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HomeMy WebLinkAboutExh62_Modification_Request_v1_230217.pdfDocuSign Envelope ID: 7B0468D5-05FF-424C-BE5E-6F57A941153F From: Dalton Arndt <dalton.arndt@devcous.com> Sent: Monday, February 6, 2023 12:07 PM To: Matthew Herrera Subject: RE: Solera HEX decision modification Follow Up Flag: Follow up Flag Status: Flagged CAUTION: This email originated from outside the City of Renton. Do not click links, reply or open attachments unless you know the content is safe. Good Afternoon Matt, After review of the letter Jack had sent Chip back in May of last year, our request has not changed. It is our believe that we can obtain a greater efficiency of construction by focusing subcontractors on an individual building at a time, rather than splitting efforts between the two. As Jack had mentioned in his letter, we wish to focus on the affordable building first as we have made scheduling commitments to our investors. This does not mean work will be completely halted on the market rate building, as there is ample site work around the building that will continue. Framers will then rotate to the market rate building after completion of framing the affordable building, this sequencing would carry on with the remaining trades; with the market rate building being completed no later than 6-months behind the affordable building. Please see a summarized schedule below: Affordahle- Framing- January 30, 2023 Finishes- North Tower: October 2023, South Tower: January 2024 Completion - Market: Framing -January 23, 2023 Finishes- North Tower: March 2024, South Tower June 2024 Completion -test Tower October 2024, East Tower January 20.A Additional sequencing details: Framing has started on both Blocks, and based on the manpower by the framing company they will be framed simultaneously, though concentrating more on Block "A" where we will push any excess manpower. Beyond that our focus will continue to be on Block " A" for the rough -in, and finish trades, with the direction to concentrate on Block "A" and then follow to Block "B" with the goal of Block "B" being around 3-4 months behind Block "A", but again manpower will concentrate on Block "A" first. Please let me know if you know if have any additional questions. Thank you, Dalton Arndt Development Manager, DevCo Development DevCo Family of Companies EXHIBIT 62 DocuSign Envelope ID: 7B0468D5-05FF-424C-BE5E-6F57A941153F PO Box 41081 Bellevue, WA 98009 Mobile: 253.606.0715 Email: dalton.arndt@DevCoUs.com Website: www.DevCoUs.com From: Matthew Herrera <MHerrera@Rentonwa.gov> Sent: Friday, January 20, 2023 12:07 PM To: Dalton Arndt <dalton.arndt@devcous.com> Subject: RE: Solera HEX decision modification Hi Dalton, I was able to review the file and bring myself back up to speed on the project this morning. I think the scope of what I need to see in the submittal is fairly limited. I think it can be as simple as a narrative of what the request entails. Jack had provided a letter back in May 2022. Take a look at that and see if any changes are needed in what he was asking. I would also like a projected timeline of construction milestones, i.e. when is Block A expected to be completed and how far is Block B anticipated to be behind? Does all work on Block B stop and focus is all on Block A for a period of time? If you can provide some insights here that would be helpful. You can send these to me via email and I will start the process of getting it into the system. After I get everything, I'll send over an invoice for the modification fee. Let me know if you have questions and/or want to have a quick call to discuss. Thanks! -Matt MATT HERRERA, AICP, Current Planning Manager City of Renton I CED I Planning Division 1055 S Grady Way 16th Floor I Renton, WA 98057 Virtual Permit Center I Online Applications and Inspections DESK: (425) 430-6593 1 MOBILE: (206) 308-6231 1 mherrera@rentonwa.gov From: Matthew Herrera Sent: Thursday, January 19, 2023 3:11 PM To: Dalton Arndt <dalton.arndt@devcous.com> Subject: RE: Solera HEX decision modification Hi Dalton, Apologies in my delayed response. Just need to find some time to review the file and determine what I need to process the modification. I should have something for you tomorrow. Thanks for your patience. -Matt DocuSign Envelope ID: 7B0468D5-05FF-424C-BE5E-6F57A941153F May 16, 2022 City of Renton 1055 South Grady Way Renton, WA 98057 Attn.: Mr. Chip Vincent Director of Community and Economic Development Re: Solera Dear Chip: We are writing to explain a minor modification that we would like to ask the City to approve for the build -out of Solera. We are happy with the way the City has dealt with us to date and are grateful for the civic investments made in the Highlands neighborhood. Please consider this letter our request for a Minor Modification to amend the Hearing Examiner Decision for Solera' by substituting the following condition for Condition 1.d of the HEX Decision: "d. The Applicant shall complete the project phases in the sequence of the updated phasing plan as provided in Exhibit 15, as modified by this Condition 1.d. Construction of Phase 2 may occur concurrently with Phase 1. The City shall not issue any Temporary Certificates of Occupancy for Buildings A-1 and A-2 until the roofs have been fully installed on Buildings B-1 and B-2. Phase 3 townhome construction shall not begin until the building permits for Phase 1 have been paid for by the Applicant and issued by the City. One block of Phase 3 townhome construction (north or south of NE 11" St) may begin following building permit issuance of Phase 1. The second block of Phase 3 townhomes may begin following building permit issuance for the second mixed use building in Phase 2. Certificates of occupancy for the townhomes will not be issued until the podium and framing for Phase 1 has passed inspection. (Modified Condition #18y, Solera unit type plans have firmed up since the hearing, so that we now know that Block A will be all affordable units, and Block B will be mostly market rate." We know it is important to the City to ensure the successful completion of the market rate component of Solera. That is what we intend to do. We have closed the financing for both the affordable and the market rate rental components of the