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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 05/01/20131 Minutes City of Fort Collins Economic Advisory Commission Regular Meeting 300 LaPorte Ave City Hall May 1, 2013 8:00 a.m. – 9:00 a.m. For Reference: Blue Hovatter, Chair 493-3673 Council Liaison Wade Troxell Josh Birks, Staff Liaison 416-6324 Wendy Bricher, Minutes 221-6506 Commission members present: Commission members absent: Michael Kulisheck Ann Hutchison Blue Hovatter Dan Lenskold Christophe Febvre Sam Solt Glen Colton Jim Clark Channing Arndt Guests: Mike Pruznick Sarah Pruznick, Youth Advisory Board Geni Arndt Staff Present: Wendy Bricher, Minutes Josh Birks, Economic Health Director Mike Beckstead, Chief Financial Officer Agenda Item 1: Meeting called to order Meeting called to order at 8:02 a.m. Agenda Item 2: Foothills Assistance Package Mike Pruznick, citizen, commented that he does not support the Foothills Assistance Package as written and believes it could be high risk if we have an economic downturn. He also believes this mall does not meet the needs of the community and may not remain sustainable with competing entities such as Timnath or Loveland. He believes we also don’t have the infrastructure to support the growth that we currently have (tiered electric and water rates). The Economic Advisory Commission met for the second time regarding the Foothills Assistance Package to ask questions and clarify items within the Package presented to the EAC on 4/24/13. Channing Arndt Financial Services 300 LaPorte Ave PO Box 580 Fort Collins, CO 80522 970.221.6505 970.224.6107 - fax fcgov.com 2 asked for clarification regarding debt financing for the project. Mike Beckstead replied that it is typical for a project such as this to have a debt reserve fund when you are doing bond financing. Unique to this deal is that we have two reserve funds at 7.3 million dollars each. Once the supplemental reserve is fully funded, we then only have to focus on the debt payments. The pledged sales tax revenue goes to this reserve. The Economic Advisory Commission also asked about the impact to Larimer County. Mike Beckstead commented that the City is proposing to the County that we share 50% of the residential Tax Increment coming off of this project. We acknowledge that the County lives and dies with property tax collections, and we are committed to work with the County to fix. However, we do need better data to estimate the best solution. The past model has data flaws, and new data needs to be evaluated. A good example is the Rising Tide Analysis for the DDA; we need to look at the holistic value of these kind of developments and if it compensates for the lost tax revenue. Channing Arndt also asked what is the alternative to not investing. Josh Birks replied that in the last ten years, we have lost 61% in sales tax collections for the mall site. The assessed values for property tax have likely fallen as well. Glen Colton asked about the impact to other businesses (i.e. movie theatres, clothing stores) and the inflow vs. transfer of businesses from other parts of town. Specifically, will the new mall cause unintended blight in other parts of Fort Collins? Josh Birks referred to the presentation and explained where the inflow/outflow EPS Analysis was used to address this concern. Base on the modeling information we have, the leakage equation is being altered in a positive way. Jim Clark asked if the model took into account the geographical area or just Fort Collins? Josh replied that the study was based on Fort Collins only, but it is understood that more resident income is leaving our community than 10 years ago due to other developments in Northern Colorado. Mike Kulisheck asked if the project could move forward without the support of Tax Increment Financing (TIF) by raising taxes or taking funding from the General Fund? Josh commented that it could be done that way, but would have direct, immediate negative impacts on the services currently being provided to the citizens of Fort Collins. Additional discussion regarding the impacts to Larimer County and Poudre School District continued. Christophe Febvre asked why TIF tends to favor cities over counties and school districts. Mike Beckstead presented a brief history of TIF and commented that Tax Increment Financing was in place prior to the Gallagher and Tabor Acts, which severely limited the County’s ability to recover with changing land values. Glen Colton was concerned that the City is on the hook if the mall does not perform and raises prices on goods that the citizens have to pay for directly. A summary of scenarios was presented by Mike to address this concern. In addition, Josh Birks commented that a study has been completed on why retailers have not chosen Fort Collins on their own in the past. The study indicated that Fort Collins simply did not have a current location that would suit their brand. Revitalizing the mall may offer this opportunity. After thorough consideration and discussion, the EAC developed the following recommendation to the Fort Collins City Council. Jim Clark moved and Channing Arndt seconded the following motion: The Economic Advisory Commission (EAC) believes that the Foothills Mall redevelopment is an important part of the Fort Collins City Plan and economic vision. As such, the EAC supports the public finance assistance package for the Foothills Redevelopment Project as described by City Staff. As part of this recommendation, the EAC highly recommends good faith efforts by the City in order to understand the full revenue and cost implications for, and to collaborate with, other taxing entities based on forthcoming rigorous analysis of the forecasted and eventually actual impacts of redevelopment. 3 Motion Passed 6 – 1 (nays Colton) The next meeting is scheduled on May 15, 2013 from 11:00 a.m. – 1:30 p.m.