HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 04/21/2009 - FIRST READING OF ORDINANCE NO. 046, 2009, APPROPRI ITEM NUMBER: 33
AGENDA ITEM SUMMARY DATE: April 21, 2009
FORT COLLINS CITY COUNCIL STAFF: Chuck Seest
Christina Vincent
SUBJECT
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 impacts to both the City of Fort Collins and the
Fort Collins Urban Renewal Authority as a result of the North College 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 - Stormwater/Wetlands Improvements $1.8 M
C. Other Public Improvements - On-Site (not Deeded to City) $3.4 M
Subtotal for Funding of the Project Public Improvements $8.0 M
3. URA Funding for financing costs to URA $3.8 M
Total Financial Impact of the Project JL6.4 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 $5.8 M
2. URA Funding for the North College Marketplace
A. City Capital Improvements - College/Willox Improvements $2.8 M
B. City Capital Improvements - Stormwater/Wetlands Improvements $1.8 M
C. Other Public Improvements - On-Site (not Deeded to City) $3.4 M
Subtotal for Funding of the Project Public Improvements $8.0 M
3. URA Funding for financing costs to URA $2.6 M
Total Financial Impact of the Project R64 M
The decline in interest rates as compared to the projection in September when the Financial
Assistance Agreementwas 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(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. The 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 improvements and then bond against that amount in the future. The URA is
proposing to borrow a total of$5,000,000 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 (Local Street Portion) $2,812,620
*Wetlands Mitigation, Landscaping, Unsuitable Materials and
Payment to the Wetlands Reserve -Natural Areas Fund $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 Redevelopment Agreement—List of costs for
improvements.
2. Location map.
3. Diagrams of North College Marketplace street and wetlands improvements.
4. Loan Agreement.
5. Promissory note.
6. Powerpoint presentation.
ATTACHMENT 1
Exhibit C i
Public Improvement Total Cost
Off Site Street Infrastructure (Local Street Portion) $2,812,620*
Demolition,Property Cleanup and Site Preparation Cost $366,650
Wetlands Mitigation, Landscaping, Unsuitable Materials and $1,763,206
Payment to Wetlands'Reserve Fund
On-Site Utilities (Sanitary,Storm,Water,Dry) $1,022,861
Gateway/Landscaping/Pedestrian Connection/Grading/ $1,702,128
North/South Circulation and College Avenue Public Access
Easement/
Paving of Grape Street
Relocation Assistance(Up to$1,000 per residence) $10,000
Contingency $322,535
Total Cost for Improvements $8,000,000
"5900,000 is potential reimbursement to the URA from adjacent properties as they develop/redevelop.
Note: All cost numbers contained herein are based on preliminary cost estimates and are subject to change
based upon final design and cost fluctuations.
This Public Improvements budget is supported by the Public Improvements Summary dated
September 4,2008,as amended.
ATTACHMENT 2
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ATTACHMENT
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COLLEGE AND WILLOX CONCEPT
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1 INTERWEST CONSULTING GROUP
I I LANE DIMENSIONS ARE LIP To STRIPE
I 1 I'PAN ON MEDIAN CURB
2'PAN ON OUTSIDE CURB
COLLEGE AVE.DESIGN PER STATE HIGHWAY
( ACCESS CODE.
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!L` FSHAOED AREAS ARE EXISTING PAVEMENT LIMITS. '
BLUE LINES ARE APPROXIMATE LOT AND ROW LINES.
RED HATCH DENOTES PROPOSED WALK.
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ATTACHMENT 4
LOAN AGREEMENT BETWEEN THE CITY OF FORT COLLINS
AND THE FORT COLLINS URBAN RENEWAL AUTHORITY ,
FOR FUNDING THE NORTH COLLEGE MARKETPLACE PROJECT
(PHASE ONE)
THIS LOAN AGREEMENT (the "Agreement") made this day of
2009, by and between the CITY OF FORT COLLINS, COLORADO, a municipal
corporation, (the "City"), and FORT COLLINS URBAN RENEWAL AUTHORITY, a
public body corporate and politic of the State of Colorado, (the "Borrower").
RECITALS
A. Borrower is an urban renewal authority for the City, created pursuant to
Colorado Revised Statutes Part 1 of Title 31, Article 25, as amended (the "Act").
B. Borrower was created on January 5, 1982 to prevent and eliminate
conditions related to certain "blight factors" in the community. The Act gives the
Borrower broad powers to carry out its statutory mandate. Included are the powers to
enter into contracts, borrow or lend funds and to acquire property, among others.
Urban renewal projects may be financed in a variety of ways and urban renewal
authorities are authorized to borrow money, issue bonds, and accept grants from public
or private sources.
C. By Resolution 2004-151, the City Council for the City (the "City Council")
found and declared the area described therein (the "Area") to be a blighted area as
defined in the Act, and appropriate for inclusion in an urban renewal project.
D. By Resolution 2004-152, the City Council made findings and approved the
urban renewal plan (the "Plan") for the North College Avenue Corridor.
