November 29, 2021 Special City Council and CoW Meetings

Special City Council Meeting

You can find the agenda HERE, a synopsis of the legislation that was read HERE, with the full legislation HERE, and the council packet for the week HERE. You can watch a video of the meeting HERE.

Council Vice President Seren called the special city council meeting to order. The clerk called the roll:

Present: Seren, Ungar, Hart, Cobb (Stein was excused for the holiday and Russell was excused due to illness)

Council Vice President Seren then opened public comments, limiting comments (because it was a special city council meeting) related to the item on the agenda, the resolution authorizing the City Manager to enter into a development agreement with Flaherty & Collins for the development of the Cedar-Lee-Meadowbrook project.

  • One resident requested that the city slow down the development process, advocated to maintain as much green space as possible, and expressed concern that a building will obstruct light for current residents adjacent to the site.
  • One resident voiced support for the development project, citing walkability, the increase of business and housing diversity, and the benefits for urban sustainability.
  • One resident requested that the city slow down the development process, announced that the petitioners for the park mandate have submitted signatures to the Board of Elections, advocated for public discussion, and cited the need for environmental responsiveness.
  • One resident asked questions about the development agreement, asking whether certain design issues can be solidified before entering into the agreement.

Councilmember Ungar, for the Planning and Development Committee, presented the following legislation:

  • Resolution 154-2021: Second Reading only. A Resolution authorizing the City Manager to enter into a Development Agreement with F&C Development, Inc. concerning the “Cedar-Lee Meadowbrook” development; and declaring an emergency. [The third reading will be at the December 6 City Council meeting, where it will be voted on.]

Council Vice President then adjourned the meeting.

Committee of the Whole Meeting

Council Vice President Seren convened the meeting. The clerk called the roll:

Present: Seren, Ungar, Hart, Cobb (Stein was excused for the holiday and Russell was excused due to illness)

Seren then gave the floor to Economic Development Director Tim Boland, who began his presentation with a history and overview of the proposed development of the Cedar-Lee-Meadowbrook sites. (Here is another Cedar-Lee-Meadowbrook Development History, dated February 2, 2021.)

Mr. Boland then presented an explanation of the 10-step development process standard for private-public development projects. If passed at the December 6 City Council meeting, the resolution authorizing the City Manager to enter into a Development Agreement with Flaherty & Collins concerning the Cedar-Lee-Meadowbrook development, the project will be at step (D), the Development Agreement.

The Development Agreement “unlocks” steps (E) Financing Process, which determines what incentives will be available and what terms on which those incentives will be provided, and likely includes negotiations with the school district and the bond council, and (F) Site Design Process, which will include multiple reviews of the site design, including community feedback and design revisions, and will require approvals by the Planning Department, the Planning Commission, the Board of Zoning Appeals, and the Architectural Board of Review.

After Mr. Boland’s presentation, Councilmember Ungar asked for more details about the roles of the Planning Department, the Planning Commission, the Board of Zoning Appeals, the Architectural Review Board after the Development Agreement is in place.

Planning Director Eric Zamft then presented, stating that once the Development Agreement is approved, the Design Process begins with the development team, and their architect (City Architecture) will present a much more detailed plan than has been presented thus far. This plan will then be sent to the Planning Department, which reviews it to ensure it is sufficient to go in front of the Planning Commission.

The Planning Commission then reviews the site plan, which includes the massing, the height, the way the buildings are situated on the site, where the public spaces are located and delineated, and so on. The Planning Commission will conduct a preliminary review, which will include giving the public opportunity to review the plan and provide feedback; the development team will then revise according to feedback from the public and the Planning Commission before returning for final review and approval later in the year.

Zamft then stated that regarding materials and how the building looks, that will come before the Architectural Board of Review (ABR). As above, there will be a preliminary review of the team’s initial design, and the public and ABR will provide feedback, and then the development team will revise and later come back for final review and approval.

Zamft anticipates that the project may require some variances from our Zoning Code. He states the site falls under the C2X zone (Multiple Use), but due to some of the irregular shapes of some of the site spaces, some variances may be needed to proceed.

Zamft also clarified that the landscaping plan, which will come at the end of the process, is designated under the authority of the Planning Director, which means that all landscaping plans and details must be approved by the Planning Director.

Councilmember Ungar noted that the development of the design plan will take about a year, with approval currently scheduled for the end of 2022.

Councilmember Cobb asked how much debt was originally incurred for the construction of the parking garage. Staff did not have that number at hand. (The City Manager later did some digging in the archives and found that the cost of the Cedar-Lee parking garage was $4,950,000.00, which occurred in 2007 and was paid to Cleveland Cement Contractors, Inc.) He confirmed with staff that the debt is currently scheduled to be paid off in 2028 and that we are refinancing it, which will lower the annual debt payments, convert the debt to taxable debt, but extend the life of the financing to 2033.

Councilmember Hart noted regarding Sections 6(B) and (C) of the Development Agreement, MBE/FBE [minority business enterprise and female business enterprise] Participation and Prevailing Wage, that there is no reporting for compliance. She stated that F&C are exceeding their targets at Top of the Hill, so she believes we could make these sections stronger for compliance.

Hart also stated that she would like F&C to provide reporting on contractors’ and subcontractors’ tax withholding reporting. Seren inquired whether we should use a third party for this monitoring. Council was assured that F&C would provide monthly reports.

Councilmember Moore, regarding section 2(F) and (G), discussing collaboration and coordination for constructing storm and sewer infrastructure, asked whether this was regarding the identified SSO at the site. Law Director Bill Hanna confirmed that it is and that this section establishes that the SSO will be corrected at the same time as construction and that the city and F&C will coordinate so as to ensure that both projects take place without disruption to either.

