Councilors back appraisal to advance 138-unit Johnson Vocational Center redevelopment

City staff told councilors they plan to commission an independent appraisal to verify the value of the Johnson Vocational Center property at 200 Park Avenue, a step staff and councilors said is needed before advancing negotiations on a redevelopment proposal that would create about 138 housing units under a long-term ground lease.

The property discussion arose after the city issued an RFP for several surplus school district properties. Staff said multiple responses were received and the city advanced the most viable proposal: a mixed-income development with housing above a podium containing parking and ground-floor commercial space. Staff said the preferred proposal would allow the city to retain long-term control of the asset while securing consideration for its use.

Commissioner Matt O'Jay summarized the negotiation history and said, “Simply, I think, to buttress our data point, that is we had responses to the RFP that demonstrates some bracketing of the value of our asset. We'd like an independent third party to come in and tell us just how close to accurate that is.” Councilors present expressed support for ordering the appraisal. Staff said the transaction under consideration was a 65-year ground lease with consideration of $1,025,000.

Staff described practical issues the project team must address: a shared party wall with an adjacent property, surface parking patterns in the area, and the need to reconcile neighborhood expectations for amenities and mixed-use with what the finance plan will support. The city’s development staff said they would negotiate an agreement to avoid disturbing the neighboring property during demolition and construction and that these arrangements are common in urban redevelopment.

Developers identified in the discussion included national developer Penn Penrose and local partner Hanover Ventures; staff said Penn Penrose is partnering with Hanover and that Hanover is in contract on at least one other downtown property. The city’s business-development representative, Eric, told councilors the project team is preparing applications for IDA abatements and pilot structures and is finalizing financing, grants and plans that the Industrial Development Agency will review as part of the site-plan and abatement process.

Staff said the council should expect legislation in the coming quarter if negotiations and due diligence proceed: “We very much intend to have legislation requested before you this coming quarter,” staff said. No formal vote to sell or convey the property was recorded during the discussion; councilors said an appraisal will inform any future sale or lease decision.

Less critical details discussed included property size (the site was described as about 33,000 square feet of land with a roughly 50,000-square-foot former automotive building), the RFP timeline (committee convened last October) and the practical difficulty of building community space and ground-floor commercial in income-restricted projects because those spaces typically do not generate revenue consistent with operating budgets.