HomeMy WebLinkAboutMINUTES-04/18/1995-Regulart April 18,1995
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council -Manager Form of Government
Regular Meeting - 6:30 p.m.
A regular meeting of the Council of the City of Fort Collins was held on Tuesday, April 18,
1995, at 6:30 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was
answered by the following Councilmembers: Apt, Azari, Janett, Kneeland, McCluskey, Smith
and Wanner. Councilmember Absent: None.
Staff Members Present: Davis, Jones, Roy.
CITIZEN PARTICIPATION
David Roy, 1039 West Mountain Avenue, stated if Council does not believe the Timberline
expansion should be done, then Council has an obligation to inform citizens why the project
should be abandoned.
Yolanda C. Nicely, 300 East Harmony Road, expressed concerns regarding the homeless and
encouraged Council to help homeless receive useable skills.
Gerry Horak, 1511 Lakeside Avenue, opposed the influence the Chamber of Commerce had on
the recent election.
CITIZEN PARTICIPATION FOLLOW-UP
Councilmember Kneeland responded to Ms. Nicely's concerns stating Council would soon be
considering a panhandling ordinance and spoke of measures being taken in Fort Collins to help
alleviate the homeless situation.
Councilmember Apt responded to Mr. Roy's concerns regarding Timberline Road, and clarified
Council would be looking at the design of the road and assured Mr. Roy the public is welcomed
to participate in the process.
April 18, 1995
Agenda Review
Interim City Manager Diane Jones clarified that item #19, Public Hearing and Resolution 95-47
Declaring the Intent of the Council of the City of Fort Collins to Issue Multi -Family Housing
Revenue Bonds for Courtney Park Apartments; and Declaring its Intent to Reimburse Certain
Capital Expenditures by Issuing Bonds, is a public hearing. She stated due to the cancellation of the
April 4 meeting there were two appeals Items #28, Consideration of the Appeal of the February 27,
1995, Decision of the Planning and Zoning Board Approving a Development Project Known as the
Hugh M. Woods P.U.D. - Final, and #29, Hearing and First Reading of Ordinance No. 44, 1995,
Rezoning Approximately 140 Acres from the T-Transition, District to the R-P, Planned Residential,
District with a PUD Condition, Known as the Summitview Properties Rezoning, on the Agenda.
Kelly Ohlson, 2040 Bennington Circle, requested that Item #19, Public Hearing and Resolution 95-
47 Declaring the Intent of the Council of the City of Fort Collins to Issue Multi -Family Housing
Revenue Bonds for Courtney Park Apartments; and Declaring. its Intent to Reimburse Certain
Capital Expenditures by Issuing Bonds, be withdrawn from the Consent Agenda.
***CONSENT CALENDAR***
The Consent Calendar consists of Item Numbers 7 through 24. This Calendar is intended to allow
the City Council to spend its time and energy on the important items on a lengthy agenda. Staff '
recommends approval of the Consent Calendar. Anyone may request an item on this calendar to be
'pulled" off the Consent Calendar and considered separately. Agenda items pulled from the Consent
Calendar by the Public will be considered separately under Agenda Item #25 Public Pulled Consent
Items. Items pulled from the Consent Calendar by staff or Councilmembers may be considered
separately under Agenda Item #35, Council/Staff Pulled Consent Items.
Second Reading of Ordinance No. 32, 1995 Authorizing the City of Fort Collins to Enter into
a Livestock Grazing Lease Agreement for Meadow Springs Ranch with Natural Fort Grazing,
Ltd.
In January 1995, staff issued a RFP for a six -year livestock grazing lease. Although similar
to the 1992 RFP, it is for 6 years so as to coincide with the six -year demonstration phase of
the MSR biosolids research management plan. Adjustments to the lease will then be made
based on the findings at the conclusion of the biosolids demonstration phase. Ordinance No.
32, 1995, was unanimously adopted on First Reading on March 21, 1995.
8. Second Reading of Ordinance No. 33, 1995, Appropriating Prior Year Reserves for Special
Library Projects.
Ordinance No. 33, 1995, which was unanimously adopted on first reading on March 21,
appropriates $50,000 in prior year reserves in the General Fund Reserve for Library '
April 18, 1995
tDonations. The Fort Collins Public Library receives monetary gifts and donations on an
ongoing basis. This revenue is deposited in the Reserve for Library Donations.
9. Second Reading of Ordinance No. 34, 1995 Appropriating Unanticipated Revenue in the
General Fund for the Library Outreach Program.
This Ordinance, which was unanimously adopted on First Reading on March 21, 1995
appropriates the Outreach funds in the amount of $10,248. The General Service funds in the
amount of $92,234 were projected and appropriated in the 1995 budget.
10. Second Reading of Ordinance No 35, 1995 Authorizing the Sale of Certain Real Property
and Appropriating Unanticipated Revenue to the Parkland Fund
The City's Right -of -Way Agent has been working on the land sale since early 1994. Signs
advertising the land sale were posted in the spring of 1994, notices were mailed to area
property owners, and a neighborhood meeting was held on June 7, 1994. The sale of the land
has gone through the City's Purchasing Department sixty day public advertising process.
Ordinance No. 35, 1995 was unanimously adopted on First Reading on March 21, 1995.
Second Reading of Ordinance No 36, 1995, Vacating an Easement at 1501 South Shields
1 Street.
To meet the City's need for street, sidewalk and bike path improvements for the Shields Street
Project, the City purchased a 9 foot strip of land from Harold and Phyllis Worth at 1501 South
Shields and acquired a pocket easement for utilities. The existing easement could not be used
for street improvements so the acquisition of the 9 foot strip was required for the project. In
addition, the easement will revert to the Worths if it is not used for a sidewalk and bike path
purposes. During negotiations, Harold and Phyllis Worth requested that the City vacate the
16.5 foot easement because they did not want to rely on the automatic reversion of the
easement. Ordinance No. 36, 1995 was unanimously adopted on First Reading on March 21,
1995.
12. Second Reading of Ordinance No. 37, 1995 Authorizing the Granting of a Non -Exclusive
Storm Drainage Easement on Buckingham Park for the New Belgium Brewery.
The development of the "New Belgium Brewery" will require stormwater flows to cross
Buckingham Park land. The easement site is along an old oxbow area of the Poudre River.
The site is vegetated with natural grass and trees. This area is not part of the park irrigated turf
area. Ordinance No. 37, 1995 was unanimously adopted on First Reading on March 21, 1995.
13. Second Reading of Ordinance No 38, 1995 Appropriating Unanticil2ated Revenue of $98 437
' from PR-1 to Police Services Budget -
3
April 18, 1995
School resource officers will be specially trained to work proactively with the entire school
community to assist in providing a safe and healthy learning environment. Accordingly, this
program fits nicely into the concept of community policing and the practice of problem -
solving, and broadens attempts to develop additional community and public safety programs
with a significant portion of community.
Ordinance No. 38, _1995, which was unanimously adopted on First Reading appropriates to
the City's General Fund $98,437 in funds to be received by the City from the School District
under the SRO Program for 1995.
14. Second Reading of Ordinance No. 39, 1995 Appropriating Funds from the Affordable
Housing Trust Fund for Use as Matching Funds for the Latimer Home Improvement
Rehabilitation Program.
Ordinance No. 39, 1995, which was unanimously adopted on First Reading on March 21, 1995
appropriates $22,500 from the General Fund Affordable Housing Trust Fund Reserve to
provide required matching funds to receive approximately $350,000 from the Colorado
Division of Housing for the Latimer Home Improvement Program.
15. Second Reading of Ordinance No. 40. 1995 Appropriating Funds From Prior Year Reserves
and Authorizing Transfer of Appropriated Amounts between Funds for the Purpose of I
Providing Additional Amounts Needed to Construct Street Improvements to Linden Street
Between Walnut and Jefferson Streets.
The project bid for the Linden Streetscape improvement came in 9% over the cost estimate
and due to other factors is in need of additional funding to construct the improvements as
originally envisioned. The actual Bid price was $687,000. The project scope was reduced by
$82,500 on First Reading resulting in a revised cost of $604,500. A contingency of $60,500
was added to the project for a total project cost of $665,000. Available appropriations for the
Linden Street project total $550,000, including the GID contribution ($250,000) and the City
contribution from last year ($300,000). The total additional funding needed to construct the
project is $115,000. This Ordinance was unanimously adopted on First Reading on March 21,
1995.
16. First Reading of Ordinance No. 41. 1995 Vacating Portions of East Horsetooth Road and
Mitchell Drive Right -of -Way and Retaining the Same for Utility and Drainage Easement
Purposes,
A Minor Subdivision for the First Choice Bank, located at the southeast corner of East
Horsetooth Road and Mitchell Drive, was approved on March 30, 1995. The detention pond
design for the project requires a berm to be constructed adjacent to Horsetooth Road and
Mitchell Drive. Due to the height of the berm, a retaining wall is proposed to be constructed '
at the back of the sidewalk and would encroach into a portion of the existing dedicated right-
4
April 18, 1995
1 of -way on both Mitchell Drive and East Horsetooth Road. Since the City does not want to
take on the maintenance responsibility for private structures, these facilities are typically
constructed outside of the public right-of-way. However, in this case, the site is constrained
by public streets on 3 sides and the Larimer County Canal #2 on the south side which restricts
the area available for the detention pond.
The developer dedicated extra right-of-way along the Horsetooth Road frontage for a right
turn lane to Mitchell Drive. Since the need for the right turn lane is for City at large use, and
not just needed for this project, in most cases the City would have had to purchase the right-of-
way. Therefore, staff believes the dedication the City received for the right turn lane is an
acceptable trade-off for the proposed vacation being requested to solve the project's drainage
problem. In addition, the right-of-way beyond the back of the sidewalk in this location is not
necessary for street purposes. For the above reasons it is recommended that the excess right-
of-way be vacated. As a result, the retaining wall encroachment will be eliminated by vacating
that portion of the right-of-way behind the sidewalk.
17. First Reading of Ordinance No. 42, 1995, Amending Section 2-182 of the City Code Relating
to Membership of the Community Development Block Grant Commission.
At its March 13, 1995 meeting, the Community Development Block Grant (CDBG)
Commission voted unanimously to reduce the membership of the Commission from 13
members to 11 members. This Ordinance, if adopted, will reduce the membership of the
Commission effective May 12, 1995 (10 days following final adoption of the Ordinance on
second reading on May 2, 1995).
18. First Reading of Ordinance No. 43, 1995, Appropriating Unanticipated Revenue in the
General Fund.
The Fort Collins Housing Authority (the "Authority") made a payment to the City from its
1994 budget in the sum of $16,894.51 as a "Payment in Lieu of Taxes" ("PILOT") for public
services and facilities. The Authority has requested that the City refund the money "...to again
fund sorely needed affordable housing related activities, to attend the low-income housing
needs of Fort Collins residents."
