COMMUNICATION URBAN DESIGN REVIEW BOARD CITY OF DES MOINES, IOWA OCTOBER 21, 2014 MEETING

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1 COMMUNICATION URBAN DESIGN REVIEW BOARD CITY OF DES MOINES, IOWA OCTOBER 21, 2014 MEETING Subject: Recommendation Prepared by: PRELIMINARY DESIGN AND FINANCIAL ASSISTANCE PROPOSAL FOR AC HOTEL (401 EAST GRAND AVENUE) X APPROVE DISAPPROVE ACTION OTHER ERIN OLSON-DOUGLAS EOD@DMGOV.ORG Attachment Listing: Summary: Heart of America Hotel Group (HOA, Mike Whalen, President, 1501 River Drive, Moline, IL 61265) is proposing a 6-story, 108-room AC Hotel for the city-owned parking lot at the southeast corner of E. Grand Avenue and E. 4th Street in the East Village. AC Hotel is a Marriott flag that is new to the North American market and will bring a boutique hotel to downtown Des Moines. AC Hotels seek urban locations and, thus, bring a mix of hotel features well-suited to this site including underground parking, an indoor-outdoor rooftop lounge, a small fitness facility, and a limited food services that encourage guests to walk to the areas restaurants and other amenities. The mass of the building fronts on E. Grand with the southern portion of the site that abuts the alley and SoHo lofts providing a small surface parking lot over the underground parking. The ground floor of the project is occupied with the hotel s public uses, including the main entry, lobby, breakfast area, and meeting rooms along East Grand Avenue and a secondary walk-up entry along E. 4 th Street. The entry and egress to the below grade parking is on East 4 th Street. The project utilizes a mix of light-colored gray/buff brick, grey limestone, metal panels, large expanses of glass curtain wall and fiber cement panels to relate to the context of the East Village, while also bringing contemporary architecture to this area of downtown. HOA s staff architects are providing architectural design services with Confluence and Raker Rhodes assisting with landscape and civil design services. The project cost is estimated at approximately $18.5M. On May 5, 2014 by Roll Call # , City Council approved preliminary terms of agreement with HOA for an economic development grant that provides 80% of the project-generated TIF over 20 years (net present value estimated at $3.8M total over 20 years) and grants back the land sale proceeds to the developer, valued at $550,000. Additional information on the project and proposed assistance is provided below. Scope of Review Board to make recommendation to City Council on: Design review of renovation /remodeling/new construction for City-owned or leased project Design review for urban renewal project with specific development requirements Whether a proposed urban renewal project qualifies for funding from tax increment. Whether the level of financial assistance funded from tax increment revenues proposed for a specific individual project are reasonable and appropriate. The selection of urban renewal sites for clearance or rehabilitation and problems relating to acquisition, clearance or rehabilitation of property, relocation of displaced persons and disposition of acquired property. Skywalk System Other

2 PAGE 2 Urban Design Review Board Action: The Board is asked to provide the project team with recommendations for their consideration as the design is developed, The Board is also asked to make its recommendation on the proposed level of tax increment financing assistance. Staff Recommendation: Approval of the preliminary design concept and financial assistance request. Background: HOA has acquired the Des Moines franchise rights for a new Marriott hotel concept named AC Hotels. Founded in 1998, AC Hotels has nearly 80 properties located in Spain, Italy, France, and Portugal. AC Hotels and Marriott formed a joint venture in 2011, leveraging the unique style and design of these upscale urban-inspired hotels with the portfolio power and distribution of Marriott International. AC Hotels by Marriott targets travelers searching for a design-led hotel in a great location. Once stabilized, the average daily rate is projected at $130. The project fills a key block connecting the East Village to the Riverwalk and will contribute to the East Village s expansion northward to E. Grand Avenue. The proposed density, massing and uses support the desired development pattern in this section of downtown and will bring increased visitor activity to existing East Village businesses. Its ground floor includes the hotel lobby and other semi-public uses, providing the desired street level activity. The site provides for its own parking needs and buries this parking at the interior of the block and below grade. A boiler mechanical system is proposed. Rooftop equipment will be screened by extending façade material to provide a mechanical enclosure. The hotel use is considered commercial and, thus, the proposed 75 height will require an exception to the 55 limit on non-residential uses in the Capitol Dominance Overlay District. The project team intends to present this request to the Zoning Board of Adjustment in November. The site is one of several anticipated redevelopment projects on the south side of E. Grand Avenue. The site plan for the AC Hotel reflects a larger plan for enhancing pedestrian activity and safety in the area by reducing the north-south crossing width of E. Grand Avenue with the addition of permanent on-street parking and corner bump-outs on the south side of the street. The project team is working with the owners of Norden Hall to the east to combine their site accesses on E. Grand Ave. Staff has challenged the project team to explore an alternate configuration of the below grade parking entry/egress to colocate with the alley curb cut. The project intends to meet or exceed the landscape standards for this area and the project team will be prepared to discuss the landscape and site furnishings concepts at the Board meeting. The project is in the area covered by the Eastern Gateway District Design Guidelines. The project interprets these guidelines in a contemporary architectural proposal while respecting their intent. excerpt from Eastern Gateway District Design Guidelines New Construction The intent of this section is to establish objectives and minimum standards to guide new construction project design. 1. Reinforce the unique existing character of the Civic Center Historic District. New construction should build upon the commercial style brick character of the Eastern Gateway

