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Tuesday, May 26, 2015

Why Fort Thomas Picked Bloomfield/Schon Over Other Potential VA Homes Developers

VA Homes. FTM file. 
After years of of trying to attract a developer for the 10 historic VA homes in Fort Thomas, the city changed its approach from a "Request for Proposal" process to a "Request for Qualifications process. The main difference being that a minimum bid was set by the city in the "RFP" versus simply asking for qualifications of a developer this time around.

Bloomfield/Schon (Cincinnati) was selected over Neace Ventures (New Albany, Indiana).

In 2011, when the homes were appraised at $2.4 million, the city struck out when asking companies to submit bids to renovate the officer homes. Then just last year, the appraised value had since been lowered to $510,000. The city asking price for a minimum bid was lowered to $900,000.

"One of the main obstacles we were facing was that million dollar marker," said City Administrator, Don Martin in a previous FTM article. "We believed by having this minimum bid reduced to under that mark we would really generate some interest."

While money was the main obstacle for obtaining a developer the last two rounds of bidding, the RFQ process has pushed that part back for later in the process. According to the memo completed by CT Consultants, who have assisted the city in the interviews regarding the sale and abatement of the VA homes, now the biggest obstacle will be completing that abatements without obtaining the deeds to the property.

This is part of the deal that the VA does not want to budge on.

"Regardless of which developer is ultimately chosen, they both expressed concerns about completing the abatement of the property without first obtaining the deed to the property," said former city engineer and current CT Consultant, Frank Twehues, in a memo to the city. "There are options for funding as discussed, such as city financing and/or grants - although (they are) slim due to current limitations that the federal government will not provide abatement or brownfield grants to property that is owned by themselves."

According to Twehues, Bloomfield/Schon and Neace Ventures approached the RFQ process in very difference manners. Neace intended to sell the unrestored homes to interested parties (home owners, non-profits and/or developers) for further redevelopment. They had no plans to restore the homes, save one to two of the current VA homes.

Neace had not currently participated in Environmental Remediation, Tax Increment Financing or Historic Tax Credits.

In contrast, Bloomfield/Schon indicated they would be involved in the project from abatement to the sale of the last restored property to a buyer. In their RFQ, they also said they would be open to selling a property to a developer, after first restoring the facade of the home. "They are open to selling a shell of a building to the right buyer who would also appreciate the historical value and complete a restoration in a timely manner," said Twehues in a memo.

So while both developers said they would include doing abatement and restoration on the "bones" of the buildings, only Bloomfield/Schon indicated they would also restore the outside of the building. They both may end up parceling up the 10 homes.

Mark Ramler, owner of Mansion Hill Properties, talked about why the process may have stalled the first few times it went out for bid. "It's a huge project, and an incredible amount of risk for any single developer to take on," he said. "Unless the city is willing to structure the deal differently, and work with multiple developers, then I fear they’ll never find anyone to touch those houses."

The risk component will ultimately be decided after Bloomfield/Schon investigates TIF and Historic Tax Credits. They do have experience with it, but the VA will only deal with the city, which makes this deal hard to complete if the city is unwilling to take on some of the risk themselves.

"If the city wants to see these homes saved, then they need to assume some more of the risk," said Ramler. 

"We were hoping that Bloomfield/Schon would submit qualifications," said Martin. "We feel this is our best opportunity to get this project completed. If they can't make this work, it's unlikely that anyone can."

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