HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/01/2009 - RESOLUTION 2009-083 APPROVING THE POSTING OF A BON ITEM NUMBER: 19
AGENDA ITEM SUMMARY DATE: September 1, 2009
FORT COLLINS CITY COUNCIL STAFF: Mike Freeman
Josh Birks
SUBJECT
Resolution 2009-083 Approving the Posting of a Bond in Lieu of Payment of Street Oversizing
Capital Improvement Expansion Fees.
RECOMMENDATION
Staff recommends adoption of this Resolution.
FINANCIAL IMPACT
The Resolution will defer the collection of approximately $85,000 in Street Oversizing Capital
Expansion Fees; these fees will be deferred for a period not to exceed 12 months from the issuance
of building permit.
EXECUTIVE SUMMARY
The Fort Collins Brewery has plans to develop a 34,000 square foot (SF) brewery and restaurant.
The project has faced several financial challenges,including below cost appraisals and construction
delays and, as a result, is short of funds. The business owner has asked the City to defer the Street
Oversizing Capital Expansion Fees associated with the proposed project to provide some relief and
facilitate construction, for a period not to exceed 12-months from the issuance of building permit.
BACKGROUND
Fort Collins Brewery (FCB) is a local craft brewery currently located in Larimer County. The
brewery is planning a 34,000 square foot (SF) new building for expansion and relocation into the
City. The project includes a 30,000 SF craft brewery and a 4,000 SF restaurant, located at the
northwest corner of Lincoln Avenue and Lemay Avenue, within the Downtown Development
Authority (DDA) boundary. The project has been able to secure the necessary City approvals to
begin construction and anticipates beginning site work before the end of summer. However, the
construction loan provided by FCB's bank has been authorized for an amount lower than the
projected construction costs. As a result,the project is short of funds during the construction period.
September 1, 2009 -2- Item No. 19
The City, through the Economic Health group, has been working on and off with FCB for the past
four years, to assist them with the development of a new brewery and restaurant. Previous efforts
included using Private Activity Bonds to finance the project. This attempt failed due to inability of
the business to secure the necessary letter of credit. On February 12, 2009,the DDA approved Tax
Increment Finance (TIF) assistance in the amount of$539,918 ($324,525 for public improvements
in the right-of-way and $215,393 for facade improvements on the Lincoln and Lemay Avenue
facades). These funds provided by the DDA will be available once the City issues a Certificate of
Occupancy(CO) and the County certifies the value of the building. Therefore, these funds are not
available during the crucial construction period.
Tom Peters, President of Fort Collins Brewery, approached the City to discuss ways to assist the
project in overcoming the estimated shortfall, approximately $500,000. City staff recommended
phasing the project by delaying the preparation of a portion of the site for a future expansion
building. This adjustment saved the project approximately$100,000 in up front fees,which will be
collected when the expansion building is constructed in the future.
After much deliberation, the City determined it could also recommend Council consider deferring
the collection of Street Oversizing Capital Expansion Fees if the developer provided a bond as
security in place of the fees. The deferral would allow FCB to avoid paying approximately$85,000
in upfront fees. The deferral will authorize the collection of the fees 12 months from the issuance
of building permit. The developer has indicated that construction can not be completed without
some relief of development fees.
Staff supports this recommendation for the following reasons:
1. FCB is a member of the Uniquely Fort Collins target industry cluster.
2. The business is moving from the County to City.
3. The business will locate within the "beer triangle" and reinforce this unique destination.
4. The project will add 4 primary jobs to the City (from the brewery expansion) and 20
additional support jobs (from the restaurant).
5. The project will contribute to the DDA by providing additional assessed value.
6. The bond provides a remedy for collecting the fees if the project should fail, making the
recommendation not a typical deferral or waiver of fees.
The remaining portion of the approximately $500,000 shortfall has been closed through value
engineering the construction of the brewery and restaurant. FCB has carefully considered the DDA
improvement, and also the overall value of the completed building, so as not to adversely impact
the value of the proposed building. The following steps have been taken to reduce construction
costs or value engineer the project:
1. FCB removed the insulated foam metal roof panels in exchange for a banded insulation
package in the pre-engineered portion of the building. NOTE: This type of panel has NOT
been removed from any of the walls.
2. FCB engineered the mechanical and electrical systems to be constructed more efficiently and
has requested additional discounts from the manufacturers of all mechanical and electrical
equipment. So far,most have offered discounts to put their equipment on this higher profile
proj ect.
September 1, 2009 -3- Item No. 19
3. FCB has removed the decorative stone retaining walls on the upper portion of the detention
pond in favor of a poured concrete wall. This provides a better structure and with decorative
inserts installed on the forms, this will provide a very unique exposed concrete pattern.
4. FCB has further negotiated with all subcontractors for best pricing. All have responded with
acceptance in offering lower prices than originally quoted, due to shortage of work in these
current economic times.
5. FCB is working with a smaller, independent, local contractor to minimize the contractor
operating and profit numbers.
ATTACHMENTS
1. Letter of request from Fort Collins Brewery, Tom Peters, President
2. Council Finance Committee Meeting Minutes, August 17, 2009
3. Site location map
ATTACHMENT 1
' r
Fort Collis Drewer9
Tom Peters City of Fort Collins
p: 970.472.1499 x15 Josh Birks, Economic Advisor
f: 970.472.1520
(970) 221-6324
14 August 2009
To City of Fort Collins Council Members:
The Fort Collins Brewery has been working with the City of Fort Col-
lins since June of 2008 to develop and finalize plans for a new brew-
ery at the NW corner of Lincoln & Lemay. We have overcome many
obstacles with this property and final city approval was received in
April 2009 for our new facility.
