HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/19/1999 - ITEMS RELATING TO THE ISSUANCE OF CITY OF FORT COL I
AGENDA ITEM SUMMARY ITEM NUMBER: 10
DATE: October 19, 1999
FORT COLLINS CITY COUNCIL STAFF: Alan KrcmarW
Jay Hardy
SUBJECT :
Items Relating to the Issuance of City of Fort Collins Downtown Development Authority
Subordinate Tax Increment Revenue Bonds, Series 1999.
RECOMMENDATION:
The DDA Board of Directors and staff recommend adoption of the Ordinances on Second Reading.
EXECUTIVE SUMMARY:
A. Second Reading of Ordinance No. 150, 1999, Authorizing the Issuance of City of Fort
Collins Downtown Development Authority Taxable Subordinate Tax Increment Revenue
Bonds Series 1999 in the Amount of$750,000 for the Purpose of Financing Certain Capital
Improvements and Capital Projects.
B. Second Reading of Ordinance No. 151, 1999, Appropriating Proceeds from the Issuance of
City of Fort Collins.Colorado,Downtown Development Authority Taxable Subordinate Tax
Increment Revenue Bonds, Series 1999, for the Purpose of Making Certain Capital
Improvements in the Downtown Area of Fort Collins and Appropriating Revenues in the Tax
Increment Fund.
The City of Fort Collins created the Downtown Development Authority to make desired
improvements in the downtown area Through tax increment financing, the DDA has made
significant contributions to the redevelopment and improvement of the downtown area. These two
Ordinances provide funding from unreserved fund balance in the DDA Debt Service Fund to make
additional improvements in the downtown area. Ordinance No. 150, 1999.which was unanimously
adopted on First Reading on October 5. 1999,issues short term bonds for the projects which will be
paid from the tax increment revenue Ordinance No. 151, 1999,which appropriates the proceeds in '
to the Capital Projects Fund for the various projects,was also unanimously adopted on First Reading
on October 5, 1999.
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AGENDA ITEM SUMMARY ITEM NUMBER: 11 A-B
DATE: October 5, 1999
FORT COLLINS CITY COUNCIL Alan Krcmarik/
STAFF: Jay Hardy
SUBJECT:
Items Relating to the Issuance of City of Fort Collins Downtown Development Authority
Subordinate Tax Increment Revenue Bonds, Series 1999.
RECOMMENDATION:
_..
The DDA Board of Directors and staff recommend adoption of the Ordinance on First Reading.
FINANCIAL IMPACT:
At the end of 1998, the Downtown Development Authority Debt Service Fund held $630,000 of
unreserved fund balance. By the eiiftf 1999;,tbe%trice `furid'balance is projected to grow to
approximately $900,000. The DDA Board and 4he staff*ommend using a portion of the
unreserved fund balance to make capital nprovements in thetowntown area consistent with the
mission of the Authority. Over"fhe ensuingyeazs'the projects receiving the benefit through the
capital improvements dill repay the value of the projects through increased tax increment. The
DDA debt service fund has sufficient revenue to meet all required debt service payments and reserve
requirements for 1999 through 2006.
EXECUTIVE SUMMARY:
A. First Reading of Ordinance No. 150, 1999,Authorizing the Issuance of City of Fort Collins
Downtown DevelopmentAuthority Taxable-Subordinate 'ax Increment Revenue Bonds
Series 1999 in the Amount of.$750,000 for the PuT se of Financing Certain Capital
Improvements and Capital Projects.
B. First Reading of Ordinance No. 151, 1999,Appropriating Proceeds from the Issuance of City
of Fort Collins. Colorado, Downtown Development Authority Taxable Subordinate Tax
Increment Revenue Bonds, Series 1999, for the Purpose of Making Certain Capital
Improvements in the Downtown Area ofFort Collins and Appropriating Revenues in the Tax
Increment Fund.
The City of Fort Collins created the Downtown Development Authority to make desired
improvements in the downtown area. Through tax increment financing, the DDA has made
significant contributions to the redevelopment and improvement of the downtown area. These two
Ordinances provide funding from unreserved fund balance in the DDA Debt Service Fund to make
additional improvements in the downtown area. The first Ordinance issues short term bonds for the
DATE: October 5, 1999 2 ITEM NUMBER: I 1 A-B
projects which will be paid from the tax increment revenue The second Ordinance appropriates the
proceeds in to the Capital Projects Fund for the various projects.
