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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 07/05/2011 - SECOND READING OF ORDINANCE NO. 074, 2011, APPROPRDATE: July 5, 2011 STAFF: Mike Freeman Christina Vincent AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 10 SUBJECT Second Reading of Ordinance No. 074, 2011, 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 Kaufman and Robinson, Inc. Project at 1330 Blue Spruce. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on June 7, 2011, authorizes a loan from the City to the Urban Renewal Authority (URA) to reimburse Kaufman and Robinson, Inc for the public improvements associated with building a new location at 1330 Blue Spruce Drive. Offsetting these costs allowed the retention and expansion of a locally owned business to be economically feasible. The total cost of this Project was $192,891. The requested loan amount from the City of Fort Collins General Fund Reserves to the URA will be $192,891. The URA will utilize the City’s Interfund Borrowing program that was formally added to the City’s investment policies in 2008. This program enables the City to use a portion of its investment portfolio to assist City Departments and related entities (e.g., the URA) to access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary - June 7, 2011 (w/o attachments) COPY COPY COPY COPY ATTACHMENT 1 DATE: June 7, 2011 STAFF: Mike Freeman Christina Vincent AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 22 SUBJECT First Reading of Ordinance No. 074, 2011, 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 Kaufman and Robinson, Inc. Project at 1330 Blue Spruce. EXECUTIVE SUMMARY The Fort Collins Urban Renewal Authority (URA) is seeking a loan from the City to reimburse Kaufman and Robinson, Inc (KRI) for the public improvements associated with building a new location at 1330 Blue Spruce Drive. Offsetting these costs allowed the retention and expansion of a locally owned business to be economically feasible. The total cost of this Project was $192,891. The requested loan amount from the City of Fort Collins General Fund Reserves to the URA will be $192,891. The URA will utilize the City’s Interfund Borrowing program that was formally added to the City’s investment policies in 2008. This program enables the City to use a portion of its investment portfolio to assist City Departments and related entities (e.g., the URA) to access funds at a competitive interest rate while still providing a market based yield to the City investment portfolio. BACKGROUND / DISCUSSION The City and the URA entered into an intergovernmental agreement on August 15, 2006 allowing the City to advance fund 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.” On June 2 2009, the URA Board approved a Redevelopment Agreement between the URA and KRI to provide financial assistance through reimbursement for a new building project at 1330 Blue Spruce Drive. The obligation was to reimburse up to $215,000 upon issuance of a Certificate of Occupancy for the public improvements as stated in the Redevelopment Agreement. On December 1, 2009, the URA Board approved a revised Redevelopment Agreement between the URA and KRI to provide additional financial assistance through reimbursement for green building components added to the new building project at 1330 Blue Spruce Drive. The original obligation was to reimburse up to $215,000 and was increased by $54,000 for green building features, bringing the maximum amount to $269,000 upon issuance of a Certificate of Occupancy for the public improvements as stated in the Redevelopment Agreement. Exhibit C from the Redevelopment Agreement lists the public improvements included as total eligible costs (Attachment 1). FINANCIAL / ECONOMIC IMPACTS The Project was determined by the URA Board to be a qualified project for tax increment financing and consistent with the North College URA Plan, as well as the North College Corridor Plan. Over the remaining life of the plan area, the project will generate an estimated $600,000. This action approves the loan agreement between the City and URA to finance the commitment made by the URA Board to Kaufman and Robinson. URA funding for the Project totals $192,891. This loan is a five year term loan, with the first four years interest only payments and the remaining balance paid in year five. COPY COPY COPY COPY June 7, 2011 -2- ITEM 22 STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. ATTACHMENTS 1. Exhibit C to the Kaufman and Robinson Redevelopment Agreement – List of estimated costs for public improvements. 2. Powerpoint presentation ORDINANCE NO. 074, 2011 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 KAUFMAN AND ROBINSON, INC. PROJECT AT 1330 BLUE SPRUCE WHEREAS, the Fort Collins Urban Renewal Authority (the “URA”) 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 URA whereby the City will provide support services to the URA and will advance funds to the URA so long as the advance of such funds is evidenced in writing by a promissory note; and WHEREAS, Kaufman and Robinson, Inc. had proposed the construction of a new 10,000 square foot commercial building on a parcel of land approximately 1.76 acres in size located at 1330 Blue Spruce (the “Project”); and WHEREAS, the Project included the construction and installation of public infrastructure such as street and stormwater infrastructure improvements within the North College Urban Renewal Area; and WHEREAS, on June 2, 2009, the Board of Commissioners of the URA (the “Board”) adopted Resolution 2009-018, approving the provision of financial assistance in the amount of $215,000 for the Project; and WHEREAS, on June 2, 2009, the Board suggested that additional financial support might be considered if more green building technologies were incorporated in the Project; and WHEREAS, on December 1, 2009, the Board adopted Resolution 2009-022 approving up to an additional $54,000 in financial assistance due to additional green building technologies that were being added to the Project; and WHEREAS, the Project has been completed; and WHEREAS, the total cost of the Project is $1,600,000 and the cost of the public infrastructure improvements is $192,891; and WHEREAS, the URA will not have sufficient tax increment revenues in 2011 to fund its contribution to the Project; and WHEREAS, City staff recommends that the City lend the URA the funds needed for that purpose; and WHEREAS, staff has prepared a proposed promissory note (the “Note”) and loan agreement entitled “Loan Agreement Between the City of Fort Collins and the Fort Collins Urban Renewal URA for the Kaufman and Robinson, Inc. New Building at 1330 Blue Spruce Project” (the “Loan Agreement”) attached hereto as Exhibit “A” [Exhibit “A” is on file in the office of the City Clerk] and incorporated herein by this reference; and WHEREAS, there are sufficient prior year reserves in the City’s General Fund to fund a loan to the URA for the purpose of funding the Project street and stormwater infrastructure improvements; and WHEREAS, Article V, Section 9 of the City 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, the City Manager recommends funding the loan to the URA from the General Fund and it is the desire of City Council to do so. 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 ONE HUNDRED NINETY TWO THOUSAND EIGHT HUNDRED NINETY ONE DOLLARS ($192,891) for expenditure as a loan to the Fort Collins Urban Renewal Authority. Section 2. That the use of this $192,891 in General Fund Reserves for the purpose of funding a loan to the URA, according to the terms and conditions of the Note and Loan Agreement, will provide necessary improvements to public infrastructure and will be beneficial for all City citizens. Section 3. That the Loan Agreement is hereby approved, and the Mayor is authorized to execute said agreement, subject to such modifications in form or substance as the Mayor may, in consultation with the City Attorney, deem desirable and necessary to protect the City’s interests. -2- Introduced, considered favorably on first reading, and ordered published this 7th day of June, A.D. 2011, and to be presented for final passage on the 5th day of July, A.D. 2011. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 5th day of July, A.D. 2011. _________________________________ Mayor ATTEST: _____________________________ City Clerk -3-