It’s taken six years and on-and-off negotiations with developers, but the city is close to securing a deal that could see a seven-story apartment complex with more than 200 units on a 1.5-acre city-owned parcel on Oak Street in downtown Lakeland. The project plans also include 2,000 square feet of street-level retail and a six-story, 424-space parking garage.
The Lakeland Community Redevelopment Agency advisory board Thursday unanimously approved Tampa-based Onicx Group’s proposed 40-page “200 Oak Street” development plan for the city block-sized lot between North Kentucky and North Tennessee avenues.
The proposed agreement now goes before the city commission, perhaps as soon as April 18, Lakeland Community Redevelopment Agency Manager Alis Drumgo told the advisory board.
The proposed deal features significant revisions to the plan Onicx presented in October when commissioners agreed to negotiate with the company and set an April deadline to finalize details.
Drumgo said commissioners requested more density and Onicx delivered. Its original six-story, 153-unit apartment building has been expanded to seven stories and “200-plus” units.
In addition, Onicx’s six-story parking garage will contain 424 parking spaces with 134 inside and 16 surface spaces outside leasable to the city at $70 a month for 9-to-5 business and free public access parking at night and weekends.
Plus, Drumgo said, instead of purchasing the parcel, which is undeveloped but offers about 150 parking spaces, for $1.08 million as tentatively agreed in October, the property will be sold for $1.836 million — a $750,000 boost for the city.
Review the development agreement here or at the end of this article.
There are some concessions in the pact that commissioners must agree to. The original agreement called for 10% of the housing units to be set aside for households that earn 80% or less of Polk County’s $47,000 average median income (AMI).
At 153 apartments, that affordable housing “unit count” was 15. Under the proposed 200-unit agreement, the affordable housing unit count will remain 15.
“When we asked the developer to increase the density, we kept in mind what the developer planned to do originally,” Drumgo said. “So, we kept the number at the 15 unit count at 80 percent AMI.”
Instead of 3,000 square feet of street-level commercial space, there will only be 2,000-square-feet of space that can be used for a cafe but won’t be suitable size for a grocery store that downtown’s growing residential community says is needed.
The agreement asks the city to enter into a 25-year lease for 134 parking spaces in the parking garage at a rate of $70 per month, per space, with 5% escalation every five years with 16 street-level surface spaces made available for public parking.
The proposed deal includes 10 years of tax increment financing that abates 80 percent of property taxes over the first five years, 60 percent property tax abatement for years six through 10 and waives up to $736,000 in impact fee permit credits, which essentially makes up for the increase in the parcel’s purchase price.
Onicx originally proposed a 90 percent tax abatement for the first two years, 70 percent for the next five and 100 percent impact fee relief.
The city wanted 70 percent abatement for years one through five, 50 percent for years six through 10 and impact fee caps with incentives.
Ultimately, CRA negotiators and the company agreed to split the difference with the 80/60 property tax abatement scheme and the $736,000 cap on impact fee relief.
The city is “looking at a net zero thus far on the project” which Drumgo said is a good deal since the purpose of selling the lot is to “unlock development” downtown.
The pact includes “agreement relative to offsite improvements,” he said. “The developer needs assurance we will limit” costs for off-site improvements that could be necessary for the project but the CRA is “working with attorneys” and conducting “due diligence to understand the costs” and “ensure the CRA and city are not left on the hook” for unexpected utility installation costs.
Drumgo said the CRA is willing to work with Onicx, especially after “the developer moved on the things that the city asked for” even with the project getting increasingly expensive.
In October, Onicx estimated the project would cost it about $40 million. “Now, that’s about $53.6 million. It’s going to be an investment,” he said.
CRA Advisory Board Chair Brandon Eady said with several Oak Street lot proposals falling through across the years and Onicx already seeking a six-month delay to begin the two-year project, he wants the agreement to prohibit further extensions.
Drumgo said it was uncertain if such a provision would be feasible, although the agreement could include financial penalties for granting extensions.
Onicx Group Vice President Arjun Choudhary said his company needs time to secure the necessary financing, which it will do, noting “everything is getting more expensive everywhere. The longer we hold into this project, the harder it is to get financing. Our intent is to break ground as soon as possible.”
The CRA has pondered developing the Oak Street parcel since 2015. In 2018, a private developer expressed interest in developing the site as “dense urban multi-family residential project with potential of incorporating some mixed-use elements.”
The CRA began soliciting bids in March 2019 for the project. A selection committee chose Tampa-based Catalyst Asset Management Inc.’s plan over one presented 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 set aside 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 withdrew from the project in September 2020 citing COVID impacts and “investor trepidation.”
The CRA solicited a new round of bids in July 2021. The selection committee unanimously chose Onicx Group’s submitted plan, which at its Oct. 18 meeting, the Lakeland City Commission accepted and agreed to begin development agreement negotiations with a deadline to seal the deal within six months — no later than April.
An October development document submitted by Onicx listed prospective montyly rentals for market-rate apartments as $1,196 for a studio, $1,350 for a one-bedroom, $1,932 for a two-bedroom, and $2,100 for two-bedroom.
Comparing the rates to those at downtown competitors Mirrorton, NoBay and The Gardens, the document notes, “Given 200 Oak Street’s superior location and design type compared to the current market supply, we chose to set rents slightly above the competitive set.”
Onicx Group has completed more than $500 million in real estate projects over the last five years with more than 900 multifamily units in mixed-use projects currently under development. Among area projects is the Marriott Residence Inn Downtown Winter Haven.
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