STUDY SESSION TO: Mayor and Council FROM: Dan Poremba, John Voboril DEPARTMENT: Community Development DATE: May 4, 2020 SUBJECT: CityCenter Redevelopment Planning Progress with SKB DESCRIPTION: CityCenter Redevelopment Planning Progress with SKB RECOMMENDATION: This informational update to Council is provided in anticipation of a Predevelopment Agreement (PDA) between the same parties which is scheduled to be presented for Council consideration at the May 18, 2020 Regular City Council Meeting. PREVIOUS COUNCIL ACTION: On February 18, 2020, City Council approved by motion the execution of an Exclusive Negotiation Agreement (ENA) between the City/EEF and SKB of Portland, Oregon (also referred to as Scanlan Kemper Bard). Following a year-long, multi-step procurement process, the ENA reflected the selection of SKB as the preferred master developer partner with the City to redevelop the “City Property” at Englewood City Center. This is the property owned or controlled by the City and EEF, shown in blue on the attached site plan. The City initiated exploration of the redevelopment of the City Property in connection with the August 2018 foreclosure of the three-square block former Weingarten Realty property at CityCenter, shown in red on the attached site plan. This led to the implementation of a master developer procurement process. Council has been briefed at key points throughout the process. As previously noted, the ENA is the first of three anticipated agreements between the City/EEF and SKB, each requiring Council review and approval. SUMMARY: Council’s recent considerations regarding CityCenter redevelopment have included the following key points. • CityCenter currently presents a dated and fading image and the need for redevelopment has been documented in multiple City-sponsored planning studies, and in two recent independent studies of the Urban Land Institute. • Englewood has a timely opportunity to guide the redevelopment of CityCenter to re- establish it as Englewood’s “central place” with a viable and sustainable future. Redevelopment can significantly improve CityCenter’s mix of uses, activity levels, walkability, financial sustainability, property values and contribution to City revenues. • Englewood is receiving no current income from its CityCenter property interests and redevelopment will enable the City to generate new revenues from these interests. The specific factors that supported Englewood’s selection of SKB for the master developer role on the City Property included: • SKB’s specific experience partnering with municipalities on complex, mixed-use and transit-oriented development (TOD) projects, including redevelopments, • Due to SKB’s continuing interest in also acquiring the former Weingarten property, the selection of SKB preserves the possibility that the City Property and former Weingarten • SKB demonstrated a commitment to the high level of public outreach the City requires. ANALYSIS: Staff and SKB have been working through the various tasks outlined in the ENA, a copy of which is attached. Staff is pleased with SKB’s progress and the evolving relationship between the City and SKB. SKB has performed its obligations in a timely and partner-like manner, including its timely transfer of a $50,000 earnest money deposit to the City. Key tasks incorporated in the ENA include the following: • SKB has become an important member of the Downtown Matters Steering Committee and, working with the City’s consulting team, is contributing its special districts expertise, • Working with City executive staff, SKB sponsored an initial space planning analysis of the Civic Center building to evaluate possibilities for the most efficient and cost-effective use of the building and to evaluate potential alternative locations for a new civic center building, • Working with their planning and architectural firm, Tryba Architects, SKB completed an evaluation of other similar transit-oriented developments currently in process in the Denver area (a summary of this Station Area Comparison Study is attached), • To formulate parking solutions, SKB retained Fehr & Peers, a national transportation engineering firm with experience working on other TOD projects involving RTD, • SKB and the City have met with RTD to begin to discuss ideas for rearranging and possibly reducing the shared RTD parking currently provided by the City, • SKB and staff have communicated with the current interim owner of the former Weingarten property (LNR Partners) to explore opportunities SKB acquiring the property or specific portions and to discuss general coordination matters. FINANCIAL IMPLICATIONS: Collaborating with SKB to formulate a mutually acceptable redevelopment plan for the City Property at CityCenter will