The projects include the Northern Hotel($3 11,000), 185 North College($105,600), 107-115 South
College($84,000), City Drug ($67,000), 328 Remington($50,000),345 East Mountain($40,000),
251 Linden ($20,000), and 231 South Howes Street ($18,500). The total of the eight projects is
$716,000. All of these projects have been reviewed and recommended by the Board of Directors
of the DDA.
Two other projects have been reviewed and recommended by the DDA Board. They include the
Armstrong Hotel ($240,000)and the 401 West Mountain Trolley Station($170,800). There is not
sufficient tax increment in 1999 to cover the colt of these two projects. These projects are planned
to be funded from a future borrowing.
The Transportation Services Area has also requested that the DDA participate financially in the
Repair and Maintenance of the Remington Parking Structure.
BACKGROUND
For background, staff has provided the summary for each project that was reviewed and approved
by the Board of Directors of the DDA. s
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1. Northern Hotel '
EXECUTIVE SUMMARY
The Downtown Development Authority is excited to have the opportunity to participate in the
redevelopment of the Northern Hotel. As a long-standing icon in Fort Collins,the Northern Hotel
offers a glimpse of a bygone era as well as a great opportunity to revive a building,which is highly
visible to anyone visiting the city.
The DDA has committed $331,0004o this renovation��roject, with-City Council approval. The
project will generate enough tail increment to support thiis participation through the combination of
housing and commercial reta1scheduled as part of the projee{ The DDA will be acquiring an
easement on the fa*e as the ptiblic benefit.+# ---- G-
BACKGROUND INFORMATION
The Northern Hotel,once the gem of Northern Colorado,has seen many different faces throughout
the years. In addition to its many faces. the Northern has endured its share of problems. Most
recently, a fire in the `70's placed this historic structure in a`condemned' state,banning use on the
upper floors. This project will rehabilitate these floors, enabling them to be used for the first time
in almost 25 years.
Over time,the Northern has seen many attempts at renovation. However, due to the nature of the
building's historic fabric and current condition,renovation was both difficult and expensive. Staff
believes the timing of this proposal to bring this structure back to life is opportune.
DATE: October 5, 1999 3 ITEM NUMBER: 11 A-B
Conformance with DDA and Communitv Goals. Objectives, rules and regulations
The redevelopment of the Northern Hotel helps to fulfill many significant long-range planning and
development goals of Fort Collins, specifically downtown.
Ci1y Plan
From City Plan,Policy DD-1.2,After-Hour Activities: Uses that expand the range of activities such
as entertainment facilities and residential uses will be encouraged.
The Northern Hotel project offers additional housini in the downtown.
From City Plan, Principle D-4:'Historically and architecturallsignificant buildings in Downtown
will be preserved and enhanced.
The Northern Hotel project is both historically and architecturally significant.
Land Use Code
The redevelopment of the Northern Hotel conforms to Article 3, Division 3.4, Subdivisions 3.4.7
of the Fort Collins Land Use Code-requiring-that a local historic structure and/or a structure that is
eligible for listing on the National Register of Historic Plaoesxprovide a development plan and
building design for the preservation and adaptive use of the historic resource.
The Northern Hotel project conforms to the above-mentioned regulation.
Downtown Plan
From the Downtown Plan, Policy 9—Historic Resources: Preserve and enhance the historic and
architectural values of Downtown...Preserve the historic character of Downtown...Respect and be
sensitive to the historic and architectural character of Downtown...Encourage the redevelopment and
adaptive reuse of historically significant..and archit=turally important structures...Promote the
designation of eligible structures and districts as local, state avid national landmarks.
Redevelopment of the Northern Hotel clearly meetsall of these%goals.
FINANCING
The DDA is one of many financial elements in this project. As stated in the Executive Summary,
the DDA committed $131.000. Tax increment financing is the selected method to retire the debt.
Although the calculations for housing and commercial tax increment are different.the tax increment
from the property will support the DDA commitment. Additionally, any excess property tax
increment would go to the City, via the DDA.
DATE: October 5, 1999 4 ITEM NUMBER: 11 A-B
2. 185 North College Avenue
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EXECUTIVE SUMMARY
The redevelopment ofthe property at the southwest corner ofthe intersection of LaPorte and College
Avenues brings to one of the most important gateways in downtown an attractive two-story brick
structure, which will house a restaurant, retail and office space. This comer lot was once a gas
station and an auto repair shop. The project being built fulfills all the objectives spelled out in the
three pages of the Downtown Plan devoted to the site as well as City Plan standards for infill and
mixed use developments.
