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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/23/2021 - HUGHES STADIUM LAND UPDATEDATE: STAFF: November 23, 2021 Tyler Marr, Assistant City Manager WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Hughes Stadium Land Update. EXECUTIVE SUMMARY The purpose of this item is to affirm Council direction regarding the acquisition, financing and outreach process regarding the future use(s) of the Hughes Stadium land. The City and Colorado State University recently agreed to accelerate the purchase of the Hughes Stadium property, consistent with the citizen-initiated ordinance passed in April of 2021. Council Finance Committee met and agreed with the staff-recommended approach to pursue a hybrid-financing option, with a partial up-front cash payment with the outstanding amount coming from a financing through certificates of participation. The exact split of funding sources (primarily presumed to be General Fund and/or Natural Areas Fund) for the $12.5 million purchase is recommended to be determined after the land use of the property is known. It is anticipated the transaction can be completed in the first half of 2022. There are several interests in and potential uses for the site, consistent with the ballot language, that include Natural Areas, recreation, and Indigenous uses, among others. Staff proposes a robust and externally led engagement process to discern community expectations and desires around the site. This process will likely take all of 2022 to complete, with determined land uses not being available for public use until 2023 at the earliest. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council support moving forward with hybrid-financing, including relevant Council decisions and consistent with the recommendation of Council Finance Committee, to acquire the property? 2. Does Council support the recommended approach that staff partner with an external resource for the community engagement process to determine the future land use of the site? BACKGROUND / DISCUSSION In April 2021’s City election, Fort Collins voters approved Citizen -Initiated Ordinance No. 1, requiring the City to pursue acquisition of the 164 acre Hughes Stadium property at fair market value. (Attachment 1) The exact language of the ballot measure is as follows: Shall the City enact an ordinance requiring the City Council of the City of Fort Collins to immediately rezone upon passage of the ordinance a 164.56-acre parcel of real property formerly home to the Hughes Stadium from the Transition District to the Public Open Lands District, and requiring the City to acquire the property at fair market value to use said property for parks, recreation, and open lands, natural areas, and wildlife rescue and restoration, and furthe r prohibiting the City from de-annexing, ceasing acquisition efforts or subsequently rezoning the property without voter approval of a separate initiative referred to the voters by City Council, and granting legal standing to any registered elector in the City to seek injunctive and/or declaratory relief in the courts related to City noncompliance with said ordinance? Council has already completed the rezoning of the land in the passage of Ordinance No. 069, 2021. Staff has been pursuing purchase options of the property from Colorado State University (CSU) for well over a year. In November 23, 2021 Page 2 August 2021, the City entered a memorandum of understanding (MOU) with CSU and Cottonwood Land and Farms that provided a path for the City to acquire the land, after several oth er land transactions, and development approvals were met. In early November, CSU and the City began working to accelerate the purchase of the Hughes land independent of the other items in the MOU, while remaining optimistic that the other elements of the MOU, including the construction of affordable and workforce housing for CSU, can come to fruition. Council is scheduled to hear a preliminary metro district proposal from Cottonwood Land and Farms related to the property described in the MOU in February, 2022. Financing Approach At the November 3 Council Finance Committee meeting, staff presented potential options for purchasing the Hughes land from CSU and discussed a couple of other forthcoming needs in relevant areas. (Attachment 2) The three options discussed are as follows, with every choice proposing a “true-up” of either the General or Natural Areas fund based on final land use decision: 1. Cash purchase a. This option would utilize existing reserves of both General and Natural Areas funds to fully cover the $12.5M purchase. 2. Financing a. This option proposes a $22 million, 20-year term that would allow the financing of the Hughes purchase, an additional Natural Areas acquisition, and a needed golf irrigation system. This option would require approximately $787,000 for Hughes annually, to be split between the General and Natural Areas funds. 