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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/01/2000 - ITEMS RELATED TO THE ISSUANCE OF CITY OF FORT COLL TT TIF AGENDA ITEM SUMMARY ITEM NUMBER: 9 A-B DATE: February 1, 2000 io FORT COLLINS CITY COUNCIL Alan Krcmank STAFF: Jay Hardy SUBJECT: Items Related to the Issuance of City of Fort Collins Downtown Development Authority Subordinate Tax Increment Revenue Bonds, Series 2000. RECOMMENDATION: The DDA Board of Directors and staff recommend adoption of the Ordinances on First Reading. FINANCIAL IMPACT: At the end of 1999, the Downtown Development Authority Debt Service Fund held $130,000 of unreserved fund balance. By the end of 2005, the unreserved fund balance is projected to grow to approximately $3,500,000. The DDA Board and the staff recommend using a portion of the unreserved fund balance and tax increment over the next five years to make capital improvements in the downtown area consistent with the mission of the Authority. Over the ensuing years, the projects receiving the benefit through the capital improvements will repay the value of the projects through increased tax increment. The DDA debt service fund is projected to have sufficient revenue to meet all required debt service payments and reserve requirements for 1999 through 2006. EXECUTIVE SUMMARY: A. First Reading of Ordinance No. 9, 2000, Authorizing the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Subordinate Tax Increment Revenue Bonds, Series 2000A, Dated their Delivery Date, in the Aggregate Principal Amount of $610,000 for the Purpose of Financing Certain Capital Improvements and Capital Projects; and Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the Principal of, Interest on and any Premium Due in Connection with the Redemption of the Bonds. B. First Reading of Ordinance No. 10, 2000, Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2000, for the Purpose of Making Certain Capital Improvements in the Downtown Area of Fort Collins and Appropriating Expenditures from the DDA Debt Service Fund to Make the 2000 Payment on the Bonds. . 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. The two items below, Ordinance No. 9, 2000 and Ordinance No. 10, 2000 provide funding from future tax increment in the DDA Debt Service Fund to make additional improvements in the downtown DATE: February 1, 2000 2 ITEM NUMBER: 9 A-B area. The first Ordinance issues short term bonds for the 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 total of the four projects and associated interest costs is $650,000. All of these projects have been reviewed and recommended by the Board of Directors of the DDA. The projects include (amount in parentheses): (1) Armstrong Hotel ($240,000), (2) 401 West Mountain "Trolley Station" ($170,800), (3)the Four Comers Project ($140,000), and (4) the Walnut Street Sidewalk improvements ($45,000). BACKGROUND: For background, staff has provided the summary for each project that was reviewed and approved by the Board of Directors of the DDA. 1. Armstrong Hotel EXECUTIVE SUMMARY Contingent upon approval by City Council, the Downtown Development Authority has agreed to acquire a facade easement on the Armstrong (formerly 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 $6,000,000 renovation cost which should result in $2.3 million in taxable improvements and an annual tax increment of$64,000. DDA participation in this project is retroactive. Should the tax increment fail to reach the specified levels, the owners will be contractually obligated to make up any shortfalls The owners must document expenditures on the facade improvements and if such expenditures fall below the amount contracted for, the DDA 's participation is reduced correspondingly. The project has been awarded a State Historic Grant of$100,831 (total grant—not all funds are for the facade), final approval by the Fort Collins Landmarks Preservation Commission should have occurred Wednesday, January 26, and it has been placed on the National Register of Historic Places as well as the local and state historic registers. BACKGROUND The Armstrong Hotel (currently the Empire 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 redevelopment of the Armstrong Hotel complies strongly and directly with the tenets of City Plan, the Fort Collins Land Use Code and the Fort Collins Downtown Plan. DATE: February 1, 2000 3 ITEM NUMBER: 9 A-B With regard to 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... The Armstrong hotel is a designated historic structure and it concentrates visitors to Fort Collins in the most pedestrian-friendly cultural neighborhood in the community. 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. 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 better than 100 people. Principle D-4: Historically and architecturally significant buildings in Downtown will be preserved and enhanced. • The historic Armstrong Hotel will be preserved and enhanced. Policy DD-5.4 Parking. Shared parking allowances will be encouraged for nearby uses... The Armstrong Hotel has limited amount of on-site parking 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. With regard to the Fort Collins Land Use Code: The redevelopment of the Armstrong Hotel conforms to Article 3, Division 3.4, Subdivision 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 Places provide a development plan and building design for the preservation and adaptive use of the historic resource. With regard to the 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 as local, state and national landmarks. DATE: February 1, 2000 4 ITEM NUMBER: 9 A-B Redevelopment of the Armstrong Hotel clearly 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 helps to fulfill these economic development objectives. Most specifically, it will compliment the visitor housing options in the central business district and enhance the attraction of outside dollars into this community. 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.DDA Plan of Development The original planning document, Fort Collins Downtown Development Authority Plan of Development, adopted as a part of the creation process for the DDA in 1981 includes specific references to historic preservation. Three listed goals and objectives (G, H, J, and R, pgs. 