Resolution 92-93 reinstated the requirement by the City of the Authority to make annual
PILOTS to the City. The purpose of the resolution was to clarify that these funds are the
property of the City and not excess HUD funds. The City may dispose of them as it deems
appropriate in accordance with law, including remitting the funds to the Authority if the
Council determines that such remittal serves a valid public purpose. The Council remitted the
PILOT to the Authority in 1992, 1993, and 1994.
April 18, 1995
19. Public Hearing and Resolution 95-47 Declaring the Intent of the Council of the City of Fort '
Collins to Issue Multi -Family Housing Revenue Bonds for Courtney Park Apartments: and
Declaring its Intent to Reimburse Certain Capital Expenditures by Issuing Bonds,
On March 23, 1995, the City received a proposal from Prime Residential, L.P. (the
"Company") for the City to issue private activity bonds for the purpose of acquiring and
renovating a multi -family housing project in Fort Collins known as Courtney Park Apartments
(the 'Project"). The Project is located at the northeast corner of Lemay and Harmony (4430
South Lemay). It consists of 248 units of which 62 or 25% of the total will be designated as
affordable housing to low income residents.
Passage of the Inducement Resolution would allow the City to issue $8,500,000 in private
activity bonds for the purpose of constructing the Project. The proposal is consistent with the
City's adopted policies regarding issuance of these bonds. The Project is consistent with the
Council goal of increasing the quality and affordability of housing within the City and would
insure that the project would continue to be occupied by low- and moderate -income tenants
for a period of at least fifteen years
20. Resolution 95-48 Approving the Final Design of the Railroad Consolidation Project and
Authorizing the Acquisition by Eminent Domain Proceedings of Certain Land Necessary for
the Construction of Said Projects. '
The Downtown Railroad Track Consolidation project has been broken into three phases for
construction. The target dates for the construction of each of those phases is as follows:
PHASE I July - September 1995
PHASE II July 1995 - June 1996
PHASE III September 1995 - August 1996
The City must acquire two parcels of property from Schrader Oil for the construction of the
connecting track as a part of Phase H. We have been discussing the acquisition with Schrader
Oil for the past six months. The negotiations for these parcels are being complicated by the
potential of environmental contamination on these parcels. Schrader Oil has told us that the
northern site was contaminated by petroleum products leaking from underground storage tanks
which have been replaced. Schrader Oil is in the process of putting together a clean up plan
for the petroleum contamination. There is also the potential of environmental contamination
from an old coal gasification plant. The plant was owned and operated by the Poudre Valley
Gas Company until about 1930. This company later became the Public Service Company.
21. Resolution 95-49 Authorizing the Mayor to Execute a Grant Agreement with the United
States Federal Aviation Administration (FAA) to Acquire an Aircraft -Rescue -Fire -Fighting
Truck (ARFF). '
April 18, 1995
tThis grant that the FAA is offering to fund under the standard 90% FAA/10% Sponsor (City
of Fort Collins (5%) and City of Loveland (5%)) was identified in the 1993 Five Year Airport
Master Plan Update, the 1994 Joint Planning Conference (a meeting of the Airport Manager,
airport users and FAA personnel which identified and prioritized grant projects) and the
Airport Operations and Development Policy adopted by The Fort Collins and Loveland City
Councils in July of 1994. The Sponsor's share (Fort Collins-5%, Loveland-5%) had been
earmarked and is included in the 1995 Airport budget. This grant project involves the
acquisition of an aircraft specific fire truck that will replace the current fire truck which the
FAA has tested and found to be substandard. This project improves current safety standards
and does not enhance the Airport's ability to accommodate either larger or more frequent
operations. The project covered by this grant is consistent with the Airport Operations and
Development Policy and is included in the 20-year Airport Capital Improvement Program
which the Councils adopted.
22. Resolution
95-50 Authorizing
the Mayor to
Execute a Grant Agreement with the Division of
Aeronautics
of the Colorado
Department of
Transportation for the Purchase and Installation
of Five Aircraft
Band Radios
at the Fort Collins/Loveland
Municipal Airport
This is a safety enhancing project. Operating maintenance vehicles on and around the runways
and taxiways creates the possibility of collision with aircraft. These radios will be mounted
in the Airport maintenance vehicles so that the operators may monitor radio transmissions and
advise aircraft of their movements. Vehicles to receive radios include the snowplows (2),
mowing tractor (1) and pickup trucks (2) used for maintenance and inspections on the airfield.
This project does not enhance the Airports ability to accommodate either larger or more
frequent operations. The project covered by this grant is consistent with the Airport
Operations and Development Policy which the Councils adopted in July 1994.
23. Resolution 95-51 Amending the Guidelines for the Cultural Development and Programming
Account (Fort Fund).
At the March 22, 1995 meeting of the Cultural Resources Board, the Board voted to
recommend the following changes to the guidelines for the Cultural Development and
Programming Account (Fort Fund).
In the overview section under "The following will not be considered for funding" the
following sentence would be added:
Any event in which the event sponsor donates, or intends to donate, the net
proceeds or profit from the event to another organization and/or individual.
This amendment clarifies that it is against city policy to grant money to an organization which
' in turn passes these monies along to other organizations or individuals.
April 18, 1995
24. Routine Deeds and Easements.
A. Deed of Easement from Colorado State University Research Foundation (CSURF) for
permanent sanitary purposes located directly east of the proposed Windtrail on Spring
Creek PUD which is approximately ''/z mile east and 'h mile south of the Prospect Road
and Shields Street intersection. Monetary consideration $0.
B. Deed of Easement from Sundance Hills for drainage and utility purposes located on Lots
21, 22, 23, and 24 of Greenbriar Village 2nd which are all on the south side of Indian
Paintbrush Court. Greenbriar Village is located on the southwest comer of Willox Lane
and Redwood Street. Monetary consideration $10.
C. Deed of Easement from Donald and Mary Scott for the purpose of stormwater detention
located on Lot 10 of Creger Plaza which is 3737 South Mason Street. Monetary
consideration $10.
D. Deed of Easement from Everitt Enterprises for storm drainage and detention pond
purposes located at the northwest corner of Worthington Avenue and West Drake Road.
Monetary consideration $0.
1
E. Deed of Right -of -Way from Windtrail Limited Liability Company for the purpose of '
permanent right-of-way located at the northeast end of Gilgalad Way which is the
northwest corner of Windtrail Townhomes PUD. Monetary consideration $0.
F. Deed of Easement from Everitt Enterprises for the purpose of a temporary turnaround
access easement located at the end of Worthington Circle near the Center for Advanced
Technology's 17th Filing. Monetary consideration $0.
G. Deed of Easement from Innovation LLC for utility purposes located at the Oakridge
Business Park, 17th Filing which is just southeast of Oakridge and Innovation Drives off
of East Harmony Road. Monetary consideration $10.
H. Deed of Easement from Solar Ridge Development for the purpose of a permanent
waterline located on Lot 4, Block 3, Solar Ridge First Filing which is northwest of West
Vine Drive and North Taft Hill Road. Monetary consideration $10.
I. Deed of Easement from Solar Ridge Development for the purpose of a permanent
waterline located on Lot 3, Block 3, Solar Ridge First Filing which is northwest of West
Vine Drive and North Taft Hill Road. Monetary consideration $10.
Deed of Easement from Evergreen Park, Replat No. 1, for permanent drainage purposes
located on Lots 18 and 19 of said subdivision which is just northeast of Conifer Street '
and North College Avenue. Monetary consideration $0.
April 18, 1995
K. Powerline Easement from Powell and Garnette M. Stiles, 2220 Vassar, needed to install
a new underground streetlight. Monetary consideration: $10.
L. Powerline Easement from Helen Sandmann 707 Colorado, needed to underground
existing overhead electric services. Monetary consideration: $10.
The following deeds are located at the north end of Greenstone PUD, Phase 2
M. Deed of Right -of -Way from Steven and Patricia Coupens located at the north end of
Silver Moon Lane which is �/s mile east and �/2 mile north of South Lemay Avenue and
County Road 32. Monetary consideration $10.
N. Deed of Right -of -Way from Greenstone Incorporated located at the north end of Silver
Moon Lane. Monetary consideration $10.
O. Deed of Easement from Steven and Patricia Coupens for utility purposes located at the
north end of Silver Moon Lane. Monetary consideration $10.
P. Deed of Easement from Harrie and Kaye Hogan for utility purposes located at the end
of Silver Moon Lane. Monetary consideration $10.
' Q. Deed of Easement from Greenstone Incorporated for utility purposes located at the north
end of Silver Moon Lane. Monetary consideration $10.
***END CONSENT***
Items on Second Reading were read by title by Deputy City Clerk Molly Davis.
7. Second Reading of Ordinance No 32 1995 Authorizing the City of Fort Collins to Enter into
a Livestock Grazing Lease Agreement for Meadow Springs Ranch with Natural Fort Grazing.
Ltd.
8. Second Reading of Ordinance No 33 1995 Appropriating Prior Year Reserves for Special
Library Projects,
9. Second Reading of Ordinance No 34 1995 Appropriating Unanticipated Revenue in the
General Fund for the Library Outreach Program.
10. Second Reading of Ordinance No 35 1995 Authorizing the Sale of Certain Real Property
and Appropriating Unanticipated Revenue to the Parkland Fund.
0
April 18, 1995
Second Reading of Ordinance No. 36, 1995, Vacating an Easement at 1501 South Shields I
Street.
12. Second Reading of Ordinance No. 37. 1995 Authorizing_ the Granting of a Non -Exclusive
Storm Drainage Easement on Buckingham Park for the New Belgium Brewery.
13. Second Reading of Ordinance No. 38. 1995 Appropriating Unanticipated Revenue of $98,437
from PR-1 to Police Services Budget,
14. Second Reading of Ordinance No. 39, 1995 Appropriating Funds from the Affordable
Housing Trust Fund for Use as Matching Funds for the Larimer Home Improvement
Rehabilitation Program,
15. Second Reading of Ordinance No. 40, 1995 Appropriating Funds From Prior Year Reserves
and Authorizing Transfer of Appropriated Amounts between Funds for the Purpose of
Providing Additional Amounts Needed to Construct Street Improvements to Linden Street
Between Walnut and Jefferson Streets,
31. Items Relating to the Establishment of an Art in Public Places Program and Creation of an Art
in Public Places Board,
A. Second Reading of Ordinance No. 20, 1995 of the Council of the City of Fort Collins '
Amending Chapter 23 of the Code of the City of Fort Collins to Establish the Art in
Public Places Program and Adopting the Art in Public Places Guidelines.
B. Second Reading of Ordinance No. 21, 1995 of the Council of the City of Fort Collins
Amending Chapter 2, Article III, of the Code of the City of Fort Collins Creating an Art
in Public Places Board.
Items on First Reading were read by title by Deputy City Clerk Molly Davis.
16. First Reading of Ordinance No. 41, 1995 Vacating Portions of East Horsetooth Road and
Mitchell Drive Right -of -Way and Retaining the Same for Utility and Drainage Easement
Purposes.
