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HomeMy WebLinkAboutDowntown Development Authority - Minutes - 11/06/2003DOWNTOWN DEVELOPMENT AUTHORITY REGULAR DmEGTQRSI MEETING 10 1�A7i. .PFi'.;' uI, 7400UrnIRiAM tiR4-: �,i { `UA. IS6N 404.4020. MINUTES OF NOVEMBER 6, 2003 REGULAR MEETING THE BOARD OF DIRECTORS OF THE DOWNTOWN DEVELOPMENT AUTHORITY MET IN REGULAR SESSION AT 1 1 :00 A.M. ON NOVEMBER 6, 2003 IN THE MEETING ROOM AT THE EDWARDS HOUSE LOCATED AT 402 WEST MOUNTAIN AVENUE, FORT COLLINS, CO 80521 . PRESENT THERE WERE PRESENT: Kim JORDAN. CHAIR STEVE TAYLOR, VICE CHAIR JASON MEADORS, SECRETARYIUREASURER BILL BERTSCHY MARY BRAYTON CAREY HEWITT GREG BELCHER LARRY STROUD BILL SEARS STAFF: ROBERT STEINER, EXECUTIVE DIRECTOR ANNE GARRISON Jim MARTELL, COUNSEL GUESTS: JOHN FISCHBACM. ALAI KRCMARIK, MYRNE WATROUS. RANDY HENSLEY DAVID SHORT, MIKKAL TOROERSON, DON BACHMAN, CLARK MAPES, JOE FRANK, KELLY OLSON, JOHN KEFALAS CALL TO ORDER MS. JORDAN CALLED THE MEETING TO ORDER AT I I : 10 A.M, AND ROLL CALL WAS TAKEN. APPROVAL OF MINUTES MR. BERTSCHY MOVED TO APPROVE THE MINUTES OF OCTOBER 2, P003 THIS WAS SECONDED BY MR. SEARS AND CARRIED UNANIMOUSLY. CITIZEN INPUT KELLY OLSON SOUGHT NOT TO CHANGE, BUT TO CLARIFY THE MINUTES OF SEPTEMBER 4, 2003 IN WHICH HE HAD EXPRESSED CONCERN REGARDING THE EXPENDITURE OF PUBLIC FUNDS IN CONNECTON WITH THE PERFORMING ARTS CENTER, AS STATED AT THAT TIME, HE IS NOT OPPOSED TO THE PROJECT, BUT WOULD BE OPPOSED TO THE POSSIBILITY OF ANY MONIES BEING SPENT FOR CONSULTANT FEES TO SET UP A BALLOT ISSUE. LIKEWISE, MR. OLSON SAID HE IS ALSO NOT OPPOSED TO NAMING RIGHTS BEING OFFERED, PROVIDING THE PURCHASING ENTTY'S FINANCIAL RATIO IS SIGNIFICANT AND PROPORTIONATE, MR, OLSON ALSO INQUIRED WHETHER OR NOT THE FACUADE PROGRAM IS ACTIVELY PROMOTED, SINCE MANY BUSINESSES SEEM IN NEED OF ASSISTANCE. CLEANLINESS OF DOWNTOWN STREETS AND SIDEWALKS ALSO NEED ATTENTION. DOES LOITERING LIMIT THE NUMBER OF BENCHES PROVIDED? ARE TAXES LOWER FOR THE OWNER WHEN DDA OWNS THE EASEMENT ON A FA9E, AND WHAT RECOURSE IS THERE IF AN OWNER FAILS TO MAINTAIN THIS INVESTMENT? SIGNAOK WAS ALSO MENTIONED, AND MR. STEINER RESPONDED TO ALL THESE QUESTIONS. DDA MINUTES PAGE 2 AFFORDABLE HOUSING MR, JOHN KEFALAS OF CATHOLIC CHARITIES PRESENTED A PROPOSAL TO CREATE A STATEWIDE TRUST AFFORDABLE HOUSING TRUST. THIS WOULD BE FUNDED BY INCREASING THE DOCUMENTARY FEE FROM ONE CENT PER $ 100 OF VALUATION TO FOUR CENTS PER $ 100 OF VALUATION, AND FROM ONE CENT TO TWO CENTS PER $ 100 VALUATON FOR COMMERCIAL PROPERTIES AND VACANT LAND. THIS WOULD GENERATE A PROJECTED $26.5 MILLION ANNUALLY, WITH SPECIAL CONSIDERATION GIVEN TO HOUSEHOLDS AT, OR FALLING BELOW 30% OF ADJUSTED MEDIAN INCOME (AMU, FIFTY PERCENT OF FUNDS WOULD BE RESERVED FOR HOUSEHOLDS FALLING BELOW THE 50% AMI. THIS MEASURE IS SEEN AS AN ECONOMIC STIMULUS, AS WELL AS MEETING AFFORDABLE HOUSING NEEDS, THE FUNDS WOULD ALSO BE USED TO PRESERVE EXISTING AFFORDABLE HOUSING AND ENCOURAGE NEW CONSTRUCTION OF HOMES FOR SALE AS WELL AS AFFORDABLE RENTALS. IN ADDITION, THEY WOULD HELP PROVIDE DOWN PAYMENT ASSISTANCE AND SPECIAL NEEDS HOUSING, IN THE 1 990'3 COLORADO EXPERIENCED A LOT OF EXPANSION WITH MORE JOBS AND SUBSEQUENT OROWR CONTRIBUTING TO THE APPRECIATION OF HOMES AND RENTALS, SINCE 2001 , HOWEVER, LAYOFFS HAVE CREATED AN IMBALANCE AND AN EVEN GREATER NEED FOR AFFORDABLE HOUSING. FOR