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 a project 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. This project fulfills a critical 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 it provides a place for visitors to the city to enjoy its many amenities without having to drive. Adding more hotel rooms to the downtown inventory provides visitors with a beautiful, convenient, one-stop sleeping, entertainment, and eating environment. Financing 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. The rehabilitated Armstrong Hotel will cost about $6,000,000. The owners, with the assistance of the Larimer County Assessor's office, have been conservative in their estimation of "incremental" new 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 DATE: February 1, 2000 5 ITEM NUMBER: 9 A-B 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. 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. The owners must also document expenditures on the facade improvements and if such expenditures fall below the amount contracted for, the DDA's participation is reduced correspondingly. The estimated restoration cost for the facade is $316,749. The Colorado Historical Society's grant program has agreed to fund $79,168 (25 percent) of the facade work. The balance, $237,518, is proposed to be DDA funded. The Authority's acquisition price, therefore, is 25 percent less than the total being invested in the facade. The DDA's agreement to participate in this project constitutes a part of the local funding match which the State Historic Fund requires of its projects. 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 through the funding of the public right-of-way. BACKGROUND This location, situated across from the beautiful 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 mission in mind, this is a textbook downtown project. It will result in some low-intensity neighborhood retail, an increase in the availability of professional services downtown, and it includes market-rate urban housing. The design is contemporary but not intrusive. It is the kind of project that incorporates the diversity and functionality, which makes Fort Collins unique. This project continues many of the goals of the DDA as well as our 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. DATE: February 1,2000 6 ITEM NUMBER: 9 A-B 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. 3. The Four Corners (Mason & Laporte) Project This project will make improvements to the streets, intersections and streetscapes along Mason Street, in conjunction with the Civic Center Projects at Laporte Avenue. This project will improve and upgrade Mason Street, including landscaped pedestrian ways, enhanced crosswalks, tree planting and decorative lighting along the Civic Center projects. These enhancements will connect the Civic Center to the existing downtown area. This is a public-public partnership negotiated between the City and the DDA. The City had requested that the DDA participate in some of the maintenance and repair of the Remington Parking Structure. Due to previous agreements, the DDA could not assist. However, the DDA Board and Executive Director have instead agreed to participate in some improvements near the new Parking Structure. The DDA agreed that the City will do this work or contract for the work and the DDA would provide the City with $140,000 not later than March 31, 2000. 4. The Walnut Street Sidewalk Improvements The DDA has also agreed to provide financial support for sidewalk/streetscape improvements along the north side of Walnut Street,from College to the old firehouse, at a cost of $45,000. This includes colored concrete, paver installation and tree grates along the sidewalk frontage, as well as renovating the traffic island at the intersection of Pine, Walnut and College. The island treatment will include some new landscaping and possibly a splash block strip next to the curb. Staff has determined that it will be most efficient to integrate the Walnut Street improvements into contracts for the Downtown intersections because the Walnut Street design and the project coordination needs to complement the other work along College and especially at the Northern Hotel. SUMMARY The DDA Board has met to review each of these projects. For the reasons outlined above, the Board has recommended each project for funding through issuance of subordinate tax exempt revenue bonds to be repaid with tax increments revenues that will be received in 2000 to 2005. The DDA Board and its staff recommend adoption of the Ordinances. City staff also recommends adoption of the Ordinances. Final interest rates and amounts will be inserted into the Ordinances on second reading. • ORDINANCE NO. 9, 2000 AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, DOWNTOWN DEVELOPMENT AUTHORITY SUBORDINATE TAX INCREMENT REVENUE BONDS, SERIES 2000A, DATED THEIR DELIVERY DATE, IN THE AGGREGATE PRINCIPAL AMOUNT OF $610,000 FOR THE PURPOSE OF FINANCING CERTAIN CAPITAL IMPROVEMENTS AND CAPITAL PROJECTS; AND PROVIDING FOR THE PLEDGE OF CERTAIN INCREMENTAL AD VALOREM TAX REVENUES TO PAY THE PRINCIPAL OF, INTEREST ON AND ANY PREMIUM DUE IN CONNECTION WITH THE REDEMPTION OF THE BONDS BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO,THAT: Section 1. Definitions and Construction. A. Definitions. In this Ordinance the following terms have the following respective meanings unless the context hereof clearly requires otherwise: (1) Additional Parity Bonds: any Panty Securities issued after the issuance ofthe Bonds. • (2) Authority: the City of Fort Collins, Colorado, Downtown Development Authority. (3) Averse Annual Debt Service Requirements:the aggregate of all Debt Service Requirements(excluding any redemption premiums)due on the Bonds or any other issue of Panty Securities for all Bond Years beginning with the Bond Year in which Debt Service Requirements of the Bonds or such Parity Securities are first payable and ending with the Bond Year in which the last of the Debt Service Requirements are payable, divided by the number of such years. (4) Bond Year: the twelve (12) months commencing on the second day of December of any calendar year and ending on the first day of December of the next succeeding calendar