The City of Upper Arlington will pay Pizzuti Solutions approximately $ 2.12 million to serve as the owner’s agent for the design and construction of a community center in the Kingsdale Shopping Center.
The company, a division of Columbus-based The Pizzuti Companies, will provide a range of services throughout the design and construction phase, including project oversight, schedule and budget management, procurement support, design review, construction supervision and completion assistance.
Upper Arlington City Council voted 6-0 without comment on May 24 for the contract with Pizzuti Solutions.
Councilor John Kulewicz retired because he works for a law firm, Continental Real Estate Cos. represents, a company converting the former Macy’s property in Kingsdale, where the community center is to be built for an estimated $ 54.2 million.
“(The Community Center) is the largest and most complex (city-funded) project in the city’s history and we want to be sure we have all the expertise we need to make sure it is successful,” said Council President Brendan King after the vote. “The city has great people, but nobody in the organization has experience with a project of this size.
“As is so often the case with construction projects of this size, we hired an owner representative, Pizzuti Solutions, to safeguard our interests and guide the city through this process.”
Pizzuti Solutions will act as a “single point of contact” for the city throughout the project, according to a May 17 HR report to City Council from City Manager Steve Schoeny and Park Development and Art Director Jeff Anderson.
The staff’s report states that Pizzuti Solutions has “provided services (owner’s agent) to many large, intricate public sector projects,” including several in the city of Columbus, such as the Michael B. Coleman Governmental Center, Linden Park Community Center and Park Redevelopment and Columbus Metropolitan Libraries projects.
Emma Speight, the city’s director of community affairs, said there were no links between Pizzuti Solutions and Margie Pizzuti, who co-chaired the task force on the feasibility of the city’s community center.
The staff’s report to the council states that Pizzuti Solutions is one of 11 companies that have contested the contract. The report states that the contract amount is equal to 2.75% of the total estimated project budget of $ 70 million, plus a 10% success fee that is earmarked for unforeseen expenses.
“With no bonds currently being issued for this project, the city must transfer the $ 2,117,500 from the general fund reserves to the Infrastructure Improvement Fund to properly account for this transaction,” the staff report said. “This is in line with the financial model developed as part of the Task Force’s process for the feasibility of the community center.”
The city plans to build a 95,300 square foot facility in Kingsdale after voters approved a “deliberative question” on May 4th asking if Upper Arlington should build a new community center.
Plans for a 7-story community center include an indoor swimming pool, fitness facilities, three gyms, a jogging track, a program room for a senior citizen center, a daycare center, and a multi-purpose function room. The upper two floors of the building are rented out as professional office space.
Construction will start in 2022 and will open in 2024.
The community center is part of a major redevelopment of Continental’s former Macy’s property that plans to build three 7-story buildings.
In addition to the community center, Continental’s share in the project is to result in 325 one- and two-room apartments, eight townhouses, 142 residential units for assisted living and 6,000 square meters of restaurant space on the ground floor.
City officials have promised that no income taxes or property taxes will be collected to fund the construction of the community center. Schoeny said the city will issue $ 55 million in bonds to fund construction.
He said the majority of the project’s debt will be paid with approximately $ 1.6 million in annual revenue generated from 30-year tax hike financing agreements with Continental for the redevelopment of Macy’s and two previously established funds become.
Through these agreements, which were also approved by the Upper Arlington Schools, developers pay money that would otherwise go to the school district through property taxes. The city can use funds from TIF funds for “improvements to public infrastructure”.
Schoeny said other sources of funding for the community center will include an estimated $ 500,000 in annual bed taxes paid by guests staying at two Upper Arlington hotels, along with $ 5.42 million raised through naming rights and other donations and an estimated $ 450,000 annually in income taxes expected from the redeveloped site.
This would keep the city’s cash contribution at around $ 8.8 million, which the task force said could be financed with part of the Upper Arlington’s “Rainy Day” fund.
The task force estimates that renting office space on the sixth and seventh floors could raise an additional $ 264,512 annually. That money would be more than what the task force would have estimated to service the construction debt.
Officials said the ongoing running costs for the community center are funded through membership fees.
Speight said on June 1 that the city is “getting ready” to apply for qualifications to design the community center, “with the aim of bringing a recommendation to the council this summer.”
“A final development plan for the community center building will be submitted to the Board of Zoning and Planning for review and approval prior to construction,” she said. “A schedule for this is still pending.”
Speight said the city will continue “talks with potential tenants for a significant portion” of the office space in the community center building.
The demolition of Macy’s blue brick building that anchored Kingsdale from 1970 to 2015 began the week of May 17th.
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