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HomeMy WebLinkAbout04-01-24 Public Comment - L. Jay - Re_ The Guthrie Application #23354From:Lorre Jay To:Bozeman Public Comment; Agenda Subject:[EXTERNAL]Re: The Guthrie Application #23354 Date:Monday, April 1, 2024 11:41:15 AM Attachments:Realtor.com 4_1_24 Apartments for Rent in Bozeman, between $1650 and $2000 per month.pdf CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Attachment. Lorre Jay | President | Portfolio Valuation Advisors, LLC C: (203) 561-7983 lorrejay@gmail.com On Apr 1, 2024, at 11:38 AM, Lorre Jay <lorrejay@gmail.com> wrote: Dear City Commissioners, I have been made aware of the Guthrie Application #23354 and deep incentives requested by the developer. I have reviewed Home Base Partners’ (“HBP”) Guthrie Renovation vs. New Build Comparison dated 1/26/2024 (item 33) (“Comparison”) andhave the following concerns with this project and proposed deep incentives being requested from the City. Parking The HBP will not need to provide parking for all the residents. With 111 proposed units and only 24-28 parking spaces provided, depending on the season, HBP is requesting 87 avoided parking spaces. Parking spacesare valued at $55k/space according to a previous member of the City Commission who is a developer. If approved, the City would be granting 87 x $55k = $4.785 million in avoided cost and value to Home Base Partners. This means the developer will gain that in profit while renters,the neighborhood and City residents will all lose that economic benefit. The rule-of-thumb on traffic is 10 trips per household per day, so you can imagine the additional traffic and wasted time for residents to find adequate parking. Affordable Housing for Whom? The project proposes affordable housing in the form of rents at $1650 andup. According to the Bozeman 2023 Economic Market Update, the average wage in Bozeman is $58,645 (p.10) and the Median Household Income for renters is $49,543 (p. 6). Based on the City’s housing threshold of 30% of household income, that puts an affordable rent at below the threshold of $1,239 - $1,466/month including utilities. [1] This project proposes 111 units at $1650 and up in rent. They have proposed with the New Build, 22 units @ $1650/month (studio), 35 units at $1684/month (1 bedroom), then the remaining 56 units at $1800 - $2000/month (1 bedroom). The “affordable” 56 units, will remain affordable for only 30 years. The average unit size is 590 square feet.Based on the City’s own estimates of affordability, this is not affordable housing therefore this project should not get the deep incentives of such. Deep Incentives Should Not Be Granted for a Project that isEffectively Building Market-Based Housing Labelled as “Affordable” I pulled up rentals in Realtor.com for available housing in Bozeman, MT on April 1, 2024. It has at least 52 rentals in the $1650 - $2000 range onthe market today. All appear to be greater than 590 square feet. Of those, 11 are 1 bedroom, 36 are 2 bedroom, 3 are 3-bedroom and 2 are studios. This market research indicates there are plenty of options (and more coming online daily) in the price range that HBP proposes with morespace. So, supply is not an issue. It also indicates that claiming to provide “Affordable Housing” at a $1650 price point for a small 1-bedroom is just frankly not true (See attached). The available rentals on Realtor.com for apartments below $1650 are slim. As of 4/1/24, apartments for rent below $1650 in Realtor.com are only 13, with 12 @1 bedrooms and 1 larger. Most are between 400 – 700 square feet. It seems unnecessary to provide such juicy incentives to add to the bottom line of a developer for basically building market-based housing. Developer’s Financial Comparison Misrepresents Renovate v. NewBuild HBP has submitted a renovate vs. new build comparison. HBP has aconflict of interest in performing this biased comparison and has tilted the results to lead to a faulty conclusion. HBP is using an estimate of $700 per square foot to renovate 42 units versus $425 per square foot to build 111 new units. Despite that cost differential, the 42 units after renovation will have double the electricity/gas for 40% of the units. That means that utility costs will soar to $1570/unit/year (Renovate) versus $324/unit/year (New Build). If $700 psf is being spent to renovate, one would think that a creative solution would be to add insulation and/or improve the design to avoid that excessive heat loss and utility cost. In addition, the GC Costs (Arco Murray), the largest cost in HBP’s budget, is $8.785 mln (Renovate) and $17.520 mln (New Build). However, the supporting documentation indicates that New Build costs is $19.6 mlnnegatively affecting HBP’s conclusion. Furthermore, “Contingencies” occur several times in the Renovate Case: both in HBP’s budget and in the GC’s budget for a total of $2.3 mln(Renovate). However, the New Build only has $1 mln in contingencies for building 250% more units. If you take out the contingencies from both Renovate and New Build costsand correct for the underestimated Arco Murray estimate, the Renovate cost drops to $584 psf and the New Build increases to $440 psf. This brings the HBP Comparison conclusion into question and questions the reliability of other HPB estimates. In addition, the conclusion that the Renovate case, despite having a much higher price tag per unit, would not provide any additional square footage or units appears flawed and biased and designed to justify the developerspreferred position. The Guthrie project needs further analysis to understand more completely the negative effects and transfer of economic benefits and assets from theCity to a private developer. The Guthrie project and proposed tax incentives do not appear to be fair from a financial point of view to the City of Bozeman. The City Commission should take back the review authority and not transfer assets and benefits from the City to HBP. Sincerely, Lorre F. Jay2964 Meah Lane Bozeman, MT 59718 [1] Calculations: $49,543 x 30% / 12 = $1239 and $58,645 x 30% / 12 = $1,466. 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Single family homes Bozeman Condos Bozeman Townhomes Bozeman Apartments Bozeman Rentals for neighborhoods near Bozeman, MT West Shiloh Rentals Fairway Estates Rentals South Side Rentals See more Bedrooms near Bozeman, MT Bozeman, MT Studio Apartments for Rent Bozeman, MT 1 Bedroom Rentals Bozeman, MT 2 Bedroom Rentals See more Rentals for cities near Bozeman, MT Belgrade Rentals Big Sky Rentals Livingston Rentals See more Rentals for zips near Bozeman, MT 59718 Rentals 59715 Rentals 59714 Rentals See more The Best Time of Year To Rent in Houston, TX: When Renters Can Find Deals Learn about the best time of year to rent in Houston, TX, and discover strategies for timing your move to find the best deals and… affordable rent with Realtor.com.Read article Renting an Apartment for the First Time: A Guide for New Renters Discover everything you should know if it’s your first time renting an apartment. Use Realtor.com to find an apartment that suits… your budget and needs.Read article Moving cost calculator Get estimates Move from ZIP code Move to ZIP code Size of move 2-3 beds Packing None What is the median rent for Bozeman, MT? Median rent for Bozeman, MT is $886,000. How many active rental listings are in Bozeman, MT? In Bozeman, MT there are currently 52 active rental listings. What are some of the most popular neighborhoods near Bozeman, MT for renters? Some of the most popular neighborhoods for renters near Bozeman, MT are West Shiloh, Fairway Estates, South Side, Mountain View Meadows, Downtown Helena. What are some popular zip codes and neighborhoods around Bozeman, MT for renters? You may also be interested in apartments that are for rent in the nearby ZIP codes of 59718, 59715, or in neighboring cities, such as Belgrade, Big Sky, Livingston, Three Forks, Manhattan. 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