year. (5) Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Subordinate Tax Increment Revenue Bonds, Series 2000A, dated their delivery date, in the aggregate principal amount of$610,000. (6) Charter: the Home Rule Charter of the City, as amended. (7) City: the City of Fort Collins, Colorado. i (8) Combined Average Annual Debt Service Requirements: the sum of the Average Annual Debt Service Requirements for all issues of Parity Securities for which the computation is being made. (9) Commercial Bank: a state or national bank or trust company that is a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, which has a combined capital and surplus of$3,000,000 or more,and that is located within the United States of America. (10) Cost of the Project: all or any part of the cost of acquiring, constructing and installing the Project;all surveying,inspection,fiscal, and legal expenses; all costs of issuing the Bonds; any discount on the sale of the Bonds; costs of financial, professional, and other estimates and advice; repayment of any interim loans or interfund borrowings; capitalized interest on the Bonds; contingencies; reserves for payment of the principal of or interest on the Bonds; and all such other costs as may be necessary or incidental to the acquisition, construction and installation of the Project or any part thereof. (11) Council: the governing body of the City. (12) Debt Service Requirements: the principal of, interest on and any premium due in connection with the redemption of the Bonds,any Additional Parity Bonds, any Parity Securities or any other securities payable from the Tax Increment Revenues. (13) Development and Expense Fund: the special fund created in Ordinance No. 142, 1985,of the City,designated therein as the"Development Account"of the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund"and referred to in Section 5A hereof. (14) District: the area described in the Plan of Development and approved by Ordinance No.46, 1981,of the City,as amended by Ordinance No. 162, 1981,of the City and Ordinance No. 2, 1983, of the City and as has heretofore been or as may hereafter be amended by valid legislative action of the City as determined by the appellate courts of the State. (15) Downtown Development Authority Act: part 8 of article 25 of title 31, Colorado Revised Statutes, as amended. (16) Event of Default: one of the events described in Section I OA hereof. (17) Excess Investment Earnings:the aggregate of the amounts computed as of each installment computation date, consisting of the excess of: 2 • (a) the amounts earned on investments(other than in tax-exempt obligations) of gross proceeds of the Bonds held in the Development and Expense Fund,the Tax Increment Fund and the Subordinate Bonds Debt Service Account(if the amounts earned exceed $100,000) (but not the Excess Investment Earnings Account),including unrealized gains or losses upon the retirement of the last Bond, over (b) the amounts that would have been earned on such investments at the yield on the Bonds determined on a present value basis from the date of issuance of the Bonds without adjustment for costs of issuance. Notwithstanding the provisions of this Section IA(17), the City shall construe the term Excess Investment Earnings in conformity with all applicable federal statutes and regulations as the same may be amended from time to time. (18) Excess Investment Earnings Account: the special fund created in Section 5H hereof. (19) Federal Securities: bills,certificates of indebtedness,notes,bonds or similar securities which are direct obligations of the United States of America or are obligations the principal and interest of which are unconditionally guaranteed by the United States of America. (20) Fiscal Year: the twelve(12)months commencing on the first day of January of any calendar year and ending on the last day of December of such calendar year or such other twelve-month period as may from time to time be designated by the Council as the fiscal year of the City. (21) Interest Payment Date: a date designated by ordinance for the payment of interest on the Bonds or any other designated security. (22) Investment Earnings: all income derived from the investment of any proceeds of the Bonds deposited in the Development and Expense Fund or the Subordinate Bonds Debt Service Account, to the extent not subject to federal arbitrage rebate requirements. (23) Investment Letter: the investment letter to be executed by the Purchaser. (24) Maturity Date: a date designated by ordinance for the payment of principal of the Bonds or any other designated security. • 3 (25) 1983 Tax Increment Revenue Bond Anticipation Notes: the City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bond Anticipation Notes, Series April 1, 1983, dated April 1, 1983, in the aggregate principal amount of$3,100,000. (26) 1984 Tax Increment Revenue Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Series 1984A, dated October 1, 1984, in the aggregate principal amount of$8,200,000. (27) 1985 Tax Increment Revenue Refunding Bonds: the City of Fort Collins, Colorado, Downtown Development Authority-Tax Increment Refunding Bonds, Series 1985A, dated November 1, 1985, in the aggregate principal amount of$8,885,000. (28) 1988 Tax Increment Revenue Refunding and Improvement Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Revenue Refunding and Improvement Bonds, Series 1988, dated May 15, 1988, in the aggregate principal amount of$13,545,000. (29) 1992 Tax Increment Revenue Refunding Bonds: the City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Revenue Refunding Bonds, Series 1992, dated March 15, 1992, in the aggregate principal amount of $11,380,000. (30) 1998 Tax Increment Revenue Bonds: the City of Fort Collins, Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 1998, dated July 1, 1998, in the aggregate amount of$190,000. (31) 1999 Tax Increment Revenue Bonds: the City of Fort Collins, Colorado,Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds,Series 1999,dated November 1, 1999,in the aggregate principal amount of$750,000. (32) Ordinance: this Ordinance No. 9,2000,of the City. (33) Outstanding or outstanding: as of any particular date, all Bonds, Additional Parity Bonds, Parity Securities or any such other securities payable in