MIXED USE MASS TIMBER DEVELOPMENT 702 NORTH A STREET, SPRINGFIELD, OR 97477 DATE: 10/19/2020 SITEWORKS PAGE: 20F19 DESIGN I BUILD SPRINGFIELD ZONING MAP & EXISTING SITE INFORMATION r = � r C 5T T r off 1 U) D ZONING MAP NOT TO SCALE Public Land & Open Space Low Density Residential Community Commercial Mixed Use Commercial SITE LOCATION E EXHIBIT A .r... fir• • . w• „f _ PAVED PARKING r,11411111.4*111111 EXISTING SITE PLAN DIAGRAM NOT TO SCALE PHASE 2 - FUTURE DEVELOPMENT 10 FT MAX SETBACK 25 FT MIN. BUILDING HEIGHT BUILDING HEIGHT SUBJECT TO SHADE POINT HEIGHT REGULATIONS PER 3.2-225A EASEMENT SOUTHEAST PARCEL - FOCUS SITE RKI PAVED PANG PHASE 1A - PROPOSED DEVELOPMENT 90 FT MAX BUILDING HEIGHT 25 FT MIN. BUILDING HEIGHT STORIES MIN. L1N10 0 FT MAX STREET SETBACK ON A -STREET VEHICLE ACCESS ALLOWED FROM A -STREET fl ALLOWED USES - MIXED USED COMMERCIAL (MUC) ZONE • BUSINESS AND PROFESSIONAL OFFICES AND PERSONAL SERVICES • EATING AND DRINKING ESTABLISHMENTS (INCLUDING TAVERNS AND BREW PUBS) • RECREATIONAL FACILITIES • RELIGIOUS, SOCIAL AND CIVIC INSTITUTIONS • RESIDENTIAL USES IN AREAS DESIGNATED MIXED-USE IN THE METRO PLAN OR REFINEMENT PLANS • RETAIL SALES • TRANSIENT ACCOMMODATIONS Attachment 3, Page 10 of 19 PHASE 1 B - FUTURE RENOVATION EXISTING BUICK DEALERSHIP MUC - ZONE DEVELOPMENT STANDARDS • MINIMUM FLOOR AREA = 6000 SF • MIN F.A.R. = .40 • 40 FT MIN. STREET FRONTAGE • 60% MIN. GROUND FLOOR AREA AS COMMERCIAL USE • UNLIMITED LOT COVERAGE • BUILDING SETBACK = 0 FT SPRINGFIELD MOTORS MIXED USE MASS TIMBER DEVELOPMENT 702 NORTH A STREET, SPRINGFIELD, OR 97477 DATE: 10/19/2020 PAGE: 30F19 SITEWORKS DESIGN I BUILD SITE MASSING DIAGRAM 7w -L1 r i r r EXHIBIT A r 8T� ysrRFF7' a,- Attachment 3, Page 11 of 19 PHASE 1 7 STORIES RESIDENTIAL TYPE IV -C: 63,980 SF 1 STORY COMMERCIAL TYPE IV -C: 9,020S TOTAL 73,000 SF 85FT BUILDING HEIGHT (MASS TIMBER CONSTRUCTION) 84 TOTAL RESIDENTIAL UNITS 49 ONE BEDROOM UNITS 28 TWO BEDROOM UNITS 7 THREE BEDROOM UNITS PHASE 2 4 STORIES RESIDENTIAL TYPE VA: 62,000 SF 1 STORY COMM. / RES. TYPE IA: 15,900 SF 52FT BUILDING HEIGHT 85 TOTAL RESIDENTIAL UNITS 58 ONE BEDROOM UNITS 23 TWO BEDROOM UNITS 4 THREE BEDROOM UNITS 77,900 SF TOTAL BUILT SF 53,845 SF RESIDENTIAL LEASABLE 6,745 SF COMMERCIAL LEASABLE 12,070 SF COMMON AREA/ CIRCULATION 5,240 SF ROOF DECK AREA SPRINGFIELD MOTORS MIXED USE MASS TIMBER DEVELOPMENT 702 NORTH A STREET, SPRINGFIELD, OR 97477 DATE: 10/19/2020 PAGE: 50F19 SITEWORKS DESIGN I BUILD PHASE 1 - SITE DIAGRAM & MASSING B STREET I PROPOS- ---- -- --- -------- NOT TO SCAL A STREET 1 EXHIBIT A PHASE 1H HISTORIC DEALERSHIP RENOVATION TO RESTAURANT/ BREWERY PHASE 1A PROPOSED 7 STORY DEVELOPMENT Attachment 3, Page 12 of 19 EXIS I INU PUS I UFFlUE SPRINGFIELD MOTORS MIXED USE MASS TIMBER DEVELOPMENT 702 NORTH A STREET, SPRINGFIELD, OR 97477 DATE: 10/19/2020 SIITEWORKS PAGE: 60F19 I- W W H y 2 H ti PHASE 1 - FLOOR PLANS EXHIBIT A 1 ST FLOOR PLAN & SITE PLAN NOT TO SCALE A STREET Attachment 3, Page 13 of 19 I I I I I I "-4 3 BEDROOM 2 BEDROOM 1,089 SF LI -819 SF BEDROOM E E ® � 748 SF oc 1 BEDROOM 1510 SF 1B510SF j I�v�� �� I ��v�I 1g 10 SF 510 SF (�1--� �� �� �—t/ 1 BEDROOM — '1 1 r "`"' 1 BEDROOM 510 SF r --7I X1510 SF 510SI (tel—" �, �r )510 SF = E �T7 SF O =� =� 2BEDROOM BEDROOM AMENITY =��__= 732 SF 736 SF 267 SF 2ND - 8TH FLOOR PLAN NOT TO SCALE SPRINGFIELD MOTORS MIXED USE MASS TIMBER DEVELOPMENT 702 NORTH A STREET, SPRINGFIELD, OR 97477 DATE: 10/19/2020 SIITEWORKS PAGE: 70F19 SPRINGFIELD FEASIBILITY - MASSING t& it EXHIBIT A 7 STORIES TYPE IV -C: 63,980 SF 1 STORY TYPE IV -C: 9,020 SF (MASS TIMBER CONSTRUCTION) 84 RESIDENTIAL UNITS A 73,000 SF TOTAL BUILT SF 54,425 SF RESIDENTIAL LEASABLE 2,300 SF COMMERCIAL LEASABLE 16,275 SF COMMON AREA / CIRCULATION 4 MASSING 3A Attachment 3, Page 14 of 19 SPRINGFIELD FEASIBLITY 702 N. A STREET Spnngfield, OR 97477 2020.06.25 a J m z c� Ld 0 W W U C.