Mayor George’s Update on the Downtown Development

Our team at City Hall continues to work towards achieving the community vision for the Downtown Development on the former Lakewood Hospital site with our development partner, CASTO / North Pointe Realty. The City and CASTO have been diligently working through the complex layers of site planning, architecture, engineering, finance, and legislative and administrative review necessary to meet our local requirements. However, the City recently received new information from one of the intended end users which will shift some of the ultimate utilization of the site.

Roundstone Insurance has informed the City that its needs and priorities have changed. Roundstone desires to fully own and be sole user of the facility for their office, which is impossible to achieve within the community priorities for a mixed-use development that advances multiple community priorities and goals. With this information, it’s clear that the mixed-use vision Lakewood is pursing in our downtown development no longer aligns with the corporate vision Roundstone has for its headquarters.

The City is now aware that while our Planning & Development Department and CASTO methodically worked through the development process, Roundstone was actively exploring alternative options where it could establish its headquarters on a single-user site with no shared ownership.  While the City is disappointed that Roundstone’s shift in corporate priorities caused it to exit our downtown development project, and while the increases in interest rates and ongoing volatility in construction costs have also presented ongoing challenges and delays for the development, the project remains largely unchanged and our community vision remains intact. Roundstone’s exit means that the space previously intended to be office space will now be built as housing. So, despite Roundstone’s choice, our goal remains to have shovels in the ground as soon as possible.

The City and CASTO remain committed to the overall community-informed vision for the development, which includes:

• the largest construction of new, market rate residential units in Lakewood in over 50 years;
• the largest development of affordable housing units in Lakewood in nearly 50 years;
• the creation of a new urban community space to serve Downtown Lakewood;
• the creation of new jobs and tax base to support City services;
• the addition of new retail and commercial destinations in our downtown; and
• the preservation of the historic presence of the Curtis Block architecture.

Based on the known market demand for more new housing and additional affordable housing units, the proposed Roundstone building will likely be replaced by a 5-story mixed-use building with four floors of residential units over first floor retail and commercial uses.  This allows us to further our housing goals by bringing to market more total units in a mixed-income approach with people of high incomes, middle-incomes, and more limited incomes to find a home in the development.  In 2019, our Community Reinvestment Area (“CRA”) program was revised to allow for developers to tap into a 15-year tax abatement if 20% of the total units were deemed affordable under Department of Housing and Urban Development guidelines. Additionally, a project of this scale will be highly beneficial in helping Lakewood alleviate market demand and, by doing so, keep existing affordable units from being flipped into high-income units.

The Mayor’s Office and department directors continue to actively work with City Council, Lakewood City Schools, and the relevant City boards and commissions to ensure that the final project vision will be delivered in a timely fashion. CASTO is currently reassessing the project financials as a result of this change, and in the meantime, we remain focused on delivering this transformative project for the people of Lakewood.