likely require that certain professional consultants’ fees be funded from the approved 2020 Community Development professional services budget. As previously approved by Council, EEF is funding related special counsel legal fees (up to $150,000 in 2020). These expenditures will allow Englewood to generate new net revenues and to protect and enhance property values, property taxes and sales taxes within and adjacent to CityCenter as the redevelopment proceeds. CONCLUSION: Working with the City’s outside counsel, staff is finalizing a Predevelopment Agreement (PDA) between the City/EEF and SKB for EEF Board and Council review. The PDA is expected to be presented for Council consideration and at the May 18, 2020 Regular City Council Meeting. The PDA would govern the subsequent process of formulating a mutually-acceptable and definitive Master Development Agreement (MDA). Subject to EEF Board and City Council approval, the MDA would then govern the parties’ long- term public/private partnership relationship. Subject to possible COVID-19 schedule impacts, the MDA could be completed by year-end 2020. These are the steps that are customarily undertaken by municipalities in structuring master development agreements. ATTACHMENTS: CityCenter Site Plan (City Property in blue and the former Weingarten property in red) Exclusive Negotiation Agreement between the City/EEF and SKB Station Area Comparison Study CityCenter Site Plan (City Property shown in blue and the former Weingarten property is shown in red (still labelled as the C-III Property) /Former Weingarten Prop. 1 EXCLUSIVE NEGOTIATION AGREEMENT This EXCLUSIVE NEGOTIATION AGREEMENT (this “ENA") is made and entered into this [_] day of February, 2020 (the “Effective Date”), by and between CITY OF ENGLEWOOD, a Colorado home—rule municipality (“Englewood”), ENGLEWOOD ENVIRONMENTAL FOUNDATION, a tax-exempt political subdivision of Englewood (“EEF” and collectively with Englewood, the “City”) and SCAN LANKEM PERBARD COMPANIES, LLC, an Oregon limited liability company (“Master Developer”). Englewood, EEF and Master Developer are sometimes hereinafter collectively referred to as the “Parties” and individually as a “Party.” Recitals A. City is pursuing a mixed-use, transit-oriented redevelopment project (the “Project”) on approximately 10.6 acres of property located adjacent to the Englewood light rail and multi—modaltransit station (the “Project Area"). The Project Area is identified on the map attached as Exhibit A hereto. The property that comprises the Project Area is owned or controlled by the City or EEF. B. On March 28, 2019, City published a Request for Qualifications(“RFQ”) from interested master developers, and in response to the RFQ, Master Developer submitted its quali?cations for the Project. C. On April 24, 2019, City published a Request for Proposals (“RFP”) from the respondents of the RFQ, and in response to the RFP, Master Developer submitted its proposal for the Project dated May 15, 2019. D. Following additional procurement process steps, including multiple interviews and meetings participated in by senior City staff from multiple departments, City staff recommended Master Developer to the City Council as the preferred master developer for the Project. Based on City staffs recommendation, at its meeting on January 27, 2020, the City Council directed staff to prepare an exclusive negotiating agreement with Master Developer. E. The Parties acknowledge that the purpose of this ENA is to enable the Parties to negotiate exclusively and proceed with the studies, due diligence and next steps necessary to establish the terms and conditions of a subsequent Preliminary Development Agreement (“PDA”) and a subsequent Master Development Agreement (“MDA”) that would facilitate development of the Project. F. The Parties acknowledge that robust public outreach and communication conducted in collaboration with appropriate City staff will be necessary to understandthe needs and desires of the Englewood community and key stakeholders with regard to the Project. I54‘; I20.4 G. The Parties desire to enter into this ENA upon the terms set forth below. Agreement NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the Parties mutually agree as follows: 1. Mutual Agreement to Negotiate Exclusively; Good Faith Negotiations a. During the Negotiation Period (as de?ned in Section 2 below), Master Developer and City shall negotiate exclusively and in good faith with each other concerning the proposed development of the Project and the terms and conditions of the contemplated PDA and preliminary terms and conditions of the MDA. b. Each Party shall use commercially reasonable efforts to attend scheduled meetings, direct its respective consultants to cooperate