The URL can be used to link to this page

Home My WebLink AboutCOUNCIL - AGENDA ITEM - 06/27/2006 - JOINT CITY COUNCIL/DOWNTOWN DEVELOPMENT AUTHORITY DATE: June 27, 2006 WORK SESSION ITEM STAFF: Chip Steiner FORT COLLINS CITY COUNCIL SUBJECT FOR DISCUSSION A Joint City Council/Downtown Development Authority Work Session. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED City Council will meet with the Board of the Downtown Development Authority to review activities of the Authority during the past 12 months including an update on the Beet Street Cultural program, to discuss changing the Authority's bond ceiling, and to consider pursuing a change in State legislation with regard to the length of tax increment districts. BACKGROUND City Council and the DDA Board of Directors will address the following topics at the Council work session of June 27, 2006: 1. Review of Authority activities for the past 12 months. The DDA has taken action on 28 different projects during the last year. It has committed or provided funding to 18 public and private capital improvement projects including Otter Industries,the Sears-Trostel building,two alley improvements,and renovation of Oak Street Plaza. It has added one new staff member, attempted, with the guidance and assistance of the City,to revise state legislation with regard to tax increment districts,established a facade grant program, and is funding and co-managing the downtown river district infrastructure study. 2. Beet Street Update. The Beet Street Cultural Program has established a working committee, drafted and approved bylaws, hired a headhunter to help in the selection of an executive director, and is three-quarters of the way through a comprehensive visioning process to define the purpose, core values, and mission of the organization. 3. Changing the DDA Tax Increment Bond Ceiling. Voters approved a$25 million bond ceiling for tax increment financing in 1982. The DDA is currently about$3 million short of hitting that ceiling even though between now and 2011 roughly$15 million in tax increment revenues are expected to be generated. At its July 6 meeting,The DDA Board of Directors will call for an election to be held in conjunction with the November general election and will ask for Council approval later in July. The Board has proposed a new bond ceiling of$150 million. This is about double the original ceiling June 27, 2006 Page 2 of$25 million in 2006 dollars. The new ceiling can be carried forward if the length of the tax increment collection period is extended(see item#4) or if a new TIF district is created in 2011. Tax increment financing does not entail the levying of a new tax. Changing the ceiling simply allows for the continued use of tax increment revenues for the economic revitalization of the central business district. 4. Tax Increment Legislation. Staff will review the proposal to amend state legislation on the life of DDA tax increment districts and how it affects Authority operations and other taxing jurisdictions. The Authority has commissioned a study by BBC consultants to assess how the use of tax increment has affected Larimer County revenues and expenses from 1982 to the present. JUNE 273 2006 CITY - DDA JOINT WORK SESSION !E dda DOWNTOWN Citydf Fart Cdltins DEVELOPMENT AUTHORITY !0 d& CONTENTS 1 . DDA Overview 2. Annual Review 3. Beet Street Update a. Increase Bond Authorization 5. Changing TIF Legislation 1 !