BACKGROUND INFORMATIONry
The southwest comer of LaPorte and College was targeted by the Downtown Plan which devotes
three pages to the site. The Plan states "The site is located on one of the most important blocks in
the retail district of the Downtown area...the City has the opportunity to have a positive influence on
the future of the entire block through the appropriate disposition of the LaPorte property."
The Downtown Plan was written in the late 1980's long before the redevelopment of Blocks 31 and
32 to the west. The intersection's importance has only increased in the intervening decade. The
project being built on the site is,a two-st �office;,wtail and-restaurant structure that directly and
intentionally picks up on many f the historic architectural th knes of downtown Fort Collins. The
design is clearly in line with City Plan in scope;�'massing, inaterials. spacing of architectural
elements, and pedestrian orientation:'Although a f6v-on-site-parking spaces will be provided, the
project intends to take advantage of the new parking structure being built directly to the west.
The Downtown Development Authority considered participation in this project in June 1999 and
agreed to acquire an easement on the fagade,assuming it was built as design illustrations indicated,
for$105,600. The easement is for a 20-year period and requires all maintenance to be conducted
and paid for by the property owner.
The Authority's agreement to participate was predicated onth a following:
The importance ofthe intersection and the long standing need Whave a quality improvement placed
on the site:
• The creative and sensitive design of the structure toward the historic downtown environment
and to pedestrians. The DDA noted the function the site has in connecting Old Town Fort
Collins and the new civic center facilities to the west of the property;
• The conformance of the design to every criteria of the Downtown Plan and to City Plan;
0 The actual cost to build the fagade estimated at$158,500;
• The owner's willingness to bid and manage the construction of General Improvement District
improvements which are occurring simultaneously with the development of the building
itself;
• The opportunity to leverage a high-quality project directly across the street from the
proposed renovation of the Northern Hotel which effectively redevelops 50 percent of the
entire intersection.
DATE: October 5, 1999 5 ITEM NUMBER: 11 A-B
FINANCING
The new structure at 185 North College Avenue will have a value of between $990,000 and $1.2
million according to estimates provided by the Larimer County Assessor's office. Using the more
conservative number,this will generate property taxes of$27,500 (based upon current mill levies)
which, after subtracting current tax liability of $1,917 leaves an incremental value of $25,600.
Through mid 2006,the project should pay about $140,000 in tax increment and if the annual level
of$25,600 is not reached (regardless of the reason)the owner of the property is obligated to make
up any shortfall. The City,through the DDA, would retain any excess.
The DDA's$105,600 easementacquisition constitutes b,'tween {8 and 10.6 percent of the project's
completed value which is consistent with the level ofAuthonty participation in almost every project
it has ever been involved with Mie-major exceptiosbeing Old Town Square).
Because this project is being included with a series of other DDA projects, the issuance and
borrowing costs for this(and all)the projects is considerably less than what they would be as stand-
alone projects.
Cost estimate:
The following numbers were prwwided by-,the owner, e-project:-
Earthwork 25,000
Foundation - 12,5110'
Structural Steel 22,000
Framing 50,000
Insulation 5,000
Stucco 20,000
Doors 7,000
Windows 11.000
Hardware 4,500
Drywall . 18,OOOw -
Painting 1,500
Awnings 11,000 "
Signage - .- 7.000
Light Fixtures 2.500
Flood Doors 2,000
General Conditions 10,000
Contractor profit/overhead 22.000
Total: $251.000
From these figures, the DDA subtracted earthwork, foundation, insulation, drywall, general
conditions,and contractor profit and overhead(total of$92.500). In some cases the improvement
cost should legitimately be home by the whole project (e.g. earthwork, foundation, general
conditions, profit and overhead) while in others, the "benefit" was clearly to the interior of the
DATE: October 5, 1999 6 ITEM NUMBER: 11 A-B
building(drywall,and insulation). Nevertheless,the resulting$158,500 hard cost of improvements
exceeds the cost of the easement acquisition by better than 50 percent.