whole or in part from the Tax Increment Revenues which have been authorized, executed and delivered, except the following: (a) Any Bond, Additional Parity Bond, Parity Security or other security cancelled by the City,by the Paying Agent or otherwise on behalf of the City on or before such date; 4 Is security Any Bond, Additional Parity Bond, Panty Security or other security held by or on behalf of the City; (c) Any Bond, Additional Panty Bond, Parity Security or other security of the City for the payment or the redemption of which moneys or Federal Securities sufficient(including the known minimum yield available for such purpose from Federal Securities in which such amount wholly or in part may be initially invested) to meet all of the Debt Service Requirements of such Bond, Additional Panty Bond, Parity Security or other security to the Maturity Date or specified Redemption Date thereof shall have theretofore been deposited in escrow or in trust with a Trust Bank for that purpose; and (d) Any lost, destroyed, or wrongfully taken Bond, Additional Panty Bond,Panty Security or other security of the City in lieu of or in substitution for which another bond or other security shall have been executed and delivered. (34) Owner: the holder ofany bearer instrument or registered owner of any registered instrument. (35) Parity Securities: bonds, warrants, notes, securities, leases or other contracts evidencing borrowings and payable from the Tax Increment Revenues equally or on a panty with the Bonds. • (36) Paving Agent: the Financial Officer of the City, or his successors. (37) Permitted Investments: all securities or deposits authorized by ordinances of the City and, to the extent applicable, the laws of the State. (38) Person: any individual, firm, partnership, corporation, company, association,joint-stock association,orbody politic or any trustee,receiver,assignee,or other similar representative thereof. (39) Plan of Development: the plan approved by Resolution 81-129 of the City. (40) Pledged Revenues: the Tax Increment Revenues and the Investment Earnings. (41) Project: the capital improvements or capital projects described in the Plan financed with the proceeds of the Bonds. (42) Property ax Base Dates: September 15, 1980, with respect to the District described in Ordinance No. 46, 1981,of the City; September 15, 1981,with respect • 5 to the area added to the District by Ordinance No. 162, 1981, of the City; September 15, 1982, with respect to the area added to the District by Ordinance No. 2, 1983, of the City; and the applicable dates pursuant to the Downtown Development Authority Act with respect to such other areas as have heretofore been or as may hereafter be added to the District by valid legislative action of the City as determined by the appellate courts of the State. (43) Purchaser: (44) Redemption Date: the date fixed for the redemption prior to maturity of any Bonds or other designated securities payable from the Tax Increment Revenues in any notice of prior redemption given by or on behalf of the City. (45) Registrar: the Financial Officer of the City, or his successors. (46) Regular Record Date: the fifteenth day of the calendar month next preceding an Interest Payment Date for the Bonds. (47) Securi or securities: any bond issued by the City or any other evidence of the advancement of money to the City. (48) Special Record Date: the date fixed by the Paying Agent for the determination of ownership of Bonds for the purpose of paying interest not paid when due or interest accruing after maturity. (49) State: the State of Colorado. (50) Subordinate Bonds or Subordinate Securities:the Bonds and any other bonds or securities payable from the Tax Increment Revenues having a lien thereon subordinate or junior to the lien thereon of the 1992 Tax Increment Refunding Bonds. (51) Subordinate Bonds Debt Service Account: the special fund created in Ordinance No. 101, 1998, of the City designated therein as the "City of Fort Collins, Colorado, Downtown Development Authority Subordinate Tax Increment Bonds Debt Service Account" and referred to in Section 5F hereof. (52) Superior Bonds or Suverior Securities: the 1992 Tax Increment Refunding Bonds and any other bonds or securities payable from the Tax Increment Revenues having a lien thereon superior or senior to the lien thereon of the Bonds. (53) Tax Increment Fund: the special fund created in Ordinance No. 142, 1985, of the City designated therein as the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund" and referred to in Section 5B hereof. 6 . (54) Tax Increment Principal and Interest Account:the special fund created in Ordinance No. 142, 1985, of the City, designated therein as the "Principal and Interest Account' of the "City of Fort Collins, Colorado, Downtown Development Authority Tax Increment Bonds, Bond Fund" and referred to in Section 5C hereof. (55) Tax Increment Reserve Account: the special fund created in Ordinance No. 142, 1985, of the City, designated therein as the "City of Fort Collins, Colorado, Tax Increment Bonds, Reserve Fund"and referred to in Section 5D hereof. (56) Tax Increment Revenues: all revenues derived in each Fiscal Year from the levy of ad valorem taxes at the rate fixed each year by or for each public body having taxing power over all or any portion of the District upon that portion of the valuation for assessment of all taxable property within the District and the boundaries of such public body which is in excess of the valuation for assessment of all taxable property within the District and the boundaries of such public body on the Property Tax Base Dates, all in accordance with Section 31-25-807(3)(a)(11)of the Downtown Development Authority Act, less any collection fees lawfully payable to the City or Larimer County, Colorado, for services rendered in connection with the collection of such ad valorem taxes; provided,that in the event of a general reassessment of taxable property in the City, the valuation for assessment of taxable property within the District on the Property Tax Base Dates will be proportionately adjusted as required by the Downtown Development Authority Act or other applicable law. • (57) Transfer Agent: the Financial Officer of the City, or his successors. (58) Trust Bank: a