*j CL w W C7 C9 Ne Ne Z Z Q Q a a a a W W W W y y co �L---------------------EXHIBIT A ---------------------J 9 STREET CAR PARKING SPACES 10 STREET CAR PARKING SPACES 1 EXISTIN&BUILDING 8,000 SF GROUND FLOOR CORRIDOR Lu 210 SF I F MEP / TRASH / BIKE / STORAGE 1 5,560 SF STAIR 200 SF COMMERCIAL 2,300 SF ELEV 90 SF LOBBY 460 SF L STAIR 200 SF 80' - 6" 10 STREET CAR PARKING SPACES 8 STREET CAR PARKING SPACES Attachment 3, Page 15 of 19 1" = 40--0" en W Q a W C7 Z Y OG a a a H W H y LO SPRINGFIELD FEASIBLITY 702 N. A STREET Springfield, OR 97477 2020.06.25 -------------------- 59 STREET CAR PARKING SPACES 55 PRIVATE CAR PARKING SPACES ' I I 114 TOTAL PARKING SPACES I I 48 UNITS; 2.38 TOTAL PARKING RATIO , II 8 STORIES TYPE IV -C ' 9,020 SF (NEW) + 8,000 SF (E) _ 17,020 SF TOTAL GROUND FLOOR AREA 60% COMMERCIAL REQUIRED C* = 10,212 SF MIN COMMERCIAL SPACE i W CO3 55 PRIVATE CAR PARKING SPACES C9 beZ a 1 EXISTIN&BUILDING 8,000 SF GROUND FLOOR CORRIDOR Lu 210 SF I F MEP / TRASH / BIKE / STORAGE 1 5,560 SF STAIR 200 SF COMMERCIAL 2,300 SF ELEV 90 SF LOBBY 460 SF L STAIR 200 SF 80' - 6" 10 STREET CAR PARKING SPACES 8 STREET CAR PARKING SPACES Attachment 3, Page 15 of 19 1" = 40--0" en W Q a W C7 Z Y OG a a a H W H y LO SPRINGFIELD FEASIBLITY 702 N. A STREET Springfield, OR 97477 2020.06.25 EXHIBIT A F ---------------------------------T --------------------------� 9,140 TOTAL SF PER FLOOR I 12 UNITS PER FLOOR 84 UNITS ON 7 FLOORS: i 7*7 = 49 ONE BEDROOM UNITS I 4*7 = 28 TWO BEDROOM UNITS I I I 1 *7 = 7 THREE BEDROOM UNITS I I I _�------------------------BEDROOM � —_ 1,100 SF I L - — - — - — - 595 SF 280 SF 90 SF 200 SF SPRING ITY 702 N. A STREET 702 N. A STREET 3C Spnngfield, OR 97477 1j32" = 1'-0" 2020.06.25 Attachment 3, Page 16 of 19 z c� Ld 0 EXHIBIT B BLUE MCKENZIE APARTMENTS LLC PROJECT BUDGET, TASKS, & TIMELINE Project Budget — Predevelopment & Acquisition Loan Predevelopment Activity Amount Development Management $409,000 Architectural Design $739,250 Structural Engineering $116,250 Civil Engineering $31,500 Mechanical Engineering $148,600 Surveying & Geotechnical $17,000 Cost Estimating $75,000 Loan Fee $20,000 Contingency $43,400 Predevelopment Total $1,600,000 Acquisition Activity Amount Property Acquisition $400,000 Acquisition Total $400,000 LOAN TOTAL $2,000,000 Project Tasks & Timeline The Project timeline is intended to inform estimated timing and relationship of tasks and predevelopment phases to be funded during the initial pre -development and property acquisition loan ($2M) phase. SEDA will disburse loan funds to Owner on a monthly basis according to the Predevelopment & Acquisition Loan Agreement. 1. Property Acquisition. Owner will acquire fee simple title to the Property no later than June 30, 2021. 2. Survey & Geotechnical. Owner will complete surveying and geotechnical work needed to complete the schematic design in four to six weeks, no later than June 30, 2021. Development of Project Concept and Scope. Owner agrees to refine the Project concept and scope for a mixed-use development that is consistent with the following attributes ("Schematic Design"): (a) eight -story mixed-use building; (b) seven stories of market rate residential development providing approximately 84 units; (c) approximately 5,000 square feet of ground floor commercial retail; and (c) CLT construction. Owner's Conceptual Design will include at least the following: (i) a site plan that shows the location of the structure, streets, any parking areas and open spaces; (ii) a program showing all proposed uses for