City eyes Water Street finances

By Dan DuChene
Mar. 25, 2009    ·    4:32 a.m.

With the staff in formal discussion with two developers, and two more in the works, City Council met to discuss the Water Street project Tuesday.

Joseph Fazio, an attorney from Miller Canfield representing the city in development negotiations, said, “I’m pleased to report that we’re making pretty good progress.”

Fazio told City Council negotiating has gone to a short list with a proposed fast food restaurant and developer Magellan Properties since the process began in December. He said the city’s contracted real-estate brokerage firm C.B. Richard Ellis is still negotiating with a possible senior housing development and student apartment complex.

With a looming $31.2 million debt on the 38-acre site and the first bond payment coming due in November, Council also heard what these proposed developments would mean for taxable value.

City Planner Richard Murphy laid out what the city could expect to capture from property taxes from these developments using comparisons to others like it from around the city.

With bond payments averaging $1.44 million payment every year until 2031, Murphy estimated the development could repay 28 to 36 percent of the debt and take up about 42 percent of the available space. This would not include any space taken up by roads, infrastructure or publicly owned land.

“We really need to concentrate on density if we’re going to get some pay back,” Mayor Paul Schreiber said at the meeting.

Councilmember Michael Bodary, D-Ward 2, said low-density developments could be placed at the eastern exterior, where the structures would resemble existing buildings.

“I don’t want to pass by something that we can really get,” Bodary said of placing zoning restrictions on Water Street development.

The discussion is a continuation of a conversation had at the March 18 City Council meeting where a zoning plan to encourage dense growth on Water Street was passed on first reading in a split decision.

Earlier in the meeting, Fazio said the zoning will help recruit developers to the project. Additionally, he said infrastructure and demolition discussions from the meeting would help with the process as well, as moving forward in these areas helps give a clearer picture of what Water Street will look like.

Water Street sub-committee
City Manager Ed Koryzno informed City Council staff is looking at the possibility of creating a sub-committee to discuss Water Street.

Koryzno said the committee would likely consist of Schreiber and two other Councilmembers to discuss Water Street issues in more detail. He said specifics about developers would be discussed.

Because of the want to protect a developer’s anonymity, Koryzno said the City Attorney’s Office is looking into whether the committee would fall under the state Open Meetings Act or Freedom of Information Act.

Known as sunshine laws, the OMA and FOIA are designed to allow the public access to government meetings and records. There are exemptions listed in the laws, including discussing lease and purchase negotiations.

“Certainly we will want to maintain the confidentiality of the developers,” Koryzno said. "However, we don’t want to violate either of those public acts.”

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