City OKs purchase of parcels to build downtown workforce housing

Although many questions remain, the Sarasota City Commission on Monday unanimously approved City Manager Marlon Brown’s proposal to acquire two parcels one block north of Main Street and pursue plans for a workforce housing apartment development in the heart of downtown.

Introduced as a concept last week, Brown faced commissioners from the other side of the dais as a presenter during the April 15 meeting, seeking approval of 10 directives, including $7.4 million, including closing and other costs, to acquire two properties across First Street from City Hall. There, he proposes to build two 10-story buildings totaling 192 affordable and workforce-priced apartments. 

The Barancik Foundation has committed $1.5 million toward acquiring the parcels, with expected additional support from the Community Foundation of Sarasota County and the Gulf Coast Community Foundation. The City Commission authorized funding partnership agreements with the three foundations to be drafted, and Brown was authorized to contact other government agencies and non-profit organizations that may be interested in becoming a funding partner with the attainable workforce housing initiative.

Any funding gap in the cost to acquire the properties will be filled by the city’s Affordable Housing Trust Fund — which is currently at more than $4 million — and, if needed, the city’s general fund balance.

Due diligence for the purchase of the two parcels at 1544 and 1590 First Street will begin immediately with closing anticipated by the end of July. The city already owns a parking lot on the proposed development site at 1530 First Street.

As first reported by the Observer last week, construction cost is estimated at $70 million to $80 million, to be funded via revenue bond, with operations and debt service covered by rents. Those rents will mirror the city’s affordable housing incentives program, will be tiered at 80% or less, 100% or less and 120% or less area median income.

Brown’s plan includes selling street-level commercial space to recoup a portion of the city’s capital investment.

Brown told commissioners some state funding may be available for the land purchase.

“Representative (Fiona) McFarland was supposed to be here this morning. She had something that came up that she could not attend,” Brown said. "Representative McFarland put in a $2 million requests to the state of Florida for assistance for this program that has passed both the Senate and the House and is waiting Gov. DeSantis’ signature for the release of those dollars.”

Once built, the city would not manage the apartments. Brown told commissioners the plan includes contracting a management company or organization to tend to the day-to-day operations. The city would also contract an owner’s representative to oversee construction and other related development details.

“We're not in the business of managing an apartment complex, so that is why I'm asking the commission to engage a development and a project team and an owner's rep for everything that we are not capable of,” Brown said. “We are just providing that door to allow this to happen. We are providing that opportunity that, in perpetuity, this remains affordable and attainable.”

Photo by Andrew Warfield

In his motion to approve, Commissioner Erik Arroyo amended the request to include a pro forma to demonstrate that construction, operating and ongoing maintenance costs can be covered by the proposed affordable and workforce housing rents.

The project will achieve 192 units by taking advantage of the city’s own affordable housing density bonus incentives program in the downtown area combined with the state’s Live Local Act, which grants by right height equal to the tallest building within a one-mile radius, in this case 18 stories. Brown’s proposal is three stories of parking below seven stories of residences.

The city’s program requires 15% of the bonus density be priced in the affordable housing range, in this case rounded up to 22 units in addition to the 122 bonus units plus 48 base density units.

Brown’s time line for the project has construction beginning in 2025 and occupancy in 2027.

“I think it's a really good start,” said Vice Mayor Jen Ahearn-Koch. “I’m cautiously optimistic about this.”