South Elm St Masters

Over the next few months, I will be posting a few interesting points that i am uncovering while reading through the massive information dump provided to me by the city staff... 

For reasons unknown, I have been instructed to go through a PIRT process to obtain simple answers to a few, very simple questions. 
The lengthy unnecessary Public Information Request actually provided unflattering documents highlighting the unequalled incompetence with which The South Elm Street redevelopment was/is handled.

Dyan Arkin who is the lead person on this project also handles the Bessemer shopping center. Maybe time for the city's leadership to revisit the employee's performance evaluations. To be fair, she inherited the project from diabolical dick-head Dan Curry who worked for Andy Scott.

Here is a couple of answers...just for fun

Q: Please provide any and all amendments/changes made to the South Elm Street master development plan after the master developer was selected.
A: The Master Developer has not yet submitted a master development plan. 

Weird as a Master development plan was submitted to obtain funding, another one during the developer's selection process and a Master Development Agreement was voted on by council on March 19th 2013. 

Q: Did the city remove contamination from any other privately owned parcel?
A: No. The City removed an underground tank from the 725-727 S. Elm Street property owned by the ------ family. This activity was funded under the EPA assessment grant to determine if soil contamination has occurred.

Even stranger, as the tank was full, the tank was huge, truck loads of earth were removed and replaced but the answer remained No. The original assessment submitted to the EPA to receive funding also referred to specific contamination located on that specific site.

"...This activity was funded under the EPA assessment grant to determine if soil contamination has occurred...."   
The reason I asked the question to begin with was because, the city used my acreage to receive subsidies and funded the removal of this specific tank on the only other private property within the Redevelopment area, all while attempting to condemn and restrict my property. 
They then reported me to Guilford County Health and finally turned me in to the State Environmental Agency... 

We have now entered a new phase... Fortunately for us, Mr Ed Kitchen of the Bryan foundation came running and saved us from ourselves... he not only gave us a dog park, but also provided the concept for the Union Square University campus. 

The timing could not have been better, since, after years of civic masturbation, and blown timelines, the selected master developers were still exploring themselves.

On March 19th 2013, the "Master Development agreement was approved. Within it, it is stated that "...upon execution of this Agreement, Developer will within three months commence performance of any and all obligations under this agreement” ...   Performance ??? 

To date the "Master developers" including Bob Chapman and Bob Isner have yet to take possession of any parcel of land, as they appear to be adverse to paying associated property taxes. It will be interesting to see how the redevelopment land gets transferred to the Universities since, technically, the redevelopment Commission still owns the land... 

Vigilance is a must now that one of the Masters got a new job working for our ex-Mayor.

Article 9.15 of the Master Development Agreement
Conflict of interest. 
"The developer covenants that neither it nor any of its members, directors, officers, or employees has any interest, nor shall acquire any interest, directly or indirectly, which would conflict in any manner or degree with the performance of the services herunder, including the causing of commission to suffer a conflict of interest prohibited by applicable laws, regulations or contract with funding entity. The developer further covenants that in the performance of this agreement, no person having such interest shall be employed by it or shall subcontract with it to perform duties under this agreement."

"In business you don't get what you deserve, you get what you negotiate..."

Remember this line from the airline catalogs back in the 90's? 

Who negotiates these shitty deals on our behalf? 

Remember when George Carr wanted the city to donate the Bessemer center land only to lease it back to the city for the library use?

Remember when Kaplan, House and Kern wanted us to build them a parking garage and then lease it back from them at the tune of $8,000,000 +?

To date, the SEDG still has not taken  possession of the land they were supposed to buy 2 years ago. To date they have missed each and every milestone associated with the project.  

So...now what? how will the land be transferred to the university campus? will Isner of NAI  be the broker, the landlord, the builder and the master developer? Will he kiss us first?

Some items of interest from the South Elm  St's Master development agreement draft.

"Background 

In January of 2012, the Commission selected the South Elm Development Group (SEDG) to begin negotiations for a Master Development Agreement to develop the South Elm Street Redevelopment site. SEDG recommended a three-step contract process: a Memorandum of Understanding (MOU) allowed SEDG exclusive rights to negotiate with the Commission; a Predevelopment Agreement (PDA) allows SEDG to continue exclusive negotiations as they prepare the groundwork for a binding Master Development Agreement, which will outline the scope and process for development of the site. "

From the PDA

"During the term of the PDA, the following activities shall be performed by the Developer and funded as noted under separate agreement with the City of Greensboro: 

- Up to $7000 for Soil and Groundwater Sample Maps, Findings Tables and Maps as required for Brownfields Agreement; 

- Up to $11,900 for Field Surveys; 

- Up to $15,000 for Engineering Activities related to Eligible Infrastructure Improvements; 

- Up to $9000 for Traffic Impact Study; 

-Up to $1400 for Legal Fees related to structuring Land Swap Agreements with adjoining land owners. "

From The MDA

"4. Identify and secure financing for development, including both public and private sources 

a. Funding and financing sources are being researched and discussed; the MDA will include anticipated sources for each phase, but each component will need to be evaluated as it becomes ready for development. 

b. Private funding could include developers’ equity, grants and low-interest loans through philanthropic organizations, and investor financing, among others. 

c. Public funding could include state Powell Bill funds, state Low-Income Housing Tax Credits, Tax Increment or Certificate of Participation Financing, EB-5 funds (Employment Based Immigration through the federal Immigration Department), among others. 

Summary of Developer’s Memo with Staff Comments 

2. Description of take-down mechanism for the land: 

a. RCG will sell parcels directly to component sub-developers; proceeds will be disbursed at a ratio of 60% to SEDG and 40% to RCG until RCG has received $3 million, then at 80% SEDG, 20% RCG for any additional revenue. 

