MMI Development submits private-public partnership plan for Lake Underhill Road upgrade and multi-family/commercial development
MMI’s plan for a Public-Private Partnership (P3) will clean up contaminated landfill, upgrade Lake Underhill Road, and create a walkable village with residential and commercial space.
ORLANDO, FL – August 11, 2020 – Orlando-based MMI Development has submitted a plan to Orange County and the state of Florida seeking to clean up a former dump on Lake Underhill Road and restore the 38-acre site for the purpose of developing market-rate apartments as well as neighborhood village commercial space. Coupled with the planned clean-up of a contaminated site, MMI proposes to also construct a full upgrade of Lake Underhill Road from Dean to Rouse to modern standards.
The plan is known as a P3 (Public-Private Partnership), a joint venture enabled by Florida state law between a governmental entity and a private company. P3 structures have used in many other projects throughout Florida, including the massive I-4 Ultimate project.
A site plan for MMI’s proposed Fieldstream Village calls for the development of to 1,500 apartments in four phases; four parking structures and 52,000 to 100,000 square feet of walkable commercial/retail/office space. The plan also calls for MMI to improve Lake Underhill Road between Dean and Rouse roads, widening Lake Underhill Road to four lanes. The road plan further calls for bike lanes and broad pedestrian walkways, and the construction of three roundabouts that will improve traffic flow in the congested corridor as well as pedestrian safety and walkability.
Key to the project is the excavation and remediation of a long-closed Orange County dump that operated from the early 1960s to 1980. The dump’s existence has long prevented the site from being developed and placed on the county’s tax rolls, despite its proximity to State Road 408 and Lockheed Martin’s east Orlando campus. Among the reasons the road improvements have not been done, is that a portion of the old dump lies beneath the pavement of Lake Underhill Road. The MMI plan calls for building temporary alternative lanes on Lake Underhill Road to allow for excavation of the waste underneath the road, then reconstructing the road afterward.
“This is a site that many people have looked at before because of all of the success we’ve seen along Alafaya Trail, which is less than a mile away,” said MMI President Mike Wright. “A few companies have even taken a run at trying to develop this property before, but no one has been able to get around the fact that there’s an old dump on the property. The property used to be out in the middle of nowhere, but now it is in the middle of a thriving residential area. Our plan will not only apply a long-needed and complete clean-up but will also make the stretch of Lake Underhill Road between Rouse and Dean, the most improved section on the entire stretch of Lake Underhill Road. The design will ensure that no traffic, no matter how busy, will ever be a slow roll or stopped.
In order to finance the dump’s cleanup as well as make the needed improvements to Lake Underhill Road, Wright is asking Orange County to approve an innovative funding formula using tax-increment financing, or TIF. Under a TIF formula, future tax revenues derived from increases in the property’s value – as it is developed – are dedicated toward repaying the loans taken out to undertake the infrastructure work.
“Without the TIF, or Orange County simply coming up with around $40+ million, no developer is going to be able to do anything with this site,” Wright said. “Conventional financing for a project like this doesn’t exist in today’s environment. Banks just won’t lend on this type of project due to its complexity and the number of variables. That’s why TIF financing is ideal for projects like these.”
MMI has applied to both Orange County and the Florida Department of Environmental Protection to designate the site as a “brownfield” in order to take advantage of state incentives for the voluntary cleanup of the dump. Wright said that these incentives will cover only about 10 percent of the cleanup costs.
The MMI team includes: Land planners Shook Kelley of Charlotte, N.C.; land-use attorney Jason Searl of GrayRobinson in Orlando; environmental consultant Kelly Eger-Smith of American Environmental Consulting; governmental affairs consultant Angel de la Portilla of Central Florida Strategies; Joe Kilsheimer of Kilsheimer & Associates and attorney Brandon Hueber of Hueber Law.
This would not be Wright’s first use of TIF financing to create infrastructure that opens up land for development. In 2016, MMI struck a deal with the City of Apopka to create a TIF district that enabled the construction of a half-diamond interchange at Marden Road and State Road 414.
The new road access created market conditions that enabled MMI to develop apartments and a new K-12 private academy, a track, and field facility, and additional potential commercial and residential projects. The total value of the new Apopka construction: More than $100 million. Moreover, the Apopka TIF district was given a 10-year term to repay the financing, but will be retired in less than five years, Wright said.
“Were it not for the construction of that interchange, we definitely would not have been able to bring those projects to market,” Wright said. “And without the City of Apopka agreeing to allow this innovative financing technique, that land would have probably lain fallow and its value would have been next to zero for who knows how long.”
Similarly, Wright said, excavating an old dump and making improvements to Lake Underhill Road are expensive projects. A private developer like MMI can afford to tackle projects like this if the future value of the project is converted into a funding mechanism that pays the costs today.
“This is new in the sense that TIF financing hasn’t been used in Orange County before to excavate an old landfill in order to create developable land,” Wright said. “At the same time, that’s kind of the point: TIF financing is intended to bring a unique funding solution to problems that can’t be otherwise fixed. When we are all done, it will be a win-win for both Orange County and MMI and more importantly the residences surrounding the 38-acre tract in terms of walkable shopping options and elimination of the traffic problem on Lake Underhill Road .”