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HomeMy WebLinkAbout2014 - Economic Advisory Commission - Annual ReportEconomic Advisory Commission 2014 Annual Report The EAC consists of nine members meeting regularly on the third Wednesday of every month. The board receives regular updates from staff and advises City Council on matters pertaining to the economic health and sustainability of the city. The board continues to gather community input on economic issues and represent the ideas expressed. Members who served in 2012 include Chair, Blue Hovatter, Vice-chair, Sam Solt, Michael Kulisheck (Mike), Jim Clark (Partial Year), Linda Stanley, Denny Otsuga, Glen Colton, Ann Hutchison, Michael Rechnitz. 2014 Year in Review: The following are items the Economic Advisory Commission were briefed upon, and formal action was taken with a recommendation forwarded to the City Council: 1. Foothills Mall Redevelopment and Reimbursement Agreement Recommendation Mike Beckstead is available to hold a special meeting on this topic if requested. He provided copies of the AIS, resolution modification and PowerPoint presentation. Staff will be inviting board representatives to a special “super-board” as well. Mike Beckstead presented the benefits of the changes to the agreement, including retaining the timeline of the development. From a financial perspective in a rising interest rate market, he would like the bonds issued sooner than later. The mall itself is a catalyst project to revitalize Midtown, it creates a sense of place, and lastly it will increase sales tax revenue. There are three requests: 1. Change the lease space required before bonds can be issued, 2. Clarify language around penalty payments if residential units are not completed, and 3. Modification of use of reserve and supplemental reserve funds. The current agreement is for 240,000 square feet of executed leases with provisions, to issue the bonds. He showed a chart of the January agreement numbers and the new proposed numbers. The equity position (invested dollars) and recourse commitment are higher than the original intent. Walton is the equity partner and there is an outside financer for the construction loan. If something goes wrong Walton is obligated on the $130 million construction. The risks and implications of the changes are: there is no additional financial risk to the City, and the district risk is related to a low probability event in the next six months. The City elected not to use its balance sheet for this; it is on the metro district’s balance sheet. There is no benefit to the developer’s financial position with these changes. Startup risk is on the metro district if the bonds are issued but the mall is not built. The City is not obligated to pay back those bonds. That is why it is a 7% marketed to high risk hedge funds. There is start-up risk to the metro district if appropriate leasing does not occur within a certain time frame, but the risk is low. Regarding Request #1, there is a clause about 50% payment of lost property tax increment in the event the residential units are delayed. The change is to pay either a fee or property tax, but not both. He added that there are two reserves planned. One is funded by bond proceeds. The other is supplemental reserve funded by revenue. In the event there is a need to tap into a reserve, it is neutral to the City because that reserve needs to be replenished. The agreement will be modified to allow the use of the supplemental reserve first. The Centerra development agreement is discussed as a “living document,” it has gone through seven drafts. He wishes he had anticipated the flexibility that would be necessary in a project of this magnitude. Deals like this need adaptability. Ann Hutchison moved and Mike Kulisheck seconded: The Economic Advisory Commission supports the amendment to the redevelopment agreement for the Foothills Mall. Motion passed, 7-1-0. Glen stated that he did not support of the original mall agreement, and therefore does not support the amendments. 2. Climate Action Plan Citizen Advisory Committee Member Nomination Blue Hovatter (Chair) indicated there was a request from Lucinda Smith, via Darin Atteberry, to have a commission member participate on the Climate Action Plan citizen advisory committee. • Glen Colton volunteered to be the committee member. • Michael Rechnitz volunteered to be the alternate. Denny Otsuga moved and Sam Solt seconded: EAC nominates Glen Colton as the CAC member and Michael Rechnitz as the alternate. Motion passed unanimously, 5-0-0. 3. Disposable Bags Fee Ordinance Recommendation Susie said staff started working on this project two years ago. Council requested an ordinance for paper and plastic bags for grocery stores. They both have a heavy environmental footprint and 60% of bags come from grocers. Staff has followed a path taken by other communities that have had great reductions in use of disposable bags. Staff has involved the community, including businesses in the process. May 2014 staff went to Council with a 10 cent per paper or plastic bag ordinance. The proposal is that the grocer keeps all the revenue, and must apply 50% toward giving away durable bags. The main idea is to encourage reducing waste at the source. It is part of the Road to Zero Waste. This program will divert waste from the landfill; reduce greenhouse gas emissions, etc. In July there was a public meeting and since then Council has come back with its own proposal. Council would like the ordinance applied to all retailers in Fort Collins, not just grocers. Temporary food vendors, such as farmers markets and restaurants, would be exempt. Council would also like retailers to all provide on-site recycling. Also the grocers can charge the actual cost per