City presents three concepts for 21 South Lynn Street; staff recommends public presentations by developers

The city manager presented three development proposals for the city-owned property at 21 South Lynn Street and recommended inviting developer teams to present publicly so council and the public could compare concepts and next steps.

Staff purchased the site in August 2023 to guide redevelopment toward broader downtown goals, including active first-floor uses, a diversity of housing types and higher taxable valuation than a likely market-driven student housing tower, the city manager said. The city issued an RFP in September 2024 and received three responses by the November deadline.

Staff summarized the proposals as follows:

- Grand Rail (with Urban Acres, OPM and Axiom): a six-story, steel-framed midrise targeting LEED Silver with about 6,300 sq. ft. of entertainment/ground-floor space (letters of interest from the Englert Theatre and the Stories Project), three floors of office, and two upper residential floors with 20 units (16 market-rate, four affordable). Staff estimated a total valuation near $21.5 million and said the team proposed a $3 million lot purchase; the team initially requested no TIF gap financing but signaled flexibility if anchor tenants required support.

- Iceberg (Hodge Construction Group, Slingshot Architecture and partners): a 13-story building with five office floors, seven floors of residential including 76 affordable senior units to be financed with Low Income Housing Tax Credits (LIHTC), and about 3,800 sq. ft. of restaurant/entertainment and 2,000 sq. ft. of micro retail. Staff estimated valuation at roughly $24 million and reported the team proposed a $2 million lot purchase and indicated a potential TIF need of $7–10 million depending on tax-credit outcomes. The proposal is based on 4% LIHTC assumptions; staff noted 9% competitive credits could materially change the TIF need but are unlikely to be obtainable for this cycle.

- Salida Partners (Shive-Hatchery, Skydeck Capital and partners): a mixed-use concept with 6,900 sq. ft. of flexible entertainment/micro-kitchen/micro-retail and a multi-level Stories Project space; the team proposed 26 market-rate units, six affordable units, and 14 short-term-stay units, and suggested a $1 lot transfer (effectively no-cost). Staff estimated the development valuation at about $37 million but judged its pro forma would require a subsidy gap up to roughly $5 million to support prioritized arts and nonprofit space; staff concluded Salida’s concept was not financially viable under RFP objectives focused on generating property tax revenue without large ongoing subsidies.

Staff recommended inviting Grand Rail and Iceberg to present publicly and noted Salida Partners’ proposal was compelling in programming and materials — including a proposed mass-timber construction approach — but carried a financing gap staff did not believe the city should underwrite given the stated RFP goal of a tax-generating redevelopment. The memo recommends that council identify which teams it wishes to hear from publicly and set consistent presentation lengths; staff suggested 20–30 minutes per team with Q&A formatted to allow side-by-side comparison.

Councilors discussed flexibility in proposals, the potential to require longer affordability periods if the city provides land or subsidy, and whether new partners could be added to teams. Staff said the city, as landowner, could require additional affordability or other performance conditions but cautioned that overly prescriptive requirements could make projects infeasible. Councilors agreed to invite all three teams to present at a future work session so members could evaluate details and ask questions; staff will coordinate timing and presentation formats with the teams.