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City OKs 7 story downtown apartment complex, parking garage

For seven years, the City of Lakeland has been looking for a builder to purchase the city-owned 1.5-acre parking lot on Oak Street downtown and replace it with a multi-use development. And now he has a deal with a company that wants to build a seven-story apartment complex with a 424-space parking lot.

The Lakeland City Commission on Monday approved a 21-page development agreement with Tampa-based ONICX Group to build at least 200 apartments, 2,000 square feet of street-level retail and multi-story parking. The vote was 6 to 1, with Commissioner Bill Read voting against.

But after months of negotiations, time is running out. The whole deal could fall apart if, or when, the US Federal Reserve raises interest rates and puts funding for the $53.6 million project out of Onicx’s reach.

As part of the pact, Onicx will buy the property for $1.836 million and the city’s Community Redevelopment Agency (ARC) will contribute up to $1.1 million towards the construction of the multi-storey parking lot.

The agreement includes several stipulations that allow the developer and the city to withdraw at different times from the project.

Onicx has a 90-day “inspection period” to determine the “suitability of the property for its project”.

If the company determines that the project is not feasible as planned, it may “terminate the agreement for any reason before the expiration of the inspection period and receive a refund of its $25,000 deposit. “, states the agreement. Onicx may request two 30-day extensions to the inspection period.

Under the pact, Onicx must complete the purchase of the property within one year of signing the agreement. He can request 30-day extensions, but they will cost the company $10,000 each.

Site plan for floors 5 to 7; see the plans of the other floors here or in the document at the end of this article.

Other stipulations include a $736,000 cap on the amount the city will waive fees related to site plan reviews, building permits, inspections, impact fees and offsite utility improvements.

“If these costs are expected to exceed this amount, Onicx will notify the City of the additional costs and the City will notify Onicx whether or not it agrees to pay, waive, or otherwise satisfy the additional costs,” the agreement reads. “If the city chooses not to bear the additional costs, Onicx may choose to pay the additional costs and move forward with the project or terminate the agreement.”

There is also a 36 month time frame to complete the project once it has started.

The terms are tied to lengthy negotiations with Onicx since winning the bid in September with a proposed $40 million, 153-unit apartment complex that has been drastically altered since October at the behest of the commission. , adding expense and complication.

“We and everyone involved in the process need to get it started,” Onicx Group Vice Chairman Arjun Choudhary told the commissioners. “Interest rates are rising” and the company is scrambling to secure financing before that happens.

The project has “already done the rounds”, he said. Onicx expects to have “answers” regarding funding within 30-45 days.

Choudhary said the Oak Street project is a pivotal project for Onicx, “the first of three that I’m trying to do” which will be introduced in the next six months and which will “catalyze” the downtown real estate market “for the success in the future; these will be the first projects of their kind” in Lakeland.

But first, the Oak Street project must get underway, agreed Choudhary, commissioners and planners.

On April 8, the Lakeland CRA Advisory Board unanimously approved Onicx Group’s proposed 40-page development plan for Oak Street for the block-sized lot on the north side of Oak Street. , between North Kentucky and North Tennessee avenues.

City Attorney Parker Davis told the commission that the plan calls for Onicx to build the seven-story apartment building and integrated parking lot, that the ARC will help build $1.1 million. dollars.

Onyx originally submitted a proposal for a six-story, 153-unit apartment building on the site. The original pact called for 10% of housing units to be set aside for affordable housing for households earning 80% or less of Polk County’s average median income (AMI) of $47,000.

With 153 apartments, that affordable housing “unit count” was 15. Under the proposed new agreement, the number of affordable housing units will remain at 15, with Onicx committing to build “at least” 200 units.

“We understand that affordable housing is a huge need for the community,” said Alis Drumgo, Lakeland CRA’s deputy director and deputy director of community development, noting that ideally the city is aiming for 20% affordable housing in new developments. , but, in this case, the commission’s request to add more units and build a parking lot changed the scenario for Onicx.

Because of this, he said, project costs have gone from an initial estimate of $36 million to now over $50 million.

“What we didn’t want to do was penalize the developer for responding to the commission’s request,” Drumgo said, so the affordable housing requirement would remain at 15 units.

Even then, “roughly calculating, (Onicx) ‘leaves about $2 million on the table’ over the 15 years, all 15 units should qualify as affordable housing.”

The proposed deal includes 10 years of tax increment financing (TIF) that reduces 80% of property taxes in the first five years, a 60% abatement of property taxes for years six through 10 and waives up to to $736,000 in impact fee permit credits.

The ARC has been planning to develop the Oak Street plot since 2015. In 2018, a private developer expressed interest in developing the site as a “dense urban multi-family residential project with the potential to incorporate some mixed-use elements” .

ARC began soliciting submissions in March 2019 for the project. A selection committee chose the plan from Tampa-based Catalyst Asset Management Inc. over the one submitted by Lakeland’s Broadway Real Estate Services.

Catalyst’s 2019 proposal called for a six-story structure with 173 apartments, 38 of which would be reserved for affordable housing. Their proposal also included 10,000 square feet for retail and a four-story parking garage. But after a year of negotiations, Catalyst pulled out of the project in September 2020, citing COVID impacts and “investor apprehension.”

ARC solicited a new round of bids in July 2021. The selection committee unanimously chose the plan submitted by Onicx Group. At its October 18 meeting, the city commission agreed and agreed to begin negotiations with a deadline to seal the deal within six months — no later than April.

An October development document submitted by Onicx lists potential monthly rents for apartments at market price at $1,196 for a studio, $1,350 for a T1, $1,932 for a T2 and $2,100 for a T2. .

Comparing rates to downtown competitors Mirrorton, eBay and The Gardens, the document notes: “Given the superior location and design type of 200 Oak Street compared to current market offerings, we have chose to set rents slightly higher than those of the competition.

Onicx Group has completed over $500 million in real estate projects over the past five years, with over 900 multi-family units in mixed-use projects currently under development. Projects in the area include the Marriott Residence Inn Downtown Winter Haven.

Deena S. Hawkins

The author Deena S. Hawkins