3. Hybrid - cash and financing a. This option would provide $4 million in cash, with $2 million coming from each of the Natural Areas and General funds, and finance $11.5 million over 10 years and include the golf irrigation project in addition to the Hughes purchase. This would require a combined $944 ,000 for the Hughes portion annually from the Natural Area and General funds. Staff recommended the City pursue the hybrid option and Council Finance Committee concurred, while reiterating the importance of ensuring the proper balancing and shoring up of the two funds once final land use is determined. It should be noted that the financing options above are solely for acquisition of the site. To prepare, restore, or alter the land for final determined uses, additional funds will be needed to complete any work and open the parcel for public use. Determination of Land-Use Staff is aware of numerous desired uses for the Hughes land, once the City acquires it. This includes everything from basic open land uses, including restoration and trails; recreational uses, both new and those already present on the site such as disc golf; a wildlife rehabilitation center; and various Indigenous uses, including ceremonial access and other potential opportunities. All these uses would likely be allowed under the ballot language. As such and recognizing the various stakeholders and broader community interest in these items, staff believes it is critical to carefully listen to the community before making any determinations on the future land use. While several other engagement initiatives will continue and are likely to relate to certain stakeholder interests in Hughes use, including work with Indigenous community members, staff recommendation is to bring on a public engagement firm to design and execute a full engagement plan to inform Council about diverse community desires and work with staff and the community to propose and formulate potential use mixes. This is primarily for two reasons: November 23, 2021 Page 3 1. Avoiding any perception of bias or preconceived views of ideal land use - having a specific department run the public engagement process might imply that that departm ent is the preferred decision maker or eventual use for the land. 2. Dedicated capacity to see this process through from start to finish, given the number of current vacancies and capacity of staff. If Council is supportive of this direction, staff will work to identify potential cost needs and then bring forward an appropriation for Council approval, prior to moving forward with a request for proposals (RFP) to begin the work. Because of the time frame to engage and select an engagement partner and want ing to ensure a non-rushed and thorough engagement process, staff believes that this engagement work would take 2022 and potentially some of 2023, with potential land-use decisions being decided thereafter. If the property is acquired before the public engagement process is complete, the Natural Areas Department and Parks Department would temporarily manage the site with Parks managing the frisbee golf course and Natural Areas managing the rest of the property. ATTACHMENTS 1. Hughes Stadium Site (PDF) 2. Council Finance Committee Minutes (PDF) 3. Powerpoint Presentation (PDF) ATTACHMENT 1 Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Finance Committee Meeting Minutes November 3, 2021 3:00 – 5:00 pm Zoom Council Attendees: Julie Pignataro, Kelly Ohlson, Emily Francis, Shirley Peel Staff: Carrie Daggett, John Duval, Kyle Stannert, Lance Smith, Dave Lenz, Zack Mozer, Blaine Dunn, Ryan Malarky, Amanda Newton, Aaron Harris, Theresa Connor, Matt Fater, Erik Martin, Sue, Kraig Bader, Cara Neth, Renee Callas, Teresa Roche, Lawrence Pollack, Cody Forst, Barb Brock, Zoe Shark, Jen Authier, Jennifer Poznanovic, Jo Cech, Ginny, Javier Echeverria, Victoria Shaw, Adam Bromley, Molly Reeves, SeonAh Kendall, Nina Bodenhamer, Matt Fater, Tyler Marr, Josh Birks, Carolyn Koontz Others: Kevin Jones Vicky McLane ____________________________________________________________________________________ Meeting called to order at 3:00 pm Approval of minutes from the October 6, 2021, Council Finance Committee Meeting. Kelly Ohlson moved for approval of the minutes as presented. Emily Francis seconded the motion. Minutes were approved unanimously via roll call by; Julie Pignataro, Kelly Ohlson and Emily Francis. A.Natural Areas Land Acquisition Financing Blaine Dunn, Accounting Director November 23rd Work Session related to the Hughes land purchase. ATTACHMENT 2 DISCUSSION / NEXT STEPs; Julie Pignataro; is Natural Areas is a type of Open Space? Zoe Shark: Natural Areas are defined – 1041 regulations – a specific definition - Open Space is a broader term and there is not a city definition. Part of the public engagement is clarifying ‘when you said you wanted more open space, what does that look like to you, to the community? Julie Pignataro; so many people use these terms interchangeable – Are golf courses considered open public space? Zoe Shark; Parks and golf courses are "Public Open Lands" Julie Pignataro; Public open land is the zoning - I applaud the engagement that was done. Do our golf courses pay for themselves? Victoria Shaw; our golf courses are enterprise funded which means that they do fund themselves and they repay the General Fund for any administrative services that we provide. In this case, we are adding in the bonding for the irrigation system at Southridge which will be repaid out of golf revenues. This was a need that was recognized several years ago in terms of needing financing for this and this is an attractive option with the right timing. Blaine Dunn; we have done similar things in the