17. First Reading of Ordinance No. 42, 1995, Amending Section 2-182 of the City Code Relating
to Membership of the Community Development Block Grant Commission
18. First Reading of Ordinance No 43, 1995, Appropriating Unanticipated Revenue in the
General Fund.
10
April 18, 1995
29. Hearing and First Reading of Ordinance No. 44. 1995. Rezoning Approximately 140 Acres
from the T-Transition. District to the R-P. Planned Residential. District with a PUD
Condition. Known as the Summitview Properties Rezoning,
30. Items Relating to Economic Incentives.
A. First Reading of Ordinance No. 45, 1995 of the Council of the City of Fort Collins
Amending Article II of Chapter 25 of the Code Concerning a Credit Against the Personal
Property Tax Due From Large Base Industry in an Enterprise Zone.
B. First Reading of Ordinance No. 46, 1995 of the Council of the City of Fort Collins
Amending Article II of Chapter 25 of the Code Concerning a Credit Against the Personal
Property Tax Due From Large Base Industry.
C. First Reading of Ordinance No. 47, 1995 of the Council of the City of Fort Collins
Amending Division 1 of Article III of Chapter 25 of the City Code Concerning a Use Tax
Limit for Large Base Industry.
D. First Reading of Ordinance No. 48, 1995 of the Council of the City of Fort Collins
Amending Article III of Chapter 25 of the City Code Concerning Deferred Payment of
' Use Tax for Large Base Industry.
E. First Reading of Ordinance No. 49, 1995 of the Council of the City of Fort Collins
Amending Article III of Chapter 25 of the City Code Concerning the Return, for Verified
Community Benefits, of Use Tax Paid by Large Base Industry.
Councilmember McCluskey made a motion, seconded by Councilmember Smith, to adopt all items
not removed from the Consent Agenda. Yeas: Councilmembers Apt, Azari, Janett, Kneeland,
McCluskey, Smith and Wanner. Nays: None.
THE MOTION CARRIED.
April 18, 1995
Resolution 95-47 ,
Declaring the Intent of the Council
of the City of Fort Collins to Issue
Multi -Family Housing Revenue Bonds
for Courtney Park Apartments; and Declaring its Intent
to Reimburse Certain Capital Expenditures by Issuing Bonds, Adopted
The following is staff's memorandum on this item.
"Financial Impact
The debt service on the private activity bonds will be paid by revenues generated by the project. The
bonds do not constitute a debt of the City of Fort Collins.
Executive Summary
On March 23, 1995, the City received a proposal from Prime Residential, L.P. (the "Company") for
the City to issue private activity bonds for the purpose of acquiring and renovating a multi family
housing project in Fort Collins known as Courtney Park Apartments (the "Project"). The Project
is located at the northeast corner of Lemay and Harmony (4430 South Lemay). It consists of 248
units of which 62 or 25% of the total will be designated as affordable housing to low income '
residents.
Passage of the Inducement Resolution would allow the City to issue $8,500,000 in private activity
bonds for the purpose of constructing the Project. The proposal is consistent with the City's adopted
policies regarding issuance.of these bonds. The Project is consistent with the Council goal of
increasing the quality and affordability of housing within the City and would insure that the project
would continue to be occupied by low- and moderate -income tenants for a period of at least fifteen
years.
BACKGROUND:
In response to the housing needs of the residents of Fort Collins, the City Council has established
as one of its goals to increase the quality and affordability of housing. In 1984, (he Council adopted
specific criteria for the issuance of tax-exempt bonds that would acquire, rehabilitate, or maintain
the supply of low-income housing. Through the adoption of Resolution 84-179, specific criteria
were adopted which allow the City the opportunity to pursue its commitment to affordable housing
in accordance with state and federal legislation and regulations. Since the policy was adopted,
changes in federal tax law and limits on issuer's capacity have sharply reduced the City's ability to
support low-income housing through tax-exempt financing. One of the few remaining means to do
so is through the State of Colorado's Private Activity Bond allocation program. This is the same
program that provides funding for industrial development revenue bonds.
12
April 18, 1995
tThrough this program, the City was allocated $2,397,900 for distribution in 1995. The Courtney
Park Apartments is the first application submitted for the City's allocation. The applicant and
developer for the Project is Prime Residential, L.P., a Maryland limited partnership. The Project,
as described in the application to the City, is the acquisition and renovation of a 248 unit multi -
building complex located at the northeast corner of Harmony Road and Lemay Avenue. Sixty-two
units will be affordable to those earning 50% or less of median income for the Fort Collins Area.
The proposed issue of bonds is presently estimated at $8,500,000. The difference between the City's
allocation of $2,397,900 and $8,500,000 will be provided by the State. The bonds will be paid from
the revenue generated by the Project, so the tern is expected to be 15 years based on the projected
cash flows of the Project. These bonds are not an obligation of the City of Fort Collins.
Evaluation of Application Against the City's Criteria
Criterion #1
The City's criteria for the issuance of multi fcanily revenue bonds are used to evaluate the
application for the Project. The first criteria requires that 20% of the units must be rented to
families at or below 70% of median income. Since this Project contains 248 units, 50 must be
affordable to meet the requirement. The Project will have 62 or 25% of the units designated as
' affordable.
#2 stipulates that base rents for 20% of the units must be set at 30% of 70% of existing median
income for Fort Collins as established by HUD. 1995 median incomes for Fort Collins are:
One Person
$30,937
Two Persons
35,400
Three Persons
39,750
Four Persons
44,200
Calculation of the maximum monthly rents at 70% of median income with 30% allocated to rent is
as follows:
One Bedroom/One Person $541
One Bedroom/Two Persons 619
Two Bedroom/Two Persons $619
Two Bedroom/Three Persons 774
13
April 18, 1995
The Project will calculate the maximum monthly rents at 50% of median income with 30% allocated ,
to rent which results in even more affordability.
One Bedroom/2 Persons $445
Two Bedroom/4 Persons 555
#3 asks the ownerfor an additional rent subsidy for the 20% restricted units. (The rent subsidy is
provided instead of collecting the City's normal IDRB fee). Since the rents are calculated at 50%
of median rather than 70% of median and are lower than required by the City, the applicant
requests that the City waive the subsidy requirement. Staff agrees with the request.
#4 provides that Criterion #2 & #3 will be used to calculate the actual rents established for the
restricted units. This has been agreed to by the applicant.
#5 requires final approval for the Project by the Planning and Zoning Board and that rights of
appeal have expired. This is not a concern since the Project is a renovation of an existing apartment
complex and does not need such approval.
#6 requires that the amenities in the restricted units must be the same as the non -restricted. This
criteria has been met.
#7 stipulates that all federal and state requirements for these bonds must be met. It is the applicant's I
intention to do so. All documents regarding this transaction will be written in that manner.
states that the bond trustee will be responsible for assuring Criterion #7 is metandthat an
annual report will be provided to the City. Bond documents will be drafted with this stipulation.
#9 and #10 provide the City Council with the right to deny a project even if the criteria are met or
to vary criteria one through four.
Recommendation
The Affordable Housing Board (the "Board") met on April 6, 1995, and discussed the Courtney
Park Apartments proposal. The Board voted unanimously to recommend that the Council adopt the
inducement resolution if the following conditions are met: (1) that the maximum monthly rents are
calculated at 50% or less of median income; and (2) that a minimum of 25% of the units will be
maintained as affordable for not less than fifteen years. The Company has agreed to meet these
terms.
Staff recommends the passage of the Inducement Resolution, as it supports the Council goal of
increasing the quality and affordability of housing and is consistent with adopted policies for
multifamily housing. " I
14
April 18, 1995
Finance Director Alan Krcmarik briefly outlined this item. He clarified the federal requirement for
affordability is 20% and stated Council could raise the percentage by adopting a City policy.
Adam Peterson, representing Prime Residential, stated he would be working under the guidelines
imposed by the State and stated feasibility would be impacted if the percentages were increased.
He stated rental rates on these units would be approximately $150 per month per unit less than
current rental rates throughout the City. He responded to Council questions and stated students do
not qualify for low income housing.
Councilmember Kneeland made a motion, seconded by Councilmember Smith, to adopt Resolution
95-47.
Kelly Ohlson, 2040 Bennington Circle, spoke of the need for follow up to assure that 25% of the
housing units remain affordable.
Betty Maloney, 1309 City Park Avenue and Affordable Housing Board member, urged adoption of
the resolution and concurred with comments from Mr. Ohlson regarding follow up.
Yolanda C. Nicely, 300 Harmony Park, urged adoption of the proposal.
' Peterson stated bond trustees are responsible for compliance monitoring including auditing property
files to assure compliance.
1
Krcmarik spoke of how the trustee carries out requirements.
The vote on Councilmember Kneeland's motion was as follows: Yeas: Apt, Azari, Janett, Kneeland,
McCluskey, Smith and Wanner.
THE MOTION CARRIED.
Councilmember Reports
Councilmember Apt reported on a meeting held by the Growth Management Committee. He stated
the committee is scheduling a meeting with Larimer County Commissioners to discuss Transfer of
Development Rights (TDR) in the corridor between Loveland and Fort Collins.
Councilmember Janett reported the application deadline was extended to May 3 for Boards and
Commissions applications.
15
April 18, 1995
Consideration of the Appeal of the February 27, 1995, '
Decision of the Planning and Zoning Board Approving a Development
Project Known as the Hugh M. Woods P.U.D. - Final. Decision Upheld.
The following is staff's memorandum on this item.
"Executive Summary
On February 27, 1995, the Planning and Zoning Board approved the Hugh M. Woods P. U.D. -
Final. This project consists of a request for a 73,500 square foot retail warehouse building, with
an additional 63,576 square feet of canopy coverage (including building materials, commodity
storage) on 15.83 acres located at the southwest corner of South College Avenue and Skyway Drive.
The property is zoned by - Planned Business, with a planned unit development condition.
On March 8, 1995, a Notice of Appeal was received by the City Clerk's office regarding the decision
of the Planning and Zoning Board.
As permitted under the City Code, the Notice of Appeal filed by Councilmember/Appellant Gina C.
Janett did not specify the grounds upon which the appeal was taken. However, in a memorandum
to the City Clerk's office dated March 31, 1995, the Appellant requested that the following issues
be addressed at the hearing on the appeal: traffic access and circulation, changes in topography, I
and changes in vegetation.
The procedures for deciding the appeals are described in Chapter 2, Article 11, Division 3 of the City
Code. "
City Attorney Steve Roy briefly outlined the appeals process and defined the term parties -in -interest.
Councilmember Janett spoke of neighborhood compatibility and transportation concerns. She
questioned if the project would minimize the disturbance of topography and vegetation at the site.
Mayor Azari stated she would allow 30 minutes for each side to speak.
City Planner Steve Olt gave a brief presentation and described the project. He responded to Council
questions regarding topography, traffic integration and circulation issues.