South Elm St redevelopment 101

Twelve years in the making and after a 200% turnover in Redevelopment Commission Commissioners, and dedicated city staffers, the RDC finally got it together and sent out an RFP in Dec 2010

South Elm St RFP here: http://www.scribd.com/doc/198873231/SE-RFP-Amended-2-9-11

From the initial entries, three finalists were selected and additional questions were asked...

In the end, 2 firms were in the running...the Russell company out of Atlanta (a 100% Black owned firm) and the chosen group SEDG (a 100% white owned firm). 

During a poorly orchestrated politically correct maneuver designed to gain community support, Bob Chapman and Bob Isner soon hired  Yvonne Smith. It is worth noting that Yvonne Smith is NOT a partner but a consultant. A black consultant who was a PARTNER  in a competing development entity prior to its elimination.

The selected Group responded to additional questions here: http://www.scribd.com/doc/198873401/SEDG-Additional-Questions2-1-Reduced

Original Project Timeline

Projected Solicitation Schedule (subject to modification) 

December 15, 2010	Announcement of Solicitation
March 31, 2011	Proposals due
July 15, 2011	Notice of respondents selected for interview
August 1-15, 2011	Interviews
September 15, 2011	Development Team selection
September 15, 2011	Notice of successful respondent
September 20–30, 2011	Advertisement for upset bid
November 15, 2011	City Council Approval

Original Development Timeline 

Pre-development Timeline (from City Council approval of property sale) 

2 months Sales and Development Agreement 

6 months Final Development Plan/Design Approval 

8 months Secure Financing Commitments 

9 months Property Closing  

12 months Start Construction 

48 months Complete Construction  

From the RDC minute...here: http://www.scribd.com/doc/198877141/FINAL-RCG-4-26-11-A-M

WORK SESSION ON DEVELOPMENT PROPOSALS FOR THE SOUTH ELM STREET REDEVELOPMENT PROJECT 

South Elm Development Group Presentation: 

Mr. Chapman described the process to do a residual value analysis to determine the cost of building improvements and their worth after being built. He walked the Commission through elements of the project based on parameters in the Request for Proposals (RFP) and made the following points: 

• 1.7 acres would be “for sale” residential with 26 units of stand-alone townhouses. 

• 3.4 acres of “for rent” residential. 

• 1.6 acres for retail. 

• .25 acre for offices. 

• The average rent for apartments would be $.93 per square foot per month. 

• The estimated rent for retail would be $16.00 per square foot per year, renter pays all costs. 

• The estimated office rent would be a full service rate. 

• The average footage for the 168 residential apartments is 635 square feet. 

• 95,000 square feet of retail space. 

• 15,000 square feet of office space. 

• The cost of building apartments is $89.00 per square foot not counting land cost or developer profit. 

• The cost of building offices is $110 per square foot, totally inclusive. 

• The total residual value for the land under the “for sale” residential is $515,000. 

• 390 units would be needed for a parking structure. 

• The cost to build parking structures would be $4.6 million. 

• The total residual value for the property is $5.4 million of which $3 million would be paid to the City for the land and $2.4 million would be the return on development contribution to profit and overhead. 

• The total project cost based on square footage prices is $37.7 million dollars for the program South Elm Development Group has in mind. 

• Sources of funds: $5.6 million coming from a 221(d)4 loan based on the assumption that the Market Study is acceptable to HUD; for the 25% of units set aside with income restriction, low income housing tax credits of $2 million; and the sale of tax exempt multifamily housing bonds of $1.8 million. 

• Residential sales projecting net of the land cost at $3.5 million; retail at $12.5 million. 

• South Elm Development Group would like to have an Identity of Interest with the City of Greensboro to allow payment of the buildings as they are built. 

• Developer’s fee is $2.4 million. 

• Developer’s equity is $1.4 million. 

• Developer is proposing a Certificate of Participation to fill the gap of $2.67 million dollars. 

Worth noting:

Tax Increment Financing or TIF has been identified as a potential financing source...TIF has many issues associated with its use, not least of which is the displacement of lower income residents as they can no longer afford to live in the home they grew up in due to massive increases in Property taxes.

Certificate of Participations also bypass the community altogether.

The deal is a different deal altogether now...A university campus changed the game. Robbie had a lot to do with Isner being selected as the master developer. Robbie, Isner and Co have identified proven ways to pillage the coffers even though the project is way way behind schedule and the selected development team has yet to do one thing it was hired to do. Pay attention council... I have been! 

Isner's new gig

Dang...

Am i the only one thinking that this is getting more and more inappropriate and indecent?

"...When asked if NAI would take the lead in brokering the redevelopment project, Isner said, “that’s to be determined, but that might be a good guess.”...


Isner is learning from his  good friend and new boss Robbie Perkins. Robbie paved the way for this precedent, and now wants to get his. 

The selected Master developers ( Bob Isner and Bob Chapman) refused to take ownership of the redevelopment land as it was originally intended, because they did not want to pay the associated property taxes. To date, they have contributed NOTHING to the deal...

As a matter of fact, the deal today looks nothing like the deal presented and reviewed during the developer 's selection process.  

7 + years in the making, the process has been plagued by incompetence and ineffectiveness.  Bob Isner and Co are now seeking massive incentives and municipal financing even though Bob Isner's group was selected mostly based upon its ability to provide financial backing to the project. 

I was part of the citizen advisory board for this project, and as such, I have attended each and every meeting during the selection process. 

Stay tuned...