MANY THE COST FOR HOUSING IS 35% TO 50% OF THEIR INCOME, SO HOMELESSNESS INCREASES. THERE 13 A NEED TO CREATE OPPORTUNITES FOR HOME OWNERSHIP AND REASONABLE RENTALS, MR. KEFALAS IS WORKING WITH THE COLORADO ASSOCIATION OF REALTORS AND THE COLORADO ASSOCIATION OF HOMESUILDERS, BUT THERE IS A NEED FOR MORE FOR -PROFIT ORGANIZATIONS FROM THE PRIVATE SECTOR, MR. STROUD SUGGESTED A COMMITTEE TO BEGIN DISCUSSIONS ON HOW DDA MIGHT BE A PART. MR. STEINER NOTED THAT DDA HAD PREVIOUSLY ASSISTED WITH THREE AFFORDASLE HOUSING PROJECTS, BUT FOR THE MOST PART, THESE ORGANIZATIONS DO NOT APPROACH US. HOWEVER, MR. STEINER CONCLUDED. HE FELT IT WOULD BE BENEFICIAL FOR DDA TO LEND ITS NAME AND SHOW CONSIDERATION FOR THIS ISSUE. IT WAS DECIDED TO PLACE IT ON THE AOENOA IN DECEMBER. DOWNTOWN STRATEGIC MR. MARTELL EXPLAINED A CHANGE IN HIS DECISION CONCERNING MR. BERTSCHY BEING ABLE PLAN TO VOTE ON THE CAPTONED ITEM, MR. MARTELL STATED THAT AT THE LAST MEETING, HE WAS UNCLEAR AS TO WHETHER IT WAS A OUASFJUDICIAL OR LEGISLATIVE ISSUE AND THIS HAS NOW BEEN RESOLVED. AS A RESULT, MR, BERTSCHY MAY PARTICIPATE IN DISCUSSIONS AND VOTINO. MR. MAPES THEN PROVIDED A FINAL REVIEW OF THIS PLAN FOR THE BOARD. TALLER BUILDINGS AND CODE CHANGES WERE DISCUSSED IN SOME DEPTH, THE COLOR CODED SCHEMATIC HAS BEEN CORRECTED, AND ONLY MINOR CHANGES TO THE LANQUAGE OF THIS DOCUMENT ARE ANTICIPATED. CODE ADOPTION MAY COME WITH THE DOWNTOWN PLAN UPDATE IN MARCH. OR WITH THE SPRING CODE CHANOES. MR. SEARS MOVED THAT THE ISSUE BE TABLED UNTIL CERTAIN PORTONS OF THE DOWNTOWN STRATEGIC PLAN HAVE BEEN CLARIFIED FOR THE BOARD, THIS WAS SECONDED BY MR. STROUD AND CARRIED UNANIMOUSLY, 223 N. COLLEGE PROVIDING THE OVERVIEW, MR, STEINER EXPLAINED THAT MR. TORGERSON MAE BEEN UNSUCCESSFUL IN BREAKING THE LEASE WITH THE SIGN COMPANY WHICH USES THE BILLBOARDS. AT THE LAST MEETING, IT WAS SUGGESTED THAT DDA PURCHASE THE LEASE AND IN SO DOINO, COVENANT NOT TO CONTINUE BEYOND THE THREE YEAR PERIOD. MR. MARTELL CLARIFIED THAT 90 DAYS NOTICE OF NON RENEWAL IS REQUIRED, BUT THAT NOTICE COULD BE OIVEN EARLIER IF DDA SHOULD DECIDE TO PURCHASE THE LEASE. MR, HEWITT MOVED TO ACCEPT THE PROPOSAL THAT DDA PURCHASE THE LEASE FOR $50.000, AND THE LEASE BE TERMINATED ON APRIL 1. 2006. REVENUES FROM THE SION COMPANY WILL BE RETAINED BY THE DDA, AND LEGAL COUNSEL WILL DRAFT THE AGREEMENT, THIS WAS SECONDED BY MR. MEADORS AND CARRIED UNANIMOUSLY. OTHER BUSINESS MS, BRAYTON INQUIRED ABOUT THE STATUS OF THE PROGRESSIVE OLD TOWN SQUARE AGREEMENT. SHE REQUESTED IT BE REVIEWED AND BROUGHT FORWARD AT THE DECEMBER MEETING, ADJOURN M3. BRAYTON MOVED TO ADJOURN THE MEETINO UNTIL 3:30 P.M. IN THE AFTERNOON. THIS MOTION WAS SUBSEQUENTLY WITHDRAWN. THERE BEING NO FURTHER BUSINESS. MR. BELCHER MOVED TO ADJOURN AT 1 2:55 P.M, THIS WAS SECONDED BY MR. SEARS. JASON MEADORS, SECRETARY DOWNTOWN DEVELOPMENT AUTHORITY ANNUAL RETREAT RETREAT NOTES OF NOVEMBER 6, 2003 THE BOARD OF DIRECTORS OF THE DOWNTOWN DEVELOPMENT AUTHORITY MET FOR THE PURPOSES OF A RETREAT COMMENCINO 1 :20 P-M, AT THE EDWARDS HOUSE, LOCATED AT 402 WEST MOUNTAIN AVENUE, FORT COLLINS, CO 8052 1 , PRESENT THERE WERE PRESENT: KIM JORDAN, CHAIR STEVE TAYLOR, VICE CHAIR JASON MEADORS, SECRETARY/TREASURER MARY BRAYTON LARRY STROUD CAREY HEWITT GREO BELCHER BILL BERTBCHY BILL SEARS STAFF: ROBERT STEINER, EXECUTIVE DIRECTOR ANNE GARRISON JIM MARTELL, LEGAL COUNSEL