Transportation Planner Tom Vosburg addressed transportation and traffic concerns. He spoke of
how Skyway Drive would be realigned with the existing frontage road and clarified the frontage road
would not be closed but realigned.
16
April 18, 1995
SUPPORTING APPEAL
Al Bacilli, 520 Galaxy Court, spoke of truck traffic and safety concerns. He stated he did not object
to the project but did object to the entrance on Skyway Drive.
Michael Atchison, 6405 Orbit Way, expressed concerns regarding disruption of the wetlands, traffic
safety and increased traffic. He stated he did not feel that the roads are currently being kept up to
City or County standards and this project would only increase the problem. He stated Hugh M.
Woods should consider helping the neighborhood to bring the roads up to current County standards.
Kurt Niemier, representing Deliworks owners, requested a right -in only access and stated elimination
of that access would dramatically impact the business.
Roland Browley, 421 Galaxy Way, asked that Hugh M. Woods provide a written guarantee that its
employees and delivery persons will not use Constellation.
OPPOSED THE APPEAL
Lucia Liley, Attorney for the Applicant, stated the use is consistent with the approved master plan.
She provided Council with a topography handout outlining topography changes. She spoke of how
' the building would be situated so that it would not be the most visible part of the landscape. She
spoke of a traffic impact analysis that was completed and submitted to staff and noted the plan was
consistent with the South College Avenue Access Control Plan. She clarified the developer will pay
for the complete realignment of the frontage road, easement and construction.
Jim Sell, of Jim Sell Design, gave a slide presentation and spoke of design issues, noting loading
dock areas are recessed, bermed and out of sight.
Matt Delich, performed traffic study and stated access to the site conforms with the South College
Access Control Plan. He stated he believed neighborhood traffic would be limited.
Bruce Farrell, 6304 Constellation Drive and business owner in the area, stated he represented over
30 residents of Skyview Subdivision for its support of the project. He believed the project was
compatible with the neighborhood and urged Council to deny the appeal.
Chris Chandler, Owner Hickory House Restaurant, believed the frontage road realignment was the
best option and stated he was willing to give the easement. He stated he believed Hugh M. Woods
will be an asset to the neighborhood and urged approval of the development.
Sue Ellen Alishouse, 6408 Solar Court and President of Skyview South Homeowners Association,
stated residents were not fearful of the cut and fill problems.
17
April 18, 1995
REBUTTAL I
Al Bacilli, 520 Galaxy Court, stated he has not seen any of the supporters at the neighborhood
meetings and stated safety issues have not been adequately addressed.
Debbie Almond, Owner of Deliworks, expressed access concerns.
Michael Atchison, 6405 Orbit Way, believed Hugh M. Woods and City staff have done an excellent
job of looking at all aspects, but stated eagles are nesting in the area.
CON REBUTTAL
Lucia Liley clarified that Deliworks was offered the frontage road realignment first, but decided
against it.
Maryann May, a Skyview resident, supported the project.
Guy Richardson, 225 East Skyway Drive, spoke in support of the project and stated the project
would set a standard for future development along College Avenue.
Tim Theiler, 5909 Mars Drive, supported the project. ,
Kerri Whitesell, Skyway resident, stated she supported the project and stated staff answered all of
her concerns at the first neighborhood meeting, therefore she saw no need to attend anymore.
Dale Matuska, 6508 Solar Court, stated issues were adequately addressed by staff and supported the
project as well as the quality of the project.
Kathleen Richardson, 225 East Skyway Drive, supported the project.
Vosburg clarified Tiernan Drive is a right -in, right -out access as defined in the South College Access
Control Plan.
Councilmember Smith expressed concerns regarding outside mitigation and questioned if the City
would be setting a precedent for future appeals.
Olt spoke in favor of the landscape plan that was submitted to the City.
City Forester Tim Buchanan reported on how the number of replacement trees was determined and
recommended off -site mitigation allowing credit for some of the on -site plants.
Olt clarified sidewalks would be added along the frontage road, adjacent to the site. I
112
April 18, 1995
Councilmember McCluskey spoke of the need to follow-up on the traffic issues, and suggested
obtaining an agreement from Hugh M. Woods that traffic would be restricted through the
neighborhood.
Olt stated a condition of final approval was based on the above.
Vosburg spoke of the difficulty in reconciling a poorly designed frontage road and stated if in the
future the access is deemed dangerous, it will be closed.
City Attorney Steve Roy responded to Council questions and stated if Council believes the criterion
has not been satisfied then they should make a motion approving the variance, and if passed then
make a motion to uphold approval of the development proposal including the variance.
Councilmember Smith made a motion, seconded by Councilmember Kneeland, to grant a variance
from the requirements of Criterion No. A-2.3 of the LDGS based on findings that: 1) the Project does
not meet the requirements of All Development Criterion A-2.3 of the LDGS because of the
significant on -site disturbance to the topography and vegetation, and a variance is therefore required;
2) because on -site and off -site mitigation measures to be undertaken, the plan for th eProject is equal
to or better than such plan would be if it conformed to the requirements of A-2.3; and 3) such
variance to the criterion would not be detrimental to the public good, nor would it impair the intent
' and purposes of the LDGS.
Councilmember Janett spoke of her reasons for filing the appeal and stated it was important to follow
the policies in the Code.
The vote on Councilmember Smith's motion was as -follows: Yeas: Councilmembers Apt, Azari,
Janett, Kneeland, McCluskey, Smith and Wanner. Nays: None.
THE MOTION CARRIED.
Councilmember Kneeland made a motion, seconded by Councilmember Wanner, to uphold the
decision of the Planning and Zoning Board. Yeas: Councilmembers Apt, Azari, Janett, Kneeland,
McCluskey, Smith and Wanner. Nays: None.
THE MOTION CARRIED.
Ordinance No. 44, 1995,
Rezoning Approximately 140 Acres
from the T-Transition, District to the R-P,
Planned Residential, District with a PUD Condition,
Known as the Summitview Properties Rezoning Postponed to May 2.
' The following is staff's memorandum on this item.
19
April 18, 1995
C
"Executive Summaa
This is a request to rezone approximately 140.0 acres located north of East Vine Drive and west of
Summirview Road from the T, Transition, District to R-P, Planned Residential, District with a PUD
condition. The applicant anticipates the property will be developed with a mixing of residential
uses, including a mobile home park, and commercial uses. Even though the proposed use of the
property includes mobile homes, this rezoning does not approve, or in any way commit, the City to
approving a mobile home park on the property. The proposed PUD condition would require any
development proposal to be reviewed against the criteria of the Land Development Guidance
System. Essentially then, the rezoning requested by the applicant and recommended by staff
establishes no uses for the property and only determines that the PUD process be utilized for any
development proposals.
OWNER and APPLICANT. Summirview Properties, a Colorado General Partnership
P.O. Box 153
Fort Collins, CO 80522
BACKGROUND:
The original applicant, Summitview Co., a Colorado LLC, on behalf of the owner, Summirview '
Properties, a Colorado General Partnership, submitted a written petition requesting rezoning of
approximately 140.0 acres located north of East Vine Drive and west of Summitview Road from the
T, Transition, District to R-P, Planned Residential, District with a PUD condition. This Petition
was subsequently ratified and affirmed by the Owner, Summirview Properties.
The applicant anticipates the property will be developed with a mixing of residential uses, including
a mobile home park, and commercial uses. Even though the proposed use of the property includes
mobile homes, this rezoning does not approve, or in any way commit, the City to approving a mobile
home park on the property. The proposed PUD condition would require any development proposal
to be reviewed against the criteria of the Land Development Guidance System (LDGS).
As indicated, the current zoning of the property is the T, Transition, District. The property was
placed into the T Zone at the time of its annexation into the City in August, 1983. The T Zone is for
properties which are in a transitional stage with regard to ultimate development. No development
is allowed to occur in the T Zone. The only uses permitted on properties in the T Zone are those
uses that existed on the date the property was placed into the district. According to Section 29-423
of the Code of the City of Fort Collins, the City Council must change the zoning of a property in the
T Zone to another zoning district within 60 days from the date the matter is considered by the
Planning and Zoning Board. This means the property must be rezoned by the City before the end
of May 1995.
The current zoning and existing land uses of surrounding properties are as follows: '
FA
April 18, 1995
N. B-P, Planned Business, undeveloped
R-L-P, Low Density Planned Residential, undeveloped
E: FA-1, Farming (County), undeveloped
S: I, Industrial (County), industrial uses, railroad yard
O, Open (County), mobile home park
W.• FA-1, Farming (County), undeveloped
The requested zoning is the R-P, Planned Residential, District. The R-P District designation is for
areas planned as a unit to provide a variation in use and building placement. The property will
probably eventually develop with a mix of residential uses, including single family, multi family, and
possibly mobile homes. The site may also include some neighborhood scale commercial uses. The
R-P zone is in conformance with a number of policies contained in the City's Comprehensive Plan,
including policies which provide for a mixing of residential uses in neighborhoods and encouraging
growth to the "north. " Some examples from the City's Comprehensive Plan are as follows:
From the Goals and Objectives document:
Encourage the diversity of housing types which allows a mixture of income levels in all
neighborhoods.
Promote increased development in the north and northeastern areas of the City.
Encourage increased residential development of the northeastern area in order to support and
direct the redevelopment of the area.
The above themes are repeated in the following policies from the Land Use Policies Plan:
#41 The City should encourage residential development in the northeast, particularly giving
special consideration to the undeveloped industrially zoned land in the area adjacent to
the existing residential neighborhoods.
#75 Residential areas should provide for a mix of housing types.
The Land Use Policies Plan also contains the following policy for low density residential uses:
#79 Low density residential uses should locate in areas:
a. Which have easy access to existing or planned neighborhood and
regional/community shopping centers;
b. Which have easy access to major employment centers;
' C. Within walking distance to an existing or planned elementary school;
21
April 18, 1995
d. Within walking distance to an existing or planned neighborhood park and within
easy access to a community, park; and
e. In which a collector street affords the primary.
The subject property addresses some, but not all, of the locational items of the above policy. An item
by item discussion follows:
a. Related to neighborhood shopping, the applicant is anticipating proposing neighborhood
scale commercial uses on the property. These uses could eventually contain convenience
shopping, day care, and other similar types of neighborhood oriented businesses. There
is also a 15-20 acre B-P, Planned Business, zoned piece of property located about one-
half mile north of the subject property.. The property owner of that site expects to
develop a grocery store based neighborhood shopping center, of between 120,000 and
150,000 square feet, in the future. The closest community/regional shopping center is
Central Business District (CBD), approximately three miles to the west.
b. Concerning major employment centers, the Valley Air Park (2,750 jobs) is within two
miles, the CBD (8,550 jobs) is, as indicated above, within three miles, Poudre Valley
Hospital (3, 750 jobs) is within three miles, and Colorado State University (CSU) with
6,000 jobs) is within four miles. '
C. Tavelli Elementary is the closest school to the subject property. The school is
approximately two miles away (as the crow flies) and three miles away using the current
street system. Both distances are beyond a walking radius. However, the school district
has indicated, because Tavelli is near capacity, that children would be bussed from the
site to schools with excess capacity, such as Riffenburgh and O'Dea. Evidently bussing
would be required for any type of residential development on the property.
d. Regarding a neighborhood park, the Parks Department indicates a neighborhood park
will eventually be developed within the square mile of the subject property and could
even include a part of the subject property. No site has yet been acquired as site
selection will be a function of development plans submitted for the area. The wet land
on the property offers an opportunity to combine a natural area within a park setting.