past with tagging golf course projects to other debt financing packages. Julie Pignataro; are the irrigation upgrades going to save water? Victoria Shaw: yes Julie Pignataro; I don’t want to delay the golf irrigation as we need to conserve water which is such a precious resource - I appreciate all of the information you have provided. I believe other Councilmembers will have a lot to say about these options as well. Do we know how much debt the city has? ACTION ITEM: Blaine Dunn; We keep a very close eye on that, and I will follow up via a memo as we like to keep our enterprise and governmental debt separate both from a policy and from a disclosure standpoint. Governmental debt is roughly $37M Blaine Dunn; we were scheduled to bring our Debt and Investment Policies forward at this meeting for your review, but that topic was moved to accommodate this specific item. We do have some policies in place including that we won’t have more than 4-5% of the General Fund committed at any time for the governmental side. 3 years payment from Natural Areas go to second land parcel – we would recommend no debt financing for the second parcel - funds will be made whole over time Kelly Ohlson; We don’t know what part of these will end up as part of the Natural Areas portfolio. I like the true up of funds based on land use determination and I want to make sure that is very clear and in writing when we move forward with this land deal. What are the 3-year payments from Natural Areas of $2.2M per year if we are starting with the 50/50 thing and then truing up later? Blaine Dunn; we could have made that bullet more clear - the 3-year payments from the Natural Areas fund are purely to go to the 2nd parcel purchase. If this is a hybrid option we would recommend not debt financing the 2nd parcel at all - that they pay for the 2nd land parcel as they are planning to do now. Kelly Ohlson; I am good Emily Francis; Next time, can you put all 3 options in a table so we can see that all at one time? I like the staff recommendation. Where are we using it for? Where is it coming from? We will need to talk about any trade-offs as a community. Shirley Peel; what would a tribal land bank actually look like? Tyler Marr; that is partly why we have a work session scheduled on November 23rd – outlining what an engagement effort would look like for all stakeholders including the indigenous community, Recreation and Natural Areas stakeholders as including clarity and timing of what that might look like. Blaine Dunn; we wanted to come to Finance Committee prior to the Work Session since it is a rather large $12M purchase. Hughes Stadium Property UpdateNovember 23, 2021Tyler MarrAssistant City ManagerATTACHMENT 3 2Direction Sought from Council1. Does City Council support moving forward with hybrid-financing, including relevant Council decisions and consistent with the recommendation of Council Finance Committee, to acquire the property?2. Does City Council support the recommended approach that staff partner with an external resource for the community engagement process to determine the future land use of the site? 3Ballot Language – Citizen Initiated Ordinance April 6, 2021Shall the City enact an ordinance requiring the City Council of the City of Fort Collins to immediately rezone upon passage of the ordinance a 164.56-acre parcel of real property formerly home to the Hughes Stadium from the Transition District to the Public Open Lands District, and requiring the City to acquire the property at fair market value to use said property for parks, recreation, and open lands, natural areas, and wildlife rescue and restoration, and further prohibiting the City from de-annexing, ceasing acquisition efforts or subsequently rezoning the property without voter approval of a separate initiative referred to the voters by City Council, and granting legal standing to any registered elector in the City to seek injunctive and/or declaratory relief in the courts related to City noncompliance with said ordinance? Background4• Ballot measure passed April, 2021 requiring rezoning and acquisition of the 164-acre property• Council rezoned the land in Ordinance 2021-069 • Memorandum of Understanding reached with CSU and Cottonwood Land and Farms in August• Council Finance discussed financing options on 11/3• On 11/15, CSU and the City announced that they were going to accelerate the Hughes Purchase Financing OptionsAll options recommend a ”true-up” of funding sources once land use is known1. Cash Purchase - $6.25M from both General and Natural Areas Fund Reserves2. Financing – 20-year $22M offering for Hughes, additional Natural Areas purchase, and golf irrigation system• $787k annually for Hughes3. Hybrid Option – 10-year, 11.5M offering for Hughes and golf irrigation• $2M cash from General and Natural Areas fund• $944k annually for Hughes• Council Finance and Staff Recommendation5 Determining the Future Land Use• Multiple stated interests in the property• Existing uses• Indigenous uses –including potential landback• Recreation• Natural Areas• As such, staff recommends a robust process led by a 3rd party facilitator• Anticipate that this could take all of 2022 to complete. 6 7Next Steps &TimelineAcquisitionWork 2022 2023 202420252026Public Engagement Process Preparing Site For Potential Public Use Land Use Determination THANK YOU!