GUESTS: JOHN FISCHBACH. DAVID SHORT, JOE FRANK, CLARK MAPES, DON BACHMAN, KELLY OLSON BUSINESS IMPROVEMENT DISTRICT (BID) MR. STEINER OPENED THE TOPIC BY SHARING THAT THIS IDEA HAS BEEN A POINT OF DISCUSSION SINCE THE MID I QQD'S. IT WAS REVISITED LAST YEAR DUE TO SECURITY AND MAINTENANCE CONCERNS, AT THAT TIME, R WAS DETERMINED THAT SEVEN AND ONE HALF MILLS WOULD HAVE TO BE ADDED TO FUND A MODEST PROORAM. THE INCREASED MILL LEVY WOULD REWIRE A VOTE, AND WAS TOO LARQE TO BE PRACTICAL. THE ISSUES BEFORE THE BOARD ARE ENHANCED MAINTENANCE, SECURITY AND INCREASED MARKETING, AND IF THESE ARE DESIRED, HOW SHALL WE PAY FOR THEM? SOME OF THE COMMENTS EXPRESSED WERE AS FOLLOWS: • MR. HEWITT SUGOESTED THAT INSTEAD OF 7.5 MILLS A SMALLER AMOUNT BE LEVIED THAT WOULD TAKE CARE OF MAINTENANCE • MS. JORDAN ASKED IF PURCHASING THE NEEDED EQUIPMENT WAS NOT WHAT HAD BEEN PREVIOUSLY DECIDED, i MR. BERTSCHY HOPES TO ACCOMPLISH A CLEANER, BETTER LOOKING, SAFER ENVIRONMENT FOR DOWNTOWN, MR. BELCHER NOTED ON A RECENT VISIT TO CHIQA00 THAT CLEANING CREWS WORKED AT NIGHT AND THAT THE STREETS WERE METICULOUSLY MAINTAINED, " MR. HEWITT BELIEVES ORAFFD NEEDS TO BE REMOVED IN 48 HOURS, FEWER. INCIDENCES OCCUR THE FASTER 1T DISAPPEARS " MR, TAYLOR INQUIRED EXACTLY WHAT IS ENTAILED BY THE TERM, "ENHANCED MAINTENANCE?" MR, HEWITT RESPONDED TO THIS QUESTION EXPLAINING THAT FROM HIS VIEWPOINT SIDEWALKS SHOULD BE STEAM CLEANED EVERY MONTH OR SO, PLANTERS SHOULD BE ENHANCED, SIDEWALKS MAINTAINED, PERHAPS SOME HANOINO BASKETS, OLD FASHIONED STREET LKiHTINQ, AND CANOPIES TO CREATE SOME UNIFORMITY. MR. STROUD SEES SOME GOOD RESULTS WITH REGARD TO SECURITY, A POLICE PRESENCE AND EFFECT OF THE ORDINANCES RETREAT NOTES PAGE 2 " SUGGESTIONS WERE MADE CONCERNING DDA AND DBA USING BOTH WESSITES TO PROMOTE A STRONGER MARKETING PRESENCE, " ESTABLISH CLOSER TIES TO COMMERCIAL REAL ESTATE " COMMUNICATE MORE AGGRESSIVELY WITH OWNERS WHO WANT TO DO SOMETHING WITH THEIR PROPERTY " MR. BELCHER SUGGESTED A PROACTIVE STANCE WAS NEEDED PARTICULARLY WITH THE ADVENT OF THE LIFESTYLE CENTER " CONCERNING THE HIRING OF A DEDICATED MARKETING PERSON FOR DOWNTOWN; MR. BELCHER SUOGESTED THAT IF A STRONO ENOUGH RETAIL BASE IS ESTABLISHED, PEOPLE WILL WANT TO MOVE DOWNTOWN, HENCE THERE WOULD BE NO NEED FOR A MARKETING PERSON. " MR. STROUD NOTED THAT STUDIES SUGGEST THE NEED TO BRING A MAJOR RETAILER DOWNTOWN, BUT FOR REASONS OF ACCESSIBILITY, PARKING AND VISIBILITY, HE DOES NOT BELIEVE THIS WILL HAPPEN. " DAVID SHORT, DOWNTOWN BUSINESS ASSOCIATION NOTED THAT IT IS THE TASK OF THE DBA TO MARKET DOWNTOWN, BUT ITS BUDGET IS $50,000 ANNUALLY, AND IT IS INSUFFICIENT TO ADEQUATELY ADDRESS TODAY'5 NEEDS, " MR. HEWITT FEELS IT IS IMPERATIVE THAT DDA TAKE THE LEAD IN THIS MATTER AND NOT LEAVE IT TO A COMMITTEE. " MR. STEINER NOTED THAT OLD TOWN SQUARE IS SHOWING ITS AGE, AND WHILE MORE MAINTENANCE 15 BEING DONE NOW THAN EVER BEFORE, IT 15 JUST TOO WORN TO SHOW THE EFFECTS. ^ MR. HEW= ASKED IF WE COULD USE TAX INCREMENT TO RESTORE THE PLATA " MR. TAYLOR ASKED ABOUT A DEMONSTRATION PROJECT IN WHICH WE DO A MODEL JOB OF CLEANING A SPECIFIC AREA IN DOWNTOWN SO AS TO SELL THE PUBLIC. ^ MR. BELCHER NOTED THAT IF MAINTENANCE 15 PLACED AS A PRIORITY IT WILL HAVE A TRICKLE DOWN EFFECT, " MR. FISCHBACH SUGGESTED THAT HE AND MR. STEINER REVIEW OLD STUDIES AND NUMBERS TO ESTABLISH A SPRINGBOARD " MR. STEINER BELIEVES THE