The closest community park is Lee Martinez Park about two and one-half miles to the
west.
e. The Transportation Department indicates collector streets will provide the required
access into the property. Collector streets will also connect any development within the
property to adjacent properties and developments.
The PUD requirement would require that all development proposals on the property be reviewed '
against the criteria contained in the LDGS. The most immediate development plans for the property
22
April 18, 1995
include the development of a mobile home park which would provide relocation sites for residents
of the Pioneer Mobile Home Park on Harmony Road. Residential proposals would be required to
satisfy the requirements of Activity Chart Hof the LDGS. Chart His designed to implement Land
Use Policy #79 presented above. The LDGS requires residential projects to achieve a minimum
score of 60%. Higher, scores are required for densities above 6.0 units per acre. Credit is received
for proximity to shopping, parks, transit, day care, employment, contiguity, and "north" Fort
Collins. Bonus credit can be received for property size, open space dedication, and providing
affordable housing. Staff has not completed Chart H in relationship to the rezoning request because
the type of information needed to complete the chart is not available at the time of a rezoning.
The Northeast Area Transportation Study revised the•City's MASTER STREETS PLAN far many
streets in the northeast area. The most major revision was the elimination of the Fort Collins
Expressway (By -Pass) from the plan. All other section line roads, including County Roads 11, 50,
and 52, have been downgraded to Minor -Arterials (two travel lanes and a continuous center left turn
lane). Adjacent streets are classified as follows:
East Vine Drive Primary Arterial (four travel lanes plus a designs for limited left turn
movements)
Summitview Road Primary Arterial
Findings
1. The subject property was placed into the T Zone at the time of its annexation into the City in
August of 1983. According to Section 29-423 of the Code of the City of Fort Collins, the City
Council must change the zoning of a property in the T Zone to another zoning district within
60 days from the date the matter is considered by the Planning and Zoning Board. This
means the property must be rezoned by the City before the end of May, 1995.
2. The requested R-P, Planned Residential, District is in general conformance with the policies
of the City's Comprehensive Plan.
PLANNING AND ZONING BOARD RECOMMENDATION
The Planning and Zoning Board conducted two public hearings on the rezoning request, one on
February 27, and the other on March 27. At the March meeting the Board voted 7-0 to recommend
the subject property be placed into the I-L. Limited Industrial, District with a PUD condition. The
Board also recommended that the Council consider the noise impacts of the Fort Collins Airpark
on the development of the property. A copy of the minutes from the March 27 meeting is attached.
As the March minutes indicate, there was considerable discussion concerning the adjacent railroad
tracks and flight patterns and noise generated from aircraft utilizing the Valley Air Park. The Board
noted that the Land Use Conflicts Chart contained within the LDGS (copy attached) indicated that
23
April 18, 1995
there are no presumed conflicts between industrial uses and airports and flight patterns. Low '
density residential uses are presumed to have noise, aesthetic, access, and safety issues with airports
and flight patterns. This discussion, essentially, led to Board to making recommendation of I-L
zoning with a PUD condition even though the Board understood that a residential development
could be still be proposed on the property as a PUD.
While the Conflict Chart is designed to identify the kinds of conflicts that are presumed to exist
between different land uses, the chart is not one of the criteria which must be used to make a final
development decision. The chart is used for informational purposes to identify conflicts and possible
design measures to be incorporated into a development plan to mitigate the conflicts. Design
measures may include open space setbacks and buffers, landscaping, building orientation, and other
architectural treatment.
There are primarily two policies from the Land Use Policies Plan regarding the location of
industrial uses. They are as follows:
#59 Industrial uses should locate near transportation facilities which offer the required
access to the industry but will not be allowed to create demands which exceed the
capacity of the existing and future transportation network of the City.
#60 Industrial development should locate within the City or consistent with the phasing plan I
for the urban growth area, where the proper sizing of facilities such as water, sewer and
transportation has occurred or is planned.
As indicated above, the subject property is planned to be served by two primary arterial streets (Vine
Drive and Summitview). Thus, industrial zoning for the property would conform to policies #59 and
#60.
The policy changes made to the Master Streets Plan, i.e., elimination of the expressway and down
grading of most county roads in the area appears to have changed property -owners expectations
regarding the future development possibilities of their land. For example, the City should consider
that the Waterglen property located one mile to the east, was zoned 1-L with a PUD condition at the
time of its annexation into the City. The Waterglen property has the same basic locational attributes
as the subject property for industrial development as well as the additional attribute of having
frontage on 1-25. The Waterglen property -owner chose to request residential development which
was subsequently approved by the City. The current property -owner of the subject property also
does not desire to have an industrial zoning district applied to the property. And, the current
development plans do not include industrial uses.
STAFF RECOMMENDATION
Staff recommended approval of the requested rezoning to the Planning and Zoning Board. Staff '
also recommended that a PUD condition be attached to the R-P Zone for the property which would
24
April 18, 1995
require all redevelopment proposals for the property to be reviewed against the criteria of the
LDGS. Even though the proposed use of the property includes mobile homes, this rezoning does not
approve, or in any way commit the City to approving, a mobile home park on the property.
Essentially then, the rezoning requested by the applicant and recommended by staff establishes no
uses for the property and only determines that the PUD process be utilized for any development
proposals.
The City Council may place zoning. conditions on the subject property. According to Section 29-45
of the Code of the City of Fort Collins, the City may "impose reasonable conditions relating to use
for the purpose of preserving and promoting the public health, safety and welfare of the inhabitants
of the city and the public generally, and to encourage and facilitate the orderly development of the
city. " Listed below are the two basic types of zoning conditions the Council could consider in
addition to the PUD condition recommended by staff?
(1) Land use restrictions.
A condition limiting the uses allowed on the property is possible. NOTE: Manufactured
housing (mobile homes and modular homes) which meet the Uniform Building Code
(UBC) requirements and are placed on a permanent foundation are considered single-
fannily housing in Fort Collins.
' (2) Density restrictions.
A condition limiting the residential density (units per acre or total number of units) on
the property is also possible. The Council could place a density restriction on the
property limiting residential development to no more than "X" units per acre.
Any zoning condition should have a policy basis in the City's Comprehensive Plan.
Other than the above two basic types of conditions, additional stipulations relating to the site design
of future development are, perhaps, more appropriately handled through the PUD review process. "
Chief Planner Ken Waido gave a presentation on this item and spoke of definitions of the various
zones. He stated the Planning and Zoning Board voted unanimously that the project be placed in the
I-L with a PUD condition and stated Council should consider noise from the Fort Collins Airpark.
He stated staff's recommendation is different from the recommendation given by the Planning and
Zoning Board. He responded to questions and stated the I-L zoning allows for broader industrial
policies regarding access and utilities. Be commented staff is still investigating property for the
relocation of Pioneer Mobile Home Park. He clarified both recommendations include the PUD
condition. He stated it was staff's understanding that redevelopment plans for the Pioneer site for
commercial retail uses must begin by March 1996.
25
April 18, 1995
Ira Paul, consultant speaking on behalf of the developer, gave a brief presentation showing Council '
an aerial view of the property and noted consultants are in the process of compiling a report relating
to wetland issues, noise and flight patterns over the area. He spoke of the need for a well balanced
community. He clarified the Pioneer Mobile Home Park is to be closed in March of 1996.
Mayor Azari requested input from the audience before making a motion.
Mark Wilford, resident of Adrial Hills representing the Northeast Community Coalition, spoke in
support of the I-L with a PUD condition. He stated the parcel was inappropriate for high impact
residential use due to the wetlands located on the property, and stated the railroad switch stations
would create safety concerns. He urged Council's support of the Planning and Zoning Board's
decision.
Clair McMillan, owner of the Downtown Airpark, urged adoption of the Planning and Zoning
Board's recommendation.
Betty Maloney, 1309 City Park Avenue, representing the Affordable Housing Task Force, urged
Council to approve rezoning.
Paul Miller, representing the Burlington Northern Railroad, spoke of safety issues stating the
switchyard poses a real safety hazard. He read a statement from Burlington Northern Railroad '
stating it does not favor the zoning of the Vine Street property for residential use due to the location
of the switching activities. He urged Council to zone the property I-L with a PUD condition.
Barb Sommermeyer, 1813 Barrington Court, spoke of the need to follow policies and requested that
the property be zoned I-L with a PUD condition.
Vinnie Jigabowskas, manager of Collindale Mobile Home Park, spoke of school overcrowding in
the area and the lack of public transportation.
Rick Lavin, Professor at CSU, spoke of the sensitivity of the wetland areas, noting he supported I-L
zoning.
Mike Nicely, 300 Harmony Road, stated there are going to be problems at any location and urged
Council to allow the mobile home park into the LDGS.
Kathy Bee, resident of the Chesapeake Subdivision, spoke of the impact additional students would
have on surrounding schools and stressed bussing concerns.
Becky Thorne, resident of Pioneer Mobile Home Park, urged Council to adopt it as R-P with a PUD
condition.
1
April 18, 1995
Joe Solomon, resident of the northeast area, urged adoption of the Planning and Zoning Board's
recommendation.
Brent Thorne, 300 East Harmony Road, stated residents of Pioneer Mobile Home Park are asking
for a place to live and stated he realized the existing park is run down but the issues need to be
addressed.
Leslie Moss, 300 East Harmony Road, stated any form of home adds to the economic stability of a
community.
Yolanda C. Nicely, 300 East Harmony Road, spoke of the right of home ownership and urged
Council to help the residents gain the needed zoning.
Don Blalock, 300 East Harmony Road, noted the developers have talked with the residents of
Pioneer Mobile Home Park and commented most mobile home parks are located near airports and
railroad tracks and so he urged Council to support the location of the mobile home park in the
Summitview area.
Don Horock, Summitview Drive resident, urged adoption of the Planning and Zoning Board's
recommendation siting safety and traffic issues.
' Jean DePue, 300 East Harmony Road, asked for Council's help in securing a place to live.
Karen Weitkunat, 1513 North College Avenue, stated the north side of town already houses the
majority of low income residents. She spoke of the need to disburse the burden of low income
housing throughout the City, and urged Council to support the decision of the Planning and Zoning
Board.
Delores Williams, Fort Collins resident, spoke of her disappointment with staff for not supporting
the Planning and Zoning Board's recommendation.
Randy Emmer, 300 East Harmony Road, stated he wanted to find out if he was going to have a home
for his children.
Richard Schott, President of Adrial Hills Condominium Association, urged adoption of the Planning
and Zoning Board's recommendation.