Commercial Bank which has a combined capital and surplus of$25,000,000 or more and which is authorized to exercise and is exercising trust powers. B. Construction. This Ordinance,except where the context by clear implication herein otherwise requires, shall be construed as follows: (1) Words in the singular number include the plural, and words in the plural include the singular. (2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender refer to any gender. (3) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter or otherwise correspond to the respective articles, sections, subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise so designated. • 7 (4) The titles and headlines applied to articles, sections and subsections of this Ordinance are inserted only as a matter of convenience and ease in reference and in no way define or limit the scope or intent of any provisions of this Ordinance. (5) Any inconsistency between the provisions of this Ordinance and those of the Downtown Development Authority Act is intended by the Council. To the extent of any such inconsistency the provisions of this Ordinance shall be deemed made pursuant to the Charter and shall supersede to the extent permitted by law the conflicting provisions of the Downtown Development Authority Act. , Section 2. Recitals. A. Establishment of Authority and Approval of Plan of Development. Pursuant to Ordinance No.46, 1981,the City has heretofore established the Authority. Pursuant to Resolution 81-129 the City has heretofore approved the Plan of Development. The Plan of Development so approved contained a provision for division of taxes as authorized by the Downtown Development Authority Act effective for twenty-five years beginning September 8, 1981. B. Special Election and Canvass of Returns. At a special election held in the City on Tuesday, June 1, 1982, in accordance with law and pursuant to due notice there was submitted to the qualified electors of the District the following question: Shall the City of Fort Collins issue bonds or otherwise provide for loans, advances or indebtedness from time to time in an amount not to exceed $25,000,000 at a maximum net effective interest rate not to exceed 18 per centum per annum,the use of which shall be to finance capital improvements and capital projects within the parameters of the Plan of Development of the Fort Collins Downtown Development Authority, and irrevocably pledge the special fund into which all of that portion of property taxes in excess of such taxes which are produced by the levy at the rate fixed each year by or for any public body upon the valuation for assessment of taxable property within the boundaries of the District last certified prior to the effective date of approval by the Fort Collins City Council of the Plan of Development of the Downtown Development Authority or,as to an area later added to the boundaries of the District, the effective date of the modification of the Plan of Development from which special fund shall be paid the principal of,the interest on, and any premiums due in connection with the bonds of, loans or advances to, or indebtedness incurred by, whether funded, refunded, assumed, or otherwise, the City of Fort Collins for financing or refinancing, in whole or in part, development projects within the boundaries of the Plan for Development area. As evidenced by the canvass of the returns of said election and the Statement and Certificate of Determination of Result thereof made by the Board of Elections of the City on June 4, 1982, a majority of said electors voted affirmatively on said question. 8 • C. Prior Bonds. Pursuant to the authority so conferred at said election the City has heretofore issued and sold the 1983 Tax Increment Revenue Bond Anticipation Notes in order to finance capital improvements and capital projects as provided in the Plan of Development. Pursuant to the authority so conferred at said election the City has heretofore issued and sold the 1984 Tax Increment Revenue Bonds in order to refund,pay and discharge the 1983 Tax Increment Revenue Bond Anticipation Notes and finance capital improvements and capital projects as provided in the Plan of Development. Pursuant to the authority so conferred at said election the City has heretofore issued and sold the 1985 Tax Increment Revenue Refunding Bonds in order to refund, pay and discharge the 1984 Tax Increment Revenue Bonds. Pursuant to the authority so conferred at said election the City has heretofore issued and sold the 1988 Tax Increment Revenue Refunding and Improvement Bonds in order to refund, pay and discharge the 1985 Tax Increment Revenue Refunding Bonds and finance capital improvements and capital projects as provided in the Plan of Development. Pursuant to the authority so conferred at said election the City has heretofore issued and sold the 1992 Tax Increment Revenue Refunding Bonds in order to refund,pay and discharge the 1988 Tax Increment Revenue Refunding and Improvement Bonds. The City has heretofore issued and sold the 1998 Tax Increment Revenue Bonds and the 1999 Tax Increment Revenue Bonds in order to finance capital improvements and capital projects as provided in the Plan of Development. D. Project. The City has need for and desires to acquire, construct, install and finance the Project. • E. Authority. Pursuant to art. XX, §6 of the Colorado Constitution, Art. V, Section 19.8 of the Charter and the Downtown Development Authority Act,the City is authorized by Council action and pursuant to the election described in Section 2A hereof to issue the Bonds. Section 3. The Bonds. A. Authorization. The Bonds are hereby authorized to be issued for the purpose of financing the Project. B. Bond Details. (1) Generally. The Bonds shall be issuable in fully registered form in the denomination of$100,000 or any integral multiple of$5,000 in excess of thereof. Pursuant to the recommendations of the Committee on Uniform Security Identification Procedures, CUSIP numbers may be printed on the Bonds. The Bonds shall mature on December 1, 2005, and shall bear interest from their delivery date or the Interest Payment Dates to which interest has been paid next preceding their respective dates, whichever is later, to their Maturity Date, except if redeemed prior