BOARD SHOULD MAKE MAINTENANCE A PRIORITY, AND DO A DEMONSTRATION SECTION AS A PRECURSOR TO GOING TO THE VOTERS, WE SHOULD THEN EXAMINE OUR RESOURCES TO SEE IF DDA CAN OFFER ASSISTANCE. MARKETING STAFF POSITION MR. STEINER PRESENTED THE IDEA OF A DDA STAFF PERSON DEDICATED TO MARKETINO THE DOWNTOWN. THE INITIAL RESPONSE FROM THE BOARD IS TO BEGIN AN AGGRESSIVE MAINTENANCE PROGRAM AND REVIEW ITS IMPACT BEFORE PROCEEDING FURTHER. MR. HEWITT OBSERVED THAT BOULDER SALES TAX FIGURES ARE DOWN 30% OVER THE LAST FEW YEARS, YET A HOTEL IS UNDER CONSTRUCTION AND THE CITY HAS REDONE THE PEARL STREET MALL. HOW GO THEY DO IT? MR. FRANK SUGGESTED AN INVITATION BE ISSUED TO THE BUSINESS RECRUITERS FROM BOULDER AND COLORADO SPRINGS TO ADDRESS THE DDA BOARD. MR. FISCHBACH WONDERED IF THE BOARD COULD TAKE A MORE ACTIVE ROLE AT TIMES WHEN PROGRESSIVE OLD TOWN SQUARE PROPERTY MANAGEMENT HAS A VACANCY. PROJECT FUNDING PROJECT FUNDING LEVELS WERE DISCUSSED. THREE CATEGORIES ARE FUNDED, THESE ARE PUBLIC WORKS, RESIDENTIAL AND COMMERCIAL. IT IS PROJECTED THAT DDA WILL HAVE ALMOST SEVENTEEN MILLION DOLLARS IN THE YEAR 201 1 AS LONG AS PROJECTS FUNDED GENERATE THE PROJECTED AMOUNT OF TAX INCREMENT. COMMUNITY ARTS CAMPUS/OLD TOWN CULTURAL ARTS CENTER THE COMMITTEE IS EXPERIENCING A PROBLEM FINDING A NAME FOR THIS COMPLEX, AND MR. STROUD ASKED THE BOARD TO GIVE SOME CONSIDERATION TO THIS AND SUBMIT ANY NAMES R FEELS ARE APPROPRIATE, AND EMAIL IDEAS TO MR. STEINER, THOSE WHO ARE PART OF THE WORKING COMMITTEE ARE ATTEMPTING TO PUT TOGETHER A LEADERSHIP COMMITTEE, AND TO THIS END, THERE WILL BE A MEETING ON DECEMBER 3, 2003. A GREAT DEAL OF WORK LIES AHEAD TO IDENTIFY A SITE, REVIEW THE ZOO CAMPAIGN INFORMATION, DEVELOP A SCOPE, PUT TOGETHER A COST ANALYSIS, TOGETHER WITH ARCHITECTURAL DESIGNS. HE ALSO STATED THAT 20045 IS THE TARGETED DATE TO BUILD. MS. JORDAN SUGGESTED DDA HEAR THE CITY'$ THOUGHTS ON THE ACQUISITION OF LANO, IN PARTICULAR LAND PURCHASED SPECIFICALLY FOR THIS PROJECT. ADJOURN THERE BEING NO FURTHER BUSINESS, THE RETREAT CONCLUDED AT 3:DO P.M DOWNTOWN DEVELOPMENT AUTHORITY TO: DDA Board of Directors FROM: Chip Steiner DATE: December 2, 2003 RE: Mason Street North The developers of Mason Street North have submitted a revised request for DDA participation in this mixed -use project located at the terminus of Mason Street at Cherry Street. The original request was for $261,416. The DDA agreed to fund up to $251,570. The new request is for DDA participation in the amount of $984,444. A comparison of the original and new proposal: Original New Northern Parking Plaza $27,780 $38,123 Roundabout 39,658 52,921 Central Parking Plaza 70,062 94,794 Railroad Crossing 12,920 14,858 Southern Parking Plaza 70,116 113,402 Central Parking Plaza Kiosk 27,500 31,625 Cherry Street Pedestrian Crossing 13,380 15,962 Subtotal $261,416 $361,685 The new proposal adds the following: Interior Courtyard $106,614 Eastern Entrance Courtyard 11,900 Brick Facades of Building A 95,399 Brick Facades of Building B 78,729 Brick Facades (and limited Masonry) of Building C 76,125 Site Utilities 95,457 Storm Water 48,585 Lee Martinez Park Parking/Plaza Improvements 35,000 Allowance to Purchase BN Railroad Easement 75,000 Total $261,416 $984,444 The revised proposal does not include a new estimate for total project cost. Although the original request suggested a cost of around $8 million, staff