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COUNCIL - COMPLETE AGENDA - 01/14/2014 - COMPLETE AGENDA
City of Fort Collins Page 1 Karen Weitkunat, President City Council Chambers Gerry Horak, District 6, Vice President City Hall West Bob Overbeck, District 1 300 LaPorte Avenue Lisa Poppaw, District 2 Fort Collins, Colorado Gino Campana, District 3 Wade Troxell, District 4 Cablecast on City Cable Channel 14 Ross Cunniff, District 5 on the Comcast cable system Darin Atteberry, City Manager Steve Roy City Attorney The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224- 6001) for assistance. City Council Adjourned Meeting January 14, 2014 6:00 PM CALL MEETING TO ORDER ROLL CALL 1. Items Relating to the Redevelopment of the Foothills Mall. (staff: Darin Atteberry, Josh Birks, Bruce Hendee, Mike Beckstead; 20 minute staff presentation; 2 hour discussion) A. Resolution 2014-004 Approving an Updated Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. B. Resolution 2014-005 Updating Prior Action Regarding the Redevelopment of Foothills Mall and Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. C. First Reading of Ordinance No. 008, 2014, Vacating Foothills Parkway Right-of-Way Between College Avenue and Mathews Street, and Vacating a Portion of Mathews Street. D. First Reading of Ordinance No. 009, 2014, Authorizing the Conveyance of a Permanent Irrigation Ditch Easement and Right-of-Way to the Larimer County Canal No. 2 Irrigating Company Within the South College Avenue Frontage Road. The purpose of this item is to authorize and approve several items relating to the redevelopment of Foothills Mall. Resolution 2014-004 authorizes and approves the execution of a Reimbursement and CITY COUNCIL Redevelopment Agreement to support the redevelopment of Foothills Mall. The Agreement was made available for public review on Friday, January 3. Revisions to the Agreement since that time include the addition of a new Subsection 12.3(g), related to Arc Thrift Store, as well as clarification of the minimum Mall square footage. Resolution 2014-005 approves a time extension for developing a financial model with Larimer County for evaluating fiscal impacts associated with the formation of tax increment financing districts. Ordinance No. 008, 2014 vacates the right-of-way for the remaining public street portion of Foothills Parkway from College Avenue to Mathews Street, along with a portion of the west side of Mathews Street intersecting Foothills Parkway. Ordinance No. 009, 2014, authorizes the conveyance of a permanent irrigation ditch easement and right-of-way to accommodate the realignment of the Larimer No. 2 Ditch, which allows the ditch to be relocated off the Mall property. OTHER BUSINESS ADJOURNMENT City of Fort Collins Page 1 urban renewal authority Karen Weitkunat, Chairperson City Council Chambers Gerry Horak, Vice-Chairperson City Hall West Bob Overbeck 300 LaPorte Avenue Lisa Poppaw Fort Collins, Colorado Gino Campana Wade Troxell Ross Cunniff Cablecast on City Cable Channel 14 on the Comcast cable system Darin Atteberry, Executive Director Steve Roy, City Attorney Wanda Nelson, Secretary The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224- 6001) for assistance. URBAN RENEWAL AUTHORITY BOARD MEETING January 14, 2014 (after Regular Council Meeting) CALL MEETING TO ORDER ROLL CALL AGENDA REVIEW o Executive Director’s Review of Agenda. CITIZEN PARTICIPATION Individuals who wish to make comments regarding items remaining on the Consent Calendar or wish to address the Board on items not specifically scheduled on the agenda must first be recognized by the Chairperson or Vice Chair. Before speaking, please sign in at the table in the back of the room. The timer will buzz once when there are 30 seconds left and the light will turn yellow. The timer will buzz again at the end of the speaker’s time. Each speaker is allowed 5 minutes. If there are more than 6 individuals who wish to speak, the Chairperson may reduce the time allowed for each individual. State your name and address for the record. Applause, outbursts or other demonstrations by the audience are not allowed Keep comments brief; if available, provide a written copy of statement to Secretary Address your comments to Council, not the audience City of Fort Collins Page 2 CITIZEN PARTICIPATION FOLLOW-UP STAFF REPORTS COMMISSIONER REPORTS Discussion Items The method of debate for discussion items is as follows: ● Chairperson introduces the item number and subject; asks if formal presentation will be made by staff ● Staff and/or Applicant presentation (optional) ● Chairperson requests citizen comment on the item (five-minute limit for each citizen) ● Board questions of staff on the item ● Board motion on the item ● Board discussion ● Final Board comments ● Board vote on the item Note: Time limits for individual agenda items may be revised, at the discretion of the Chairperson, to ensure all citizens have an opportunity to speak. Please sign in at the table in the back of the room. The timer will buzz when there are 30 seconds left and the light will turn yellow. It will buzz again at the end of the speaker’s time. 1. Consideration and Approval of the November 5, 2013 Urban Renewal Authority Board Minutes. The purpose of this item is to approve the November 5, 2013 minutes of the Urban Renewal Authority Board meeting. 2. Items Relating to the Redevelopment of Foothills Mall. (staff: Darin Atteberry, Josh Birks, Bruce Hendee, Mike Beckstead; 5 minute staff presentation; 20 minute discussion) A. Resolution No. 068 Approving an Updated Redevelopment and Reimbursement Agreement with the City of Fort Collins, Walton Foothills Holdings VI, L.L.C., and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. B. Resolution No. 067 Updating the Terms of Resolution No. 056 Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. The purpose of this item is to authorize and approve items relating to the redevelopment of Foothills Mall. Resolution No. 068 authorizes and approves the execution of a Reimbursement and Redevelopment Agreement to support the redevelopment of Foothills Mall. The Agreement was made available for public review on Friday, January 3. Revisions to the Agreement since that time include the addition of a new Subsection 12.3(g), related to Arc Thrift Store, as well as clarification of the minimum Mall square footage. Resolution 067 approves a time extension for developing a financial model with Larimer County for evaluating fiscal impacts associated with the formation of tax increment financing districts. CONSIDERATION OF CITIZEN-PULLED CONSENT ITEMS OTHER BUSINESS ADJOURNMENT Agenda Item 1 Item # 1 Page 1 AGENDA ITEM SUMMARY January 14, 2014 City Council STAFF Josh Birks, Economic Health Director Darin Atteberry, City Manager Bruce Hendee, Chief Sustainability Officer Mike Beckstead, Chief Financial Officer SUBJECT Items Relating to the Redevelopment of the Foothills Mall. EXECUTIVE SUMMARY A. Resolution 2014-004 Approving an Updated Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. B. Resolution 2014-005 Updating Prior Action Regarding the Redevelopment of Foothills Mall and Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. C. First Reading of Ordinance No. 008, 2014, Vacating Foothills Parkway Right-of-Way Between College Avenue and Mathews Street, and Vacating a Portion of Mathews Street. D. First Reading of Ordinance No. 009, 2014, Authorizing the Conveyance of a Permanent Irrigation Ditch Easement and Right-of-Way to the Larimer County Canal No. 2 Irrigating Company Within the South College Avenue Frontage Road. The purpose of this item is to authorize and approve several items relating to the redevelopment of Foothills Mall. Resolution 2014-004 authorizes and approves the execution of a Reimbursement and Redevelopment Agreement to support the redevelopment of Foothills Mall. The Agreement was made available for public review on Friday, January 3. Revisions to the Agreement since that time include the addition of a new Subsection 12.3(g), related to Arc Thrift Store, as well as clarification of the minimum Mall square footage. Resolution 2014-005 approves a time extension for developing a financial model with Larimer County for evaluating fiscal impacts associated with the formation of tax increment financing districts. Ordinance No. 008, 2014 vacates the right-of-way for the remaining public street portion of Foothills Parkway from College Avenue to Mathews Street, along with a portion of the west side of Mathews Street intersecting Foothills Parkway. Ordinance No. 009, 2014, authorizes the conveyance of a permanent irrigation ditch easement and right-of-way to accommodate the realignment of the Larimer No. 2 Ditch, which allows the ditch to be relocated off the Mall property. STAFF RECOMMENDATION Staff recommends adoption of the Ordinances on First Reading and the Resolutions. 1 Packet Pg. 3 Agenda Item 1 Item # 1 Page 2 BACKGROUND / DISCUSSION A. Resolution 2014-004 Approving an Updated Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. NOTE: Please refer to the May 7, 2013 Agenda Item Summary for a project overview, description of public benefits, and other project details (See Attachment 1). Overview of Changes On November 8, 2012, exclusive negotiations between the Fort Collins Urban Renewal Authority (URA) and Walton/Alberta were initiated under an Agreement to Negotiate. On May 8, 2013, the City Council and the URA Board each adopted a resolution authorizing and approving the execution of a Redevelopment and Reimbursement Agreement in connection with the redevelopment of the Foothills Mall. Since May, Alberta Development on behalf of Walton Foothills Holdings VI, L.L.C. (Developer) has continued to refine the site plan and program for the redevelopment of Foothills Mall. The following summarizes the changes to the project since May. Mall Configuration The Planning and Zoning Board (P&Z) approved a Project Development Plan (PDP) for the redevelopment of Foothills Mall on February 7, 2013. On December 12, 2013, P&Z reviewed a major amendment to the PDP. The major amendment includes a change in the total square footage of the project of approximately 10 percent, Table 1 highlights the differences. The biggest change is a reduction of the theater of approximately 43,000 square feet. Only concessions are taxable at a theater and constitute approximately one-third of total sales; therefore this reduction does not have a one for one proportional impact on anticipated retail sales. In addition, the changes include a reduction in other commercial space of approximately 32,000 square feet (the difference between the increase of interior mall space and reduction of all other space). 1 Packet Pg. 4 Agenda Item 1 Item # 1 Page 3 Table 1 Project Square Footage Comparison Feb. Dec. SF % Retained/Redeveloped Interior Mall 176,161 208,098 31,937 18.1% Macy's 127,971 127,971 0 0.0% Theater 86,754 43,655 -43,099 -49.7% Youth Activity Center 23,863 24,705 842 3.5% All Other Space 319,038 254,702 -64,336 -20.2% Total 733,787 659,131 -74,656 -10.2% Difference Eligible Costs Review Certain projects costs are eligible for public assistance per Colorado Revised Statutes relating to Urban Renewal and Special Districts (Title 32). The types of eligible costs for each (Urban Renewal Authority and Metro District) are relatively broad, overlap to some extent, and include such categories as: Acquisition of a blighted area; Demolition and removal of buildings and improvements; Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the objectives of the urban renewal plan; Carrying out plans for a program through voluntary action and the regulatory process for the repair, alteration, and rehabilitation of buildings or other improvements in accordance with the urban renewal plan; Acquisition of any other property where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, lessen density, eliminate obsolete or other uses detrimental to the public welfare, or otherwise remove or prevent the spread of blight or deterioration or to provide land for needed public facilities. It is important to note that the total amount of eligible costs per the Colorado Revised Statutes may be as high as $108 million -- significantly higher than the $53 million in public assistance being offered, which is approximately 49 percent of the estimate of total eligible costs (see Table 2). However, the Developer and the City established a process to identify project costs that are extraordinary costs associated with remediating blighted conditions on the property, or costs associated with public improvements or public infrastructure. These are costs in which there is direct public benefit. The process of identifying the eligible costs balanced the need to maximize the public benefit while ensuring the public assistance was the minimum amount necessary to make the project financially viable. 1 Packet Pg. 5 Agenda Item 1 Item # 1 Page 4 The following provides a brief description of each of the eligible costs summarized in Table 2 below: Land Acquisition: This amount represents the estimated value of the land underlying the portions of the project that include the public gathering spaces such as the east and west lawns, the Foothills Activity Center, and other green or public spaces on the site. Parking Structure: The parking structure allows for greater utilization of site; specifically the ability to create public gathering spaces and additional pedestrian and bicycle facilities/amenities. Demolition/Abatement: Demolition and deconstruction of the aging facility represents an extraordinary cost associated with remediating blight and mitigation the hazardous materials. Fixture and Amenities: This represents urban design enhancements to the public gathering spaces (east and west lawns) to provide high quality of place. Ditch Relocation: Relocating a segment of the Larimer No. 2 ditch to the west side of College Ave. represents an extraordinary cost associated with remediating blight and provides an opportunity for a pedestrian underpass (described below). Site Work: This cost is associated with earthwork (grade and fill), site walls to alleviate topographic constraints on the site, as well as asphalt paving, curb and gutter, and sidewalks. Utilities: This represents upgrades and improvements to sanitary sewer, storm water, water lines and fire water systems. Soft Costs: Architectural and engineering costs associated with activity center, parking structure, as well as materials testing, and environmental/abatement management. Foothills Activity Center: A publicly owned and operated activity center that includes gymnasium, public meeting rooms and after-school programs for youth. Pedestrian Crossing/Underpass: A pedestrian connection linking MAX BRT and Foothills Mall utilizing Larimer No. 2 Ditch alignment under College Ave. Originally the developer requested $72 million in cost reimbursement. Through the negotiation process outlined above this amount was reduced to the $53 million public finance package presented in this document. The most notable reductions from the requested assistance fall into three categories: (1) Land Acquisition, which the developer requested $16 million in reimbursement; and (2) Soft Costs, which the developer requested $7.1 million, and (3) Parking Structure, which the developer requested $12.8 million. 1 Packet Pg. 6 Agenda Item 1 Item # 1 Page 5 Table 2 Summary of Eligible Costs for Reimbursement, Comparison ($ Millions) The eligible costs have not changed significantly since May. The costs as site, utility, and public improvement costs remain fixed despite the change in the total square footage of the project. One change that has been specifically identified is the shift in the parking structure to 978 spaces and four stories from a larger six story structure. Staff queried the Developer regarding savings related to this shift. Alberta Partners indicates that the project budget has always assumed a smaller structure than was entitled and, therefore, the cost for this improvement has not changed. This is consistent with the Developer’s approach to the multifamily housing, which includes and entitlement for 800 units but has been modeled at 446 units based on developer input. Staff further evaluated the Developer’s statement by comparing the cost per space of a 4-story 978 space parking structure to current market costs. At the original cost estimate of $12.8 million this equates to $13,000 per space (excluding Architecture and Engineering Costs), which is consistent with costs for similar structures being constructed in the market today. Financial Investment Overview The following narrative summarizes the revised financing package and highlights changes since May. The public financing package still includes the pledge of four revenue sources in the following priority order: Sources Foothills Metropolitan District Capital Mills - The Metro District will pledge 50 mills of ad valorem real property tax revenue to the bond. This mill levy expires when the bond is fully repaid or within 25 years, whichever comes first. Property Tax Increment - The URA will pledge 100 percent of the annual ad valorem property tax increment revenue over the 25-year tax increment period or until the bond is fully repaid, if prior to expiration of the tax increment period, less an administrative fee up to a maximum of 1.5 percent of the gross property tax increment revenue received by the URA. 1 Packet Pg. 7 Agenda Item 1 Item # 1 Page 6 Public Improvement Fee - The Developer will impose a 1 percent Public Improvement Fee (PIF) on all taxable transactions within the Project and pledge these revenues to the bond. This revenue source terminates with the repayment of the bond. Sales Tax Increment – As the URA will pledge 100 percent of the annual sales tax increment generated above a base by the Project from the City’s 2.25 percent General Fund Sales Tax rate (the “Core Rate”), which is the sales tax increment established for the URA in the Midtown Urban Renewal Plan. The above priority order works such that the first revenue source pledged to bond repayment is the last revenue source out. Debt service is paid from all revenues collected and excess pledged revenues are released by the Bond Trustee if not needed to support Debt Service as provided in the agreement. Therefore, Tax increment revenues will be returned to the URA and the City when not needed for debt service on the bond. Therefore, the Sales Tax Increment Pledge, despite existing for all 25 years, is expected to result in the return of funds back to the City as early as 2018. Project Cost Summary The total redevelopment project is estimated to cost $313 million; down from the estimated $319 million in May (previously misstated in the May 7 Agenda Item Summary). These costs are split between the commercial/retail at approximately $231 million (down from $237 million in May) or 74 percent and 446 anticipated residential units at a total cost of $82 million or 26 percent. The eligible costs, which remain the same as described in May (See Table 3), total approximately $53 million or 17 percent of the total cost and 23 percent of the commercial/retail costs. The eligible costs represents the target amount of bond proceeds to be generated by the pledged revenues. Table 3 Summary of Eligible Costs for Reimbursement ($ Millions) Blight Removal Infrastructure City Infrastructure Total Public Land Acquisition $ 5.5 $ 5.5 Parking Structure 9.6 9.6 Demolition / Abatement 3.9 3.9 Fixture & Amenities 1.4 1.4 Ditch Relocation 2.8 2.8 Site Work 12.9 12.9 Utilities 4.5 4.5 Soft Costs 4.6 4.6 Foothills Activity Center 4.8 4.8 Pedestrian Crossing / Culvert 3.0 3.0 TOTAL $ 45.2 $ 7.8 $ 53.0 Slide 9 from the presentation Assumptions The financial analysis resulting in the public finance investment contemplated in the proposed Redevelopment and Reimbursement Agreement relies on several key assumptions. Several of these assumptions have changed since May. Each of assumptions and the changes are described briefly below: 1 Packet Pg. 8 Agenda Item 1 Item # 1 Page 7 Project Timing - The financial analysis assumes a December 23 “go” date for commencement of construction activity. This result in a ground breaking in January/February 2014 and substantial completion of the project in November 2015, a delay of one year from the original schedule presented in May. Annual Sales Per Square Foot - The financial analysis assumes $378 per square foot in annual retail sales once the project stabilizes up from $350 per square foot in May (this rate excludes non-retail space and the anchor department store). The sale per square foot figure has increased due the increased confidence in anticipated retailers at the center. In addition, this assumption relies on several inputs: (a) the average annual sales per square foot figure for all Malls as provided by the International Council of Shopping Centers ($458 per square foot for 2012); and (b) Economic & Planning Systems full analysis of retail transfer, inflow and growth. Occupancy - The financial analysis assumes, based on the construction schedule, that 75 percent of the gross leasable area will be occupied by retail tenants by December 31, 2015. This number will grow to 95 percent occupancy and remain at this level by December 31, 2016. A delay of approximately one year. Retail Sales Growth - The financial analysis assumes that retail sales will grow by 2 percent annually. This pace of growth is consistent with historical growth rates in the City of Fort Collins of 5.4 percent annually since 1990. In addition, this rate falls short of the historic growth rate of inflation as measured by the Consumer Price Index, 2.9 percent annually since 1982. NO CHANGE SINCE MAY. Property Value Growth - The financial analysis assumes that real property values will increase by 2 percent every other year or 1 percent average annually. This pace of growth is conservative compared to the historical growth rate in of real property in Larimer County. NO CHANGE SINCE MAY. Public Finance Revenue Summary The Redevelopment and Reimbursement Agreement contemplates utilizing the pledged revenues, as described, to support the issuance of a bond by the Foothills Metro District. The proceeds from the bond issuance are intended to pay or reimburse the eligible costs and to pay cost of issuance. As described, the bond will be supported by four revenue sources. In May, a single public finance scenario was presented in the Agenda Item Summary and staff presentation. The staff presentation attached to this document presents several scenarios covering assumptions about interest rate and sales tax rate. Two scenarios are highlighted including: (1) a scenario based on an assumed 7.00 percent interest rate consistent with the May assumption and (2) a more conservative scenario assuming a 7.25 percent interest rate. These scenarios are compared to the single scenario presented in May below, see Table 4. These scenarios indicate that the City sales tax increment applied to debt service on the bonds will range between $9.0 and $12.0 million depending on interest rate. In addition, the net new Sales Tax revenue to the City after release of pledged revenues over the 25 year time period will range between $108 and $117 million, depending on assumptions about interest rate and inclusion versus exclusion of sales transfer changes. The more specific information provided in subsequent tables below relates to the first scenario assuming a 7.00 percent interest rate consistent with the May assumptions. 1 Packet Pg. 9 Agenda Item 1 Item # 1 Page 8 Table 4 Project and Public Finance Summary Comparison Jan 14th Jan 14th @ 7.00% Bond @ 7.25% Bond Gross Leasable Area 711k + 24k Sales Per Square Foot $350 Total Project Cost - Retail $237 Open Assumption Nov '14 Bonds at Par Value $73 $71 $72 Cum Bond Payments $165 $159 $163 First Three Revenue Sources $170 $151 $151 Dedicates Sales Tax Revenue $105 $106 $106 GF Sales Tax Revenue $147 $149 $149 Estimated City ST Remitted $8.8 $9.0 $12.0 Net New ST Revenue $108 $117 $114 Net New w/o Addtl Transfer $111 $108 $231 Phases '14-'15 ($ Millions except Sales per Square Foot) May 7th 641k + 24k $378 Slide 8 from the presentation The primary revenues supporting the bond will come from the Metro District in the form of annual ad valorem taxes on real property and from the Mall owner in the form of PIF revenues. These two revenue sources will generate $43.1 and $65.6 million respectively between 2014 and 2038. These revenues have decreased since May based on the changes to the project site plan and program; Table 5 shows a comparison. In addition, the pledged URA property tax increment will generate approximately $42.7 million during the same period. By 2020, these three revenue sources will represent $6.1 million in revenue annually. Based off the financial analysis, it is anticipated that sales tax increment contribution towards debt service and the supplemental reserve ends by 2018 until 2029 when additional sales tax increment contributions are required to meet the debt payments on the bond. The total sales tax increment contribution is anticipated to be $9 million. 1 Packet Pg. 10 Agenda Item 1 Item # 1 Page 9 Table 5 Comparison of Public Finance Revenues Generated by the Project, 2014-2038 ($ Millions) Cumulative Annual Funding 2020 Cumulative Annual Funding 2020 First Three Revenue Sources 25 years 25 years District Property Tax $ 50.0 $ 2.1 $ 43.1 $ 1.8 URA Property Tax Increment 55.2 2.3 42.7 1.9 Developer Sales PIF 64.7 2.3 65.6 2.4 Metro District Funding $ 169.9 $ 6.7 $ 151.4 $ 6.1 Today's Value $ 62.5 $ 55.3 May 7th Jan 14th Slide 21 from the presentation In addition, sales tax increment has been pledged to support the issuance of a bond. There are three components to the sales tax generated by the Project, including: Base - Existing sales tax revenue generated by retailers in the Mall and surrounding Project Area. Transfer - Revenue from other areas of the city that shift to the Mall after redevelopment. New - The net new revenue, or revenue in excess of base and transfer, associated with the redeveloped mall project. In addition, the sales tax revenue can be broken by the various pieces of the effective 3.85 percent rate. There are two main pieces, including: Core City Sales Tax Rate - This corresponds to the long-standing 2.25 percent General Fund rate. Dedicated City Sales Tax Rate - This corresponds to the sum total of four dedicated sales taxes including: Transportation (0.25 percent), Natural Areas (0.25 percent), Building on Basics (0.25 percent), and Keep Fort Collins Great (0.85 percent) dedicated sales tax rates for a total of 1.60 percent. The revenue generated by the constituent pieces of the Sales Tax rates is summarized in Table 6. The base, transfer, and new components of the Dedicated City Sales Tax Rate will generate approximately $106 million between 2014 and 2038. In addition, the Core Rate base Sale Tax Revenue will generate approximately $44.5 million during the same period. Therefore, the total revenue generated by the project that is not pledged to the bond is approximately $150.5 million. 1 Packet Pg. 11 Agenda Item 1 Item # 1 Page 10 Table 6 Comparison of Sales Tax Revenue Generated by the Project, 2014-2038 ($ Millions) Cumulative Annual Funding 2016 Cumulative Annual Funding 2016 City Sales Tax Revenue 25 years First Full Year 25 years First Full Year Dedicated Base / Transfer / New $ 104.6 $ 3.5 $ 106.0 $ 3.6 Core Base 44.4 1.8 44.5 1.8 Core Transfer & New 102.7 3.1 104.6 3.2 City Sales Tax $ 251.7 $ 8.4 $ 255.1 $ 8.7 Today's Value $ 94.7 $ 94.8 May 7th Jan 14th Slide 22 from the presentation The Agreement only pledges the transfer and new (together, the incremental) sales tax revenue related to the Core Rate. Based on the financial analysis, these sales tax increment revenues represent approximately $104.6 million (up from $102.7 million in May) or the anticipated pledged sales tax increment revenue. Public Finance Package Structure To better understand the structure of the public finance package, Table 7 summarizes the anticipated sales tax revenue split between the two rates (Core and Dedicated) by the three components (Base, Transfer, and New). In 2016, the total pledged sales tax increment revenue to the project (identified by the yellow) totals $3.2 million (up from $3.1 million in May) of the approximately $5.1 million generated by the Core Rate (2.25 percent). The City retains the remaining $5.4 million generated by the unpledged Dedicated Rate (1.60 percent) and Core Rate base. These numbers increase to $3.4 million in pledged increment revenue and $5.6 million in retained revenue by 2018. 1 Packet Pg. 12 Agenda Item 1 Item # 1 Page 11 Table 7 Comparison of Annual Sales Tax Revenue Generated by the Project, 2016 & 2018 ($ Millions) Base Transfer New Total Base Transfer New Total Core Tax - 2.25% 1.8 1.0 2.1 $ 4.9 1.8 0.9 2.3 $ 5.1 Dedicated Tax - 1.6% 1.3 0.7 1.5 $ 3.5 1.3 0.7 1.6 $ 3.6 Total $ 3.1 $ 1.7 $ 3.6 $ 8.4 $ 3.2 $ 1.6 $ 3.9 $ 8.6 Base Transfer New Total Base Transfer New Total Core Tax - 2.25% 1.8 1.1 2.2 $ 5.1 1.8 1.0 2.4 $ 5.3 Dedicated Tax - 1.6% 1.3 0.8 1.6 $ 3.7 1.3 0.7 1.7 $ 3.8 Total $ 3.1 $ 1.9 $ 3.8 $ 8.8 $ 3.2 $ 1.8 $ 4.2 $ 9.1 May 7th Sales Tax in 2016 Sales Tax in 2018 Jan 14th Sales Tax in 2016 Sales Tax in 2018 Slide 25 from the presentation As stated, the pledged sales tax increment revenue serves as the last revenue source to support the issuance of the bond. Therefore, as the remaining three pledged revenues grow over time the need for pledged sales tax increment revenue to support the bonds diminishes. The financial analysis demonstrates this in the estimated cash flow presented in Table 8. The bond will likely be issued in 2014 with three years of capitalized interest. Based on forecasts, revenue will first be available to fund debt payments (including contributions to the supplemental reserve) of the bond in 2015. In 2015, the pledged revenue sources, excluding the sales tax increment revenue, will generate approximately $1.8 million towards bond repayment and reserve contributions. The pledged sales tax increment revenue will generate an additional $0.8 million. These two revenue sources combined will generate sufficient revenue (along with capitalized interest) to cover the debt payment and reserve contributions required by the bond. The pledged revenue sources, excluding the sales tax increment revenue, will grow to $4.9 million in 2017 largely due to the delay in property tax valuation and collection. The pledged sales tax increment revenue is anticipated to grow to $3.3 million. Together, these revenues will cover the debt payment and the last sizable portion of the supplemental reserve fund contribution. Starting in 2018, the pledged revenue sources, excluding sales tax increment revenue, are anticipated to cover the debt payment, which is anticipated to terminate in 2038. As a result, starting in 2018 the pledged sales tax increment revenue will not be required to meet debt payments or reserve contributions until 2029 when additional sales tax increment contributions will be required. These revenues will, according to the terms of the Agreement, be released back to the City. In 2018, the total sales tax revenue retained by the City and sales tax increment revenue released back to the City will rise to $9.0 million and continue at this rate with 2 percent growth per year. This constitutes a $4.2 million increase in net new revenues compared to the existing $4.8 million of sales tax revenue generated in 2012. Approximately $7.2 million of the pledge sales tax increment is used between 2015 and 2017 to support the debt payment and reserve contributions. Additional sales tax increment contributions will be required between 2029 and 2038 increasing the total estimated sales tax increment applied to the bonds to $9.0 million. 1 Packet Pg. 13 Agenda Item 1 Item # 1 Page 12 Table 8 Anticipated Public Finance Cash Flow, 2012-2019 ($Millions) May 7th First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax Sales Tax Revenue 2012 4.8 2015 2.1 2.5 4.6 --- 5.0 5.0 2016 2.3 3.1 5.4 --- 5.3 5.3 2017 6.5 3.2 9.7 --- 5.4 5.4 2018 6.5 3.3 6.0 3.3 + 5.5 = 8.8 2019 6.7 3.4 5.7 3.4 + 5.6 = 9.0 Jan 14th First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax Sales Tax Revenue 2012 4.8 2015 1.8 0.8 2.7 --- 3.8 3.8 2016 2.4 3.2 5.6 --- 5.5 5.5 2017 4.9 3.3 8.1 0.2 5.5 5.7 2018 5.5 3.4 5.3 3.4 + 5.6 = 9.0 2019 5.5 3.5 5.4 3.5 + 5.7 = 9.2 Slide 24 from the presentation One final change between the May financial package and the current version relates to the use of excess PIF revenue. The project financials are conservatively based on a sales estimate of $378 per square foot. The National average in 2012 for all malls was $455 per square foot and newer malls in Denver were $600 to $700 per square foot. Anticipating this upside potential, staff built into the May agreement the creation of a Foothills Mall Fund (FMF) where excess revenues from the PIF could be used for specific improvements associated with the Mall. The intent was to keep the Mall fresh and competitive in the retail market. On further reflection, staff considered the FMF provided additional value to the Developer and not the community. The Agreement requires the Developer to maintain the Mall as a “Class A” shopping Agenda Item 1 Item # 1 Page 13 Other Taxing Entities – Could benefit because the URA could elect to discontinue collecting property tax increment allowing these revenues to flow to the entities ahead of schedule. City – Benefits from early payment of the bonds and termination of the sales tax increment, as well as from the sales tax revenue generated by the increase from $378 to $478 per square foot. B. Resolution 2014-005 Updating Prior Action Regarding the Redevelopment of Foothills Mall and Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. Under Resolution 2013-045, the City committed to work with Larimer County to develop such agreements as may be necessary to develop a model for evaluating fiscal impacts associated with the formation of tax increment financing districts. Work was to be completed by December 15, 2013. For two reasons the work has not been completed - the County wants to involve multiple municipalities and when the floods hit, the County put this work on hold. The County has confirmed its desire to complete this work in 2014 and would like a one year extension. In light of the modification to the schedule for the Mall project, language regarding property tax increment to be shared with the County has been updated. C. First Reading of Ordinance No. 008, 2014, Vacating Foothills Parkway Right-of-Way Between College Avenue and Mathews Street, and Vacating a Portion of Mathews Street. Foothills Parkway was originally built and dedicated as a public street from College Avenue to Stanford Road with the development of the Foothills Fashion Mall (now known as Foothills Mall). In 1988, an expansion to Foothills Mall for Foley’s (now Macy’s) resulted in the vacation of Foothills Parkway right-of- way from Mathews Street to Stanford Road as approved in Ordinance No. 116, 1987 adopted by City Council on May 17, 1988. The owner of Foothills Mall has requested that the remaining public portion of Foothills Parkway from College Avenue to Mathews Street be vacated. Additionally, a portion of right-of-way along the west side of Mathews Street would be vacated due to the owner realigning a portion of Mathews Street intersecting Foothills Parkway, resulting in excess right-of-way. The owner received approval by the Planning and Zoning Board on February 7, 2013 of the Foothills Mall Redevelopment Project Development Plan and a condition of approval of the plan was made requiring this portion of Foothills Parkway be vacated. Vacations of public right-of-way are governed by City Code Section 23-115, which provides for an application and review process prior to submission to the City Council for formal consideration. The process includes review by potentially affected utility agencies, City staff, emergency service providers, and affected property owners in the vicinity of the right-of-way proposed to be vacated. This review process was followed in conjunction with review of the Foothills Mall Redevelopment Project Development Plan, and based on comments received; the Planning Development and Transportation Director recommended that the vacation be approved. With the proposed vacation, easements for access, emergency access, drainage, utilities, and transit would be retained, preserving rights to utilize the vacated portion for these purposes. In order to ensure that the vacation is tied to the approval of the Foothills Mall Redevelopment, this vacation is conditioned upon the recording of the Ordinance, which must occur concurrently with the recordation of the subdivision plat known as "Foothills Mall Redevelopment Subdivision". If Foothills Parkway and a portion of Mathews Street are vacated, the City will no longer be responsible for the maintenance, and as such, the roadways can be eliminated from the City’s street maintenance program. Ongoing maintenance of the area being vacated is the responsibility of the abutting property owner; however, with redevelopment of Foothills Mall, a metro district has been established, and maintenance of the vacated area would be assigned to the metro district. 1 Packet Pg. 15 Agenda Item 1 Item # 1 Page 14 D. First Reading of Ordinance No. 009, 2014, Authorizing the Conveyance of a Permanent Irrigation Ditch Easement and Right-of-Way to the Larimer County Canal No. 2 Irrigating Company Within the South College Avenue Frontage Road. The Larimer No. 2 Ditch is currently located on the Foothills Mall site and is to be relocated to the west of College Avenue in an effort to accommodate the redevelopment of the mall and the adjacent properties. The proposal is to realign the ditch so that it flows underground in a box culvert from its current location immediately north of Red Lobster restaurant, within the College Avenue frontage road and day lighting at its current location immediately south of Monroe Drive. It should be noted that the additional benefit of realigning the ditch allows a pedestrian underpass to be constructed in the location where the ditch currently flows under College Avenue. The pedestrian underpass will allow the redeveloped mall to have excellent pedestrian connections to the Mason Corridor and MAX transit stations. The frontage road along College Avenue immediately adjacent to Markley Motors and Red Lobster restaurant was dedicated as right-of-way in the 1970's as part of the subdivision that created those commercial sites. Right-of-way that is dedicated to the City of Fort Collins is owned and maintained by the City; however, the adjacent property owners have a property right in the right of way in that if the City ever vacated the right of way, under State law, ownership of the land would revert back to those adjacent property owners. In order for the City to dedicate the required easement to the Larimer No. 2 Ditch Company for the relocated ditch, the City must acquire that underlying property right from Markley Motors and Red Lobster. The City has acquired the necessary property interests from Markley Motors and is in the process of acquiring the necessary property interests from Red Lobster. This Ordinance authorizes the City to convey a permanent easement to the Ditch Company to operate and maintain ditch facilities under the College Avenue frontage road, once the necessary remainder property interests have been acquired. It should be noted that the City is not seeking compensation from the ditch company for the conveyance of the easement because the relocation is occurring as a result of the redevelopment of the mall. FINANCIAL / ECONOMIC IMPACT Financial Impact to the City The financial analysis evaluated the impact of the sales tax increment pledge over the full 25 years of the bond term. This provides a fuller understanding of the impact to the City of the sales tax increment pledge. The total anticipated sales tax revenue generated by the Core Rate between 2014 and 2038 is approximately $149 million with $105 million in sales tax increment pledged toward the bonds (Transfer and New; shown in yellow), as shown in Table 9. The Dedicated Rate generates approximately $106 million between 2014 and 2038. The grand total of anticipated sales tax is approximately $255 million. Table 9 Comparison of Sales Tax Revenue Generated by the Project, 2014-2038 ($ Millions) Base Transfer New Total Base Transfer New Total Core Tax - 2.25% 44 35 68 $ 147 44 31 74 $ 149 Dedicated Tax - 1.6% 32 24 49 $ 105 32 22 52 $ 106 Total $ 76 $ 59 $ 117 $ 252 $ 76 $ 53 $ 126 $ 255 May 7th Jan 14th Sales Tax over 25 Years Sales Tax over 25 Years Slide 23 from the presentation 1 Packet Pg. 16 Agenda Item 1 Item # 1 Page 15 As indicated previously, the staff presentation includes two public finance scenarios: (a) an assumed interest rate of 7.00 percent, and (b) an assumed interest rate of 7.25 percent. In both scenarios, the estimated new revenue between 2014 and 2038 is approximately $126 million. In the 7.00 percent scenario the estimated sales tax increment contribution to debt service is approximately $9.0 million. The estimated sales tax increment contribution to debt service in the 7.25 percent scenario is estimated at $12.0 million. Therefore, the estimated net new sales tax revenue received by the City or remitted to the City as released pledged sales tax increment, after subtracting the anticipated sales tax increment contribution to debt service, will range between $114 and $117 million or between $4.6 and $4.7 million annually on average. This amount is up from $108 million in net new revenue estimated in May. A change in the amount of sales tax transfer accounts for a substantial portion of the estimated increase in net new sales tax revenue to the City. Adjusting the above revised net new sales tax revenue estimates to exclude this increase in sales tax transfer reduces the anticipated range to between $108 and $111 million. This is an even more conservative estimate of anticipated net new revenue and remains on par with the previously estimated amount of $108 million presented in May. Economic Impact Analysis Overview The Project will generate economic impacts during construction and operations. The construction activities, occurring while the Developer builds and renovates Foothills, will generate one-time impact for construction workers and businesses in the area. The on-going operations of the redeveloped mall and the occupying tenants will create annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. An economic impact analysis prepared by TIP Strategies and ImpactDataSource evaluates the plan to redevelop the Foothills Mall (Attachment 3). The analysis uses the Project Development Plan as approved by the Planning & Zoning (P&Z) Board, on February 7, 2013, as the input, assuming a $312 million project investment and 446 multi-family residential units. The one-time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these works, as shown in Table 9. The redeveloped mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200-300 workers but employment is trending lower. It is projected that tenants leasing space in the redeveloped mall will employ a total of 1,200 workers when fully leased. In total, the mall’s operations will support 1,434 total workers and $28.4 million in workers’ earnings annually. Table 9 Summary of One-Time and Annual Economic Impacts Construction (One-Time) One-Time Jobs 2,905 Earnings $160,096,057 Average Earnings per Job $55,111 Operations (On-going)** Annual Jobs 1,434 Earnings $28,375,412 Average Earnings per Job $19,785 In addition to economic impacts, the redevelopment of the mall will generate one-time revenues collected by the City of Fort Collins. These revenues will be generated by the construction and renovation investment. Specifically, the redevelopment and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one-time revenue from Sales and Use Taxes will total approximately $5.1 million with approximately $4.8 million in construction 1 Packet Pg. 17 Agenda Item 1 Item # 1 Page 16 materials sales and use tax revenue and $197,000 in sales and use tax from construction worker spending, as shown in Table 10. The total building permit and plan check fees, capital expansion fees, utility fees, and street oversizing fees will total approximately $12.4 million. Table 10 Summary of One-Time Fiscal Impacts Sales and Use Taxes - Construction Materials $4,870,250 Sales and Use Taxes - Construction Worker Spending $197,245 Total Sales & Use Taxes $5,067,495 Building Permit & Plan Check Fees $848,414 Capital Expansion Fees (Less Credits) $3,441,306 Stormwater, Water & Wastewater Fees (Less Credits) $6,332,604 Street Oversizing Fees $1,729,600 Total Permit, Plan Check, and Fees $12,351,924 If Foothills Parkway and a portion of Mathews Street are vacated, the City will no longer be responsible for the maintenance, and as such, the roadways can be eliminated from the City’s street maintenance program. Ongoing maintenance of the area being vacated is the responsibility of the abutting property owner; however, with redevelopment of Foothills Mall, a metro district has been established, and maintenance of the vacated area would be assigned to the metro district. ENVIRONMENTAL IMPACTS Triple Bottom Line Analysis City staff prepared a Triple Bottom Line Analysis Map (TBLAM) for the Foothills Mall Redevelopment Project. The purpose of looking at major projects through a triple bottom line lens is to identify opportunities and issues in an unbiased and broad way. The TBLAM is not used to make decisions but rather to identify and work to mitigate issues, to optimize solutions whenever possible, and to inform decisions. The Mall TBLAM is presented in Attachment 4. Carbon Footprint A carbon footprint analysis was completed for the Mall Redevelopment Project at City Council’s request, to evaluate the footprint of the proposed redeveloped mall and compare that to the footprint of the existing mall and to the existing mall if it were operating under thriving conditions. A local sustainability engineering consulting firm, The Brendle Group, prepared the analysis in conjunction with City staff. The footprint analysis was reviewed and refined at a May 3, 2013 mall charrette and was provided to City Council on May 3rd separate from the AIS. Storm Water Quality The Foothills Redevelopment is required to meet current storm water standards, which will result in significant upgrades to the site. Runoff will be captured and treated to remove pollutants and discharged off site at a much slower rate than the existing condition. The storm water management and treatment facilities will provide significant reductions in peak rates of runoff from the site seen during all storm events. The reductions will create improvements in the environment downstream of the site such as reductions in the erosion of channels and improved water quality in rivers and streams that receive the runoff from the site. 1 Packet Pg. 18 Agenda Item 1 Item # 1 Page 17 BOARD / COMMISSION RECOMMENDATION At its April 24 and May 1, 2013 meetings, the Economic Advisory Commission (EAC) recommended supporting the Redevelopment and Reimbursement Agreement. At its October 16, 2013 meeting, the EAC recommended supporting the revised Redevelopment and Reimbursement Agreement. PUBLIC OUTREACH The following lists outreach associated with all URA actions related to Foothills Mall. Outreach between 2007-2008 April 4, 2007 written notification to property owners and business interests April 6, 2007 published notification in the Coloradoan April 11, 2007 public open house April 17, 2007 City Council meeting, submitting the Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County April 19, 2007 Planning and Zoning Board meeting Written notification to taxing entities May 15, 2007 City Council meeting, adopting the Foothills Urban Renewal Plan November 18, 2008 City Council meeting, dissolving the Foothills Urban Renewal Plan Outreach between 2011-2013 January 21, 2011 written notification to property owners and business interests February 1, 2011 City Council meeting, authorizing staff to prepare an Existing Conditions Survey April 20, 2011 public open house May 17, 2011 City Council meeting, submitting Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County May 19, 2011 written notifications to taxing entities July 12, 2011 written notification to property owners and business interests 2011, general outreach was also provided throughout the year to community organizations, such as the South Fort Collins Business Association and Chamber of Commerce September 6, 2011 City Council meeting adopting the Midtown Urban Renewal Plan July 18, 2012 written notification to property owners and business interests (Mall area only) November 8, 2012 URA Board meeting, adopting an Agreement to Negotiate with mall Owner December 12, 2012 written notice to property owners and business interests December 12, 2012 published notification in the Coloradoan February 28, 2013 City Council meeting, reaffirming the Midtown Existing Conditions Survey and Urban Renewal Plan March 28, 2013 written notice to property owners and business interests regarding the plan amendment March 28, 2013 published notification in the Coloradoan regarding the plan amendment. General Outreach on the Financial Investment Package: Economic Advisory Commission Meeting, Special Session, April 24, 2013 and May 1, 2013 (Provided under separate cover as part of the City Council Packet on May 2, 2013) Fort Collins Area Chamber of Commerce, Local Legislative Affairs Committee, April 26, 2013 Open House for Board and Commission Chairs, April 30, 2013 Economic Advisory Commission Meeting, October 16, 2013 Council Finance Committee Meeting, October 21, 2013 Public Open House, October 30, 2013. 1 Packet Pg. 19 Agenda Item 1 Item # 1 Page 18 ATTACHMENTS 1. Council Agenda Item Summary, May 7, 2013 (w/o attachments) (PDF) 2. EPS memo on Sales per Square Foot Comparables (PDF) 3. ImpactDataSource Economic Impact Analysis (PDF) 4. Triple Bottom Line Analysis (PDF) 5. Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (PDF) 6. Larimer County Canal No. 2 Ditch Easement Location Map (PDF) 7. Powerpoint presentation (PDF) 8. Comparison of Revised Agreement with Agreement dated 5/7/13 (PDF) 1 Packet Pg. 20 COPY COPY COPY ATTACHMENT 1 DATE: May 7, 2013 STAFF:Darin Atteberry, Mike Beckstead, Bruce Hendee, Josh Birks AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 28 SUBJECT Resolution 2013-042 Approving a Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, LLC, and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. EXECUTIVE SUMMARY This resolution authorizes and approves the execution of a Redevelopment and Reimbursement Agreement, by the City Manager of the City of Fort Collins, in connection with the redevelopment of the Foothills Mall. BACKGROUND / DISCUSSION Project Overview Location Located within the Midtown Urban Renewal Plan (Adopted, September 2011), the Foothills Fashion Mall (“Foothills”) encompasses approximately 76.3 acres of property bounded generally on the north by Swallow Road, on the east by Stanford Road, on the south by Monroe Drive, and on the west by College Avenue. The project is zoned C-G General Commercial and is located in the Transit-Oriented Development Overlay District (the “TOD District”). History The original Foothills Fashion Mall opened in 1973 and was constructed, owned, and operated by a partnership that included the Everitt Companies. The Everitt Companies developed numerous real estate projects during the 1970s, 80s, and 90s throughout Fort Collins. In 1988, Foothills was expanded to include additional anchor stores (J.C. Penney, Mervyn’s). In 1995, Foothills changed further with an expansion of the Foley’s (now Macy’s) building. The Fort Collins Urban Renewal Authority (“URA”) was created by City Council in 1982 to prevent and eliminate conditions in the community related to certain “blight factors”, as defined in Sections 31-25-101, et seq., Colorado Revised Statutes (the “Urban Renewal Law”). Using tax increment financing (“TIF”), the URA is able to leverage public and private investment to remediate blight, which is complimentary to the City’s broader goal of promoting redevelopment and infill in targeted areas. Midtown Fort Collins has been identified as one of these targeted areas for infill and redevelopment, primarily because it includes a significant portion of the College Avenue commercial corridor and the Mason Corridor collectively referred to as the “Community Spine”. A major influence in Midtown is Foothills Mall. For the first decades of operation, the Mall was a major regional retail center that attracted shoppers from northern Colorado, southeastern Wyoming, and southwestern Nebraska. The mall underwent several expansions in 1980s and 1990s, but nevertheless has experienced declining sales and increasing vacancies, partly due to increasing competition from newer retail centers in northern Colorado. The loss of two major anchor stores, Mervyn’s and JC Penny, only further contributed to the mall’s decline and solidified the revitalization of the mall as a top City priority. General Growth Properties (GGP) purchased the aging mall in 2003 with plans to revitalize and redevelop the property. Recognizing the mall has significant barriers to redevelopment, the City early on explored TIF via the URA as a potential tool to assist with its redevelopment. In the City’s 2005 Economic Action Plan, the mall is identified as the “single most important retail redevelopment initiative in the City”, and identifies the establishment of an Urban Renewal Plan as the “most effective manner for the City to assist in the redevelopment”. In 2007, the City hired a consultant to conduct an Existing Conditions Survey to determine if the area contained sufficient conditions according to Urban Renewal Law to declare it blighted. The 2007 Survey affirmed blight factors exist and declared the area blighted. City Council ultimately adopted Resolution 2007-052 and 2007-053 declaring Foothills Mall blighted and approving the Foothills Mall Urban Renewal Plan, respectively. Unfortunately, GGP did 1.1 Packet Pg. 21 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -2- ITEM 28 not initiate any redevelopment activities and decided to postpone investment because of the economic environment at the time. In order to preserve the ability to use TIF in the future, City Council passed Resolution 2008-110 which repealed Resolution 2007-053 and dissolved the Foothills Mall Urban Renewal Plan. Despite this setback, redevelopment of the mall continued to be a top priority. In 2010, the City conducted a Redevelopment Study for Midtown; while this analyzed Midtown as a whole, a significant portion was dedicated to the mall and potential redevelopment scenarios that could occur. One of the action items from this Study was for staff to examine Midtown for conditions of blight and determine whether it met statutory qualifications for an Urban Renewal Area. In February 2011, as a result of the recommended action item, City Council adopted Resolution 2011-008 authorizing and directing staff to prepare an Urban Renewal Plan and Existing Conditions Survey (Survey) for the Midtown Area, including Foothills Mall. Since the mall had been previously examined in 2007, staff conducted a basic site evaluation and determined that the blight factors cited in 2007 remained present in 2011. Ultimately, City Council adopted Resolutions 2011-080 and 2011-081 adopting the Midtown Existing Conditions Survey and Midtown Urban Renewal Plan, respectively. Conversations between the City and GGP about redevelopment of the mall continued throughout this time. However, GGP decided not to invest in the property and sold Foothills Mall and adjacent properties to Walton Foothills Holdings IV, LLC (the “Developer”) in July 2012. Seeing redevelopment of Foothills Mall seemed imminent, the URA sent notice mid-July to property owners and tenants within and immediately adjacent to the mall informing those parties that ownership had changed. Additionally, the notice solicited redevelopment proposals for the URA to take into consideration. Although general inquiries were received, the URA only received a formal proposal from Walton/Alberta. In September 2012, the URA sent the Walton/Alberta a formal letter selecting them as the developer for the project. Project Description Alberta Development Partners in partnership with Walton Street Capital (the “Developers”) intend to undertake a comprehensive redevelopment of the Foothills Fashion Mall (the “Project”). The redevelopment will include a mixed- use redevelopment with a commercial/retail component (734,979 square feet), a commercial parking structure and up to 800 multi-family dwelling units on 76.3 acres. Retail The project proposes to deconstruct portions of existing Foothills and renovate the remaining original structure, for a 388,084 square foot, one-level, enclosed shopping mall. In addition, various free standing buildings including the Commons At Foothills Mall Building, the Shops at Foothills Mall buildings, The Plaza at Foothills Mall, the Corner Bakery, Christy Sports and the Youth Activity Center building would all be deconstructed. In their place, eight new retail buildings are proposed along South College Avenue, ranging from 9,300 square feet to 31,715 square feet in size. Internal to the site, five new retail building are proposed to be located northwest of the existing enclosed mall. These five building range from 7,636 square feet to 12,000 square feet in size. To the southeast of the existing mall, four new restaurants are proposed ranging in size from 8,088 square feet to 124,000 square feet as well as a new, two-story 24,000 square foot Foothills Activity Center to replace the Youth Activity Center. Additionally, a new 86,754 square foot entertainment and theater building is proposed located southeast of the new restaurants. The large east green area and smaller west green plazas anchor the pedestrian network. The commercial component provides a total of 3,581 parking spaces via a six level, 84,663 foot parking structure and surface parking spaces. Residential The residential component of the project proposes up to 800 multi-family units distributed among five buildings that will include a mix of studio, one, two, and three bedroom units. Current plans call for the construction of 446 residential units. The residential component of the project includes 1,422 parking space via three separate subterranean structures (858 spaces), an above ground structure (472 spaces) and 92 open surface parking stalls. The residential buildings will range in height from two- to five-stories. Generally, the residential building heights get taller as the project develops from the north to south along Stanford Road. 1.1 Packet Pg. 22 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -3- ITEM 28 Green Development Practices/Components The Developer is committed to developing an efficient and high performing project in an effort to meet or exceed many of the objectives identified in the City’s Climate Action Plan. It should be noted that redevelopment of the Foothills Mall will inherently achieve many significant improvements including the removal and mitigation of existing hazardous materials (Asbestos), a complete upgrade of stormwater facilities on-site, and the inclusion of updated HVAC and lighting systems, which are significantly more efficient than the existing systems. The Developer is currently engaged with the City of Fort Collins in a modified Integrated Design Assistance Program (IDAP) in an effort to identify opportunities for improved building performance. City staff and the Developer’s design team has a scheduled half-day design charrette on May 3 to identify design opportunities that will result in high- performance buildings that exceed building code requirements for energy performance. The objectives of that meeting are to identify proposed design elements that go above and beyond code requirements; to collaborate on new opportunities for enhanced design features to decrease the project’s carbon impact; to quantify the project’s carbon impact, and to identify and agree on a clear plan of action to achieve a high performance project. The results of the meeting will be provided to City Council under separate cover. The Developer has committed to numerous other “green” components within the project, which are included in Attachment 1 and titled “Foothills Mall Renovation and Fort Collins Green Code Compliance.” The City of Fort Collins has provided the Developer a response to that memo with a list of enhancements and additional measures to improve the environmental sustainability of the project (Attachment 2). The Developer has agreed to comply with those measures and will be updating their memo to include the enhancements. The updated memo will be provided to City Council under separate cover. The Climate Action Plan includes a goal of diverting 50% of waste from the landfills and Alberta addressed this policy in several ways. As part of the deconstruction/demolition of the existing mall, Alberta has committed to dismantle the existing structures in manner that diverts at least 50% (by weight) of all materials from the landfill. Alberta Development has provided a memo which articulates how this will be accomplished, which is included as Attachment 3. It should be noted that demolition and construction waste material diversion is included as an agenda item during the May 3 charrette to identify ways to increase the diversion amount even more. The recycling plan during operations of the mall is also a key component of the overall waste diversion goals and several recommendations have been made to the Developer by the City’s Environmental Services that address this issue. These recommendations are included within the enhancements and additional measures provided to the Developer to improve the environmental sustainability of the project (Attachment 2). An overall waste management plan will be developed for the project and is included as part of the May 3 charrette. Blight Conditions A first step in any Urban Renewal Authority project is the determination of whether an area constitutes a blighted area under Colorado Urban Renewal Law. The principle purpose of determining blight and creating the related urban renewal plan and programs and/or projects of redevelopment is to eliminate blight or prevent the spread of blight and/or the further deterioration of blight areas (Colorado Revised Statutes Section 31-25-107(4.5). In 2007, the City of Fort Collins commissioned Terrance Ware & Associates to conduct an Existing Conditions Study to determine if the Foothills Mall area met the statutory requirements to be determined a “blighted area”. The 2007 study concluded the area was blighted based on six blight conditions. Furthermore, all of the blight conditions were found to still be in existence in April 2011 when the City conducted a second existing conditions study as part of the Midtown Existing Conditions Survey, which was third-party verified by MTA Planning & Architecture. In addition to deterioration of structures, obsolescence of building systems and poor or unsafe ingress and egress, there were three site conditions that contributed to the determination of blight. These included: poor and hazardous pedestrian circulation; inadequate vehicular circulation; and, inadequate drainage facilities. The three site conditions were found to be present, independent of each other, in multiple locations; however, all three site conditions were found to exist on the southwestern portion of the site. The plan identified missing sidewalk connections along College Avenue, as well as a lack of pedestrian connections from College Avenue to the interior of the site; inadequate vehicular circulation within the interior of the site due to a lack of drive aisles and curb and gutter; as well as poor drainage as a result of the topography of the site. In particular, the site containing Sears is lower than the remaining mall site, and is immediately adjacent to a drainage ditch. The report states: “Drainage of the 72-acre parcel is highly 1.1 Packet Pg. 23 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -4- ITEM 28 inadequate. There are only six drains to facilitate drainage for the entire property. This causes significant back-ups often resulting in flooding during heavy rainstorms.” The site plan submitted to and approved by the Planning and Zoning Board on February 7, 2013, reflects an effort to meet the goals of City Plan, the Land Use Code, and remediate the blight conditions identified in the 2007 Existing Conditions Study. In addition to the meeting the goals of City Plan and the Land Use Code, the current site plan remediates the three highlighted blight conditions in the following manner. In relation to vehicular circulation, the plan reconfigures the site to provide definite drive aisles with curb and gutter. The proposed drive aisles provide clear sight lines, and are clearly delineated with landscaped islands. Additionally, the proposed new building does not extend as far to the west as the existing building, and the existing drainage ditch is to be accommodated with an underground culvert. This eliminates the “bottleneck” issue and provides ample space for overall vehicular circulation. The existing lack of adequate pedestrian connections is alleviated by addressing both the vertical and horizontal constraints on the site. In order to achieve adequate pedestrian connections to the interior of the site, a significant amount of fill (roughly eight 8 feet in some locations) is proposed on the site. The fill would allow the pedestrian connections from College Avenue to the interior of the site to meet ADA requirements. Additionally, new sidewalks are proposed along College Avenue, as well as the main entrance into the mall from College Avenue. Finally, the inadequate drainage on the site is remedied by adding the fill, which allows for improved flow to the exterior of the site, as well as adding new drainage structures where appropriate. Eligible Costs Certain projects costs are eligible for public assistance per Colorado Revised Statutes relating to Urban Renewal and Special Districts (Title 32). The types of eligible costs for each (Urban Renewal and Metro District) are relatively broad and include such categories as: • Acquisition of a blighted area; • Demolition and removal of buildings and improvements; • Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the objectives of the urban renewal plan; • Carrying out plans for a program through voluntary action and the regulatory process for the repair, alteration, and rehabilitation of buildings or other improvements in accordance with the urban renewal plan; • Acquisition of any other property where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, lessen density, eliminate obsolete or other uses detrimental to the public welfare, or otherwise remove or prevent the spread of blight or deterioration or to provide land for needed public facilities. It is important to note that the total amount of eligible costs per the Colorado Revised Statutes is significantly higher than the $53 million in public assistance being offered. However, the Developer and the City of Fort Collins established a process to identify project costs that are extraordinary costs associated with remediating blighted conditions on the property, or costs associated with public improvements or public infrastructure. These are costs in which there is direct public benefit. The process of identifying the eligible costs balanced the need to maximize the public benefit while ensuring the public assistance was the minimum amount necessary to make the project financially viable. The following provides a brief description of each of the eligible costs summarized in Table 1 below: • Land Acquisition: This amount represents the estimated value of the land underlying the portions of the project that include the public gathering spaces such as the east and west lawns, the Foothills Activity Center, and other green or public spaces on the site. • Parking Structure: This cost represents 75% of the parking structure. The structure allows for greater utilization of site including the public gathering spaces. • Demolition/Abatement: Demolition and deconstruction of the aging facility represents an extraordinary cost associated with remediating blight and mitigation the hazardous materials. • Fixture and Amenities: This represents urban design enhancements to the public gathering spaces (east and west lawns) to provide high quality of place. 1.1 Packet Pg. 24 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -5- ITEM 28 • Ditch Relocation: Relocating a segment of the Larimer No. 2 ditch to the west side of College Ave. represents an extraordinary cost associated with remediating blight. • Site Work: This cost is associated with earthwork (grade and fill), site walls to alleviate topographic constraints on the site, as well as asphalt paving, curb and gutter, and sidewalks. • Utilities: This represents upgrades and improvements to sanitary sewer, storm water, water lines and fire water systems. • Soft Costs: Architectural and engineering costs associated with activity center, parking structure, as well as materials testing, and environmental/abatement management. • Foothills Activity Center: A publicly owned and operated activity center that includes gymnasium, public meeting rooms and after-school programs for youth. • Pedestrian Crossing/Underpass: A pedestrian connection linking MAX BRT and Foothills Mall utilizing Larimer No. 2 Ditch alignment under College Ave. Table 1 Summary of Eligible Costs for Reimbursement ($ Millions) Public Benefit Fort Collins provides a high quality of place attributed to the lively historic downtown and the city’s impressive parks, trails and open space networks. These community assets make Fort Collins an attractive place for both a well- educated workforce and diverse industries. The redevelopment of Foothills represents an opportunity to strengthen the existing high quality of place. The Project meets numerous City Plan policy objectives and occurs in a Targeted Redevelopment Area (as defined by City Plan). Thus, the project represents an opportunity to achieve more than economic outcomes but an opportunity to strengthen the overall community. City Plan Objectives The Project as proposed meets a variety of City Plan objectives, including but not limited to: Economic Health • EH 1.4 – Target the Use of Incentives to Achieve Community Goals: The project will achieve broader community goals as described, including redevelopment within a Targeted Infill Area, infrastructure upgrades, and support of transit. • EH 4.1 – Prioritize Targeted Redevelopment Areas: The Link-N-Greens site is within an identified targeted redevelopment area in City Plan. 1.1 Packet Pg. 25 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -6- ITEM 28 Community and Neighborhood Livability • LIV 5.1 – Encourage Targeted Redevelopment and Infill: The Foothills site is encompassed by the identified targeted redevelopment areas within City Plan. In addition, the Project meets the purpose of this principle because it: N Promotes the revitalization of existing, underutilized commercial and industrial areas; N Concentrates higher density housing and mixed-use development in locations that will be served by high frequency transit in the future; N Promotes reinvestment in an area where infrastructure already exists; and N Increases economic activity in the area to benefit existing residents and businesses and may provide the stimulus to redevelop. • LIV 5.2 – Target Public Investment along the Community Spine: Additionally, the project occurs in the identified “community spine,” which has been identified as the “highest priority area for public investment in streetscape and urban design improvements and other infrastructure upgrades to support infill and redevelopment and to promote the corridor’s transition to a series of transit-supportive, mixed-use activity centers”. • LIV 21.4 – Provide Access to Transit: The project includes access to bus stops along College Avenue, Foothills Parkway and Stanford Road. In addition, the Project lies within a short walking distance of both the Horsetooth and Swallow MAX stops. Furthermore, the project will include the construction of a pedestrian underpass across College Avenue facilitating a safe link to MAX and Mason Corridor. Transportation • T 3.3 – Transit Supportive Design: The proposed Project includes significant enhancements to pedestrian and bicycle connectivity around and thru the site. In addition, the underpass connection to MAX signifies a major opportunity to connect the Project to the MAX Bus Rapid Transit system. Economic Health Strategic Plan In addition, the project as proposed addresses one of the four goals of the Economic Health Strategic Plan adopted by City Council in June 2012. This goal is supported by several strategies, which this project addresses specifically. Goal 4: Develop community assets and infrastructure necessary to support the region’s employers and talent. • Targeted Infill & Redevelopment: This project falls in a defined targeted and infill area and delivers a significant redevelopment project as a catalyst in the area. Midtown Urban Renewal Area The Midtown Urban Renewal Plan, adopted in 2011 and ratified and confirmed in February 2013, is intended to stimulate private sector development in the Plan area using a combination of private and public investment and Urban Renewal Authority financing. Numerous objectives are identified to guide such investment, and the redevelopment of Foothills Mall accomplishes several, including: • Facilitate redevelopment by private enterprise through cooperation among developers and public agencies to plan, design, and build needed improvements. • Address and remedy conditions in the area that impair or arrest the sound growth of the City. • Implement the Comprehensive Plan. • Redevelop and rehabilitate the area in a manner which is compatible with and complementary to unique circumstances in the area. • Improve pedestrian, bicycle, vehicular and transit-related circulation and safety. • Contribute to increased revenues for all taxing entities. 1.1 Packet Pg. 26 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -7- ITEM 28 Financial Investment Overview On November 8, 2012, exclusive negotiations between the URA and Walton/Alberta were initiated under an Agreement to Negotiate. Negotiations with regard to the public financing package have been occurring since. The public financing package includes the dedication of four revenue sources in the following priority order: Sources • Foothills Metropolitan District Capital Mills – The Metro District will pledge 50 mills of ad valorem real property tax revenue to the bond. This mill levy expires when the bond is fully repaid or within 25 years, whichever comes first. • Property Tax Increment – The URA will pledge 100 percent of the annual ad valorem property tax increment revenue over a 25-year period, less an administrative fee up to a maximum of 1.5 percent of the gross property tax increment revenue received by the URA. • Public Improvement Fee – The Developer will impose a 1 percent Public Improvement Fee (PIF) on all taxable transactions within the Project and pledge these revenues to the bond. This revenue source sunsets after 30 years. • Sales Tax Increment – The URA will pledge 100 percent of the annual sales tax increment generated above a base by the Project related to the City’s 2.25 percent General Fund Sales Tax rate (the “Core Rate”). The above priority order works such that the first revenue source pledged to bond repayment is the last revenue source out. Therefore, the Sales Tax Increment Pledge, despite existing for all 25 years, will begin to release funds back the City as early as 2018. Project Cost Summary The total redevelopment project is estimated to cost $312 million. These costs are split between the commercial/retail at approximately $230 million or 74 percent and 446 anticipated residential units at a total cost of $82 million or 26 percent. The eligible costs described above total (See Table 1) approximately $53 million or 17 percent of the total cost and 23 percent of the commercial/retail costs. The eligible costs represents the target amount of bond proceeds to be generated by the pledged revenues. Assumptions The financial analysis resulting in the public finance investment contemplated in the proposed Redevelopment and Reimbursement Agreement relies on several key assumptions. Each of these assumptions is described briefly below: • Project Timing – The financial analysis assumes a May 8 “go” date for commencement of construction activity. This result in a ground breaking in June/July 2013 and substantial completion of the project in November 2014. Demolition of the old Sears building, and construction of the new building in place of Sears, along with the residential is not likely to be complete until sometime in 2015. • Annual Sales Per Square Foot – The financial analysis assumes $350 per square foot in annual retail sales once the project stabilizes, assumed to occur in 2016. This assumption relies on several inputs, including the average annual sales per square foot figure for all Malls as provided by the International Council of Shopping Centers ($458 per square foot for 2012). In addition, Economic & Planning Systems provided a full analysis of retail transfer, inflow and growth, which was used to project the anticipated retail sales level at the redeveloped mall (See Attachment 4 for more details). • Occupancy – The financial analysis assumes, based on the construction schedule, that 80 percent of the gross leasable area will be occupied by retail tenants by December 31, 2015. This number will grow to 95 percent occupancy and remain at this level by December 31, 2016. • Retail Sales Growth – The financial analysis assumes that retail sales will grow by 2 percent annually. This pace of growth is consistent with historical growth rates in the City of Fort Collins of 5.4 percent annually since 1990. In addition, this rate falls short of the historic growth rate of inflation as measured by the Consumer Price Index, 2.9 percent annually since 1982. • Property Value Growth – The financial analysis assumes that real property values will increase by 1 percent annually. This pace of growth is conservative compared to the historical growth rate in of real property in Larimer County. 1.1 Packet Pg. 27 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -8- ITEM 28 Public Finance Revenue Summary The Redevelopment and Reimbursement Agreement before the URA Board for consideration contemplates utilizing the pledged revenues, as described, to support the issuance of a bond by the Foothills Metro District. The proceeds from the bond issuance are intended to pay or reimburse the eligible costs and to pay cost of issuance. As described, the bond will be supported by four revenue sources. The primary revenues supporting the bond will come from the Metro District in the form of annual ad valorem taxes on real property and a PIF. These two revenue sources will generate $50.0 and $64.7 million respectively between 2015 and 2038, as shown in Table 2, over the 25 year anticipated life of the bond. In addition, the pledged URA property tax increment will generate approximately $55.2 million during the same period. By 2017, these three revenue sources will represent $6.4 million in revenue annually, the first full year of stabilized Metro District ad valorem tax, PIF and property tax increment. Based off the financial analysis, it is anticipated that these three revenue sources will be able to cover the full debt payment of the bond by the end of 2017. Table 2 Summary of Public Finance Revenues Generated by the Project, 2015-2038 ($ Millions) In addition, sales tax increment has been pledged to support the issuance of a bond. There are three components to the sales tax generated by the Project, including: • Base – Existing sales tax revenue generated by retailers in the Mall and surrounding Project Area. • Transfer – Revenue from other areas of the city that shift to the Mall after redevelopment. • New – The net new revenue, or revenue in excess of base and transfer, associated with the redeveloped mall project. In addition, the sales tax revenue can be broken by the various pieces of the effective 3.85 percent rate. There are two main pieces, including: • Core City Sales Tax Rate – This corresponds to the long-standing 2.25 percent General Fund rate. • Dedicated City Sales Tax Rate – This corresponds to the sum total of four dedicated sales taxes including: Transportation (0.25 percent), Natural Areas (0.25 percent), Building on Basics (0.25 percent), and Keep Fort Collins Great (0.85 percent) dedicated sales tax rates for a total of 1.60 percent. The revenue generated by the constituent pieces of the Sales Tax rates is summarized in Table 3. The base, transfer, and new components of the Dedicated City Sales Tax Rate will generate approximately $104.6 million between 2015 and 2038. In addition, the Core Rate base Sale Tax Revenue will generate approximately $44.4 million during the same period. Therefore, the total revenue generated by the project that is not pledged to the bond is approximately $149.0 million. 1.1 Packet Pg. 28 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -9- ITEM 28 Table 3 Summary of Sales Tax Revenue Generated by the Project, 2015-2038 ($ Millions) The Agreement only pledges the transfer and new sales tax revenue related to the Core Rate. Based on the financial analysis, these sales tax revenues represent approximately $102.7 million or the anticipated pledge sales tax revenue. However, the Agreement distinguishes between sales tax pledge and remittance/share. Each item is described below: • Sales Tax Pledge – The Agreement pledges only tax revenues generated by the Core Rate, only the tax revenue in excess of the base and defines the base as the 12 months prior to the modification of the Plan to authorize tax increment. • Sales Tax Share/Remittance – The Agreement recognizes that the sales tax pledge is only the extent necessary to support debt service and reserve contributions after all other revenue sources contribute completely to support the bond. Public Finance Package Structure To better understand the structure of the public finance package, Table 4 summarizes the anticipated sales tax revenue split between the two rates (Core and Dedicated) by the three components (Base, Transfer, and New). In 2016, the total pledged sales tax revenue to the project (identified by the yellow) totals $3.1 million of the approximately $4.9 million generated by the Core Rate (2.25 percent). The City retains the remaining $5.3 million generated by the unpledged Dedicated Rate (1.60 percent) and Core Rate base. These numbers increase to $3.3 million in pledged revenue and $5.5 million in retained revenue by 2018. Table 4 Annual Summary of Sales Tax Revenue Generated by the Project, 2016 & 2018 As stated, the pledged sales tax revenue serves as the last revenue source to support the issuance of the bond. Therefore, as the remaining three pledge revenues grow over time the need for pledged sales tax revenue to support the bonds diminishes to zero. The financial analysis demonstrates this in the estimated cash flow presented in Table 5. 1.1 Packet Pg. 29 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -10- ITEM 28 The bond will likely be issued in 2013 with three years of capitalized interest. Based on forecasts, revenue will first be available to fund the debt service of the bond in 2015. In 2015, the pledged revenue sources, excluding the sales tax revenue, will generate approximately $2.1 million towards bond repayment and reserve contributions. The pledged sales tax revenue will generate an additional $2.5 million. These two revenue sources combined will generate sufficient revenue (along with capitalized interest) to cover the debt payment and reserve contributions required by the bond. The pledged revenue sources, excluding the sales tax revenue, will grow to $6.5 million in 2017 largely due to the delay in property tax valuation and collection. The pledged sales tax revenue is anticipated to grow to $3.2 million. Together, these revenues will cover the debt payment and the last sizable portion of the supplemental reserve fund contribution. Starting in 2018, the pledged revenue sources, excluding sales tax revenue, are anticipated to cover the debt payment thru the rest of the bond term, which is anticipated to terminate in 2038. As a result, starting in 2018 the pledged sales tax revenue will not be required to meet debt payments or reserve contributions. These revenues will, according to the terms of the Agreement, be released back to the City. At that point, the total sales tax revenue retained by the City will rise to $8.8 million and continue at this rate with 2 percent growth per year. This constitutes a $4.0 million increase in net new revenues compared to the existing $3.2 million base (both Core and Dedicate Rates) and estimated $1.6 million in transfer. As a result approximately $8.8 million of the pledge sales tax is used between 2013 and 2017 to support the debt payment and reserve contributions. Table 5 Anticipated Public Finance Cash Flow, 2015-2019 ($ Millions) FINANCIAL / ECONOMIC IMPACTS Financial Impact to the City Net Revenue to the City The financial analysis evaluated the impact of the sales tax pledge over the full 25 years of the bond term. This provides a fuller understanding of the impact to the City of the sales tax pledge. The total anticipated sales tax revenue generated by the Core Rate between 2015 and 2038 is approximately $147 million with $103 million pledged toward the bond issuance (Transfer and New; shown in yellow), as shown in Table 6. The Dedicated Rate generates approximately $105 million between 2015 and 2038. The grand total of anticipated sales tax is approximately $252 million. The estimated new revenue between 2015 and 2038 is approximately $117 million. Subtracting the estimated $8.8 million in tax used to make debt payments and reserve contributions between 2013 and 2017 leaves approximately $108 million in net new to the City or approximately $4.3 million annually on average. 1.1 Packet Pg. 30 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -11- ITEM 28 Table 6 Summary of Sales Tax Revenue Generated by the Project, 2015-2038 ($ Millions) Sensitivity/Risk Analysis Staff has evaluated 3 risk scenarios that are summarized in Table 7. Scenario I – current assumptions on the District bond assume a non-rated issue with a term of 25 years at a 7% interest rate supported by the four pledged revenues as previously discussed. If the interest rate were to increase to 8%, debt service would increase by $17M and cause an $11M reduction in the Net New City Revenue. Scenario II – assumes a 10% reduction in sales per square foot (a reduction from the current assumption of $350 sq. ft. to $315 sq. ft.) and a reduction in assessed property values of 10%. Metro District revenues would decline by $20M, Remitted Sales Tax Revenue would increase by $6M, and Net New City Revenue would decline by $23M, largely driven by the reduction in sales tax receipts. Scenario III – assume a 20% reduction in sales per square foot (a reduction from the current assumption of $350 sq. ft. to $280 sq. ft.) and no change to assumed property valuations. Metro District revenue would decline by $13M, Remitted Sales Tax Revenue would increase by $2M, and Net New City Revenue would decline by $35M. In summary, the most significant risk to the City occurs with from a shortfall in sales per square foot. As previously stated, staff believe the sales per square foot assumption of $350 is conservative compared with other retail activity benchmark data. Table 7 Summary of Sensitivity Analysis ($ Millions) Economic Impact Analysis Overview The Project will generate economic impacts during construction and operations. The construction activities, occurring while the Developer builds and renovates Foothills, will generate one-time impact for construction workers and businesses in the area. The on-going operations of the redeveloped mall and the occupying tenants will create annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. 1.1 Packet Pg. 31 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -12- ITEM 28 An economic impact analysis prepared by TIP Strategies and ImpactDataSource evaluates the plan to redevelop the Foothills Mall (Attachment 5). The analysis uses the Project Development Plan as approved by the Planning & Zoning (P&Z) Board, on February 7, 2013, as the input, assuming a $312 million project investment and 446 multi-family residential units. The one-time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these works, as shown in Table 8. The redeveloped mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200-300 workers but employment is trending lower. It is projected that tenants leasing space in the redeveloped mall will employ a total of 1,200 workers when fully leased. In total, the mall’s operations will support 1,434 total workers and $28.4 million in workers’ earnings annually. Table 8 Summary of One-Time and Annual Economic Impacts Construction (One-Time) One-Time Jobs 2,905 Earnings $160,096,057 Average Earnings per Job $55,111 Operations (On-going)** Annual Jobs 1,434 Earnings $28,375,412 Average Earnings per Job $19,785 In addition to economic impacts, the redevelopment of the mall will generate one-time revenues collected by the City of Fort Collins. These revenues will be generated by the construction and renovation investment. Specifically, the redevelopment and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one-time revenue from Sales and Use Taxes will total approximately $5.1 million with approximately $4.8 million in construction materials sales and use tax revenue and $197,000 in sales and use tax from construction worker spending, as shown in Table 9. The total building permit and plan check fees, capital expansion fees, utility fees, and street oversizing fees will total approximately $12.4 million. Table 9 Summary of One-Time Fiscal Impacts Sales and Use Taxes – Construction Materials $4,870,250 Sales and Use Taxes – Construction Worker Spending $197,245 Total Sales & Use Taxes $5,067,495 Building Permit & Plan Check Fees $848,414 Capital Expansion Fees (Less Credits) $3,441,306 Stormwater, Water & Wastewater Fees (Less Credits) $6,332,604 Street Oversizing Fees $1,729,600 Total Permit, Plan Check, and Fees $12,351,924 ENVIRONMENTAL IMPACTS Triple Bottom Line Analysis City staff prepared a Triple Bottom Line Analysis Map (TBLAM) for the Foothills Mall Redevelopment Project. The purpose of looking at major projects through a triple bottom line lens is to identify opportunities and issues in an unbiased and broad way. The TBLAM is not used to make decisions but rather to identify and work to mitigate issues, to optimize solutions whenever possible, and to inform decisions. The Mall TBLAM is presented in Attachment 6. 1.1 Packet Pg. 32 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -13- ITEM 28 The City of Fort Collins is committed to analyzing major projects using a triple bottom line approach. Over the next several months, the Sustainability Services Area will be working to identify and optimize the set of tools and approaches to conduct these analyses in conjunction with the development of the community sustainability plan. Carbon Footprint A carbon footprint analysis is being completed for the Mall Redevelopment Project at City Council’s request. The analysis will evaluate the footprint of the proposed redeveloped mall and compare that to the footprint of the existing mall and to the existing mall if it were operating under thriving conditions. A local sustainability engineering consulting firm, The Brendle Group, has been retained to prepare the analysis in conjunction with City staff. The footprint analysis will be reviewed and refined at the May 3, 2013 mall charrette and will be provided to City Council by close of business on May 3rd under separate cover. Storm Water Quality The Foothills Redevelopment is required to meet current storm water standards, which will result in significant upgrades to the site. Runoff will be captured and treated to remove pollutants and discharged off site at a much slower rate than the existing condition. The storm water management and treatment facilities will provide significant reductions in peak rates of runoff from the site seen during all storm events. The reductions will create improvements in the environment downstream of the site such as reductions in the erosion of channels and improved water quality in rivers and streams that receive the runoff from the site. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BOARD / COMMISSION RECOMMENDATION The Economic Advisory Commission met April 24 and May 1, 2013 and voted 6-1 to recommend the following: “The Economic Advisory Commission believes that the Foothills Mal redevelopment is an important part of the Fort Collins City Plan and economic vision. As such, the EAC supports the public finance assistance package for the Foothills Redevelopment Project as described by City staff. As part iof this recommendation ,the EAC highly recommends good faith efforts by the City in order to understand the full revenue and cost implications for, and to collaborate with other taxing entities based on forthcoming rigorous analysis of the forecasted and eventually actual impacts of redevelopment.” PUBLIC OUTREACH The following lists outreach associated with all URA actions related to Foothills Mall. Outreach between 2007-2008 • April 4, 2007 written notification to property owners and business interests • April 6, 2007 published notification in the Coloradoan • April 11, 2007 public open house • April 17, 2007 City Council meeting, submitting the Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County • April 19, 2007 Planning and Zoning Board meeting • Written notification to taxing entities • May 15, 2007 City Council meeting, adopting the Foothills Urban Renewal Plan • November 18, 2008 City Council meeting, dissolving the Foothills Urban Renewal Plan 1.1 Packet Pg. 33 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) COPY COPY COPY May 21, 2013 -14- ITEM 28 Outreach between 2011-2013 • January 21, 2011 written notification to property owners and business interests • February 1, 2011 City Council meeting, authorizing staff to prepare an Existing Conditions Survey • April 20, 2011 public open house • May 17, 2011 City Council meeting, submitting Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County • May 19, 2011 written notifications to taxing entities • July 12, 2011 written notification to property owners and business interests • 2011, general outreach was also provided throughout the year to community organizations, such as the South Fort Collins Business Association and Chamber of Commerce • September 6, 2011 City Council meeting adopting the Midtown Urban Renewal Plan • July 18, 2012 written notification to property owners and business interests (Mall area only) • November 8, 2012 URA Board meeting, adopting an Agreement to Negotiate with mall Owner • December 12, 2012 written notice to property owners and business interests • December 12, 2012 published notification in the Coloradoan • February 28, 2013 City Council meeting, reaffirming the Midtown Existing Conditions Survey and Urban Renewal Plan • March 28, 2013 written notice to property owners and business interests regarding the plan amendment • March 28, 2013 published notification in the Coloradoan regarding the plan amendment General Outreach on the Financial Investment Package: • Economic Advisory Meeting, Special Session, April 24, 2013 and May 1, 2013 (See Attachment 8) • Fort Collins Area Chamber of Commerce, Local Legislative Affairs Committee, April 26, 2013 • Open House for Board and Commission Chairs, April 30, 2013 ATTACHMENTS 1. Memorandum from JPRA Architects RE: Foothills Mall Renovation and Fort Collins Green Code Compliance, March 13, 2013. (Update under separate cover) 2. Memorandum RE: Recommendations to Enhance Environmental Sustainability of the Foothills Mall Redevelopment Project, April 23, 2013. 3. Memorandum from Alberta Development Corporation RE: Deconstruction Plan for Foothills Mall Redevelopment, April 22, 2013 4. Memorandum from Economic & Planning Systems RE: Foothills Redevelopment Sales Forecasts, April 30, 2013. 5. Economic Impact Analysis, Foothills Mall Redevelopment, April 30, 2013 6. Fort Collins Triple Bottom Line Analysis Map, Prepared by City/URA Staff, May 1, 2013 7. Preliminary Pedestrian Crossing Design, April 19, 2013 8. Economic Advisory Commission, Minutes, May 1, 2013 9. South Fort Collins Business Association, Letter of Support, 10. Boards/Commissions Session Summary, April 30, 2013 1.1 Packet Pg. 34 Attachment: Council Agenda Item Summary, May 7, 2013 (w/o attachments) (Foothills Mall) M EMORANDUM To: Joshua Birks, Economic Health Director From: Dan Guimond and Chris Leutzinger Subject: Foothills Development Sales Forecasts Date: April 30, 2013 This memorandum summarizes EPS’ sales performance assumptions used in the public financing model for the proposed Foothills Mall Development Plan. Retail sales levels are first estimated by store category. The projected sales performance levels are compared to other area shopping centers to validate that the assumptions used are reasonably conservative. The sources of 2015 annual store sales are then estimated including the recapture of existing leakage by trade area residents, sales attributable to new trade area growth, and new inflow to Fort Collins to calculate net new sales to the City. Sales Performance The average sales performance by retail store category was derived through a three step estimation process: • Existing stores remaining in the project were estimated to increase their average annual sales by 25 percent over current (2011) levels based on the greater market attraction of an expanded and fully leased project. • Newly signed tenants, as well as other specified tenants on Alberta’s leasing plan identified as likely to be signed were estimated to perform at the average national sales level. • The remaining unleased spaced was estimated to achieve an overall average of $325 per square foot. Based on these factors, total annual retail sales are estimated at $229.2 million on 710,979 square feet (734,979 square feet minus 24,000 square foot Foothills Activity Center) which equates to $322 per square foot. Shopping centers typically calculate their average sales not including department stores. Excluding Macy’s, average sales rise to $349 per square foot based on $203.5 million in annual sales on 582,429 square feet as shown in Table 1 on the following page. ATTACHMENT 2 1.2 Packet Pg. 35 Attachment: EPS memo on Sales per Square Foot Comparables (Foothills Mall) Joshua Birks April 30, 2013 Foothills Development Sales Forecasts Page 2 123078_Sales Memo_4-30 Table 1 Estimated Annual Sales Foothills Redevelopment Individual shopping center sales figures are closely held. Private firms such as Alberta Development Partners do not publish their figures. EPS compiled average sales per square foot numbers for specified centers from multiple sources including IRS 10-K annual reports for publicly traded companies and discussions with officials at the major shopping center REITs as shown in Table 2. Table 2 Shopping Mall Sales Comparables Size $ PSF New Sales Existing Sales Net Sales New Stores Sq. Ft. Avg. $ Total $ Total $ Total Convenience Goods 45,822 $447 $20,473,806 $6,202,640 $14,271,166 Shopper's Goods General Merchandise 128,550 $200 $25,710,000 $24,935,261 $774,739 Other Shopper's Goods 314,054 $392 $122,995,686 $64,274,798 $58,720,887 Subtotal 442,604 $336 $148,705,686 $89,210,060 $59,495,626 Eating and Drinking 222,553 $270 $60,016,925 $5,775,707 $54,241,218 Building Material & Garden 0 $0 $0 $0 $0 Total Retail Goods 710,979 $322 $229,196,417 $101,188,406 $128,008,011 Total Excluding Dept. Stores and F 582,429 $349 $203,486,417 Source: Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Models\Foothills-Alberta\Sales Flow Model\[123078-SalesFlows-TPI_030613.xlsx]Net New Summary (2) Mall $ PSF Year EPS estimate for Foothills Mall $349 Colorado Malls Cherry Creek 1 $721 2012 Park Meadows $650 2011 FlatIron Crossing $548 2012 Twenty Ninth Street (Boulder) $588 2012 ICSC National Mall Average National Average $365 2009 National Average $386 2010 National Average $417 2011 National Average $455 2012 % Change 2009 - 2012 25% ICSC Regional Averages Mountain $534 2012 1 Based on average of Taubman 23 mall portfolio Source: ICSC; Industry Sources; Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Data\Foothills\[123078-Mall Sales data_2012.xlsx]Mall Sales 1.2 Packet Pg. 36 Attachment: EPS memo on Sales per Square Foot Comparables (Foothills Mall) Joshua Birks April 30, 2013 Foothills Development Sales Forecasts Page 3 123078_Sales Memo_4-30 According to ICSC, average national mall sales reached $455 per square foot in 2012. This is up about 24.7 percent over average sales of $365 per square foot in 2009. In general sales in the western US are higher than the national averages; the ICSC Mountain Region average was $534 per square foot in 2012. Locally, Park Meadows sales were $650 per square foot in 2011 which is up 8.9 percent over 2009 sales of $597 per square foot. FlatIron Crossing sales were $548 per square foot, up 36 percent from $403 per square foot in 2009. Twenty Ninth Street, an outdoor lifestyle center in Boulder, experienced average sales of $588 in 2012, up almost 41 percent from $389 in 2009. Cherry Creek Mall sales are conservatively estimated at $721 per square foot which is the average for Taubman’s portfolio of 23 centers nationwide. EPS is therefore comfortable that its sales estimates are reasonably conservative for purposes of evaluating public financing options. Sales by Source EPS also estimated the portion of new annual retail sales (excludes existing store sales) by source including Leakage Recapture, Sales from New Growth, and New Inflow. The total of these sources equal net new sales to the City. The remaining portion of sales is assumed to be sales transfers (Cannibalization) from existing stores. The expanded Foothills Mall development is projected to generate $229.2 million in sales which is comprised of $101.2 million in existing store sales and $128.0 in new store sales. These new store sales are expected to be derived from approximately 27 percent Leakage Recapture, 9 percent New Growth, and 30 percent New Inflow resulting in an estimated 67 percent Net New Sales or $85.2 million in annual sales. The remaining $42.8 million is estimated to be sales transfers as shown in Table 3. Table 3 Estimated Annual Net New Sales Foothills Mall Redevelopment Net Sales Leakage Capture New Growth New Inflow Net New Cannibalized New Stores $ Total % of Net Sales from Leakage Capture % of Net Sales from New Growth % of Net Sales from New Inflow $ $ Convenience Goods $14,271,166 10% 10% 14% $4,797,014 $9,474,152 Shopper's Goods General Merchandise $774,739 30% 20% 30% $619,791 $154,948 Other Shopper's Goods $58,720,887 39% 8% 39% $49,912,754 $8,808,133 Subtotal $59,495,626 39% 8% 39% $50,532,545 $8,963,081 Eating and Drinking $54,241,218 20% 10% 25% $29,832,670 $24,408,548 Building Material & Garden $0 0% 0% 0% $0 $0 Total Retail Goods $128,008,011 27% 9% 30% $85,162,230 $42,845,781 % of Net Sales 67% 33% Source: Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Models\Foothills-Alberta\Sales Flow Model\[123078-SalesFlows-TPI_030613.xlsx]Net New Summary (2) 1.2 Packet Pg. 37 Attachment: EPS memo on Sales per Square Foot Comparables (Foothills Mall) Prepared for: City of Fort Collins 300 LaPorte Avenue Fort Collins, Colorado 80522 Prepared by: Impact DataSource, LLC 4709 Cap Rock Drive Austin, Texas 78735 www.impactdatasource.com A REPORT OF THE ECONOMIC IMPACT OF THE FOOTHILLS MALL RENOVATION IN FORT COLLINS, CO April 30, 2013 ATTACHMENT 3 1.3 Packet Pg. 38 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) TABLE OF CONTENTS Executive Summary………………………………………………...………………………………………………………………3 Project Summary Introduction………………………………………………...