3. "Robert Trimble Block" Building (107-115 South College Avenue)
EXECUTIVE SUMMARY
The building known as the Robert Trimble Block Building is one which carries a tremendous
amount of history for Fort Collins, as well as currently housing the Catacombs Restaurant. This
historic building, located nextoto"City Drug is located just off1he main corner of the busiest
intersection in downtown FortCollins. The developer ofthe Fug,ject is The Kaplan Company. The
total private investment of the renovation is estimatgI at$666,948,of which,$107,537 will restore
<;k
the faoade of the building. Tax increment revenue from this project will exceed$100,000,while the
DDA has committed $84,000.
BACKGROUND INFORMATION
The Robert Trimble Block has contained a variety of commercial enterprises for nearly a century,
from ca. 1900 to the present. It is named for its original owner,Robert E.Trimble,a prominent Fort
Collins businessman and son of early Fort Collins merchant and stockman William H. Trimble. Its
first occupant was Tyler-Lowe MercantileLbmpany hom ea*9024910. The historic building also
was the home to The Boston Store,the Vance Shoe Store,and 16.Stores Co.,Collins Cash Clothing
Company, Piggly Wiggly,Hibbs Clothing Co.,a dry, stole as well as a jeweler. In 1960 this
location was then replaced by retailmchainstore,Ben*ranklin,-which operated for a decade. Team
Electronics, The Catacombs, Bays Pets and Things,and Wahus Ice Cream have also been located
in this building. In August 1998 the building came under the ownership of Image Enterprises,Inc.
This building renovation is consistent with many of the City and DDA's goals, as outlined in the
following document references:
City Plan:
Principle D-4: Historically and architecturally significanfbuiloi gs in Downtown will be preserved
{
and enhanced.
Downtown Plan:
Policy 9—Historic Resources: Preserve and enhance the historic and architectural values of
Downtown... Preserve the historic character of Downtown...Respect and be sensitive to the historic
and architectural character of Downtown...Encourage the redevelopment and adaptive reuse of
historically significant and architecturally important structures.
Redevelopment of the Robert Trimble Block clearly meets all of these elements.
DATE: October 5, 1999 7 ITEM NUMBER: 11 A-B
FINANCING
The redevelopment of the Robert Trimble Block will cost approximately $666,948. This
incremental increase to the property value of the building will generate over$100,000 in the next
5 '/z years. The DDA has committed $84,000 to this project. As with all DDA projects, if the tax
increment fails to reach the specified levels,the owners will be contractually obligated to make up
any shortfalls. This guarantees that the debt incurred to acquire the fagade easement will be covered.
Any excess increment flows to the City through the DDA.
Attachments to this memorandum"include elevationgvf he building,site plan,fagade cost estimate
and the easement and maintenance agreements u
4. Cite Drug Building(101-103°South College Avenue)
EXECUTIVE SUMMARY
The City Drug Building has long been a cornerstone of downtown Fort Collins. This historic
building is currently undergoing an extensive remodel of the fagade and the second floor. The
developer of the project is The Kaplan Company. The total private investment of the renovation is
estimated at$559,280.75. The DDA commitment of$67,000 is contingent on City Council approval
as well as work being completed as=presented:,As reposed,"this�rnished project would generate
over $70.000 in tax increment-money, which would e ttsed to retire the debt.
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BACKGROUND INFORMATION
The City Drug Building is comprised of two adjoining buildings,which were separate entities until
ca. 193 7. The southernmost portion of the building,occupying Lot 15.was constructed before 1886.
The building (105 South College Ave.)was divided longitudinally. In 1886, it was occupied by a
tailor and a tobacco shop. By 1891,the tobacco shop was gone and in its place was an insurance
office, and by late 1895 a millinary shop had replaced the insurance office. This building then was
the home to a grocery and hardware shop,bookstore,pharmacy,bank,and fmally in 1968 City Drug
rested in this location.
. < AM
The building and renovation, located anhe 100% (busiest) intersection of downtown, offer many
of the elements outlined in the Downtown Plan drafted in 1989-
Downtown Plan:
Policy 9—Historic Resources: Preserve and enhance the historic and architectural value of
Downtown...Protect historically significant and architectural important structures,sites and districts.
City Plan:
Policy DD-1.1,Land Use: Basic Land use activities will be clustered..to promote the movement of
pedestrians...while preserving the historical buildings and character of the area..
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DATE: October 5, 1999 8 ITEM NUMBER: 11 A-B
The City Drug project certainly accomplishes the above-mentioned elements of the Downtown Plan.