Marta Christianson, resident of north Fort Collins, stated she did not feel the request for rezoning
was being accurately portrayed by Mr. Paul.
Father Bertch Chilson stated the zoning in question is the only viable option for residents of Pioneer
Mobile Home Park.
27
April 18, 1995
John Reid, representing Don and Beverly Weiss, urged adoption of Planning and Zoning Board's '
recommendation with an additional condition, zoning the use of the property low or medium
residential.
Gil Willis, resident of Adriel Hills, suggested Council consider postponing high density decisions
and create a long term plan for the relocation of mobile home parks.
Jim Beatty, a Fort Collins resident, spoke of manufactured housing and the high costs of mobile
home parks. He suggested Council consider single site zoning for residential.
Mark Waldo, 300 East Harmony Road, supported the proposed Summitview site and clarified rates
for residents of the mobile home park will not raise for a year.
Chief Planner Ken Waido clarified in processing any development proposal it would not make a
difference if it were zoned I-L or R-P.
Mr. Paul responded to Council comments and stated the applicant would not be interested in the
property if it were zoned I-L.
Waido stated a traffic impact study would be completed, analyzing existing street deficiencies to
assure conformance with the City's offsite street policy. '
Councilmember Kneeland spoke of the need for long range plans for mobile home parks.
Mayor Azari spoke of the need to solve the issue and suggested holding a town meeting to look at
the true community interests in an attempt to make something happen.
Councilmember Wanner stated he supported R-P zoning and stated he would like to see a solution
to affordable housing concerns.
Councilmember Kneeland suggested postponing the item until a community meeting can be held to
further discuss the issues.
Councilmember Janett stated this issue was a lose/lose situation for Council but stated there has to
be a positive solution, in a timely manner, to this issue.
Councilmember Smith supported postponing the item.
City Attorney Steve Roy spoke of Code requirements clarifying the property must be placed in a
zoning district within 60 days of the Planning and Zoning Board's recommendation for rezoning.
He stated the zoning could be postponed to the first meeting in May.
1
W
April 18, 1995
Waido stated it would be acceptable for the applicant to submit his PUD even if the zoning is not
decided.
Jeff Donaldson, applicant, stated the mobile home park is due to close March 1, 1996 and stressed
the need to find a suitable and acceptable site in a timely manner.
Councilmember Wanner made a motion, seconded by Councilmember Janett, to zone the property
R-P with a PUD condition.
Councilmember Wanner offered an amendment to his previous motion that second reading of the
ordinance be heard at the May 16 regularly scheduled Council meeting. Councilmember Janett
accepted the amendment as a friendly amendment to the previous motion.
Councilmember Apt requested clarification of the Planning and Zoning Board's decision.
Councilmember Kneeland spoke in favor of postponing any action on the item until a community
meeting is held.
Roy clarified before a property can be zoned, it must first have a recommendation by the Planning
and Zoning Board and two readings adopted by Council.
' Councilmember Smith offered an amendment to the previous motion to remove the R-P zoning.
Councilmembers Wanner and Janett withdrew their previous motion.
Councilmember Smith made a motion, seconded by Councilmember Janett, to postpone
consideration of this item to the first meeting in May. Yeas: Councilmembers Apt, Azari, Janett,
Kneeland, McCluskey, Smith and Wanner. Nays: None.
THE MOTION CARRIED.
Items Relating
to Economic Incentives.
The following is staff's memorandum on this item.
"Executive Summary
Fort Collins Inc. has requested the City expand its role in providing economic incentives to attract
or retain existing businesses. Elements of the Fort Collins Inc. request include a reduction in the
manufacturing equipment use tax and a reduction in the personal property tax on the equipment.
' To have some idea of the impact/effect that such incentives might have, staff has provided an
analysis (based on the analysis) of a large corporation (Hyundai Electronics America) that is
29
April 18, 1995
considering locating a plant here. For Hyundai, these two reductions would total about $30 million
of revenue to be credited. FCI has made a similar request to the County and School District to
reduce their personal property tax. In addition to the tax incentives, FCI has requested the City
assist in the designation of an enterprise zone within the City and consider expediting the
development review process for large scale industrial developments.
A. First Reading of Ordinance No. 45, 1995 of the Council of the City of Fort Collins Amending
Article II of Chapter 25 of the Code Concerning a Credit Against the Personal Property Tax
due from Large Base Industry in an Enterprise Zone.
B. First Reading of Ordinance No. 46, 1995 of the Council of the City of Fort Collins Amending
Article II of Chapter 25 of the Code Concerning a Credit Against the Personal Property Tax
due from Large Base Industry.
C. First Reading of Ordinance No. 47, 1995 of the Council of the City of Fort Collins Amending
Division 1 of Article III of Chapter 25 of the City Code Concerning a Use Tax Limit for Large
Base Industry.
D. First Reading of Ordinance No. 48, 1995 of the Council of the City of Fort Collins Amending
Article III of Chapter 25 of the City Code Concerning Deferred Payment of Use Tax for Large
Base Industry.
E. First Reading of Ordinance No. 49, 1995 of the Council of the City of Fort Collins Amending
Article III of Chapter 25 of the City Code Concerning the Return, for Verified Community
Benefits, of Use Tax Paid by Large Base Industry.
The City has received a request from Fort Collins Inc. to consider modifications to its tax structure
to become more attractive to companies that are considering relocating or expanding their
operations. The request was motivated, in part, by Hyundai's pending decision regarding the
location of a new computer chip manufacturing plant. FCI also requested the City evaluate ways
to expedite the planning and zoning processes utilized for large base industrial developments. On
March 28, Council directed staff to continue analyzing the specific requests of Fort Collins Inc.
regarding use tax on manufacturing equipment and personal property tax. Council also requested
that other options be researched and presented. Council requested staff research fiscal impact
models to help analyze complex economic situations.
If the Council thinks it is appropriate for the City to negotiate use tax and personal property tax
agreements with firms meeting large base industry criteria. Then legislative actions proposed as
part of this agenda item provide the basic authority for such a negotiation process. Specific
agreements would be approved by Council afierfinal terms are negotiated. However, Ordinance
No. 47 places a limit on the amount of use tax to be paid on manufacturing equipment. All large
base industry would receive the benefit of this limit. '
T17
April 18, 1995
IBACKGROUND:
If approved, the legislative actions in this itent would greatly expand the City's role in economic
incentives. Historically, the City has approached changes of this magnitude from a policy
perspective. This section provides important background information in which an economic
incentives policy is evaluated. It covers the City's recent efforts in crafting the economic
development policy and brief discussion of how the revenue growth limits would be affected
Policy Conditions. The City updated its economic development policy in 1994. The policy was
expanded to allow development fee rebates to basic industry companies that met a simplified benefit
to cost ratio. Essentially, rebates may be approved by Council when twice the estimated costs of
streets and maintenance are paid by the company through property and sales and use taxes. This
policy represents Fort Collins' conservative approach to providing incentives. The hallmarks of
Fort Collins' current policy include:
• targeting incentives only for base industry,
• demonstrating, through analysis, positive benefit cost ratios,
• building in measures to ensure investments retain value even if the recipient company
leaves, and linking incentives to performance measures, such as the percentage of local
hires.
' Staff believes that these four policy conditions should continue to provide guidance for modifications
to the economic development policy.
Concerns about Revenue and Spending Limits. Beginning with the 1993 Budget year, the City has
operated under the revenue and spending growth limits imposed by Article X, Section 20 of the State
Constitution. The Article limits growth to a combination of growth caused by annexing property into
the City, new construction within the City and inflation as measured by the Denver -Boulder
Consumer Price Index.
Growth Actual % In
LiLail Growth Difference Dollars
1993 6.2% 1.3% 4.9% $3,540,000
1994 pre -audit 7.0% 7.2% (0.2%) (80,265)
1995 projected 7.3% ? ? ?
If the City falls short of the growth limit, the actual amount of revenue received becomes the
spending base. If the City exceeds the growth limits, the amount of revenue over the limit is subject
to refund. Staff estimates that the 1994 revenue base is $81.3 million. If the growth rate averages
about 6.5% per year, the City's revenue and spending base will increase about $5.5 million per year.
Stable revenue growth rates allow the City to more easily adjust spending patterns. The greater the
fluctuations in the base, the greater the difficulty in matching revenues with demand for services.
31
April 18, 1995
Revenue from a large scale business development would likely cause the City to exceed the revenue '
base. Use taxes on construction and equipment are received prior to the growth being recognized
in the growth limit calculation. The growth limit depends on the actual value of the improvements
constructed or annexed. There is a two-year lag between construction, the value being included in
assessed values, and resulting tax revenue.
Using the Hyundai data as an example, the City might receive $25 million or more in construction
and equipment use tax in a single year. This would far exceed the $5.5 million allowable growth
estimated above. Depending on other revenue collections, over $20 million would be subject to
refund according to Article X, Section 20. The chart below shows the City's total revenue (the bars)
and depicts the refund (the difference between the line and the bars) that would be caused by a large
scale project.
The other way the Article affects the City is by specifically limiting the growth in revenue from
property tax. Most of the new value from a large manufacturing plant would be in equipment which
is taxed as personal property. Land and buildings, in contrast are considered real property.
Personal property is not included in the calculation of the growth limit, only real property is. By
maintaining the current mill levy, the City would far exceed the growth limit for property tax and
be placed in a refund situation from the revenue received as personal property tax in 1997 or 1998.
Preliminary estimates of the personal property tax for Hyundai place the refund level at about $2
million. This is in addition to the revenue over the limit from the use tax analysis above.
Currently, the City receives about $6.2 million in property tax (from real and personal property) per
year. If the Hyundai plant located here, the property tax revenue in 1998 would grow by
approximately $2.8 million, most of which would exceed the property tax growth limit. The chart
below demonstrates how the property tax revenue limit could be exceeded by rapid increases in
personal property subject to taxation. The data in the chart assume that the mill levy stays the same.
Lowering the mill levy would help manage the revenue over the limit, however, it might place
services at risk once the personal property is depreciated because the levy could not be increased,
even to the prior level, without voter approval. The $2.8 million in new property tax revenue would
drop to $850,000 by 2001.
Erratic/uneven/fluctuating (rapid) revenue growth from large scale projects could cause revenue
management issues for the City. The revenue would either have to be refunded to the taxpayers or
be approved for retention and use by the voters. If an incentive policy provides better management
of the fluctuations in the revenue growth, the City would be addressing two financial management
concerns at the same time.
In the sections below, staff presents options to fashion an economic incentive package for the two
major revenue sources from a large base industrial development, that is, the personal property tax
revenue and the use tax on manufacturing equipment. I
32
April 18, 1995
Property Tax - Real and Personal
In Colorado, the authority for property taxation is both constitutional and statutory. The State
Constitution provides that all property is taxable unless declared exempt by the Constitution.