………………………………………………………………………5 Description of The Project……………………………………………………………………………………………………5 Summary of the Economic Impact of the Project…………………………………………………………………5 Analysis of Temporary Construction Activity Activities During Renovation and Construction at Foothills Mall………………………………………… 6 Revenues Collected During Renovation and Construction at Foothills Mall…………………………6 Analysis of Worker & New Household Spending Additional Taxable Sales During Operations…………………………………………………………………………7 Additional Sales Tax Collections During Operations………………………………………………………………7 METHODOLOGY Conduct of the Analysis……………………………………………………………………………………………………… 8 Discussion of Economic Impact Calculations…………………………………………………………………………8 Page 2 1.3 Packet Pg. 39 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) EXECUTIVE SUMMARY Project Background Alberta Development Partners plan to significantly renovate the Foothills Mall and develop 460 residential apartment units on the site. The developer plans to invest $318 million in new renovation and construction including soft costs. The project is expected to provide a one‐of‐a‐kind shopping, entertainment and community gathering experience featuring contemporary architecture that honors Fort Collins' vibrant, outdoor‐centric and sustainability‐minded community. The mall will draw shoppers from across northern Colorado and southern Wyoming, resulting in significant fiscal benefits for Fort Collins. Economic Impact The renovation of Foothills Mall and construction of multi‐family residential units will generate temporary economic impacts during construction and on‐going impacts by tenants operating in the renovated mall. The construction activities will generate a one‐time impact for construction workers and businesses in the area. The renovated mall will create on‐going annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. The one‐time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these workers. The renovated mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200‐300 workers but employment is trending lower. It is projected that tenants leasing space in the renovated mall will employ a total of 1,200 workers when fully leased. In total, the mall's operations will support 1,434 total workers and $28.4 million in workers' earnings annually. Economic Impact Construction (One‐Time): Total Total Change in Jobs 2,905 Total Change in Earnings $160,096,057 Average Earnings per Job $55,111 Renovated Mall Operations (On‐going)* Total Total Change in Jobs 1,434 Total Change in Earnings $28,375,412 Average Earnings per Job $19,784.84 * Total employment and earnings at the mall during the first year of leased‐up activity. One‐Time Revenues Collected by Fort Collins During Construction/Renovation The Foothills Mall renovation will generate one‐time fiscal impacts for Fort Collins. Specifically, the renovation and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one‐time revenues collected by Fort Collins during construction and renovation related to the Foothills Mall project is summarized below. One‐Time Revenues Collected by Fort Collins During Construction/Renovation Sales and Use Taxes ‐ Construction Materials $4,870,250 Sales and Use Taxes ‐ Construction Worker Spending $197,245 Capital Expansion Fees TBD Building Permits TBD Plan Check Fees TBD Total $5,067,495 Page 3 1.3 Packet Pg. 40 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) EXECUTIVE SUMMARY On‐Going Revenues Collected by Fort Collins as a Result of the Foothills Mall Project Fort Collins has negotiated a development plan that includes revenue sharing between the City and the developer to help finance a portion of the project costs using the incremental real and business personal property tax collections at the site and incremental sales tax collections at the mall over the next 25 years. In addition, the workers employed directly or indirectly by mall tenants as well as new residential households residing in a portion of the 460 residential units will generate additional sales tax revenue for Fort Collins on an on‐going basis. An estimate of the additional sales tax collections generated through worker spending and new household spending is summarized below. On‐Going Revenues Collected by Fort Collins Related to Worker Spending and New Household Spending Sales and Use Taxes ‐ Worker Spending $146,006 Sales and Use Taxes ‐ New Household Spending $75,355 Total $221,362 While the above is a summary of the results of this analysis, details are on the following pages. Page 4 1.3 Packet Pg. 41 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) PROJECT SUMMARY Introduction This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas based economic consulting, research and analysis firm. The report estimates some of the impacts associated with the construction and renovation of the Foothills Mall. The report summarizes the one‐time economic and fiscal benefits related to the construction and renovation activity. In addition, some new on‐going revenues are estimated related to worker spending and new household spending. Description of the Project Alberta Development Partners plan to significantly renovate the Foothills Mall and develop 460 residential apartment units on the site. The developer plans to invest $318 million in new renovation and construction including soft costs. The project is expected to provide a one‐of‐a‐kind shopping, entertainment and community gathering experience featuring contemporary architecture that honors Fort Collins' vibrant, outdoor‐centric and sustainability‐minded community. The mall will draw shoppers from across northern Colorado and southern Wyoming, resulting in significant fiscal benefits for Fort Collins. Fort Collins has negotiated a development plan that includes revenue sharing between the City and the developer to help finance a portion of the project costs using the incremental real and business personal property tax collections at the site and incremental sales tax collections at the mall over the next 25 years. Summary of the Economic Impact of the Project The project will have the following economic impact on the City of Fort Collins area: Annual On‐Going Economic Impact Direct Indirect & Induced Total Total number of permanent direct and indirect jobs to be created 1,200 234 1,434 Salaries to be paid to direct and indirect workers $20,128,536 $8,246,876 $28,375,412 Average Salaries to be paid to direct and indirect workers $16,774 $35,213 $19,785 Number of new residential apartment units to be built in the City as a part of the project 460 0 460 Number of new households who will move to the City (50% of new units) 230 0 230 Number of new residents in the City 575 0 575 Number of new students expected to attend local school district 220 0 220 Summary of Taxable Spending Total One‐Time Taxable Sales During Construction $131,623,250 Annual On‐Going Taxable Sales related to Worker and New Household Spending $5,749,650 How this economic activity translates into additional costs and benefits for local taxing districts is summarized next. Page 5 1.3 Packet Pg. 42 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) ANALYSIS OF TEMPORARY CONSTRUCTION ACTIVITY Activities During Renovation and Construction at Foothills Mall The construction activity at the Foothills Mall will result in purchases subject to the use tax in Fort Collins. The projected use tax collections are summarized below. Construction Purchases Subject to Use Taxes Taxable Purchases Construction Purchases Subject to Use Taxes $126,500,000 Total Construction Expenditures $253,000,000 % Spent on Materials 50% % Purchases Subject to Use Taxes 100% Construction Purchases Subject to Use Tax $126,500,000 In addition, a portion of the wages paid to construction workers will likely be spent in Fort Collins and generate additional sales taxes for the City. Taxable Spending by Construction Workers Taxable Retail Sales Direct and spin‐off construction worker taxable spending $5,123,250 Total Construction Expenditures $253,000,000 % Spent on Labor (Const. Worker Earnings) 50% % Spent on taxable items 27% % Spent within Fort Collins 15% Taxable Spending by Construction Workers $5,123,250 Revenues Collected During Renovation and Construction at Foothills Mall Fort Collins will collect use taxes on construction material purchases and on local taxable spending by construction workers. Also, the construction activity will require capital expansion fees, building permits and plan check fees to be paid to the city. A summary of the one‐time revenues collected by Fort Collins related to the construction and renovation is presented below. One‐Time Revenues Collected by Fort Collins During Construction/Renovation Sales and Use Taxes ‐ Construction Materials $4,870,250 Sales and Use Taxes ‐ Construction Worker Spending $197,245 Capital Expansion Fees TBD Building Permits TBD Plan Check Fees TBD Total $5,067,495 Page 6 1.3 Packet Pg. 43 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) ANALYSIS OF WORKER & NEW HOUSEHOLD SPENDING Additional Taxable Sales During Operations While the city and development district have made assumptions about the taxable sales at the mall, the on‐going activity at the mall will support additional taxable sales in Fort Collins. For example, the direct and spin‐off workers supported by the mall employers will spend a portion of their earnings on taxable goods and services. A portion of this spending will occur in Fort Collins outside of the mall area. Also, the new households to Fort Collins will also result in additional taxable sales. Therefore, the table below summarizes some of the estimated additional taxable sales supported by the mall renovation and residential construction. Additional Annual Taxable Spending Supported by Workers and New Households Taxable Retail Sales Direct and spin‐off worker taxable spending $3,792,374 Total Workers' Earnings $28,375,412 % Spent on taxable items 27% % Spent within Fort Collins 55% % Spent outside of Mall site 90% New Household Spending $1,957,276 Number of new Housing Units 460 % of units occupied by net new households* 50% Average household income in Fort Collins $63,673 % Spent on taxable items 27% % Spent within Fort Collins 55% % Spent outside of Mall site 90% Additional Taxable Retail Sales in Area $5,749,650 * Impact DataSource assumes that 50% of the new residential units will be occupied by new residents to the city and therefore these households will support additional taxable sales. See the explanation detailed in the Methodology Section. In total, workers and new households are projected to support $5.7 million in taxable sales each year after renovation and construction. These taxable sales have thus far not been considered in the analysis of the project and represent taxable sales in existing businesses not located at the mall. Additional Sales Tax Collections During Operations The additional taxable spending by workers and new households will result in tax revenue for Fort Collins. The table below summarizes the annual revenue collected by Fort Collins not related to sales at the Foothills Mall site. On‐Going Revenues Collected by Fort Collins Related to Worker Spending and New Household Spending Sales and Use Taxes ‐ Worker Spending $146,006 Sales and Use Taxes ‐ New Household Spending $75,355 Total $221,362 Page 7 1.3 Packet Pg. 44 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) METHODOLOGY Conduct of the Analysis This analysis was conducted by Impact DataSource using estimates provided to the City of Fort Collins by the firm, local rates and information and assumptions by Impact DataSource. Using this data, the economic impact from the project and some revenues to be collected by Fort Collins were estimated. Discussion of Economic Impact Calculations The economic impact as calculated in this report can be categorized into two main types of impacts. 1. Direct economic impacts are the immediate economic activities generated by the firm or project. These impacts include the employment at the firm and salaries paid to the firm's workers as well as expenditures made by the firm. 2. Indirect and induced economic impacts represent the additional economic activity that is supported by the firm or project. Indirect jobs and salaries are created in new or existing area firms, such as maintenance companies and service firms that may supply goods and services to the firm. In addition, induced jobs and salaries are created in new or existing local businesses, such as retail stores, gas stations, banks, restaurants, and service companies that may supply goods and services to new workers and their families. Note: This report labels the combined indirect and induced impacts as simply "Indirect". To estimate the indirect and induced economic impact of the firm and its employees on the area, regional economic multipliers were used. This economic analysis utilized economic impact multipliers obtained an input/output model produced by from Economic Modeling Specialists Inc. (EMSI). The EMSI multipliers used in this analysis are specific to Larimer County and various industries. Two types of regional economic multipliers were used in this analysis: an employment multiplier and an earnings multiplier. An employment multiplier was used to estimate the number of indirect and induced jobs created and supported in the area. An earnings multiplier was used to estimate the amount of salaries to be paid to workers in these new indirect and induced jobs. The multipliers show the estimated number of indirect and induced jobs created for every one direct job at the firm and the amount of salaries paid to these workers for every dollar paid to a direct worker at the firm. The multipliers used in this analysis are listed below: Industry (NAICS) Earnings Employment Commercial and Institutional Building Construction (236220) 0.33 0.62 New Multifamily Housing Construction (236116) 0.32 0.50 Family Clothing Stores (448140) 0.41 0.18 Department Stores (except Discount Department Stores) (452111) 0.41 0.22 Motion Picture Theaters (except Drive‐Ins) (512131) 0.49 0.18 Full‐Service Restaurants (722110) 0.41 0.22 Limited‐Service Restaurants (722211) 0.40 0.17 Explanation of New Households in Fort Collins Residential impact studies often argue that 100% of newly constructed residential units will be occupied by new‐to‐the‐ area households. This argument is based on the assumption that if local household moves into the newly constructed unit, a household from outside of the area will occupy the unit vacated by the first household. Alternatively, it is argued that it may be that the new home allows the local area to retain a household that would otherwise move out of the area for lack of suitable housing. Opposing this view is the argument that employment drives household formation and the impetus behind new households in the local area is new jobs, not new residential units. Impact DataSource believes that the supply of housing is an important role in household formation and that the attraction of Fort Collins' quality of life supports the assumption that 50% of the new residential units will be occupied by new‐to‐the area households. Page 8 1.3 Packet Pg. 45 Attachment: ImpactDataSource Economic Impact Analysis (Foothills Mall) Triple Bottom Line Analysis Map (TBLAM) Evaluated by: Adapted from the City of Olympia and Evergreen State College Sustainable Action Map (SAM). Economic Notes: Environmental Strengths Limitations Opportunities Threats Project/Decision: Social Strengths Limitations Opportunities Threats Community Municipal Strengths Limitations Opportunities Threats Strengths Limitations Opportunities Threats ATTACHMENT 4 1.4 Packet Pg. 46 1.5 Packet Pg. 47 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 48 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 49 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 50 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 51 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 52 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.5 Packet Pg. 53 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (Foothills Mall) 1.6 Packet Pg. 54 Attachment: Larimer County Canal No. 2 Ditch Easement Location Map (Foothills Mall) 1 Foothills Mall Redevelopment Redevelopment and Reimbursement Agreement 14 January 2014 ATTACHMENT 7 1.7 Packet Pg. 55 Attachment: Powerpoint presentation (Foothills Mall) 2 • Objectives: • Realize Community Vision & Expectations • Launch a Catalytic Opportunity in Midtown • Realize a Significant Revenue Opportunity • Minimize Risk to Balance Sheet, Credit Rating & Revenue • Challenges • Build a Competitive Design & Create a Sense of Place • Resolve Tenant Issues • Create a Connection with Mason BRT • Replace the Youth Activity Center Objectives & Challenges 1.7 Packet Pg. 56 Attachment: Powerpoint presentation (Foothills Mall) 3 College Avenue Perspective Previous PDP Proposed Major Amendment 1.7 Packet Pg. 57 Attachment: Powerpoint presentation (Foothills Mall) 4 East Green – Theater Renderings Major Amendment 86,754 sq. ft. theater/entertainment 43,655 sq. ft. theater Previous PDP 1.7 Packet Pg. 58 Attachment: Powerpoint presentation (Foothills Mall) 5 West Green – Main Mall Rendering Proposed Major Amendment Previous PDP 1.7 Packet Pg. 59 Attachment: Powerpoint presentation (Foothills Mall) 6 Parking Structure Elevations Parking structure entitlement changed to 4 levels - (978 spaces). Entitlement is now consistent with financial Major Amendment Parking Structure modeling. Elevations, Dec. 12, 2013 1.7 Packet Pg. 60 Attachment: Powerpoint presentation (Foothills Mall) 7 Mall Configuration 1.7 Packet Pg. 61 Attachment: Powerpoint presentation (Foothills Mall) 8 Historical Mall Sales Net Taxable Sales Estimated Net Taxable Sales at the Mall Began to Decline in 2001…. Data is Not Adjusted for Inflation – Actual Deterioration is Worse 1.7 Packet Pg. 62 Attachment: Powerpoint presentation (Foothills Mall) 9 Additional Related Actions City Council – • 1st Reading: Vacating Foothills Parkway Right-of-Way Between College Avenue and Mathews Street • 1st Reading: Authorizing the Conveyance of a Permanent Irrigation Ditch Easement and Right-of-Way to the Larimer County Canal No. 2 • Resolution: Extending the previously adopted Resolution directing staff to collaborate with Larimer County on TIF impact analysis Urban Renewal Authority Board – • Resolution: Approving and Authorizing Execution and Delivery of the Revised Redevelopment and Reimbursement Agreement • Resolution: Extending the previously adopted Resolution directing staff to collaborate with Larimer County on TIF impact analysis 1.7 Packet Pg. 63 Attachment: Powerpoint presentation (Foothills Mall) 10 Location of ROW Vacation & Ditch Easement 1st Reading: Vacating Foothills Parkway Right-of- Way Between College Avenue and Mathews Street 1st Reading: Authorizing the Conveyance of a Permanent Irrigation Ditch Easement and Right-of- Way to the Larimer County Canal No. 2 1.7 Packet Pg. 64 Attachment: Powerpoint presentation (Foothills Mall) 11 College Avenue Mathews Street Swallow Road Foothills Parkway right-of-way vacation Portion of Mathews Street right-of-way vacation Foothills Parkway (existing private drive) Right-of-Way Vacation Context Map – Close Up N 1.7 Packet Pg. 65 Attachment: Powerpoint presentation (Foothills Mall) 12 Existing Ditch Alignment New Alignment and Easement Location 1.7 Packet Pg. 66 Attachment: Powerpoint presentation (Foothills Mall) 13 Summary of Changes • Change in Mall Configuration • Commercial square footage down by 10% • 6% second floor of theater – low value square footage • 4% from retail space • Grand opening delayed approximately 1 year – phased opening • P&Z reviews and approval scheduled • Financial Incentive Deal is Largely Unchanged • $53M Public Improvements • Maintained cap on maximum bond payments at $180M • New – Early bond pay down from upside revenue potential • Financial Return to the City Equal To / Slightly Better • Sales per square foot increased based on known tenant mix • Net new sales tax (net of remittance to support bonds) • Flat at $108M - $111M – excluding additional transfer sales • Increased slightly to $114M - $117M including additional transfer 1.7 Packet Pg. 67 Attachment: Powerpoint presentation (Foothills Mall) 14 Foothill Mall Project Summary Comparison $9 - $12 of URA Sales Tax Increment Remitted Depending on Rates….. $108 to $117 Net New Sales Tax Revenue (Rates & Transfer) May 7th Jan 14th @7.00% Bond ($ millions – Except Sales per Square Foot) Jan 14th @7.25% Bond GLA 711K + 24K 641K + 24K Sales Per Sq Ft $350 $378 Same Total Cost Retail Project $237 $231 Open Assumption Nov ’14 Phases ‘14-’15 Bonds at Par Value $ 73 $ 71 $ 72 Cum Bond Payments $165 $159 $163 First Three Revenue Sources $170 $151 $151 Dedicated Sales Tax Rev $105 $106 $106 Core Sales Tax Revenue $147 $149 $149 Est Sales Tax Increment Remitted $ 8.8 $9.0 $12.0 Net New Sales Tax Revenue $108 $117 $114 Net New without Addtl Transfer $111 $108 1.7 Packet Pg. 68 Attachment: Powerpoint presentation (Foothills Mall) 15 Public Improvement Costs No Change to Public Improvement Costs ($ millions) Blight Removal Infrastructure City Infrastructure Total Public Land Acquisition $ 5.5 $ 5.5 Parking Structure 9.6 9.6 Deconstruction / Abatement 3.9 3.9 Fixture & Amenities 1.4 1.4 Ditch Relocation 2.8 2.8 Site Work 12.9 12.9 Utilities 4.5 4.5 Soft Costs 4.6 4.6 Foothills Activity Center 4.8 4.8 Pedestrian Crossing / Culvert 3.0 3.0 TOTAL $ 45.2 $ 7.8 $ 53.0 1.7 Packet Pg. 69 Attachment: Powerpoint presentation (Foothills Mall) 16 Bond Details • Bond Issue Spring of 2014 $71M $72M less Capitalized Interest 8M 9M less Reserve Fund 7M 7M less Issuance Cost 3M 3M • Net Proceeds $53M $53M • Additional Supplemental Reserve of $7.1M - $7.2M from Pledged Revenue • Senior Lien on Pledged Revenue in order of seniority: 1. Metro District 50 mills of property tax – paid by mall property owners 2. URA Property Tax Increment – paid by mall property owners 3. Developer 1% Public Improvement Fee (PIF) – paid by mall customers 4. URA Sales Tax Increment Revenue Pledge on 2.25% Core rate Slight Reduction in Bond Par Value… Anticipate 7% - 7.25% Interest Rate… No Change to the Seniority of Pledged Revenue 7.00% Bond 7.25% Bond 1.7 Packet Pg. 70 Attachment: Powerpoint presentation (Foothills Mall) 17 Early Bond Pay Down Additional Revenue Opportunity Redirected to Retire Bonds Early... Creates Win for the Community, Taxing Districts, Developer & City • Opportunity of higher sales per square foot: • Model assumes $378 per sq ft. • National Average - $455 in 2012 • Colorado Mall 2012 average ranges from $548 to $721 • Sales per sq ft of $478 generates additional $18M of PIF revenue • Agreement modified to direct any excess PIF revenue towards additional principal payment. Previously it was direct to the Foothills Mall fund where it would be used to refresh the developers asset. • Bond term could be reduced by 4 years via early principal payment • Benefits: • Metro District 50 mills for debt service terminates – Developer benefits • TIF revenue “could” be eliminated – Taxing district benefits from early revenue • PIF terminates – Community savings • City benefits from additional sales tax revenue 1.7 Packet Pg. 71 Attachment: Powerpoint presentation (Foothills Mall) 18 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 3.85% Sales Tax (Baseline) 3.85% Sales Tax (Transfer) Annual Remit of Sales Tax 3.85% Sales Tax (New) Sales Tax by Year Summary $117M $76M $53M $9M $255M Cumulative Sales Tax Generated by Mall 7% Scenario Including Dedicated Taxes 1.7 Packet Pg. 72 Attachment: Powerpoint presentation (Foothills Mall) 19 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 3.85% Sales Tax (Baseline) 3.85% Sales Tax (Transfer) Annual Remit of Sales Tax 3.85% Sales Tax (New) Sales Tax by Year Summary $74M $52M $35M $9M $171M Cumulative Sales Tax Generated by Mall 7% Scenario Sunsetting Dedicated Taxes 1.7 Packet Pg. 73 Attachment: Powerpoint presentation (Foothills Mall) 20 Risk Analysis A Rate Increase Or Sales Decline Are The Two Primary Risks 1% Increase in Bond Rate = $17M Reduction in Net New Revenue. ($ millions) Note: 2012 Sales per Square Foot at Foothills = $185 sq ft Assumptions May 7th Jan 14th Jan 14th Jan 14th Jan 14th Sales per square foot $350 Sq Ft $378 Sq Ft $378 Sq Ft $378 Sq Ft $340 Sq Ft Property Tax Estimate Value Estimate Value Estimate Value Base less 10% Estimate Value Cum Bond Pmts & Supp Res $165 $159 $163 $177 $177 Risk Sensitivity First 3 Revenue Sources 170 151 151 151 145 Remitted URA Sales Tax increment 9 9 12 26 32 Net New Revenue $ 108 $ 117 $ 114 $ 100 $ 76 7% Interest Base Case 7% Interest Base Case 7.Interest25% Interest 8% 8% Interest ‐10% Sales 1.7 Packet Pg. 74 Attachment: Powerpoint presentation (Foothills Mall) 21 Redevelopment Agreement • Critical Dates and Elements included in Agreement: • Major Amendment to PDP is consistent with Feb 2013 approved PDP • All commitments of May 7th within Exhibit C • Bonds Issued by June 30th 2014 • Bonds mature no later than 25 years from issuance • URA pledged sales & property tax increment ends in 2038 or when bonds are paid off • Public Improvement Fee ends when Bonds are paid off • Residential Construction • 200 units completed by Dec 2016, 246 by Dec 2018 • If not completed, Developer pays 50% of lost revenue starting 2020 • Alberta to pay affordable housing fees enacted prior to December 1, 2014 1.7 Packet Pg. 75 Attachment: Powerpoint presentation (Foothills Mall) 22 Summary of Changes • Change in Mall Configuration • Commercial square footage down by 10% • 6% second floor of theater – low value square footage • 4% from retail space • Grand opening delayed approximately 1 year – phased opening • P&Z reviews and approval scheduled • Financial Incentive Deal is Largely Unchanged • $53M Public Improvements • Maintained cap on maximum bond payments at $180M • New – Early bond pay down from upside revenue potential • Financial Return to the City Equal To / Slightly Better • Sales per square foot increased based on known tenant mix • Net new sales tax (net of remittance to support bonds) • Flat at $108M - $111M – excluding additional transfer sales • Increased slightly to $114M - $117M including additional transfer 1.7 Packet Pg. 76 Attachment: Powerpoint presentation (Foothills Mall) 23 Back-Up 1.7 Packet Pg. 77 Attachment: Powerpoint presentation (Foothills Mall) 24 Foothills Activity Center Less Retail Eliminate Entrance No D&B Above Theater Reconfigure Shops Along College Acquire & More Retail More Retail More Retail 1.7 Packet Pg. 78 Attachment: Powerpoint presentation (Foothills Mall) 25 Project Assumptions • Project Timing • Mall except Sears – Ground breaking June 2013 – Completion Nov 2014 • Sears & Residential – Summer 2015 • Economics: • Annual Sales per square foot - $350 • Occupancy – 80% 2015, 95% thereafter • Growth – 2% year sales, 1% year property assessed value • Project Costs - $319M: • Mall - $237M • Residential 446 units - $82M • Public Improvement Costs - $53M • Blight Removal & Infrastructure - $45M • Public Benefits - $8M Mall Open for 2014 Holidays, Fully Completed by Summer 2015… Total Cost $319M Including $53M of Public Improvement Costs May 7th Jan 14th • Project Timing • Mall – Ground breaking Winter 2013 – Partial Completion Spring 2015 • Majority completed Winter 2015 • Economics: • Annual Sales per square foot - $378 • Occupancy – 50-75% 2015, 95% 2016 • Growth – 2% year sales, 1% year property assessed value • Project Costs - $313M: • Mall - $231M • Residential 446 units - $82M • Public Improvement Costs - $53M • Blight Removal & Infrastructure - $45M • Public Benefits - $8M Partial Mall Open in Spring 2015, Majority Completed Winter 2015. Total Cost $313M Including $53M of Public Improvement Costs 1.7 Packet Pg. 79 Attachment: Powerpoint presentation (Foothills Mall) 26 Mall Financing 7% Bond Including Dedicated Taxes 1.7 Packet Pg. 80 Attachment: Powerpoint presentation (Foothills Mall) 27 First Three Revenue Sources • First 3 Revenue Sources: • Releases URA Sales Tax Increment if First 3 Revenue Sources covers debt • Revenue above debt service assigned to pay down debt principal 3 Pledged Revenue Sources with Higher Priority than URA Sales Tax Increment ($ millions) Cumulative First Three Revenue Sources 25 Years District Property Tax $ 50.0 $ 2.1 URA Property Tax Increment 55.2 2.3 Developer Sales PIF 64.7 2.3 Bond Funding $ 169.9 $ 6.7 Today's Value $ 62.5 Annual Funding 2020 25 Years $ 43.1 $ 1.8 42.7 1.9 65.6 2.4 $ 151.4 $ 6.1 $ 55.3 Cumulative Funding Annual Funding 2020 May 7th Jan 14th 1 .7 Packet Pg. 81 Attachment: Powerpoint presentation (Foothills Mall) 28 Sales Tax Revenue Total of Sales Tax Revenue Expected over 25 years $252M………………….$255M Annual Sales Tax Revenue in the First Full Year $8.4M………………….$8.7M Base = existing revenue from the existing mall Transfer = revenue from other areas of the city that will transfer to the mall New = net new revenue associated with the redeveloped mall ($ millions) Jan 14th Cumulative Sales Tax Revenue 25 Years First Full Year Dedicated Base / Transfer / New $ 104.6 $ 3.5 Core Base 44.4 1.8 Core Transfer & New 102.7 3.1 Sales Tax $ 251.7 $ 8.4 Today's Value $ 94.7 Annual Funding 2016 May 7th 25 Years First Full Year $ 106.0 $ 3.6 44.5 1.8 104.6 3.3 $ 255.1 $ 8.7 $ 94.8 Cumulative Funding Annual Funding 2016 1.7 Packet Pg. 82 Attachment: Powerpoint presentation (Foothills Mall) 29 Base Transfer New 44 31 74 $ 149 32 22 52 $ 106 $ 76 $ 53 $ 126 $ 255 Sales Tax over 25 years New and Pledged Sales Tax Revenue May 7th = $108M of Net New Sales Tax Revenue Anticipated Dec 17th = $117M of Net New Sales Tax Revenue Anticipated ($ millions) Base Transfer New Core Tax ‐ 2.25% 44 35 68 $ 147 Dedicated Tax 1.6% 32 24 49 $ 105 $ 76 $ 59 $ 117 $ 252 Sales Tax over 25 years Remitted Revenue: $9M $9M Sales Tax Revenue retained by the City $149M $151M URA Sales Tax Increment pledged towards debt = $103M $105M May 7th Jan 14th New Revenue 1.7 Packet Pg. 83 Attachment: Powerpoint presentation (Foothills Mall) 30 ($ millions) Sales Tax Revenue – First 5 Years + + = = Sales Tax Revenue in 2016 Exceeds 2012 Current Revenue. Net New Sales Tax Revenue Exceeds May 7th Estimate. + + = = YEAR 2012 ‐ 4.8 2015 2.1 2.5 4.6 ‐ 5.0 5.0 2016 2.3 3.1 5.4 ‐ 5.3 5.3 2017 6.5 3.2 9.7 ‐ 5.4 5.4 2018 6.5 3.3 6.0 3.3 5.5 8.8 2019 6.7 3.4 5.7 3.4 5.6 9.0 Sales Tax Revenue First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax YEAR 2012 ‐ 4.8 2015 1.8 0.8 2.7 ‐ 3.8 3.8 2016 2.4 3.2 5.6 ‐ 5.5 5.5 2017 4.9 3.3 8.1 0.2 5.5 5.7 2018 5.5 3.4 5.3 3.4 5.6 9.0 2019 5.5 3.5 5.4 3.5 5.7 9.2 Sales Tax Revenue First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax Jan 14th 31 ($ millions) Sales Tax Revenue Illustration of Revenue Retained and Revenue Pledged Sales Tax Revenue retained by the City URA Sales Tax Increment pledged towards debt service Base Transfer New Core Tax ‐ 2.25% 1.8 1.0 2.1 $ 4.9 Dedicated Tax 1.6% 1.3 0.7 1.5 $ 3.5 $ 3.1 $ 1.7 $ 3.6 $ 8.4 Base Transfer New Core Tax ‐ 2.25% 1.8 1.1 2.2 $ 5.1 Dedicated Tax 1.6% 1.3 0.8 1.6 $ 3.7 $ 3.1 $ 1.9 $ 3.8 $ 8.8 Sales Tax in 2016 Sales Tax in 2018 May 7th Base Transfer New 1.8 1.0 2.3 $ 5.1 1.3 0.7 1.6 $ 3.6 $ 3.1 $ 1.7 $ 3.9 $ 8.6 Base Transfer New 1.8 1.0 2.4 $ 5.3 1.3 0.7 1.7 $ 3.8 $ 3.2 $ 1.8 $ 4.2 $ 9.1 Sales Tax in 2016 Sales Tax in 2018 Jan 14th 1.7 Packet Pg. 85 Attachment: Powerpoint presentation (Foothills Mall) 32 Mall Financing 7% Bond Excluding Dedicated Taxes 1.7 Packet Pg. 86 Attachment: Powerpoint presentation (Foothills Mall) 33 Foothill Mall Project Summary Comparison $9 - $12 of URA Sales Tax Increment Remitted Depending on Rates….. Net New Sales Tax Revenue Increase from $69 to $71 - $74 GLA 711K + 24K 641K + 18K Sales Per Sq Ft $350 $378 Same Total Cost Retail Project $237 $231 Open Assumption Nov ’14 Phases ‘14-’15 Bonds at Par Value $ 73 $ 71 $ 72 Cum Bond Payments $165 $159 $163 First 3 Revenue Sources $170 $151 $151 Dedicated Sales Tax Rev $ 22 $ 22 $ 22 Core Sales Tax Revenue $147 $149 $149 Est URA ST Increment Remitted $8.8 $9.0 $12.0 Net New ST Revenue $69 $74 $71 May 7th Jan 14th ($ millions – Except Sales per Square Foot) Jan 14th @7.25% Bond Excluding Dedicated Taxes 1.7 Packet Pg. 87 Attachment: Powerpoint presentation (Foothills Mall) 34 Sales Tax Revenue Total of Sales Tax Revenue Expected over 25 years $169M………………….$171M Annual Sales Tax Revenue in the First Full Year $7.3M………………….$7.6M Base = existing revenue from the existing mall Transfer = revenue from other areas of the city that will transfer to the mall New = net new revenue associated with the redeveloped mall ($ millions) May 7th Jan 14th 25 Years First Full Year $ 21.7 $ 2.5 44.5 1.9 104.6 3.2 $ 170.8 $ 7.6 $ 55.4 Cumulative Funding Annual Funding 2016 Excluding Dedicated Taxes Sales Tax Revenue Dedicated Base / Transfer / New $ 22.3 $ 2.4 Core Base 44.4 1.8 Core Transfer & New 102.7 3.1 Sales Tax $ 169.4 $ 7.3 Today's Value $ 69.1 Cumulative Funding Annual Funding 2016 1.7 Packet Pg. 88 Attachment: Powerpoint presentation (Foothills Mall) 35 Base Transfer New 45 31 74 $ 149 8 4 10 $ 22 $ 52 $ 35 $ 83 $ 171 Sales Tax over 25 years New and Pledged Sales Tax Revenue May 7th = $69M of Net New Sales Tax Revenue Anticipated Dec 17th = $74M of Net New Sales Tax Revenue Anticipated ($ millions) Remitted Revenue: $9M $9M Sales Tax Revenue retained by the City = $67M $67M URA Sales Tax Increment pledged towards debt =$103M $105M May 7th Jan 14th Base Transfer New Core Tax ‐ 2.25% 44 35 68 $ 147 Dedicated Tax 1.6% 8 5 10 $ 23 $ 52 $ 40 $ 78 $ 170 Sales Tax over 25 years Excluding Dedicated Taxes New Revenue 1.7 Packet Pg. 89 Attachment: Powerpoint presentation (Foothills Mall) 36 ($ millions) Risk Analysis Note: 2012 Sales per Square Foot at Foothills = $185 sq ft A Rate Increase Or Sales Decline Are The Two Significant Risks 1% Increase in Bond Rate = $16M Reduction in Net New Revenue. Excluding Dedicated Taxes Assumptions May 7th Jan 14th Jan 14th Jan 14th Jan 14th Sales per square foot $350 Sq Ft $378 Sq Ft $378 Sq Ft $378 Sq Ft $340 Sq Ft Property Tax Estimate Value Estimate Value Estimate Value Base less 10% Estimate Value Cum Bond Pmts & Supp Res $165 $159 $163 $177 $177 Risk Sensitivity First 3 Revenue Sources 170 151 151 151 145 Remitted URA Sales Tax increment 9 9 12 26 32 Net New Revenue $ 69 $ 74 $ 71 $ 58 $ 39 7% Interest Base Case 7% Interest Base Case 7.25% Interest 8% Interest 8% Interest ‐10% Sales 1.7 Packet Pg. 90 Attachment: Powerpoint presentation (Foothills Mall) 37 ($ millions) Sales Tax Revenue – First 5 Years + + = = Sales Tax Revenue in 2018 Exceeds 2012 Current Revenue. Net New Sales Tax Revenue Exceeds May 7th Estimate. + + = = Jan 14th Excluding Dedicated Taxes YEAR 2012 ‐ 4.8 2015 2.1 2.5 4.6 ‐ 5.0 5.0 2016 2.3 3.1 5.4 ‐ 4.3 4.3 2017 6.5 3.2 9.7 ‐ 4.3 4.3 2018 6.5 3.3 6.0 3.3 4.4 7.7 2019 6.7 3.4 5.7 3.4 4.4 7.8 Sales Tax Revenue First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax May 7th YEAR 2012 ‐ 4.8 2015 1.8 0.8 2.7 ‐ 3.8 3.8 2016 2.4 3.2 5.6 ‐ 4.3 4.3 2017 4.9 3.3 8.1 0.2 4.4 4.6 2018 5.5 3.4 5.3 3.4 4.4 7.8 2019 5.5 3.5 5.4 3.5 4.5 8.0 Sales Tax Revenue First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & 38 May 7th ($ millions) Sales Tax Revenue Illustration of Revenue Retained and Revenue Pledged Sales Tax Revenue retained by the City URA Sales Tax Increment pledged towards debt service Jan 14th Base Transfer New Core Tax ‐ 2.25% 1.8 1.0 2.1 $ 4.9 Dedicated Tax 1.6% 0.9 0.5 1.0 $ 2.4 $ 2.7 $ 1.5 $ 3.1 $ 7.3 Base Transfer New Core Tax ‐ 2.25% 1.8 1.1 2.2 $ 5.1 Dedicated Tax 1.6% 0.9 0.5 1.1 $ 2.5 $ 2.7 $ 1.6 $ 3.3 $ 7.6 Sales Tax in 2016 Sales Tax in 2018 Base Transfer New 1.8 1.0 2.3 $ 5.1 0.9 0.5 1.1 $ 2.5 $ 2.7 $ 1.5 $ 3.4 $ 7.6 Base Transfer New 1.8 1.0 2.4 $ 5.2 0.9 0.5 1.2 $ 2.6 $ 2.7 $ 1.5 $ 3.6 $ 7.8 Sales Tax in 2016 Sales Tax in 2018 Excluding Dedicated Taxes 1.7 Packet Pg. 92 Attachment: Powerpoint presentation (Foothills Mall) 39 Mall Financing 7.25% Bond Including Dedicated Taxes 1.7 Packet Pg. 93 Attachment: Powerpoint presentation (Foothills Mall) 40 Base Transfer New 44 31 74 $ 149 32 22 52 $ 106 $ 76 $ 53 $ 126 $ 255 Sales Tax over 25 years New and Pledged Sales Tax Revenue May 7th = $108M of Net New Sales Tax Revenue Anticipated Dec 17th = $114M of Net New Sales Tax Revenue Anticipated ($ millions) Base Transfer New Core Tax ‐ 2.25% 44 35 68 $ 147 Dedicated Tax 1.6% 32 24 49 $ 105 $ 76 $ 59 $ 117 $ 252 Sales Tax over 25 years Remitted Revenue: $9M $12M Sales Tax Revenue retained by the City = $149M $151M URA Sales Tax Increment pledged towards debt = $103M $105M May 7th Jan 14th New 7.25% Scenario Revenue 1 .7 Packet Pg. 94 Attachment: Powerpoint presentation (Foothills Mall) 41 May 7th ($ millions) Sales Tax Revenue Illustration of Revenue Retained and Revenue Pledged Sales Tax Revenue retained by the City URA Sales Tax Increment pledged towards debt service Base Transfer New Core Tax ‐ 2.25% 1.8 1.0 2.1 $ 4.9 Dedicated Tax 1.6% 1.3 0.7 1.5 $ 3.5 $ 3.1 $ 1.7 $ 3.6 $ 8.4 Base Transfer New Core Tax ‐ 2.25% 1.8 1.1 2.2 $ 5.1 Dedicated Tax 1.6% 1.3 0.8 1.6 $ 3.7 $ 3.1 $ 1.9 $ 3.8 $ 8.8 Sales Tax in 2016 Sales Tax in 2018 7.25% Scenario Jan 14th Base Transfer New 1.8 0.9 2.3 $ 5.1 1.3 0.7 1.6 $ 3.6 $ 3.2 $ 1.6 $ 3.9 $ 8.7 Base Transfer New 1.8 1.0 2.4 $ 5.3 1.3 0.7 1.7 $ 3.7 $ 3.2 $ 1.7 $ 4.1 $ 9.0 Sales Tax in 2016 Sales Tax in 2018 1.7 Packet Pg. 95 Attachment: Powerpoint presentation (Foothills Mall) 42 Mall Financing 7.25% Bond Excluding Dedicated Taxes 1.7 Packet Pg. 96 Attachment: Powerpoint presentation (Foothills Mall) 43 Base Transfer New 44 31 74 $ 149 8 4 10 $ 22 $ 52 $ 35 $ 83 $ 171 Sales Tax over 25 years New and Pledged Sales Tax Revenue May 7th = $69M of Net New Sales Tax Revenue Anticipated Dec 17th = $71M of Net New Sales Tax Revenue Anticipated ($ millions) Remitted Revenue: $9M $12M Sales Tax Revenue retained by the City = $67M $66M URA Sales Tax Increment pledged towards debt =$103M $105M May 7th Jan 14th Base Transfer New Core Tax ‐ 2.25% 44 35 68 $ 147 Dedicated Tax 1.6% 8 5 10 $ 23 $ 52 $ 40 $ 78 $ 170 Sales Tax over 25 years 7.25% Scenario New Excluding Dedicated Taxes Revenue 1 .7 Packet Pg. 97 Attachment: Powerpoint presentation (Foothills Mall) 44 Ordinance No. 008, 2014 Vacating Foothills Parkway Right-of-way Between College Avenue and Mathews Street, and Vacating a Portion of Mathews Street 1.7 Packet Pg. 98 Attachment: Powerpoint presentation (Foothills Mall) 45 Proposed Vacation Area Map N N 1.7 Packet Pg. 99 Attachment: Powerpoint presentation (Foothills Mall) 46 College Avenue Mathews Street Swallow Road Foothills Parkway right-of-way vacation Portion of Mathews Street right-of-way vacation Foothills Parkway (existing private drive) Context Map – Close Up N 1.7 Packet Pg. 100 Attachment: Powerpoint presentation (Foothills Mall) 47 Overview • Plat for Southmoor Village Fifth Filing (approved in 1972) dedicated Foothills Parkway from College Avenue to Stanford Road • In 1988 as part of the expansion of Foley’s (now Macy’s), Foothills Parkway was vacated from Mathews Street to Stanford Road (Ordinance No. 116, 1987) • Walton Foothills Holdings VI, LLC submitted a request to vacate the remaining Foothills Parkway right-of-way 1.7 Packet Pg. 101 Attachment: Powerpoint presentation (Foothills Mall) 48 Overview • Abutting property owners & City Utilities report no objection • Easement for access, emergency access, drainage, utilities and transit is retained • If approved, Ordinance is not effective until approval of the final plan for the Foothills Mall Redevelopment Subdivision 1.7 Packet Pg. 102 Attachment: Powerpoint presentation (Foothills Mall) 49 Conveyance of a Permanent Irrigation Ditch Easement 1.7 Packet Pg. 103 Attachment: Powerpoint presentation (Foothills Mall) 50 Irrigation Ditch Easement Needed to accommodate the realignment of the Larimer No. 2 Ditch Easement granted to Larimer Canal No. 2 Irrigating Company Ditch Realignment Agreement (Intergovernmental Agreement to be reviewed January 7) 1.7 Packet Pg. 104 Attachment: Powerpoint presentation (Foothills Mall) 51 Existing Ditch Alignment New Alignment and Easement Location 1.7 Packet Pg. 105 Attachment: Powerpoint presentation (Foothills Mall) REDEVELOPMENT AND REIMBURSEMENT AGREEMENT THIS REDEVELOPMENT AND REIMBURSEMENT AGREEMENT (the “Agreement”) dated as of May __, 2013January __, 2014, is made by and among the FORT COLLINS URBAN RENEWAL AUTHORITY, a body corporate and politic of the State of Colorado (the “Authority”), WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company (the “Developer”), the CITY OF FORT COLLINS, COLORADO, a municipal corporation (the “City”), and FOOTHILLS METROPOLITAN DISTRICT, a quasi-municipal corporation organized and existing in accordance with Title 32, Article 1, C.R.S. (the “District”). The Authority, the Developer, the City and the District are sometimes collectively called the “Parties,” and individually, a “Party.” RECITALS All capitalized terms used, but not defined, in these Recitals, have the meanings ascribed to them in this Agreement. The Recitals are incorporated to this Agreement as though fully set forth in the body of this Agreement. WHEREAS, Developer or District owns or has the right to construct improvements on the real property described in Exhibit A, which is known as the Foothills Mall (the “Property”) and desires to redevelop the Property. Developer has submitted a proposal to the Authority and the City to redevelop the Property by constructing approximately 735,979no fewer than 641,000 square feet of commercial development (which minimum size does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property (the “Project”). WHEREAS, the Authority is carrying out the Midtown Urban Renewal Plan approved by the City Council on September 6, 2011, as amended on May 8, 2013, and as further defined hereinafter (the “Urban Renewal Plan”), which includes the Property, by entering into this Agreement with the City, the District and the Developer to implement the Project Development Plan that was approved by the City’s Planning and Zoning Board on February 7, 2013 (the “PDP”).in the manner described herein. The District is expected to provide services and facilities to assist the Authority in carrying out the Urban Renewal Plan. WHEREAS, the Authority has selected the Developer for exclusive negotiations based on the proposal submitted to the Authority and pursuant to that certain Agreement to Negotiate, dated as of November 16, 2012, by and between the Authority and Developer (the “Agreement to Negotiate”). WHEREAS, the City has determined that it is in the best interests of the City and its inhabitants to assist in the redevelopment of the Property in order to remedy blighted conditions within and around the Property pursuant to the Urban Renewal Plan, as hereinafter set forth, and to provide a catalyst for development, increase sales tax revenues and job opportunities, and provide other economic and social benefits to the City. WHEREAS, the District was organized by Order and Decree Creating District issued on November 30, 2012, and recorded on January 10, 2013. The City approved the original Service ATTACHMENT 8 1.8 Packet Pg. 106 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) Plan of the District on September 4, 2012, as amended and restated pursuant to City Council approval on May 78, 2013. WHEREAS, the Parties have agreed to enter into this Agreement for the redevelopment of the Property in accordance with the Urban Renewal Plan, the Act (defined hereinafter) and the PDP), the description of the Project as set forth herein, and the Development Approvals. WHEREAS, the District was organized for the purpose of, inter alia, issuing the District Bonds (defined hereinafter), the proceeds of which are intended to pay or reimburse the costs of the Eligible Improvements and to pay Costs of Issuance (defined hereinafter). NOW THEREFORE, in consideration of the mutual covenants and promises of the Parties contained in this Agreement, and other valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree to the terms and conditions in this Agreement. AGREEMENT 1. DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the context, capitalized terms mean: “Act” means the Colorado Urban Renewal Law, Part 1 of Article 25 of Title 31 of the Colorado Revised Statutes. “Add-On PIF” means the public improvement fee in the amount of 1.00% as set forth in the PIF Covenant, which will be collected in accordance with the terms of the PIF Covenant, and will be imposed on retail sales that are occurring on the Property that are subject to the City’s Sales Tax, subject to the terms and provisions of this Agreement. “Add-On PIF Revenues” means the revenues generated by the Add-On PIF. The full amount of the Add-On PIF will remain pledged to payment of the District Bonds for so long as such District Bonds are outstanding. “Agreement” means this Redevelopment and Reimbursement Agreement, as it may be amended or supplemented in writing. References to sections or exhibits are to this Agreement unless otherwise qualified. All exhibits are incorporated tointo and made a part of this Agreement. “Agreement to Negotiate” means the Agreement to Negotiate between the Authority and the Developer dated as of November 16, 2012. “Authority” means the Fort Collins Urban Renewal Authority, a body corporate and politic of the State of Colorado which has been duly created, organized, established and authorized by the City to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Act, and its successors and assigns. “Authority Administrative Fee” means a fee up to a maximum of 1.5% of the gross property tax increment revenue received by the Authority from the Larimer County Treasurer each year, which fee includes all amounts required to pay collection, enforcement, disbursement, and 1.8 Packet Pg. 107 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) administrative fees and costs required to carry out the Urban Renewal Plan, including, without limitation, collection and disbursement of the Pledged Property Tax Increment Revenue. “Authority Pledged Revenues” means, collectively, the Pledged Property Tax Increment Revenues and the Pledged Sales Tax Increment Revenues. “Cap Amount” means an amount equal to $53,000,000 (Fifty-Three Million US Dollars), which is the maximum amount of Eligible Costs that shall be paid from the net proceeds of the District Bonds. “City” means the City of Fort Collins, Colorado, a home rule municipal corporation. “City Manager” means the City Manager of the City. “City Requirements” means, collectively, the Ft. Collins’ Land Use Code and the PDP. “Commence Construction” or “Commencement of Construction” means the commencement by the District or the Developer of actual physical work, including, but not limited to, deconstruction, demolition, site grading, and construction, on the Property as required to carry out the Project. “Complete Construction” or “Completion of Construction” means: (a) With respect to the public improvements, construction acceptance in accordance with the City Requirements, applicable laws, ordinances, and regulations of the City, the District, and any other governmental entity or public utility with jurisdiction, subject to any applicable conditions of maintenance and warranty, including; (b) With respect to any specifically identified portion of the Project, the issuance of a certificate of occupancy by the City so that the portion of the Project described in such certificate may open for permanent occupancy and utilization for its intended purposes; or (c) With respect to the Project, the completion of all Eligible Improvements and the issuance of a certificate of occupancy by the City so that no less than ninety-five percent (95%) of the leasable area within the Project may open for permanent occupancy and utilization for its intended purposes. “Costs of Issuance” means the reasonable and necessary costs incurred in connection with the issuance of the District Bonds, including, without limitation, reserve funds, capitalized interest, underwriter’s compensation, financial consultant fees, fees and expenses of bond counsel, counsel to the underwriter, counsel to the District, fees and third party out-of-pocket expenses of the City, including but not limited to counsel to, and economic analysis and financial consulting services for, the City, fees and third party out-of-pocket expenses of the Authority, including but not limited to counsel to, and economic analysis and financial consulting services for, the Authority, credit enhancement fees and expenses, fees and expenses of the District Bond Trustee, bond registrar, paying agent, transfer agent, remarketing agent and rating agency fees. Costs of Issuance shall be approved by the District’s bond counsel and shall be reasonable and in accordance with market standards. 1.8 Packet Pg. 108 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) “Default” or “Event of Default” means any of the events described in Section 18; provided, however, that such events will not give rise to any remedy until effect has been given to all grace periods, cure periods and periods of enforced delay provided for in this Agreement. “Developer” means Walton Foothills Holdings VI, L.L.C., a Delaware limited liability company and any successors and assigns approved in accordance with this Agreement. “Developer Advances” means, collectively, amounts advanced or incurred by the Developer to pay any Eligible Costs. Developer Advances shall include, without limitation, (a) Eligible Costs paid directly or advanced by the Developer, (b) advances to the District for design and construction by the District of Eligible Improvements, and (c) Authority Reimbursable Costs (as defined in the Agreement to Negotiate) from the Developer to the Authority in compliance with the requirements of the Agreement to Negotiate. All Developer Advances to the District must be made in accordance with the provisions of the Reimbursement and Infrastructure Acquisition Agreement. “Development Approvals” means the regulatory approvals issued by the City for the Project, including the Overall Development Plan (ODP), Project Development Plan (PDP), Final Development Plans (FDPs), Development Agreement or Agreements, Subdivision Plat, and all other plats, plans and requirements included in or incorporated into the City’s approval of the Project under the City Land Use Code. Because multiple FDPs will be submitted and reviewed for up to 3 phases of the Project, with respect to any particular portion of the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for that particular portion of the Project. With respect to the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for all phases of the Project. “District” means the Foothills Metropolitan District, formed pursuant to Sections 32-1-101, et seq., C.R.S., and its successors and assigns. “District Administrative Account” means an account established by the Authority into which the Authority shall deposit all of the incremental District Operating Revenue and District Debt Service Mill Levy received by the Authority from time to time pursuant to Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado. “District Bond Documents” means, collectively, the documents pursuant to which the District Bonds are issued. “District Bond Indenture” means any indenture or similar documents pursuant to which the District Bonds are issued. “District Bond Trustee” means the trustee in connection with the issuance of any District Bonds. “District Bonds” means any bonds, certificates of participation, securities or other obligations issued or incurred by the District to finance or refinance the Eligible Costs in accordance with the terms and provisions of this Agreement, including any bonds, debt in the form 1.8 Packet Pg. 109 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) of a loan, certificates of participation, or securities issued or incurred by the District to refund any such Bonds, or any related obligations to reimburse the provider of a guaranty, insurance policy, liquidity instrument or credit enhancement for the District Bonds. Notwithstanding the foregoing or any provision to the contrary contained herein, District Bonds shall not include any obligation by the District to reimburse the Developer for Developer Advances pursuant to reimbursement agreements or similar agreements between the Developer and the District regarding such matters. “District Debt Service Mill Levy” means a property tax levy of fifty (50) mills levied by the District on the taxable property of the District. The District Debt Service Mill Levy rate may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Debt Service Mill Levy is neither diminished nor enhanced as a result of such changes. The District Debt Service Mill Levy shall be imposed only so long as there are outstanding District Bonds. “District Debt Service Mill Levy Revenue” means the revenue generated from the District Debt Service Mill Levy, net of the County Treasurer’s cost of collection. “District Operating Mill Levy” means a property tax imposed by the District in an amount not exceeding ten (10) mills, except as hereinafter provided, separate and apart from the District Debt Service Mill Levy, for the purpose of paying the administrative, operations and maintenance expenses of the District, including all amounts required to be paid to the City for the maintenance of Larimer County Canal No. 2. Notwithstanding the foregoing, the District Operating Mill Levy may be imposed by the District in an amount up to fifteen (15) mills upon the written consent of the City Manager upon receipt of evidence satisfactory to the City Manager that such an increase in the District Operating Mill Levy is necessary for the District to comply with its operation and maintenance obligations under the Service Plan. The District Operating Mill Levy may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Operating Mill Levy is neither diminished nor enhanced as a result of such changes. “District Operating Revenue” means the revenue produced by the District’s Operating Mill Levy and the Specific Ownership Taxes attributable to the District Operating Mill Levy. “District Pledged Revenue” means, collectively, (a) the District Debt Service Mill Levy Revenue, (b) the revenue from the Pledged District Specific Ownership Taxes, and (c) Add-On PIF Revenue. “Effective Date” means the date of this Agreement. “Eligible Costs” means, collectively, the reasonable and customary expenditures for the design and construction of the Eligible Improvements as set forth in Exhibit D, which shall be certified and approved in accordance with Exhibit E. Eligible Costs shall include, without limitation, reimbursement to the Developer for Authority Reimbursable Costs (as defined in the Agreement to Negotiate) made by the Developer to the Authority. Eligible Costs shall be paid from the net proceeds of the Bonds, subject to the Cap Amount. District Bond proceeds shall not 1.8 Packet Pg. 110 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) be used to pay, and Eligible Costs shall not include, any accrued interest on unreimbursed Developer Advances. “Eligible Improvements” means the public improvements described in Exhibit D that are to be acquired, constructed or installed as part of the Project. “Estimated Revenues from Property Taxes” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from property taxes on the Property. “Estimated Revenues from Residential Property” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from the residential component of the Property beginning January 1, 2019, assuming that the residential component of the Property is constructed in accordance with the schedule set forth in Section 4.3 hereof. “Exhibits” The following Exhibits are a part of this Agreement: Exhibit A: Legal Description of the Property Exhibit B: Description of TIF Area Exhibit C: Description of the Project Exhibit D: Eligible Costs and Eligible Improvements Exhibit E: Procedure for Documenting, Certifying and Paying Eligible Costs Exhibit F City Specifications for Foothills Activity Center Exhibit G Estimated Revenues from Property Taxes and Estimated Revenues from Residential Property Exhibit H Permitted Uses of Foothills Mall Fund Exhibit I Maximum Annual Repayment CostsNet Debt Service on the District Bonds “Financing Plan” means a plan prepared by the Developer and the District for review and approval by the City and the Authority demonstrating that there will be sufficient Pledged Revenues to service the debt service requirements on the District Bonds. Approval of the Financing Plan by the City and the Authority shall be a condition precedent to the issuance of the District Bonds. “Foothills Activity Center” means the Foothills Activity Center to be constructed on the Project in accordance with the provisions of Section 4.4 hereof. 