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The Marian Group not top choice for residents on Urban Government Center evaluation committee

The Urban Government Center is slated to undergo a multimillion-dollar development. | Courtesy of Google Maps

Three of the residents who helped pick which developer would revitalize the 12-acre Urban Government Center said they favored another developer over The Marian Group, which was ultimately chosen to work with the city to restore the vacant property along Barret Avenue to use.

Two of those three said they were content with the city’s decision to move forward with The Marian Group despite favoring other proposals and believe the city’s process for choosing a winning developer was fair. The third resident remains upset by the choice and described the evaluation process as arbitrary.

Insider Louisville spoke about the decision-making process with three of the four residents who served on a nine-person committee that evaluated proposals from five different developers to revitalize the city-owned property in Paristown Pointe. One resident member of the committee, Lizabeth Calenberg, declined to comment for this story. The remaining five members were Metro employees.

The names of the committee members were released by the city after the Kentucky Office of Attorney General ruled that the committee was a public agency and violated the state open meetings act by hosting closed-door meetings.

The committee made a final recommendation to the city after reviewing the proposals and speaking with the developer. The city also hosted public meetings and allowed for residents to submit their feedback online.

In December, the city announced that The Marian Group was selected, and the parties signed a formal development agreement earlier this month.

A close competition
The proposal includes a variety of housing, community space, a hotel and retail shops. | Courtesy of The Marian Group

The process resulted in a tight race between The Marian Group and two other developers, Steve Smith and Underhill Associates, according to two of the evaluation committee members, German Paristown Neighborhood Association secretary Mary Hardesty and Original Highlands Neighborhood Association president Chuck Woodall.

According to score sheets recently published by Louisville Metro, The Marian Group edged out Underhill Associates by 20 points and developer Steve Smith by 65 points.

“I literally changed my vote back and forth” between The Marian Group and Underhill Associates, said Hardesty, who said she ended up casting her voice in favor of Underhill Associates in part because of feedback from residents, particularly those from Paristown Pointe, at public meetings.

“I liked Underhill’s a little bit more just aesthetically” and the inclusion of senior housing, she said, but The Marian Group was a close second and presented “the most worked-through proposal.” Hardesty said she made it clear she’d be happy with either of the two proposals.

“They were both legitimate proposals,” she added.

Woodall, a real estate agent and committee member, said that for him, the top proposal came from Steve Smith, who’s leading a more than $30 million development just down the street.

“When it comes down to a Louisville neighborhood, you want accessibility, you want parking, you want traffic control, you want something that complements the neighborhood,” he said, noting later, “Those are the things that make my phone ring.”

Woodall liked that Smith’s proposal offered more owner-occupied housing than the others, he said, adding that the proposal had parking for a large office development that could then be used by people who are attending a show at the Kentucky Center for the Performing Arts or grabbing a drink at Goodwood Brewing’s planned taproom after work hours.

“They ultimately chose The Marian Group, and I think there is nothing wrong with that decision,” Woodall said.

This map gives an overview of the plan that Underhill Associates submitted. (Click to enlarge) | Courtesy of Underhill Associates

Hardesty agreed that Smith has a strong proposal compared to other competitors for the redevelopment project, Lifestyle Communities and Weyland Ventures.

“Steve Smith, he had a pretty good proposal, and some of the neighborhood representatives preferred his. I can’t say one way or the other whether it was good or bad; he just didn’t get the points,” she said.

Similar to Hardesty, Debbie Hoblitzell, a Paristown Pointe resident and member of the evaluation committee, cast her vote in favor of Underhill Associates. The trump card for her: Underhill wanted to renovate the existing buildings, whereas the other four developers’ plans would not.

“Underhill was by far my favorite, and I let (the committee) know that. I tried to be as objective as possible,” she said. “They were going to leave the buildings intact, and I thought that would be most environmentally sound. It’s not because I think the buildings are gorgeous.”

Hoblitzell said she thinks keeping the existing buildings would have less of an environmental impact and blamed the city for allowing the buildings to fall into so far into disrepair. City moved its employees off the site after finding that the buildings were infested with mold.

In addition to keeping the buildings, Hoblitzell said she liked Underhill because they “seemed like they were the most open to talking to the residents and making changes or amendments to the plan.” She also noted that Underhill Associates was the favored developer among Paristown Pointe residents.

