Scherer Site 'Parcel D' Developer Feedback and Next Steps
Wednesday, December 21, 2016 at 10:41AM;)
Via a December 21 e-newsletter from the Minneapolis Park & Recreation Board:
MPRB evaluating potential adjustments to strategy for developing Parcel D of Scherer site
Background
On Nov. 17, 2016, the Minneapolis Park and Recreation Board (MPRB) issued a Request for Qualifications (RFQ) from private development teams interested in working with MPRB and the community to create a concept plan that would lead to development of the “Parcel D” portion of the former Scherer Brothers site. Development of the site, as contemplated in the RiverFirst Initiative and Above the Falls Master Plans, is intended to aid in activating and financially supporting the future park site.
The RFQ followed a 2015 Request for Proposals (RFP) that was issued exclusively to Graco and Ryan Corporation, which was ultimately rejected by the Board of Commissioners due to a lack of alignment with Performance Standards that have been established for the site. The updated RFQ was intended to provide for a more qualitative review of respondents and ideas. The selected team would be awarded an Exclusive Rights Period to create a concept plan for the site. Development of the plan would include community engagement through an appointed Community Advisory Committee (CAC), Project Advisory Committee (PAC) and Technical Advisory Committee (TAC). Upon Board approval of the recommended concept plan MPRB would then enter into a Contract for Private Development with the developer for final design and construction of the improvements on Parcel D.
Prior to releasing the RFQ, MPRB staff met with community stakeholders as well as development teams that expressed potential interest in developing the site. The final RFQ included feedback received from the PAC, TAC, CAC and attendees of a public meeting regarding the process and site.
Responses
Responses to the RFQ were due no later than 4:00 PM on Dec. 16, 2016. No responses were received.
At least three development teams had expressed initial interest in developing the site. MPRB staff followed up with members of those teams to better understand why they chose not to submit a response at this time. A summary of that feedback follows:
1. Several teams expressed concern over the idea of a land lease as contemplated in the performance standards for the site. While the RFQ gave development teams an opportunity to suggest alternate financial structures, projections of significant future park operating and maintenance costs (created by MPRB consultants during the Riverfirst Initiative) coupled with the land lease structure proved a barrier to some possible teams.
2. The proposed community engagement process was also a deterrent to potential development teams. Developers expressed concern over being selected based on their strengths and then having a community process drive a concept plan that their team may or may not be best suited to implement. This was perceived as having too significant an upfront investment by the development team for a process that was not completely within their control.
3. Challenges of the site, including neighboring industrial uses, the small amount of land available for development, the geography of the site in proximity to streets, a high water table, and high tension electrical lines on the site were also cited as reasons developers did not respond.
4. Developers also pointed to the Performance Standards emphasis on structured parking and a mixture of intended uses as a challenge to creating a financially successful development on the site.
5. Finally, more than one developer stated that their offices are very busy right now and they are being very selective in new work. Therefore they had to weigh the strengths and challenges of this project against other, more straightforward, opportunities.
Next Steps
1. Inform the CAC and confirm the date for the next meeting.
2. Reinforce the notion that this approach is intended to deliver a superior project. The MPRB is not intending to back away from that goal.
3. Evaluate assumptions of the Performance Standards, ground lease strategy, and operations cost thresholds to determine necessary adjustments.
4. Strategize other methods of creating a relationship with developers for the site, including holding the land until the concerns noted above are no longer a concern.