3 PAGE 3 district and set off the Beaux Arts style of the Civic Center Historic District. The east side of the Civic Center Historic District includes the Des Moines Municipal Building (City Hall), Federal Courthouse, Police Station, and the Armory Building. New construction projects should not imitate the classically inspired architecture in the Civic Center Historic District but compliment the commercial quality of buildings in the larger surrounding district. 2. Reinforce the early 1900 s context and pedestrian-scale in the District through the choice and use of exterior building materials to further the image of the Eastern Gateway district as predominantly an area of masonry construction with red, rust, and buff tones brick for commercial buildings. Use of building materials should allow for the introduction of contemporary building materials; these contemporary materials are to be used in a manner to strengthen the context of the area and compliment brick as a predominant feature material on the primary building façade. A traditional brick size is encouraged. Brick color is preferred in the range of the red, rust and buff family of colors to complement the existing palette of brick and reinforce to the District s existing context and image. Other materials, such as stone, glass, metals, etc., may also be used if used in a manner which are compatible with the use of brick and enhance the historic precedence for brick as an exterior building material in the area. Secondary walls are encouraged to use brick and/or highlight brick material to offer ongoing district continuity and context. 3. Promote a compatible building height and density to encourage an appropriate level of development intensity and achieve consistency with existing structures. Therefore, new buildings are encouraged to be a minimum of 24 feet, or two stories, in height. One-story buildings are discouraged. However, a greater building density of 3-5 stories is strongly encouraged. Building heights shall be consistent with Capitol View Protection standards. This measure is intended to ensure that new construction does not overwhelm adjacent historic buildings as well as maintain significant views of the State Capitol Building. To meet this guideline, new buildings cannot exceed 75 in height in Capitol Dominance Overlay District A. Any structure in Capitol Dominance Overlay District B shall have a maximum building height of 55 feet. However, if the portion of the structure over 55-ft. height is devoted entirely to a residential use, the maximum building height shall be 75 feet. Chimneys, cooling towers, elevator bulkheads, antennae, and necessary mechanical appurtenances extending above the roof of a building may exceed the maximum elevation established for such district by not more than fifteen feet provided they are set back at least fifteen feet from all faces of the building adjacent to a street. 4. Maintain the concept of a street wall and provide a dynamic, pedestrian-friendly public realm. New construction should promote building up to the property line. The building is

4 PAGE 4 encouraged to be oriented and designed to provide a strong visible main entry from the primary street. The ground floor should also enhance pedestrian appeal with ground floor openness through the use of windows with clear glazing or very lightly tinted glazing. When possible, the design plan is encouraged to provide desirable streetscape amenities such as attractive awnings, signage, outdoor seating areas, etc. All designs should be developed with human scale in mind and create spaces which are comfortable for people to use. Typically, buildings close to or at the property line and which maintain a sidewalk width of feet offer a more desirable human scale and a compatible scale with the intended development and uses targeted for the neighborhood. It is recommended that 50% of the building s façade be set at the property line and 60% of the remaining building frontage be set no more than 8 feet back from the property line. 5. Promote ceiling heights that enhance architectural emphasis on the street level. New construction is encouraged to have a street level ceiling height no less than 11 feet above the finished floor. A ceiling height of 16 ft. 18 ft. is encouraged to support ground level retail development. 6. Incorporate street level uses that build upon the pedestrian character of the Eastern Gateway district. Projects along E. Locust St. should have a predominantly retail/commercial, civic/cultural uses or entertainment uses at the street level. 7. Reinforce a pedestrian-friendly scale and rhythm to the street façade and achieve a scale of new construction which is similar to the scale of the existing historic building pattern in this area. To achieve this result, various design measures are encouraged to subdivide the façade and add visual richness to the area. For instance, belt courses and vertical subdivisions may be used to emphasize bays. Other strategies include the using cornices, changes in patterns of masonry openings, material selection, height and other details are encouraged to provide an interesting and appealing pedestrian experience and to avoid long, monotonous facades which typically detract from a positive street level experience. 8. Door and window style, design, placement and proportion are encouraged to complement the historic character of the area, context and building scale. Projects are strongly encouraged to address doors and windows in a manner which offers continuity and compatibility to a district which historically offered significant amount of street level retail, window displays and views in to and out of buildings for an increased sense of activity.

5 PAGE 5 Proposed Financial Assistance Financial assistance recommended for the project utilizes land sales proceeds ($550,000) and 80% of the new project-generated tax increment for 20 years (estimated to have a net present value of $3.8M). The exact amounts of the annual installment will fluctuate with the property s actual property tax assessment. In addition to the hotel s property tax generation, it is estimated that the City will collect approximately $5.7 million in hotel/motel tax over 20 years. The level of the assistance request is comparable to previously reviewed TIF requests for downtown projects. Staff offers the following information on projects that may be considered comparable. 201 E. Locust Street (2014) Financial assistance recommended for the $49 million project (124 market rate apartments, a 137-room extended stay hotel, a 317-space parking structure) will be paid out over 15 years in the total amount of $5,000,000 5% $3,546,845). The breakdown of payments will be $400,000 annually for the first five years and $300,000 annually for the last ten years. The assistance will come from tax increment generated mainly by the project, with a portion of the assistance being funded from the general Metro Center Urban Renewal Area. The project will generate 76% of its own assistance over the first five years and be self supporting beginning in year 6. Waterfront Lodging (2012) $32.4 million project constructing 2 hotels totaling 250 rooms and a 238 space parking structure at 2nd and Water Street. Financial assistance included $1.1 million up front grant for construction of the parking garage, with 75% of the tax increment generated by each hotel to be paid out in an economic development grant over 15 years.

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