Due to uncertain economic times, the Fort Collins Brewery has
worked non-stop to re-secure financing for our new project. Funding
has become very tight, appraisals very lean and overall construction
very slow.
We are currently faced with a tremendous amount of up-front fees
that will stop this project before it gets started. With your help in al-
lowing us to defer the street oversizing fees of approximately $
85,000, we will be able to begin construction on our new brewery
this Fall. We would plan to put a bond for this amount in place prior
to building permit issuance to guarantee this amount. We would ask
for a 1 year term until this amount is paid to the City of Fort Collins.
Please consider this as our formal request for bonding and deferment
of payment on these fees. We are not asking for elimination of this
amount, just a 1 year delay to make this project a reality and finally
move forward in getting the Fort Collins Brewery into Fort Collins.
Respectfully,
Tom Peters
President
Ambiance, Inc._d/b/a Fort Collins Brewery
www.FortCollinsBrewery.com-- 1900 E. Lincoln Av#B-Fort Collins,CO 80524--tompeters@fortcollinsbrewery.com
ATTACHMENT 2
City of
Council Finance Committe ®RAFT Fort Collins
Minutes - DRAFT
\ August 17, 2009
V For Collins Brewery
Josh Birks presented an update on the progress of the Fort Collins Brewery project. Due to the
current economy the FC Brewery plan for expansion has had some challenges. The Brewery
recently secured City approval on their new site but construction appraisal fell short of their
costs. The shortfall is around half a million dollars. As a result, they are requesting that the City
defer some of their fees ($85,000 in street over sizing) until the completion of new building
construction.
Darin Atteberry said that this project fits within the "Uniquely Fort Collins' Cluster and the City
that the City would still get the money—it is just deferred for 12 months.
Committee members agreed that this should be a discussion item for entire City Council at a
future meeting.
Spending Transparency Project Update
Lawrence Pollack gave an update on the project. The Database is going live on Septemb
2009.
Some of the items that have been changed or fixed as a result of comments fro e last
review are.
1. No description on each expenditure —There will now be a des ' ion for each
transaction
2. FAQ—Is now compiled and will be available on the site.
3. The name of each Council Member will now be " i le for all of their expenditures.
4. Employee earnings were not originally incl d, but will now be included showing
previous year salary, job title, and ser i area.
• (TheCommittee recomm that the FAQ explains that the total includes
overtime and bonus ut not benefits).
Council Worksession De of 8/11/09
Darin Atteberry told t ommittee members that the last budget meeting is today, and then he
will be meeting in i dually with each council member. He wants to make sure that all City
Council me s are aware of what is contained in the final budget and that each has had an
opportu o ask questions.
,. -
w. a r
}
I IP
T �I
f Jr � shm. '
fort Collins ire ery Site
4 {
t • . r
_ -EaL In c oFnvAu , - _ �
k y ' i
Afte ZB
-s
ti r
' r 11 1... 1. - A .
omo
II
y AN
Y
' � z
R e
a
a Link-.N -Greens Golf Course r '; ■
# Imart Supercentpr -}
on
oo
dt or
911.
i �q
1 F
•i •_ _ �, ti •
4 � + INFO
L4' on
I
or
41
lip
-I+• E
oil
y
i p
tiL 0 2009 TeIe AV as- -} + -
i_ --
I mageey Date : Or. t 14 , 200 - 40� 35-08 . 181' N 105V03 ' 34- 56' VV elev 1505 m' Eire alk 2 . 67 km
RESOLUTION 2009-083
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING THE POSTING OF A BOND IN LIEU OF PAYMENT OF STREET
OVERSIZING CAPITAL IMPROVEMENT EXPANSION FEES
WHEREAS,Section 7.5-19 of the City Code generally requires the payment of development
fees prior to or at the time of issuance of the first building permit for the property to be developed
but also states that City Council may approve by resolution an agreement between the City and the
fee payer deferring the payment of said fees; and
WHEREAS,Fort Collins Brewery is planning a development project that includes a 34,000
square foot building at the northwest corner of Lincoln Avenue and Lemay Avenue (the"Project')
for the relocation of its operations; and
WHEREAS, the current economic climate is endangering the ability of the Fort Collins
Brewery to complete its Project; and
WHEREAS, City staff has recommended cost saving measures, including phasing the
Project, but the payment of the Street Oversizing Capital Improvement Expansion Fee (the"Fee")
at the time of issuance of the building permit will still adversely affect the viability of the Project;
and
WHEREAS, City staff is recommending that Fort Collins Brewery be authorized to post a
bond to secure the payment of the Fee in twelve months when additional funding will be available
to Fort Collins Brewery.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that Fort Collins Brewery is hereby allowed to post a bond in lieu of payment of the Street
Oversizing Capital Improvement Expansion Fee at the time of issuance of the building permit for
a period of twelve(12)months at which time the Street Oversizing Capital Improvement Expansion
Fee will be due and payable.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 1 st
day of September-A.D. 2009.
Mayor
ATTEST:
City Clerk