cannot identify the source of that figure. Based on current calculations (but using the original estimate of $125/sf construction cost) the project's value at completion would be in the neighborhood of $5,252,500. This would generate an annual tax increment of $80,8321 and support $397,477 in tax increment financing (6 years, 6% interest). It is likely construction costs are higher today than when the original estimate was made. Aside from the apparent inability of the projected tax increment to support the requested funding of $984,444, staff questions the legitimacy of using public funds for either of the courtyards, for the railroad easement, and, depending upon the exposure to public lines - of -sight, for the facades themselves. Further, staff is unclear what exactly is involved in the Lee Martinez Park Parking/Plaza improvements and whether this constitutes a public improvement. It is almost certain that construction costs have increased as reflected in the changes in the numbers between original and new estimates and, assuming the project goes forward, the request for additional funding from the DDA for those items seems justified. And, to the extent that the site utilities and storm water improvements can be shown to be occurring offsite (i.e. on public property), the request for DDA funding of these also seems justified. If the Authority were to fund these items only, the total cost would be $505,727. If the Lee Martinez Park Parking/Plaza improvements can legitimately be classified as public improvements, the total would rise to $540,727. Fagade easements would add $250,253 for a total of $790,980. Staff supports the increased participation for the items originally to be funded by the DDA. On the balance of the items staff has the following recommendations: Storm water and site utilities: support those improvements that are in the public right- of-way. Lee Martinez Park Parking/Plaza Improvements: Need verification that this is a legitimate public improvement. Facades: This project is internally oriented. Staff is uncomfortable with fagade easements but it is clearly the call of the Board. Courtyards: Staff does not see, even if the courtyards are dedicated to the public, that there is much public benefit derived and therefore does not support DDA funding. Railroad Easement: How does the public benefit? To whom does the property/easement belong? Staff does not support this. Depending on Board direction, DDA funding could look like: ' Calculated as follows: 17,524sf of office/retail @$125/sf=$2,190,500 x .29 (commercial multiplier) x .092 (mill) _ $58,443 in tax increment. 22,736sf of residential @ $125/sf--$2,842,000 x .08 (residential multiplier) x .092 (mill) _ $20,917 in tax increment. 20 underground private residential parking spaces @ $10,000 each = $200,000 x .08 (residential multiplier) x .092 (mill) _ $1,472 in tax increment. Total annual tax increment is $58,443 + $20,917 + $1472 = $80,832. Six year financing at 6% = supportable debt of $397,477. Option 1: Fund only those items approved originally. Cost to DDA goes from $261,416 to $361,685. If the project is assessed at $8 million, DDA participation amounts to 5 percent of total cost. This is completely supported by the project's estimated tax increment. Option 2: Fund the original items plus site utilities and storm water. DDA cost is $505,677 or 6.3 percent