The Downtown Development Authority considered participation in this project in May 1999 and
agreed to acquire an easement on the facade,assuming it was built as design illustrations indicated,
for $67,000. The easement requires all maintenance to be conducted and paid for by the property
owner.
The Authority's agreement to participate was predicated on the following:
• The importance of this structure to downtown Fort Collins;
• The actual cost of renovation owthe fa*e estimated'at$73,672.94;
• The owner's willingness to comply ;all City rules and regulations regarding the
renovation, including flood°proofingtlus building.
FINANCING
This project will have an improved value estimated at$559,000 in taxable improvements. The tax
increment generated from this project will supply more money than the debt. In the unlikely event
the property value does not support the annual increment,the contract requires the property owner
to pay this amount. Any excess in this amount flows to the City through the DDA.
Because this project is being ancluded:w th alsenes f other DDA projects, the issuance and
borrowing costs for this(and all)the projects are�considerably less than what they would be as stand
alone projects.
5. 328 Remington(Old Baptist Church)
EXECUTIVE SUMMARY
The`Old'Baptist Church located at 328 Remington is in the final planning stages of a change of use
and renovation of the existing structure. Currently used as a dwelling unit in approximately 10%
of the usable space,this beautiful structure is.slated asa,film.and-dance school in the near future.
Currently planned is a$350,000 improvement tcoheproperty,and the DDA has committed$50,000
to this project, pending City `Council approval. _Tax increment for the project is estimated at
approximately $10,000 annually, which would be used to fund the DDA portion of the project.
Earlier in the planning process, the DDA requested the annexation of this property into the DDA
boundary. This request was supported and passed by City Council in September 1998.
BACKGROUND INFORMATION
Originally constructed in 1897, this historic church structure will receive a facelift, internally and
externally. A film and dance school is the anticipated user of the facility,offering a new dimension
to the already culturally rich Fort Collins,and downtown. While this project will offer many things
to our community, additional jobs and educational services are at the top of the list. This project
offers many different elements of adaptive reuse of a historic structure.
DATE.• October 5, 1999 9 ITEM NUMBER: 11 A-B
Conformance with DDA and Community Goals, Objectives, rules and regulations
The redevelopment of the Baptist Church accomplishes many of the significant goals of our
community through the following document references:
City Plan
From City Plan, Principle D4: Historically and architecturally significant buildings in Downtown
will be preserved and enhanced.
Land Use Code
Y: }
The redevelopment of the Bapt g"urch`conforms-to Article`-3;Division 3.4, Subdivisions 3.4.7
of the Fort Collins Land Use Code requiring that a local historic structure and/or a structure that is
eligible for listing on the National Register of Historic Place provide a development plan and
building design for the preservation and adaptive use of the historic resource.
Downtown Plan
From the Downtown Plan, Policy 9—Historic Resources: Preserve and enhance the historic and
architectural values of Downtown=Preserve-the historic character of Downtown...Respect and be
sensitive to the historic and architectural charactirofDowntov�...Encourage the redevelopment and
adaptive reuse of historically-significant and Ircl itecturally mportant structures...Promote the
designation of eligible structures<and"districts,as local; state and national landmarks.
FINANCING
The DDA has committed$50.000 in reimbursable funds toward this redevelopment project. The tax
increment from the property will be used to retire the debt of this commitment. The total anticipated
investment exceeds$350,000 in taxable improvements. This private investment will provide ample
funds for repayment of the debt.
As with all DDA projects, excess revenue flowstto the City through the DDA.
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6. 345 East Mountain Avenge,._ .
EXECUTIVE SUMMARY
The project located at 345 East Mountain Avenue,also known as the old Salvation Army building,
has undergone an entire renovation. The building owner, LPJ Limited Partnership Association, is
the developer. As Mountain Avenue begins to extend east past Walnut Street, this renovated
property has become a tremendous addition to the block. Total private investment for the project
IS over $375,000, and the DDA has committed $40,000. Tax increment revenue for the project is
estimated to be approximately $15,680 per year beginning in 2000. This increment will total
approximately$94,000 between 2000 and 2006 when the current DDA expires,and these revenues
would be used to fund the project.
DATE: October 5, 1999 10 ITEM NUMBER: I 1 A-B
BACKGROUND INFORMATION
The structure located at 345 East Mountain Avenue was built in 1901 as a private residence. The
only remaining evidence of this residence uncovered to date is an interior brick wall of the current
building.
