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Agenda Item - 2024-02-20 - Number 04.2 - Approval of LORA Meeting Minutes 4.2 165,4 REDEVELOPMENT AGENCY REPORT O OSEGO\ Subject: Approval of Lake Oswego Redevelopment Agency (LORA) Board Meeting Minutes Meeting Date: February 20, 2024 Staff Member: Kari Linder, Recording Secretary Report Date: February 13, 2024 Department: City Manager's Office Action Required Advisory Board/Commission Recommendation ❑X Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑X Not Applicable ❑ Information Only Comments: ❑ Board Direction ❑X Consent Agenda Staff Recommendation: Approve minutes as written. Recommended Language for Motion: Move to approve the LORA meeting minutes as written. Project/ Issue Relates To: Issue before Board (Highlight Policy Question): ❑Council Goals/Priorities EAdopted Master Plan(s) ❑X Not Applicable ATTACHMENTS 1. November 7, 2023, Draft Regular LORA Meeting Minutes 2. November 21, 2023, Draft Regular LORA Meeting Minutes Respect. Lxcel'erce. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 LAKE OSWEGO REDEVELOPMENT AGENCY MEETING 1 MINUTES November 7, 2023 13. CALL TO ORDER, REDEVELOPMENT AGENCY (LORA) Chair Buck called the regular Lake Oswego Redevelopment Agency (LORA) meeting to order at 9:00 p.m. on Tuesday, November 7, 2023. The meeting was held both virtually via video conferencing and in-person in the Council Chamber at City Hall, 380 A Avenue. Present: Chair Buck and Board Members Corrigan, Wendland (via video conferencing), Mboup, Verdick, Rapf, and Afghan Staff Present: Martha Bennett, Executive Director; Ellen Osoinach, LORA Counsel; Kari Linder, Recording Secretary; Sidaro Sin, Redevelopment Manager Others Present: Eric Cress, Principal and President, Urban Development Partners; Lincoln Walker, Senior Director, Investor Relations, Urban Development Partners 14. BOARD BUSINESS 14.1 Third Amendment to the North Anchor Project Disposition and Development Agreement. Sidaro Sin, Redevelopment Manager, reviewed the request from Urban Development Partners (UDP) to extend three major deadlines: the residential component financial close, the hotel component financial close, and the final preclosing DDA termination date from December 31, 2023 to June 28, 2024. The extension would effectively push out other deadlines in the schedule of performance listed in Attachment 2. The Board had extended the deadline and the DDA in June of 2023 to allow for UDP to work on the North Anchor hotel component, do some design changes, and other things to help the project pencil out, make it more efficient, and add community amenities. The previous extension also allowed the City to pursue the Vertical Housing Development Zone Tax Abatement Program as a pilot project for North Anchor. Since June, good progress has been made. The DR modification was currently being reviewed for completeness by the City. Notices about the vertical housing project were sent to the different taxing entities the program would affect, and the team hoped to schedule the project for a public hearing and adoption by City Council in December. It was anticipated that the residential component would break ground in March or April of 2024, and the hotel component would commence shortly afterwards with completion expected in December of 2026.The Board's approval of this six-month extension request would allow UDP to complete the development review modification and land Redevelopment Agency Meeting Minutes Page 1 of 4 November 7, 2023 use application for the hotel and provide the City additional time to implement the vertical housing program if needed. Having both of the projects move forward was critical to put the project in the best position possible to get financing. UDP was committed to the project and closing before the June 2024 deadline was one of its highest priorities. Eric Cress, Principal and President, UDP, highlighted via PowerPoint the challenges faced and the company's accomplishments since June and reviewing the request for a six-month extension. Lincoln Walker, Senior Director, Investor Relations, UDP, reviewed the status of the project's debt and equity. The team had engaged in conversations with various groups and brought to the meeting a letter of intent from a banking partner, which was a positive development for the project. While the summer had been a difficult period due to rising interest rates, there had been substantial changes in the past five days. Within the past few weeks, UDP had also received a letter of intent for the apartments from a larger, institutional-sized investor. While there were some permitting and construction costs that needed to be worked through, the company was making good progress and receiving more engagement from a variety of investors. A few individuals Mr. Walker knew in the community had reached out asking to participate, which was a positive sign and boded well for the project going forward. The total equity capitalization amounted to slightly over $40 million with a combined total of $89 million for both projects. UDP aimed for around 60 percent loan to cost for the apartments, translating to approximately$16 million of the $40 million, with the remaining $23 million allocated for the hotel. Mr. Cress noted the company had invested $4 million over the past four months as it continued to work through the redesign process. He continued the presentation with an overview of the schedule, which was consistent with Staff report the Board had received. Chair Buck thanked the team for the updates and their ongoing work on the project. Earlier today, the County voted unanimously to approve its participation in the development zone, and the City appreciated the County's support. Many recent events had highlighted the difficulty multifamily projects had with financing. A recent article in the Oregonian highlighted the drag financing difficulties would have on housing production. Everyone was starting to see the need to pull out all the stops, and the City appreciated UDP's creative thinking, recognizing it was still a tight market and the City could not operate like it did five years ago. The County wanted certainty that the project would provide workforce units and had noted language in one of the documents that seemed to suggest those units were optional. The City needed to ensure the DDA cemented the language because Mayor Buck had given them his word that it would happen. Mr. Sin said the language was in the DDA, though there might be some looser language stating the units were contemplated versus required. He was