of total cost. Tax increment from the project supports $397,500 (assuming an $8 million assessed value). Option 3: Fund option 2 plus the Lee Martinez Park Parking/Plaza improvements. DDA cost goes to $540,677 or 7 percent of total project cost and $143,200 more than is supported by the project's tax increment. Option 4: Adding fagade funding to Option 3, DDA cost goes to $755,930 or 9.5 percent of total cost and $358,500 more than is supported by the project's tax increment. As a comparison, the Authority agreed to fund $500,000 toward the $4.8 million Pine Street Lofts project (10 percent of total project cost but it is important to remember that Mason Street Lofts includes no commercial development and therefore more tax increment from the district as a whole will be used to finance DDA participation in that project than will be required by the Mason Street North project). Staff would recommend Option 3 if the Lee Martinez Park Parking/Plaza improvements are legitimately classified as a public improvement and contingent upon verification of what site utility and storm water work falls within the public right-of-way. Mason Street North clearly fits within the goals and objectives of all City planning documents pertaining to downtown. It brings housing and jobs and it develops one of the more blighted areas of the central business district. dduDOWNTOWN DEVELOPMENT ALITHORITY TO: DDA Board of Directors FROM: Chip Steiner DATE: December 2, 2003 RE: 325 Cherry Street Terrace Lofts Cherry Street Terrace Lofts, a development proposal submitted by Greg Glebe and Mickey Willis, is a mixed use project composed of nine one -bedroom residential units over art studios on the ground floor. The site currently is owned by Mr. Glebe and is used as a specialty easel manufacturing plant. The DDA is being asked to acquire a fagade easement on the new building, fund a plaza, landscaping, and public improvements for $383,573. Total project construction cost is $1,591,907 and has an estimated market value of $2,080,720 upon completion. The developers have estimated an annual tax increment of $49,511 and are requesting an additional annual supplement of $14,418 above the projected increment. Staff calculates the increment differently. Fifty percent of the project is residential and would generate $7,700 in taxes. The commercial portion of the project would generate $27,900 annually in taxes. Annual tax increment would be $35,600 ($27,900 + $7,700) less existing taxes of $6,153 or $29,447. To finance a six year debt, this amount would support DDA participation of $144,800. On a one-time borrow and payback basis, the tax increment would support $176,682. All these figures assume an assessed value of $2,080,720. The proposal brings to downtown Fort Collins some small, affordable housing units. The design fits nicely into the neighborhood. The combination work -living space is novel (at least for Fort Collins) and provides a unique alternative to other housing opportunities. Staff supports DDA participation in the amount of $200,000 (12.5% of project development cost) based upon a $2,080,720 AV upon completion. To provide that level of funding the Authority should use one-time borrow and payback financing (in other words, no long term debt). ddoDOWNTOWN DEVELOPMENT AUTHORITY TO: DDA Board of Directors FROM: Chip Steiner DATE: December 2, 2003 RE: Historic