the Project; (iii) the location of uses within the Project; (iv) the approximate square footage of each use; (v) building envelopes that show the approximate scale and massing of the proposed buildings; and (vi) illustrative sketches depicting the character of the overall Project, Page 1 of 2 Attachment 3, Page 17 of 19 including public spaces. SEDA will have the right to review and approve or disapprove of the Schematic Design, which approval shall not be unreasonably withheld. The Schematic Design will be completed within 12 weeks of Survey no later than September 1, 2021. 4. Schematic Design. Owner will prepare schematic level architectural design drawings ('Schematic Design's and engineering drawings and specifications of the Project, which shall be consistent with the Conceptual Design approved by SEDA. The drawings will include a site plan, floor plans, elevation views and renderings, and SEDA will have the right to review and approve or disapprove of the Schematic Design, which approval shall not be unreasonably withheld. Upon completion of Schematic Design, Owner will prepare and provide to SEDA a preliminary cost estimate and construction schedule for the Project, which cost estimate and schedule shall be subject to SEDA's review and approval. Owner will provide SEDA with the Schematic Design for review no later than [date 12 -weeks out]. 5. Design Development Drawings and Specifications. Owner will prepare the design development level architectural and engineering drawings and specifications of the structures ("Design Development Drawings'. The dimensioned drawings, details and the specifications will be sufficiently detailed to allow subcontractor pricing and for the contractor to prepare cost estimates, a schedule, construction contract, and to obtain a building permit. SEDA will have the right to review and approve or disapprove of the 50% and 90% Design Development Drawings, which approval shall not be unreasonably withheld. Upon completion of Design Development Drawings, Owner will prepare and provide to SEDA an updated cost estimate and construction schedule for the Project, which updated cost estimate and schedule shall be subject to SEDA's reasonable review and approval. 6. Construction Documents. Owner will prepare construction documents for the Project sufficient to allow the City to review and issue a building permit for all vertical construction other than site work ("Construction Documents"). SEDA will have the right to review and approve or disapprove of 50% and 100% Construction Documents, which approval shall not be unreasonably withheld. The 50% Construction Documents must be provided to SEDA no later than and the 100% Construction Documents must be provided to SEDA no later than March 1, 2022. 7. Final Cost Estimate. Upon completion of Construction Documents and no later than May 15, 2022, Owner will prepare and provide to SEDA an updated cost estimate and construction schedule for the Project, which updated cost estimate and schedules shall be subject to SEDA's reasonable review and approval. After completion of a competitive subcontractor bid process for the construction of the Project, Owner shall provide to SEDA an updated project budget and timeline. The final project budget and timeline is subject to reasonable review and approval by the SEDA. Page 2of2 Attachment 3, Page 18 of 19 EXHIBIT C StepsAt set-up of this form, please complete steps below for pre -development phases 1 List Contractors in Column C 2 Insert Estimated Total Budget by Task in Column G Do Not Modify Column L Prime Hours Sub Fixed Costs Total Estimated Total Spent By End Total Spent Total Spent to Percent Task Percent of Total Task Attachment 3, Page 19 of 19