thereto, at the rate of_ per annum. Said interest shall be payable on • 9 December 1, 2000, and semiannually thereafter on the first day of June and the first day of December of each year. If upon presentation at maturity the principal of any Bond is not paid as provided herein,interest shall continue thereon at the same interest rate until the principal is paid in full. The Debt Service Requirements of the Bonds shall be payable in lawful money of the United States of America to the Owners of the Bonds by the Paying Agent. The principal and interest shall be payable to the Owner of each Bond upon presentation and surrender thereof at maturity or upon prior redemption, by check or draft mailed to such , Owner at the address appearing on the registration books of the City maintained by the Registrar or by wire transfer to such bank or other depository as the Owner shall designate in writing to the Paying Agent. Except as hereinbefore and hereinafter provided,the interest shall be payable to the Owner of each Bond determined as of the close of business on the Regular Record Date, irrespective of any transfer of ownership of the Bond subsequent to the Regular Record Date and prior to the Interest Payment Date,by check or draft or wire transfer directed to such Owner as aforesaid. Any interest not paid when due and any interest accruing after maturity shall be payable to the Owner of each Bond entitled to receive such interest determined as ofthe close of business on the Special Record Date,irrespective of any transfer of ownership of the Bond subsequent to the Special Record Date and prior to the date fixed by the Paying Agent for the payment of such interest, by check or draft or wire transfer directed to such Owner as aforesaid. Notice of the Special Record Date and of the date fixed for the payment of such interest shall be given by sending a copy thereof by certified or registered first-class,postage prepaid mail,at least fifteen(15)days prior to the Special Record Date,to the Owner of each Bond upon which interest will be paid determined as of the close of business on the day preceding such mailing at the address appearing on the registration books of the City. Any premium shall be payable to the Owner of each Bond redeemed upon presentation and surrender thereof upon prior redemption,by check or draft or wire transfer directed to such Owner as aforesaid. If the date for making or giving any payment,determination or notice described herein is a Saturday,Sunday,legal holiday or any other day on which the office of the Paying Agent or Registrar is authorized or required by law to remain closed, such payment, determination or notice shall be made or given on the next succeeding day which is not a Saturday, Sunday, legal holiday or other day on which the office of the Paying Agent or Registrar is authorized or required by law to remain closed. (2) Redemntion. The Bonds shall be subject to optional redemption prior to their Maturity Date,in whole or in part,at any time at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the Redemption Date. The Bonds may be redeemed in part if issued in denominations that are integral multiples of$5,000. Such Bonds shall be treated as representing a corresponding number of separate Bonds in the denomination of $5,000 each. Any such Bond to be redeemed in part shall be surrendered for partial redemption in the manner hereinafter provided for transfers of ownership. Upon payment of the redemption price of any such 10 Bond redeemed in part the Owner thereof shall receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Unless waived by the Owners of any Bonds to be redeemed, notice of redemption shall be given by the Paying Agent in the name of the City by sending a copy thereof by certified or registered first-class postage prepaid mail,not less than thirty(30)nor more than sixty(60)days prior to the Redemption Date,to the Owner of each of the Bonds being redeemed determined as of the close of business on the day preceding the first mailing of such notice at the address appearing on the registration books of the City. Such notice shall specify the number or numbers of the Bonds to be redeemed, whether in whole or in part,the principal amounts thereof and the date fixed for redemption and shall further state that on the Redemption Date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the redemption date plus any premium due and that from and after such date interest will cease to accrue. In addition,the Paying Agent is hereby authorized to comply with all operational procedures and requirements of The Depository Trust Company relating to redemption of Bonds and notice thereof. Bonds called for optional redemption as provided herein shall be redeemable only to the extent of moneys on deposit with the Paying Agent and legally available for redemption of Bonds on the date of such notice. Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond shall not affect the validity ofthe redemption proceedings with respect to any other Bond. Any Bonds redeemed • prior to their Maturity Date by call for prior redemption or otherwise shall not be reissued and shall be cancelled the same as Bonds paid at or after maturity. (3) Interest Rates. The maximum net effective interest rate for the Bonds is 18%per annum. The actual net effective interest rate for the Bonds is_%per annum. (4) Execution and Authentication. The Bonds shall be executed by and on behalf of the City with the facsimile or manual signature of the Mayor, shall bear a facsimile or manual impression of the seal of the City, shall be attested with the facsimile or manual signature of the City Clerk, shall be countersigned with the facsimile or manual signature of the Financial Officer of the City, and shall be authenticated with the manual signature of the Registrar. Should any officer whose facsimile or manual signature appears on the Bonds cease to be such officer before delivery of the Bonds to the Purchaser, such facsimile or manual signature shall nevertheless be valid and sufficient for all purposes. No Bond shall be valid or become obligatory for any purpose or be entitled to any security or benefit under this Ordinance unless and until the certificate of authentication on such Bond shall have been duly executed