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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 05/05/2009 - SECOND READING OF ORDINANCE NO. 046, 2009, APPROPR ITEM NUMBER: 17 AGENDA ITEM SUMMARY DATE: May 5, 2009 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest Christina Vincent SUBJECT Second Reading of Ordinance No. 046, 2009, Appropriating Funds from the City's General Fund Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan for the North College Marketplace Project. RECOMMENDATION Staff recommends adoption of this Ordinance on Second Reading. EXECUTIVE SUMMARY The Urban Renewal Authority(URA) is seeking a loan from the City to establish monetary flow of funds to begin the North College Marketplace wetlands mitigation reimbursement and off site street infrastructure capital improvement projects and the demolition and property cleanup. The cost of these projects, without financing charges, total $4,942,476. This Ordinance, unanimously adopted on First Reading on April 21, 2009, authorizes the requested loan amount of$5,000,000 from the City of Fort Collins' General Fund Reserves to the Urban Renewal Authority. The URA will utilize the City's Interfund Borrowing program that was formally added to the City's investment policies last year. This program enables the City to use a portion of its investment portfolio to assist City Departments and related entities (e.g., the Downtown Development Authority, and the Urban Renewal Authority)to access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - April 21, 2009. (w/o original attachments) ATTACHMENT 1 ITEM NUMBER: 33 AGENDA ITEM SUMMARY DATE: April 21, 2009 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest S Christina Vincent SUBJECT z First Reading of Ordinance No. 046, 2009, Appropriating Funds from the City's General Fund Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan for the North College Marketplace Project. RECOMMENDATION Staff recommends adoption of this Ordinance on First Reading. FINANCIAL IMPACT There will be significant and beneficial financial impactsboth to the City of Fort Collins and the Fort Collins Urban Renewal Authority as a-result of the Nort46s,-ollege Marketplace. Over the life of the North College Urban Renewal Authority Plan Area, the project will generate an estimated $16.4 million in tax increment. This action approves the loan agreement between the City and the Urban Renewal Authority(URA)to finance the commitment made by the URA Commission to the project proponent back in September 2008. The project proponent has delivered the documents reflecting the commitment of Kroger Corporation ("King Soopers")to the project. When the Urban Renewal Authority (URA) Commission approved the agreement in September 2008, interest rates were higher(4.00%) and the related itemization of the financial impact was as follows: 1. URA Funding for projects elsewhere in the URA Plan Area $4.6 M 2. URA Funding for the North College Marketplace A. City Capital Improvements - College/Willox Improvements $2.8 M B. City Capital Improvements - Stonnwater/-Wetlands-Improvements $1.8 M C. Other Public Improvements „=On-Ste (riot Deeded to City) 3.4 M Subtotal for Funding oflie=Ar ject l5Iic4 provements $8.0 M 3. URA Funding for financing costs to URA $3.8 M Total Financial Impact of the Project 16.4 M Now that interest rates have dropped significantly(2.85%), the related itemization of the financial impact is as follows: April 21, 2009 -2- Item No. 34 1. URA Funding for projects elsewhere in the URA Plan Area S5.8 M 2. URA Funding for the North College Marketplace A. City Capital Improvements - College/Willox Improvements $2.8 M B. City Capital Improvements -S tormwater/-Wet ands Improvements $1.8 M C. Other Public Improvements ; On-Site (riot Deeded to City) $3.4 M Subtotal for Funding of the>Pr jectaPubl'ic.Improvements $8.0 M 3. URA Funding for financing costs to URA $2.6 M Total Financial Impact of the Project RL4 M The decline in interest rates as compared to the projection in September when the Financial Assistance Agreement was approved results in an additional$1.2M being available for projects within the overall North College URA Plan Area. EXECUTIVE SUMMARY The Urban Renewal Authority(�)is seeking_ng a loanfrom the City to establish monetary flow of funds to begin the North College/Marketplace wetlands mitigationNreimbursement and off site street n l r l I:I l+l 51�9 infrastructure capital improvement projects andLthe demolition and property cleanup. The cost of these projects, without financing c�harg s'-t�o��$4,9'42,476. T)ie requested loan amount from the City of Fort Collins' General Fund Reserves to the Urban Renewal Authority will be $5,000,000. The URA will utilize the City's Interfund Borrowing program that was formally added to the City's investment policies last year. This program enables the City to use a portion of its investment portfolio to assist City Departments and related entities (e.g., the Downtown Development Authority,and the Urban Renewal Authority)to access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio. BACKGROUND On September 16, 2008, the URA Board approved Resolution No. 011, authorizing an agreement between the URA and 1908 North College, LLC to provide financial assistance for the North College Marketplace. It was determined at that time that the URA would need to borrow the funds to pay for the public improvemerfts nWd then Bond against that amount in the future. The URA is proposing to borrow a total of$5 000 001 0` from the City,; The City and the URA entered\into an intergovernmental agreement on August 15, 2006 allowing "the City to advance funds to the URA in support of