bag, and additional costs for complying with the ordinance, and list the charge on the sales receipt. Disposable bags would only be provided upon express consent under the revised ordinance. Retailers/grocers would have to keep records as well. Council wants to see the City reduce its use of plastic bags. We have trash can liners in parks and natural areas, as well as pet waste bags. The ordinance would sunset in one year. Mike Kulisheck moved and Linda Stanley seconded the following motion: The Economic Advisory Commission prefers Ordinance 2014-099 (Option 1) of the disposable bag ordinance. We believe it to be the more effective of the two options at reducing the number of disposable bags used in Fort Collins, as identified in the Road to Zero Waste. It would have no perceivable negative impacts on the local economy. Additional Comments: If Option 1 were to be modified the EAC would support the expansion to include all retail stores, the notification requirements for the consumer, and a 3-5 year sunset period for a review of the ordinance. The EAC also believes that Option 2, as it stands, could have negative economic impacts on smaller businesses, especially the requirements for onsite recycling facilities at all businesses. We also feel there should be clear direction on the use of proceeds collected by the stores to provide a solution to the problem area. Motion approved 8-0-0. 4. 2015-2016 City Budget Recommendation EAC Chair was instructed to develop a memo to City Council regarding the proposed 2015-2016 budget. The following comments/concerns were to be incorporated into the memo: • Concern about funding for RMI. • Should make statement supporting personnel. Current levels do not show support from the City. • Concerns about pulling funding from Shop Fort Collins. • Need more general support for local economy. • Staff does not have bandwidth to support local initiatives. • More scrutiny of cluster support. • Ensure flexibility of competitive process to determine needs based on cluster stage. • Flagships are necessary for business, so if you are too careful about making sure it is the broad plan, sometimes the specific cannot happen. • There needs to be sustainability, and that can only happen when there is actual business contributing to the cluster. • Small and medium businesses should get the majority of the funding. • Airport support needs to be viewed as gap funding with a limited term. • Unanimous concern for broadband. • Unsure Fort Collins needs the amount of URA funding that is being used. We are pouring money on a hot real estate market. • Some new businesses are benefitting from other projects that used URA funds. • How we treat CSU Ventures Program speaks highly to how we feel about what our students are doing and whether we want to keep them here, and whether we choose to develop those businesses here. Overlooking this is very shortsighted. It will be seen as an area where we could have had an impact. We are missing a great opportunity. This practice is becoming commonplace at institutions that develop technology. • Can cluster dollars could be used for CSU Ventures. • CSU Ventures is a company. • CSU Ventures should look at the competitive bid process. • Interest in seeing examples in other communities. • MIT has multiple sources of funding, including keeping the patents on technology developed there. They also allow students to use the labs to do work for government projects. These dollars will be matched, so we are not working alone in this. This keeps those who are educated and born and grown here, here. This will be returned tenfold to the community. • Suggestion to add to the recommendation that if there is additional funding, the CSU Venture offer should be supported. • We do not need to keep all of the talent here. CSU is a statewide treasure and asset. • Expression of hesitation in adding items that have fallen below the line. • Suggestion to say we are supportive of leveraging additional dollars that benefit organizations such as CSU. Ann Hutchison moved and Michael Rechnitz seconded the following motion: That the EAC allow the Chair to draft a memo to Council regarding the Commission’s recommendations on Budget Offers, with agreement on final language agreed to via email. Motion approved 7-0-0. Linda left before motion. 5. Building on Basics ¼ Cent Tax Renewal Project List Recommendation Members reviewed the project list online. Ann gave her explanation of each project, and told the group which projects have recently been moved off the list. Many projects moved off of the list may move to general operating costs. Ginny arrived and provided the most recent project list including O&M costs for the next four years, and inflation on real construction costs. Many projects are actually “funds” which helps leverage dollars. The southeast community center will include an outdoor pool with no contingencies. The Gardens on Spring Creek fund is now focused on the visitor center, and they will need to fundraise $1 million for the project. Funds for new vans were reduced by half, as federal money can be leveraged if the City can match funds. The Community Marketplace is high on the list, but not in, because the plans for it are nebulous; the property and partner have not yet been identified. As the Local Food cluster matures, the project may become more feasible. Ann Hutchison moved and Mike Kulisheck seconded the following motion: That the Economic Advisory Commission send a recommendation to City Council that they are supportive of the list as presented because it includes cultural and transportation enhancements that have a long term positive economic impact. Motion failed 2-3-1. Michael Rechnitz, Glen Colton and Blue Hovatter voted against. Denny Otsuga abstained.