Tomorrow night the City Council will take a deeper look at one of the most controversial development proposal since the original Safeway and 301 Airport Blvd. project at the Drive-in raised red flags a decade or more ago. The Council will be attempting to give the staff some direction on how to proceed with two developers who want to use city-owned public parking lots to build housing-retail projects in the downtown area between the Post Office and Bayswater Ave. But is the horse already stuck behind the cart? I think so and here is why:
The City put out requests for qualifications to 90 developer contacts on May 27, 2011. The request was only open for two months and yielded 19 responses. Those 19 responses were winnowed down to six for interviews. Now the City is proposing to limit consideration to only two and they are not even interested in the same parcels for their proposals. Given the short timeframe for responses in the midst of some of the worst real estate headwinds in a decade, this all seems premature and not smart negotiating tactics.
Second, the two developers being considered (Grosvenor and Equity Residential NASDAQ: EQR) have concepts that include 100 to 140 residential units and 35,000 square feet of retail with parking for the units only. The replacement public parking is TBD elsewhere, so these projects are really even bigger than described since underground or elevated parking will need to replace that which is lost. Plus we have yet to see the impact of the rest of the Primrose retail upgrade on parking.
Lastly, one of the projects envisions retaining portions of the Post Office structure and notes that is has an uncertain historic status. Well, not really. Its status is pretty clear when one looks into it. The Post Office sale is far from certain to begin with. It is the parking lot nearby that is of interest. So why give a developer a firm, single bid committment when the resource is very much up in the air?
Lots F and N are nothing special. Lot F, in particular, is often a mess but now is not the time to go sole source with a developer who has only a hasty "concept" to offer at time when the economy may finally be on the rebound. Tune in tomorrow to see how the discussion goes.