HomeMy WebLinkAboutII. C. PEMBROKE SQUARE REDEVELOPMENT 6.18.24Pembroke Square Redevelopment
Kathy Warren, Director, Planning and Community Development
City Council Briefing, June 18, 2024
•Developer: Pembroke Square Associates, LLC
•Shenandale Associates, LLC, Vincent R. Olivieri, Manager
•Marc Associates, LLC, John E. Olivieri, Manager or Michael V. Olivieri, Manager
•Emilio Olivieri Family Company No. 1, LLC, John E. Olivieri, Manager
•Blue Ridge Associates of Virginia, LLC, Vincent A. Napolitano, Operating Manager
•Vincent A. Napolitano, Frederick J. Napolitano II and John C. Napolitano
•Builder: Thomas Builders, SB Ballard
•A&E: Cox Kliewer, ODA Architecture, Kahler Slater
•Legal: Freiden, Seery, Nuchols and Hahn
•Financing: Towne Bank
DISCLOSURES
PEMBROKE SQUARE REDEVELOPMENT | 2
•History of Pembroke Mall
•Timeline for Pembroke Square Redevelopment
•Proposed Redevelopment Plan
•2022/2024 Project Cost Comparison
•Fiscal Impact Analysis
•Next Steps
PEMBROKE SQUARE REDEVELOPMENT | 3
Presentation Overview
•In March 1965, construction began on Pembroke Mall.
•In 1966, 21 of the mall’s first stores opened.
• In 1981, Pembroke Mall underwent its first expansion.
•By the mid-1990s, Pembroke Mall started to lose tenants, primarily to newer,
larger, and better malls in the area such as Lynnhaven Mall and MacArthur
Center.
•In 2003, the mall’s management began strategizing for a redevelopment plan.
Pembroke Mall History
PEMBROKE SQUARE REDEVELOPMENT | 4
•In 2015, Sears Holdings spun off 235 of its properties, including the Sears at
Pembroke Mall, into Seritage Growth Properties.
•In 2018, it was announced that Sears would be closing.
•In 2020, Stein Mart closed.
•In December 2021, the mall announced that the 48 remaining tenants must
vacate by the end of January 2022, as part of a $200 million redevelopment plan.
•In July 2022, Pembroke Mall was rebranded to Pembroke Square – Mixed -Use
Project to include residential, retail, restaurants and hotel.
Pembroke Mall History Continued
PEMBROKE SQUARE REDEVELOPMENT | 5
•February 2022 – Developer requested cost-participation for public parking as part of the Pembroke Mall Redevelopment Plan
•April 2022 – City Council approved Resolution to approve Term Sheet for the Redevelopment of Pembroke Mall
•December 2022 – Aviva senior housing breaks ground
•April 2022 - December 2023 – Developer revised development plan
•Fall 2023 – Demolition of central area of mall (former Stein Mart) and outparcel (former Suntrust building)
•March 2024 – City Council Closed Session briefing on revised Term Sheet
•June/July 2024 – Public Briefing and City Council to consider Cost-Participation for not to exceed $22.35 M for public parking
PEMBROKE SQUARE REDEVELOPMENT | 6
Pembroke Square Redevelopment
Transition from Mall to Mixed-Use Community
7
•Phase I – Senior Living
•Phase II – Multi-Family Development with Parking
Deck
•Phase III – Hotel Development with Parking Deck
Anticipated Future Phases
•Two Office Towers estimated at $240M Total
Development Cost
Three Phases of Development
PEMBROKE SQUARE REDEVELOPMENT | 8
Phase I – Senior Living
(Aviva)
153 units
$64.3M
Start Dec 2022
(Under Construction)
Complete Oct 2024
PEMBROKE SQUARE REDEVELOPMENT | 9
Phase I
Aviva Senior Living
Phase II – Multifamily
272 Units
611-Space Parking Garage
$69M
Start 4th Qtr. 2025
Complete 4th Qtr. 2027
PEMBROKE SQUARE REDEVELOPMENT | 11
Phase II
Phase III - Hotel
156 Rooms
134-Space Parking Garage
$30M
Start 1st Qtr. 2025
Complete 4th Qtr. 2026
PEMBROKE SQUARE REDEVELOPMENT | 12
Phase III
Phase Original Proposal
Feb. 2022
Cost New Proposal
March 2024
Cost
Phase I – Senior
Development
158 Units $50M 153 units $64.3M
Phase II – Multifamily
Development
329 Units $66.6M 272 Units $69M
Phase III – Hotel 209 Rooms $45.8M 156 Rooms $30M
Total Development Cost $162.4M $163.3M
City Cost-Participation
for Parking
Total City Cost Participation
Phase II 582 Spaces
Phase III 209 Spaces
Total Spaces 791
$17.5M
$6.3M
$23.8M
Phase II 611 Spaces
Phase III 134 Spaces
Total Spaces 745
$18.3M
$4.02M
$22.35M
Proposal Comparison
PEMBROKE SQUARE REDEVELOPMENT | 13
Parking Garages:
•Two parking garages - total 745 parking spaces
•Cost per parking space - $30,000/space + $2,750/space carrying costs
•General Fund pays debt service associated with total issuance of $24.4M Bonds ($22.35 M Not to Exceed cost-participation for garage construction)
Revenue from the project anticipated to begin in FY 2026
•Fiscal Impact includes all projected Real Estate General Fund Revenue to occur from development
•To ensure revenues remain within the General Fund, dedication of the Real Estate revenue equivalent to the revenue generated would need to occur within the General Fund
Establishment of a Special Service District (SSD)
•$0.45 to support Debt Service for design and developer construction gap at $5,000 per space ($5.5M)
•Garage maintenance would be $275 per space
PEMBROKE SQUARE REDEVELOPMENT | 14
Estimated Fiscal Impact – Assumptions
(Dedicating Real Estate Tax Equivalent)
•20-year cumulative revenue $48,476,540
•20-Year cumulative expenses $33,182,300
•Estimated Net Revenue $15,294,240
•Net Present Value of Revenue $7,513,822
PEMBROKE SQUARE REDEVELOPMENT | 15
Estimated Fiscal Impact – General Fund
•Cost -Participate for $30,000/space for a not to exceed amount of
$22.35M for the construction and an additional $2,750/space carrying
cost: 745 spaces @ $32,750/space = $24.4M
•Developer shortfall of $4M in construction costs and $1.5M design cost to
be paid for from newly established SSD @ $.45
PEMBROKE SQUARE REDEVELOPMENT | 16
For Consideration
•City Council may consider cost-participating in the Pembroke Square redevelopment project by paying a not to exceed amount of $22.35M for two public parking garages with a total of 745 spaces.
•If City Council is amenable, an ordinance could be added to the July 2, 2024, City Council agenda for consideration.
PEMBROKE SQUARE REDEVELOPMENT | 17
Next Steps
QUESTIONS?
PEMBROKE SQUARE REDEVELOPMENT | 18