City staff reports $800,000 financing gap for proposed 447 Harrison breezeway project; board resists cash injection

City and CRA staff briefed the CRA virtual workshop July 16 on the status of negotiations over the 447 Harrison Avenue "breezeway" redevelopment and on Virtuous Cycle’s proposal to purchase or lease the property and build leasable space while maintaining a public breezeway.

Staff summary and financials Brandy Waldron, CRA staff, told the board that the CRA had designed a one‑story breezeway project and planned to commit $500,000 from the downtown CRA budget to construct the original public‑restroom/leasable‑space design. The CRA paused that plan after the Downtown Improvement Board recommended soliciting a private developer partner. Two proposals were received and the CRA’s evaluation committee recommended Virtuous Cycle; the prior board authorized entering negotiations with that company, Waldron said.

Waldron reported Virtuous Cycle now estimates constructing the proposed project would cost about $1,200,000 and that the developer identified a financing gap of about $800,000 in a recent email. The developer had proposed purchasing the property for a nominal fee or entering a long‑term lease while maintaining a permanent public easement for the breezeway, staff said.

Board reaction Mayor Allen Branch said he would not support a direct cash injection to cover a developer’s financing gap. “I'm not in favor for any cash injection,” Branch said during the discussion, adding that the city has invested significantly in downtown projects over the last decade. Commissioner Janice Lucas and Commissioner Brian Granger voiced similar reluctance to provide direct public subsidies for a private developer’s expanded concept; Granger said the board should either sell the building outright or change the scope if the developer can’t close the financing gap.

Other options discussed - Scope reduction: Staff said the developer could reduce scope (for example, omit a public restroom) or accept a reduced purchase price or payment schedule to lower the funding shortfall. - Sale or lease: Commissioners discussed a nominal sale with a permanent easement for the breezeway or a long‑term lease as alternatives to a public cash contribution. - DIB involvement: Commissioner Alan Hughes suggested the Downtown Improvement Board might have funds or capacity to help manage or maintain parts of the finished breezeway; he also noted the DIB has roughly $230,000 available in its account.

Staff direction and next steps No vote was taken at the July 16 workshop. Staff was directed to continue negotiations, confirm the developer’s financial assumptions, present options that do not require a large cash injection from CRA or the general fund, and return to the board with a recommendation. The board asked staff to bring formal proposals and any appraisals or financial exhibits that clarify whether a deal can be done without new public capital.

Why it matters The 447 Harrison property is city‑owned and located in the downtown CRA district; decisions about whether to invest CRA funds, sell, lease, or retain the structure will affect public access, downtown activation and future downtown maintenance obligations.

Ending The CRA did not authorize payment to close the developer’s reported $800,000 gap. Staff will return with a menu of options — reduced scope, sale at nominal price with easement, long‑term lease, or a recommendation to retain and complete the original CRA project — for further board consideration.