� d& 1 . DDA OVERVIEW r YY si4 j x�aeNa s DOWNTOWN DEVELOPMENT !, d& AUTHORITY OVERVIEW ry • Approved by voters in 1981 (68%for) • Bond ceiling established at$25 million • Over 100 projects since inception including - Old Town Square - Cortina - Opera Galleria - Holiday lights - Stonehouse Grill - Downtown Strategic Plan - Downtown River Infrastructure Plan - SRO Housing and Affordable Housing - Beet Street • 2 M dda DDA OVERVIEW cont. • Tax increment financing is orimary economic development tool - DDA receives property taxes from within the district that result from real (bricks and mortar) property improvements (this is called the"tax increment') - The increment is used to finance borrowings(usually bonds) - Proceeds from the bonds are used to invest in downtown projects that improve its economic,cultural, social welfare A healthy downtown reduces demand on public services and increases property and sales tax revenues generated within the downtown district. • MEN dda 2. ANNUAL REVIEW 3 !� dda A14NUAL REVIEW „ . Converted Tenney and Trimble Court alleys to pedestrian-ways . In partnership with the City, began an continue renovating Old Town Square . Funded$80,000 toward holiday lights,street entertainment,free holiday parking, holiday banners . Committed up to$100,000 toward the purchase of LED holiday light strands for 2006 . In partnership with the City,bought, installed,and operated an ice rink in Old Town Square . Funded Urban Living Lofts . Funded and co-manage Downtown River Infrastructure Plan . Initialed community market, amphitheater, hotel feasibility analyses • !� dda ANNUAL REVIEW cont. m .R, . Funded Stonehouse Grill . Funded Outpost Sports Building renovation . Funded Rocky Mountain Raptor Program concept plan . Funded Penny Flats . Funded$350,000 toward Oak Street Plaza renovation . Established a facade grant program . Initiated public service announcements on KUNC . Provided funding for median improvements at College and Mountain . Funded 145 East Mountain(Tailgate Tommy's building) . Funded Otter Industries building . Attempted to change State legislation on DDA TIF districts . Participating in City Branding process . Funded Clothes Pony Alley facade 4 10 M d& ANNUAL REVIEW cont. • Funded Taste of Philly • Funded bike shop • Funded kayak park • Funded Alpert Building renovation • Funded Sears-Trostel renovation • Initiated a study of in the impact of TIF on County revenues and expenditures(underway) • Hired a project manager • Established Beet Street Committee and in the process of recruiting x t an executive director • !M d& 3. BEET STREET UPDATE do �� 5 !14 dda BEET STREET UPDATE • I�ommittee established: - Steve Taylor,Chair Cheryl Zimlich,Vice Chair Jerry Wilson,PSD ' - Ann Gill,CSU Dean College of Arts and Humanities - Patrick Fahey,Chair,CSU Department of Fine Arts Darin Atteberry,City Manager - Kelly Ohlson,City Council e - Chris Osborne, President, First National Bank - Tom Sutherland - Patrick Moran, CRB Chair - Kim Jordan,New Belgium Brewing - Bruce Freestone,OpenStage and arts producer's representative - Donna Visocky,Arts Alive • !a dda BEET STREET UPDATE cont. m • Bylaws drafted and adopted • Meeting schedule established(second Thursday every month, 7:30 a.m., First National Bank Boardroom) • Headhunter hired for executive director recruitment • Visioning process (ongoing process. Information below is draft language): - PURPOSE: • TO ESTABLISH AND MAINTAIN FORT COLLINS AS A CENTER THAT FOSTERS,CELEBRATES,AND INSPIRES HUMAN CREATIVITY THROUGH DIVERSE CULTURAL PROGRAMMING AND EXPERIENCES - CORE VALUES AND BELIEFS: • CULTURE EXPRESSES HUMAN CREATIVITY THROUGH RECREATION,SPIRITUALITY,THE ARTS, MUSIC, LEARNING, ENVIRONMENT,AND HAVING FUN • 6 11111 dda BEET STREET UPDATE cont. • VISIONING PROCESS cont. - CORE VALUES AND BELIEFS cont. • LEVERAGE,THROUGH PARTNERSHIP AND PROMOTION,LOCAL CULTURAL,ARTS, RECREATIONAL,AND EDUCATIONAL PROVIDERS; • BEET STREET IS AN ECONOMIC ENGINE • PRODUCE EXPERIENCES AND PROGRAMMING THAT SERVE AS WIDE A VARIETY OF PEOPLE AND INTERESTS AS POSSIBLE • PRODUCE INNOVATIVE,WORLD-CLASS PROGRAMMING AND EXPERIENCES • PROMOTE AN INTRIGUING, PEDESTRIAN-FRIENDLY ENVIRONMENT THAT IS INVITING TO AND ENGAGES ITS USERS • CULTURAL VITALITY THAT ENHANCES GREAT ENVIRONMENTAL STEWARDSHIP • COLLABORATION AND COORDINATION OF LOCAL RESOURCES AND THE COMMUNITY. • do BEET STREET UPDATE cont. • VISIONING PROCESS