E. By the Intergovernmental Agreement approved by City of Fort Collins
Resolution 2006-082, the City may advance funds to the Borrower in support of its
activities so long as any such advance of funds is evidenced in writing in the form of a
loan memorialized by a promissory note, which transaction shall not be valid until first
having been approved by both the City Council and the URA Commission.
F. Borrower will incur certain costs relating to the design, installation,
construction and financing of public improvements in the Area (the "Project") and has
requested and applied to City for a loan to provide funding for these costs not to exceed
1
Five Million Dollars ($5,000,000) and City is willing to make a loan on the terms and
conditions hereinafter set forth (the "Loan').
G. Tax increment financing for the Project is specifically permitted pursuant
to Section 7 of the Plan.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
Section 1. The Loan. After the effective date of this Agreement, the adoption
of the required resolutions by the City and Borrower, and the execution of a promissory
note and other documents as may reasonably be required the City will loan the
Borrower the sum of Five Million Dollars ($5,000,000) from the City's investment
portfolio (the "Loan').
Section 2. Interest. Interest on the Loan will accrue at a rate equal to 2.85%.
Section 3. Payment. Principal and accrued interest will be due and payable
by the Borrower to the City on an annual basis from the effective date of the Agreement.
Borrower, in its sole discretion, may prepay all or any portion of the Loan at any time
and without any prepayment penalty. If a prepayment is made, the funds will go first
toward any interest which has accrued and the balance then applied to the reduction of
principal.
Section 4. Tracking. Borrower agrees to maintain a separate payable line-item
within its accounting system to track the Loan.
Section 5. Alternative Financing. The Parties contemplate that at some point
in the future the Borrower will obtain alternative financing (e.g. bond financing) and
will diligently pursue that financing with a goal to reducing the outstanding balance of
the Loan.
Section 6. Notice. Any notice required to be delivered in writing will be
accomplished by personal delivery or mailing postage prepaid by the United States
Postal Service, or other commercial carrier to the following addresses:
2
If to the City
City of Fort Collins
Director of Finance
PO Box 580
Fort Collins, CO 80522-0580
If to the Borrower
Fort Collins Urban Renewal Authority
Director of Advance Planning
PO Box 580
Fort Collins, CO 80522-0580.
Section 7. Entire Agreement. This Agreement will be construed according to
its fair meaning, as if prepared by both Parties, and constitutes the entire understanding
and agreement of the Parties related to the matters addressed in this Agreement.
CITY:
CITY OF FORT COLLINS, COLORADO, a
municipal corporation
By:
Douglas P. Hutchinson, Mayor
ATTEST:
By:
Wanda Krajiceck, City Clerk
APPROVED AS TO FORM:
By:
Assistant City Attorney
3
BORROWER:
FORT COLLINS URBAN RENEWAL
AUTHORITY, a public body corporate and
politic of the State of Colorado.
By:
Executive Director
4
ATTACHMENT 5
PROMISSORY NOTE
$5,000,000 .2009
FOR VALUE RECEIVED, FORT COLLINS URBAN RENEWAL AUTHORITY, a public
body corporate and politic of the State of Colorado ('Borrower"), promises to pay to the order
of THE CITY OF FORT COLLINS, COLORADO, a municipal corporation ("Lender'), at its
office at 300 LaPorte Avenue, Fort Collins, Colorado 80524, in lawful money of the United States
of America the principal amount of Five Million Dollars ($5,000,000). This Promissory Note is
issued pursuant to the Loan Agreement dated as of 12009,between Borrower
and Lender (the "Loan Agreement'). Capitalized terms used herein but not defined herein
have the meanings given such terms in the Loan Agreement. The obligations of Borrower
evidenced by this Promissory Note are payable in accordance with the terms and conditions of
the Loan Agreement.
The rate of interest borne by this Promissory Note is a fixed rate equal to 2.85%per
annum("Interest Rate"). Final payment of all unpaid Principal and accrued interest will be due
and payable on the Maturity Date. The annual interest rate of this Promissory Note is
computed on a 360 day year basis, multiplied by the actual number of days elapsed.
The Loan may be drawn 100%upon execution of the Loan Documents, or in part from
time to time,but not more frequently than monthly.
This Promissory Note shall mature on December 31, 2029. At such time all unpaid
principal, interest, default interest, fees and charges owing under this Note shall be deemed
payable in full.
Unless otherwise agreed or required by applicable law, payments will be applied first to
any accrued interest; then to principal; then to any late charges; and then to any unpaid
collection costs.
If Lender refers this Note to an attorney for collection or seeks legal advice following a
default beyond all cure periods alleged under this Note, or the Lender is the prevailing party in
any action instituted on this Note, or if any other judicial or non-judicial action, suit or
proceeding is instituted by Lender or any future holder of this Note, and an attorney is
employed by Lender to appear in any such action or proceeding, or to reclaim, seek relief from
a judicial or statutory stay, sequester, protect,preserve or enforce Lender's interest in this Note,
the Loan Documents or any other security for this Note (including, but not limited to,
proceedings under federal bankruptcy law or in connection with any state or federal tax lien),
then Borrower promises to pay reasonable attorneys' fees and reasonable costs and expenses
incurred by Lender and/or its attorney in connection with the above-mentioned events. If not
paid within ten (10) days after such fees become due and written demand for payment is made,
such amount shall be due on demand or may be added to the principal, at the Lender's
discretion.