This residence was apparently converted to a business ca. 1958. According to Building Department
Records,in January 1969 the owner remodeled,and many businesses have been located at the site.
Past tenants include Michaud Electric,Milar Electric,Salvation Army,along with the current tenant,
Balloffet and Associates. This lasfehange triggered a shift from retail to office use for the building.
FINANCING
According to the Latimer County Assessor,this property is estimated to increase in value$558,000
based on renovation and higher rental income generated by the new tenants. The taxable
improvement will provide approximately$15,680/year,which will be used to retire the debt for this
project. As with all DDA projects,the excess funds from this property will flow to the City through
the DDA.
7. 251 Linden Street
EXECUTIVE SUMMARY
The Downtown Development Authority is sch6`ziuted•to participhte in the historic renovation of the
building known as 251 Linden Street. The DDA has committed a total of$20,000 to the project,
which is estimating a total renovation cost of$296,600. This building is one of the few structures
on Linden Street which has not been remodeled. The anticipated tax increment from this proj ect will
be used to retire the debt.
BACKGROUND INFORMATION
This property is one of downto,�°.s:last.un-restored v d neglected historic properties with the
building in critical need of care and restoration.'Okbandoned in,1974 after the last tenant, Summers
Auto,moved to a new location,the property be6n a`cbnsiste aesthetic and structural decline.
The property was built in 1883 and is listed in the Local and National Register Historic District. A
photo from early 1900's shows"Plattner Implement Company" occupying the storefront with retail
farm implements. The first entry appearing in the Fort Collins City Directory shows "P.P. Tubbs
- Hay,Feed and Coal" as occupants in 1902.
The restoration of the interior and exterior will be performed in compliance with the Secretary of the
Interior's Standards for Archaeology and Historic Preservation. Existing interior Victorian fabric
will be saved and restored. The twin staircase will be restored and the skylight reopened.
This property has great significance to the community in many ways. It also accomplishes many of
the goals outlined as follows:
DATE: October 5, 1999 11 ITEM NUMBER: 11 A-B
City Plan
Principle D-4: Historically and architecturally significant buildings in Downtown will be preserved
and enhanced.
Downtown Plan
Policy 9—Historic Resources : Preserve and enhance the historic and architectural values of
Downtown...Preserve the historic character of Downtown...Respect and be sensitive to the historic
and architectural character of Downtown...EncourageAhe redevelopment and adaptive reuse of
historically significant and architecturally important structures.
FINANCING
The repayment of the debt created for this project will be issued through the tax increment generated
in the restoration process. It is projected that the property will produce approximately$8,317/year
in tax increment. Extending this amount over the anticipated 4.5 years, the total of$37,430 in
collected in tax increment revenue.
As will all DDA projects, excess revenue flows to the City of Fort Collins,through the DDA.
8. 231 South Howes f
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EXECUTIVE SUMMARY The property located at 231 South Howes is scheduled for renovation from a two-story residence to
offices. The existing structure is a designated historic landmark,which means any facade work must
be with the approval of the Landmark Preservation Commission(LPC).
A total of$250,000 in taxable improvements is estimated for the property. The project would be
funded through tax increment financing,and include improvements to the right-of-way. The DDA
commitment to this project is $18,500. - y
BACKGROUND INFORMATION I
The current owner purchased the residence of the late Adelia Davis, located at 231 South Howes
This building is located across from the Federal Post Office at the intersection of Olive and Howes.
The main building was constructed in 1903 and remodeled in 1942 into a duplex. There has been
little done to the house since that time. The project will include all new plumbing,heating and air
conditioning and electrical work, as well as the reinstallation of the original staircase, which was j
removed to create the upper apartment.
As part of the historical fabric of downtown Fort Collins,this renovation adds commercial space as
well as a residential unit to the downtown. Complete with the re-location of a fifty-year-old prize
winning rose garden relocation, and the addition of a carriage house,this project is a fine example
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DATE: October 5, 1999 12 ITEM HUM13ER: 11 A-B
of retaining the turn of the century flavor of this house, while providing an attractive mix of
residential and commercial use.
FINANCING
This project will be financed through tax-increment funding in the amount of$18,500, with City
Council approval. This debt will be self-supported by the private investment of approximately
$250,000 to the project. As with all DDA projects, any excess tax increment revenue goes to the
City of Fort Collins through the DDA.