Differing opinions on the process

According to Hardesty and Woodall, the evaluation committee met during hours-long meetings over a number of weeks to analyze the proposals, listen to the developers and ask questions. The developers weren’t given a time limit when talking to the committee, all three said.

“As the process was designed, it was fair. They did not get hustled out the door,” Woodall said.

Hardesty described the process as “objective.”

Hoblitzell, however, was unhappy with the process.

“The point assigning was pretty arbitrary. There wasn’t a scale” for how to award or subtract points, she said, adding that she felt a couple of committee members may have had preconceptions about the developers.

Hoblitzell said she thought Underhill would be rated more highly since they planned to renovate the existing buildings.

“All in all, so many people did express that they wanted Underhill, and they wanted the building to remain and wanted the Bellarmine people there, and that didn’t happen,” she said, adding that when she’d note to the committee that many residents want to keep the buildings, the response was “‘Yeah and so what?’ It seemed to me like it had very little bearing on everything.”

Theresa Zawacki

One individual who Hoblitzell said she thought “did a good job” was Theresa Zawacki, senior policy adviser to Louisville Forward. Zawacki led much of the process for Louisville Forward; she did not serve on the evaluation committee.

Hardesty told Insider that she thought city officials thoroughly explained how the evaluation process would work.

“They held our hand practically for that. The scoring was the scoring,” Hardesty said, adding: “Yes, (residents) did prefer Underhill, but they weren’t against Marian.”

Woodall noted the evaluation committee was more than half city employees, giving the city more weight in the process. “What they wanted to do was take some of the heat off the city is basically how I felt,” he said.

Still, Woodall said, he thinks the city “went out their way to get community involvement,” more so than they have in the past.

“They did consider what the neighbors wanted,” he added. “I think it was a good process, and I hope they continue to do that.”

‘Not going to make everybody happy’

During the past two days, fliers were placed in mailboxes; a Paristown Pointe resident posted to Nextdoor and another individual started a petition on Change.org; all question how The Marian Group was chosen and encouraged people to ask the city to reevaluate all the proposals and/or halt all work on the property until residents questions and concerns are addressed.

The fliers and posts also asked people to show up and voice their concerns at a public meeting regarding the development at 6 p.m. tonight, July 25, at the Highland Community Ministries, 936 Barret Ave.

Screenshot of Change.org petition

At a previous public meeting back in the spring, some residents criticized the decision-making process and said they felt residents did not get enough input. They said they did not like that The Marian Group’s proposal did not preserve the existing buildings, include a library or offer more green space; they also raised concerns about the impact of adding low-income housing to the neighborhood.

“I think some people have sour grapes,” Hardesty said. “I think some people are not happy that their person didn’t get it.”

The meeting, which will be hosted by representatives of The Marian Group, will focus on the proposed construction of 22 modern shotgun-style houses on a two-acre lot at 814 Vine St. that is part of the broader Urban Government Center development, Justin Brown, principal at The Marian Group, told Insider in a mid-July interview. The company is not prepared to talk about the full project, which is estimated to cost more than $50 million, he said.

In addition to the single-family houses, The Marian Group’s plan calls for a low-income, multi-family housing complex for Family Scholar House, commercial space, market-rate apartments, a multi-use community center, a parking garage, green space and a boutique hotel.

Woodall, a self-described cynic, said he is “cautiously optimistic” about the future of the Urban Government Center and The Marian Group’s plans for it. He poopooed criticism that followed the announcement of the winning proposal.

“It is one of the first times the city has gotten community input, and there is a small group of people who feel like” they didn’t get heard or “somebody’s got their hand in the till, or it’s going to be another Fourth Street Live or some crap like that,” he said. “You are not going to make everybody happy.”

Woodall said he’s received calls from about 10 people who were concerned about the project being jammed through.

Those callers “were not aware because they are not involved in the neighborhoods they live in,” he said, noting that the Original Highlands Neighborhood Association voted in support of the process. “For a city operation, they really fell over backward.”

Hardesty said she is happy with the decision and the process and trusts the expertise of city employees.

“The city people, I think their expertise put them in a position to see what was a more viable proposal,” Hardesty said. “We are just neighborhood people. We don’t have the skill set. We know what we like.”

“I think in the end, people are going to like it,” she added.