1.8 Packet Pg. 111 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) “Foothills Mall Fund” means the fund to be held by the District and applied in accordance with the terms and provisions of this Agreement. “Force Majeure” means any delays in or failure of performance by any Party of its obligations under this Agreement as a result of acts of God; fires; floods; earthquake; strikes; labor disputes; regulation or order of civil or military authorities; or other causes, similar or dissimilar, which are beyond the control of such Party. “Larimer County Canal No 2” means that portion of the canal or ditch, owned by The Larimer County Canal No. 2 Irrigation Company, commonly known as the Larimer County Canal No. 2, in the location to which it will be moved as part of the Project, lying between the west boundary of the South College Avenue right-of-way and the west boundary of the McClelland Drive right-of-way, and thence south along and under the west frontage road of College Avenue past the south boundary of the West Monroe Drive right-of-way, and thence continuing due south for an approximate distance of 130+\- feet to where the relocated portion of the ditch intersects the existing Larimer County Canal No. 2 ditch alignment. “Party” or “Parties” means one or all of the parties to this Agreement. ““Net Debt Service” means the total payments of principal and interest on the District Bonds, less the amounts that are paid from funds held by the District Bond Trustee as capitalized interest and reserve funds, including interest earnings on any such funds. “Original PDP” means the Project Development Plan relating to the Project approved by the City’s Planning and Zoning Board on February 7, 2013. “Party” or “Parties” means one or all of the parties to this Agreement. “PIF Covenant” means a declaration of covenants by Developer imposing and implementing the Add-On PIF within the Property. “Pledged District Specific Ownership Taxes” means the specific ownership tax revenues received by the District in each year pursuant to § 42-3-107, C.R.S. that is attributable to the dollar amount of ad valorem taxes generated from the District Debt Service Mill Levy. “Pledged Property Tax Increment Revenue” means 100% of the annual ad valorem real property tax revenue received by the Authority from the Larimer County Treasurer in excess of the amount produced by the levy of those taxing bodies that levy property taxes against the Property Tax Base Amount in the TIF Area in accordance with the Act and the regulations of the Property Tax Administrator of the State of Colorado law, but not including, (a) the District Operating Revenue, (b) the District Debt Service Mill Levy Revenue, (c) the Authority Administrative Fee, (d) mill levy override payments approved by the electors of Poudre School District in 2012 and subsequent years, and (e) any offsets collected by the Larimer County Treasurer for return of overpayments or any reserve funds retained by the Authority for such purposes in accordance with Sections 31-25-107(9)(a)(III) and (b) of the Act. Pledged Property Tax Increment Revenues shall not include any ad valorem personal property tax revenue., and (f) $60,000 each year of such annual revenues. 1.8 Packet Pg. 112 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) “Pledged Sales Tax Increment Revenues” means 100% of the Sales Tax Increment Revenues received annually by the Authority from the City during the period in which taxes are divided in the TIF Area pursuant to the Act. “Pledged Revenue” means, collectively, the District Pledged Revenue and the Authority Pledged Revenue. “Project” means the acquisition, construction and installation of approximately 734,979no fewer than 641,000 square feet of commercial development (which minimum does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property, in accordance with the PDP, including any amendments to the PDP or deviations from the PDP as may be approved pursuant to the City’s Land Use Code, and consistent with Exhibit C attached hereto, with such amendments to or variances from Exhibit C as are approved by the City Manager.Development Approvals, this Agreement and Exhibit C.. The Project includes off-site improvements provided for and required under this Agreement or the Development Approvals. Notwithstanding the foregoing, however, for purposes of determining whether Construction of the Project has been Completed, the Residential Component of the Project shall be deemed to include 446 multifamily residential units. “Project Fund” means the fund to be created pursuant to the District Bond Indenture into which net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) will be deposited to pay Eligible Costs. “Property” means the real property described in Exhibit A, which is either owned by Developer or on which the Developer otherwise has the right or will have the right to construct improvements on the PropertyProject. “Property Tax Base Amount” means the amount certified by the Larimer County Assessor as the valuation for assessment of all taxable property with the TIF Area in accordance with Section 31-25-107(9)(a)(I) of the Act. The Property Tax Base Amount and increment value shall be calculated and adjusted from time to time by the Larimer County Assessor in accordance with Section 31-25-107(9) of the Act and the rules and regulations of the Property Tax Administrator of the State of ColoradoColorado law. “Reimbursement and Infrastructure Agreement” means that certain agreement between the District and Developer dated as of April 26, 2013, that requires the District to reimburse the Developer for the Eligible Costs and sets forth the procedures under which Eligible Improvements constructed by the Developer for the benefit of the District may be acquired by the District. “Residential Component of the Project” means the portion of the Project intended to be developed for residential uses. The Residential Portion of the Project will generally occur on the area shown as Blocks 3, 4,5 and 6 on the Original PDP. “Sales Tax” means the municipal sales tax of the City imposed at the rate of 2.25% on sales of goods and services that are subject to municipal sales taxes pursuant to Chapter 25, Article 3 of the Fort Collins Municipal Code. 1.8 Packet Pg. 113 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) “Sales Tax Base Amount” means the total collection of sales taxes levied at the rate of 2.25% within the TIF Area for the applicable twelve-month period in accordance with Section 31-25-107(9)(a)(I) of the ActColorado law. “Sales Tax Increment” means Sales Tax Revenues collected by the City in excess of the Sales Tax Base Amount during the period in which taxes are divided in the TIF Area pursuant to the Act. “Sales Tax Revenues” means the funds generated by imposition of the Sales Tax collected within the TIF Area. “Service Plan” means the service plan for the District approved by the City on September 4, 2012, as amended and restated. “Special Fund” means the fund defined in Section 107(9)(a)(II) of the Act. “TIF” means tax increment financing to which the tax increment provisions of Section 31-25-107(9) of the Act apply. “TIF Area” means that part of the urban renewal area described in the Urban Renewal Plan as described and depicted in Exhibit B, within which the tax increment provisions of Section 31-25-107(9) of the Act apply. “Underpass” means the pedestrian underpass at the current Larimer County Canal No. 2 ditch alignment under College Avenue for the purpose of connecting the Project to the Mason Corridor and MAX transit facility. “Urban Renewal Plan” means the Midtown Urban Renewal Plan adopted and approved by the City Council on September 6, 2011, and as may hereinafter be amended from time to time. as amended on May 8, 2013, and as may hereinafter be amended from time to time; provided, however, that if, prior to June 1, 2014, the City elects to exclude the Property from the Midtown Urban Renewal Plan and adopts a new urban renewal plan for the Property, such new plan shall, upon written notice to all Parties, become the “Urban Renewal Plan” for the purposes of this Agreement as long as: (a) all property included within such new plan is acceptable to the Developer and the District, and (b) such new plan is consistent with the Act and with the terms and conditions of this Agreement. 2. FINANCING AND CONSTRUCTION OF PROJECT. 2.1 Construction of Project. The Developer and/or the District, in accordance with the provisions of this Agreement and the PDP, shall (i) construct the Project, including without limitation, all Eligible Improvements, (ii) be responsible for compliance in all respects with the City RequirementsDevelopment Approvals, and (iii) shall be responsible for payment of fees related to redevelopment of the Property and the construction of the Project. The Project may be constructed in phases. 2.2 Financing the Costs of the Project. The Eligible Improvements shall be financed from the net proceeds of the District Bonds, up to the Cap Amount. The remainder of the Project, 1.8 Packet Pg. 114 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) including the cost of any Eligible Improvements that exceed the Cap Amount, shall be financed by the Developer and may be reimbursed by the District from excess Pledged District Specific Ownership Taxes and District Debt Service Mill Levy Revenues released from the District Bond Documents in accordance with the provisions of Section 3.2 of this Agreement. . The Parties agree that the Urban Renewal Plan provides that one of the methods of financing the Eligible Improvements shall be the use of property tax and sales tax increment financing pursuant to Section 31-25-107(9), C.R.S., as more fully described in the Urban Renewal Plan and that this Agreement implements the tax increment financing provisions of the Urban Renewal Plan. 3. ISSUANCE OF DISTRICT BONDS. Subject to the terms and provisions hereinafter set forth, the District will issue the District Bonds to pay or reimburse the Developer or the District for Eligible Costs, up to the Cap Amount, and to pay the Costs of Issuance related to the District Bonds. The District Bonds shall be issued in anone or more series in a combined aggregate principal amount sufficient to generate net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) to be deposited in the Project Fund and applied to the payment or reimbursement of Eligible Costs. 3.1 Conditions Precedent to Issuance of District Bonds. The following conditions shall be satisfied on or prior to the issuance of the District Bonds: (a) The Developer and the District shall prepare the Financing Plan and the City Manager and the Executive Director of the Authority shall have approved the Financing Plan. The Financing Plan shall also be in form and substance satisfactory to the District’s bond counsel and the underwriter of the District Bonds. The Financing Plan shall demonstrate that there is expected to be sufficient Pledged Revenues derived from the construction of the Project to pay the debt service requirements on the District Bonds when due. (b) The Developer shall provide to the City Manager evidence satisfactory to the City Manager that the Developer has obtained all equity and private financing necessary to construct the non-residential components of the Project. (c) The Developer shall have obtained executed lease agreements, excluding the existing department store located on Larimer County Parcel Number 9725391002, totaling at least 240,000 square footage of the retail area of the Project with tenants that, in the aggregate, have an average sales per square foot of at least $350375 based on average national sales performance, and, except as hereinafter provided, of which at least 120,000 square feet shall be leased to tenants new to the City of Fort Collins. Notwithstanding the foregoing, however, in the event that at least 60,000 of such square footage is leased to tenants that are new to Fort Collins, then this condition shall be deemed satisfied with the prior written consent of the City Manager, which consent shall not be unreasonably withheld, conditioned or delayed, provided that in determining whether to give such consent the City Manager may consider the impact on the proposed financing from a reduced percentage of tenants new to the City. (d) The Developer shall have imposed the Add-On PIF in accordance with Section 4.7 hereof. 1.8 Packet Pg. 115 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) (e) The District’s Service Plan shall be amended in a form acceptable to the Parties (the “Service Plan Amendment”), subject to approval by the City Council, to allow the District to issue the District Bonds and impose the District Debt Service Mill Levy in accordance with the terms and provisions of this Agreement. (f) The Urban Renewal Plan shall be amended in a form acceptable to the Parties, subject to approval by the City Council. (g(e) The Developer shall have obtained the Development Approvals for the Project, as described in this Agreement and in Exhibit C. (f) The City and the Authority shall receive an opinion of the District’s bond counsel relating to the validity ofthat the District Bonds have been validly issued and opining as to the tax-exempt status thereofof the bonds, which opinion shall be addressed to the City and the Authority, or the City and the Authority shall receive a reliance letter from the District’s bond counsel. (g) No event of default hereunder shall have occurred and be continuing hereunder, unless such Event of Default has been cured, remedied or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. 3.2 Provisions to be Included in District Bond Documents. The District Bond Documents shall contain the following provisions: (a) The District Bonds shall be payable from the Pledged Revenues in the following order of priority: (i) the District Debt Service Mill Levy Revenues; (ii) the Pledged District Specific Ownership Taxes; (iii) the Pledged Property Tax Increment Revenues; (iv) the Add-On PIF Revenues; and (iii) the Pledged Sales Tax Increment Revenues. (b) After the debt service requirements on the District Bonds have been paid or provided for in each fiscal year, and after all payments have been made to replenish the reserve fund for the District Bonds and to make any payments into any required rebate funds for the District Bonds, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (i) To the extent required by the underwriter of the District Bonds based on market conditions, the District Bond Documents may establish a supplemental reserve fund (the “Supplemental Reserve Fund”) and provide that any excess Pledged Revenue shall be deposited into the Supplemental Reserve Fund to be maintained in an amount that is not more than 10% of the original 1.8 Packet Pg. 116 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) aggregate principal amount of the District Bonds. The District Bond Trustee shall keep a record of the sources of the Pledged Revenue that are used to fund and maintain the Supplemental Reserve Fund, if any. (ii) After the Supplemental Reserve Fund, if any, has been fully funded, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (A) The District, the City and the Authority hereby agree pursuant to Section 31-25-107(11) C.R.S. that any such excess Sales Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the City. The District Bond Documents shall provide that the City is a third-party beneficiary under the District Bond Documents with respect to this provision relating to the requirement of remitting any excess Sales Tax Increment Revenues to the City as set forth above. (B) Any excess Add-On PIF Revenues shall be released from the lien of the District Bond Documents andapplied by the District Bond Trustee to prepay principal on the District Bonds upon payment of all scheduled debt service for the year in which said Add-On PIF Revenues were collected. In the event that Add-On PIF Revenues are used to fund or maintain the Supplemental Reserve and are released after full payment of the District Bonds, excess Add-On PIF Revenues shall be remitted to the District for deposit in the Foothills Mall Fund. (C) Any excess Pledged Property Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted to the Authority. (D) Any excess Pledged District Specific Ownership Taxes and District Debt Service Mill Levy Revenues shall be remitted to the Districtapplied by the District Bond Trustee to debt service payments on the District Bonds in the following year. (c) The District Bond Documents shall provide that moneys on deposit in the Supplemental Reserve Fund shall be applied solely to pay the debt service requirements on the District Bonds in the event of an insufficiency of Pledged Revenues to make such payments, provided, however, that moneys on deposit in the reserve fund for the District Bonds shall be applied to the payment of the debt service requirements on the District Bonds prior to applying any funds on deposit in the Supplemental Reserve Fund to such payment. Upon termination of the Supplemental Reserve Fund, the moneys on deposit in the Supplemental Reserve Fund shall be remitted by the District Bond Trustee based on the source of Pledged Revenues used to fund and maintain the Supplemental Reserve Fund in accordance with the provisions set forth in subparagraph (b)(ii) above. 1.8 Packet Pg. 117 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) (d) The District Bond Documents shall provide that the net proceeds of the Bonds shall be deposited in the Project Fund and requisitioned by the District to pay Eligible Costs as set forth in Exhibit D hereof, with such requisitions to be made substantially in accordance with Exhibit E hereof. The District Bond Documents shall provide that any requisition remitted to the District Bond Trustee shall simultaneously be remitted to the City Manager, or the City Manager’s designee. In the event that the City provides written notice to the Developer and the District that it disputes that all or any portion of the requisition qualifies as an Eligible Cost or otherwise fails to comply with the requisition requirements in Exhibit E, then the City, the Developer and the District agree to act in good faith to attempt to resolve any such dispute. (e) Without the prior written consent of the City Manager, the District Bonds shall mature no later than 25 years after the date of issuance thereof, the total repayment costand shall not contain a pledge of Pledged Property Tax Increment Revenues or Pledged Sales Tax Revenues that extends beyond the final payment of said revenues to the Authority; the total Net Debt Service of the District Bonds shall not exceed $180,000,000, and the maximum annual debt service requirementsNet Debt Service on the District Bonds shall not exceed the amounts set forth in Exhibit I hereto. 3.3 Approval by City of District Bond Documents. Prior to the issuance of any District Bonds, including any bonds issued to refund any District Bonds, the District Bond Documents shall have been approved by the City. The City will have ten (10) business days after receipt of such District Bond Documents by the City Attorney and the City’s bond counsel to notify the District in writing if it objects to any provisions set forth in such District Bond Documents, setting forth its specific objections. If the City does not object in writing to the District Bond Documents within such ten (10) business day period, then the City will be deemed to have consented to the form and substance of such District Bond Documents. In addition, the District Bond Documents shall provide that any material amendments to the District Bond Documents shall be subject to approval by the City. 3.4 Refunding Bonds. Notwithstanding anything to the contrary contained herein, to the extent that District Bonds are issued to refund outstanding District Bonds, the Authority shall have the right to determine whether, and to what extent, it will pledge the Authority Pledged Revenues to such refunding District Bonds. In the event that all or a portion of the Authority Pledged Revenues are to be pledged to the payment of such refunding District Bonds, as a condition to such pledge, the Authority may in its discretion impose conditions and limitations in any such refunding District Bonds that were not applicable to the District Bonds being refunded. Any such refunding District Bonds that are secured in part by the Authority Pledged Revenues shall also be subject to review and approval by the City Attorney and the City’s bond counsel. 4. OBLIGATIONS OF THE DEVELOPER. 4.1 Construction of Project. As set forth in Section 2.1 hereof, the Developer and/or the District shall construct the Project. The Project shall be constructed substantially in accordance with the PDPDevelopment Approvals and Exhibit C attached hereto, unless otherwise agreed to by the City Manager and the Executive Director of the Authority. 1.8 Packet Pg. 118 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) 4.2 Construction of Eligible Improvements. The Developer shall construct, or cause the District to construct, the Eligible Improvements set forth in Exhibit D hereto. Such Eligible Improvements shall be financed with the net proceeds of the Bonds, subject to the Cap Amount, and, if necessary, other financing sources obtained by the Developer. 4.3 Construction of Residential Component of Project.; Affordable Housing. The Developer shall Complete Construction of the residential components of the Project, subject to Force Majeure, as follows: (a) on or prior to December 31, 20152016, the Developer shall Complete Construction of the first phase of the residential component of the Project consisting of a minimum of 200 units; (b) on or prior to December 31, 20172018, the Developer shall Complete Construction of the second phase of the residential component of the Project consisting of at least an additional 246 units. Failure to Complete Construction of the residential components of the Project in accordance with this Section 4.3 shall not be deemed to be an Event of Default under this Agreement, provided, however, that if Construction of the residential components of the Project is not Completed as set forth above, then beginning with the 20192020 fiscal year, the Developer shall be obligated to pay in such fiscal year and each fiscal year thereafter, regardless of whether the Developer is the owner of the Property on which the residential component of the Project is to be constructed, an amount equal to 50% of the difference between the Pledged Revenues generated from the residential component of the Project and the Estimated Revenues from the Residential Property, as follows: (i) such payment shall be made to the City to the extent that any Pledged Sales Tax Increment Revenues are applied in such fiscal year to the payment of the debt service requirements on the District Bonds; and (ii) to the extent that such payment is not due and owing to the City in any fiscal year, the balance of any such amount to be paid by the Developer in such fiscal year shall be deposited in the Foothills Mall Fund. The Project shall pay any affordable housing fees that may be enacted by the City Council on or before December 1, 2014, as if such fees had been in place and applicable to the Project. Any affordable housing impact fee that may be adopted as part of such requirements shall be paid by the Developer when due for the Project, except that for any portion of the Project developed prior to the imposition of the fee, such fee shall be paid no later than sixty days after adoption. 4.4 Construction and Transfer of Foothills Activity Center. (a) The Developer and/or District, as applicable, shall construct the Foothills Activity Center in substantial conformance with the specifications set forth on Exhibit F (the “City Specifications”) and upon”). The construction of the Foothills Activity Center shall be completed no later than March 31, 2015. (b) The Developer shall transfer to the City the Foothills Activity Center within thirty (30) days after the occurrence of (i) Completion of Construction of the Foothills Activity Center; (ii) acceptance of the same by the City in writing as consistent with the requirements of this Agreement, (iii) payment by the City of any Excess Costs, as defined 1.8 Packet Pg. 119 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) below, and (vi) approval by the City Manager and the Developer of the instruments hereinafter described or to be used, in connection with transfer of the Foothills Activity Center as and to the extent said approvals are specifically required in this Section 4.4. (c) The Developer will dedicatetransfer the Foothills Activity Center and the underlying real estate to the City, either by platting a separatespecial warranty deed in a form reasonably satisfactory to the City, together with appropriate reciprocal easements and other easements to provide for access to the Foothills Activity Center, as well as for utilities, shared walls and other similar necessary arrangements for use of the property, as a separately platted lot, or by recording a declaration of covenant creating. (d) In lieu of the form of transfer described in subsection (c), the Developer may transfer the Foothills Activity Center to the City as a separate property interest within a common interest community with the Foothills Activity Center as a separate unit, soestablished by declaration of covenant reasonably satisfactory to the City and consistent with Exhibit F, together with such easement and access rights and other appurtenances as the City may reasonably request. The City shall review and respond to a request for approval with reasonable promptness, and shall be obligated to approve said declaration of covenant if: (i) It burdens the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate itself, and (B) that the City has fee ownership of the Foothills Activity Center. does not unreasonably interfere with, impair or burden the City’s right or ability to operate the Foothills Activity Center (“FAC”) as a public recreation facility with related accessory uses and activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement; (ii) It allocates to the Foothills Activity Center only costs for the operation, maintenance, repair and replacement of common areas of and benefitting the building in which the Foothills Activity Center is located and structural elements of such building required for the Foothills Activity Center space, excluding: 1) real property taxes and personal property taxes; 2) operations, maintenance, repair and replacement paid for by the District; and 3) operations, maintenance, repair and replacement of common facilities that are duplicative of facilities provided in the FAC (“Operating Expenses”), allocated fairly to the Foothills Activity Center as a proportion of all space within the building and other buildings within the relevant Operating Expense measurement area, excluding common areas, with the FAC square footage amount deemed for the purpose of this Section to be capped at 18,000 square feet (the “FAC Allocation of Expenses”). The FAC Allocation of Expenses hereunder shall not exceed $2.25 per square foot of the Foothills Activity Center space per year, with no increase in that rate during the first three (3) calendar years following transfer of the Foothills Activity Center to the City. After the end of the third (3 rd ) full calendar year after transfer to the City, the FAC Allocation of Expenses shall not increase by more than three percent (3%) in any calendar year. 1.8 Packet Pg. 120 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) (e) The City and Developer and/or District, as applicable, will coordinate the construction and tenant finish of the Foothills Activity Center to ensure that it meets the City Specifications; however, in no event shall the total cost of(hard costs, soft costs and permit costs) of constructing the Foothills Activity Center in accordance with the City Specifications for the Foothills Activity Center that Developer and/or District, as applicable, is required to expend, exceed $4.8 million. Any costs in excess of $4.8 million will either require (i) amendments to the City’s Specifications so that as built, the cost does not exceed $4.8 million, which amendments shall be agreed upon by the Parties within ten (10) business days of Developer/District notification of a cost overrun, or (ii)5.1 million. The Developer and/or the District agree to keep the City informed of any potential cost overruns exceeding $5.1 million. In the event that such potential cost overruns are identified, the City shall be responsible for designating, in consultation with the Developer/District, sufficient modifications to the City Specifications to reduce the total costs of the Foothills Activity Center to $5.1 million, or to such other amount as the City may, in its discretion, agree may be incurred. Any such City-approved costs in excess of $5.1 million will either require that the City will pay to the Developer or the District, as the case may be, the difference between the costs of the updated City Specifications and the $4.85.1 million, (“Excess Costs”), within 3090 days of written demand by the Developer or District accompanied by reasonable documentation, subject to annual appropriation by the City Council at its sole discretion. The Developer and/or the District agree to keep the City informed of any potential cost overruns exceeding $4.8 million. (f) The City agrees that the Foothills Activity Center will be subject to any covenants, easements or other documents recorded against the Property as of the date of conveyance. this Agreement, any other documents, covenants or easements recorded in the normal course of the development of the Project, including a declaration of covenant as described above, and certain use restrictions relating to tenant leases entered into prior to said date of transfer, provided any such covenants, easements or other documents burden the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate itself, and (B) that does not unreasonably interfere with, impair or burden the City’s right or ability to operate the FAC as a public recreation facility with related accessory uses and activities activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement. Any such documents, covenants or easements shall be subject to the City’s review and approval of the same solely for compliance with the requirements of this Agreement. No covenants, easements or declarations recorded after transfer of the Foothills Activity Center to the City shall be effective as against the City without the City’s express written approval, which shall be subject to the action of the City Council, in its discretion. The City shall review and respond to a request for approval with reasonable promptness. (g) The Developer and/or District agree to cooperate with the City in connection with any applicable procedural requirements of the City related to the construction of the Foothills Activity Center. In connection with design and construction of the Foothills Activity Center, the Developer and/or District shall use good faith efforts to require that all available third-party contractor and material warranties to the extent that 1.8 Packet Pg. 121 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) they relate to labor or materials supplied for the Foothills Activity Center, extend to the benefit of the City in a form reasonably satisfactory to the City. 4.5 Solar and Other Energy Efficiency Improvements. The Developer and/or the District, as applicable, agree to construct the Project to accommodate the addition of solar panels to the roof tops of the principal non-residential components subsequent to the Completion of Construction of the Project. The City agrees that funds in the Foothills Mall Fund may be applied by the Developer to pay the costs of installing solar panels or other energy efficiency improvements within the Project upon reasonable documentation being provided to the City. Within five (5) years after the issuance of the last Certificate of Occupancy for the non-residential component of the Project, Developer agrees to make application to the City for the addition of one or more solar panels or other energy efficiency improvements to the Project. 4.6 Compliance with Design and Construction Regulations; Payment of Fees and Costs. The design and construction of the Project will comply with all applicable codes and regulations of entities having jurisdiction, including the City Requirements. The Developer and/or the District will pay or cause to be paid all required fees and costs, including those imposed by the City, in connection with the design, construction, applicable warranty requirements, and use of the Project. 4.7 Imposition of Add-On PIF. On or prior to the issuance of the District Bonds, the Developer shall impose the Add-On PIF on retail sales occurring on the Property that are subject to the City’s Sales Tax, provided, however, that in connection with any property that is not owned by the Developer, the Developer shall use its best efforts to impose such Add-On PIF on such retail sales occurring on any such Property, subject to the consent of the owners of such Property. All property under the Developer’s control as of the Effective Date shall be made subject to the Add-On PIF, and any property within the Project acquired by the Developer subsequent to the Effective Date shall become subject to this requirement. The Add-On PIF shall be imposed only for so long as the District Bonds are outstanding, or thirty years from the Effective Date, whichever is longer. So long as the District Bonds are outstanding, the Developer covenants to cause all Add-On PIF Revenues to be remitted to the District Bond Trustee and such Add-On PIF Revenues shall be pledged to the payment of the District Bonds. Upon payment in full or defeasance of all outstanding District Bonds, To the extent that the Add-On PIF is still being imposed, prior to the initial issuance of the District Bonds, the Developer covenants that it shallto cause all Add-On PIF Revenues to be deposited in the Foothills Mall Fundheld in a trust account and remitted to the District Bond Trustee upon the initial issuance of the District Bonds. The Developer agrees that it shall be responsible for enforcing the placard requirements and for the implementation of the Add-On PIF with the retailers in the Project. 4.8 Access to Property. Developer will permit representatives of the City and the Authority access to the Property and the Project at reasonable times during regular business hours and with prior notice as necessary for the purpose of carrying out or determining compliance with the Agreement, the Urban Renewal Plan, or any City code or ordinance, including, without limitation, inspection of any work being conducted. No compensation will be payable for such access. The City and the Authority, as applicable, agree to restore the Property and any component of the Project to its condition prior to any tests or inspections made by the City and further agree that they shall be responsible for any damage that results from the City or the Authority, as 1.8 Packet Pg. 122 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) applicable, accessing the Property pursuant to their respective rights under this Agreement, to the extent permitted by law and, in the case of the City, subject to annual appropriation of funds by the City Council, in its sole discretion. 4.9 Class A Shopping Center. The Developer represents and warrants that, following Completion of Construction of the Project, the physical condition of the Project will be maintained as a “Class A” shopping center, in a manner consistent with comparable shopping centers in the State of Colorado. 4.10 Maintenance of Project. The Developer and/or District shall be responsible for the maintenance of the Project, except for the Foothills Activity Center, the Underpass and the Larimer County Canal No. 2 (which shall be maintained by the City), provided that the District shall provide funding for the City to maintain Larimer County Canal No. 2. The City shall pay for the costs of maintaining the Foothills Activity Center and the Underpass. The costs incurred by the Developer and/or the District in maintaining the Project shall be paid from the District Operating Revenue. The City’s obligations shall be subject to the annual appropriation of funds by the City Council, in its sole discretion. 4.11 Appeal of Property Taxes. In the event that the Developer seeks a reduction in all or any portion of the Property’s real property tax assessed valuation or seeks an abatement of real property taxes on all or any portion of the Property, and any such reduction or abatement results in the Pledged Revenues generated from the real property taxes on the Property being less than the Estimated Revenues from Property Taxes such that the Pledged Sales Tax Increment Revenues that would otherwise be remitted to the City are needed to pay the debt service requirements on the District Bonds, then beginning with the fiscal year in which such reduction or abatement becomes effective, the Developer shall be obligated to pay to the City in such fiscal year and each fiscal year thereafter where such reduction or abatement results in the property taxes on the Property being less than the Estimated Revenues from Property Taxes, an amount equal to 50% of the amount of Pledged Sales Tax Increment Revenues applied to the payment of the District Bonds in such fiscal year. Notwithstanding the foregoing, in any fiscal year that the Pledged Sales Tax Increment Revenues are not applied to the payment of the debt service requirements on the District Bonds, no payments shall be due and owing from the Developer to the City pursuant to this Section 4.11. In the event that the Developer who sought the reduction or abatement sells all or a portion of the Property, the subsequent owner shall be obligated to make any payments to the City required by this Section 4.11. A memorandum of this covenant satisfactory to the City and the Authority shall be recorded with the Larimer County Clerk and Recorder's Office. The Developer shall provide written notice to the City and to the Authority of any requested reduction in any portion of the Property’s real property tax assessed valuation or abatement of any portion of the Property’s real property taxes. 4.12 Notification of Sale of Property. The Developer shall provide written notice to the City and the Authority of any sale of all or any portion of the Property. 4.13 Payment of City and URA Expenses. The Developer agrees that it shall pay or reimburse the City and the Authority for all fees, costs and out-of-pocket third party expenses incurred by them in connection with developing, negotiating and preparing this Agreement and 1.8 Packet Pg. 123 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) related documents and issuing the District Bonds, including without limitation, all legal fees and out-of-pocket third party expenses, provided that, to the extent that such fees and expenses qualify as Costs of Issuance, such fees and expenses may be paid from the proceeds of the District Bonds. In the event that the District Bonds are not issued on or prior to JulyMarch 31, 20132014, the Developer shall pay or reimburse the City and the Authority for such fees and expenses no later than AugustApril 15, 20132014. In addition, to the extent that the District’s Bond Counsel determines that not all such fees and expenses qualify as Costs of Issuance hereunder, then the Developer shall pay or reimburse the City and the Authority for any such fees and expenses not paid from proceeds of the District Bonds as Costs of Issuance. Upon satisfaction of the reimbursement obligation pursuant to this Section, the Agreement to Negotiate shall be deemed to be terminated and to have no further force or effect. 5. THE DISTRICT. 5.1 Compliance with Service Plan and Applicable Law. At all times the District will comply with the requirements of the Service Plan as it may be amended from time to time. To the extent authorized by its Service Plan, the District may design, construct, finance, own, acquire, maintain, and operate Eligible Improvements in accordance with all applicable laws, ordinances, standards, policies, and specifications of the State of Colorado, the City, and any other entity with jurisdiction. 5.2 District Bonds. Subject to the terms and provisions of this Agreement, the District shall issue the District Bonds within ninety (90) days of the satisfaction of the conditions precedent set forth in Section 3.1 hereof. Net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) shall be deposited to the Project Fund and used to pay or reimburse the Developer for Eligible Costs, as further set forth herein and in the District Bond Documents. The District agrees to irrevocably pledge the District Pledged Revenue to the payment of such District Bonds. The District Bonds shall be issued in compliance with Section 3 hereof. 5.3 District Pledged Revenue. The District covenants to impose the District Debt Service Mill Levy so that such District Debt Service Mill Levy will be in effect no later than January 1, 20142015, and the District covenants to continue to impose the District Debt Service Mill Levy for so long as any District Bonds remain outstanding. The District further covenants that so long as any District Bonds remain outstanding, that the District will remit all District Pledged Revenues to the District Bond Trustee for such outstanding District Bonds. Notwithstanding expiration of the time or times that the Pledged Property Tax Increment Revenue may be collected pursuant to the Act, the District agrees that the full amount of the District Debt Service Mill Levy shall at all times remain pledged to the payment of any outstanding Bonds to the extent required by the District Bond Documents or to the payment of any outstanding District Bonds to the extent required by the District Bond Documents. In the event that the District Pledged Revenues are imposed and collected by the District after all outstanding District Bonds have been paid or defeased, the District shall thereafter deposit all District Pledged Revenues in the Foothills Mall Fund. 5.4 District Operating Revenue; Maintenance Expenses. The District will use the District Operating Revenue to pay its normal and reasonable operating and maintenance expenses, 1.8 Packet Pg. 124 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) to pay the City for the maintenance of Larimer County Canal No. 2, and for any other lawful purpose. The District covenants that, upon the written request of the City, it shall use District Operating Revenues to pay all costs incurred by the City in maintaining Larimer County Canal No. 2. 5.5 Reimbursement and Infrastructure Agreement. The District will acquire certain tracts of the Property and/or easements as necessary, as designated onin the PDPDevelopment Approvals, from Developer (the “District Property”) and will manage the District Property in accordance with the Service Plan. 5.6 Foothills Mall Fund. The District covenants to deposit any Add-On PIF Revenues released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the District pursuant to Section 3.2 hereof into the Foothills Mall Fund. Without the prior written consent of the City Manager, the District shall apply or disburse moneys on deposit in the Foothills Mall Fund only in accordance with Exhibit H. The Parties acknowledge and agree that any expenditure of funds on deposit in the Foothills Mall Fund shall be constrained by and must be in compliance with applicable State and federal law governing the use of such funds, which, in part, will be governed by the source of such funds. In addition, the Parties acknowledge that the District may only undertake activities and expend funds for purposes authorized by the Special District Act and the approved Service Plan of the District. The District shall provide the City with all documentation relating to the application of moneys on deposit in the Foothills Mall Fund. 5.7 No Impairment. The District will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive, apply and pledge District Pledged Revenue to payment of the District Bonds. 6. THE AUTHORITY. 6.1 Authority Pledged Revenues. The Authority covenants and agrees that it will pledge the Authority Pledged Revenues to the payment of the District Bonds in accordance with the terms and provisions of this Agreement. The Authority agrees to establish the Special Fund in accordance with the provisions of the Act and deposit the Authority Pledged Revenues into the Special Fund upon receipt. All moneys on deposit in the Special Fund, and any other Pledged Property Tax Increment Revenues or Pledged Sales Tax Increment Revenues received by the Authority, will be remitted to the District Bond Trustee in accordance with the terms and provisions of the District Bond Indenture so long as any District Bonds remain outstanding. 6.2 District Debt Service Mill Levy and District Operating Revenue. The Authority hereby irrevocably pledges any amounts received from the District Debt Service Mill Levy and the District Operating Revenue to the District. The District Debt Service Mill Levy and the District Operating Revenue, when and as received by the Authority, will be subject to the lien of such pledge without any physical delivery, filing, or further act. The Authority will deposit into the District Administrative Account any and all of the District Debt Service Mill Levy and/or District Operating Revenue received by the Authority from time to time in accordance with Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado from the levy of the District on taxable real property within the TIF Area. The Authority will transfer all of the revenue in the District Administrative Account to the District 1.8 Packet Pg. 125 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) on or before the 20 th day of each month. The obligation of the Authority to make deposits in the District Administrative Account and to transfer such revenue to the District shall expire when the Authority’s right to receive such revenue expires pursuant to the Act. The District shall use the District Operating Revenue to pay its normal and reasonable administrative, operating and maintenance expenses. The District shall pledge the District Debt Service Mill Levy Revenue to payment of the District Bonds. 6.3 Multi-Fiscal Year Obligation. The Parties acknowledge that, according to the decision of the Colorado Court of Appeals in Olson v. City of Golden, 53 P.3d 747 (2002), an urban renewal authority is not a local government and therefore is not subject to the provisions of Article X, Section 20 of the Colorado Constitution. Accordingly, the Authority’s obligation to remit the Authority Pledged Revenue to the District Bond Trustee in accordance with the provisions of this agreement does not require electoral authorization and is not subject to annual appropriation. 6.4 No Impairment. The Authority will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive and apply Authority Pledged Revenue in accordance with the terms and provisions of this Agreement. 6.5 Cooperation with District and Developer. The Authority agrees to cooperate in a reasonable manner to assist the District in issuing District Bonds and to pledge the Authority Pledged Revenue to the payment of such District Bonds in accordance with the provisions of this Agreement and the District Bond Documents. 7. THE CITY. 1.1 Cooperation with District and Developer. The City agrees to cooperate with the Developer and District in reviewing, scheduling hearings for, and scheduling the Service Plan Amendment for approval by the City Council. 1.2 Cooperation with Authority. The City agrees to cooperate with the Authority in reviewing, scheduling hearings for, and scheduling the amendment to the Urban Renewal Plan for approval by the City Council. 7.1 Collection of Authority Pledged Revenue. The City agrees to pay tothat is will not amend or modify the Authority any Authority Pledged Revenues when,Urban Renewal Plan as and if received by the City, but which are due and owing to the Authority pursuant to the Urban Renewal Planit relates to this Agreement without the consent of all of the other Parties. 7.2 Underpass. The City agrees to accept ownership of the Underpass from the Developer or the District upon Completion of Construction of the Underpass and in accordance with the terms and conditions of the development agreement related theretothis Agreement. 8. PAYMENT OR REIMBURSEMENT OF ELIGIBLE COSTS. The Developer or District, as applicable, will be paid or reimbursed for Eligible Costs from the net proceeds of the District Bonds on deposit in the Project Fund upon compliance with the requisition process set forth in the District Bond Documents, which shall substantially comply with the requirements set forth in Exhibit E hereto. Such payment or reimbursement of Eligible Costs shall also comply with the 1.8 Packet Pg. 126 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) Reimbursement and Infrastructure Agreement between the Developer and the District. Cost savings in the line items listed in Exhibit D may be allocated to cost overruns in other line items only in accordance with the provisions set forth in Exhibit D. 9. BOOKS AND ACCOUNTS; FINANCIAL STATEMENTS. The Authority and District will keep proper and current itemized records, books, and accounts in which complete and accurate entries will be made of the receipt and use of all amounts of revenue received from any and all sources and such other calculations required by this Agreement, the District Bond Documents, and any applicable law or regulation. The Authority and the District will prepare after the close of each fiscal year, a complete financial statement prepared in accordance with generally accepted accounting principles accepted in the United States of America for such year in reasonable detail covering the above information, and if required by statute, certified by a public accountant, and will furnish a copy of such statement to the other Parties within two hundred and ten (210) days after the close of each fiscal year of the Authority and the District or upon such earlier date as may be required by the District Bond Documents. 9.1 Inspection of Records. All books, records and reports (except those allowed or required by applicable law to be kept confidential) in the possession of the City, the Authority, and the District, including, without limitation, those relating to the Pledged Revenue, the Authority Administration Fee, Eligible Improvements, Eligible Costs, District Pledged Revenue, District Operating Revenue, District Bonds will at all reasonable times be open to inspection by such accountants or other agents as the respective Parties may from time to time designate. 