cont. - MISSION • BEET STREET WILL PRODUCE'X"WEEKS OF WORLD-CLASS PROGRAMMING THAT GENERATES"X"ATTENDANCE. NEXT: ONE MORE VISIONING SESSION TO FINALIZE LANGUAGE AND TO RESOLVE ISSUES AND IDEAS THAT HAVE BEEN PLACED IN THE "PARKING LOT' HIRE AN EXECUTIVE DIRECTOR(BY THE END OF SUMMER) HIRE STAFF AND BEGINNING PROGRAMMING(BY THE END OF THE YEAR) 7 4. INCREASE BONDING !, dda AUTHORIZATION ar INCREASE BONDING Ell AUTHORIZATION rt THE ISSUE: BOND AUTHORIZATION ESTABLISHED IN 1981 CAPPED TIF EXPENDITURES AT $25 MILLION. THE DDA IS THREE MILLION SHORT OF THE HITTING THE CEILING WHILE PROJECTIONS THROUGH 2O11 INDICATE TOTAL TIF REVENUES TO BE RECEIVED AT$15 MILLION+ • 8 INCREASE BONDING d& AUTHORIZATION oe� SUGGESTED SOLUTION: ASK ELECTORS WITHIN THE DDA DISTRICT TO APPROVE AN ADDITIONAL BORROWING CAPACITY OF $150 MILLION INCREASE BONDING Sod. AUTHORIZATION WHY$150 MILLION? • $150 MILLION IS JUST DOUBLE THE CURRENT BOND CEILING IN 2006 DOLLARS. A SINGLE LARGE PUBLIC PROJECT(E.G.A PERFORMING ARTS FACILITY) COULD COST AS MUCH AS$60 MILLION OR MORE THAN 1/3RD OF A NEW$150 MILLION BORROWING CAP THE NEW BORROWING CAP CAN BE CARRIED FORWARD FOR USE IN EITHER AN EXTENDED TIF PERIOD OR IF A NEW TIF PERIOD IS ESTABLISHED IN 2011. IN OTHER WORDS, IT WILL NOT BE NECESSARY TO ASK FOR NEW BONDING CAPACITY AT A LATER DATE. • 9 INCREASE BONDING M, dda AUTHORIZATION ma„� THE PROCESS: DDA BOARD CALLS FOR AN ELECTION TO PLACE THE QUESTION OF INCREASED BONDING CAPACITY BEFORE THE QUALIFIED ELECTORS WITHIN THE DDA DISTRICT. CITY COUNCIL APPROVES THE ELECTION AND THE BALLOT LANGUAGE. • THE QUESTION IS PLACED BEFORE THE ELECTORS AT THE REGULARLY SCHEDULED NOVEMBER ELECTION. • f+ e INCREASE BONDING dda AUTHORIZATION D, 1,.R. • DIRECTION FROM CITY COUNCIL: s DOES CITY COUNCIL CONCUR WITH THE REQUEST FROM THE DDA TO PLACE THE ISSUE OF$150 MILLION IN ADDITIONAL BONDING CAPACITY BEFORE THE VOTERS AT THE NOVEMBER, 2006 ELECTION? • 10 5. CHANGING TIF 11'4Ldda LEGISLATION ,r f l_ �fi M l`R • dda CHANGING TIF LEGISLATION THE ISSUE. STATE LEGISLATION CURRENTLY LIMITS DDA TAX INCREMENT DISTRICTS TO A LIFE OF 30 YEARS. THE FORT COLLINS DDA TIF DISTRICT EXPIRES IN 2011. THIS MEANS THAT TAX INCREMENT FINANCING AS A TOOL FOR DOWNTOWN REDEVELOPMENT WILL EITHER NO LONGER BE AVAILABLE OR A NEW DISTRICT AND A NEW BASE YEAR ESTABLISHED. A NEW BASE YEAR MEANS ZERO AVAILABLE TAX INCREMENT FUNDS UNTIL NEW PROJECTS BEGIN TO COME ON LINE. • 11 !� dda CHANGING TIF LEGISLATION cont. r PROPOSED SOLUTION: REQUEST A CHANGE IN STATE LEGISLATION THAT ALLOWS DDAs TO EXTEND THE USE OF TIF IN TEN-YEAR INCREMENTS IN EXCHANGE FOR MOVING UP THE BASE YEAR IN EQUIVALENT TEN-YEAR INCREMENTS R • dda CHANGING TIF LEGISLATION cont. .�,,,.... IMPACT OF THE CHANGE: BASE YEAR BECOMES 1992 2. LOSS OF INCREMENT REVENUES TO DDA FOR YEARS 2007- 2011 =$4,350,000($870,000 ANNUALLY) s. INCREASE IN SCHOOL DISTRICT REVENUES: $2,175,000 INCREASE IN COUNTY REVENUES: $1,088,000 INCREASE IN CITY REVENUES: $350,000 a. ABILITY FOR DDA TO RECEIVE TAX INCREMENT REVENUES THROUGH 2O21. 5. AT AN ANNUAL GROWTH RATE OF 2%, DDA TAX INCREMENT REVENUES WOULD RETURN TO CURRENT LEVELS(AROUND $3 MILLION ANNUALLY) BY THE YEAR 2021. • 12 !� dda CHANGING TIF LEGISLATION cont. TM .� • REQUEST TO CITY COUNCIL DOES CITY COUNCIL AGREE WITH THE DDA'S SUGGESTION TO SEEK A CHANGE IN DDA TIF LEGISLATION DURING THE 2007 COLORADO STATE LEGISLATIVE SESSION? • !7 dda THANK YOU ! m THE DDA BOARD THANKS CITY COUNCIL FOR THE OPPORTUNITY TO MEET AT WORK SESSION. THE BOARD THANKS THE CITY MANAGER'S OFFICE FOR ITS STRONG AND CONTINUING SUPPORT OF DOWNTOWN THE BOARD ALSO THANKS AND DEEPLY APPRECIATES WORKING IN PARTNERSHIP WITH THE CITY INCLUDING THE PARKS AND RECREATION DEPARTMENT,THE PLANNING DEPARTMENT,THE ENGINEERING DEPARTMENT,AND TRANSPORTATION SERVICES. THE COMMITMENT THE CITY HAS MADE TO DOWNTOWN FORT COLLINS MAKES THE WORK OF THE DDA EASIER, MORE EFFECTIVE,AND JUST .k PLAIN FUNI • 13