Developers pitch mixed-use overhaul of 40 Fifth Street; EDIC weighs expanding incentive tools for redevelopment

Developers asked the Economic Development and Investment Committee to consider expanding the city’s redevelopment incentive toolkit to support a proposed mixed-use overhaul of the 40 Fifth Street Business Center that would convert and add residential and commercial space and reposition a large, mostly vacant office-industrial building.

Shannon Roars Jones, identified in the record as representing Roars, described a proposal to remove roughly 20,000–30,000 square feet from the west end of the existing building, build an approximately 800-foot-long residential building in three phases and add roughly 20,000–22,000 square feet of first-floor commercial space adjacent to reconfigured commercial space behind it. "What we're looking at doing here is just asking you to consider changing, as part of your land redevelopment, conversation, opening up some of the incentives that are available to redevelopment of kind of existing commercial buildings," she said.

The developer's concept, which they termed the "Center of Innovation," includes a co‑working space of about 20,000 square feet operated by an international co‑working partner, a wellness center and shared meeting and training spaces. Roars Jones said the full redevelopment concept would cost about $80 million and that the developer plans to phase the work: an initial $20 million section would include about 107 apartment units, below-grade parking running the length of the new building and 20,000–22,000 square feet of commercial space. The site is about 11 acres and the developer described roughly 1,100 current surface parking stalls, some of which would be replaced with underground parking.

City and committee members asked clarifying questions about vacancy rates and financing. Roars Jones said the building was about 95% occupied before 2021 and is now roughly 40% occupied post‑COVID; she said some tenants, including Sanford Patient Financial Services, remain and that letters of intent are being negotiated for new tenants. Committee members and staff discussed available incentive tools, including the city's pilot exemption program, tax-increment financing (TIF) and the five-year remodeling exemption. Staff said the pilot program provides the city's most flexibility for negotiations and that TIF has more stringent documentation requirements.

Committee members did not vote on any incentive for the 40 Fifth Street project at the meeting. Jim Gilmore (EDIC staff) said staff will consult with finance and consulting partners about comparable programs used elsewhere and that the committee will consider policy changes later in the year. "We are kind of bringing it to you today," he said, "... while there's no specific request today, except that you would consider these types of uses, as you're working through your new land development code and your new incentives process." The committee kept the item on its agenda for further study.