10. INSURANCE. At all times prior to Completion of Construction of the Project, the District and the Developer, within ten (10) days after request by the City or the Authority, will provide the City or the Authority, as the case may be, with proof of payment of premiums and certificates of insurance showing that the District and the Developer are carrying, or causing prime contractors to carry, builder's risk insurance (if appropriate), commercial general liability, automobile, and worker's compensation insurance policies in commercially reasonable amounts and coverages approved by the City Manager or the Executive Director of the Authority. Such policies of insurance shall be placed with financially sound and reputable insurers. 11. INDEMNIFICATION. For each Eligible Improvement, from Commencement of Construction through Completion of Construction, and for any action arising during that time period, Developer agrees to indemnify, defend and hold harmless the City and the Authority, its officers, agents and employees, from and against all liability, claims, demands, and expenses, including fines imposed by any applicable state or federal regulatory agency, court costs and attorney fees, on account of any injury, loss, or damage, which arise out of or are in any manner connected with any of the work to be performed by Developer, any subcontractor of Developer, or any officer, employee, agent, successor or assign of Developer under this Agreement, if such injury, loss, or damage is caused in whole or in part by, the negligent act or omission, error, professional error, mistake, accident, or other fault of Developer, any subcontractor of Developer, or any officer, employee, agent, successor or assign of Developer, but excluding any injuries, losses or damages which are due to the gross negligence, breach of contract or willful misconduct of the City or the Authority, as the case may be. 1.8 Packet Pg. 127 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) 12. REPRESENTATIONS AND, WARRANTIES AND COVENANTS. 12.1 Representations and Warranties by the Authority. The Authority represents and warrants as follows: (a) The Authority is a body corporate and politic of the State of Colorado, duly organized under the Act, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations. (b) The Authority knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the Authority or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the Authority or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the Authority is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the Authority. (d) The Authority Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the Authority will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of any District Bonds. (e) This Agreement constitutes a valid and binding obligation of the Authority, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.2 Representations and Warranties by the District. The District represents and warrants as follows: (a) The District is a quasi-municipal corporation and political subdivision of the State of Colorado, organized and existing in accordance with Title 32, Article 1, C.R.S., and has the legal capacity and the authority to enter into and perform its obligations under this Agreement and the documents to be executed and delivered pursuant hereto. (b) The execution and delivery of this Agreement and such documents and the performance and observance of their terms, conditions and obligations have been duly and validly authorized by all necessary action on its part, and such documents and such performance and observance are valid and binding upon the District. (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the District or to the District’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a 1.8 Packet Pg. 128 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) default under any agreement or other instrument to which the District is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the District. (d) The District knows of no litigation, proceeding, initiative, referendum, or investigation or threat of any of the same contesting the powers of the Authority, the District or any of its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (e) The District Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the District will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of the District Bonds. (f) This Agreement constitutes a valid and binding obligation of the District, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.3 Representations and, Warranties and Covenants by the Developer. Developer represents and warrants as follows: (a) Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and in good standing and authorized to do business in the State of Colorado and has the power and the authority to enter into and perform in a timely manner its obligations under this Agreement. (b) The execution and delivery of this Agreement have been duly and validly authorized by all necessary action on its part to make this Agreement and are valid and binding upon Developer. (c) The execution and delivery of this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to Developer or to Developer’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which Developer is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of Developer. (d) Developer knows of no litigation, proceeding, initiative, referendum, or investigation or threat or any of the same contesting the powers of the Developer or any of its principals or officials with respect to this Agreement that has not been disclosed in writing to the other Parties. (e) Developer agrees that it shall enforce the imposition and collection of the Add-On PIF and the remittance of the Add-On PIF to the District Bond Trustee. (f) Developer covenants and agrees that it shall complete the Project in strict conformance with the terms of this Agreement, and Exhibit C, including but not limited to high quality architectural and landscape design exceeding the City of Fort Collins Land Use Code 1.8 Packet Pg. 129 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) minimum standards and consistent in character with the approved Project Development Plan dated February 7, 2013, and the environmental sustainability measures set forth in Exhibit C, except as approved in writing by the City Manager. (g) Except with regard to the signature pages from ARC, as defined below, in escrow with Fidelity National Title Company (“Fidelity”) are: (i) a Termination and Relocation Agreement between the Developer and arc Thrift Stores (“ARC”), (ii) an Estoppel Agreement between the Developer, ARC, Crown Financial, LLC (“Crown”) and Larimer Park Associates (“LPA”), (iii) an Escrow Agreement, between the Developer, ARC and Fidelity (collectively the “ARC Escrow Documents”), (iv) assignments between Crown and the Developer and LPA and the Developer, and (v) funds in an amount sufficient to cover the payment obligations to Crown and LPA pursuant to the separate assignment agreements with Crown and LPA and the escrow deposit required under the Escrow Agreement. Provided ARC has delivered fully executed copies of the ARC Escrow Documents with instructions to permit the completion of the escrow as hereinafter described, the Developer covenants and agrees that on or before Noon on January 15, 2014, the Developer shall deliver confirmation to Fidelity to complete the escrow so that fully-executed copies of the ARC Escrow Documents are delivered to the applicable parties and funding related to the same occurs in accordance with each applicable document. 12.4 Representations and Warranties by the City. The City represents and warrants as follows: (a) The City is a body corporate and politic and a home rule municipality of the State of Colorado, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations under this Agreement. (b) The City knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the City or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required hereunder and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the City or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the City is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the City. (d) This Agreement constitutes a valid and binding obligation of the City, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 13. TERM. The term of this Agreement is the period commencing on the Effective Date and terminating on the later of: (i) the date of payment in full of the District Bonds, or (ii) thirty years from the Effective Date; provided, however, that the Authority’s obligation to remit the Authority 1.8 Packet Pg. 130 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) Pledged Revenue to the District Bond Trustee shall terminate upon the expiration of the time period that the Authority is authorized pursuant to the Act to receive the Authority Pledged Revenue, and provided, further, that the following provisions, without limitation, shall continue beyond the term of this Agreement: (A) the District’s and Developer’s obligation to operate and maintain the Project in accordance with the standards set forth herein, (B) the District’s obligation to reimburse the City for the costs of maintaining Larimer County Canal No. 2, (C) the limitation on the imposition of the Add-on PIF for no more than thirty years from the Effective Dateonly so long as any District Bonds are outstanding without the written consent of the City, (D) the Developer’s indemnification obligations under Section 11 hereof, (E) any rights and remedies that a Party has for an Event of Default hereunder, and (F) any rights that a Party has to inspect books and records as set forth in Section 9 hereof. 14. CONFLICTS OF INTEREST. None of the following will have any personal interest, direct or indirect, in this Agreement: a member of the governing body of the Authority or the City, an employee of the Authority or of the City who exercises responsibility concerning the Urban Renewal Plan, or an individual or firm retained by the City or the Authority who has performed consulting services to the Authority in connection with the Urban Renewal Plan, this Agreement, or the Authority Financing. None of the above persons or entities will participate in any decision relating to the Agreement that affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 15. ANTIDISCRIMINATION. Developer, for itself and its successors and assigns, agrees that in the construction of the Eligible Improvements and in the use and occupancy of the Property and the Eligible Improvements, Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, sexual preference, disability, marital status, ancestry, or national origin. 16. NOTICES. Any notice required or permitted by this Agreement will be in writing and will be deemed to have been sufficiently given for all purposes if delivered in person, by prepaid overnight express mail or overnight courier service, by certified mail or registered mail, postage prepaid return receipt requested, addressed to the Party to whom such notice is to be given at the address set forth on the signature page below or at such other or additional addresses as may be furnished in writing to the other Parties. Additionally, the Parties agree to provide concurrent notice via electronic mail. 17. DELAYS; FORCE MAJEURE. Subject to the following provisions, time is of the essence. Any delays in or failure of performance by any Party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, earthquake, strikes, labor disputes, regulation or order of civil or military authorities, or other causes, similar or dissimilar, which are beyond the control of such Party. 18. EVENTS OF DEFAULT. The following events shall constitute an Event of Default under this Agreement: (a) Failure by the Authority to pledge the Authority Pledged Revenue to any outstanding District Bonds in accordance with the District Bond Documents or failure to remit any 1.8 Packet Pg. 131 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) such Authority Pledged Revenues within five (5) business days of the date they are required to be remitted; (b) Failure by the District to impose the District Debt Service Mill Levy or to remit the District Pledged Revenues within five (5) business days of the date they are required to be remitted; (c) Any representation or warranty made by any Party in this Agreement proves to have been untrue or incomplete in any material respect when made and which untruth or incompletion would have a material adverse effect upon any other Party; (d) Any Party fails in the performance of any other covenant in this Agreement and such default continues for thirty (30) days after written notice specifying such default and requiring the same to be remedied is given by a non-defaulting Party to the defaulting Party. If such default is not of a type which can be cured within such thirty (30) day period and the defaulting Party gives written notice to the non-defaulting Party or Parties within such thirty (30) day period that it is actively and diligently pursuing such cure, the defaulting Party shall have a reasonable period of time given the nature of the default following the end of such thirty (30) day period to cure such default, provided that such defaulting Party is at all times within such additional time period actively and diligently pursuing such cure in good faith. ; (e) The Developer fails in the timely performance of its obligations under Section 12.3(g). 19. REMEDIES. To the extent that an Event of Default has occurred and is continuing hereunder, and District Bonds have not yet been issued, no District Bonds shall be issued until such Event of Default has been cured, or remedied, or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. Upon the occurrence and continuation of an Event of Default, the non-defaulting Party’s remedies will be limited to the right to enforce the defaulting Party’s obligations by an action for injunction, specific performance, or other appropriate equitable remedy or for mandamus, or by an action to collect and enforce payment of sums owing hereunder, and no other remedy, and no Party will be entitled to or claim damages for an Event of Default by the defaulting Party, including, without limitation, lost profits, economic damages, or actual, direct, incidental, consequential, punitive or exemplary damages. In the event of any litigation or other proceeding to enforce any of the terms, covenants or conditions of this Agreement, the prevailing party in such litigation or other proceeding will receive, as part of its judgment or award, its reasonable attorneys’ fees and costs. The occurrence and continuation of an Event of Default will not affect the obligation of the Authority or the District to collect and remit Pledged Revenues or the obligation of the Authority to remit the District Debt Service Mill Levy Revenue or the District Operating Revenue to the District in accordance with the terms and provisions of this Agreement. 19.20. TERMINATION. Upon the occurrence of any of the following events, this Agreement may be terminated in accordance with the provisions hereinafter set forth: 1.8 Packet Pg. 132 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) (a) In the event that the District Bonds are not issued on or prior to December 1, 2013June 30, 2014, then any Party shall have the option to terminate this Agreement. (b) In the event that the District Bonds have not been issued and the Developer or the District have not Commenced Construction of any portion of the Project on or prior to OctoberMarch 1, 20132014, then any Party shall have the option to terminate this Agreement. In order to terminate this Agreement, a Party shall provide written notice of such termination to the other Parties. Such termination shall be effective thirty (30) days after the date of such notice unless prior to such time, the Parties are able to negotiate in good faith to reach an agreement to avoid such termination. Upon such termination, this Agreement shall be null and void and of no effect, and no action, claim or demand may be based on any term or provision of this Agreement. In addition the Parties agree to execute a mutual release or other instruments reasonably required to effectuate and give notice of such termination. In the event that this agreement is terminated pursuant to this Section 20, the Developer agrees that it shall continue to be obligated to pay or reimburse the Authority for Authority Reimbursable Costs in accordance with the Agreement to Negotiate and shall continue to be obligated to pay or reimburse the City and the Authority for its costs, fees and expenses as set forth in Section 4.11 hereof. 20.21. NONLIABILITY OF OFFICIALS, AGENTS, MEMBERS, AND EMPLOYEES. Except for willful or wanton actions, no trustee, board member, commissioner, official, employee, consultant, manager, member, shareholder, attorney or agent of any Party, nor any lender to any Party or to the Project, will be personally liable under the Agreement or in the event of any default or for any amount that may become due to any Party. 21.22. ASSIGNMENT. Except for a District Bond Trustee in connection with the issuance of the District Bonds, this Agreement will not be assigned in whole or in part by any Party without the prior written consent of the other Parties; provided, however, the following assignments and transfers will not require any such consent: (a) Developer may assign all or a portion of this Agreement to the District; (b) subject to written notice to the City and the Authority from Developer containing the name and address of the lender or other party, Developer may pledge, collaterally assign or otherwise encumber all or any part of its rights under this Agreement, including its right to receive any payment or reimbursement, to any lender or other party that provides acquisition, construction, working capital, tenant improvement or other financing to Developer in connection with development of the Property and/or construction of the Eligible Improvements; and (c) on and after Completion of Construction of the Project and subject to written notice to the City and the Authority, the Developer may assign all or any part of its rights under this Agreement to any purchaser of all or any portion of the Project. On and after Completion of Construction of the Project and in the event that the Developer sells all or a portion of the Project to a purchaser, and such purchaser accepts all or a part of the Developer’s obligations hereunder, then Developer shall be released from all of its obligations hereunder that have been assumed or accepted by such purchaser, provided, however, that no such release shall be effective until the City and the Authority have received written confirmation that such purchaser has assumed or accepted any such obligations hereunder. The Authority recognizes that Developer may form, together with investors, a separate, special purpose entity to develop, own and/or 1.8 Packet Pg. 133 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) operate all or a portion of the Property or of the Eligible Improvements to be constructed thereon and that one or more assignments of all or a portion of this Agreement may be required in connection with such activities and such transfer(s) will not require any consent by the Parties. Except as otherwise specifically set forth in Section 4.11 hereof, no covenants or obligations of the Developer or the District hereunder shall run with the land. 22.23. COOPERATION REGARDING DEFENSE. In the event of any litigation or other legal challenge involving this Agreement, the District Bonds, the validity of the Urban Renewal Plan, the District, or any other material part or provision of this Agreement or the ability of any Party to enter into this Agreement, the Parties will cooperate and jointly defend against such action or challenge, to the extent permitted by law. 23.24. SECTION CAPTIONS. The captions of the sections are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 1.8 Packet Pg. 134 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) 24.25. ADDITIONAL DOCUMENTS OR ACTION. 25.1 The Parties agree to execute any additional documents or take any additional action, including but not limited to estoppel documents requested or required by third parties, including without limitation, lenders, tenants or potential purchasers, that is necessary to carry out this Agreement or is reasonably requested by any Party to confirm or clarify the intent of the provisions of this Agreement and to effectuate the agreements and the intent. Notwithstanding the foregoing, however, no Party shall be obligated to execute any additional document or take any additional action unless such document or action is reasonably acceptable to such Party. 25.2 If all or any portion of this Agreement, or other agreements approved in connection with this Agreement are asserted or determined to be invalid, illegal or are otherwise precluded, the Parties, within the scope of their powers and duties, will cooperate in the joint defense of such documents and, if such defense is unsuccessful, the Parties will use reasonable, diligent good faith efforts to amend, reform or replace such precluded items to assure, to the extent legally permissible, that each Party substantially receives the benefits that it would have received under this Agreement. 25.3 At the time of issuance of the District Bonds, each of the Authority and the City shall deliver an opinion of counsel addressed to the District, or with a reliance letter delivered to the District, with respect to this Agreement and the Urban Renewal Plan, which opinions shall state in substance that the Agreement and the Urban Renewal Plan have been duly authorized, executed, and delivered by the Authority and the City, as applicable, constitute valid and binding agreements of the Authority and the City, as applicable, and are enforceable according to their terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.4 At the time of issuance of the District Bonds, the District shall deliver an opinion of counsel addressed to the City and the Authority, or with a reliance letter delivered to the City and the Authority, with respect to this Agreement, which opinion shall state in substance that the Agreement has been duly authorized, executed, and delivered by the District, constitutes a valid and binding agreement of the District, and is enforceable according to its terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.5 The City Manager shall have the authority to act on behalf of the City under this Agreement and the Executive Director shall have the authority to act on behalf of the Authority under this Agreement. 25.26. AMENDMENT. This Agreement may be amended only by an instrument in writing signed by the Parties. 26.27. WAIVER OF BREACH. A waiver by any Party to this Agreement of the breach of any term or provision of this Agreement must be in writing and will not operate or be construed as a waiver of any subsequent breach by any Party. 1.8 Packet Pg. 135 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) 27.28. GOVERNING LAW. The laws of the State of Colorado govern this Agreement. The District Court of Larimer County will be the exclusive venue for any litigation. 28.29. BINDING EFFECT. This Agreement will inure to the benefit of and be binding upon the Parties and their respective legal representatives, successors, heirs, and assigns, provided that nothing in this paragraph permits the assignment of this Agreement except as set forth in Section 22. 29.30. EXECUTION IN COUNTERPARTS. This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which will constitute but one and the same instrument. 30.31. LIMITED THIRD-PARTY BENEFICIARIES. Except for the District Bond Trustee for any District Bonds, direct lenders to the District that have been assigned rights hereunder in accordance with Section 22, or any provider of credit enhancement for the District Bonds, this Agreement is not intended and shall not be deemed to confer any rights on any person or entity not named as a Party to this Agreement. 31.32. NO PRESUMPTION. The Parties and their attorneys have had a full opportunity to review and participate in the drafting of the final form of this Agreement. Accordingly, this Agreement will be construed without regard to any presumption or other rule of construction against the Party causing the Agreement to be drafted. 32.33. SEVERABILITY. If any provision of this Agreement as applied to any Party or to any circumstance is adjudged by a court to be void or unenforceable, the same will in no way affect any other provision of this Agreement, the application of any such provision in any other circumstances or the validity, or enforceability of the Agreement as a whole. 2. MINOR CHANGES. This Agreement has been approved in substantially the form submitted to the governing bodies of the Parties. The officers executing this Agreement are authorized to make and may have made, minor changes to this Agreement and attached exhibits as they have considered necessary. So long as such changes were consistent with the intent and understanding of the Parties at the time of approval by the governing bodies, the execution of the Agreement will constitute the approval of such changes by the respective Parties. 33.34. DAYS. If the day for any performance or event provided for herein is a Saturday, a Sunday, a day on which national banks are not open for the regular transactions of business, or a legal holiday pursuant to Section 24-11-101(1), C.R.S., such day will be extended until the next day on which such banks and state offices are open for the transaction of business. 34.35. GOOD FAITH OF PARTIES. In the performance of this Agreement or in considering any requested approval, consent, acceptance, or extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily, capriciously, or unreasonably withhold, condition, or delay any approval, acceptance, or extension of time required or requested pursuant to this Agreement. 35.36. PARTIES NOT PARTNERS. Notwithstanding any language in this Agreement or any other agreement, representation, or warranty to the contrary, the Parties will not be deemed to be 1.8 Packet Pg. 136 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) partners or joint venturers, and no Party is responsible for any debt or liability of any other Party. 36.37. NO WAIVER OF IMMUNITY. Nothing contained in this Agreement constitutes a waiver of sovereign immunity or governmental immunity by any Party under applicable state law. 1.8 Packet Pg. 137 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) IN WITNESS WHEREOF, this Agreement is executed by the Parties as of ________ __, 2013. IN WITNESS WHEREOF, this Agreement is executed by the Parties as of January __, 2014. FORT COLLINS URBAN RENEWAL AUTHORITY _____________________________________ ATTEST: Gerry Horak, Vice Chairperson _____________________________ Darin Atteberry, Executive Director Notice Address: Fort Collins Urban Renewal Authority 300 LaPorte Avenue P.O. Box 580 Fort Collins, CO 80522 Attention: Darin Atteberry, Executive Director Email: DATTEBERRY@fcgov.com 1.8 Packet Pg. 138 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) CITY OF FORT COLLINS, COLORADO By: Gerry Horak, Mayor Pro Tem (SEAL) Attest: _______________________ Wanda Nelson, City Clerk APPROVED AS TO FORM _______________________ Steve Roy, City Attorney Notice Address: City of Fort Collins 300 LaPorte Avenue P.O. Box 580 Fort Collins, Colorado 80522 Attention: Steve Roy, Esq., City Attorney Email: SROY@fcgov.com 1.8 Packet Pg. 139 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) FOOTHILLS METROPOLITAN DISTRICT _________________________________ ATTEST: ________________________, President _____________________________ Secretary Notice Address: ______________________________ ______________________________ ______________________________ c/o White, Bear and Ankele, P.C. The Streets at Southglenn 2154 E.Commons Avenue, Suite 2000 Centennial, CO 80122 Attention: _____________________Kristen Bear Email: ________________________kbear@wbapc.com 1.8 Packet Pg. 140 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) PUBFIN/1716617.1 WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company By: Foothills Alberta Management, LLC, a Colorado limited liability company Its: Authorized Agent By: ____________________________ Donald G. Provost Its: Manager Notice Address: Walton Foothills Holdings VI, L.L.C. 5750 DTC Pkwy, Suite 210 Greenwood Village, CO 80111 Attention: Donald G. Provost Email: ___________________dgp@albdev.com With a copy to: Brownstein Hyatt Farber Schreck, LLP 410 Seventeenth Street, Suite 2200 Denver, CO 80202 Attention: Carolynne C. White, Esq. Email: cwhite@bhfs.com 1.8 Packet Pg. 141 Attachment: Comparison of Revised Agreement with Agreement dated 5/7/13 (Foothills Mall) - 1 - RESOLUTION 2014-004 OF THE COUNCIL OF CITY OF FORT COLLINS APPROVING AN UPDATED REDEVELOPMENT AND REIMBURSEMENT AGREEMENT WITH THE FORT COLLINS URBAN RENEWAL AUTHORITY, WALTON FOOTHILLS HOLDINGS VI, L.L.C., AND THE FOOTHILLS METROPOLITAN DISTRICT REGARDING THE REDEVELOPMENT OF FOOTHILLS MALL WHEREAS, at its regular meeting convened on May 7, 2013, the City Council adopted Resolution 2013-042, approving a Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. (the “Developer”), and the Foothills Metropolitan District (the “District”) regarding the redevelopment of Foothills Mall (the “Agreement”); and WHEREAS, following the adoption of Resolution 2013-042, final planning and analysis, and ongoing work to carry out the Foothills Mall redevelopment project (the “Mall Project”) that is the subject matter of the Agreement have resulted in further negotiations between the parties to the Agreement regarding project details and schedule; and WHEREAS, in addition to a change in the total square footage of the buildings to be constructed as part of the Mall Project and an adjustment to the schedule to reflect the delayed start of construction of the Mall Project, details related to the Foothills Activity Center and portions of the Project fronting on College Avenue have been more fully developed and agreed upon by the parties to the Agreement; and WHEREAS, in light of these developments, the parties have negotiated certain modifications to the Agreement; and WHEREAS, these updated terms and conditions are incorporated into the Redevelopment and Reimbursement Agreement attached hereto as Exhibit “A” and incorporated herein by this reference (the “Updated Agreement”); and WHEREAS, the City Council has determined that it is in the best interests of the City and its citizens to provide financial assistance to the Mall Project in order to remedy blighted conditions within and around the Mall pursuant to the Midtown Urban Renewal Plan, using certain property and sales tax increment revenues in accordance with the Act, together with certain available revenues of the District and the Developer, to provide a catalyst for redevelopment in the Midtown Urban Renewal Area, to increase sales tax revenues and job opportunities, and to provide other economic and social benefits to the City and surrounding community; and WHEREAS, on September 4, 2012, the City Council adopted Resolution 2012-084, approving a Service Plan for Foothills Metropolitan District (the “District”), the boundaries of which are wholly within the corporate limits of the City; and Packet Pg. 142 - 2 - WHEREAS, the District was organized by Order and Decree Organizing District issued on November 30, 2012, and recorded on January 10, 2013; and WHEREAS, at its regular meeting convened on May 7, 2013, the City Council adopted Resolution 2013-044, approving an Amended Service Plan for the Foothills Metropolitan District, which Amended Service Plan was to include as an exhibit and to incorporate by reference the final executed Redevelopment and Reimbursement Agreement by and between the City, the Authority, the District and the Developer; and WHEREAS, the completion of the Amended Service Plan as so approved requires the inclusion of the Redevelopment and Reimbursement Agreement as an exhibit; and WHEREAS, the recitals described in Resolution 2014-042, except as superseded by the terms of this Resolution, are incorporated herein by this reference; and WHEREAS, in light of the foregoing, the City Council desires to approve the Updated Agreement, and authorize certain related actions. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. Ratification and Approval of Prior Actions. All action heretofore taken (not inconsistent with the provisions of this Resolution) by the City Council or the officers of the City Council or the City named in this Resolution relating to the Mall Project, the execution and delivery of the Agreement, and the performance of the City’s obligations under the Agreement and related documents is hereby ratified, approved and confirmed. Section 2. Finding of Best Interests and Public Purpose. The City Council hereby finds and determines, pursuant to the Constitution, the laws of the State, the Charter and the Code of the City, and in accordance with the foregoing recitals, that adopting this Resolution, providing the specified assistance for the Mall Project, and entering into the Updated Agreement and performing all obligations set forth therein, are necessary, convenient, and in furtherance of the City’s purposes and are in the best interests of the inhabitants of the City, and will serve the important public purposes of remedying blighted conditions within and around the Foothills Mall pursuant to the Midtown Urban Renewal Plan, providing a catalyst for redevelopment in the Midtown Urban Renewal Area, increasing sales tax revenues and job opportunities, and providing other economic and social benefits to the City and surrounding community, and the City Council hereby authorizes and approves the same. Section 3. Approval of Updated Agreement. The Updated Agreement, in substantially the form attached hereto as Exhibit “A”, is in all respects approved, authorized and confirmed. Section 4. Authorization to Execute. The Mayor of the City is hereby authorized and directed to execute and deliver the Updated Agreement, for and on behalf of the City, in substantially the form and with substantially the same content as attached, provided that the Packet Pg. 143 - 3 - approval hereby given to the Updated Agreement includes an approval of such additional details therein, deletions therefrom, or additions thereto as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate for its completion, or desirable to protect the interests of the City. The execution of the Updated Agreement by the Mayor shall be conclusive evidence of the approval by the City Council of the same in accordance with the terms of this Resolution and the Updated Agreement. Section 5. Updated Agreement Incorporated in District Service Plan. It is the intent of the City Council that the Updated Agreement, as approved hereunder, shall, upon final preparation and signing, be attached to the Amended Service Plan of the District, in substantial performance of the terms of Resolution 2013-044. Section 6. Direction to Act. The City Clerk is hereby authorized and directed to attest all signatures and acts of any official of the City in connection with the matters authorized by this Resolution and to place the seal of the City on any document authorized and approved by this Resolution. The Mayor, the Mayor Pro-Tem of the City, the City Manager, the Financial Officer, the City Clerk and other appropriate officials or employees of the City are hereby authorized and directed to execute and deliver for and on behalf of the City any and all additional certificates, documents, instruments and other papers, and to perform all other acts that they deem necessary or appropriate, in order to implement and carry out the transactions and other matters authorized by this Resolution. The execution of any instrument by the aforementioned officers or members of the City Council shall be conclusive evidence of the approval by the City of such instrument in accordance with the terms of this Resolution and the Updated Agreement. Section 7. Severability. If any section, subsection, paragraph, clause or provision of this Resolution or the Agreement hereby authorized and approved shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution or the Agreement, the intent being that the same are severable. Section 8. Repealer. All prior resolutions, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. Section 9. Effectiveness. This Resolution shall take effect immediately upon its passage. Packet Pg. 144 - 4 - Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins this 14th day of January, A.D. 2014. _________________________________ Mayor Pro Tem ATTEST: _____________________________ City Clerk Packet Pg. 145 REDEVELOPMENT AND REIMBURSEMENT AGREEMENT THIS REDEVELOPMENT AND REIMBURSEMENT AGREEMENT (the “Agreement”) dated as of January __, 2014, is made by and among the FORT COLLINS URBAN RENEWAL AUTHORITY, a body corporate and politic of the State of Colorado (the “Authority”), WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company (the “Developer”), the CITY OF FORT COLLINS, COLORADO, a municipal corporation (the “City”), and FOOTHILLS METROPOLITAN DISTRICT, a quasi-municipal corporation organized and existing in accordance with Title 32, Article 1, C.R.S. (the “District”). The Authority, the Developer, the City and the District are sometimes collectively called the “Parties,” and individually, a “Party.” RECITALS All capitalized terms used, but not defined, in these Recitals, have the meanings ascribed to them in this Agreement. The Recitals are incorporated to this Agreement as though fully set forth in the body of this Agreement. WHEREAS, Developer or District owns or has the right to construct improvements on the real property described in Exhibit A, which is known as the Foothills Mall (the “Property”) and desires to redevelop the Property. Developer has submitted a proposal to the Authority and the City to redevelop the Property by constructing no fewer than 641,000 square feet of commercial development (which minimum size does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property (the “Project”). WHEREAS, the Authority is carrying out the Midtown Urban Renewal Plan approved by the City Council on September 6, 2011, as amended on May 8, 2013, and as further defined hereinafter (the “Urban Renewal Plan”), which includes the Property, by entering into this Agreement with the City, the District and the Developer to implement the Project in the manner described herein. The District is expected to provide services and facilities to assist the Authority in carrying out the Urban Renewal Plan. WHEREAS, the Authority has selected the Developer for exclusive negotiations based on the proposal submitted to the Authority and pursuant to that certain Agreement to Negotiate, dated as of November 16, 2012, by and between the Authority and Developer (the “Agreement to Negotiate”). WHEREAS, the City has determined that it is in the best interests of the City and its inhabitants to assist in the redevelopment of the Property in order to remedy blighted conditions within and around the Property pursuant to the Urban Renewal Plan, as hereinafter set forth, and to provide a catalyst for development, increase sales tax revenues and job opportunities, and provide other economic and social benefits to the City. WHEREAS, the District was organized by Order and Decree Creating District issued on November 30, 2012, and recorded on January 10, 2013. The City approved the original Service EXHIBIT A TO RESOLUTION 1 Packet Pg. 146 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 2 Plan of the District on September 4, 2012, as amended and restated pursuant to City Council approval on May 8, 2013. WHEREAS, the Parties have agreed to enter into this Agreement for the redevelopment of the Property in accordance with the Urban Renewal Plan, the Act (defined hereinafter), the description of the Project as set forth herein, and the Development Approvals. WHEREAS, the District was organized for the purpose of, inter alia, issuing the District Bonds (defined hereinafter), the proceeds of which are intended to pay or reimburse the costs of the Eligible Improvements and to pay Costs of Issuance (defined hereinafter). NOW THEREFORE, in consideration of the mutual covenants and promises of the Parties contained in this Agreement, and other valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree to the terms and conditions in this Agreement. AGREEMENT 1. DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the context, capitalized terms mean: “Act” means the Colorado Urban Renewal Law, Part 1 of Article 25 of Title 31 of the Colorado Revised Statutes. “Add-On PIF” means the public improvement fee in the amount of 1.00% as set forth in the PIF Covenant, which will be collected in accordance with the terms of the PIF Covenant, and will be imposed on retail sales that are occurring on the Property that are subject to the City’s Sales Tax, subject to the terms and provisions of this Agreement. “Add-On PIF Revenues” means the revenues generated by the Add-On PIF. The full amount of the Add-On PIF will remain pledged to payment of the District Bonds for so long as such District Bonds are outstanding. “Agreement” means this Redevelopment and Reimbursement Agreement, as it may be amended or supplemented in writing. References to sections or exhibits are to this Agreement unless otherwise qualified. All exhibits are incorporated into and made a part of this Agreement. “Agreement to Negotiate” means the Agreement to Negotiate between the Authority and the Developer dated as of November 16, 2012. “Authority” means the Fort Collins Urban Renewal Authority, a body corporate and politic of the State of Colorado which has been duly created, organized, established and authorized by the City to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Act, and its successors and assigns. “Authority Administrative Fee” means a fee up to a maximum of 1.5% of the gross property tax increment revenue received by the Authority from the Larimer County Treasurer each year, which fee includes all amounts required to pay collection, enforcement, disbursement, and 1 Packet Pg. 147 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 3 administrative fees and costs required to carry out the Urban Renewal Plan, including, without limitation, collection and disbursement of the Pledged Property Tax Increment Revenue. “Authority Pledged Revenues” means, collectively, the Pledged Property Tax Increment Revenues and the Pledged Sales Tax Increment Revenues. “Cap Amount” means an amount equal to $53,000,000 (Fifty-Three Million US Dollars), which is the maximum amount of Eligible Costs that shall be paid from the net proceeds of the District Bonds. “City” means the City of Fort Collins, Colorado, a home rule municipal corporation. “City Manager” means the City Manager of the City. “Commence Construction” or “Commencement of Construction” means the commencement by the District or the Developer of actual physical work, including, but not limited to, deconstruction, demolition, site grading, and construction, on the Property as required to carry out the Project. “Complete Construction” or “Completion of Construction” means: (a) With respect to the public improvements, construction acceptance in accordance with the City Requirements, applicable laws, ordinances, and regulations of the City, the District, and any other governmental entity or public utility with jurisdiction, subject to any applicable conditions of maintenance and warranty, including; (b) With respect to any specifically identified portion of the Project, the issuance of a certificate of occupancy by the City so that the portion of the Project described in such certificate may open for permanent occupancy and utilization for its intended purposes; or (c) With respect to the Project, the completion of all Eligible Improvements and the issuance of a certificate of occupancy by the City so that no less than ninety-five percent (95%) of the leasable area within the Project may open for permanent occupancy and utilization for its intended purposes. “Costs of Issuance” means the reasonable and necessary costs incurred in connection with the issuance of the District Bonds, including, without limitation, reserve funds, capitalized interest, underwriter’s compensation, financial consultant fees, fees and expenses of bond counsel, counsel to the underwriter, counsel to the District, fees and third party out-of-pocket expenses of the City, including but not limited to counsel to, and economic analysis and financial consulting services for, the City, fees and third party out-of-pocket expenses of the Authority, including but not limited to counsel to, and economic analysis and financial consulting services for, the Authority, credit enhancement fees and expenses, fees and expenses of the District Bond Trustee, bond registrar, paying agent, transfer agent, remarketing agent and rating agency fees. Costs of Issuance shall be approved by the District’s bond counsel and shall be reasonable and in accordance with market standards. 1 Packet Pg. 148 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 4 “Default” or “Event of Default” means any of the events described in Section 18; provided, however, that such events will not give rise to any remedy until effect has been given to all grace periods, cure periods and periods of enforced delay provided for in this Agreement. “Developer” means Walton Foothills Holdings VI, L.L.C., a Delaware limited liability company and any successors and assigns approved in accordance with this Agreement. “Developer Advances” means, collectively, amounts advanced or incurred by the Developer to pay any Eligible Costs. Developer Advances shall include, without limitation, (a) Eligible Costs paid directly or advanced by the Developer, (b) advances to the District for design and construction by the District of Eligible Improvements, and (c) Authority Reimbursable Costs (as defined in the Agreement to Negotiate) from the Developer to the Authority in compliance with the requirements of the Agreement to Negotiate. All Developer Advances to the District must be made in accordance with the provisions of the Reimbursement and Infrastructure Acquisition Agreement. “Development Approvals” means the regulatory approvals issued by the City for the Project, including the Overall Development Plan (ODP), Project Development Plan (PDP), Final Development Plans (FDPs), Development Agreement or Agreements, Subdivision Plat, and all other plats, plans and requirements included in or incorporated into the City’s approval of the Project under the City Land Use Code. Because multiple FDPs will be submitted and reviewed for up to 3 phases of the Project, with respect to any particular portion of the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for that particular portion of the Project. With respect to the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for all phases of the Project. “District” means the Foothills Metropolitan District, formed pursuant to Sections 32-1-101, et seq., C.R.S., and its successors and assigns. “District Administrative Account” means an account established by the Authority into which the Authority shall deposit all of the incremental District Operating Revenue and District Debt Service Mill Levy received by the Authority from time to time pursuant to Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado. “District Bond Documents” means, collectively, the documents pursuant to which the District Bonds are issued. “District Bond Indenture” means any indenture or similar documents pursuant to which the District Bonds are issued. “District Bond Trustee” means the trustee in connection with the issuance of any District Bonds. “District Bonds” means any bonds, certificates of participation, securities or other obligations issued or incurred by the District to finance or refinance the Eligible Costs in accordance with the terms and provisions of this Agreement, including any bonds, debt in the form 1 Packet Pg. 149 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 5 of a loan, certificates of participation, or securities issued or incurred by the District to refund any such Bonds, or any related obligations to reimburse the provider of a guaranty, insurance policy, liquidity instrument or credit enhancement for the District Bonds. Notwithstanding the foregoing or any provision to the contrary contained herein, District Bonds shall not include any obligation by the District to reimburse the Developer for Developer Advances pursuant to reimbursement agreements or similar agreements between the Developer and the District regarding such matters. “District Debt Service Mill Levy” means a property tax levy of fifty (50) mills levied by the District on the taxable property of the District. The District Debt Service Mill Levy rate may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Debt Service Mill Levy is neither diminished nor enhanced as a result of such changes. The District Debt Service Mill Levy shall be imposed only so long as there are outstanding District Bonds. “District Debt Service Mill Levy Revenue” means the revenue generated from the District Debt Service Mill Levy, net of the County Treasurer’s cost of collection. “District Operating Mill Levy” means a property tax imposed by the District in an amount not exceeding ten (10) mills, except as hereinafter provided, separate and apart from the District Debt Service Mill Levy, for the purpose of paying the administrative, operations and maintenance expenses of the District, including all amounts required to be paid to the City for the maintenance of Larimer County Canal No. 2. Notwithstanding the foregoing, the District Operating Mill Levy may be imposed by the District in an amount up to fifteen (15) mills upon the written consent of the City Manager upon receipt of evidence satisfactory to the City Manager that such an increase in the District Operating Mill Levy is necessary for the District to comply with its operation and maintenance obligations under the Service Plan. The District Operating Mill Levy may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Operating Mill Levy is neither diminished nor enhanced as a result of such changes. “District Operating Revenue” means the revenue produced by the District’s Operating Mill Levy and the Specific Ownership Taxes attributable to the District Operating Mill Levy. “District Pledged Revenue” means, collectively, (a) the District Debt Service Mill Levy Revenue, (b) the revenue from the Pledged District Specific Ownership Taxes, and (c) Add-On PIF Revenue. “Effective Date” means the date of this Agreement. “Eligible Costs” means, collectively, the reasonable and customary expenditures for the design and construction of the Eligible Improvements as set forth in Exhibit D, which shall be certified and approved in accordance with Exhibit E. Eligible Costs shall include, without limitation, reimbursement to the Developer for Authority Reimbursable Costs (as defined in the Agreement to Negotiate) made by the Developer to the Authority. Eligible Costs shall be paid from the net proceeds of the Bonds, subject to the Cap Amount. District Bond proceeds shall not 1 Packet Pg. 150 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 6 be used to pay, and Eligible Costs shall not include, any accrued interest on unreimbursed Developer Advances. “Eligible Improvements” means the public improvements described in Exhibit D that are to be acquired, constructed or installed as part of the Project. “Estimated Revenues from Property Taxes” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from property taxes on the Property. “Estimated Revenues from Residential Property” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from the residential component of the Property beginning January 1, 2019, assuming that the residential component of the Property is constructed in accordance with the schedule set forth in Section 4.3 hereof. “Exhibits” The following Exhibits are a part of this Agreement: Exhibit A: Legal Description of the Property Exhibit B: Description of TIF Area Exhibit C: Description of the Project Exhibit D: Eligible Costs and Eligible Improvements Exhibit E: Procedure for Documenting, Certifying and Paying Eligible Costs Exhibit F City Specifications for Foothills Activity Center Exhibit G Estimated Revenues from Property Taxes and Estimated Revenues from Residential Property Exhibit H Permitted Uses of Foothills Mall Fund Exhibit I Maximum Annual Net Debt Service on the District Bonds “Financing Plan” means a plan prepared by the Developer and the District for review and approval by the City and the Authority demonstrating that there will be sufficient Pledged Revenues to service the debt service requirements on the District Bonds. Approval of the Financing Plan by the City and the Authority shall be a condition precedent to the issuance of the District Bonds. “Foothills Activity Center” means the Foothills Activity Center to be constructed on the Project in accordance with Section 4.4 hereof. “Foothills Mall Fund” means the fund to be held by the District and applied in accordance with the terms and provisions of this Agreement. 