Project. We would be happy to share those documents with the City. Our concrete subcontractor has the capacity to build the parking structures for both the market rate and affordable components at the same time. That work is underway concurrently on both blocks. The ability to work both blocks at once does not hold true for the balance of our subcontractors. They are only able to work on one side at a time and maintain efficiency. We would like to be able to assign the other subcontractors, starting with the framer, to the 'Revised Findings of Fact, Conclusions of Law and Final Decision on the Solera Master Plan, Modification to Master Plan, Site Plan and Preliminary Plat; Street Modification (LUA20,000305, SA-M, PP, SA-H, MOD), dated March 14, 2021 (the "HEX Decision"). " Block B will include two affordable units and 313 market rate units, Block A will include 275 affordable units and no market rate units, with the overall multifamily unit mix for Blocks A and B of Solera being 313 market rate units, and 277 affordable units. 10900 NE 8'11 Street, #1200, Bellevue, WA 98004 425-452-4041 DocuSign Envelope ID: 7B0468D5-05FF-424C-BE5E-6F57A941153F affordable component first. With this approach, we think the spread between completion of the market rate and affordable components will not exceed six months. We are making this request for two reasons: (1) Because of the time value of the tax credits generated by the affordable component, we have an incentive to complete those buildings first. (2) More importantly, we would like to fulfill as best we can the scheduling representations we have made to our tax credit investor Boston Financial, a very important tax credit investor relationship for us. They in turn have relied on those representations to make commitments to their upper tier investors. While we are now making good progress, we will be unable to deliver the affordable buildings on the schedule we originally promised, because of supply chain issues and COVID. To the extent we can, we would like to minimize that delay. The City can rely on our commitment to complete the market rate component based on the amendment to the Hearing Examiner Decision proposed above. Our agreement with Citibank (the lender for both the affordable and market rate rental components of the Project) states that we shall contribute the first $40,000,000 required to build the market rate rental component before the lender will advance funds. We have contributed about $11,000,000 so far to purchase the market rate land and pay for the market rate construction to date. We will have contributed the full $40,000,000 to the market rate component by the time we have installed the roofs on the market rate buildings. We will have a compelling incentive to complete the market rate buildings in a timely manner after having invested $40,000,000 in the land and those buildings. With the City's cooperation, we also undertake to complete the 11,000 square feet retail portion of Buildings A-1 and A-2 as soon as possible so that Highlands residents can enjoy those retail uses as soon as possible. We believe our request can be achieved through a Minor Modification to the Hearing Examiner Decision, consistent with Condition 21.b of the HEX Decision, if this sequencing adjustment is acceptable to the City. We would be happy to introduce you to Citibank and Boston Financial for any additional perspective that you might consider useful. Also, please let us know if there is any other additional information that would be helpful in reviewing our request. Thank you in advance for your consideration. Yours truly, SOLERA AFFORDABLE, LLC Per: Evan J. Hunden SOLERA MARKET, LLC Per: Evan J. Hunden Managing Member Managing Member 10900 NE 811' Street, #1200, Bellevue, WA 98004 425-452-4041 DocuSign Envelope ID: 7B0468D5-05FF-424C-BE5E-6F57A941153F Armondo Pavone Mayor Community & Economic Development C. E. "Chip" Vincent, Administrator E. Jack Hunden, Managing Member May 27th, 2022 Solera Affordable, LLC Solera Market 10900 Northeast Bch Street, #1200 Bellevue, Washington 98004 425.452.4041 Dear Jack, Thank you for meeting with me earlier this month to discuss the Solera project. The Solera master plan is a significant private investment for the Sunset Highlands neighborhood following years of capital public investments to the area. The community planning effort in the years preceding the capital and private investment foresaw the mixed income and mixed use development that Solera will bring to the neighborhood. As you know from our discussions with your team during the entitlement period, the balance of affordable and market rate units is a priority for the City and the master plan phasing schedule prioritized the market rate and the master plan's infrastructure to be completed in the initial phase. The City has issued construction and building permits for the concrete podiums for the affordable Block A (Phase 2) and the market rate Block B (Phase 1) and work is now occurring on both phases concurrently. I understand from our conversation that the concurrent construction capacity and efficiency can be maintained through the podium process, however as the buildings begin to move to the vertical stage this would no longer be the case. Due to financing commitments, it is my understanding that the affordable Block A (Phase 2) would need to be prioritized following the completion of the podiums. You have indicated that although Block A would be completed first, the completion of Block B would not exceed six (6) months following the Block A completion. A modification to the master plan phasing schedule would need to be processed in order to alter the completion of the Blocks. The City supports the Solera project and would also support a modification to the master plan phasing schedule to accommodate your noted financing commitments and construction efficiencies. The Department of Community and Economic Development stands ready to process a modification when the project nears completion of the podiums for Blocks A and B. At that time, please contact Current Planning Manager Matt Herrera to determine materials needed for the modification application. Respectfully, C.E. Chip Vincent Department Administrator 1055 South Grady Way, Renton, WA 98057 • rentonwa.gov