The Brookings City Council approved a development agreement with Linchpin Corporation for the redevelopment of the Old Armory in downtown Brookings and construction of a hotel and parking ramp, and approved contract change orders for the Bob Shelden baseball field renovation during Tuesday’s meeting.
Background on Old Armory
Mike Struck, director of Community Development, explained the Old Armory project has been in the works for about five years.
Linchpin Corporation was selected by the city council as the preferred team in November 2019 after completing the request for proposals, according to an attachment to the agenda, available on the city’s website.
Since then the city has been working on a developmental agreement, Struck said.
“Linchpin Corp. submitted a concept whereby the exterior Armory structure would be restored and the interior modifications would consist of office/commercial space, meeting space, and restaurant and lounge,” according to the attachment.
“The boutique hotel will consist of 60-70 rooms above a two-level parking garage with 90 parking stalls. The proposal is a two-phase construction project with the Armory renovations occurring in phase I carrying a renovation cost of $3.36 million. Phase II consists of the hotel and parking garage with an estimated cost of $12.3 million. The total cost of the project would be approximately $15.7 million,” according to the attachment.
“The development agreement looks at it as a three-phase project,” Struck said.
The first phase is due diligence where Linchpin will go through structural analysis, hazardous material remediation, proper permitting, Historic Preservation and city building regulations. Phase 2 is the redevelopment of the Old Armory building itself. Phase 3 is the addition of the hotel and parking garage, just west of the Old Armory.
Key components for the city from a liability standpoint is its agreement to invest in repairing the existing roof of the Old Armory, and those costs would be fronted by the city and would be eligible for Tax Increment Financing reimbursement, Struck said.
Developers will be seeking two TIF districts, one for each phase of the project: the Old Armory renovations and the hotel/parking lot renovations, he said.
The developers have asked the city to waive any landfill disposal costs associated with hazmat abatement, Struck said. They will seek alcohol licenses and the transfer of property would be at zero dollars, and they request access to public parking and the south side of Third Street to use for construction.
Councilor Nick Wendell asked about an estimated cost of disposal of hazardous materials.
“I just want to make sure we’re not underestimating costs of materials … that we know are in the building,” Wendell said.
Wendell said he was looking for reassurance it would be a typical cost, “not one that could escalate, given that we know there is some hazardous material in that facility.”
Struck said there is asbestos and lead because it was an old shooting range – “those would be the two primary costs,” he said.
City Manager Paul Briseno said the city was anticipating around $25,000 in costs. The city disposes of similar materials for other companies, too.
Wendell asked what the time frame would be for the public parking being used for construction and if there was an alternate parking plan for the downtown area.
Struck said the development agreement had a timeline; they were anticipating a 12-month build for the hotel.
“For the loss of those parking spaces, there isn’t a plan at this particular time to replace them elsewhere,” Struck said.
He pointed out the 72-hour lot was just blocks up Third Avenue and other public parking lots are available by the NAPA building, the Brookings Activity Center, and along Front Street in front of the Capitaline building by the railroad tracks.
“The other thing I would like to remind the public is the parking lot out in front of the city/county government center is a public parking lot and is available to park in. After 5 o’clock, there’s very few that ever utilize this parking lot,” Struck said.
“Upon completion, the parking ramp garage would be available to the public,” Struck said, for a fee.
Angela Boersma, president and CEO of Linchpin Corporation, said street closures would be posted for the public.
As part of Linchpin’s quarterly updates, they would present the phasing plan to the council, and the information could be posted on the city’s website and other social media, she said.
Councilor Leah Brink asked for a timeline on the project with dates, and when will the deed transfer.
Struck expected to execute the development agreement in three weeks, sometime after the referendum period. The due diligence process will take about eight months; that will include analysis of existing structure, Historic Preservation review process, and dealing with utility issues/relocations and building permits.
“Upon completion, we’d be looking at transferring the Armory portion of the property to them within about 30 days,” Struck said.
Upon transfer of the property, they’d have 30 days to start construction, he added. They were estimating 12 months for the construction of the Armory portion. Hotel due diligence will be occurring, too, and it will be about 18 months for the hotel and parking ramp build-out.
“All said, you’re probably looking at somewhere in the ballpark of about 2 1/2 to 4 years from start to finish, to complete everything,” Struck said.
Brink asked for an explanation of how the BID district works.
“A Business Improvement District … currently we have one in the city of Brookings,” Struck said.
It applies to all hotels with more than 25 hotel rooms. As a hotel opens, they are automatically added to the BID. The funds are utilized primarily for the Convention and Visitors Bureau to recruit, retain and attract new business to Brookings that benefits the local hotel industry, he said.
“The creation of a second Business Improvement District would be placed on this particular hotel, so they would actually have two Business Improvement Districts,” Struck said.
The way the BID works is a charge of $2 per night per occupied room.
“So in this particular hotel, customers would pay $4 a night; $2 would go to Business Improvement District No. 1, and then the second $2 would go to the Business Improvement District No. 2,” Struck said.
The funds would go to the parking ramp’s maintenance and upkeep. The ramp could hold as many as 90 vehicles, he said.
“This has been a long time coming,” Mayor Keith Corbett said. “Huge thank you to Linchpin Corporation; this is really exciting what it’s gonna do.”
By: Jodelle Greiner
COURTESY OF: The Brookings Register