1 Packet Pg. 151 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 7 “Force Majeure” means any delays in or failure of performance by any Party of its obligations under this Agreement as a result of acts of God; fires; floods; earthquake; strikes; labor disputes; regulation or order of civil or military authorities; or other causes, similar or dissimilar, which are beyond the control of such Party. “Larimer County Canal No 2” means that portion of the canal or ditch, owned by The Larimer County Canal No. 2 Irrigation Company, commonly known as the Larimer County Canal No. 2, in the location to which it will be moved as part of the Project, lying between the west boundary of the South College Avenue right-of-way and the west boundary of the McClelland Drive right-of-way, and thence south along and under the west frontage road of College Avenue past the south boundary of the West Monroe Drive right-of-way, and thence continuing due south for an approximate distance of 130+\- feet to where the relocated portion of the ditch intersects the existing Larimer County Canal No. 2 ditch alignment. “Net Debt Service” means the total payments of principal and interest on the District Bonds, less the amounts that are paid from funds held by the District Bond Trustee as capitalized interest and reserve funds, including interest earnings on any such funds. “Original PDP” means the Project Development Plan relating to the Project approved by the City’s Planning and Zoning Board on February 7, 2013. “Party” or “Parties” means one or all of the parties to this Agreement. “PIF Covenant” means a declaration of covenants by Developer imposing and implementing the Add-On PIF within the Property. “Pledged District Specific Ownership Taxes” means the specific ownership tax revenues received by the District in each year pursuant to § 42-3-107, C.R.S. that is attributable to the dollar amount of ad valorem taxes generated from the District Debt Service Mill Levy. “Pledged Property Tax Increment Revenue” means 100% of the annual ad valorem property tax revenue received by the Authority from the Larimer County Treasurer in excess of the amount produced by the levy of those taxing bodies that levy property taxes against the Property Tax Base Amount in the TIF Area in accordance Colorado law, but not including, (a) the District Operating Revenue, (b) the District Debt Service Mill Levy Revenue, (c) the Authority Administrative Fee, (d) mill levy override payments approved by the electors of Poudre School District in 2012 and subsequent years, (e) any offsets collected by the Larimer County Treasurer for return of overpayments or any reserve funds retained by the Authority for such purposes in accordance with Sections 31-25-107(9)(a)(III) and (b) of the Act, and (f) $60,000 each year of such annual revenues. “Pledged Sales Tax Increment Revenues” means 100% of the Sales Tax Increment Revenues received annually by the Authority from the City during the period in which taxes are divided in the TIF Area pursuant to the Act. “Pledged Revenue” means, collectively, the District Pledged Revenue and the Authority Pledged Revenue. 1 Packet Pg. 152 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 8 “Project” means the acquisition, construction and installation of no fewer than 641,000 square feet of commercial development (which minimum does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property, in accordance with the Development Approvals, this Agreement and Exhibit C.. The Project includes off-site improvements provided for and required under this Agreement or the Development Approvals. Notwithstanding the foregoing, however, for purposes of determining whether Construction of the Project has been Completed, the Residential Component of the Project shall be deemed to include 446 multifamily residential units. “Project Fund” means the fund to be created pursuant to the District Bond Indenture into which net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) will be deposited to pay Eligible Costs. “Property” means the real property described in Exhibit A, which is either owned by Developer or on which the Developer otherwise has the right or will have the right to construct the Project. “Property Tax Base Amount” means the amount certified by the Larimer County Assessor as the valuation for assessment of all taxable property with the TIF Area in accordance with Section 31-25-107(9)(a)(I) of the Act. The Property Tax Base Amount and increment value shall be calculated and adjusted from time to time by the Larimer County Assessor in accordance with Colorado law. “Reimbursement and Infrastructure Agreement” means that certain agreement between the District and Developer dated as of April 26, 2013, that requires the District to reimburse the Developer for the Eligible Costs and sets forth the procedures under which Eligible Improvements constructed by the Developer for the benefit of the District may be acquired by the District. “Residential Component of the Project” means the portion of the Project intended to be developed for residential uses. The Residential Portion of the Project will generally occur on the area shown as Blocks 3, 4,5 and 6 on the Original PDP. “Sales Tax” means the municipal sales tax of the City imposed at the rate of 2.25% on sales of goods and services that are subject to municipal sales taxes pursuant to Chapter 25, Article 3 of the Fort Collins Municipal Code. “Sales Tax Base Amount” means the total collection of sales taxes levied at the rate of 2.25% within the TIF Area for the applicable twelve-month period in accordance with Colorado law. “Sales Tax Increment” means Sales Tax Revenues collected by the City in excess of the Sales Tax Base Amount during the period in which taxes are divided in the TIF Area pursuant to the Act. “Sales Tax Revenues” means the funds generated by imposition of the Sales Tax collected within the TIF Area. 1 Packet Pg. 153 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 9 “Service Plan” means the service plan for the District approved by the City on September 4, 2012, as amended and restated. “Special Fund” means the fund defined in Section 107(9)(a)(II) of the Act. “TIF” means tax increment financing to which the tax increment provisions of Section 31-25-107(9) of the Act apply. “TIF Area” means that part of the urban renewal area described in the Urban Renewal Plan as described and depicted in Exhibit B, within which the tax increment provisions of Section 31-25-107(9) of the Act apply. “Underpass” means the pedestrian underpass at the current Larimer County Canal No. 2 ditch alignment under College Avenue for the purpose of connecting the Project to the Mason Corridor and MAX transit facility. “Urban Renewal Plan” means the Midtown Urban Renewal Plan adopted and approved by the City Council on September 6, 2011, as amended on May 8, 2013, and as may hereinafter be amended from time to time; provided, however, that if, prior to June 1, 2014, the City elects to exclude the Property from the Midtown Urban Renewal Plan and adopts a new urban renewal plan for the Property, such new plan shall, upon written notice to all Parties, become the “Urban Renewal Plan” for the purposes of this Agreement as long as: (a) all property included within such new plan is acceptable to the Developer and the District, and (b) such new plan is consistent with the Act and with the terms and conditions of this Agreement. 2. FINANCING AND CONSTRUCTION OF PROJECT. 2.1 Construction of Project. The Developer and/or the District, in accordance with the provisions of this Agreement, shall (i) construct the Project, including without limitation, all Eligible Improvements, (ii) be responsible for compliance in all respects with the Development Approvals, and (iii) be responsible for payment of fees related to redevelopment of the Property and the construction of the Project. The Project may be constructed in phases. 2.2 Financing the Costs of the Project. The Eligible Improvements shall be financed from the net proceeds of the District Bonds, up to the Cap Amount. The remainder of the Project, including the cost of any Eligible Improvements that exceed the Cap Amount, shall be financed by the Developer. The Parties agree that the Urban Renewal Plan provides that one of the methods of financing the Eligible Improvements shall be the use of property tax and sales tax increment financing pursuant to Section 31-25-107(9), C.R.S., as more fully described in the Urban Renewal Plan and that this Agreement implements the tax increment financing provisions of the Urban Renewal Plan. 3. ISSUANCE OF DISTRICT BONDS. Subject to the terms and provisions hereinafter set forth, the District will issue the District Bonds to pay or reimburse the Developer or the District for Eligible Costs, up to the Cap Amount, and to pay the Costs of Issuance related to the District Bonds. The District Bonds shall be issued in one or more series in a combined aggregate principal amount sufficient to generate net proceeds of the District Bonds in the amount of $53,000,000 1 Packet Pg. 154 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 10 (Fifty-Three Million US Dollars) to be deposited in the Project Fund and applied to the payment or reimbursement of Eligible Costs. 3.1 Conditions Precedent to Issuance of District Bonds. The following conditions shall be satisfied on or prior to the issuance of the District Bonds: (a) The Developer and the District shall prepare the Financing Plan and the City Manager and the Executive Director of the Authority shall have approved the Financing Plan. The Financing Plan shall also be in form and substance satisfactory to the District’s bond counsel and the underwriter of the District Bonds. The Financing Plan shall demonstrate that there is expected to be sufficient Pledged Revenues derived from the construction of the Project to pay the debt service requirements on the District Bonds when due. (b) The Developer shall provide to the City Manager evidence satisfactory to the City Manager that the Developer has obtained all equity and private financing necessary to construct the non-residential components of the Project. (c) The Developer shall have obtained executed lease agreements, excluding the existing department store located on Larimer County Parcel Number 9725391002, totaling at least 240,000 square footage of the retail area of the Project with tenants that, in the aggregate, have an average sales per square foot of at least $375 based on average national sales performance, and, except as hereinafter provided, of which at least 120,000 square feet shall be leased to tenants new to the City of Fort Collins. Notwithstanding the foregoing, however, in the event that at least 60,000 of such square footage is leased to tenants that are new to Fort Collins, then this condition shall be deemed satisfied with the prior written consent of the City Manager, which consent shall not be unreasonably withheld, conditioned or delayed, provided that in determining whether to give such consent the City Manager may consider the impact on the proposed financing from a reduced percentage of tenants new to the City. (d) The Developer shall have imposed the Add-On PIF in accordance with Section 4.7 hereof. (e) The Developer shall have obtained the Development Approvals for the Project, as described in this Agreement and in Exhibit C. (f) The City and the Authority shall receive an opinion of the District’s bond counsel that the District Bonds have been validly issued and opining as to the tax-exempt status of the bonds, which opinion shall be addressed to the City and the Authority, or the City and the Authority shall receive a reliance letter from the District’s bond counsel. (g) No event of default hereunder shall have occurred and be continuing hereunder, unless such Event of Default has been cured, remedied or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. 3.2 Provisions to be Included in District Bond Documents. The District Bond Documents shall contain the following provisions: 1 Packet Pg. 155 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 11 (a) The District Bonds shall be payable from the Pledged Revenues in the following order of priority: (i) the District Debt Service Mill Levy Revenues; (ii) the Pledged District Specific Ownership Taxes; (iii) the Pledged Property Tax Increment Revenues; (iv) the Add-On PIF Revenues; and (iii) the Pledged Sales Tax Increment Revenues. (b) After the debt service requirements on the District Bonds have been paid or provided for in each fiscal year, and after all payments have been made to replenish the reserve fund for the District Bonds and to make any payments into any required rebate funds for the District Bonds, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (i) To the extent required by the underwriter of the District Bonds based on market conditions, the District Bond Documents may establish a supplemental reserve fund (the “Supplemental Reserve Fund”) and provide that any excess Pledged Revenue shall be deposited into the Supplemental Reserve Fund to be maintained in an amount that is not more than 10% of the original aggregate principal amount of the District Bonds. The District Bond Trustee shall keep a record of the sources of the Pledged Revenue that are used to fund and maintain the Supplemental Reserve Fund, if any. (ii) After the Supplemental Reserve Fund, if any, has been fully funded, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (A) The District, the City and the Authority hereby agree pursuant to Section 31-25-107(11) C.R.S. that any such excess Sales Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the City. The District Bond Documents shall provide that the City is a third-party beneficiary under the District Bond Documents with respect to this provision relating to the requirement of remitting any excess Sales Tax Increment Revenues to the City as set forth above. (B) Any excess Add-On PIF Revenues shall be applied by the District Bond Trustee to prepay principal on the District Bonds upon payment of all scheduled debt service for the year in which said Add-On PIF Revenues were collected. In the event that Add-On PIF Revenues are used to fund or maintain the Supplemental Reserve and are released after full payment of the 1 Packet Pg. 156 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 12 District Bonds, excess Add-On PIF Revenues shall be remitted to the District for deposit in the Foothills Mall Fund. (C) Any excess Pledged Property Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted to the Authority. (D) Any excess Pledged District Specific Ownership Taxes and District Debt Service Mill Levy Revenues shall be applied by the District Bond Trustee to debt service payments on the District Bonds in the following year. (c) The District Bond Documents shall provide that moneys on deposit in the Supplemental Reserve Fund shall be applied solely to pay the debt service requirements on the District Bonds in the event of an insufficiency of Pledged Revenues to make such payments, provided, however, that moneys on deposit in the reserve fund for the District Bonds shall be applied to the payment of the debt service requirements on the District Bonds prior to applying any funds on deposit in the Supplemental Reserve Fund to such payment. Upon termination of the Supplemental Reserve Fund, the moneys on deposit in the Supplemental Reserve Fund shall be remitted by the District Bond Trustee based on the source of Pledged Revenues used to fund and maintain the Supplemental Reserve Fund in accordance with the provisions set forth in subparagraph (b)(ii) above. (d) The District Bond Documents shall provide that the net proceeds of the Bonds shall be deposited in the Project Fund and requisitioned by the District to pay Eligible Costs as set forth in Exhibit D hereof, with such requisitions to be made substantially in accordance with Exhibit E hereof. The District Bond Documents shall provide that any requisition remitted to the District Bond Trustee shall simultaneously be remitted to the City Manager, or the City Manager’s designee. In the event that the City provides written notice to the Developer and the District that it disputes that all or any portion of the requisition qualifies as an Eligible Cost or otherwise fails to comply with the requisition requirements in Exhibit E, then the City, the Developer and the District agree to act in good faith to attempt to resolve any such dispute. (e) Without the prior written consent of the City Manager, the District Bonds shall mature no later than 25 years after the date of issuance thereof, and shall not contain a pledge of Pledged Property Tax Increment Revenues or Pledged Sales Tax Revenues that extends beyond the final payment of said revenues to the Authority; the total Net Debt Service of the District Bonds shall not exceed $180,000,000, and the maximum annual Net Debt Service on the District Bonds shall not exceed the amounts set forth in Exhibit I hereto. 3.3 Approval by City of District Bond Documents. Prior to the issuance of any District Bonds, including any bonds issued to refund any District Bonds, the District Bond Documents shall have been approved by the City. The City will have ten (10) business days after receipt of such District Bond Documents by the City Attorney and the City’s bond counsel to notify the District in writing if it objects to any provisions set forth in such District Bond Documents, setting 1 Packet Pg. 157 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 13 forth its specific objections. If the City does not object in writing to the District Bond Documents within such ten (10) business day period, then the City will be deemed to have consented to the form and substance of such District Bond Documents. In addition, the District Bond Documents shall provide that any material amendments to the District Bond Documents shall be subject to approval by the City. 3.4 Refunding Bonds. Notwithstanding anything to the contrary contained herein, to the extent that District Bonds are issued to refund outstanding District Bonds, the Authority shall have the right to determine whether, and to what extent, it will pledge the Authority Pledged Revenues to such refunding District Bonds. In the event that all or a portion of the Authority Pledged Revenues are to be pledged to the payment of such refunding District Bonds, as a condition to such pledge, the Authority may in its discretion impose conditions and limitations in any such refunding District Bonds that were not applicable to the District Bonds being refunded. Any such refunding District Bonds that are secured in part by the Authority Pledged Revenues shall also be subject to review and approval by the City Attorney and the City’s bond counsel. 4. OBLIGATIONS OF THE DEVELOPER. 4.1 Construction of Project. As set forth in Section 2.1 hereof, the Developer and/or the District shall construct the Project. The Project shall be constructed substantially in accordance with the Development Approvals and Exhibit C attached hereto. 4.2 Construction of Eligible Improvements. The Developer shall construct, or cause the District to construct, the Eligible Improvements set forth in Exhibit D hereto. Such Eligible Improvements shall be financed with the net proceeds of the Bonds, subject to the Cap Amount, and, if necessary, other financing sources obtained by the Developer. 4.3 Construction of Residential Component of Project; Affordable Housing. The Developer shall Complete Construction of the residential components of the Project, subject to Force Majeure, as follows: (a) on or prior to December 31, 2016, the Developer shall Complete Construction of the first phase of the residential component of the Project consisting of a minimum of 200 units; (b) on or prior to December 31, 2018, the Developer shall Complete Construction of the second phase of the residential component of the Project consisting of at least an additional 246 units. Failure to Complete Construction of the residential components of the Project in accordance with this Section 4.3 shall not be deemed to be an Event of Default under this Agreement, provided, however, that if Construction of the residential components of the Project is not Completed as set forth above, then beginning with the 2020 fiscal year, the Developer shall be obligated to pay in such fiscal year and each fiscal year thereafter, regardless of whether the Developer is the owner of the Property on which the residential component of the Project is to be constructed, an amount equal to 50% of the difference between the Pledged Revenues generated from the residential component of the Project and the Estimated Revenues from the Residential Property, as follows: (i) such payment shall be made to the City to the extent that any Pledged 1 Packet Pg. 158 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 14 Sales Tax Increment Revenues are applied in such fiscal year to the payment of the debt service requirements on the District Bonds; and (ii) to the extent that such payment is not due and owing to the City in any fiscal year, the balance of any such amount to be paid by the Developer in such fiscal year shall be deposited in the Foothills Mall Fund. The Project shall pay any affordable housing fees that may be enacted by the City Council on or before December 1, 2014, as if such fees had been in place and applicable to the Project. Any affordable housing impact fee that may be adopted as part of such requirements shall be paid by the Developer when due for the Project, except that for any portion of the Project developed prior to the imposition of the fee, such fee shall be paid no later than sixty days after adoption. 4.4 Construction and Transfer of Foothills Activity Center. (a) The Developer and/or District, as applicable, shall construct the Foothills Activity Center in substantial conformance with the specifications set forth on Exhibit F (the “City Specifications”). The construction of the Foothills Activity Center shall be completed no later than March 31, 2015. (b) The Developer shall transfer to the City the Foothills Activity Center within thirty (30) days after the occurrence of (i) Completion of Construction of the Foothills Activity Center; (ii) acceptance of the same by the City in writing as consistent with the requirements of this Agreement, (iii) payment by the City of any Excess Costs, as defined below, and (vi) approval by the City Manager and the Developer of the instruments hereinafter described or to be used, in connection with transfer of the Foothills Activity Center as and to the extent said approvals are specifically required in this Section 4.4. (c) The Developer will transfer the Foothills Activity Center and the underlying real estate to the City by a special warranty deed in a form reasonably satisfactory to the City, together with appropriate reciprocal easements and other easements to provide for access to the Foothills Activity Center, as well as for utilities, shared walls and other similar necessary arrangements for use of the property, as a separately platted lot. (d) In lieu of the form of transfer described in subsection (c), the Developer may transfer the Foothills Activity Center to the City as a separate property interest within a common interest community established by declaration of covenant reasonably satisfactory to the City and consistent with Exhibit F, together with such easement and access rights and other appurtenances as the City may reasonably request. The City shall review and respond to a request for approval with reasonable promptness, and shall be obligated to approve said declaration of covenant if: (i) It burdens the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate itself, and (B) that does not unreasonably interfere with, impair or burden the City’s right or ability to operate the Foothills Activity Center (“FAC”) as a public recreation facility with related 1 Packet Pg. 159 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 15 accessory uses and activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement; (ii) It allocates to the Foothills Activity Center only costs for the operation, maintenance, repair and replacement of common areas of and benefitting the building in which the Foothills Activity Center is located and structural elements of such building required for the Foothills Activity Center space, excluding: 1) real property taxes and personal property taxes; 2) operations, maintenance, repair and replacement paid for by the District; and 3) operations, maintenance, repair and replacement of common facilities that are duplicative of facilities provided in the FAC (“Operating Expenses”), allocated fairly to the Foothills Activity Center as a proportion of all space within the building and other buildings within the relevant Operating Expense measurement area, excluding common areas, with the FAC square footage amount deemed for the purpose of this Section to be capped at 18,000 square feet (the “FAC Allocation of Expenses”). The FAC Allocation of Expenses hereunder shall not exceed $2.25 per square foot of the Foothills Activity Center space per year, with no increase in that rate during the first three (3) calendar years following transfer of the Foothills Activity Center to the City. After the end of the third (3 rd ) full calendar year after transfer to the City, the FAC Allocation of Expenses shall not increase by more than three percent (3%) in any calendar year. (e) The City and Developer and/or District, as applicable, will coordinate the construction and tenant finish of the Foothills Activity Center to ensure that it meets the City Specifications; however, in no event shall the total cost (hard costs, soft costs and permit costs) of constructing the Foothills Activity Center in accordance with the City Specifications for the Foothills Activity Center that Developer and/or District, as applicable, is required to expend, exceed $5.1 million. The Developer and/or the District agree to keep the City informed of any potential cost overruns exceeding $5.1 million. In the event that such potential cost overruns are identified, the City shall be responsible for designating, in consultation with the Developer/District, sufficient modifications to the City Specifications to reduce the total costs of the Foothills Activity Center to $5.1 million, or to such other amount as the City may, in its discretion, agree may be incurred. Any such City-approved costs in excess of $5.1 million will either require that the City will pay to the Developer or the District, as the case may be, the difference between the costs of the updated City Specifications and the $5.1 million (“Excess Costs”), within 90 days of written demand by the Developer or District accompanied by reasonable documentation, subject to annual appropriation by the City Council at its sole discretion. (f) The City agrees that the Foothills Activity Center will be subject to any covenants, easements or other documents recorded against the Property as of the date of this Agreement, any other documents, covenants or easements recorded in the normal course of the development of the Project, including a declaration of covenant as described above, and certain use restrictions relating to tenant leases entered into prior to said date of transfer, provided any such covenants, easements or other documents burden the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate 1 Packet Pg. 160 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 16 itself, and (B) that does not unreasonably interfere with, impair or burden the City’s right or ability to operate the FAC as a public recreation facility with related accessory uses and activities activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement. Any such documents, covenants or easements shall be subject to the City’s review and approval of the same solely for compliance with the requirements of this Agreement. No covenants, easements or declarations recorded after transfer of the Foothills Activity Center to the City shall be effective as against the City without the City’s express written approval, which shall be subject to the action of the City Council, in its discretion. The City shall review and respond to a request for approval with reasonable promptness. (g) The Developer and/or District agree to cooperate with the City in connection with any applicable procedural requirements of the City related to the construction of the Foothills Activity Center. In connection with design and construction of the Foothills Activity Center, the Developer and/or District shall use good faith efforts to require that all available third-party contractor and material warranties to the extent that they relate to labor or materials supplied for the Foothills Activity Center, extend to the benefit of the City in a form reasonably satisfactory to the City. 4.5 Solar and Other Energy Efficiency Improvements. The Developer and/or the District, as applicable, agree to construct the Project to accommodate the addition of solar panels to the roof tops of the principal non-residential components subsequent to the Completion of Construction of the Project. The City agrees that funds in the Foothills Mall Fund may be applied by the Developer to pay the costs of installing solar panels or other energy efficiency improvements within the Project upon reasonable documentation being provided to the City. Within five (5) years after the issuance of the last Certificate of Occupancy for the non-residential component of the Project, Developer agrees to make application to the City for the addition of one or more solar panels or other energy efficiency improvements to the Project. 4.6 Compliance with Design and Construction Regulations; Payment of Fees and Costs. The design and construction of the Project will comply with all applicable codes and regulations of entities having jurisdiction, including the City Requirements. The Developer and/or the District will pay or cause to be paid all required fees and costs, including those imposed by the City, in connection with the design, construction, applicable warranty requirements, and use of the Project. 4.7 Imposition of Add-On PIF. On or prior to the issuance of the District Bonds, the Developer shall impose the Add-On PIF on retail sales occurring on the Property that are subject to the City’s Sales Tax, provided, however, that in connection with any property that is not owned by the Developer, the Developer shall use its best efforts to impose such Add-On PIF on such retail sales occurring on any such Property, subject to the consent of the owners of such Property. All property under the Developer’s control as of the Effective Date shall be made subject to the Add-On PIF, and any property within the Project acquired by the Developer subsequent to the Effective Date shall become subject to this requirement. The Add-On PIF shall be imposed only for so long as the District Bonds are outstanding. So long as the District Bonds are outstanding, the Developer covenants to cause all Add-On PIF Revenues to be remitted to the District Bond Trustee and such Add-On PIF Revenues shall be pledged to the payment of the District Bonds. To the 1 Packet Pg. 161 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 17 extent that the Add-On PIF is imposed prior to the initial issuance of the District Bonds, the Developer covenants to cause all Add-On PIF Revenues to be held in a trust account and remitted to the District Bond Trustee upon the initial issuance of the District Bonds. The Developer agrees that it shall be responsible for enforcing the placard requirements and for the implementation of the Add-On PIF with the retailers in the Project. 4.8 Access to Property. Developer will permit representatives of the City and the Authority access to the Property and the Project at reasonable times during regular business hours and with prior notice as necessary for the purpose of carrying out or determining compliance with the Agreement, the Urban Renewal Plan, or any City code or ordinance, including, without limitation, inspection of any work being conducted. No compensation will be payable for such access. The City and the Authority, as applicable, agree to restore the Property and any component of the Project to its condition prior to any tests or inspections made by the City and further agree that they shall be responsible for any damage that results from the City or the Authority, as applicable, accessing the Property pursuant to their respective rights under this Agreement, to the extent permitted by law and, in the case of the City, subject to annual appropriation of funds by the City Council, in its sole discretion. 4.9 Class A Shopping Center. The Developer represents and warrants that, following Completion of Construction of the Project, the physical condition of the Project will be maintained as a “Class A” shopping center, in a manner consistent with comparable shopping centers in the State of Colorado. 4.10 Maintenance of Project. The Developer and/or District shall be responsible for the maintenance of the Project, except for the Foothills Activity Center, the Underpass and the Larimer County Canal No. 2 (which shall be maintained by the City), provided that the District shall provide funding for the City to maintain Larimer County Canal No. 2. The City shall pay for the costs of maintaining the Foothills Activity Center and the Underpass. The costs incurred by the Developer and/or the District in maintaining the Project shall be paid from the District Operating Revenue. The City’s obligations shall be subject to the annual appropriation of funds by the City Council, in its sole discretion. 4.11 Appeal of Property Taxes. In the event that the Developer seeks a reduction in all or any portion of the Property’s real property tax assessed valuation or seeks an abatement of real property taxes on all or any portion of the Property, and any such reduction or abatement results in the Pledged Revenues generated from the real property taxes on the Property being less than the Estimated Revenues from Property Taxes such that the Pledged Sales Tax Increment Revenues that would otherwise be remitted to the City are needed to pay the debt service requirements on the District Bonds, then beginning with the fiscal year in which such reduction or abatement becomes effective, the Developer shall be obligated to pay to the City in such fiscal year and each fiscal year thereafter where such reduction or abatement results in the property taxes on the Property being less than the Estimated Revenues from Property Taxes, an amount equal to 50% of the amount of Pledged Sales Tax Increment Revenues applied to the payment of the District Bonds in such fiscal year. Notwithstanding the foregoing, in any fiscal year that the Pledged Sales Tax Increment Revenues are not applied to the payment of the debt service requirements on the District Bonds, no payments shall be due and owing from the Developer to the City pursuant to this Section 4.11. In the event that the Developer who sought the reduction or abatement sells all or a portion of the 1 Packet Pg. 162 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 18 Property, the subsequent owner shall be obligated to make any payments to the City required by this Section 4.11. A memorandum of this covenant satisfactory to the City and the Authority shall be recorded with the Larimer County Clerk and Recorder's Office. The Developer shall provide written notice to the City and to the Authority of any requested reduction in any portion of the Property’s real property tax assessed valuation or abatement of any portion of the Property’s real property taxes. 4.12 Notification of Sale of Property. The Developer shall provide written notice to the City and the Authority of any sale of all or any portion of the Property. 4.13 Payment of City and URA Expenses. The Developer agrees that it shall pay or reimburse the City and the Authority for all fees, costs and out-of-pocket third party expenses incurred by them in connection with developing, negotiating and preparing this Agreement and related documents and issuing the District Bonds, including without limitation, all legal fees and out-of-pocket third party expenses, provided that, to the extent that such fees and expenses qualify as Costs of Issuance, such fees and expenses may be paid from the proceeds of the District Bonds. In the event that the District Bonds are not issued on or prior to March 31, 2014, the Developer shall pay or reimburse the City and the Authority for such fees and expenses no later than April 15, 2014. In addition, to the extent that the District’s Bond Counsel determines that not all such fees and expenses qualify as Costs of Issuance hereunder, then the Developer shall pay or reimburse the City and the Authority for any such fees and expenses not paid from proceeds of the District Bonds as Costs of Issuance. Upon satisfaction of the reimbursement obligation pursuant to this Section, the Agreement to Negotiate shall be deemed to be terminated and to have no further force or effect. 5. THE DISTRICT. 5.1 Compliance with Service Plan and Applicable Law. At all times the District will comply with the requirements of the Service Plan as it may be amended from time to time. To the extent authorized by its Service Plan, the District may design, construct, finance, own, acquire, maintain, and operate Eligible Improvements in accordance with all applicable laws, ordinances, standards, policies, and specifications of the State of Colorado, the City, and any other entity with jurisdiction. 5.2 District Bonds. Subject to the terms and provisions of this Agreement, the District shall issue the District Bonds within ninety (90) days of the satisfaction of the conditions precedent set forth in Section 3.1 hereof. Net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) shall be deposited to the Project Fund and used to pay or reimburse the Developer for Eligible Costs, as further set forth herein and in the District Bond Documents. The District agrees to irrevocably pledge the District Pledged Revenue to the payment of such District Bonds. The District Bonds shall be issued in compliance with Section 3 hereof. 5.3 District Pledged Revenue. The District covenants to impose the District Debt Service Mill Levy so that such District Debt Service Mill Levy will be in effect no later than January 1, 2015, and the District covenants to continue to impose the District Debt Service Mill Levy for so long as any District Bonds remain outstanding. The District further covenants that so 1 Packet Pg. 163 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 19 long as any District Bonds remain outstanding, that the District will remit all District Pledged Revenues to the District Bond Trustee for such outstanding District Bonds. Notwithstanding expiration of the time or times that the Pledged Property Tax Increment Revenue may be collected pursuant to the Act, the District agrees that the full amount of the District Debt Service Mill Levy shall at all times remain pledged to the payment of any outstanding Bonds to the extent required by the District Bond Documents or to the payment of any outstanding District Bonds to the extent required by the District Bond Documents. In the event that the District Pledged Revenues are imposed and collected by the District after all outstanding District Bonds have been paid or defeased, the District shall thereafter deposit all District Pledged Revenues in the Foothills Mall Fund. 5.4 District Operating Revenue; Maintenance Expenses. The District will use the District Operating Revenue to pay its normal and reasonable operating and maintenance expenses, to pay the City for the maintenance of Larimer County Canal No. 2, and for any other lawful purpose. The District covenants that, upon the written request of the City, it shall use District Operating Revenues to pay all costs incurred by the City in maintaining Larimer County Canal No. 2. 5.5 Reimbursement and Infrastructure Agreement. The District will acquire certain tracts of the Property and/or easements as necessary, as designated in the Development Approvals, from Developer (the “District Property”) and will manage the District Property in accordance with the Service Plan. 5.6 Foothills Mall Fund. The District covenants to deposit any Add-On PIF Revenues released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the District pursuant to Section 3.2 hereof into the Foothills Mall Fund. Without the prior written consent of the City Manager, the District shall apply or disburse moneys on deposit in the Foothills Mall Fund only in accordance with Exhibit H. The Parties acknowledge and agree that any expenditure of funds on deposit in the Foothills Mall Fund shall be constrained by and must be in compliance with applicable State and federal law governing the use of such funds, which, in part, will be governed by the source of such funds. In addition, the Parties acknowledge that the District may only undertake activities and expend funds for purposes authorized by the Special District Act and the approved Service Plan of the District. The District shall provide the City with all documentation relating to the application of moneys on deposit in the Foothills Mall Fund. 5.7 No Impairment. The District will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive, apply and pledge District Pledged Revenue to payment of the District Bonds. 6. THE AUTHORITY. 6.1 Authority Pledged Revenues. The Authority covenants and agrees that it will pledge the Authority Pledged Revenues to the payment of the District Bonds in accordance with the terms and provisions of this Agreement. The Authority agrees to establish the Special Fund in accordance with the provisions of the Act and deposit the Authority Pledged Revenues into the Special Fund upon receipt. All moneys on deposit in the Special Fund, and any other Pledged Property Tax Increment Revenues or Pledged Sales Tax Increment Revenues received by the 1 Packet Pg. 164 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 20 Authority, will be remitted to the District Bond Trustee in accordance with the terms and provisions of the District Bond Indenture so long as any District Bonds remain outstanding. 6.2 District Debt Service Mill Levy and District Operating Revenue. The Authority hereby irrevocably pledges any amounts received from the District Debt Service Mill Levy and the District Operating Revenue to the District. The District Debt Service Mill Levy and the District Operating Revenue, when and as received by the Authority, will be subject to the lien of such pledge without any physical delivery, filing, or further act. The Authority will deposit into the District Administrative Account any and all of the District Debt Service Mill Levy and/or District Operating Revenue received by the Authority from time to time in accordance with Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado from the levy of the District on taxable property within the TIF Area. The Authority will transfer all of the revenue in the District Administrative Account to the District on or before the 20 th day of each month. The obligation of the Authority to make deposits in the District Administrative Account and to transfer such revenue to the District shall expire when the Authority’s right to receive such revenue expires pursuant to the Act. The District shall use the District Operating Revenue to pay its normal and reasonable administrative, operating and maintenance expenses. The District shall pledge the District Debt Service Mill Levy Revenue to payment of the District Bonds. 6.3 Multi-Fiscal Year Obligation. The Parties acknowledge that, according to the decision of the Colorado Court of Appeals in Olson v. City of Golden, 53 P.3d 747 (2002), an urban renewal authority is not a local government and therefore is not subject to the provisions of Article X, Section 20 of the Colorado Constitution. Accordingly, the Authority’s obligation to remit the Authority Pledged Revenue to the District Bond Trustee in accordance with the provisions of this agreement does not require electoral authorization and is not subject to annual appropriation. 6.4 No Impairment. The Authority will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive and apply Authority Pledged Revenue in accordance with the terms and provisions of this Agreement. 6.5 Cooperation with District and Developer. The Authority agrees to cooperate in a reasonable manner to assist the District in issuing District Bonds and to pledge the Authority Pledged Revenue to the payment of such District Bonds in accordance with the provisions of this Agreement and the District Bond Documents. 7. THE CITY. 7.1 Collection of Authority Pledged Revenue. The City agrees that is will not amend or modify the Urban Renewal Plan as it relates to this Agreement without the consent of all of the other Parties. 7.2 Underpass. The City agrees to accept ownership of the Underpass from the Developer or the District upon Completion of Construction of the Underpass in accordance with this Agreement. 1 Packet Pg. 165 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 21 8. PAYMENT OR REIMBURSEMENT OF ELIGIBLE COSTS. The Developer or District, as applicable, will be paid or reimbursed for Eligible Costs from the net proceeds of the District Bonds on deposit in the Project Fund upon compliance with the requisition process set forth in the District Bond Documents, which shall substantially comply with the requirements set forth in Exhibit E hereto. Such payment or reimbursement of Eligible Costs shall also comply with the Reimbursement and Infrastructure Agreement between the Developer and the District. Cost savings in the line items listed in Exhibit D may be allocated to cost overruns in other line items only in accordance with the provisions set forth in Exhibit D. 9. BOOKS AND ACCOUNTS; FINANCIAL STATEMENTS. The Authority and District will keep proper and current itemized records, books, and accounts in which complete and accurate entries will be made of the receipt and use of all amounts of revenue received from any and all sources and such other calculations required by this Agreement, the District Bond Documents, and any applicable law or regulation. The Authority and the District will prepare after the close of each fiscal year, a complete financial statement prepared in accordance with generally accepted accounting principles accepted in the United States of America for such year in reasonable detail covering the above information, and if required by statute, certified by a public accountant, and will furnish a copy of such statement to the other Parties within two hundred and ten (210) days after the close of each fiscal year of the Authority and the District or upon such earlier date as may be required by the District Bond Documents. 9.1 Inspection of Records. All books, records and reports (except those allowed or required by applicable law to be kept confidential) in the possession of the City, the Authority, and the District, including, without limitation, those relating to the Pledged Revenue, the Authority Administration Fee, Eligible Improvements, Eligible Costs, District Pledged Revenue, District Operating Revenue, District Bonds will at all reasonable times be open to inspection by such accountants or other agents as the respective Parties may from time to time designate. 10. INSURANCE. At all times prior to Completion of Construction of the Project, the District and the Developer, within ten (10) days after request by the City or the Authority, will provide the City or the Authority, as the case may be, with proof of payment of premiums and certificates of insurance showing that the District and the Developer are carrying, or causing prime contractors to carry, builder's risk insurance (if appropriate), commercial general liability, automobile, and worker's compensation insurance policies in commercially reasonable amounts and coverages approved by the City Manager or the Executive Director of the Authority. Such policies of insurance shall be placed with financially sound and reputable insurers. 11. INDEMNIFICATION. For each Eligible Improvement, from Commencement of Construction through Completion of Construction, and for any action arising during that time period, Developer agrees to indemnify, defend and hold harmless the City and the Authority, its officers, agents and employees, from and against all liability, claims, demands, and expenses, including fines imposed by any applicable state or federal regulatory agency, court costs and attorney fees, on account of any injury, loss, or damage, which arise out of or are in any manner connected with any of the work to be performed by Developer, any subcontractor of Developer, or any officer, employee, agent, successor or assign of Developer under this Agreement, if such injury, loss, or damage is caused in whole or in part by, the negligent act or omission, error, professional error, mistake, accident, or other fault of Developer, any subcontractor of Developer, 1 Packet Pg. 166 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 22 or any officer, employee, agent, successor or assign of Developer, but excluding any injuries, losses or damages which are due to the gross negligence, breach of contract or willful misconduct of the City or the Authority, as the case may be. 12. REPRESENTATIONS, WARRANTIES AND COVENANTS. 12.1 Representations and Warranties by the Authority. The Authority represents and warrants as follows: (a) The Authority is a body corporate and politic of the State of Colorado, duly organized under the Act, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations. (b) The Authority knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the Authority or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the Authority or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the Authority is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the Authority. (d) The Authority Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the Authority will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of any District Bonds. (e) This Agreement constitutes a valid and binding obligation of the Authority, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.2 Representations and Warranties by the District. The District represents and warrants as follows: (a) The District is a quasi-municipal corporation and political subdivision of the State of Colorado, organized and existing in accordance with Title 32, Article 1, C.R.S., and has the legal capacity and the authority to enter into and perform its obligations under this Agreement and the documents to be executed and delivered pursuant hereto. (b) The execution and delivery of this Agreement and such documents and the performance and observance of their terms, conditions and obligations have been duly and validly authorized by all necessary action on its part, and such documents and such performance and observance are valid and binding upon the District. 1 Packet Pg. 167 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 23 (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the District or to the District’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the District is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the District. (d) The District knows of no litigation, proceeding, initiative, referendum, or investigation or threat of any of the same contesting the powers of the Authority, the District or any of its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (e) The District Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the District will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of the District Bonds. (f) This Agreement constitutes a valid and binding obligation of the District, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.3 Representations, Warranties and Covenants by the Developer. Developer represents and warrants as follows: (a) Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and in good standing and authorized to do business in the State of Colorado and has the power and the authority to enter into and perform in a timely manner its obligations under this Agreement. (b) The execution and delivery of this Agreement have been duly and validly authorized by all necessary action on its part to make this Agreement and are valid and binding upon Developer. (c) The execution and delivery of this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to Developer or to Developer’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which Developer is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of Developer. (d) Developer knows of no litigation, proceeding, initiative, referendum, or investigation or threat or any of the same contesting the powers of the Developer or any of its principals or officials with respect to this Agreement that has not been disclosed in writing to the other Parties. (e) Developer agrees that it shall enforce the imposition and collection of the Add-On PIF and the remittance of the Add-On PIF to the District Bond Trustee. 