Arvada staff propose ground‑lease workforce housing on Marshall Street parcel; council asks to pause pending homeless plan

Sam (City staff, Housing team) presented a proposal to explore workforce housing on a city‑owned parcel on Marshall Street that the city has held since 2021. The staff recommendation would use the parcel as part of a land‑banking strategy: the city would retain ownership of the land and enter a long‑term capitalized ground lease with a developer that would design, build, own and operate improvements on the site.

Nut graf: Staff framed the plan as one way to leverage publicly owned land to produce housing targeted to workforce households (staff described workforce housing as generally affordable to households earning in the workforce band under program definitions). The proposal outlined a menu of city roles — discounted long‑term ground lease, prioritized design review, assistance with community outreach, and potential loans or grant procurement — and emphasized that the city could reject proposals that did not meet objectives.

Sam described the mechanics: a capitalized ground lease typically requires an upfront payment tied to land value plus nominal annual rent, with long lease terms (investors often seek 50–99 years) so the city can preserve long‑term control and, if desired, affordability covenants. “The developer is going to be responsible for finding the money…building, operating, and managing the project, and having 100% ownership of the improvements on the land,” Sam said.

Staff estimated a feasible build of roughly 100 to 150 units on the roughly three‑acre parcel based on zoning and comparisons to nearby Marshall Point. The proposal emphasized workforce targeting (staff referenced program definitions that treat workforce housing as income‑restricted housing in the 80%–120% area median income range under funding definitions) and noted constraints: the parcel is not a candidate for LIHTC for this specific project because of nearby LIHTC projects under construction, and some grant programs (e.g., Prop 1‑2‑3 land‑banking funds) require the city to retain land ownership if awarded.

Council reaction: Members asked detailed questions about environmental remediation, infrastructure and developer subsidy levels, the potential for gentrification or concentrated poverty, and whether the site should instead be reserved for homeless services/navigation center uses for which the parcel had originally been considered. One councilmember said, “I would suggest that we hold our horses until we settle that question,” referring to the city’s homeless strategy and whether the parcel might serve that purpose.

Several members supported exploring the ground‑lease model more broadly as a tool for land banking, but most councilmembers favored pausing active pursuit of an RFP for this parcel until the homelessness strategy is complete and until staff can present more detailed financing and subsidy scenarios. Staff said they would prepare additional analysis, a community engagement plan and, if the council wishes, an attorney to draft a ground‑lease template.

Outcome: Council directed staff to hold the proposal and return with additional information; staff will not proceed with an RFP at this time. No formal vote was recorded during the study session.

Ending: Staff said the Marshall Street land‑bank concept remains an option for meeting housing goals and could be revisited after the city’s homeless strategy and additional feasibility work are complete.