Urbana seeks housing developer to buy city-owned downtown parcels

Feb. 16—URBANA — The city of Urbana plans to issue a request for proposals to buy and develop city-owned property downtown on Illinois Street between Broadway Avenue and Vine Street.

"We tried to write it as flexible enough so that if someone does want to make a proposal that is not housing-centric, they can do so," city Administrator Carol Mitten told the city council on Monday. "But we also wanted to emphasize that the guidance from the council more recently and the plans that we have are to focus on residential and enhance the tax base, since these properties are in the" Central Tax Increment Financing District.

Andrea Ruedi, the city's senior adviser for integrated strategy development, said the request will be released sometime in March.

According to a draft request, the site is made up of five vacant parcels totaling about 63,660 square feet or 1.46 acres. Most of the land is located in both the city's Enterprise Zone and the Central TIF District.

"The city of Urbana owns the full site and intends for the developer to take ownership of the property," the draft states. "The City will negotiate development incentives that will be contingent on the amount of private investment and the degree to which the City's development objectives are met."

Mitten wrote in a memo that the request is intended to fulfill one of city leaders' 2022-23 strategic goals, which was to identify one or more downtown sites that the city "will target for development with at least 50 units of market-rate housing."

Additionally, one of the proposed items for the city's 2024-25 goals is to issue requests for the development of at least two downtown city-owned sites for housing developments.

The draft request states that proposals should address the goals of the Central TIF Redevelopment Plan, especially the city's desire to enhance the real-estate tax base and create "affordable options for both residential housing and business startups in the [Redevelopment] area."

"Notwithstanding the aforesaid general guidelines, the City reserves the right to jointly consider and, where appropriate, approve projects proposed in response to the RFP that may not necessarily meet the aforesaid desired outcomes," the draft states. "Interested developers are encouraged to submit proposals that represent the development approach they believe would be most successful, even if it is not fully consistent with the desired outcomes described above."

In discussing the draft, Alderman James Quisenberry asked if the city is expecting developers to include a certain number of the parcels in their proposals.

Mitten replied that the idea is that someone will want to develop the entirety of the site. However, she added that if an applicant only wants to develop part of the property, the city could still consider their proposal "as long as it didn't leave us with a funny piece," and she will add in language to indicate their flexibility in this matter.

"I say that because that parcel number four is kind of the odd duck," Quisenberry said.

Almost all of the lots are located along the south side of Illinois between Vine and Broadway. However, the one Quisenberry referenced is along the north side of California Avenue between Vine and Broadway.

Another query came from Alderwoman Maryalice Wu, who asked if this project will be similar to 200 S. Vine St. The city sold that property, just north of the City Building, to Green Street Realty for $1 to develop into townhomes, among other incentives.

"Potentially," Mitten said. "I mean, if that's what it takes. What we're asking for is 'What do you need from the city?'"

Mayor Diane Marlin noted that it took three rounds of proposals and 10 years to develop the Vine Street property.

"That was a challenging site," she said. "And so is this, when you look at it, but not that challenging. It's doable."

Moving forward, Ruedi said the council's suggestions will be incorporated into the request, and council members will have a couple more weeks to provide comments before it is issued.

Marlin said there used to be homes on the Illinois Street property and estimated it's been 20 or more years since some of them were torn down with the intention of redevelopment.

"This is an historic moment to actually get to the point where we're seeking proposals," she said.