by Jack Mayne
It will be three to five years to complete the waterfront marina project, the developer said two months after the Des Moines City Council approved the outline of the project.
At the March 27 Council meeting, it decided Good Fit Development would be the developer of a year-around destination event location and small marketplace.
Now the city and Good Fit are in negotiation for a 100-year ground lease of the property. The developer wants an extremely long lease because the city will not sell the property and it takes an extended lease for finance lenders to commit to such a large-scale development.
Once the lease is completed, it will take another period of up to 18 months to put together financing for the project, says Good Fit Development Principal Steve Monkewicz.
“We are hoping to start the project within that time,” Monkewicz says. “If we can attract conventional financing, then we can prior to that.”
Then it will take 18 months to two years to complete the work, meaning it will “be three to five years” from now to project completion.
Reason for long lease
The city has made it clear that it will not sell the marina property, so an extremely long-term ground lease is needed in order to gain financing of such a large project. Monkewicz says they are negotiating for a 100-year lease.
Monkewicz says getting the lease signed and then getting the financing will be a large determinant on the start date for the project.
“As it is a lease as opposed to a transfer of ownership, that impacts our ability to attract financing, especially conventional financing,” he says. “In this day and age, those types of vehicles typically look to lean on the site as the collateral. We are working with the city to figure out how we can best address creating that opportunity to attract conventional financing without requiring a site ownership transfer.”
He says they are looking at the possibility of using a federal financing formula called the EB-5 Program. That program is overseen by the federal Citizenship and Immigration Services and provides foreign nationals the opportunity to become “conditional permanent residents for two years” upon making an investment of $500,000 in a qualifying project that will create at least 10 new, direct or indirect jobs for U.S. workers.
Monkewicz says EB-5 investors must submit an immigration application with a comprehensive business plan that is sufficiently detailed to demonstrate that the investment project meets the job creation requirements of the EB-5 Program.
The program as been used in the Seattle area and its Canadian law equivalent is credited with financing of much of the major development in the Vancouver, B.C. area. But, he says, Canada is restricting some of that process, causing Far East investors to seek projects along the U.S. west coast.
Citizen concerns, questions
When discussing the project with citizens in the community, Monkewicz says it is helpful to separate the physical and the emotional perspectives of the project.
“Granted, these perspectives often overlap and invariably impact each other at some point.”
He says the questions on the physical plans that come to him include what is the scope and use of the project and how does it fit into the environment. People also want to know the actual environmental and physical impact, the impact of traffic and scale of the marina on the community, particularly the immediate area adjacent to downtown.
Other questions, he says, include if it is all going to be new construction or is something going to be demolished.
Many want to know if the space being created is going to be public or private. Another small, but vocal, segment of residents “who live along the parameter” is whether views will be blocked.
“Responses to those physical type of questions are pretty easy to point to through the definition of the scope of work or the architectural plan, traffic study and environmental plan that support the project.
“There was a lot of up-front work done (on this project),” he says
A site analysis was done by the city and the University of Washington department of architecture did another earlier study on parking needs and other connectivity types of planning.
Emotional worries hardest
Monkewicz says the emotional questions are the hardest to respond to but a problem that often exists in such projects is not a problem in Des Moines because there is nothing within this development that is necessary to be preserved because of historic significance. The area consists of surface parking, old boat storage facilities, the 20-year-old harbormaster’s office, which is “not very functional.”
The current boat storage facilities will be leveled, but new storage is to be integrated into the new parking structure that will be built along the hillside, he says. The type of boat storage is similar to what is done in colder eastern climates where boats can be used for less than half of the year and need storage the rest of the year.
Monkewicz says the city also had formed an advisory committee on recommend on a path of development of the area.
“This was a real advantage (because) it speaks to a lot of the needs, concerns and desires the city has identified.
“I think the reason the city selected this development over other competitors is because our proposal is very consistent with all of those due-diligence efforts,” he says. “There has been a very thoughtful public process, there has been a thorough due diligence effort … and it just so happens that our instincts on what would benefit the marina and the community were inherently consistent with what the analyses and efforts also said.”
He says his project has the benefit of overall public consensus because of the project’s preparation and the views of it they are taking.
But, there still are skeptics, and “from out team’s perspective it is “important to take the time to address those” and to continue to collaborate with those people with questions and concerns.
“If they offer some thoughts, even if there is already a plan in place, they could still be incorporated, then there is a value to do that,” Monkewicz says. “But that being said, sometimes … consensus is not reached and maybe the civic leaders determine it is in the best interests of the community (go ahead) and do that.”
He says for Des Moines, it is not a secret that a large part of the incentive for the project is to enhance city revenue.
Some have said that the city has often not followed through and delivered people thought increased revenue would be used for.
As a citizen of Des Moines, Monkewicz suggest it is necessary to spell out to the community where additional revenue raised by the marina project would go and what it would be used for.
“A lot of places have seen quite a transition in the past 15 years in the dot-com era to now and it is deliberate that Des Moines missed out on that and the community, as a result of our last down-turn … realized that and they need to do something.”
He says that people are often very resistant to change an his group recognizes this and wants to partner with the city on the project “to the extent possible.”