Should any payment or installment hereunder be not paid when the same becomes due
and payable,Borrower recognizes that the Lender will incur extra expenses for both the
administrative cost of handling delinquent payments and the cost of funds incurred by Lender
after such due date as a result of not having received such payment when due. Therefore,
Borrower shall, in such event, without further notice, and without prejudice to the right of
Lender to collect any other amounts provided to be paid herein, including default interest or to
declare a default hereunder,pay to Lender to cover such expenses incurred as a result of any
installment payment due being not received within ten (10) days of its due date, a "late charge"
of five percent(5%) of the amount of such delinquent payment.
Except as otherwise provided herein, the Borrower waives presentment and demand for
payment, notice of acceleration or of maturity, protest and notice of protest and nonpayment,
bringing of suit and diligence in taking any action to collect sums owing hereunder and agrees
that its liability on this Note shall not be affected by any release or change in any security for the
payment of this Note or release of anyone liable hereunder. No extension of time for the
payment of this Note, or any installment or other modification of the terms made by the Lender
with any person now or hereafter liable for the payment of this Note, shall affect the original
liability under this Note of the Borrower, even provided the Borrower is a party to such
agreement.
In no event whatsoever shall the amount paid, or agreed to be paid, to the holder of this
Note for the use, forbearance or retention of the money to be loaned hereunder("Interest")
exceed the maximum amount permissible under applicable law. If the performance or
fulfillment of any provision hereof or of any of the Loan Documents or any agreement between
Borrower and the Lender of this Note shall result in Interest exceeding the limit for interest
prescribed by law, then the amount of such Interest shall be reduced to such limit. If, from any
circumstance whatsoever, the Lender of this Note should receive as Interest, an amount which
would exceed the highest lawful rate, the amount which would be excessive Interest shall be
applied to the reduction of the principal balance owing (or, at the option of the Lender, be paid
over to Borrower) and not to the payment of Interest.
If any provision hereof or any of the Loan Documents shall, for any reason and to any
extent,be invalid or unenforceable, then the remainder of the document or instrument in which
such provision is contained and any of the other Loan Documents shall not be affected thereby
but instead shall be enforceable to the maximum extent permitted by law.
Borrower and Lender hereby knowingly, voluntarily, and intentionally waive any rights
they may have to a trial by jury in respect of any litigation based hereon or arising out of, under
or in connection with this note or any course of conduct, course of dealing, statements (whether
oral or written) or actions of the other party.
- 2 -
This Promissory Note shall be construed in accordance with the laws of the State of
Colorado.
IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note as of the
day and year first above written.
BORROWER:
FORT COLLINS URBAN RENEWAL
AUTHORITY, a public body corporate and politic
of the State of Colorado.
By:
Executive Director
- 3 -
ATTACHMENT 6
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Loan agreement for
the North College Marketplace
City Council and URA Board Meeting
April 21, 2009
City of
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FINANCIAL SUMMARY — September Zoos
Totat Tax Increment Generated Over it Vears
From Tax
North College Marketplace Project urwn Renewal avtMrlry FaNa Remalmng
$16.4 Million S4.6 million
Urban Renewal AUNorlty Fwa11n9 to PmlRt Urban R.t aMUlority FU hg for FinanclnR
S8.0 Million $3.8 Million
S].SMIIIbn URi9MlPuMK $4.6 MIIIIan Clry Capital
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FINANCIAL SUMMARY - April 2009
Total Tax Increment Generated Over 21 Years
From the North College Marketplace Project UrW RWr+wl m nvq Fug RerraM4g
S16.4 Million 5
Urban Re 1 ftdv ty FW m W RW)ect Urban Renewal A ty FWglnp M Financiryl
$5.0 rulnon $2.6 Million
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Terms of Loan Agreement
➢Proceeds of$5M available to URA by end of May.
➢Interest rate is 2.85% based on 10 Year T-Note.
➢No set repayment plan.
➢URA plans to repay within 10-13 years.
➢URA subject to 5% "Late Charge" on any annual
payment that is missed.
Fort of
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1
Future Council Items Related to North
College Marketplace Project
➢Appropriation Ordinance for City Capital Project for
College/ Willox Street Improvements — May 5th.
➢Loan Agreement in 41h Qtr 2008 for remaining
$3 Million of Project Costs.
Fort Collins
QUESTIONS?
Fort Collinsl
R
4
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 21 st day of
April, A.D. 2009, and to be presented for final passage on the 5th day of May, A.D. 2009.
Mayor
ATTEST:
City Clerk
-2-
Passed and adopted on final reading on the 5th day of May, A.D. 2009.
Mayor
ATTEST:
City Clerk
-3-