by the Registrar,and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Ordinance. • 11 (5) Registration. Transfer and Exchange. Upon their execution and authentication and prior to their delivery the Bonds shall be registered for the purpose of payment of principal and interest by the Registrar. Thereafter, the Bonds shall be transferable only upon the registration books of the City by the Transfer Agent at the request of the Owner thereof or his,her or its duly authorized attorney-in-fact or legal representative. A Bond may be transferred upon surrender thereof together with a written instrument of transfer duly executed by the Owner or his,her or its duly authorized attorney-in-fact or legal representative with guaranty of signature satisfactory to the Transfer Agent, containing written instructions as to the details of the transfer,along with the social security number or federal employer identification number of the transferee and, if the transferee is a trust, the names and social security numbers of the settlors and the beneficiaries of the trust. The Transfer Agent shall not be required to transfer ownership of any Bond during the fifteen (15) days prior to the first mailing of any notice of redemption or to transfer ownership of any Bond selected for redemption on or after the date of such mailing. The Owner of any Bond or Bonds may also exchange such Bond or Bonds for another Bond or Bonds of authorized denominations. Transfers and exchanges shall be made without charge, except that the Transfer Agent may require payment of a sum sufficient to defray any tax or other governmental charge that may hereafter be imposed in connection with any transfer or exchange of Bonds. No transfer of any Bond shall be effective until entered on the registration books of the City. In the case of every transfer or exchange,the Transfer Agent shall deliver to the new Owner a new Bond or Bonds of the same aggregate principal amount,maturing in the same year,and bearing interest at the same per annum interest rate as the Bond or Bonds surrendered. Such Bond or Bonds shall be dated as of their date of authentication. New Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same obligation as the Bonds surrendered, shall be secured by this Ordinance, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The City may deem and treat the Person in whose name any Bond is last registered upon the books of the City as the absolute owner thereof for the purpose of receiving payment of the Debt Service Requirements of such Bond and for all other purposes, and all such payments so made to such Person or upon his,her or its order shall be valid and effective to satisfy and discharge the liability of the City upon such Bond to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. (6) Replacement of Bonds. If any Bond shall have been lost, destroyed or wrongfully taken,the City shall provide for the replacement thereof in the manner set forth and upon receipt of the evidence,indemnity bond and reimbursement for expenses provided in Ordinance No. 80, 1984. (7) Recitals in Bonds. Each Bond shall recite in substance that the Bond is a special and limited obligation of the City payable solely from the Pledged Revenues and the funds and accounts hereby pledged and that the Bond is not a debt or an indebtedness or a multiple-fiscal year financial obligation of the City and that the Bond is not a general 12 • obligation of the City and that the full faith and credit of the City is not pledged to pay the Debt Service Requirements of such Bond. Each Bond shall further recite that it is issued under the authority of the Constitution of the State of Colorado,the Charter,the Downtown Development Authority Act and this Ordinance. (8) Form of Bonds. The Bonds shall be in substantially the following form: • • 13 [Form of Bond] (Text of Face) UNITED STATES OF AMERICA STATE OF COLORADO COUNTY OF LARIMER CITY OF FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY SUBORDINATE TAX INCREMENT REVENUE BOND SERIES 2000A No. R- $ Interest Rate Maturity Date Original Date CUSIP _% December 1, 2005 _, 2000 REGISTERED OWNER: PRINCIPAL SUM: The City of Fort Collins, in the County of Larimer and State of Colorado, for value received,hereby promises to pay to the Registered Owner(specified above), or registered assigns, solely from the special fund and account provided therefor,as hereinafter set forth,the Principal Sum (specified above),in lawful money of the United States of America,on the Maturity Date(specified above),with interest thereon from the Original Date(specified above)to the Maturity Date,except if redeemed prior thereto, at the per annum Interest Rate(specified above),payable on the first day of June and the first day of December of each year,commencing December 1,2000,or the first such date after the date hereof, whichever is later, in the manner provided herein. If upon presentation at maturity payment of the Principal Sum of this Bond is not made as provided herein, interest continues at the Interest Rate until the Principal Sum is paid in full. The Bonds are subject to optional redemption prior to their maturity date, in whole or in part,at any time at a price equal to the principal amount of each Bond so redeemed plus accrued interest thereon to the redemption date. 14 • Bonds that are redeemable prior to their maturity date may be redeemed in part if issued in denominations which are integral multiples of$5,000. In such case the Bond is to be surrendered in the manner provided for transfers of ownership. Upon payment of the redemption price the Registered Owner is to receive a new Bond or Bonds of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered. Unless waived by the registered owners of the Bonds to be redeemed, notice of redemption of any Bonds is to be given by the paying agent in the name of the City by sending a copy of such notice by certified or registered first-class postage prepaid mail,not less than thirty(30) nor more than sixty (60) days prior to the redemption date, to the registered owner of each of the Bonds being redeemed determined as of the close of business on the day preceding the first mailing of such notice at the address appearing on the registration books of the City. Such notice is to