Want to save $100 for every member of your family? Show up at the Concord City Council meeting Monday, July 8, at 7 p.m., and oppose the city’s latest boondoggle for the DES site which will gift the developer about $100 for every man, woman and child in Concord.
The city bought the former DES building from the state and wasted $2 million to bury the power lines in front in order to attract a high-end commercial developer. What they got instead was a residential developer who agreed to buy the building for half what the city paid. Now the developer is back with the 8th change to the plan which would require the city to pay an additional $3.5 million toward project costs. But this project would be bad for the city even without the extra $3.5 million.
The RH high density residential district allows 14 units per acre or about 10 units for this site, but by devoting 5,000 of 180,000 square feet (or 3%) to commercial it becomes mixed use not subject to this limit. The developer proposes to put 125 apartments on the property, which will apparently cost roughly $180,000 to $200,000 each to build, which would mean rents on the order of $1,800 to $2,000 per month – not exactly the sort of housing the city should subsidize. This density of about 170 units per acre is unheard-of in Concord being roughly 50% more than the Kennedy Apartments or the Crutchfield Apartments of the Concord Housing Authority. It even exceeds the density of the original infamous Calibri-Green complex in Chicago, which was torn down as being unlivable and being replaced by only 43 units per acre. Each apartment would have only one on-site parking space with none for the restaurant on the property, which would choke evening parking in the South End regardless of whether the 100 or so more needed spaces are leased or just occupied.
Note that this project is in a TIF district and is in effect exempt from school taxes, so the perhaps $300,000 annually it will cost to educate children from the development and any necessary police presence will be paid by other taxpayers. The claim is made that the TIF district can be closed out sooner with this project but if the other TIF districts in the city are a guide, they will be extended into perpetuity. Also the taxable valuation is to be set at $20,797,000 regardless of project cost – a minimum 10% discount.
But back to the $3.5 million. The developer says the property needs to come in at a cost of $23.4 million to be profitable but says it might cost $30.4 million. The staff report says the developer asked the city to pay half of anything over $23.4 million, but the actual agreement states the city will pay the full $3.5 million if the cost is only $23.4 million, otherwise half of anything over $16.4 million. And the city will pay the $3.5 million up front with the developer able to walk away by paying the city $300,000 – why not require them to escrow the full $3.5 million? Of the roughly $6 million in equity required for the project, the city will be providing 75% ($1 million reduction in price already plus the $3.5 million) and the developer only 25% – hardly much of a developer’s commitment to the project.
Even without the $3.5 million payment, I don’t think Concord should approve a development that is too dense for Chicago, or subsidize high-end housing or a restaurant when those already on Main Street are often struggling. It’s time to pull the plug on this developer and get someone less grandiose like CATCH to build maybe half that number of apartments. Even using the site for a parking lot or turning half into a city park would be better financially and better for livability than the current proposal.
(Roy Schweiker lives in Concord.)