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Developers pitch mixed-use project at 510 S. 3rd; council directs staff to prepare amended RFP
Summary
Husband‑and‑wife developers proposed 32 apartments and a retail pad at 510 S. 3rd Street; council praised the analysis but expressed concerns about phasing and downtown character and directed staff to amend the prior RFP for the property and return with clarified expectations.
Alex and Elizabeth Schilling of HBU Development presented a proposal on April 27 to purchase 510 South 3rd Street (the northwest corner of 3rd and Davis) and develop two 16‑unit apartment buildings (32 units total) plus a retail component intended to capture retail spending that currently leaves Polk City.
The presenters said they are Polk City residents and argued the project addresses a shortage of rental inventory and missing retail. They cited data from Polk City's comprehensive plan and retail analyses, noting a high owner‑occupancy rate, median home value cited at $414,000, and per‑capita retail leakage the presenters calculated. The Schillings said their project would deliver about 27% of the multi‑family units the city's future land use plan projected as needed by 2030.
Council members praised the research and local commitment but raised substantive concerns. Several councilmembers objected to the proposed phasing (residential first, retail later), saying a phased approach could delay or undermine the retail component and that the design felt more like a strip retail arrangement than a traditional 'main street' downtown frontage. Other members urged that commercial uses be prioritized on the site or that the ratio of commercial to residential be rebalanced.
Staff (Chelsea) asked the council whether to pursue selling the property and whether the city should obtain an appraisal and how to structure any sale (sealed bids or an RFP). Council discussion revealed differing views: some favored obtaining an immediate appraisal to set expectations for a new RFP; others preferred waiting for the ongoing Third Street Corridor Study (expected late this year) before finalizing appraisal details. The mayor asked for clear direction to staff.
By the end of the discussion the council gave staff guidance to prepare an amended, more specific RFP for the property (and to consider whether to include an adjacent parcel in a separate RFP). Staff said it will revise the previous RFP, include clearer valuation and project expectations, and return the revised document to council at a subsequent meeting. No formal sale or purchase agreement was approved; any sale will proceed through the competitive process staff outlines.
