The City Council’s Planning and Development Committee this evening voted unanimously to approve the Church Street Village townhome project for the former Hines lumberyard at 1613 Church St.
The proposal now goes to the April 11 meeting of the City Council for final review.
A neighbor, Brian Gratch of 1630 Ashland Ave., argued to the committee that the developer had wildly overstated costs and would be making a profit of over 30 percent on the $16 million project, rather than the 10 percent he’d claimed in presentations to the city.
Mr. Gratch said that would justify reducing the number of units in the project to the 30 to 34 requested by neighbors rather than the 40 units in the latest proposal from the developer.
The developer, Walter Kihm of Cyrus Homes, said he’d made all his statements under oath, â€œand I take that very seriously. The statements are based on our best knowledge, not something pulled out of the air.â€
He said the neighbor’s analysis, â€œis the most sophomoric presentation I’ve ever seen.â€
The city’s real estate consultant, Martin Stern of U.S. Equities, said he’d reviewed the neighbor’s analysis and found it contained several errors.
He said the common rule of thumb for real estate development projects is that land costs, the hard costs of construction and the soft costs of marketing, sales and profit each account for about one-third of total project costs.
In this case. Mr. Stern said, the land cost is relatively low, at 11.3 percent, but hard construction costs, because of plans for brick exteriors and high-quality interior finish items are relatively high at 52.5 percent, but that still leaves the soft costs at about 36 percent â€“ or just slightly over the rule of thumb.
Mr. Stern said he concluded â€œthe developer’s presentation was very accurate and much closer to the truth than the other analysis,â€ although he said he had spotted one instance in which the developer appeared to have counted a $146,000 cost item twice, which he said he thought was â€œtotally inadvertent.â€
That prompted some aldermen to suggest capturing part of the discrepancy as an additional contribution to the city’s affordable housing fund.
The developer’s attorney, James Murray, said, â€œWe’re not aware that there is $146,000 floating around loose. We’d like time to review the figures to see if that suggestion is reality and then address it.â€
The revised project as approved by the committee would:
- Rezone the property to R4 rather than the R5 zoning the developer originally requested. That’s designed to reduce the density precedent the project would set for neighboring properties.
- Reduce the number of units in the project to 40. The original proposal called for 47 units and plans had previously been cut to 42 and then 41 units.
- Increase the setback of the units facing Church Street to 20 and 22 feet. That doubles the setback in the original proposal.
- Increase landscaping along the berm that marks the former route of the Mayfair branch railroad tracks and separates the site from the Onyx waste transfer station.
- Add a $50,000 contribution from the developers to the mayor’s affordable housing fund.