its activities. Any such advance of funds shall be evidenced in writing in the form of a loan memorialized by a promissory note or a grant,which transaction shall not be valid until first having been approved by both the City Council and the URA Commission." Additionally, the 2008 Updated Investment Policy modified on December 2, 2008 will allow for Interfund Borrowing. April 21, 2009 -3- Item No. 34 Attached is Exhibit C (Attachment 1) from the Redevelopment Agreement for the North College Marketplace project whereas the public improvements have been listed to include total costs. The two line items regarding this action are listed below: *Off Site Street Infrastructure (Lo�treet rtion) $2,812,620 *Wetlands Mitigation, Landscaping, Unsuitable MaterialsVand Payment to the Wetlands�Reserve-,Naturalllreas FunhL $1,763,206 *Demolition and Property Cleanup Cost $ 366,650 Subtotal $4,942,476 *Contingency Funds 57,524 Total $5,000,000 All costs are the same as presented to the URA Board on September 16, 2008. ATTACHMENTS 1. Exhibit C to the North College Marketplace v le opmnt Agreement—List of costs for improvements. U tj 2. Location map. 3. Diagrams of North College Marketplace street and wetlands improvements. 4. Loan Agreement. 5. Promissory note. 6. Powerpoint presentation. ORDINANCE NO. 046, 2009 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING FUNDS FROM THE CITY'S GENERAL FUND RESERVES FOR TRANSFER TO THE FORT COLLINS URBAN RENEWAL AUTHORITY FOR THE PURPOSE OF PROVIDING A LOAN FOR THE NORTH COLLEGE MARKETPLACE PROJECT WHEREAS, the Fort Collins Urban Renewal Authority (the "Authority") was created on January 5, 1982 to prevent and eliminate conditions related to certain blight factors in the City; and WHEREAS, the City Council, by Resolution 2004-152, has made findings required by Colorado Revised Statutes Part 1 of Title 31, Article 25 and declared the area described in Resolution 2004-151 as blighted and approved the Urban Renewal Plan for the North College Avenue Corridor(the"Plan"); and WHEREAS,on August 15,2006,the City Council adopted Resolution 2006-082 authorizing an intergovernmental agreement between the City and the Authority whereby the City will provide support services to the Authority and will advance funds to the Authority so long as the advance of such funds is evidenced in writing by a promissory note; and WHEREAS,the 1908 North College,LLC(the"Developer")owns property in the Plan area and has proposed the construction of the North College Marketplace on property located northeast of the intersection of North College Avenue and East Willox Lane (the "Project"); and WHEREAS,the Developer has requested that the Authority cover the cost of certain public improvements (the "Improvements") utilizing tax increment funding generated by the increased increment of property tax that will be collected because of the Project; and WHEREAS, the Authority recognizes the benefit that will result to the Plan area because of the Developer's redevelopment project and the installation of the Improvements and has determined that it is in the best interest of the Authority to commit a portion of the additional increment of property tax generated by the Developer's Project to funding the Improvements associated with the Project; and WHEREAS,on September 16, 2008 the Board of Commissioners of the Authority adopted Resolution No. 011 approving a financial assistance agreement with 1908 North College, LLC(the "Developer") for North College Marketplace; and WHEREAS, the Authority must borrow funds to pay for its portion of the construction of the Improvements related to the Project and agreed to in Resolution No. 011; and WHEREAS, the City Council has adopted Resolution 2008-121, which updated the City's Investment Policy to allow for interfund borrowing; WHEREAS, City staff has prepared and placed on file in the office of the City Clerk a proposed promissory note(the"Note") and loan agreement in the form entitled"Loan Agreement Between the City of Fort Collins and the Fort Collins Urban Renewal Authority for Funding the North College Marketplace Project(Phase One)" (the "Loan Agreement"); and WHEREAS, the City has funds available in its General Fund Reserves to fund the loan to the Authority and finds it is in the best interests of the City to authorize execution of the Loan Agreement and certain related documents; and WHEREAS, Article V, Section 9,of the Charter permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; and WHEREAS, it is the desire of the Council to appropriate the sum of $5,000,000 from General Funds Reserves for transfer to the Fort Collins Urban Renewal Authority, as a loan. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That there is hereby appropriated from General Fund Reserves the sum of FIVE MILLION DOLLARS($5,000,000) for transfer to the Fort Collins Urban Renewal Authority and appropriated therein as an interest-bearing loan, to provide the Fort Collins Urban Renewal Authority with the necessary financial support for urban renewal projects. Section 2. That the Note,Loan Agreement and related documents are hereby approved by the City Council on substantially the terms and conditions contained therein, subject to modifications in form or substance as the Mayor may, in consultation with the City attorney,deem to be desirable and necessary to protect the interests of the City. Introduced, considered favorably on first reading, and ordered published this 21st day of April, A.D. 2009, and to be presented for final passage on the ay of May, A.D. 2009. Mayo ' ATTEST: City Clerk -2- Passed and adopted on final reading on the 5th day of May, A-D. 2009. Mayor ATTEST: City Clerk -3-