Future Proiects
1. Armstrong Hotel
EXECUTIVE SUMMARY
Contingent upon approval by City Council, the Downtown Development Authority has agreed to
acquire a fagade easement on the Armstrong Hotel (aka Empire Hotel) following the building's
historic rehabilitation into a 58-room hotel and restaurant. The developer of the project is a team
composed of Everitt Enterprises and Sitzman-Mitchell. The $240,000 DDA commitment is also
contingent upon a $6,000,0OO renovation cost which should generate $2.3 million in taxable
improvements, and an annual tax increment of$64,000..
BACKGROUND INFORMATION-
The Armstrong Hotel was built in 1923 in response to the growing automobile tourism business.
It once housed the original Fort Collins chapter of the American Automobile Association. The
building is a locally designated historic landmark and it is eligible, and has been nominated for
National historic designation. It has been submitted to the Landmark Preservation Commission for
design review and approval.
The redevelopment of the ArmstrongHotel complies strongly anddirectly with the tenets of City
Plan and the Fort Collins Downtown Plan
Citv Plan A--
Policy DD-1.1.Land Use: Basic land use activities will be clustered...to promote the movement of
pedestrians...while preserving the historical buildings and character of the area
The Armstrong Hotel is a local designated historic structure and is in the process of obtaining formal
national designation.
Policy DD-1.2.After-Hour Activities:Uses that expand the range of activities such as entertainment
... ,restaurants,hotel/convention facilities and residential uses will be encouraged
The Armstrong Hotel will return a full-service hotel to the central business district and will include
a new, locally owned and operated restaurant and bar.
DATE: October 5, 1999 13 ITEM NUMBER: 11 A-B
Policy DD-1.7,Hotels: A high quality hotel(s)with space for large gatherings,conventions,etc., is
encouraged in the Old City Center sub-district.
The Armstrong Hotel will have a variety of meeting rooms,the largest of which will seat more than
100 people.
Principle D-4: Historically and architecturally significant buildings in Downtown will be preserved
and enhanced.
The historic Armstrong Hotel willbepreserved arid enhanced.
Policy DD-5.4 Parking. Shared parkin&allowanceswill be encouraged for nearby uses...
The Armstrong Hotel has a limited amount of on-site parking which is located at the rear of the
building(which conforms to City Plan Policy DD-5.5 requiring lots to be located behind buildings,
in side yards, or in the interior of blocks). The balance of the parking will be provided through the
use of shared facilities. These arrangements are currently being negotiated with the owners of close-
by surface parking lots.
Land Use Code
The redevelopment of the Armtrong Hotel conforms to Article 3, Division 3.4, Subdivision 3.4.7
of the Fort Collins Land Use Code requiring that a local histori�structure and/or a structure that is
eligible for listing on the National-Register of Historic Places-provide a development plan and
building design for the preservation and adaptive use of the historic resource.
Downtown Plan
Downtown Plan, Policy 9—Historic Resources:Preserve and enhance the historic and architectural
values of Downtown...Preserve the historic character of Downtown...Respect and be sensitive to the
historic and architectural character of Downtown...Encourage the redevelopment and adaptive reuse
of historically significant and architecturally important structures...Promote the designation of
eligible structures and districts.�is local,state and national landmarks.
Redevelopment of the Armstrong-Hot6Lclearly meets all of-the elements of Policy 9 of the
Downtown Plan.
Downtown Plan, Policy 15—Economic Development: Build the Downtown as the economic heart
of the community and region...Foster the development of new jobs in the Downtown...Support the
retention and expansion of existing businesses...Enhance the Downtown's dominance in finance,
government,professional services, culture and entertainment.
Redevelopment of the Armstrong Hotel helps to fulfill these economic development objectives.
Most specifically, it will complement the meager visitor housing options in the central business
district and enhance the attraction of outside dollars into this community.
DATE: October 5, 1999 14 ITEM NUMBER: 11 A-13
Downtown Plan,Policy 15.Page 110: Utilize public incentives for the location of a quality hotel(s)
nowhere else in the community but downtown.
The Downtown Plan also includes a specific recommendation in Chapter 5 (p. 116) which states:
"Establish a program to recruit major anchors to the Downtown area...A number of potential anchors
have been identified...Quality hotel(s)...eating and drinking establishments...conference centers."
The redevelopment of the Armstrong Hotel will help to fulfill this recommendation.