Webster House The DDA has been approached by Brad March, representing the Don and May Wilkins Charitable Trust, to assist in converting the Historic Webster House into offices for the CPA firm of Rickards, Long and Rulon, LLP, and for meeting, educational, and fabrication facilities for the Fort Collins Museum. The proposal is detailed in the attached book. The Historic Webster House is located at the southeast corner of Remington and Olive Streets, south of Library Park. The basic structure of the deal is for Rickards to purchase and own its offices within the building, with the balance being leased to the Fort Collins Museum (through the Fort Collins Museum Foundation) for a five to seven-year period. DDA involvement would require two steps: 1) since the property is not currently in the DDA district it must be annexed to allow tax increment funds to be used for improvements. The property is adjacent to the district and a petition for inclusion is included with the submittal from Mr. March; 2) approval of the financing request of $100,000 by the Board of Directors. The Historic Webster House is not currently on the property tax roles. Purchase price is $650,000 and the estimated value of the renovated project is $1 million. All property taxes flowing from the annexed property ($17,375 annually based on the unimproved value) will be included as tax increment. Since there is no lead time required to capture the increment, staff estimates that over a seven-year financing period at 6 percent interest, there is a supportable debt of $97,000. If $350,000 in improvements is made to the property and the full amount of those improvements are added to the assessed value, the annual increment would be $26,730 which supports a debt of about $150,000. Whatever the final assessed value turns out to be, the owners have agreed to keep the entire property on the tax roles until the DDA's debt is retired (the City has the right not to pay property taxes on that portion of the property it leases). The Don and May Wilkins Charitable Trust has a long history of involvement with Fort Collins' museum and library. The current proposal is intended primarily to address some existing needs of the museum for meeting and fabrication space —uses that cannot be added to the library park block because of ballot restrictions placed on the property at the time voters approved the acquisition and construction of the current library building. The ability to grow museum facilities and adding educational and meeting facilities downtown fit well with the DDA's expressed goal of expanding the cultural offerings in the central business district. According to the documents submitted by Mr. March, providing office space to the CPA firm will keep up to 30 employees in the downtown district. This too is important to the economic wellbeing of the central business district. The DDA's Plan of Development, the Downtown Plan, and the Downtown Strategic Plan all have policies that directly support Authority involvement. From the Plan of Development: Objective B, "To maintain the District as a regional center for commercial, financial, governmental, social, recreational, and cultural activities and to prevent deterioration from occurring (emphasis added);" Objective H, "To encourage the preservation or reuse of historically or architecturally significant buildings..." Also from the