City staff recommend negotiating with Lyon Development for 6804 Windsor; council to hold Stanley parcels

City development staff presented two proposals for 6804 Windsor Avenue, a roughly 54,000-square-foot Art Deco building from about 1930. The city purchased the property earlier for $350,000; staff reported nine developer inquiries during the RFP process and two formal proposals.

Staff recommended Lyon Development as the preferred proposer. According to the staff presentation, Lyon’s plan would create about 40 residential units with an approximately 1,300-square-foot commercial space on the northeast corner of the first floor, coworking and amenity space and a secured bike room. The developer requested purchase of the property for $350,000 and sought approximately $1.75 million in phased tax-increment financing (TIF) incentives and partial building-permit fee relief; both proposals would require parking relief or a variation.

City staff said their cash-flow model assumed tax-increment receipts beginning in 2029 (taxes paid in arrears) and projected that the developer-generated increment could pay the requested incentive over time. Staff recommended negotiating terms with Lyon to lower the up-front payment and reduce the total subsidy (for example, lowering the initial cash component to around $1.4 million in phased incentives) to shorten payback and limit use of general TIF increment.

Several aldermen raised concerns about the ground-floor design in Lyon’s concept, noting the risk that “live-work” or residential frontage could fail to activate Depot District streetscape if bedrooms abut the sidewalk. One alderman said, “I’d much prefer to have full commercial on the first level,” and others pressed staff to seek more commercial storefronts or letters of intent from retail tenants. Affordable-housing commitments were not included in Lyon’s proposal; staff said the developer could accept housing vouchers but had not dedicated units as affordable in the RFP response.

On the Stanley properties (three adjacent parcels), staff reported a single proposal from Youth Crossroads to convert one building (the former Comcast building) to nonprofit program space and requested roughly $250,000 in TIF support; staff recommended holding the Stanley parcels for now to seek a private development that would generate property and sales tax revenue. Councilors agreed to delay sale or demolition pending broader outreach to developers and potential targeted marketing to identified prospects.

The committee recorded consensus to continue negotiations with Lyon Development on 6804 Windsor and to retain the Stanley properties for future marketing. No final contract or TIF agreement was approved at this meeting; staff were directed to return with negotiated terms and design adjustments if possible.