Plan of Development
The original planning document, Fort. Collins DowntownDevelopment Authority Plan of
Development, adopted as a pa of the creation process for the DDA in 1981 includes specific
references to historic preservation. Three listed goals and objectives (G, H, J, and It, pg. 6 and 7)
all encourage support of restoration and rehabilitation with the intent of preventing physical
deterioration and expanding the mix of uses offered in the central business district.
Finally,the Plan of Development includes a hotel and convention center as aproject the DDA should
pursue. While the proposed redevelopment of the Armstrong Hotel will result primarily in a
boutique style hotel, it clearly moves in the direction of this long time DDA project objective.
For every citation above,because every public planning and policy document strongly encourages,
endorses, this kind of project,'she Downtown Development A"thority agreed to participate in the
rehabilitation of the Armstrong Hotel.Theproject fulfills a critidid gap in the downtown commercial
fabric,it restores a simple but large historic Fort Collins landmark,it will creatively take advantage
of existing parking opportunities and because the use is unchanged, automobile demand should not
increase. Indeed,adding more hotel rooms to the downtown inventory provides visitors with a more
convenient, one-stop sleeping, entertainment, and eating environment.
DDA participation is retroactive--the project must be completed before the facade easement is
acquired. This insures the flow of tax increment monies to fund the Authority's involvement.
FINANCING ~
The rehabilitated Armstrong Hotel will`cost-dbouf`$6,000,OOb. However, the owners, with the
assistance of the Larimer County Assessor's office, have been extremely conservative in their
estimation of added "incremental" value, which they have placed at $2,300,000. This should
generate $64,000 annually in property tax increment (using current mill levies) and will generate
$288.000 over a 4.5-year period (assuming taxes on the added value do not begin flowing before
2002). This is sufficient to cover the easement acquisition cost of$240,000. Since this project is
a part of a number of DDA projects, borrowing and bond issuance costs will be reduced
significantly. As with all DDA projects,should the tax increment fail to reach the specified levels,
the owners will be contractually obligated to make up any shortfalls. This guarantees that the debt
incurred to acquire the facade easement will be covered. Any excess increment flows to the City
through the DDA.
DATE: October 5, 1999 15 ITEM NUMBER: 11 A-B
2. 401 West Mountain (Trolley Station)
EXECUTIVE SUMMARY
The DDA has committed $170,800 toward the redevelopment of the property known as 401 West
Mountain. This project will be a mixed-use building with a total build-out cost estimated at
$1,782,800. Of this total, $1,496,000 is hard net costs, with the balance made up in off-site
improvements and project fees. Tax increment financing is the funding mechanism selected by DDA
to fund this redevelopment. The project will generate approximately $40,000 in annual property
tax. Tax increment on the property will produce$36,000/annually;thus any excess increment would
flow to the City of Fort Collins through the DDA. ;
The DDA's participation in this'project is"thrcughthe funding of the public right-of-way.
BACKGROUND INFORMATION
This location,situated across from the Edward's House Bed and Breakfast,and cross-cornered from
the Avery House,is a former gas station. Prior to its immediate past use,the site served as a Trolley
Station. The property has existed as a run down,non-operative gas station for the past several years.
In viewing this project with the DDA's missionin mind,this is-a textbook downtown project. It will
result in some low-intensity neighborh`x' d retail, an increase in the availability of professional
services downtown,and it includes market--rate urban housing.Me design is contemporary but not
intrusive. It is the kind of project�thatincorposates thediversity-and functionality,which makes Fort
Collins unique.
This project continues many of the goals of the DDA as well as the community, as referenced by:
Downtown Plan, Policy 15—Economic Development: Build the Downtown as the economic heart
of the community and region...Foster the development of new jobs in the Downtown...Support the
retention and expansion of existing businesses...Enhance the Downtown's dominance in finance,
government,professional services;,culture and entertainment.-
q- L di
FINANCING
This property calls for an investment of$1,782,800, with taxable improvements in the amount of
$1,496,000. The debt incurred by the DDA will be retired through tax increment financing, with
City Council approval. As with all DDA projects, any excess funds from the project flow to the
City through the DDA.
SUMMARY
The DDA Board has met to review each of these projects. For the reasons in the summaries. the
Board has recommended each project for funding through a transfer of the tax increment. In 1999,
the DDA tax increment is sufficient to cover the cost of the first eight projects. Staff will be
developing a financial proposal for the other projects at the beginning of 2000. Staff recommends
adoption of the ordinances. j
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