Property tax is divided into two major categories: real and personal. Real property includes land,
mineral rights, and improvements (buildings) on the property. Personal property includes
equipment, free standing appliances, and other movable items. Personal property is taxable if it is
used to produce income.
The value of real property is determined by the County Assessor every other year through a
reappraisal process. Personal property is valued by the owner and reported to the County Assessor.
Most non-residential property is then assessed at 29 percent of its estimated value. The value of
personal property can be depreciated by its owners. Over the life of the personal property, its actual
and assessed value depreciates from year to year.
The General Assembly has enacted statutes that allow counties, cities, and school districts to
negotiate incentive payments or credits to qualified companies to offset real and personal property
tax liability. The Enterprise Zone Act provides authorityfor the City to negotiate incentive payments
or tax credits up to the amount of the tax increment that otherwise would be payable by an eligible
company. The base year for determining the tax increment is the year prior to the approval of the
' Enterprise Zone.
By letter dated March 6, 1995, Fort Collins Inc. requested the City consider incentive payment or
credits of the real or personal property tax for a new manufacturing plant for a five year period.
Subsequently, the FCI request was lowered to an incentive payment or credit equal to 90% of the
tax increment that would result from the tax on personal property to be located at the plant.
The statutory authorityfor incentive payments or credits is accomplished through an agreement
between the City and the eligible company requesting payment. The negotiated agreement would
be sent to the County Assessor. The property would continue to be valued and assessed. However,
the tax would not be collected by the County Treasurer.
If Council decides that this is a policy option it would like to pursue; the mechanics of the incentive
payment or credit would need to be negotiated and documented in an agreement. Within the
agreement it would be possible for the City to impose the performance standards items that could
determine the level of the incentive payment or credit.
Options
(a) 90% of Personal Property Tax Liability (Ordinance No. 45, 1995). For property located in
an enterprise zone, State statutes allow cities to provide incentive payments or credits of up to 100%
of new property tax, both real and personal. Under this option, the City would set a maximum
33
April 18, 1995
incentive level of 90% of the incremental increase in the estimated personal property tax liability '
for each year over a period of five years. The City's portion of personal property tax in Hyundai's
case would be $7 million.
Pros:
• The City would receive revenue from the real property and a portion of the personal property,
thereby maintaining general government revenue sources.
• The $7 million would be a significant reduction in the company's tax liability.
• The City's competitive position would be improved.
• The authorizing legislation would be in place; we would have to negotiate the terns of the
agreement.
• The level of the incentive can be tailored to specific performance objectives.
Cons:
• The package may not be viewed as beneficial as incentives offered by other cities.
• The technique raises equity considerations; only large companies are eligible for incentives.
• The City would likely still exceed the revenue growth limit.
• May affect the company's eligibilityfor the development fee rebate program.
(b) 50% of Personal Property Liability (Ordinance No. 46, 1995). A different section of the State '
statutes allows credits in non -enterprise zones. Here, the incentive would be limited to 50% of
estimated personal property tax liability. Under this option, the incentive would apply to all large
base industry whether or not they are in an enterprise zone. As required by the statute, the tern of
the credit would not exceed four years. The amount of the incentive or credit for Hyundai would be
to about $4 million.
Pros:
Cons:
The City would receive higher property tax payments from the company.
A more conservative incentive package would be more consistent with the City's historical
response to incentive requests.
The City's competitive position would be weaker compared to the 90% option.
Even at a lower level, equity considerations are present.
The City would be more likely to exceed the revenue growth limit.
The Council may desire to develop options based on the duration of the incentive payments or
credits. The proposed ordinances would allow the duration to be four or f ve years (depending upon ,
34
April 18, 1995
whether the property is in an enterprise zone.. The incentives offered by the school district are
limited to four years. The shorter the duration, the lower the incentive.
Use Tax on Manufacturing Equipment
First, we need to define "use tax. " Use tax is imposed on personal property brought into the City
of Fort Collins for storage, distribution, or consumption whether purchased or sold inside or outside
the city. If the property was bought within the City, the company would pay sales tax. While sales
tares are paid to vendors by consumers, use tax is paid directly to the city by the user. Use tax is
intended to complement the sales tax and its purpose is to equalize competition between in -city and
out-of-town vendors and to encourage local purchases whenever possible.
The legal definition of manufacturing is: the performance of an integrated series of operations
which places tangible personal property in a form, composition , or character different from that
in which it was acquired whether for sale or for use by the manufacturer. The change inform,
composition or character must result in a different product having a distinctive character and use.
The City of Fort Collins currently imposes a sales and use tax on machinery purchased for use in
the manufacturing process.
Comparison to Other Colorado Cities. Staff surveyed the largest cities in Colorado. Ten cities
impose a sales and use tax on machinery purchases. Three cities (Arvada, Grand Junction and
Loveland) provide full tax exemptions for machinery purchases used in the manufacturing process.
Longmont exempts machinery with a cost in excess of $1,000 up to $700,000 in tax per year for
existing manufacturers. New manufacturers are entitled to the exemption with no cap for their first
two years of operation. Colorado Springs provides an "alternative tax rate " exemption where their
tax rate declines as the amount of equipment purchases increases. The first $20,000,000 in
manufacturing equipment purchases are taxed at graduated rates and any purchases over $20
million are exempt.
Comparison to Other States. The State of Colorado exempts manufacturing equipment purchases
over $500 when the equipment is capitalized.
A recent tax publication surveyed the manufacturing and machinery equipment exemptions of 45
states and the District of Columbia that collect sales and use tax. Fifteen of the 45 states tax
machinery equipment. Nine of the jurisdictions offer partial tax waivers or a reduced tax rate. The
remaining 21 states fully exempt machinery equipment used in the manufacturing process.
City Dependency on Sales and Use Tax on Manufacturing Equipment. The revenue from tax on
manufacturing equipment is a significant part of the City's revenue base. The city receives tax on
' manufacturing equipment in the form of sales taxes and use taxes. Since 1989, the city has collected
35
April 18, 1995
over $20.2 million in sales and use taxes from manufacturers. This is about 12% of the total tax ,
collections received during that time.
Sales and Use Tax Incentives for Purchasers of Manufacturing Equipment. Staff was directed
to identify and evaluate methods of providing sales and use tax incentives for manufacturing
companies. The options staff considered are: 1) tax deferral; 2) a tax limit or cap on the amount
of manufacturing sales and use taxes paid annually; and 3) an escrow method where tax dollars
would be paid by the company into a trustee bank and which could later be rebated to the payee
contingent on performance measures.
Options
(a) Tax Deferral (Ordinance No. 48, 1995). This option would allow the City to defer a
company's use tax liability over a specified period of time. Currently, the City offers payment plans
to companies with tax liability that cause economic hardship. Staff negotiates terms, including the
length of the payment schedule and interest rates on unpaid liability.
Pros:
• Helps manage revenue stream for the City.
• Better matches company's tax liability with its profits. '
• Conservative approach for City.
• Easily tied to performance measures.
• Same technique would work for existing businesses.
• Fairly easy to administer compared to other options.
• Does not reduce the City's tax base.
Cons:
• Does not address equity concerns for smaller businesses.
• Does not reduce actual tax burden of the company.
• Harder to administer than the current system.
• Some uncertainty when determining the length of the deferral.
• Deferral incentive not as good as tax credit.
• Puts City in the role of a lending institution.
• May raise disclosure issues in Annual Financial Report.
• May have negative tax consequences for the company.
• Merely delays revenue management problems.
(b) Tax Cap on Manufacturing Equipment (Ordinance No. 47, 1995). This option limits the
amount of use tax companies would pay annually for purchases of manufacturing equipment. Under
this option, no basic industry would remit more than $2,000,000 (or other level) annually in taxes '
36
April 18, 1995
for purchases of manufacturing equipment. Once the limit is reached, additional purchases would
be "tax-free."
Pros:
• Provides immediate, measurable tax relief.
• Easy to administer (only a few companies are affected).
• More competitive tax structure for Fort Collins (comparable with other cities and states).
• Easier to project revenue sources.
• Encourages local companies to invest in equipment.
Cons:
Equity concerns for all other taxpayers.
• Promotes retail sales tax dependency as more burden is put on consumers and less
burden on businesses.
• Potentially Narrows City's revenue base.
• Would affect current development fee rebate program.
• If the cap is not indexed, more companies will become eligible over time, thus reducing
the future revenue base.
• Decreases revenue base without replacement revenue.
• More difficult to administer than the current system.
• Companies would time purchases to maximize their benefit, perhaps causing revenue loss
to the City.
(c) Escrow Agreements (Ordinance No. 49, 1995). This option would provide a method in
which companies would pay their use tax liability for manufacturing equipment into an escrow
account at a trustee bank. The fiords would remain at the bank and draw interest. These tax dollars
would be rebated to the company contingent on performance criteria.
Pros:
• Helps to manage revenue for the company.
• Provides tax relief over time.
• Easy to tie to performance measures.
• Gives trustee bank assets to hold.
• Manages revenue growth for the City; prevents ratchet -back effect.
• Maintains current, broader revenue base.
• With the escrow, the City is assured the money is available. Reduces risk of default by
the company.
• At end of escrow, company could donate all or a portion of the escrowed money to the
' communityfor "legacy" type projects.
37
April 18, 1995
Provides a source of revenue if cost of services or service levels increase due to this
company.
Cons:
• Only affects large firms, there is an equity concern for smaller companies.
• Harder to administer than current system.
• Company has to pay up front, out-of-pocket expenses; not as attractive as outright
waivers or credits offered by other cities and states.
• Some shifting of tax burden if only the remitting company receives lower taxes.
Fiscal Impact Model Progress Report
Staff has reviewed several fiscal impact models for the purpose of evaluating economic incentives.
We have used a fairly simple model to analyze proposals for local firms requesting that the City
sponsor tax exempt financing by issuing industrial development revenue bonds. We have used
similar analytical techniques to evaluate proposals when we sell property. For the development fee
rebate program, the technique was simplified to provide the benefit cost ratio. As we discussed at
the March 28th meeting, staff needs to improve upon the impact models we currently use. To do a
fair analysis of large industrial projects, the current models need to be expanded. The expanded
fiscal impact model should be able to do several things:
• Focus on the fimdamental issues involved in attracting more business,
• Be able to identify and estimate direct and indirect costs as well as revenues,
• Use more accurate but reasonable assumptions about the multiplier effect,
Identify
causes and effects relationships,
• Focus on the conservative and reasonable,
• Measure costs and revenues to other jurisdictions, including the school district, the
state, and the county.
To complete the fiscal impact model, we need to collect data from several sources including the
project value, consumption patterns, employment, wages, sales, timing, and outlook.
The project data will be used to estimate how the investment by the company fits into measurable
economic values, for example, employment, earnings, products, sales.
New basic industry employment drives several other interesting aspects, including state, county,
school district, city revenue bases. Additional employment stimulates other changes including local
demographics. Changes in local demographics influences expenditure in the local economy.