1 Packet Pg. 168 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 24 (f) Developer covenants and agrees that it shall complete the Project in strict conformance with the terms of this Agreement, and Exhibit C, including but not limited to high quality architectural and landscape design exceeding the City of Fort Collins Land Use Code minimum standards and consistent in character with the approved Project Development Plan dated February 7, 2013, and the environmental sustainability measures set forth in Exhibit C, except as approved in writing by the City Manager. (g) Except with regard to the signature pages from ARC, as defined below, in escrow with Fidelity National Title Company (“Fidelity”) are: (i) a Termination and Relocation Agreement between the Developer and arc Thrift Stores (“ARC”), (ii) an Estoppel Agreement between the Developer, ARC, Crown Financial, LLC (“Crown”) and Larimer Park Associates (“LPA”), (iii) an Escrow Agreement, between the Developer, ARC and Fidelity (collectively the “ARC Escrow Documents”), (iv) assignments between Crown and the Developer and LPA and the Developer, and (v) funds in an amount sufficient to cover the payment obligations to Crown and LPA pursuant to the separate assignment agreements with Crown and LPA and the escrow deposit required under the Escrow Agreement. Provided ARC has delivered fully executed copies of the ARC Escrow Documents with instructions to permit the completion of the escrow as hereinafter described, the Developer covenants and agrees that on or before Noon on January 15, 2014, the Developer shall deliver confirmation to Fidelity to complete the escrow so that fully-executed copies of the ARC Escrow Documents are delivered to the applicable parties and funding related to the same occurs in accordance with each applicable document. 12.4 Representations and Warranties by the City. The City represents and warrants as follows: (a) The City is a body corporate and politic and a home rule municipality of the State of Colorado, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations under this Agreement. (b) The City knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the City or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required hereunder and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the City or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the City is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the City. (d) This Agreement constitutes a valid and binding obligation of the City, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 1 Packet Pg. 169 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 25 13. TERM. The term of this Agreement is the period commencing on the Effective Date and terminating on the later of: (i) the date of payment in full of the District Bonds, or (ii) thirty years from the Effective Date; provided, however, that the Authority’s obligation to remit the Authority Pledged Revenue to the District Bond Trustee shall terminate upon the expiration of the time period that the Authority is authorized pursuant to the Act to receive the Authority Pledged Revenue, and provided, further, that the following provisions, without limitation, shall continue beyond the term of this Agreement: (A) the District’s and Developer’s obligation to operate and maintain the Project in accordance with the standards set forth herein, (B) the District’s obligation to reimburse the City for the costs of maintaining Larimer County Canal No. 2, (C) the limitation on the imposition of the Add-on PIF for only so long as any District Bonds are outstanding without the written consent of the City, (D) the Developer’s indemnification obligations under Section 11 hereof, (E) any rights and remedies that a Party has for an Event of Default hereunder, and (F) any rights that a Party has to inspect books and records as set forth in Section 9 hereof. 14. CONFLICTS OF INTEREST. None of the following will have any personal interest, direct or indirect, in this Agreement: a member of the governing body of the Authority or the City, an employee of the Authority or of the City who exercises responsibility concerning the Urban Renewal Plan, or an individual or firm retained by the City or the Authority who has performed consulting services to the Authority in connection with the Urban Renewal Plan, this Agreement, or the Authority Financing. None of the above persons or entities will participate in any decision relating to the Agreement that affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 15. ANTIDISCRIMINATION. Developer, for itself and its successors and assigns, agrees that in the construction of the Eligible Improvements and in the use and occupancy of the Property and the Eligible Improvements, Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, sexual preference, disability, marital status, ancestry, or national origin. 16. NOTICES. Any notice required or permitted by this Agreement will be in writing and will be deemed to have been sufficiently given for all purposes if delivered in person, by prepaid overnight express mail or overnight courier service, by certified mail or registered mail, postage prepaid return receipt requested, addressed to the Party to whom such notice is to be given at the address set forth on the signature page below or at such other or additional addresses as may be furnished in writing to the other Parties. Additionally, the Parties agree to provide concurrent notice via electronic mail. 17. DELAYS; FORCE MAJEURE. Subject to the following provisions, time is of the essence. Any delays in or failure of performance by any Party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, earthquake, strikes, labor disputes, regulation or order of civil or military authorities, or other causes, similar or dissimilar, which are beyond the control of such Party. 1 Packet Pg. 170 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 26 18. EVENTS OF DEFAULT. The following events shall constitute an Event of Default under this Agreement: (a) Failure by the Authority to pledge the Authority Pledged Revenue to any outstanding District Bonds in accordance with the District Bond Documents or failure to remit any such Authority Pledged Revenues within five (5) business days of the date they are required to be remitted; (b) Failure by the District to impose the District Debt Service Mill Levy or to remit the District Pledged Revenues within five (5) business days of the date they are required to be remitted; (c) Any representation or warranty made by any Party in this Agreement proves to have been untrue or incomplete in any material respect when made and which untruth or incompletion would have a material adverse effect upon any other Party; (d) Any Party fails in the performance of any other covenant in this Agreement and such default continues for thirty (30) days after written notice specifying such default and requiring the same to be remedied is given by a non-defaulting Party to the defaulting Party. If such default is not of a type which can be cured within such thirty (30) day period and the defaulting Party gives written notice to the non-defaulting Party or Parties within such thirty (30) day period that it is actively and diligently pursuing such cure, the defaulting Party shall have a reasonable period of time given the nature of the default following the end of such thirty (30) day period to cure such default, provided that such defaulting Party is at all times within such additional time period actively and diligently pursuing such cure in good faith; (e) The Developer fails in the timely performance of its obligations under Section 12.3(g). 19. REMEDIES. To the extent that an Event of Default has occurred and is continuing hereunder, and District Bonds have not yet been issued, no District Bonds shall be issued until such Event of Default has been cured, or remedied, or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. Upon the occurrence and continuation of an Event of Default, the non-defaulting Party’s remedies will be limited to the right to enforce the defaulting Party’s obligations by an action for injunction, specific performance, or other appropriate equitable remedy or for mandamus, or by an action to collect and enforce payment of sums owing hereunder, and no other remedy, and no Party will be entitled to or claim damages for an Event of Default by the defaulting Party, including, without limitation, lost profits, economic damages, or actual, direct, incidental, consequential, punitive or exemplary damages. In the event of any litigation or other proceeding to enforce any of the terms, covenants or conditions of this Agreement, the prevailing party in such litigation or other proceeding will receive, as part of its judgment or award, its reasonable attorneys’ fees and costs. The occurrence and continuation of an Event of Default will not affect the obligation of the Authority or the District to collect and remit Pledged Revenues or the obligation of the Authority 1 Packet Pg. 171 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 27 to remit the District Debt Service Mill Levy Revenue or the District Operating Revenue to the District in accordance with the terms and provisions of this Agreement. 20. TERMINATION. Upon the occurrence of any of the following events, this Agreement may be terminated in accordance with the provisions hereinafter set forth: (a) In the event that the District Bonds are not issued on or prior to June 30, 2014, then any Party shall have the option to terminate this Agreement. (b) In the event that the District Bonds have not been issued and the Developer or the District have not Commenced Construction of any portion of the Project on or prior to March 1, 2014, then any Party shall have the option to terminate this Agreement. In order to terminate this Agreement, a Party shall provide written notice of such termination to the other Parties. Such termination shall be effective thirty (30) days after the date of such notice unless prior to such time, the Parties are able to negotiate in good faith to reach an agreement to avoid such termination. Upon such termination, this Agreement shall be null and void and of no effect, and no action, claim or demand may be based on any term or provision of this Agreement. In addition the Parties agree to execute a mutual release or other instruments reasonably required to effectuate and give notice of such termination. In the event that this agreement is terminated pursuant to this Section 20, the Developer agrees that it shall continue to be obligated to pay or reimburse the Authority for Authority Reimbursable Costs in accordance with the Agreement to Negotiate and shall continue to be obligated to pay or reimburse the City and the Authority for its costs, fees and expenses as set forth in Section 4.11 hereof. 21. NONLIABILITY OF OFFICIALS, AGENTS, MEMBERS, AND EMPLOYEES. Except for willful or wanton actions, no trustee, board member, commissioner, official, employee, consultant, manager, member, shareholder, attorney or agent of any Party, nor any lender to any Party or to the Project, will be personally liable under the Agreement or in the event of any default or for any amount that may become due to any Party. 22. ASSIGNMENT. Except for a District Bond Trustee in connection with the issuance of the District Bonds, this Agreement will not be assigned in whole or in part by any Party without the prior written consent of the other Parties; provided, however, the following assignments and transfers will not require any such consent: (a) Developer may assign all or a portion of this Agreement to the District; (b) subject to written notice to the City and the Authority from Developer containing the name and address of the lender or other party, Developer may pledge, collaterally assign or otherwise encumber all or any part of its rights under this Agreement, including its right to receive any payment or reimbursement, to any lender or other party that provides acquisition, construction, working capital, tenant improvement or other financing to Developer in connection with development of the Property and/or construction of the Eligible Improvements; and (c) on and after Completion of Construction of the Project and subject to written notice to the City and the Authority, the Developer may assign all or any part of its rights under this Agreement to any purchaser of all or any portion of the Project. On and after Completion of Construction of the Project and in the event that the Developer sells all or a portion 1 Packet Pg. 172 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 28 of the Project to a purchaser, and such purchaser accepts all or a part of the Developer’s obligations hereunder, then Developer shall be released from all of its obligations hereunder that have been assumed or accepted by such purchaser, provided, however, that no such release shall be effective until the City and the Authority have received written confirmation that such purchaser has assumed or accepted any such obligations hereunder. The Authority recognizes that Developer may form, together with investors, a separate, special purpose entity to develop, own and/or operate all or a portion of the Property or of the Eligible Improvements to be constructed thereon and that one or more assignments of all or a portion of this Agreement may be required in connection with such activities and such transfer(s) will not require any consent by the Parties. Except as otherwise specifically set forth in Section 4.11 hereof, no covenants or obligations of the Developer or the District hereunder shall run with the land. 23. COOPERATION REGARDING DEFENSE. In the event of any litigation or other legal challenge involving this Agreement, the District Bonds, the validity of the Urban Renewal Plan, the District, or any other material part or provision of this Agreement or the ability of any Party to enter into this Agreement, the Parties will cooperate and jointly defend against such action or challenge, to the extent permitted by law. 24. SECTION CAPTIONS. The captions of the sections are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 1 Packet Pg. 173 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 29 25. ADDITIONAL DOCUMENTS OR ACTION. 25.1 The Parties agree to execute any additional documents or take any additional action, including but not limited to estoppel documents requested or required by third parties, including without limitation, lenders, tenants or potential purchasers, that is necessary to carry out this Agreement or is reasonably requested by any Party to confirm or clarify the intent of the provisions of this Agreement and to effectuate the agreements and the intent. Notwithstanding the foregoing, however, no Party shall be obligated to execute any additional document or take any additional action unless such document or action is reasonably acceptable to such Party. 25.2 If all or any portion of this Agreement, or other agreements approved in connection with this Agreement are asserted or determined to be invalid, illegal or are otherwise precluded, the Parties, within the scope of their powers and duties, will cooperate in the joint defense of such documents and, if such defense is unsuccessful, the Parties will use reasonable, diligent good faith efforts to amend, reform or replace such precluded items to assure, to the extent legally permissible, that each Party substantially receives the benefits that it would have received under this Agreement. 25.3 At the time of issuance of the District Bonds, each of the Authority and the City shall deliver an opinion of counsel addressed to the District, or with a reliance letter delivered to the District, with respect to this Agreement and the Urban Renewal Plan, which opinions shall state in substance that the Agreement and the Urban Renewal Plan have been duly authorized, executed, and delivered by the Authority and the City, as applicable, constitute valid and binding agreements of the Authority and the City, as applicable, and are enforceable according to their terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.4 At the time of issuance of the District Bonds, the District shall deliver an opinion of counsel addressed to the City and the Authority, or with a reliance letter delivered to the City and the Authority, with respect to this Agreement, which opinion shall state in substance that the Agreement has been duly authorized, executed, and delivered by the District, constitutes a valid and binding agreement of the District, and is enforceable according to its terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.5 The City Manager shall have the authority to act on behalf of the City under this Agreement and the Executive Director shall have the authority to act on behalf of the Authority under this Agreement. 26. AMENDMENT. This Agreement may be amended only by an instrument in writing signed by the Parties. 27. WAIVER OF BREACH. A waiver by any Party to this Agreement of the breach of any term or provision of this Agreement must be in writing and will not operate or be construed as a waiver of any subsequent breach by any Party. 1 Packet Pg. 174 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 30 28. GOVERNING LAW. The laws of the State of Colorado govern this Agreement. The District Court of Larimer County will be the exclusive venue for any litigation. 29. BINDING EFFECT. This Agreement will inure to the benefit of and be binding upon the Parties and their respective legal representatives, successors, heirs, and assigns, provided that nothing in this paragraph permits the assignment of this Agreement except as set forth in Section 22. 30. EXECUTION IN COUNTERPARTS. This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which will constitute but one and the same instrument. 31. LIMITED THIRD-PARTY BENEFICIARIES. Except for the District Bond Trustee for any District Bonds, direct lenders to the District that have been assigned rights hereunder in accordance with Section 22, or any provider of credit enhancement for the District Bonds, this Agreement is not intended and shall not be deemed to confer any rights on any person or entity not named as a Party to this Agreement. 32. NO PRESUMPTION. The Parties and their attorneys have had a full opportunity to review and participate in the drafting of the final form of this Agreement. Accordingly, this Agreement will be construed without regard to any presumption or other rule of construction against the Party causing the Agreement to be drafted. 33. SEVERABILITY. If any provision of this Agreement as applied to any Party or to any circumstance is adjudged by a court to be void or unenforceable, the same will in no way affect any other provision of this Agreement, the application of any such provision in any other circumstances or the validity, or enforceability of the Agreement as a whole. 34. DAYS. If the day for any performance or event provided for herein is a Saturday, a Sunday, a day on which national banks are not open for the regular transactions of business, or a legal holiday pursuant to Section 24-11-101(1), C.R.S., such day will be extended until the next day on which such banks and state offices are open for the transaction of business. 35. GOOD FAITH OF PARTIES. In the performance of this Agreement or in considering any requested approval, consent, acceptance, or extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily, capriciously, or unreasonably withhold, condition, or delay any approval, acceptance, or extension of time required or requested pursuant to this Agreement. 36. PARTIES NOT PARTNERS. Notwithstanding any language in this Agreement or any other agreement, representation, or warranty to the contrary, the Parties will not be deemed to be partners or joint venturers, and no Party is responsible for any debt or liability of any other Party. 37. NO WAIVER OF IMMUNITY. Nothing contained in this Agreement constitutes a waiver of sovereign immunity or governmental immunity by any Party under applicable state law. 1 Packet Pg. 175 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 31 IN WITNESS WHEREOF, this Agreement is executed by the Parties as of January __, 2014. FORT COLLINS URBAN RENEWAL AUTHORITY _____________________________________ ATTEST: Gerry Horak, Vice Chairperson _____________________________ Darin Atteberry, Executive Director Notice Address: Fort Collins Urban Renewal Authority 300 LaPorte Avenue P.O. Box 580 Fort Collins, CO 80522 Attention: Darin Atteberry, Executive Director Email: DATTEBERRY@fcgov.com 1 Packet Pg. 176 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 32 CITY OF FORT COLLINS, COLORADO By: Gerry Horak, Mayor Pro Tem (SEAL) Attest: _______________________ Wanda Nelson, City Clerk APPROVED AS TO FORM _______________________ Steve Roy, City Attorney Notice Address: City of Fort Collins 300 LaPorte Avenue P.O. Box 580 Fort Collins, Colorado 80522 Attention: Steve Roy, Esq., City Attorney Email: SROY@fcgov.com 1 Packet Pg. 177 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 33 FOOTHILLS METROPOLITAN DISTRICT _________________________________ ATTEST: ________________________, President _____________________________ Secretary Notice Address: c/o White, Bear and Ankele, P.C. The Streets at Southglenn 2154 E.Commons Avenue, Suite 2000 Centennial, CO 80122 Attention: Kristen Bear Email: kbear@wbapc.com 1 Packet Pg. 178 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) 34 WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company By: Foothills Alberta Management, LLC, a Colorado limited liability company Its: Authorized Agent By: ____________________________ Donald G. Provost Its: Manager Notice Address: Walton Foothills Holdings VI, L.L.C. 5750 DTC Pkwy, Suite 210 Greenwood Village, CO 80111 Attention: Donald G. Provost Email: dgp@albdev.com With a copy to: Brownstein Hyatt Farber Schreck, LLP 410 Seventeenth Street, Suite 2200 Denver, CO 80202 Attention: Carolynne C. White, Esq. Email: cwhite@bhfs.com 1 Packet Pg. 179 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Foothills Mall: PARCEL I - FEE SIMPLE: Tract 2, The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL II - FEE SIMPLE: Tract 3, The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL III - FEE SIMPLE: Lot #1 of Replat of Tracts F, G and J and Vacated Service Road, Southmoor Village Fifth Filing, City of Fort Collins, Colorado, a municipal corporation, according to the replat filed December 13, 1973, except that portion conveyed to the City of Fort Collins, for public use by Deed of Dedication recorded April 21, 1989, as Reception No. 890178208, more particularly described as follows: A part of Lot 1 of the Replat of Tracts F, G and J and Vacated Service Road, Southmoor Village, Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at a point which bears South 00°12' East 105.36 feet from the Northeast corner of said Lot 1, and runs thence South 00°12' East 137.44 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 17.77 feet, the long chord of which bears South 33°43'30" West 16.75 feet; Thence along the arc of a 360.77 foot radius curve to the left a distance of 146.61 feet, the long chord of which bears South 56°01'30" West 145.60 feet; Thence North 44°23' East 85.72 feet; thence along the arc of a 243.83 foot radius curve to the left a distance of 189.80 feet, the long chord of which bears North 22°05' East 185.04 feet to the Point of Beginning. PARCEL IV - FEE SIMPLE: A part of Tract T and U and a part of the vacated frontage road adjacent to said Tract U, Southmoor Village Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at a point on the West line of said Tract T which bears South 01°57' East 7.19 feet and again South 12°17'30" West 180.10 feet from the Northwest corner of said Tract T, and run thence North 89°45'30" East 243.55 feet to a point on the Northerly line of East Monroe Drive; Thence along said Northerly right-of-way line, South 51°45' West 231.73 feet and again along the arc of a 193.41 foot radius curve to the right a distance of 127.73 feet, the long chord of which bears South 70°40'06" West 125.42 feet and again South 89°35'15" West 137.00 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 23.56 feet, the long chord of which bears North 1 Packet Pg. 180 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) A1 - 2 45°24'45" West 21.21 feet; Thence North 00°24'45" West 169.17 feet along the East line of South College Avenue; Thence North 89°45'30" East, 210.10 feet to the point of beginning. Also: A part of Tract T of Southmoor Village, Fifth Filing which begins at the Northwest corner of said Tract T and run thence North 89°45'30" East 227.00 feet; Thence South 74°54' East 170.06 feet; Thence South 00°14'30" East 24.45 feet to a point on the North line of Monroe Drive; Thence along said North line along the arc of a 301.32 foot radius curve to the left a distance of 124.25 feet, the long chord of which bears South 63°33'47" West 123.37 feet, and again South 51°45' West 95.97 feet; Thence South 89°45'30" West 243.55 feet; Thence North 12°17'30" East 180.10 feet; Thence North 01°57' West 7.19 feet to the point of beginning: AND a part of Tract U of Southmoor Village, Fifth Filing, and a part of the vacated frontage road adjacent to said Tract U which begins at the Northeast corner of said Tract U and run thence South 01°57' East 7.19 feet; Thence South 12°17'30" West 180.10 feet; Thence South 89°45'30" West 210.10 feet to a point on the East right-of-way line of South College Avenue; Thence North 00°24'45" West 183.00 feet; Thence North 89°45'30" East 249.52 feet to the point of beginning; City of Fort Collins, County of Larimer, State of Colorado. EXCEPT that portion described in Partial Release recorded August 19, 1988 as Reception No. 88039190. The above described Parcel IV is also known as: A part of Tract T, Tract U and the vacated frontage road adjacent to the West side of Tract U, all in Southmoor Village, Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at the Northwest corner of said Tract T and runs thence North 89°45'30" East 225.25 feet; Thence along the arc of a 140.00 foot radius curve to the right a distance of 61.50 feet, the long chord of which bears South 12°49'33" East 61.00 feet; Thence South 00°14'30" East 97.00 feet; Thence South 51°45' West 274.70 feet; Thence along the arc of a 193.41 foot radius curve to the right a distance of 127.73 feet, the long chord of which bears South 70°40'06" West 125.42 feet; Thence South 89°35'15" West 137.00 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 23.56 feet, the long chord of which bears North 45°24'45" West 21.21 feet; Thence North 00°24'45" West 352.17 feet; Thence North 89°45'30" East 249.52 feet to the Point of Beginning. PARCEL V - FEE SIMPLE: Tract A, The Foothills Fashion Mall Foley's Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL VI - FEE SIMPLE: Tract 1 and Tract 7 of The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. 1 Packet Pg. 181 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) A1 - 3 PARCEL VII - FEE SIMPLE: Tract 10 of The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL VIII - FEE SIMPLE: Tract E, Southmoor Village, Fifth Filing, together with a tract of land beginning at the Southwest corner of Tract E of Southmoor Village Fifth Filing and runs: Thence South 89°45'30" West, 50.00 feet; Thence North 00°24'45" West, 414.93 feet; Thence North 89°35'15" East, 50.00 feet; Thence South 00°24'45" East, 415.08 feet to the beginning, Larimer County, Colorado. PARCEL IX - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Easement Agreement recorded June 23, 1972 in Book 1509 at Page 306, Amended Agreement recorded June 23, 1972 in Book 1509 at Page 316, Amended Construction, Operation Reciprocal Easement Agreement recorded June 23, 1972 in Book 1509 at Page 201, Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded May 31, 1979, in Book 1956 at Page 796, Amendment No. 1 to Restatement of Amended Construction, Operation and Reciprocal Easement Agreement, recorded September 27, 1988 at Reception No. 88042996, and Amendment No. 2 to Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded September 7, 1999 at Reception No. 99079223, Assignment and Assumption of Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded December 19, 2003 at Reception No. 20030158946, and Assignment and Assumption of Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded January 30, 2004 at Reception No. 2004009265. PARCEL X - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Cross-Easement Agreement recorded September 7, 1988 at Reception No. 88042989, Grant of Easement recorded September 7, 1988 at Reception No. 88042997 and Grant of Easement recorded January 26, 1993 at Reception No. 93005028. PARCEL XI - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Easement Agreement recorded April 24, 1997 at Reception No. 97025069. 1 Packet Pg. 182 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) A1 - 4 Macy's: Tract "B" of The Foothills Fashion Mall Foley's Expansion, located in the Southwest Quarter of Section 25, Township 7 North, Range 69 West of the 6th Principal Meridian, City of Fort Collins, County of Larimer, State of Colorado, being more particularly described as follows: Considering the North line of said Tract "B" as bearing North 89°47'08" East with all bearings contained herein relative thereto: Beginning at the Northwest corner of said Tract "B"; thence along said North line, North 89°47'08" East, 147.00 feet to the Northwest corner of Tract "A" of said The Foothills Fashion Mall Foley's Expansion; thence along the West and Southerly lines of said Tract "A" by the following four (4) courses and distances, South 00°12'52" East, 180.00 feet; thence North 89°47'08" East 714.79 feet; thence North 00°12'52" West,1 28.00 feet; thence North 89°47'08" East, 132.28 feet to a point on the West right-of-way line of Stanford Road, said point being on a non-tangent curve concave to the Northwest having a central angle of 14°33'25", a radius of 1319.21 feet and a long chord which bears South 09°19'18" West, 334.27 feet; thence along the arc of said curve 335.17 feet; thence South 16°36'00" West, 93.03 feet to a point being on a non tangent curve concave to the Southwest having a central angle of 89°58'58", a radius of 15.00 feet and a long chord which bears North 28°24'00" West, 21.21 feet; thence along the arc of said curve 23.56 feet; thence North 73°24'00" West, 242.72 feet; thence South 00°14;39: East, 306.31 feet; thence South 89°45'30" West, 329.50 feet; thence South 44°45'30" West, 98.72 feet; thence North 45°14'30" West, 48.00 feet; thence South 44°45'30" West, 93.53 feet; thence North 45°14'30" West, 151.44 feet; thence South 44°45'30" West, 47.26 feet; thence North 00°14'30" West, 332.20 feet; thence North 89°47'00" East, 99.70 feet; thence North 00°13'00" West, 280.13 feet to the Point of Beginning. Sears: Tract 8, The Foothills Fashion Mall Expansion to the city of Fort Collins, County of Larimer, State of Colorado Christy Sports: Parcel One: Tract "D" Southmoor Village Fifth Filing AND the following described portion of the vacated frontage road vacated by Ordinance No. 98 as recorded in Book 1580 at page 897, which begins at the Southwest corner of said Tract "D" and run thence N 00°00'45" West 143.71 feet along the West line of said Tract D; thence S 44°59'15" West 70.71 feet; thence S 00°00'45" East 93.71 feet; thence N 89°59'15" East 50.00 feet to the Point of Beginning, together with the following described easement: 1 Packet Pg. 183 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) A1 - 5 Parcel Two: (easement) A portion of Tract 8, Foothills Fashion Mall Expansion, formerly known as a part of Tract "C" of Southmoor Village, Fifth Filing, in the City of Fort Collins, which begins at the Northeast corner of Tract "D" of said Southmoor Village, Fifth Filing, and run thence S 00°00'45" East 158.71 feet; thence S 89°59'15" West 158.71 feet; thence S 00°00'45" East 50.00 feet; thence N 89°59'15" East 185.00 feet; thence N 13°44 East 130.45 feet; thence along the Arc of a 200 foot radius curve to the left a distance of 55.72 feet; thence along the arc of a 35-foot radius curve to the right a distance of 31.81 feet; thence along the Southerly line of Foothills Parkway, on the arc of a 359.23 foot radius curve to the right a distance of 43.81 feet, and again along the Southerly line of Foothills Parkway South 89°59'15" West 29.29 feet to the Point of Beginning. Subject to the terms, agreements, provisions, conditions and obligations as contained in Easement Agreement recorded December 11, 1972, in Book 1532 at Page 904 and Assignment recorded January 8, 1973, in Book 1536 at Page 448. 1 Packet Pg. 184 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT B DESCRIPTION OF THE FOOTHILLS TAX INCREMENT FINANCING DISTRICT A TRACT OF LAND LOCATED IN THE SOUTHWEST QUARTER OF SECTION 25 AND THE SOUTHEAST QUARTER OF SECTION 26, TOWNSHIP 7 NORTH, RANGE 69 WEST OF THE SIXTH P.M.; CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO; BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE WEST QUARTER CORNER OF SAID SECTION 25, AND CONSIDERING THE WEST LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 25 AS HAVING AN ASSUMED BEARING OF S00°04’53”W, SAID LINE BEING MONUMENTED ON ITS NORTH END BY A 3" ALUMINUM CAP STAMPED LS 20123, AND ON ITS SOUTH END BY A 2-1/2" ALUMINUM CAP STAMPED LS 14823, WITH ALL BEARINGS CONTAINED HEREIN RELATIVE THERETO; THENCE ALONG THE NORTHERLY BOUNDARY OF LOT 1 OF THE “REPLAT OF TRACTS F, G, AND J, AND VACATED SERVICE ROAD, SOUTHMOOR VILLAGE, FIFTH FILING” AND THE WESTERLY EXTENSION THEREOF, N89°52'45"E, A DISTANCE OF 314.48 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF REMINGTON STREET; THENCE CONTINUING ALONG SAID NORTHERLY BOUNDARY THE FOLLOWING FIVE (5) COURSES: 1) ALONG THE WESTERLY RIGHT OF WAY LINE OF REMINGTON STREET, S00°05'37"W, A DISTANCE OF 50.00 FEET; 2) ALONG THE SOUTHERLY RIGHT OF WAY LINE OF REMINGTON STREET, N89°52'45"E, A DISTANCE OF 60.00 FEET; 3) S51°41'04"E, A DISTANCE OF 145.40 FEET; 4) S89°35'23"E, A DISTANCE OF 138.50 FEET; 5) N00°05'37"E, A DISTANCE OF 141.63 FEET; THENCE CONTINUING ALONG SAID NORTHERLY BOUNDARY AND ITS EASTERLY EXTENSION, N89°52'45"E, A DISTANCE OF 357.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF MATHEWS STREET, SAID POINT ALSO BEING THE NORTHWEST CORNER OF TRACT K, SOUTHMOOR VILLAGE, FIFTH FILING; THENCE ALONG THE WESTERLY, SOUTHERLY, AND EASTERLY BOUNDARIES OF SAID TRACT K THE FOLLOWING FIVE (5) COURSES: 1) ALONG SAID EASTERLY RIGHT OF WAY LINE OF MATHEWS STREET, S00°14'56"E, A DISTANCE OF 215.33 FEET; 2) 23.98 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 91°36'53", AND A CHORD WHICH BEARS S46°03'22"E A DISTANCE OF 21.51 FEET; 1 Packet Pg. 185 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) B - 2 3) 11.02 FEET ALONG THE ARC OF A REVERSE CURVE, HAVING A RADIUS OF 360.77 FEET, A CENTRAL ANGLE OF 01°45'00", AND A CHORD WHICH BEARS N89°00'07"E A DISTANCE OF 11.02 FEET; 4) N89°52'37"E, A DISTANCE OF 173.52 FEET; 5) N00°07'23"W, A DISTANCE OF 230.12 FEET TO THE NORTHWEST CORNER OF TRACT B OF THE FOOTHILLS FASHION MALL FOLEY’S EXPANSION; THENCE ALONG THE NORTHERLY BOUNDARY OF TRACTS B AND A OF SAID FOOTHILLS FASHION MALL FOLEY’S EXPANSION, N89°52'46"E, A DISTANCE OF 996.10 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF STANFORD ROAD; THENCE ALONG SAID WESTERLY RIGHT OF WAY LINE THE FOLLOWING SEVEN (7) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF TRACT B OF SAID FOOTHILLS FASHION MALL FOLEY’S EXPANSION, 387.18 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 1,319.30 FEET, A CENTRAL ANGLE OF 16°48'53", AND A CHORD WHICH BEARS S08°17'12"W A DISTANCE OF 385.79 FEET; 2) CONTINUING ALONG SAID EASTERLY BOUNDARY, S16°41'39"W, A DISTANCE OF 93.03 FEET; 3) ALONG THE EASTERLY BOUNDARY OF THE FOOTHILLS FASHION MALL EXPANSION, S16°41'36"W, A DISTANCE OF 482.09 FEET; 4) CONTINUING ALONG SAID EASTERLY BOUNDARY, 327.62 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 1,114.57 FEET, A CENTRAL ANGLE OF 16°50'30", AND A CHORD WHICH BEARS S08°16'21"W A DISTANCE OF 326.44 FEET; 5) CONTINUING ALONG SAID EASTERLY BOUNDARY, S00°08'53"E, A DISTANCE OF 170.00 FEET; 6) CONTINUING ALONG SAID EASTERLY BOUNDARY, S05°51'32"E, A DISTANCE OF 110.54 FEET; 7) CONTINUING ALONG SAID EASTERLY BOUNDARY AND ITS SOUTHERLY EXTENSION, S00°08'53"E, A DISTANCE OF 451.00 FEET TO A POINT ON THE SOUTHERLY BOUNDARY OF THAT TRACT OF LAND DESCRIBED IN THE SPECIAL WARRANTY DEED RECORDED OCTOBER 30, 2012 AT RECEPTION NO. 20120076539 IN THE OFFICE OF THE LARIMER COUNTY CLERK AND RECORDER; THENCE ALONG THE SOUTHERLY BOUNDARY OF THE TRACTS DESCRIBED IN THE DEEDS RECORDED AT RECEPTION NO. 20120076539, RECEPTION NO. 20050022855, AND RECEPTION NO. 2001099396, THE FOLLOWING SEVEN (7) COURSES: 1 Packet Pg. 186 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) B - 3 1) 23.56 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS N45°08'53"W A DISTANCE OF 21.21 FEET; 2) S89°51'07"W, A DISTANCE OF 214.00 FEET; 3) 312.91 FEET ALONG THE ARC OF A TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 398.41 FEET, A CENTRAL ANGLE OF 44°59'59", AND A CHORD WHICH BEARS N67°38'53"W A DISTANCE OF 304.93 FEET; 4) N45°08'54"W, A DISTANCE OF 129.24 FEET; 5) 275.94 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 351.34 FEET, A CENTRAL ANGLE OF 45°00'00", AND A CHORD WHICH BEARS N67°38'54"W A DISTANCE OF 268.90 FEET; 6) S89°51'06"W, A DISTANCE OF 199.36 FEET; 7) 23.56 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS S44°51'06"W A DISTANCE OF 21.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF JOHN F. KENNEDY PARKWAY; THENCE S89°51'06"W, A DISTANCE OF 66.00 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF JOHN F. KENNEDY PARKWAY; THENCE 23.56 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS N45°08'54"W A DISTANCE OF 21.21 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF EAST MONROE DRIVE; THENCE ALONG SAID SOUTHERLY RIGHT OF WAY LINE THE FOLLOWING FIVE (5) COURSES: 1) S89°51'06"W, A DISTANCE OF 12.16 FEET; 2) 146.82 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 221.32 FEET, A CENTRAL ANGLE OF 38°00'29", AND A CHORD WHICH BEARS S70°50'52"W A DISTANCE OF 144.14 FEET; 3) S51°50'37"W, A DISTANCE OF 327.70 FEET; 4) 179.17 FEET ALONG THE ARC OF A TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 273.41 FEET, A CENTRAL ANGLE OF 37°32'46", AND A CHORD WHICH BEARS S70°37'00"W A DISTANCE OF 175.98 FEET; 5) S89°23'22"W, A DISTANCE OF 138.44 FEET; THENCE 23.56 FEET ALONG THE ARC OF CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS S44°23'23"W A DISTANCE OF 21.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE; 1 Packet Pg. 187 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) B - 4 THENCE ALONG SAID EASTERLY RIGHT OF WAY LINE THE FOLLOWING TWO (2) COURSES: 1) ALONG THE WESTERLY BOUNDARY OF STRACHAN SUBDIVISION, SECOND FILING, S00°19'07"E, A DISTANCE OF 576.93 FEET; 2) CONTINUING ALONG SAID WESTERLY BOUNDARY, S45°28'37"E, A DISTANCE OF 44.78 FEET TO A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AS SHOWN ON THE PLAT OF SAID STRACHAN SUBDIVISION, SECOND FILING; THENCE S03°26'10"W, A DISTANCE OF 105.31 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AS SHOWN ON THE FIRST REPLAT OF 1ST CHOICE BANK OF FORT COLLINS; THENCE N88°14'59"W, A DISTANCE OF 154.42 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AND THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE REPLAT OF LOTS 1, 2, 3 & 4 – CREGER PLAZA SUBDIVISION; THENCE N00°32'51"W, A DISTANCE OF 100.00 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE PLAT OF MATTERHORN P.U.D.; THENCE ALONG THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE THE FOLLOWING TEN (10) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF LOT 1, MATTERHORN P.U.D., N44°33'53"E, A DISTANCE OF 9.22 FEET; 2) ALONG THE EASTERLY BOUNDARY OF LOTS 1 AND 2, MATTERHORN P.U.D., N00°19'07"W, A DISTANCE OF 503.93 FEET; 3) ALONG THE NORTHERLY BOUNDARY OF LOT 2, MATTERHORN P.U.D., S53°56'23"W, A DISTANCE OF 44.81 FEET; 4) ALONG THE EASTERLY BOUNDARY OF LOTS 2, 3, 4, 5 AND 11 OF SOUTH MESA SUBDIVISION AND THE SOUTHERLY EXTENSION THEREOF, N00°19'07"W, A DISTANCE OF 561.00 FEET; 5) N89°51'53"E, A DISTANCE OF 10.71 FEET; 6) N09°43'23"E, A DISTANCE OF 22.91 FEET; 7) 29.36 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 167.50 FEET, A CENTRAL ANGLE OF 10°02'32", AND A CHORD WHICH BEARS N04°42'09"E A DISTANCE OF 29.32 FEET; 8) N00°19'07"W, A DISTANCE OF 198.22 FEET; 9) S89°58'15"W, A DISTANCE OF 7.27 FEET TO THE SOUTHEAST CORNER OF LOT B, VILLA P.U.D.; 10) ALONG THE EASTERLY BOUNDARY OF SAID LOT B, N00°19'07"W, A DISTANCE OF 226.70 FEET TO A POINT ON THE SOUTHERLY BOUNDARY OF TRACT A, RICHIE’S EXPRESS CARWASH SUBDIVISION; THENCE ALONG SAID SOUTHERLY BOUNDARY OF TRACT A, AND ALONG THE SOUTHERLY BOUNDARY OF TRACT A, MOURNING SUBDIVISION, N89°59'07"W, A DISTANCE OF 665.15 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF MCCLELLAND DRIVE AS SHOWN ON THE PLAT OF SAID MOURNING SUBDIVISION; THENCE ALONG SAID EASTERLY RIGHT OF WAY LINE, N00°39'53"E, A DISTANCE OF 20.17 FEET; THENCE 23.39 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 89°21'00", AND A CHORD WHICH BEARS N45°20'23"E A 1 Packet Pg. 188 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) B - 5 DISTANCE OF 21.09 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF WEST FOOTHILLS PARKWAY AS SHOWN ON SAID MOURNING SUBDIVISION PLAT; THENCE ALONG SAID SOUTHERLY RIGHT OF WAY LINE, S89°59'07"E, A DISTANCE OF 213.00 FEET; THENCE CONTINUING ALONG SAID SOUTHERLY RIGHT OF WAY LINE, 69.10 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS OF 160.00 FEET, A CENTRAL ANGLE OF 24°44'46", AND A CHORD WHICH BEARS N77°38'30"E A DISTANCE OF 68.57 FEET TO THE WESTERLY BOUNDARY OF LOT 1, RICHIE’S EXPRESS CARWASH SUBDIVISION; THENCE ALONG SAID WESTERLY BOUNDARY, S00°04'53"W, A DISTANCE OF 14.69 FEET; THENCE ALONG THE SOUTHERLY BOUNDARY OF SAID LOT 1, S89°59'07"E, A DISTANCE OF 407.26 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE; THENCE ALONG THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE THE FOLLOWING FOUR (4) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF SAID LOT 1, N00°19'07"W, A DISTANCE OF 78.17 FEET; 2) CONTINUING ALONG SAID EASTERLY BOUNDARY, N00°04'53"E, A DISTANCE OF 86.83 FEET; 3) ALONG THE NORTHERLY BOUNDARY OF SAID LOT 1, N89°59'07"W, A DISTANCE OF 37.50 FEET TO THE SOUTHEAST CORNER OF LOT 3, MOURNING SUBDIVISION; 4) N00°04'53"E, A DISTANCE OF 870.84 FEET (BEING THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE MOURNING SUBDIVISION, THE POUDRE VALLEY MOTORS SUBDIVISION, AND THE REPLAT OF THE SWALLOW SUBDIVISION); THENCE S89°57'07"E, A DISTANCE OF 100.00 FEET TO THE POINT OF BEGINNING. CONTAINING 89.729 ACRES MORE OR LESS AND BEING SUBJECT TO ALL EASEMENTS AND RIGHTS-OF-WAY OF RECORD OR THAT NOW EXIST ON THE GROUND. I HEREBY STATE THAT THE ABOVE DESCRIPTION WAS PREPARED BY ME AND IS TRUE AND CORRECT TO THE BEST OF MY PROFESSIONAL KNOWLEDGE, BELIEF, AND OPINION. THE ABOVE DESCRIBED TRACT IS BASED UPON PREVIOUSLY RECORDED PLATS AND DEEDS AND NOT UPON AN ACTUAL FIELD SURVEY. JOHN STEVEN VON NIEDA, COLORADO P.L.S. 31169 FOR AND ON BEHALF OF THE CITY OF FORT COLLINS P.O. BOX 580, FORT COLLINS, CO 80522 1 Packet Pg. 189 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT C DESCRIPTION OF THE PROJECT The Project is a mixed-use redevelopment of the existing Foothills Fashion Mall, which will include a commercial/retail component, a commercial parking structure and up to 800 multi-family dwelling units on the Property. In its final form, the Project may include additional land adjoining the Property. The Project will deliver the following components: 1. Demolish portions of the existing Foothills Fashion Mall and renovate the original structure into a one-level, enclosed shopping mall with no less than 358,003square feet of habitable space. Any portions of the Mall which are removed shall be processed in such a way as to safely remove all asbestos and lead paint contaminants. Where possible all remaining materials shall be recycled such as doors, windows, cabinets, and fixtures, concrete and masonry, wood, metals, and cardboard. Compliance shall be certified by the hauler through receipts and signed affidavits. 2. Demolish various free standing buildings including the Commons at Foothills Mall buildings, the Shops at Foothills Mall buildings, the Plaza at Foothills Mall, The Corner Bakery, Christy Sports, Tres Margaritas and the Youth Activity Center building. Buildings or portions of buildings which are removed shall be processed in such a way as to safely remove all asbestos and lead paint contaminants. Where possible all remaining materials shall be recycled such as doors, windows, cabinets, and fixtures, concrete and masonry, wood, metals, and cardboard. Compliance shall be certified by the hauler through receipts and signed affidavits. 3. Construct eight new commercial buildings along South College Avenue, ranging from approximately 6,300 square feet to 38,000 square feet of gross building area. 4. Construct six new retail buildings internal to the site northwest of the existing enclosed mall ranging in size from approximately 8,500 square feet to 17,000 square feet of gross building area. 5. Construct four new restaurants ranging in size from approximately 6,000 square feet to 8,000 square feet of gross building area. 6. Construct a new Foothills Activity Center to replace the Youth Activity Center, as described in the Agreement and Exhibit F. 7. Construct a new theater building with no less than 42,500 square feet of gross building area located southeast of the new restaurants. 8. Construct a large east green area and smaller west green plazas providing no less than 14,000 square feet of landscaped park for use by the general public, to anchor the pedestrian network. 9. Construct no fewer than 978 parking spaces via a four level parking structure, and additional surface parking spaces. 10. Construct no less than 446 and up to 800 multi-family units distributed among five building ranging in height from two to five stories, and including a mix of subterranean, C - 1 1 Packet Pg. 190 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) surface, and structured parking spaces, all to be located in the Residential Component of the Project. 11. High quality architectural and landscape design exceeding the City of Fort Collins Land Use Code minimum standards and consistent in character with the approved Project Development Plan dated February 7, 2013, including but not limited to, the following: a. Fully shielded street, parking, pedestrian, and ornamental lighting; b. Pedestrian oriented site amenities; c. Hardscape materials and design; d. Site drainage design incorporating runoff reduction measures and water quality treatment, as described in the Fort Collins Stormwater Criteria Manual, to the maximum extent practicable; and e. Variety of high-quality building materials. 12. The final building detailing, materials, colors, and other site design details for the Project are subject to Development Review staff review at the time of Final Plan and building permit to assure the approved architecture and design and high quality materials. 13. The Project shall comply with the 2012 International Building Code, as approved by the International Code Council, in addition to all other applicable City codes and legal requirements. 14. All new construction activities and deconstruction activities for the Project shall utilize the following standards that are used by the City of Fort Collins Operations Services Department for the remodeling or demolition of City buildings: (i) recycle 100% of the concrete, rock, asphalt, dirt, bricks and metal (excluding those containing hazardous materials) and (ii) achieve 70% diversion by weight or volume of all other materials. 15. The Developer and/or the District shall comply with the following commitments as discussed at the City workshop for the Project environmental sustainability: a. Implement dust control measures, such as spraying water or covering stockpiles on all construction areas where there will be significant soil disturbances or heavy equipment activity, covering all loads, and minimizing airborne emissions associated with loading and unloading materials; b. Implement construction equipment emissions controls, such as using lower emissions equipment performing at Tier IV emissions levels, minimizing the use of diesel generators, avoiding residential areas with construction equipment emissions, and minimizing warm-up time for construction equipment and vehicles; c. Consider on-site renewables; d. Incorporate sustainable building materials and local materials in the Project, such as flagstone from local sources, to the extent feasible; e. Incorporate low energy use lighting, such as LED or compact fluorescents, wherever feasible in site and building functions; f. Ensure no-VOC or low-VOC emissions products are used in the Project; g. Install at least two plug-in electric vehicle charging stations and conduit for additional stations on the Project site; h. Minimize the use of asbestos containing materials in the Project; C - 2 1 Packet Pg. 191 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) i. Incorporate water conservation measures in the Project, such as indoor high efficiency water fixtures and outdoor water features designed to maximum sustainability and water conservation; j. Minimize or prohibit vehicle idling on the Project site, including such measures as avoiding the use of drive-throughs, and installing reminder signs regarding the harmfulness of idling in delivery, parking and drop-off/pick up areas, along with other efforts to encourage reduction in vehicle idling; k. Develop and implement a master plan for waste diversion from Mall operations and public use, including establishment of a waste diversion goal that includes retailer activities, residential areas and waste generation and minimization and recycling by the general public using the Mall; l. Incorporate features to promote multifamily recycling that exceed local and industry standards; m. Install and operate recycling depots for consolidation and processing of materials in order to increase efficiency of recycling of materials from the Mall, and establish and implement a plan for reuse of cardboard generated at the Mall site; n. Install and operate public recycling containers within the public space at the Mall, and ensure that tandem recycling and trash bins are provided throughout; o. Encourage composting of food scraps from food-related activities and establishments, and install small-scale on-site composting units, such as “Earth Tubs;” p. Encourage the use of compostable materials by food vendors at the Mall, and discourage the use of Styrofoam and other non-compostable materials; q. Construct the Project using measures that will accommodate ease of future deconstruction, such as using screws instead of nails; r. Utilize soil amendments as required in the City Code; s. Use native plants as required in the Land Use Code; t. Increase the transplanting of trees so as to maximize the number of existing trees on the Mall site that are relocated on the site and preserved; u. Create an underpass from the Mall site to MAX BRT system, as provided in the Development Approvals; v. Install and operate additional bike racks/lockers at the Mall and near the bus stops, including capacity for no fewer than 1,400 bikes; and w. Promote citizen and visitor education about environmental sustainability, particularly in areas of public activities and events. x. For all portions of the Project under the control of the Developer or the District, the Project shall use the services of a single provider for recycling and waste hauling services. C - 3 1 Packet Pg. 192 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) y. The Developer shall establish a Tenant Criteria Manual in collaboration with the City to detail specific existing City Code requirements that may apply to tenant finish projects and to highlight goals and objectives for tenant opportunities for sustainable projects. 