Letter of Interest

Letter of Interest
To: John Hanifan, City Manager
From: Preservation Chelsea - Chelsea Connection Team
Date: February 16, 2010
Re: Former Longworth Plating Site – RFP DDA-001

The Preservation Chelsea - Chelsea Connection Team (PC-CCT) proposes to redevelop the three buildings that make up the Former Longworth Plating facility for the benefit of the City of Chelsea (its administrators and its taxpayers), the Chelsea Downtown Development Authority, and the residents of and visitors to the greater Chelsea Area.
PC-CCT shares the values and goals stated in the 1-5-2010 RFP, and have compiled a proposal that reflects these values. See Additional Information section.
Our Reality
To frame the context of this proposal, consider our existing environment:
The National and Local Economy
Our nation is in the midst of the worst recession in 80 years.
Michigan is at or near the top nationally in job loss, foreclosures and other economic indicators.
Financing, especially for speculative development, is scarce.
Commercial vacancies in the Ann Arbor area are at 10-year highs.
Nationally, there is increased interest and emphasis on sustainable development and living, including:
Increased emphasis on responsible use of local resources, including food and building materials.
Increased energy efficiency/ redus.
The City of Chelsea and Surrounding Areas
Throughout Chelsea, business is down, business vacancies are up.
Most downtown businesses are struggling for survival and need all the help they can get. Foot traffic in downtown has further diminished with the downsizing of Palmer Auto Service, relocation of the Post Office, and very recently, the closure of the Chelsea Gallery and Cranesbill Books.
Planned developments at the former UAW hall and former Federal Screw Works have been shelved or delayed, further reducing downtown traffic. Large portions of the McKinley owned Clocktower Complex remain vacant or undeveloped.
On the upside, Chelsea boasts:
A wealth of historic homes and businesses, including an attractive downtown and partially restored Clocktower complex.
McKune House was named “Best Small Library in America” in 2008.
The Purple Rose Theatre, Chelsea Center for the Arts, Sounds and Sights and other signs of a strong artistic and cultural presence.
Outstanding schools.
A safe, comfortable, small town community in which to raise a family.
Adequate parking in most areas of downtown.
Natural beauty in surrounding parks and recreation areas, which attract bikers, hikers, campers, hunters and boaters.
Despite development pressure, Chelsea remains a viable rural farming community that produces a wide variety of goods.
Downtown Chelsea is a nice place to visit for a show or an afternoon stroll, but is not generally considered a “destination city” on the weekends.
The Site
Approximately 18,000 square feet of vacant industrial space in three interconnected buildings.
Historic but somewhat disjointed appearance.
Mostly structurally sound, but in need of major and immediate weatherproofing, stabilization and repair to prevent significant, irreversible degradation.
Virtually no on-site parking, but with access to 17 parking sites immediately across Jackson Street, along the railroad.
The vacant site and the railroad tracks are viewed by visitors as a barrier that separates the downtown from the Clocktower development.
Our Vision
The PC-CCT proposal for the Redevelopment of the Chelsea Connection builds on our strengths as a community, but is founded in a realistic view of the environment in which we find ourselves.
Build on our Strengths:
Chelsea’s downtown remains viable.
Businesses established at the site should be structured to complement and strengthen existing businesses.
People love downtown Chelsea, but need a reason to come back more often, stay longer, and spend more.
Chelsea residents have demonstrated a strong local interest in and support of the arts.
Businesses at the site should include artists (visual or performance)/ craftsmen/ music, preferably locally produced.
Downtown Chelsea is already a historic downtown.
Historic tourism, said to be the fastest growing segment of tourism, does and will increasingly bolster Chelsea's economy.
Renovation and restoration should enhance the historic character of the site and downtown.
Chelsea is eligible for Listing on the National Register of Historic Places.
Chelsea includes several successful restaurants, but has room for additional niche markets not presently represented, possibly a microbrewery, a downtown breakfast diner, and/or health focused eateries. There is also a demand for more live performance and entertainment venues.
Downtown Chelsea is unique, classy, a little quirky, eclectic and fun.
Development should cherish and augment these traits.
Our Vision for the Site
The former Longworth site will become The Chelsea Connection, linking downtown visually to the Clocktower, drawing pedestrians to cross the existing divide.
The redevelopment of the site will be a model for adaptive reuse and sustainable design and construction. It will become an attraction not only for the businesses housed there, but also for its historic value and forward thinking redesign.
This example of forward thinking will be used in local, state, and national literature and create more positive press for Chelsea.
The redevelopment will maximize use of nearly all of the existing structures, while accommodating the many demands on the site, including parking and environmental hazard containment.
The vision shared here is the preliminary near-term plan (for full occupancy in 3-5 years). Some of the lower value uses could be redeveloped in the long term for higher value uses, when economic pressure warrants further redevelopment. The PC-CCT philosophy is that it is important to the City and downtown businesses to attract activity sooner rather than later, for the continued health of existing businesses. Proposed uses will be further refined with input from the community – as voiced by citizens and business owners in surveys and open planning sessions. These sessions will dovetail with fundraising campaigns, hopefully held on-site.

