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Committee approves framework for public‑private partnership to redevelop 1881 Pierce Street into affordable housing
Summary
The committee approved a P3 agreement structure and non‑state use to pursue redevelopment of roughly 14.4 acres in Lakewood (1881 Pierce and adjacent parcels) with a baseline target of at least 80 affordable units; the department will continue competitive procurement and return with lease terms and recommended contract for final approval.
The Capital Development Committee approved a plan to pursue a public‑private partnership (P3) for redevelopment of state‑owned parcels at 1881 Pierce Street and adjacent properties in Lakewood into housing, including a baseline target of at least 80 affordable units.
Tom Curek, director of the Public‑Private Partnership Unit, told the committee the site comprises roughly 14.4 acres of underutilized state property. Curek said the state will continue to own the existing building and two smaller parking lots (about 8.54 acres remaining in state ownership after redevelopment) while partnering with a private developer to build multifamily housing on the other parcels. He said the city of Lakewood has agreed to upzone the area to “mix urban general” to enable higher density.
Curek described the procurement sequence: an RFQ is in the market requesting developer qualifications and high‑level concepts; the office expects a site walk and will enter predevelopment and then development agreements with a selected developer. He said the RFQ requests firms demonstrate prior experience with affordable projects and to propose a financial return to the state. Curek told the committee the department brought on KPMG, AECOM and Ballard Spahr to assist with feasibility, valuation and negotiations.
Key parameters discussed: the RFQ and recommended baseline include a minimum of 80 affordable housing units (structured to meet Low Income Housing Tax Credit requirements), a ground‑lease negotiation approach that typically targets roughly 2–4% of appraised land value as an initial market guide, and a 99‑year ground lease with potential escalation or revenue sharing provisions to be negotiated in the predevelopment phase. Curek said a preliminary feasibility study showed a maximum of about 320 units could be built on the site, and the office is “determined to get more than 80 affordable housing units.”
Committee members asked whether the baseline should be a percentage of total units rather than a fixed count; Curek said he set a minimum count (80) and included that number in the RFQ to widen the pool of proposals and allow the evaluation committee to compare concepts. He said final unit counts, ground‑lease payments and other terms will be determined during the predevelopment negotiation and brought back to the committee for approval. Legislative council staff read relevant statute and confirmed the committee must approve non‑state use and that the department “shall not enter into a contract regarding the property or lease … without the approval of the capital development committee.”
Timeline and funding: Curek said the team aims to have “shovels in the ground by the first half of 2027” with likely occupancy in 2028–29, contingent on financing and LIHTC timing. He told the committee that financing feasibility depends on tax credits and that ground‑lease payments are typically phased once a project is built and stabilized under LIHTC financing.
Action: The committee voted to approve proceeding with consideration of non‑state use of the Lakewood complex and the proposed P3 baseline (the RFQ and predevelopment approach). The roll call was recorded as unanimous (yes votes recorded for Senator Henriksen; Representative Lindsay; Senator Pelton; Representative Winter; Senator Mullica). The department will return with the recommended lease and contract for final committee approval prior to final execution.