sure the City could get Mr. Cress' verbal and written commitment. Mr. Cress confirmed the company was committed to delivering those units. The company managed and built multiple buildings with rent constrained, low-income, or workforce housing within them, so UDP was used to managing those and had experience with the compliance required. Mr. Cress clarified the schedule, noting the company planned to close on the apartments in March and the hotel in June. June 28th was the request for the DDA extension, but UDP's schedule anticipated the apartment's construction to begin prior to that date. The schedule showing issuance of demo/building permits for the hotel in July of 2024 reflected the length of time anticipated between completeness check and permit issuance. The schedule also assumed only one development review modification hearing, which is what UDP hoped, but that was the Redevelopment Agency Meeting Minutes Page 2 of 4 November 7, 2023 minimum. The company had tried to compress the timeline as much as possible while being realistic. It did take time once permit documents were in to get through the process. Board Member Afghan recognized the current situation was different from pre-covid times and supported issuing the requested extension to maintain the City's relationship with UDP. However, while he had voted for the last extension without hesitation and would vote for this extension, he would be unable to approve another extension six months from now because the project needed to go forward. If UDP faced genuine difficulties progressing, the City should explore other options. He would not advocate taking the project from UDP, but if someone presented immediate funding, the Board owed it to the residents to consider it. If construction did not start in April and July, the City would need a different conversation with UDP. Chair Buck added he believed the Board looked forward to seeing the progress UDP articulated tonight continue into the spring. Mr. Cress understood the Board represented the community and the community wanted to get the project done, which UDP heard loud and clear and that was why the company had spent so much time, energy, and money to push the project as fast as possible. UDP was committed to doing everything it could to move the project forward. His experience as a member of a national product council told him that throughout the country it was a very difficult time to get housing built because of the circumstances. However, UDP had letters of intent and people who were looking at the project seriously. It was a good project. People were excited about Lake Oswego, the location was excellent, and UDP had built a strong program. The company was pushing the project forward and what it presented to the Board today was what it expected to deliver, and it was making every effort to do so. Board Member Afghan thanked Mr. Cress and emphasized he was not arguing UDP's commitment to the project or the City. The company had spent $4 million and many years on the project. At the same time, if that commitment did not move the project forward, then the City had to explore other options. He understood the difficulty with getting financing right now, and because he understood those challenges he would vote in favor of another extension. Board Member Rapf moved to authorize the Executive Director to execute a third amendment to the December 7, 2021 Agreement for the disposition and development for the North Anchor properties. Board Member Verdick seconded the motion. A voice vote was held, and the motion passed, with Chair Buck and Board Members Corrigan, Wendland, Mboup, Verdick, Rapf, and Afghan voting `aye', (7-0). 14.2 Approval of LORA Meeting Minutes. September 19, 2023, Draft Regular LORA Meeting Minutes Board Member Verdick moved to approve the LORA meeting minutes as written. Board Member Mboup seconded the motion. A voice vote was held, and the motion passed, with Chair Buck and Board Members Corrigan, Wendland, Mboup, Verdick, Rapf, and Afghan voting `aye', (7-0). 15. ADJOURNMENT, REDVELOPMENT AGENCY (LORA) Chair Buck adjourned the LORA meeting at 9:25 p.m. Redevelopment Agency Meeting Minutes Page 3 of 4 November 7, 2023 Respectfully submitted, Kari Linder, Recording Secretary Approved by the LORA Board on {insert approval date}. Joseph M. Buck, Chair Redevelopment Agency Meeting Minutes Page 4 of 4 November 7, 2023 ATTACHMENT 2 Eo o s� LAKE OSWEGO REDEVELOPMENT AGENCY MEETING MINUTES V +� November 21, 2023 °REGO 14. CALL TO ORDER, REDEVELOPMENT AGENCY (LORA) Chair Buck called the regular Lake Oswego Redevelopment Agency (LORA) meeting to order at 5:17 p.m. on Tuesday, November 21, 2023. The meeting was held both virtually via video conferencing and in-person in the Council Chamber at City Hall, 380 A Avenue. Present: Chair Buck and Board Members Corrigan, Wendland (via video conferencing), Mboup, Verdick, Rapf, and Afghan Staff Present: Martha Bennett, Executive Director; Ellen Osoinach, LORA Counsel; Kari Linder, Recording Secretary; Evan Boone, Deputy LORA Counsel 15. PUBLIC HEARING 15.1 LORA Resolution 23-04, A Resolution of the Lake Oswego Redevelopment Agency Board Amending Lake Oswego Public Contract Rule 46-109 (Definitions), Regarding Applicability of the Rules to the Lake Oswego Redevelopment Agency, and Rule 46-0125 (Public Contracting Officer's Policies and Guidelines) to Increase Contracting Opportunities for Firms Certified by the State Certification Office for Business Inclusion and Diversity (COBID) to Include Veteran-Owned Businesses. Ellen Osoinach, LORA Counsel, reviewed the public hearing procedure for the legislative decision and asked if any Council wished to declare a conflict of interest. None were heard. Evan Boone, Deputy LORA Counsel, referred to his earlier Council Report and confirmed Board Members had no additional questions. Chair Buck opened the public hearing, confirmed there was no public testimony, and closed the public hearing. Board Member Rapf moved to adopt LORA Resolution 23-04. Board Member Mboup seconded the motion. A voice vote was held, and the motion passed, with Chair Buck and Board Members Wendland, Mboup, Verdick, Rapf, Afghan, and Corrigan voting `aye', (7-0). Redevelopment Agency Meeting Minutes Page 1 of 2 November 21, 2023 16. ADJOURNMENT, REDVELOPMENT AGENCY (LORA) Chair Buck adjourned the LORA meeting at 5:19 p.m. Respectfully submitted, Kari Linder, Recording Secretary Approved by the LORA Board on {insert approval date}. Joseph M. Buck, Chair Redevelopment Agency Meeting Minutes Page 2 of 2 November 21, 2023