Plan of Development, "Plan of Development Projects:" "The promotion of, participation in, and assistance to private and public developments ... in connection with... office ... (emphasis added)" From the Downtown Plan: Policy 3 (major policy), "Aggressively explore, develop and take action to attract major retail, government, cultural, educational, entertainment, recreation and employment anchors including new housing development that enhance the Downtown as the preeminent business, retailing and cultural center of the region (emphasis added)." From the Downtown Strategic Plan: Policy 2.1.3, "Implement an active economic development program to foster redevelopment that supports the commercial health of the retail/entertainment core by bringing more people and investment to the downtown market. Primary prospects for beneficial redevelopment include culture, hospitality, employment, and housing." Staff encourages support of this proposal at the $100,000 level. DDA participation would be contingent upon: drafting/executing all necessary legal documents, verification of assessed valuation by the County Assessor, approval by City Council of the sale of bonds to finance the DDA's expenditures. DOWNTOWN DEVELOPMENT AUTHORITY TO: DDA Board of Directors FROM: Chip Steiner DATE: December 2, 2003 RE: City Plan Update Attached to this memorandum is a copy of suggested revisions to City Plan as they relate to the central business district. It is being presented to the Board to solicit its comments and to provide input to City Council. Staff supports almost all of the portions of the document being reviewed by the Board. Generally speaking, it confirms the goals, objectives, and vision of the DDA and it gives the community the latitude to continue its redevelopment programs. Specific comments and suggestions include the following: Page 17: The policy "Our community will have a primary downtown center supported by other districts with unique or specialized areas such as employment, civic, mixed -use and commercial." Does this mean other districts will have unique or specialized areas or the downtown district will have them or both? Page 17: In the "Our Civic uses..." paragraph, change the last sentence to read "Downtown will be the focus of government administration, cultural, and service functions. Page 74: to the bulleted targets for directing growth (top of the page) add "downtown" to the list. Page 119: The first bulleted item at the top of the page, "particular emphasis shall be placed on workforce and lower income housing, in order to ensure that a balance is achieved between income levels and the cost of housing" seems a little inconsistent with a policy elsewhere in the document to pursue high -paying jobs. Maybe the bulleted item should be broadened out some to include that housing be balanced in accordance with all income levels. Page 184: in the top paragraph (continued from the previous page subheaded Downtown District), change the first full sentence to read "Diversity means Downtown must include office, finance, civic, government, cultural, and entertainment functions..." Page 199: Policy DD-3.4 Building Height. Delete the entire paragraph and replace it with "Maximum building height limits for the downtown will be in accordance with the Downtown Strategic Plan. The Board can make a recommendation to City Council if it chooses to do so.