The Columbus Redevelopment Commission has approved an agreement with Flaherty & Collins for a mixed-use multifamily urban grocer development south of Second Street downtown.
The agreement was approved Wednesday at a special commission meeting.
Redevelopment director Heather Pope said that the planned development will include approximately 200 apartment units, anywhere from 12,000-15,000 square feet of “additional retail space downtown in the form of an urban grocer” and 400 additional parking spaces. Of the parking spaces, 50 will be for the urban grocer plan, 100 will be given to the county and the remaining spaces will be for the apartment complex.
Deron Kintner, with Flaherty & Collins, also said that the developer will “invest heavily” in amenities such as a coworking space, pool, clubhouse and possibly a pickleball court. Rob Hunden, of Hunden Strategic Partners, said that the mixed-use development will also include 5,000 square feet of additional retail space. Pope said that Hunden is an expert on the hospitality industry and has brought “a great deal of knowledge and support” to the project.
Pope said the estimated project cost is about $39 million, of which the City of the Columbus will contribute $11.8 million. She added that counting bond issuance costs, this comes out to about $12.17 million. She said that the commission could provide cash or a down payment of $2 million and finance the remaining approximately $10.17 million in a bond. Proceeds from the development’s property tax dollars will go to repay the bond.
Bruce Donaldson, who is a bond counsel with Barnes & Thornburg, said that per the project agreement, the city’s $11.8 million contribution would only be taken back from the developers if they don’t complete the project.
Flaherty & Collins is committing to a guarantee that new property taxes generated from the project “will be a minimum of $500,000 a year for 25 years.” Donaldson said that a standalone tax increment financing (TIF) area will be carved out of the Central TIF area in order to facilitate that 25-year guarantee, as the Central TIF area is set to expire sometime in the mid-2020s or ‘30s.
In discussing next steps, Donaldson said that the project will require city council approval for certain pieces, including bonds and spending commission funds exceeding $500,000. The agreement allows the city and redevelopment commission to put together a committee that will “have the right to collaborate” with Flaherty & Collins. The design development process will be a partnership between the three entities, he said.
City councilman Tom Dell, who attended the meeting via WebEx, voiced his support for the development and called it a “gamechanger” for not just the downtown area, but also the city and county as well.
Andrew Lanam of Stifel Financial Corp., who has served as a financial advisor to the city, said that the project has been in the “planning stages” since January 2019. Completion of some or all of the units would likely occur in fall of 2023, with people beginning to move in late 2023 and an increase in renting occurring in 2024, Lanam said.
The mixed-use development started out as part of a larger joint project. Pope said that, originally, when the city was narrowing down developers for its hotel conference center project, finalists were told that they could get “bonus points” if they brought a multifamily urban grocer to the city as well.
For the hotel conference center development, the city chose Sprague Hotel Developers, who partnered with Flaherty & Collins (with the latter company providing the multifamily urban grocer piece).
However, because of the COVID-19 pandemic, the multifamily urban grocer project and the city’s plans for a hotel conference center were later split off into two separate projects, rather than taking place simultaneously.
Sprague Hotel Developers put the hotel conference center project on hold in July until the hospitality industry recovers from the impact of COVID-19 pandemic.
“The hospitality industry, as you all know, was crippled because of the pandemic. However, the multifamily industry was not affected as much,” Pope said. She added that the city is still engaged with Sprague on the hotel conference center development.
“COVID, of course, set us all back probably six to 12 months, depending on the component of the project,” Hunden said. “Originally, I think we all thought we’d be groundbreaking by now, but obviously COVID pushed that back. And so we sort of decoupled the multifamily and grocery piece … from the hotel piece. That’s going to need a little more time before the vaccine allows people to travel more freely.”
The proposed hotel/conference center is a major component of the city’s 2018 Envision Columbus downtown strategic development plan. It has been described as a road map for the future of the commercial area of downtown Columbus and its neighboring residential areas and parks.
The city is working with Bartholomew County in a land swap that will result in the hotel and conference center being placed on a county-owned block surrounded by Second, Franklin, Third and Lafayette streets downtown.
With the exception of the Bartholomew County Court Services building on the northwest corner, the entire block currently serves as a parking lot. Under the land swap agreement, the new court services center and its parking lot will be on the south side of First Street, across from the Bartholomew County Jail.