Proposed uses are further discussed in the Project Overview section. An overview follows:
Patrons will be visible through the restored Daniels Showroom, home to a restaurant, eye-catching retail display, Chelsea information kiosk (with maps, “walking tour” brochures, directories of businesses, events and activities), and/or historic Chelsea and automobile photos and displays. This fishbowl-like front face may house a portion of a business, but will also be the focal point for activity reflected throughout the complex. In the summer, patrons will enjoy dining on the new rooftop garden patio above the showroom.
Showroom activity will flow seamlessly into the Mack Building. Showroom and Mack buildings will be public space, with an open stair, elevator and public bathrooms.
Within the Mack Building, visitors will shop for locally grown produce, unique, locally crafted art, and furnishings. Other spaces might include a community kitchen, a bakery, health food store, and/or perhaps other retail shops (outfitter, music store and shoe store have also been suggested). Some of these activities will be housed in permanent shops, and some in flexible use space, especially on the first floor. The second floor of the Mack building will be an open-feel restaurant or microbrewery (with live entertainment) that makes adaptive use of the antique built-in cabinets in the second floor offices. Restaurant may also include secured displays of Chelsea history (furnished and maintained by Chelsea Area Historical Society). Restaurant(s) will cater to and be a meeting place for families and young adults, and emphasize healthy, flavorful choices, prepared with local and/or organic produce.
The second floor of the Livery Building will house approximately 8 urban-edged, loft-style apartments, with a central common area core (shared among residents) with laundry, gathering and lounge areas. A partial third floor addition will provide tenants with views of downtown and the Livery rooftop garden that surrounds this 500-1000 square foot living space – a place to fire up the barbeque, share conversation with friends or just relax. These units could be leased, or sold as separate condos.
The lower level of the Livery building will house indoor parking for second floor residents and workspace for the Chelsea Artisans Cooperative. Rear addition that presently houses plating tanks will be demolished, and replaced with impervious parking for Livery occupants and for adjacent First Congregational Church on Sunday mornings.

Preliminary redevelopment schedule and phasing is addressed in Additional Information. Efforts will focus on (in approximate chronological order):
Stabilization and weatherproofing structures
Remediation and encapsulation of environmental hazards
Developing high value/ high demand residential units
Drawing attention to front façade with showroom restoration (prepping for anticipated tenant)
Renovating and leasing existing spaces as quickly as possible with “appropriate value” users, allowing potential for additional value-added upgrades in the future.

The proposed redevelopment plan will draw folks (workers, new residents, artisans) downtown quickly, helping stabilize existing downtown businesses. It will also improve the financial position of the site as quickly as possible, giving additional leverage for financing the balance of the development.
Our Vision - The Partnership
Chelsea will continue to own the property while under redevelopment – for three to five years, while the property gains value and the real estate market recovers, maximizing financial benefit to the city. While some additional funding will be required by the City / DDA, the PC-CCT will work to minimize additional expenses and optimize return on investment for the city. See proposal for additional information.
PC-CCT will design and manage renovations, nurture business prospects, manage real estate leasing, and secure additional funding through aggressive grant writing, fundraising, and loans through financial institutions and/or private lenders. While most general planning and administrative work will be done by PC-CCT at no expense to the City, some members of the PC-CCT will be compensated for a portion of their work under a "reduced rate, deferred and at-risk" compensation agreement. See Project Overview - Financial Plan for additional discussion.
The Bottom Line
Conceptual construction estimates, financing and cashflow projections are discussed in Project Overview – Preliminary Financial Plan and other referenced sections. PC-CCT will work to make this project a financial success for the City of Chelsea.
Our Team
The Chelsea Connection Team is comprised of concerned citizens and experienced design, construction, and real estate professionals that have joined with the non-profit corporation Preservation Chelsea to redevelop the former Longworth site. Refer to Proposer Information and Additional Information for organizational chart and key team member profiles.
Our Commitment
Communication with City of Chelsea and DDA
Single point of contact with PC-CCT
Monthly written updates and active management of schedule and budget
Quarterly presentations/ Q&A with City and/or DDA.
Fiscal Responsibility and Accountability
Full disclosure, accountability and safeguards for all fiscal decisions.
In making decisions on the project, the goal for the PC-CCT will always be optimizing long-term value to the City of Chelsea and its residents, not personal gain.
We the leaders of the Preservation Chelsea - Chelsea Connection Team thank you for your consideration of the enclosed proposal, and for your commitment to the long-term growth and responsible development in the City of Chelsea.

Sincerely,

Michelle McClellan – President, Preservation Chelsea

Joe Merkel – PC-CCT Liaison to City/ DDA

Jan Bernath –Director, Preservation Chelsea

Tom Girard & Scott McElrath – Design Team Coordinators