(An SSO—sanitary sewer overflow—is a point in the sewer system where sewage is overflowing due to a defect or insufficiency in the system. The result is contamination of our water [and the resulting public health impacts] as well as sewage backups into homes and other buildings, causing costly property damage as well as negative health impacts. The first tier of our consent decree with the EPA is to correct many of our city’s 40 SSOs.)

Councilmember Moore asked for clarity on the anticipated TIF (tax increment financing) area. They responded that the TIF area will be limited to the project site. Hanna then clarified that the project will come back to Council in the future for approval of TIF legislation.

Seren followed up by asking what the result would be if Council did not pass the TIF legislation. They replied that the project would be halted, as part of the agreement is that the City will do its best to provide the TIF. If the City does not provide the TIF, then the developer can walk away from the agreement. Seren asked whether there is a possibility that if the City does not pass the TIF legislation, would the City be liable to pay anything to the developer; the answer was no—the development agreement clearly states that it cannot be guaranteed that the TIF legislation will pass.

Seren asked for more detail about the parking agreement. It was explained that the parking garage was originally constructed as part of a development opportunity, with the thought that it would enhance the ability of surrounding parcels to be developed. When, in the subsequent years, developers’ financing did not go through, the parking garage has been significantly underutilized, with the debt service costing the City about $460,000/year presently. The question became: What is the best way for the City to position itself with that parking garage?

Because of the debt payments and anticipating tenant use, part of the F&C development agreement is that the developer will pay the portion of the debt according to the percentage of spaces provided to tenants. Beginning at the Stabilization Date (“the earlier of (i) the date [ninety] percent [(90%)] of the apartment units in the Project Improvements are leased to tenants or (ii) [January 1, 2026]”), the developer will pay 60% of the debt service in exchange for the right to use 60% of the spaces.

When the City pays off the garage debt (2033), the City will transfer ownership of the garage to the developer, and the developer then assumes full responsibility for the garage’s management, maintenance, taxes, and so on. However, the developer still needs to ensure that public parking spaces remain available at market rates—that is, what the City charges in other parking garages.

Hanna read a relevant portion of the agreement, which states that the market rates must be comparable to those in the “region,” and Seren voiced concern about how that might be interpreted in the future.

Hart asked about whether the buildings should be required to be LEED certified if there are tax abatements; Seren clarified that because it is being financed with TIF, the LEED requirement is not activated.

Seren asked about the cost of the compensation to the school district for the TIF. Acknowledging that it’s too early to have an exact amount, he confirmed that the City is anticipating a negotiation similar to that of Top of the Hill, which resulted in the district receiving much more revenue from the site than it had collected prior to development.

Returning to the question of LEED certification, it was discussed that the agreement names several organizations that work in the area of energy-efficient and green building standards, opening up options beyond LEED.

Moore then asked about the language in the agreement, which states, “The Project shall make best efforts to integrate various components but will not be required to meet specific thresholds and/or achieve a predetermined level of green building (or similar designation).” She asked how we can ensure that green building standards are used to the greatest extent possible if it is not enforced in the development agreement. Hanna states that “best efforts” does hold legal meaning and requires demonstrable good-faith efforts, while also confirming that the language does not require a percentage or certification requirement.

Seren asked a hypothetical question: If we pass this development agreement then subsequently, before designs are finalized, we pass changes to our codes that would require a certain level of environmental building standards for new construction, would the design be subject to those new codes? Hanna responded no, that doing so would be an impairment of contract with a subsequent legislative measure attempting to change the obligations of an existing contract.

It was also discussed that the Planning Commission could be influential in enforcing the codes we already have that apply to environmental standards as well as pushing for greater demonstrable efforts toward sustainable building measures. Further, it was stated that many developers meet certification requirements but do not acquire certification due to the cost of the certification application and review process.

Moore then asked about the Merchandising Plan and whether it is possible to include any language requiring a minimum number of commercial spaces to be leased to locally owned businesses. It was stated that they can discuss this with the developer but that the pandemic makes this difficult because it is not possible to predict economic impacts even a couple of years into the future, while also adding that the developer prefers local, unique businesses but that sometimes small businesses may struggle to afford the cost of newly constructed spaces. It does include nonpoaching language (they cannot move a business from one area within the city to their commercial space). They added a reminder that there is limited square footage for commercial space, which will result in likely three to five commercial units available for lease.

Hart asked about the Future Heights pocket park and coordinating the development with this larger project to ensure overall cohesiveness for the district; the City Manager stated that they are working on that, and Zamft added that City Architecture is in conversation with Future Heights.

Hart also noted that she would like the traffic study to be mindful of the needs of cyclists and pedestrians in its analysis and reporting.

Seren then stated that this is not the last opportunity to ask questions about the development agreement and that if any councilmembers have further questions, they can reach out to staff. He also asked staff to communicate any valuable questions they receive so that all councilmembers are informed of concerns raised and responses.

Hart added that Councilmember Russell plans to reach out to a representative from a local contractors union to find out what they consider to be an acceptable percentage for prevailing wage standards.

Concluding the Committee of the Whole meeting, Seren then moved to enter executive session to consider the terms of sale or lease of City-owned real property. The clerk called roll, and council entered executive session.

On December 6, 2021, there will be a Committee of the Whole meeting at 6:30pm (agenda) and a City Council meeting at 7:30pm (agenda and legislation), both of which can be livestreamed HERE.

On December 8, 2021, The Planning Commission will be receiving a preliminary presentation on the Cedar-Lee-Meadowbrook development project and updates to the site plan from the development team. HERE is a link to view or join the meeting. You can also look at the Updated Development Concept Diagram and the Updated Preliminary Site Plan.