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.
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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.
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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
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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
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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
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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
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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").
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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:
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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
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Attachment 2, Page 9 of 11
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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
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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
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HEIGHT REGULATIONS PER 3.2-225A
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VEHICLE ACCESS ALLOWED FROM A -STREET
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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
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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
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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
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EXHIBIT A
1 ST FLOOR PLAN & SITE PLAN
NOT TO SCALE
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Attachment 3, Page 13 of 19
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SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
SIITEWORKS
PAGE: 70F19
SPRINGFIELD FEASIBILITY - MASSING
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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
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9 STREET CAR PARKING SPACES
10 STREET CAR PARKING SPACES
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EXISTIN&BUILDING
8,000 SF GROUND FLOOR
CORRIDOR
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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
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STAIR
200 SF
80' - 6"
10 STREET CAR PARKING SPACES
8 STREET CAR PARKING SPACES
Attachment 3, Page 15 of 19
1" = 40--0"
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SPRINGFIELD FEASIBLITY
702 N. A STREET
Springfield, OR 97477
2020.06.25
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59 STREET CAR PARKING SPACES
55 PRIVATE CAR PARKING SPACES '
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I 114 TOTAL PARKING SPACES
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I 48 UNITS; 2.38 TOTAL PARKING RATIO ,
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8 STORIES TYPE IV -C '
9,020 SF (NEW) + 8,000 SF (E) _
17,020 SF TOTAL GROUND FLOOR AREA
60% COMMERCIAL REQUIRED
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8,000 SF GROUND FLOOR
CORRIDOR
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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"
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SPRINGFIELD FEASIBLITY
702 N. A STREET
Springfield, OR 97477
2020.06.25
EXHIBIT A
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9,140 TOTAL SF PER FLOOR
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12 UNITS PER FLOOR
84 UNITS ON 7 FLOORS: i
7*7 = 49 ONE BEDROOM UNITS
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4*7 = 28 TWO BEDROOM UNITS
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1 *7 = 7 THREE BEDROOM UNITS
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1,100 SF
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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
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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