These aspects can then be evaluated by using some financial and economic techniques, for example,
discounting to present value or determining an internal rate of return. The results from this
9D
1
April 18, 1995
financial tests should provide some valuable information to determine if it is appropriate to provide
incentives.
Other types of costs need better techniques to evaluate them. Environmental degradation and
diminution of the quality of life are example of indirect economic costs. They have been external
to the issue offinancing growth. We still need a better way to place a value on these externalities.
Fort Collins Inc. has acquired a fiscal impact model for the purpose of evaluating fiscal impacts of
large manufacturing firms. FCI has made the model available for City staff to evaluate the Hyundai
plant location and help shape the analysis for the policy changes contemplated herein.
Staff believes the FCI model adequately models and provides realistic information on the benefits
(revenue) side. We remain concerned that externalities are not fully measured. School impacts are
included but other infrastructures, environmental concerns, traffic congestion, quality of life and
other less tangible aspects are not included. Staff will continue to work on these aspects of the
model. Staff believes refining a fiscal impact model to address these concerns would require an
additional six to eight weeks.
Development Review Process Alternatives for Large Basic Industrial Development Projects
The following options are presented for consideration as alternatives for improving the time
required to process large basic industrial developments. This is not intended to be a complete list
of possibilities, rather, a brief discussion of a range of several options which may merit further
evaluation. Depending upon decisions made relative to this issue, changes to City code and policies
may be required.
Options
Exemption. Develop specific legislation to be applied on a case -by -case basis, when approved by
Council, exempting certain types of projects from development review.
Pros:
Quickest way for development approval.
Could meet the applicant's schedule for construction.
Enables design and construction to run in parallel; developer could proceed at risk until
inspections are complete.
Cons:
• No public review of a major project with potentially high neighborhood impacts.
' No staff review of siteflandscape plans or utility plans to ensure City standards are met.
at
April 18, 1995
• Would still require development agreement and approved utility plans to construct public '
improvements that are the responsibility of the applicant.
• Applicant would have to apply to Council for exemption from development review, the result
of which would not be certain.
• Depending on the development proposal (example: a fenced site), the project might not
achieve Council's mixed-use/transportation linkage policies.
• Potential risk for the developer if development doesn't comply with City standards.
• Potential risk for City if development doesn't comply with City standards. Errors made when
developer proceeds without review are rarely corrected properly, resulting in the City
assuming responsibility for an inadequately designed system.
Rezone. Rezone the property to a district that would allow the proposed use as a "use -by -right. "
Pros:
Eliminates time involved in taking project to Planning & Zoning Board for review.
Applicant can apply directly for a building permit.
The project can proceed on a more tightly controlled schedule.
Cons:
• Applicant must go through the rezoning process. '
• The project must comply with standards of the zoning district unless granted a variance (as
opposed to the flexibility available through the PUD process).
• Additional studies and plan approvals similar to a PUD are still needed (utility plans and
development agreement would still be required).
• No public input would occur during project review despite the potential impact within the
neighborhood.
• Some aspects of technical review for a use -by -right project would be identical to the PUD
process.
Special Review Team. Establish a special review team including a project manager and staff
dedicated to the review of the project. The City could require the company to pay for this special
review team.
Pros:
Review of special studies and utility plans and preparation of development agreement would
be conducted by staff dedicated to the project.
City staff and project engineer(s) can work more closely together, possibly eliminating the
need for several rounds of review, or at least minimize the time of review.
All goals and policies of the development review process can be achieved, including public I
input.
SM
• There is greater potential overall for the project to remain on schedule.
Cons:
April 18, 1995
The project would still be required to be reviewed through the PUD process.
City would need to retain a team of plan reviewers, or establish a team of experienced,
regular staff with back-up support.
Recommendations
If Council desires to modify the City's economic incentive polices, then staff has the following
recommendations.
Property Tax Options
Staff recommends Council pursue a conservative approach to reducing the personal property tax
liability for large base industry. The limit for incentive payments or credits should beset at 50%
of personal property tax over a four year period. This would be consistent with the limit of incentive
payments for the school district. it would also be closer to an even split of the personal property tax
liability indicating a more equal partnership than the 90% level of credit suggested by FCI.
Use Tax Options
The following use tax options are not mutually exclusive. In theory, Council could choose any one
or a combination of options as economic incentive tools; however staff recommends the following:
Deferral. Staff recommends this option. Deferral agreements are fairly easy to
develop and implement. This option would provide more equity among taxpayers.
2. Escrow. Management staff recommends this option. It has good potential to manage
revenue sources over a five-year period. It would allow the City to set and evaluate
performance standards prior to distribution of the proceeds held in the escrow. It
would also allow some equity among the affected taxpayers.
Staff does not recommend that Council adopt the use tax limit. Management staff is concerned that
this option may have financial impacts that are not fully understood. This option has the potential
to reduce the City's revenue base. Until replacement revenues are in place, this approach should
not be used. Staff is also concerned about the equity of this option as it affords tax relief to only the
largest use taxpayers. If Council prefers to pursue this option, the limit should be indexed and a
sunset provision should be provided.
I
Development Review Process
41
April 18, 1995
Front a management standpoint, Council should consider the option to rezone to allow for a use -by- '
right review, as well as establishing a special development review team dedicated to the project.
In the case of large development projects, review is especially important to ensure that the project
is in harmony with the adopted neighborhood plait, and has incorporated appropriate standards and
policies. Therefore, staff does not recommend consideration of the exemption option. "
Interim City Manager Diane Jones gave a staff report on this item and stated these were policy
options for Council's consideration and not a specific package for Hyundai.
Interim Deputy City Manager Frank Bruno briefly outlined each of the policy options.
Finance Director Alan Krcmarik reported on preliminary results of the survey conducted by George
K. Baum and Associates.
Betty Maloney, 1309 City Park Avenue, member of the Affordable Housing Task Force, expressed
concerns regarding offering economic incentives to large base industries. She questioned if there
was adequate affordable housing available to accommodate a large number of new residents and
spoke of transportation and air pollution concerns.
Linda Stanley, a Fort Collins resident, was opposed to offering economic incentives for businesses
and commented that over time, economic growth creates greater costs to all residents of the I
community.
Tim McCarthy, Vice President of Manufacturing and Site Management for Symbios Logic, stated
he believed that Hyundai is the right type of growth for Fort Collins and stated Hyundai is a very
environmentally aware and clean industry.
David Roy, 1039 West Mountain, stated he was opposed to offering economic incentives and quoted
statistics when incentives failed.
John Knezovich, 1205 Green Street, recommended offering a sales and use tax cap of $2M.
Gary Petty, 4518 Seaboard Lane, Symbios employee, urged Council to take a conservative approach
but supported making a strong effort to attract Hyundai. He requested information regarding how
the tax dollars being saved, by offering incentives, would be used to benefit the community.
Eric Reno, representing Front Range Community College, spoke of the need to be competitive and
of the important role economic development has regarding the quality of life in Fort Collins.
Lucia Liley, Chair of Fort Collins Inc., spoke of the need to consider developing policies regarding
economic incentives and reported on a decision made by Larimer County Commissioners regarding
tax credit limitations. She urged Council to consider a cap to protect the City's revenue base. '
42
April 18, 1995
1 Kelly Ohlson, 2040 Bennington Circle, strongly opposed offering economic incentives and stated
adopting a policy such as this would jeopardize the quality of life and seriously impact the
environment.
Roland Mauer, representing Eldon Ward of CityScape Design, read a prepared statement by Mr.
Ward.
Tim Johnson, 1337 Stonehenge, spoke in opposition to offering economic incentives, and opposed
the manner in which the issue came about. He stated development policies should be discussed with
the community.
Ken Bonetti, resident of Mountain Avenue, urged Council to look at the costs and benefits of
offering incentives. He suggested conducting a study to determine the citizens willingness to pay
to preserve the quality of life in Fort Collins.
Paul Thompson, a Fort Collins resident, spoke of the need to preserve and attract industry and urged
adoption of the ordinances.
Krcmarik stated performance standards could be added into any or all of the ordinances.
Councilmember Smith stated he would be interested in public input on policy issues.
Councilmember Janett questioned the rationale of looking at only very large companies.
Krcmarik clarified staff was responding to a request by Fort Collins Inc.
Councilmember Smith spoke of the need to look at tax codes for corporations, retail and services
industries that locate in the City.
Councilmember Kneeland made a motion, seconded by Councilmember McCluskey, to adopt
Ordinance No. 45, 1995 on First Reading.
Krcmarik spoke of state tax credits available and clarified the state no longer taxes manufacturing
equipment at its full value.
Councilmember Kneeland spoke of the School District and the County Commissioners position
regarding this issue. She believed it would be reasonable to approve the credit for a period of no
longer than 5 years.
Mayor Azari stated she supported all of the ordinances and spoke of the need for a broad based
economic policy. She stated the ordinances would need further review before second reading.
43
April 18, 1995
The vote on Councilmember Kneeland's motion was as follows: Yeas: Councilmembers Azari, '
Kneeland and McCluskey. Nays: Councilmembers Apt, Janett, Smith and Wanner.
THE MOTION FAILED.
Councilmember McCluskey made a motion, seconded by Councilmember Kneeland, to adopt
Ordinance No. 46, 1995 on First Reading.
Councilmember McCluskey stated this was a modest proposal and noted it would need additional
review before second reading.
The vote on Councilmember McCluskey's motion was as follows: Yeas: Councilmembers Azari,
Kneeland and McCluskey. Nays: Councilmembers Apt, Janett, Smith and Wanner.
THE MOTION FAILED.
Councilmember Kneeland made a motion, seconded by Councilmember McCluskey, to adopt
Ordinance No. 47, 1995 on First Reading.
The vote on Councilmember Kneeland's motion was as follows: Yeas: Councilmembers Azari,
Kneeland and McCluskey. Nays: Councilmembers Apt, Janett, Smith and Wanner. I
THE MOTION FAILED.
Councilmember Smith made a motion, seconded by Councilmember Kneeland, to adopt Ordinance
No. 48, 1995 on First Reading.
Councilmember Smith spoke of his reasons for supporting the ordinance stating he did not believe
adoption of this ordinance would produce large financial effects.
The vote on Councilmember Smith's motion was as follows: Yeas: Councilmembers Apt, Azari,
Janett, Kneeland, McCluskey and Smith. Nays: Councilmember Wanner.
THE MOTION CARRIED.
Councilmember Kneeland made a motion to adopt Ordinance No. 49, 1995 on First Reading.
THE MOTION FAILED DUE TO LACK OF SECOND.
Councilmember Smith suggested setting a deliberate process involving interested community
members.
M
1
April 18, 1995
Adjournment
Councilmember Smith made a motion, seconded by Councilmember Janett, to continue the meeting
to April 25 at 6:30 p.m.. Yeas: Councilmembers Apt, Azari, Janett, Kneeland, McCluskey, Smith
and Wanner. Nays: None.
THE MOTION CARRIED.
The meeting adjourned at 3:00 a.m.
ATTEST:
45
C