specify the number or numbers of the Bonds to be redeemed, whether in whole or in part, the principal amounts thereof and the date fixed for redemption and is further to state that on the redemption date there will be due and payable upon each Bond or part thereof so to be redeemed the principal amount or part thereof plus accrued interest thereon to the redemption date plus any premium due and that from and after such date interest will cease to accrue. In addition,the paying agent is authorized to comply with any operational procedures and requirements of The Depository Trust Company relating to redemption of Bonds and notice thereof. Bonds called for optional redemption as provided herein are redeemable only to the extent of moneys on deposit with the paying agent and legally available for redemption of Bonds on the date of such notice.Failure to mail any notice as aforesaid or any defect in any notice so mailed with respect to any Bond does not affect • the validity of the redemption proceedings with respect to any other Bond. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF. This Bond is a special and limited obligation of the City payable solely out of and secured by an assignment and pledge (but not necessarily an exclusive assignment and pledge) of certain tax increment revenues and certain income derived from the investment of such revenues and of certain bond proceeds,all as more specifically provided in the Ordinance,and of certain funds and accounts pledged in the Ordinance. This Bond does not constitute a debt or an indebtedness or a multiple-fiscal year financial obligation of the City within the meaning of any constitutional,charter or statutory provision or limitation of the State of Colorado or of the City. This Bond is not a general obligation of the City, and the full faith and credit of the City is not pledged for the payment of the principal of or interest on this Bond. • 15 IN WITNESS WHEREOF,the City has caused this Bond to be executed in its name and on its behalf with the facsimile or manual signature of the Mayor of the City,to be sealed with a facsimile or manual impression of the seal of the City,to be attested with the facsimile or manual signature of the City Clerk of the City, and to be countersigned with the facsimile or manual signature of the Financial Officer of the City. CITY OF FORT COLLINS, COLORADO (CITY) By: (SEAL) Mayor ATTEST: City Clerk Countersigned: (Facsimile or Manual Signature) Financial Officer CERTIFICATE OF AUTHENTICATION This Bond is issued pursuant to the Ordinance herein described. Attached hereto is the complete text of the opinion of bond counsel,Ballard Spahr Andrews&Ingersoll,LLP,Denver, Colorado, a signed copy of which, dated the date of the first delivery of the Bonds, is on file with the undersigned. FINANCIAL OFFICER OF THE CITY OF FORT COLLINS, COLORADO as registrar (Manual Signature) Dated: 16 • ORDINANCE NO. 10, 2000 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PROCEEDS FROM THE ISSUANCE OF CITY OF FORT COLLINS, COLORADO, DOWNTOWN DEVELOPMENT AUTHORITY TAXABLE SUBORDINATE TAX INCREMENT REVENUE BONDS, SERIES 2000, FOR THE PURPOSE OF MAKING CERTAIN CAPITAL IMPROVEMENTS IN THE DOWNTOWN AREA OF FORT COLLINS AND APPROPRIATING EXPENDITURES FROM THE DDA DEBT SERVICE FUND TO MAKE THE 2000 PAYMENT ON THE BONDS WHEREAS, on April 21, 1991,the City of Fort Collins,Colorado,adopted Ordinance No. 46, 1981, establishing the Fort Collins, Colorado, Downtown Development Authority; and WHEREAS,the Downtown Development Authority's Plan of Development was approved by the City on September 8, 1981, and established the purpose of the Authority and the types of projects in which the Authority would participate; and WHEREAS,on June 1, 1982,a special election was held pursuant to Section 31-25-807(b) of the Colorado Revised Statutes approving the issuance by the City of up to $25,000,000 in tax increment obligations to finance certain projects of the Downtown Development Authority; and • WHEREAS,there is sufficient remaining bonding authorization available to fund additional projects in the downtown area,pursuant to Ordinance No. 9,2000,as approved by the City Council this same date,and there is sufficient revenue in the Operations and Maintenance Fund available to pay the annual debt service payments on the bonds issued by said Ordinance; and WHEREAS, through the adoption of Ordinance No. 9, 2000, of the Council of the City of Fort Collins,the Council authorized the issuance of the City of Fort Collins, Colorado, Downtown Development Authority Taxable Subordinate Tax Increment Revenue Bonds, Series 2000 (the "Bonds"), in the aggregate principal amount$610,000; and WHEREAS, the issuance of the Bonds, and the appropriation of the proceeds thereof, are necessary to complete the construction of certain improvements in the downtown area of the City; and WHEREAS,Article V, Section 9,of the Charter of the City of Fort Collins permits the City Council to make supplemental appropriations, in conjunction with all previous appropriations for that fiscal years,provided that the total amount of such supplemental appropriations,in combination with all previous appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated revenues to be received during the fiscal year. • NOW, THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That,contingent upon the final sale and issuance of the Bonds,there is hereby appropriated for expenditure from Bond proceeds in the Downtown Development Authority Operating Fund the amount of SIX HUNDRED TEN THOUSAND DOLLARS ($610,000) to be used for the following capital improvements in the downtown area: a. Armstrong Hotel , b. Trolley Station C. Four Comers Project d. Walnut Street Sidewalk Improvements Section 2. That, there is hereby appropriated for expenditure from the Downtown Development Authority Debt Service Fund the amount of EIGHTY THOUSAND DOLLARS ($80,000)to be used for the payment of debt service on the bonds. Introduced and considered favorably on first reading and ordered published this I st day of February,A.D.2000,and to be presented for final passage on the 15th day of February,A.D.2000. Mayor ATTEST: City Clerk Passed and adopted on final reading this 15th day of February, A.D. 2000. Mayor ATTEST: City Clerk