Still working out the final details
Justin Brown

Until he received word from the city that The Marian Group was chosen, Brown said he didn’t have any inkling about who’d they pick.

“We felt very confident about our proposal as I am sure everybody did. I know we felt very confident that we had put forward a good plan, a comprehensive plan, a realistic plan and one that was — you know, it’s not perfect — but one that’s a good plan, and the committee agreed,” he said.

“You had five good proposals. Every proposal was good; every proposal had a good development team behind it,” Brown continued. “I’m obviously very pleased that we won and obviously felt ours was the best.”

The meeting Wednesday night is part of the process required by the city for any rezoning request.

An application filed with Louisville Metro Planning & Design asks that the city rezone to property from high-density residential to neighborhood zoning to allow for 22 “21st century” shotgun-style houses. The plans include the 22 houses, each with a two-car garage, and open space with a pedestrian court.

Brown told Insider that the company plans to build one or two speculative houses, then build more as buyers come along. Buyers will be able to purchase the model version of the shotgun or customize it.

How quickly the housing development is complete “depends on how good the market is,” Brown said.

Of the 22 houses, three model-versions of the shotgun design will be sold at a price affordable to a family earning 130 percent of the average median income; the median income in Jefferson County for a family is $71,500, according to the U.S. Department of Housing and Urban Development. The exact prices of the houses are not set yet, Brown said.

The city still owns the Vine Street property, but The Marian Group has an agreement to buy it for $1. The company has a 20-year lease on the remaining 10 acres of the Urban Government Center; the lease rate is $1 a year.

Leasing that land “gives the city more control,” Brown said. “It was something that we both agreed on.”

The development agreement also provides an option for The Marian Group to buy portions or all of the land in the future. According to the agreement, if The Marian Group buys any of that 10 acres from the city and then resells it within 10 years for more than a 9 percent return on its equity investment, the company must share the excess profits with Louisville Metro.

“The city is very rightfully concerned about their ability to maintain control of the project for obvious reasons. … If for some reason we don’t do what we’re supposed to be doing, the city can walk in. We obviously don’t plan for that to happen,” Brown said, adding the end goal is to purchase the property from Louisville Metro.

That clause in the agreement is notable because city leaders faced backlash for selling property to developers for cheap after development company Hollenbach-Oakley made a $525,000 profit off selling land it bought from the city and promised to develop but never did.

Brown said The Marian Group is still doing its due diligence, which will take a while given the breadth of the Urban Government Center. The company also is working on formal financing agreements. Its proposal mentioned traditional bank financing, low-income housing tax credits, New Market Tax Credits, private equity, grants, city incentives and other funding options.

The Marian Group is seeking possible partners as well, he said.

“We have several groups that we are talking to about various aspects of the project. Those talks are continuing,” Brown said, adding that they won’t likely be ready to announce anything until next year. “Just because you have a partner — you have to get financing, there are a lot of steps on something this big.”

The Marian Group already has one named partner for the project: Family Scholar House. The nonprofit plans to operate a 36-unit apartment complex, which will house low-income single parents who are enrolled in college or vocational school; the idea is to provide the parents with services such as low-cost housing and mentoring programs, so they can pull themselves out of poverty.

The Marian Group is working with Family Scholar House on a similar 64-unit housing development near Riverport. | Renderings by Studio A Architecture

The inclusion of Family Scholar House in The Marian Group’s proposal is one of the reasons some residents said they were against the development.

Brown said he could not provide a tentative date for when work on the Family Scholar House could start, but he hopes to have a better timeline for the project in the first quarter of 2019.

One goal of the project is to improve walkability on and around the site and connectivity to developer Steve Smith’s more than $30 million plan down the street, Brown said.

The point of having the large yellow path cutting through the property was to provide interconnectivity with other Paristown Pointe development, he said, noting that he isn’t sure if it will end up looking exactly like the renderings.

Plans for the site could still be altered.

“It will not look exactly like that design concept, but the idea is that it will look reasonably close,” Brown said, adding that market conditions are always subject to change. “Our job, in a nutshell, is to take the wants of the community, micro and macro, there’s what the city says they’re looking for, and then there’s the 800-pound gorilla, and that’s what the market dictates that it will bear.”

Reposted from https://insiderlouisville.com/economy/real-estate/the-marian-group-not-top-choice-for-residents-on-urban-government-center-evaluation-committee/

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