16. In addition, the Project shall include the following off-site improvements, together with other off-site improvements as required by the Development Approvals: a. Construct pedestrian connection, for the purpose of connecting the Project to the Mason Corridor and MAX transit facility, from the Project along the existing alignment of the Larimer No. 2 Ditch extending from McClelland Street to the western property line of the Property. Pedestrian connection shall consist of a 12-foot wide concrete sidewalk, as well as a pedestrian underpass under College Avenue that is a minimum of 12’ wide with 8’ of clearance, internally illuminated, and constructed of concrete. b. Realign Larimer No. 2 Ditch from its from its current location immediately north of Red Lobster restaurant so that it flows underground in a box culvert, south within the College Avenue frontage road and day lighting at its current location immediately south of Monroe Avenue. C - 4 1 Packet Pg. 193 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT D ELIGIBLE COSTS AND ELIGIBLE IMPROVEMENTS ELIGIBLE IMPROVEMENTS ELIGIBLE COSTS Land Acquisition (for land underlying District public improvements) $ 5.5 million (Maximum amount; any surplus from other line items may not be transferred to this line item) Parking Structure 9.6 million* Demolition/ Abatement 3.9 million* Furniture, Fixture & Amenities 1.4 million* Foothills Activity Center 4.8 million (To the extent that Construction is Completed on the Foothills Activity Center and such construction conforms to the City Specifications set forth in Exhibit F hereto, as confirmed by the City Manager, any cost savings may be transferred to another line item) Pedestrian Crossing / Culvert 3.0 million (Actual cost must be paid, even if it exceeds this amount, which may require a transfer from another line item) Relocation of Larimer County Canal No. 2 (including related land acquisition costs) 2.8 million* Site Work 12.9 million* Earthwork 2.3 Site Walls 0.7 Asphalt Paving 2.5 Striping & Signage 0.3 Curb & Gutter 0.5 Sidewalks 1.5 Landscaping/Irrigation 0.6 East Lawn – Landscaping & Irrigation 2.1 East Lawn – Sidewalks/Hardscapes 0.3 West Lawn – Landscaping & Irrigation 0.9 West Lawn – Sidewalks/Hardscapes 0.1 Tree Salvage/Storage/Maintenance Replant 0.3 Off-Site Work Asphalt Patching 0.2 Off-Site Work Signals/Right Turn Lanes 0.6 Utilities 4.5 million* Sanitary Sewer 0.8 Storm Water 2.0 Water 1.0 Fire Water 0.7 D - 1 1 Packet Pg. 194 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) Soft Costs 4.6 million (Maximum amount; any surplus from other line items may not be transferred to this line item; amounts may be adjusted among subcategories of this line item) Parking Structure A&E 0.7 FAC A&E 0.3 Engineering 1.3 Environmental/Abatement Management 1.3 Materials Testing & Geotechnical 0.6 Fort Collins URA 0.4 TOTAL $ 53.0 Million * Within the asterisked line items amounts may shift due to (1) actual costs of construction, and cost savings in one line item may be applied to cost overruns in other line items and/or (2) based on final determination by Bond Counsel of the eligible amount of public use. D - 2 1 Packet Pg. 195 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT E PROCEDURE FOR DOCUMENTING, CERTIFYING AND PAYING ELIGIBLE COSTS 1. Applicability. All capitalized terms that are not specifically defined in this Exhibit E will have the same meaning as defined in the Agreement. The Parties recognize and acknowledge that in connection with issuance and sale of District Bonds, the District Bond Documents related to such District Bonds may establish a different procedure for the requisition of District Bond proceeds, in which event that procedure shall be substituted for the procedure in this Exhibit E to the extent that they conflict with the procedures in this Exhibit E; provided, however, the Parties agree to cooperate so that the District Bond Documents or bond documents related to District Bonds will include a procedure for certifying the Eligible Costs payable under in-process construction and other contracts to permit District Bond proceeds to be applied to direct payments under such contracts. 2. Engineer. The District will select an independent licensed engineer experienced in the design and construction of public improvements in the Fort Collins metropolitan area (the “Engineer”). The Engineer shall be responsible for reviewing, approving, and providing the certificate required by paragraph 3. 3. Documentation. The District or Developer as applicable will be responsible for documenting all Eligible Costs. Eligible Costs may be certified when a pay application has been submitted by a contractor that complies with the procedure set forth in this Exhibit E or upon Completion of Construction of an Eligible Improvement. All such submissions shall include a certification signed by both the Engineer and an authorized representative of the District or Developer, as applicable. The certificate shall state that the information contained therein is true and accurate to the best of each individual’s information and belief and, to the best knowledge of such individual, qualifies as Eligible Costs. Such submissions will include copies of backup documentation supporting the listed cost items, including bills, statements, pay request forms from first-tier contractors and suppliers, conditional lien waivers, and copies of each check issued by the District or the Developer for each item listed on the statement. The District or the Developer, as the case may be, will allocate the Eligible Costs to the Eligible Improvements according to the category for each listed in Exhibit D, and each requisition shall contain an aggregate running total of the Eligible Costs in each category. Unless required by a District or Developer construction contract then being performed, statements for payment of Eligible Costs shall not include advance payments of any kind for unperformed work or materials not delivered and stored on the Property. 4. Verification, Submission, and Payment. Each payment request will be submitted to the applicable District representative and the District Bond Trustee for review within ten (10) business days. Such review is for the purpose of verifying that the work represented in each payment request and supporting documentation complies with the requirements of this Agreement. Upon the earlier of approval of such documentation or expiration of the ten (10) business day period, the District Bond Trustee will make payments of Eligible Costs as set forth in such requisition request from moneys on deposit in the Project Fund. A copy of each payment request will also be sent to the City concurrently with submittal to the Bond Trustee. E - 1 1 Packet Pg. 196 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F CITY SPECIFICATIONS FOR FOOTHILLS ACTIVITY CENTER The Foothills Activity Center (also referred to as “FAC”) shall be constructed consistent with Resolution 2006-096, of the City Council of the City of Fort Collins, which established a “Leadership in Energy and Environmental Design” green building certification goal for new municipal buildings. The FAC shall include a minimum total of 24,705 square feet (usable programming space plus circulation space). The FAC shall incorporate the following programming spaces following the schematic layout that is attached to determine space needs. The terms of this Exhibit F shall govern the design and specifications for the FAC, except as otherwise agreed in writing by the parties as the final design and construction of the FAC proceeds. Program Square Feet (*) Lobby Area (Including stairs and elevator) 1535 sf Front Desk 180 sf IT Closet 200 sf Offices (x4), work & copy area 900 sf (2) Child Development Rooms 900 sf 1 Multi-Purpose Room (lower level) 1000 sf Lower level storage 200 sf Lower Level Restrooms 400 sf 2-3 Multi-Purpose Rooms (2 nd Floor) 2700 sf 2 nd floor storage room 400 sf 2 nd floor restrooms & IT space 700 sf 3 rd floor Fitness/Dance Room with Storage 1690 sf Cardio/Weight Room 2300 sf Gymnasium 5820 sf Changing Room (2) with lockers 600 sf Gym Storage 300 sf Top floor tumbling room 2165 sf 21,990 sf *Excludes Circulation The Foothills Activity Center must meet or exceed the following criteria: • The FAC must meet City approved design standards: http://www.fcgov.com/opserv/design-standards.php -- LEED GOLD certifiable at a minimum. Building to be certifiable as meeting the LEED GOLD standard, with all required documentation and assurances provided to the City in a manner and time that would allow for possible certification. • The Developer must coordinate weekly and upon request with the City of Fort Collins, Operation Services Department to ensure the project management team has access to all information regarding this project. F - 1 1 Packet Pg. 197 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) • The Developer must participate in an integrated design program for the FAC, and conform to the new requirements for Fort Collins Utilities Integrated Design Assistance Program (IDAP) described at: http://www.fcgov.com/utilities/business/conserve/rebates- incentives/integrated-design-assistance • Design lobby area so as to discourage loitering in that space. (Parents waiting to pick up their child will be accommodated in an alternative area.) • Interior finishes must meet or exceed the quality of finishes at NACC (Northside Aztlan Community Center). o Fitness/Dance floor and Gymnasium floor must meet or exceed the Ponder quality of the wood floor. o All finishes will be approved by the City Recreation Director o The specification for the gym floor at Northside Aztlan Center is attached • All spaces must be designed so as to be suitable for usage by both youth and adults (Furniture sizes, restroom fixture heights, etc.) • A space study is attached for planning and discussion purposes only. Final design of FAC space shall be subject to review and approval by the City Recreation Director. • Upon completion of record drawings, the electronic media (cad or revit) files must be provided to the City of Fort Collins, Operation Services Department. • All building systems (such as, for example, plumbing, mechanical and heating, ventilation and air conditioning) shall be designed and constructed to be independent and separate from the systems for the remainder of the Mall A commissioning process to demonstrate and inform appropriate City staff regarding all such building systems shall be carried out in advance of transfer of the FAC to the City. • Gymnasium Equipment must include a keypad controlled Porter system or equivalent and 6 basketball standards, wrestling mat hoist, volleyball standard and divider net that can be stored in the ceiling of the gymnasium. • Gymnasium acoustical sound barrier system must be agreed upon in advance by the City Recreation Director. • Signage must be provided on FAC entryways and on both sides of the exterior of the FAC Gymnasium with the City of Fort Collins logo and the words Foothills Activity Center, and must be consistent with the standards for signage on City facilities, all to the extent allowed by City of Fort Collins sign code. • The FAC must be designed and constructed to allow the City to secure it with the City’s access control system. • City fiber must be provided to allow City staff access to City network system. o This must be closely coordinated with City’s IT department. o Installation must be carried out by H&H Data, the City’s fiber contractor. • Conduit must be installed throughout the FAC to enable the City to add security cameras and wiring during a designated time in the construction process. • Casework must be provided for a front desk that meets the quality standards at NACC. • Cabinets and sinks must be provided in child development rooms and multi- purpose rooms that meet the quality standards at NACC. F - 2 1 Packet Pg. 198 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) • Data ports and electrical outlets must be provided throughout the FAC as specified by the City Recreation Director. • HVAC communication system must be provided that ties into the current City Operation Services system, which is from Johnson Controls. • IT closets must be provided that meet City standards. • Full public access from the FAC to the parking structure walkway, and access to and from the Mall Common Area during hours when the Mall is open to the public. If determined to be technically feasible, the City may include in the City Specifications an exterior doorway on the ground level to provide direct access to and from the FAC lobby, or may add such a doorway in the future. • Cardio/Weight Equipment satisfactory to the City must be provided to accessorize the 2000 sq. ft.cardio area (Cardio equipment to meet or exceed Star Tek recumbent bike model E-RB, upright bike model E-UB, stairmill model E-SM, treadmill model E-TRx, cross trainer model E-CT, impact strength selectorize equipment, dumbbells 5 lbs. – 80 lbs. plus rack, free weight equipment specified by staff). The cardio area will require 4 wired TV’ outlets by the cardio area. F - 3 1 Packet Pg. 199 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) FDP MAJOR AMENDMENT PLANNING AREA 2 DECEMBER 20, 2013 Do not scale prints. Use figured dimensions. ©Architects 2013 JPRA A204 Bulding Elevations Main Mall - East Match Line Match Line Match Line Match Line 6 Scale: East Mall 1/8”=Elevation 1’-0” 5 Scale: East Mall 1/8”=Elevation 1’-0” KEY PLAN SCALE - Not to Scale 20’-0" 20’-4" E-4 E-9 E-7 C-1 C-2 E-9 S-1 Transformer Truck Dock Service Area (shielded by Parking Garage in foreground) 59’-0" 27’-6" W-1 E-15 B-1 P-8 P-2 S-6 Section cut through FAC 40’-8" 40’-8" 30’-9" 59’-0" 27’-6" 20’-0" 20’-0" 20’-4" 26’-6" 41’-0" 26’-6" 21’-6" 22’-0" 24’-0" 20’-0" 20’-0" 20’-0" 22’-0" 23’-0" 25’-0" 22’-0" S-2 S-2 E-9 P-13 B-1 E-13 E-9 P-12 P-12 E-2 E-8 C-3 T-1 B-1 C-2 B-4 E-9 E-5 E-8 FDP MAJOR AMENDMENT PLANNING AREA 2 DECEMBER 20, 2013 Do not scale prints. Use figured dimensions. ©Architects 2013 JPRA A211 Bulding Elevations FAC 1 Scale: North FAC 1/8”=Elevation 1’-0” 2 Scale: South 1/FAC 8”=1’-Elevation 0” KEY PLAN SCALE - Not to Scale 100’-0" First Level Parapet 160’-4" 100’-0" First Level Parapet 154’-6" Parapet 154’-6" Parapet 160’-4" P-2 P-6 E-13 P-2 E-1 E-13 P-2 E-1 E-13 P-2 P-6 E-13 Main Mall Main Mall Parking Deck Parking Deck P-9 Matthews Paint to match B.M. Willow Creek 1468 General Notes: 1. Roof mounted mechanical to be located in designated mid-roof zone to allow building parapet to provide required screening. 2. Wall mounted meters to be located within building passage ways which are not facing College Ave. Meters will be screened by locating behind changes in building wall offsets. RE: 505 Materials & Elevations package 3. Transformers will be screened by landscaping beds. RE: 505 Materials & Elevations package RE: Studio Outside landscape package E-13 Sto Corp or Dryvit to match B.M. Squirrel Tail 1476 EXHIBIT F Page 5 of 16 F - 5 F - 6 1 Packet Pg. 202 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) F - 7 1 Packet Pg. 203 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) F - 8 1 Packet Pg. 204 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) F - 9 1 Packet Pg. 205 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) F - 10 1 Packet Pg. 206 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) F - 11 1 Packet Pg. 207 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F Page 12 of 16 F - 12 1 Packet Pg. 208 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F Page 13 of 16 F - 13 1 Packet Pg. 209 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F Page 14 of 16 F - 14 1 Packet Pg. 210 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F Page 15 of 16 F - 15 1 Packet Pg. 211 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT F Page 16 of 16 F - 16 1 Packet Pg. 212 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT G ESTIMATED REVENUES FROM DISTRICT PROPERTY TAXES AND PROPERTY TAX INCREMENT Year 50 mills Retail Property Tax 50 Mills Residential Property Tax Retail Property Tax TIF Residential Property Tax TIF 2013 -- - - - 2014 $ 650,079 - - - 2015 650,079 - - - 2016 171,815 - - - 2017 1,410,397 - $ 1,242,559 - 2018 1,478,038 $ 136,533 1,357,058 $ 231,115 2019 1,478,038 136,533 1,334,161 231,115 2020 1,507,599 280,785 1,384,199 475,294 2021 1,507,599 280,785 1,360,844 475,294 2022 1,537,751 286,401 1,411,883 484,800 2023 1,537,751 286,401 1,388,061 484,800 2024 1,568,506 292,129 1,440,121 494,496 2025 1,568,506 292,129 1,415,822 494,496 2026 1,599,876 297,971 1,468,923 504,386 2027 1,599,876 297,971 1,444,139 504,386 2028 1,631,874 303,931 1,498,302 514,474 2029 1,631,874 303,931 1,473,021 514,474 2030 1,664,511 310,009 1,528,268 524,763 2031 1,664,511 310,009 1,502,482 524,763 2032 1,697,801 316,209 1,558,833 535,259 2033 1,697,801 316,209 1,532,531 535,259 2034 1,731,757 322,534 1,590,010 545,964 2035 1,731,757 322,534 1,563,182 545,964 2036 1,766,393 328,984 1,621,810 556,883 2037 1,766,393 328,984 1,594,446 556,883 2038 1,801,720 335,564 1,654,246 568,021 G - 1 1 Packet Pg. 213 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT H PERMITTED USES OF FOOTHILLS MALL FUND The Parties agree that the long-term viability and success of the Project will be improved by creating a Foothills Mall Fund to be held by the District. It is the purpose of this fund to provide resources for the continued upgrade and enhancement of the Project. Specifically the upgrades and enhancements are intended to preserve the competitive position of the Project in the market and maintain and/or enhance the overall aesthetic quality of the Project. The Parties acknowledge and agree that any expenditure of funds on deposit in the Foothills Mall Fund shall be constrained by and must be in compliance with applicable State and federal law governing the use of such funds, which, in part, will be governed by the source of such funds. In addition, the Parties acknowledge that the District may only undertake activities and expend funds for purposes authorized by the Special District Act. Subject to the foregoing limitations, the following improvements are eligible for reimbursement from the Foothills Mall Fund: • Energy efficiency, renewable energy, and similar upgrades or improvements that reduce the environmental impact of the project; • Upgrades and improvements to or additional public amenities such as parks, plazas, community gathering areas and streetscapes that enhance the aesthetics of the Project; • Upgrades and improvements to the pedestrian, bicycle, and vehicular circulation and accessibility of the site, both interior and exterior to the Project site; • Upgrades and improvements to the Project for public health and safety, either to comply with new standards/regulations or to address unforeseen issues on the site or from the development of the Project; • Capital costs associated with the construction of additional gross leasable area, as approved by the City Manager; • In entirety or part, contributing to Capital Improvement Projects as identified by the City of Fort Collins in the adopted Capital Improvement Plan; and • Upgrades, improvements, or replacement of essential infrastructure required to maintain the overall character of the Project, including: o Replacement or maintenance of the roof, o Maintenance of significant exterior common area features, such as fountains, ice rinks, or similar features o Maintenance of significant interior common area features, including fountains, fire places, or similar features The following improvements are not eligible for reimbursement from the Foothills Mall Fund: • Any operating or maintenance costs typically funded by the District from the District Operating Revenues, except as set forth above; • Any operating or maintenance costs typically funded by the Developer from common area maintenance fees, charges, or assessments, except as set forth above; H - 1 1 Packet Pg. 214 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) • Any capital cost typically associated with the on-going maintenance of the Project, including but not limited to: o Repaving of parking lots; o Replacement of landscaping identified on the Development Approvals; o Replacement of site lighting, signs, or other decorations; and o Any capital cost associated with releasing the original Gross Leasable Area, unless otherwise noted. H - 2 1 Packet Pg. 215 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) EXHIBIT I MAXIMUM ANNUAL NET DEBT SERVICE ON THE DISTRICT BONDS Without the prior written consent of the City Manager, the District Bonds shall be structured so that the debt service requirements on the District Bonds do not exceed the maximum annual Net Debt Service amounts set forth below. Neither the total maximum nor the maximum annual Net Debt Service are intended to limit the amount of Pledged Revenue that can be collected in any year and used to pay debt service payments then due on the District Bonds or deposited to a Supplemental Reserve Fund, if required by the District Bond Documents. Year Maximum Annual Net Debt Service Requirements 2013 $ 0(1) 2014 0(1) 2015 0(1) 2016 6,270,450 2017 6,270,450 2018 6,280,450 2019 6,369,598 2020 6,806,078 2021 6,899,644 2022 7,081,282 2023 7,182,472 2024 7,368,326 2025 7,470,324 2026 7,663,578 2027 7,768,716 2028 7,970,850 2029 8,079,756 2030 8,285,546 2031 8,402,570 2032 8,615,088 2033 8,737,024 2034 8,957,212 2035 9,083,724 2036 9,314,968 2037 9,442,738 2038 9,678,442 (2) Total: $ 179,999,286 ________________ (1) The debt service on the District Bonds in these years is expected to be paid from capitalized interest. (2) Additional debt service requirements on the District Bonds are expected to be paid from amounts on deposit in the reserve fund securing the District Bonds. I - 1 1 Packet Pg. 216 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) - 1 - RESOLUTION 2014-005 OF THE COUNCIL OF THE CITY OF FORT COLLINS UPDATING PRIOR ACTION REGARDING THE REDEVELOPMENT OF FOOTHILLS MALL AND REGARDING COOPERATION AND PARTNERSHIP WITH LARIMER COUNTY ON ECONOMIC REVITALIZATION EFFORTS AND THE USE OF TAX INCREMENT FINANCING WHEREAS, at its regular meeting convened on May 7, 2013, the City Council adopted Resolution 2013-045, regarding the redevelopment of Foothills Mall and cooperation and partnership with Larimer County on economic revitalization efforts and the use of tax increment financing; and WHEREAS, Resolution 2013-045 provided for the City, through the Mayor and City Manager, to carry out certain actions generally related to working with the Fort Collins Urban Renewal Authority (the “Authority”), Larimer County, and other taxing entities in Larimer County to develop an appropriate fiscal impact analysis model for evaluating financial impacts associated with the formation of tax increment financing districts, the redevelopment of lands, and annexation of properties, including costs of service and revenue implications; and WHEREAS, Resolution 2013-045 called for certain intergovernmental agreements in support of the study and development of such a fiscal impact analysis model, and for work to be initiated no later than July 1, 2013, and completed no later than December 15, 2013; and WHEREAS, although discussions have been underway in furtherance of this work, competing priorities, including the emergency response and restoration efforts demanded by the Big Thompson River and Poudre River floods of September 2013, have impeded progress on these efforts; and WHEREAS, the City Council desires that cooperative efforts by the City, the Authority, Larimer County and, to the extent practicable, other municipalities and taxing entities in Larimer County, continue to move forward so as to develop improved methods for evaluating potential impacts as the basis for discussing and developing agreements under which the City and Larimer County may in the future work in partnership to plan, support and appropriately finance economic revitalization efforts, annexations and other undertakings; and WHEREAS, the City Council further desires that the terms of the City’s arrangements with Larimer County regarding the Foothills Mall Project be updated and confirmed, so as to be consistent with the current schedule and planning for that project; and WHEREAS, Article II, Section 16 of the City Charter empowers the City Council to, by ordinance or resolution, enter into contracts with other governmental bodies to furnish governmental services and make charges for such services or enter into cooperative or joint activities with other governmental bodies. Packet Pg. 217 - 2 - NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, AS FOLLOWS: Section 1. The terms of this Resolution supersede and replace the terms of Resolution 2013-045, except that the Recitals set forth therein are hereby incorporated into and made a part of this Resolution. Section 2. It is the intent of the City Council, in light of the significant residential portion of the Foothills Mall redevelopment, that the City will remit to the County an amount equal to fifty percent (50%) of the real property tax increment generated from the residential units that are within the Foothills Mall Project, in each year that those tax increment revenues are received for those new units and to the extent they are available after payment of debt service requirements for the Foothills Metropolitan District Bonds to be issued in connection with the Foothills Mall Project, subject to annual appropriation of funds for such payment. The City Council hereby authorizes the Mayor to execute an intergovernmental agreement in a form determined by the City Manager, in consultation with the City Attorney, to carry out the intended purposes of this Section, consistent with the terms of this Resolution. Section 3. The City Council hereby directs the City Manager to work with the Authority and the County to develop an agreement through which the City and the Authority will agree to remit to the County annually the amount of $60,000 from property tax increment received by the Authority from the Foothills Mall Tax Increment District, for each year the Authority receives such property tax increment for the fully redeveloped Foothills Mall. This amount is intended to represent the County’s share of the personal property tax increment paid from the Foothills Mall Tax Increment District. Said agreement may include such other implementation and administrative provisions as the City Manager determines to be necessary or appropriate. The City Council hereby authorizes the Mayor to execute said intergovernmental agreement in a form determined by the City Manager, in consultation with the City Attorney, to carry out the intended purposes of this Section, consistent with the terms of this Resolution. Section 4. The City Council hereby directs the City Manager to work cooperatively with the County and, to the extent practicable, with other municipalities and affected property tax levying entities in the County, to develop an appropriate fiscal impact analysis model for evaluating financial impacts associated with the formation of tax increment financing districts, the redevelopment of lands within the city, and the annexation of property into the city, including but not limited to an the analysis of cost of service and revenue implications for both the City and the County, and for other affected taxing entities. In addition: (a) The City Manager is authorized to prepare such agreements as may be necessary to retain the services of a mutually acceptable outside expert to develop the described model for evaluating fiscal impacts, which may include sharing of costs for the work. It is the Council’s intent that work on this project will be undertaken no later than May 1, 2014, and will be completed no later than December 15, 2014. Packet Pg. 218 - 3 - (b) The City Council hereby authorizes the Mayor to execute an intergovernmental agreement documenting the arrangements for this work in a form approved by the City Manager, in consultation with the City Attorney, to carry out the intended purposes of this Resolution. Section 5. Upon completion of the modeling and updated fiscal impact analysis of the Foothills Mall TIF on County infrastructure and services using the tools developed pursuant to Section 4, it is the City Council’s intent that the City Manager will conduct an updated review of the financial arrangements described above to offset impacts to Larimer County, and will propose for Council consideration such additional financial support to Larimer County, if any, as he determines to be appropriate. Section 6. The City Council hereby directs the City Manager to develop a plan for convening a discussion between City and County representatives of the relative financial benefits and costs and other impacts to the City and the County related to development, redevelopment and annexation of areas, and how those impacts should be distributed or shared, based upon the holistic analysis of those impacts resulting from the work described in Section 4, above. The City Manager shall present such plan to the City Council for further discussion and possible Council action. Passed and adopted at an adjourned meeting of the Council of the City of Fort Collins this 14th day of January, A.D. 2014. ____________________________________ Mayor Pro Tem ATTEST: _______________ City Clerk Packet Pg. 219 - 1 - ORDINANCE NO. 008, 2014 OF THE COUNCIL OF THE CITY OF FORT COLLINS VACATING FOOTHILLS PARKWAY RIGHT-OF-WAY BETWEEN COLLEGE AVENUE AND MATHEWS STREET, AND VACATING A PORTION OF MATHEWS STREET WHEREAS, Walton Foothills Holdings VI LLC, has requested that the City vacate the right-of-way for the remaining public street portion of Foothills Parkway from College Avenue to Mathews Street, along with a portion of the west side of Mathews Street intersecting Foothills Parkway; and WHEREAS, said rights-of-way are no longer necessary or desirable to retain for street purposes; and WHEREAS, pertinent City agencies and private utility companies have been contacted and have reported no objection to the proposed vacation, provided that an access, emergency access, drainage, utility, and transit easement is reserved by the City; and WHEREAS, the rights of the residents of the City will not be prejudiced or injured by the vacation of said street rights-of-way; and WHEREAS, the City shall have no duty to maintain the existing roadways after the Ordinance becomes effective. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Foothills Parkway and a portion of Mathews Street right-of-way, more particularly described on Exhibits “A” and “B” attached hereto and incorporated herein by this reference, are hereby vacated, abated and abolished, reserving the same unto the City as access, emergency access, drainage, utility, and transit easements; provided, however, that: (1) this vacation shall not take effect until this Ordinance is recorded with the Larimer County Clerk and Recorder; (2) this Ordinance shall be recorded concurrently with the subdivision plat for the development known as "Foothills Mall Redevelopment Subdivision"; and (3) if this Ordinance is not so recorded by February 1, 2017, then this Ordinance shall become null and void and of no force and effect. Packet Pg. 220 - 2 - Introduced and considered favorably on first reading and ordered published this 14th day of January, A.D. 2014, and to be presented for final passage on the 21st day of January, A.D. 2014. Mayor Pro Tem ATTEST: City Clerk Passed and adopted on final reading this 21st day of January, A.D. 2014. Mayor Pro Tem ATTEST: City Clerk Packet Pg. 221 1 Packet Pg. 222 Attachment: Exhibit A (Foothills Mall - Foothills Parkway Vacation - Ordinance) 1 Packet Pg. 223 Attachment: Exhibit A (Foothills Mall - Foothills Parkway Vacation - Ordinance) 2 Packet Pg. 224 Attachment: Exhibit B (Foothills Mall - Foothills Parkway Vacation - Ordinance) 2 Packet Pg. 225 Attachment: Exhibit B (Foothills Mall - Foothills Parkway Vacation - Ordinance) - 1 - ORDINANCE NO. 009, 2014 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CONVEYANCE OF A PERMANENT IRRIGATION DITCH EASEMENT AND RIGHT-OF-WAY TO THE LARIMER COUNTY CANAL NO. 2 IRRIGATING COMPANY WITHIN THE SOUTH COLLEGE AVENUE FRONTAGE ROAD WHEREAS, the City is the owner of right-of-way for the South College Avenue frontage road between Foothills Parkway and Monroe Drive (the “Right-of-Way”); and WHEREAS, the Larimer County Canal No. 2 Irrigating Company (“Larimer No. 2”) is the owner of an irrigation ditch that currently crosses under College Avenue north of the Right- of-Way, runs through the Foothills Mall property, and then crosses back under College Avenue at Monroe Drive; and WHEREAS, as part of the redevelopment of the Foothills Mall, the Mall owner has agreed to relocate the Larimer No. 2 ditch off of the Mall property and into a new box culvert that would run underneath the Right-of-Way; and WHEREAS, the City would benefit from the relocation of the ditch because a pedestrian underpass could then be constructed where the ditch currently crosses under College Avenue, thereby providing an improved pedestrian connection between the Mall and the MAX/BRT station; and WHEREAS, Larimer No. 2 will only agree to relocate its ditch if the City will grant it a permanent easement for the ditch within the Right-of-Way; and WHEREAS, the proposed easement is described on Exhibit “A”, attached hereto and incorporated herein by reference (the “Easement”); and WHEREAS, two commercial properties are located adjacent to the Right-of-Way; and WHEREAS, the owners of the adjacent properties also have a property interest in the City Right-of-Way, as title to the Right-of-Way property would vest in the adjacent owners if the City ever vacated the Right-of-Way; and WHEREAS, in order to avoid encumbering the interests of the adjacent property owners with the Easement, the City is negotiating with the adjacent property owners to acquire their interests in the Right-of-Way; and WHEREAS, the City would not convey the Easement to Larimer No. 2 until the City has secured such property interests from the adjacent owners; and WHEREAS, the City does not plan to charge Larimer No. 2 for the Easement because Larimer No. 2 is relocating its ditch at the request of the City for the benefit of the City and the Mall redevelopment; and Packet Pg. 226 - 2 - WHEREAS, Section 23-111(a) of the City Code authorizes the City Council to sell, convey or otherwise dispose of any and all interests in real property owned in the name of the City, provided that the City Council first finds, by ordinance, that such sale or other disposition is in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the conveyance of the Easement to Larimer No. 2 as provided herein is in the best interests of the City. Section 2. That the Mayor is hereby authorized to execute such documents as are necessary to convey the Easement to Larimer No. 2 on terms and conditions consistent with this Ordinance, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the interests of the City, including, but not limited to, any necessary changes to the legal description of the Easement, as long as such changes do not materially increase the size or change the character of the Easement. Introduced, considered favorably on first reading, and ordered published this 14th day of January, A.D. 2013, and to be presented for final passage on the 21st day of January, A.D. 2014. __________________________________ Mayor Pro Tem ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 21st day of January, A.D. 2014. __________________________________ Mayor Pro Tem ATTEST: _______________________________ City Clerk Packet Pg. 227 ([KLELW $ 3DJHRI 1 Packet Pg. 228 Attachment: Exhibit A (Foothills Mall-Larimer No. 2 Ditch Easement Dedication - Ordinance) ([KLELW $ 3DJHRI 1 Packet Pg. 229 Attachment: Exhibit A (Foothills Mall-Larimer No. 2 Ditch Easement Dedication - Ordinance) ([KLELW $ 3DJHRI 1 Packet Pg. 230 Attachment: Exhibit A (Foothills Mall-Larimer No. 2 Ditch Easement Dedication - Ordinance) ([KLELW $ 3DJHRI 1 Packet Pg. 231 Attachment: Exhibit A (Foothills Mall-Larimer No. 2 Ditch Easement Dedication - Ordinance) City of Fort Collins Page 1 u r b a n r e n e w a l a u t h o r i t y Karen Weitkunat, Chairperson City Council Chambers Gerry Horak, Vice-Chairperson City Hall West Bob Overbeck 300 LaPorte Avenue Lisa Poppaw Fort Collins, Colorado Gino Campana Wade Troxell Ross Cunniff Cablecast on City Cable Channel 14 on the Comcast cable system Darin Atteberry, Executive Director Steve Roy, City Attorney Wanda Nelson, Secretary The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224- 6001) for assistance. URBAN RENEWAL AUTHORITY BOARD MEETING January 14, 2014 (after Regular Council Meeting) CALL MEETING TO ORDER ROLL CALL AGENDA REVIEW Executive Director’s Review of Agenda. CITIZEN PARTICIPATION Individuals who wish to make comments regarding items remaining on the Consent Calendar or wish to address the Board on items not specifically scheduled on the agenda must first be recognized by the Chairperson or Vice Chair. Before speaking, please sign in at the table in the back of the room. The timer will buzz once when there are 30 seconds left and the light will turn yellow. The timer will buzz again at the end of the speaker’s time. Each speaker is allowed 5 minutes. If there are more than 6 individuals who wish to speak, the Chairperson may reduce the time allowed for each individual. State your name and address for the record. Applause, outbursts or other demonstrations by the audience are not allowed Keep comments brief; if available, provide a written copy of statement to Secretary Address your comments to Council, not the audience City of Fort Collins Page 2 CITIZEN PARTICIPATION FOLLOW-UP STAFF REPORTS COMMISSIONER REPORTS Discussion Items The method of debate for discussion items is as follows: ● Chairperson introduces the item number and subject; asks if formal presentation will be made by staff ● Staff and/or Applicant presentation (optional) ● Chairperson requests citizen comment on the item (five-minute limit for each citizen) ● Board questions of staff on the item ● Board motion on the item ● Board discussion ● Final Board comments ● Board vote on the item Note: Time limits for individual agenda items may be revised, at the discretion of the Chairperson, to ensure all citizens have an opportunity to speak. Please sign in at the table in the back of the room. The timer will buzz when there are 30 seconds left and the light will turn yellow. It will buzz again at the end of the speaker’s time. 1. Consideration and Approval of the November 5, 2013 Urban Renewal Authority Board Minutes. The purpose of this item is to approve the November 5, 2013 minutes of the Urban Renewal Authority Board meeting. 2. Items Relating to the Redevelopment of Foothills Mall. (staff: Darin Atteberry, Josh Birks, Bruce Hendee, Mike Beckstead; 5 minute staff presentation; 20 minute discussion) A. Resolution No. 068 Approving an Updated Redevelopment and Reimbursement Agreement with the City of Fort Collins, Walton Foothills Holdings VI, L.L.C., and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. B. Resolution No. 067 Updating the Terms of Resolution No. 056 Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. The purpose of this item is to authorize and approve items relating to the redevelopment of Foothills Mall. Resolution No. 068 authorizes and approves the execution of a Reimbursement and Redevelopment Agreement to support the redevelopment of Foothills Mall. The Agreement was made available for public review on Friday, January 3. Revisions to the Agreement since that time include the addition of a new Subsection 12.3(g), related to Arc Thrift Store, as well as clarification of the minimum Mall square footage. Resolution 067 approves a time extension for developing a financial model with Larimer County for evaluating fiscal impacts associated with the formation of tax increment financing districts. CONSIDERATION OF CITIZEN-PULLED CONSENT ITEMS OTHER BUSINESS ADJOURNMENT Agenda Item 1 Item # 1 Page 1 AGENDA ITEM SUMMARY January 14, 2014 Urban Renewal Authority Board STAFF Wanda Nelson, City Clerk SUBJECT Consideration and Approval of the November 5, 2013 Urban Renewal Authority Board Minutes. EXECUTIVE SUMMARY The purpose of this item is to approve the November 5, 2013 minutes of the Urban Renewal Authority Board meeting. ATTACHMENTS 1. November 5, 2013 (PDF) 1 Packet Pg. 3 November 5, 2013 Urban Renewal Authority A meeting of the Fort Collins Urban Renewal Authority was held on Tuesday, November 5, 2013, at 9:56 p.m., in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered by the following Boardmembers: Campana, Cunniff, Horak, Overbeck, Poppaw and Troxell. Boardmembers Absent: Weitkunat. Staff Members Present: Atteberry, Nelson, Roy. Agenda Review Executive Director Atteberry stated there were no changes to the published agenda. Citizen Participation Eric Sutherland, 3520 Golden Currant, discussed a plan approved by the Denver City Council that will defund Denver schools by about $30 million, in violation of the Urban Renewal Authority statutes. He stated the only legislative remedy for the chronic abuse of tax increment financing is to get rid of Urban Renewal Authorities altogether. CONSENT AGENDA 1. Consideration and approval of the Minutes of the October 15, 2013 Urban Renewal Board Meeting. 2. Resolution No. 064 Adopting Rules of Procedure for the Conduct of Meetings of the Board of Commissioners of the Fort Collins Urban Renewal Authority. The purpose of this item is to revise the adopted URA Board Rules of Procedure to establish a location for posting of meeting notices, and to add rules of conduct at URA Board meetings. Boardmember Poppaw made a motion, seconded by Boardmember Troxell, to adopt and approve all items on the Consent Calandar. Yeas: Troxell, Poppaw, Horak, Campana, Overbeck and Cunniff. Nays: none. THE MOTION CARRIED. 1.1 Packet Pg. 4 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 255 Resolution No. 065 Approving a Loan from the City of Fort Collins to the Fort Collins Urban Renewal Authority for Reimbursements for the Capstone Development Corporation Summit on College Avenue Project, Approving a Loan Agreement for that Purpose, and Appropriating Loan Proceeds for Expenditure by the Authority, Adopted The following is the staff memorandum for this item. “EXECUTIVE SUMMARY The purpose of this item is to approve a loan agreement between the City of Fort Collins and Fort Collins Urban Renewal Authority to provide funding for the reimbursement obligation to Capstone Development Corporation for The Summit on College redevelopment project and to appropriate the proceeds from the loan to pay the reimbursement obligation. BACKGROUND / DISCUSSION In September 2011, the Fort Collins Urban Renewal Authority (URA) approved a Redevelopment Agreement with Capstone Development Corp. (Developer) for The Summit on College, a mixed-use student housing project in the Prospect South Tax Increment Financing (TIF) District. The Redevelopment Agreement obligated the URA to reimburse the Developer up to $5 million in a lump sum for eligible project costs. Knowing that the URA would not have sufficient fund balance to make this payment outright, it has been anticipated that the URA would seek a loan from the City of Fort Collins, repaid using tax increment revenue generated by the project over the life of the Prospect South TIF District. Per the Redevelopment Agreement, the $5 million reimbursement obligation is due to the Developer upon completion of the project, subject to verification of eligible costs by URA staff. The Developer obtained a Certificate of Occupancy for the project in August 2013, and subsequently submitted their reimbursement request to the URA. Although URA staff is awaiting additional documentation from the Developer to verify several of the costs, once received, the agreement requires the URA to make the reimbursement within 45 business days. The City and URA have negotiated a Loan Agreement, which requires adoption of an Ordinance by City Council and a Resolution by the URA Board; however, this Agreement deviates from the current City interagency loan policy because several estimates made at the time of the Redevelopment Agreement have proven inaccurate, details described below. Estimates v. Actuals When the amount of tax increment generated by The Summit was estimated in 2011, the URA used a methodology based on project costs and assumed 1% appreciation each year, for a total of approximately $8 million. It was anticipated that the URA would have to borrow from the City to pay the reimbursement to the Developer, and at the time, the financing charge on a $5 million loan was estimated to be $2.4 million. 1.1 Packet Pg. 5 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 256 Based on the most recent August 2013 preliminary valuation from Larimer County, the project is estimated to generate $7 million of tax increment, creating a $1 million revenue shortfall from the original projection. Additionally, a combination of rising interest over the past two years (adding 71 basis points) and the City’s new interagency loan policy (adding 25 basis points), have increased the expected interest rate on the loan from the City from 4.0% to 4.96%, increasing interest cost from $2.4M to $3.78M. Table 1 summarizes the difference between the original estimates and actual numbers: Table 1 2011 Estimates 2013 Actuals Total Tax Increment $8 million $7 million Reimbursement Obligation $5 million $5 million¹ Financing Cost to URA $2.4 million $3.78 million Balance $600,000 ($1.78 million) ¹ Subject to final verification by URA staff. Between the decrease in tax increment revenue and increase in financing charge, the URA would be unable to afford the full debt obligation of a $5 million loan from the City under current investment policy interest rates. Consequently, City and URA staff have negotiated a loan agreement that allows the URA to uphold its reimbursement obligation to the Developer and remain financially solvent, while making a concerted effort to uphold the City’s interagency loan policy. Proposed Loan Agreement Terms The URA cash flow does not support a $5 million loan from the City based on current interest rates and the current interagency loan policy. A new loan structure was developed that assigns an interest rate based on the known revenue stream and term, which turns out to be 2.68%. Since City policy would require 4.96% interest, this leaves a gap of $1.78 million. To fill this gap, the URA commits to pledge 50% of future unencumbered revenue from the Prospect South TIF District to the City. For example, assume the URA collects $1 million in revenue from the Prospect South TIF District in a given year, and owes the City a $400,000 payment (principal and interest) on the Capstone loan; 50% of the remaining $600,000, or $300,000, would be paid to the City to help pay down the $1.78 million interest rate gap. This revenue share structure would continue for the life of the Prospect South TIF District, or until the $1.78 million is paid in full, whichever happens first. While City and URA staff support the negotiated loan terms, the variation from current policy is duly acknowledged. Several practices have been put into place since approval of the Capstone Redevelopment Agreement to prevent the need for additional policy exceptions, including: Tax increment estimates are based on Larimer County’s estimate of valuation that the Developer provides to the URA; the estimates assume 1% appreciation over the life of the associated TIF District. Establishing a maximum percentage of tax increment that would be available to reimburse a project that includes a combination of both reimbursable costs to the developer and URA 1.1 Packet Pg. 6 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 257 financing costs. Establishing a maximum tax increment contribution percentage of the total project cost. Reimbursement Obligation As mentioned, the URA received appropriate documentation from Capstone for the $5 million of eligible costs that can be reimbursed per the Redevelopment Agreement. Staff has reviewed the documentation and verified that Capstone incurred such costs and is therefore eligible to receive the full reimbursement obligation, minus the amount the URA is entitled to withhold until certain performance measures are met. The Redevelopment Agreement states the URA is entitled to withhold the following amounts based on Capstone’s ability to achieve certain performance measures: $100,000 until the project submits to the U.S. Green Building Council (USGBC) for LEED Certification. An additional $100,000 until the USGBC formally certifies the project achieved LEED Certification. $875,000 until the commercial space of the project is fully released. The URA will pay Capstone at a rate of $109.375/gross square foot of gross leased space as tenant leases are executed. Capstone has submitted the project to the USGBC and has executed a lease with Red Robin for a portion of the commercial space. Provided the City and URA Board approve the Loan Agreement, and the URA Board appropriates the loan proceeds accordingly, the URA would make its first reimbursement payment to Capstone in November 2013. The Resolution would approve the Loan Agreement between the City and URA, and appropriate those loan proceeds to allow the URA to pay the reimbursement obligation to Capstone. FINANCIAL / ECONOMIC IMPACTS Adopting the Resolution would approve a $5 million loan from the City of Fort Collins to the Fort Collins Urban Renewal Authority (URA) and allow the URA to pay its reimbursement obligation to Capstone. The URA would be charged an interest rate of 2.68% on the loan. Principal and interest payments will be made to the City from tax increment revenue generated by the Prospect South TIF District through 2037. Additionally, the URA will pay the City 50% of the annual unencumbered revenue collected from the Prospect South TIF District, up to $1.78 million, to repay the difference between the adjusted 2.68% interest rate and the City’s current policy interest rate of 4.96%. BOARD / COMMISSION RECOMMENDATION The URA Board Finance Committee discussed the Loan Agreement on September 16, 2013. The Committee supported the proposed terms and bringing forth this Resolution to execute the Agreement. 1.1 Packet Pg. 7 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 258 The City of Fort Collins approved the Loan Agreement via Ordinance on First Reading on October 15, 2013 (5-2 vote, Nays: Cunniff, Overbeck). Second Reading of the Ordinance is scheduled for November 5, 2013.” Eric Sutherland, 3520 Golden Currant, discussed the legislative intent of the URA statutes. Jeff Jones, Capstone Development Partners, discussed the redevelopment agreement between the URA and Capstone and stated Capstone has fulfilled its obligations under that agreement. He noted the creation of a parking structure will diminish the economic returns on the project. Boardmember Cunniff asked if the commitment to create pedestrian access to campus has been fulfilled. Mr. Jones replied the obligation is to complete that work by summer 2014 and the work is on schedule to be completed. Boardmember Cunniff asked what part of this $5 million was intended to fund that aspect of the project. Mr. Jones replied the $5 million funded eligible costs ranging from infrastructure, flood mitigation and sustainability, which the URA approved for reimbursement. Megan Bolin, Economic Health Analyst, replied there is nothing specific in the redevelopment agreement speaking to public access to the CSU campus. Boardmember Cunniff stated there was discussion the night the project was approved that the connectivity would be part of the project. Walker May, Project Development Manager for Capstone, replied that sidewalk, while it was included in the $6.5 million of total eligible costs for reimbursement, it is not part of the $5 million being requested for reimbursement. Capstone will incur the cost for the sidewalk once the easements are completed for the property to the north. Boardmember Cunniff asked if there was an independent audit of the assertion the project would not have been possible without the reimbursement. Josh Birks, Economic Health Director, replied the policy at the time was to perform an independent analysis by either staff or an independent organization. The analysis was elected to be done internally and the conclusion was that there was a gap and the $5 million in agreed upon assistance did move the projected revenue to an industry-acceptable level. Boardmember Cunniff asked if these were the same staff members who completed the analysis of the TIF cash flows at the time. Birks replied in the affirmative. Boardmember Troxell discussed the items which were part of the reimbursement obligation and noted part of the reimbursement will go toward the creation of necessary stormwater, sewer and floodplain improvements. He requested an explanation of the land acquisition, easements and demolition. Megan Bolin, Economic Health Analyst, replied the URA agreed to reimburse costs necessary for FEMA improvements and land allocation for public streets and public roads, undergrounding the on-site electric utilities, site lighting along the public streets, and curbs, gutters, and sidewalks in the public right-of-way on-site. Additionally, as a requirement of the redevelopment agreement, Capstone has built to LEED certification standards and some of the costs associated with that are to be reimbursed. 1.1 Packet Pg. 8 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 259 Boardmember Troxell noted the URA is fulfilling an obligation made to Capstone in its fulfillment of the development. Birks noted the URA would also be accepting the terms of the loan agreement with this item. Boardmember Overbeck requested information from the Finance Committee meeting. Mike Beckstead, Chief Financial Officer, replied multiple discussions have occurred based on the estimates made two years ago which led to the policy discussion and the creation of a framework on which to guide these types of deals going forward. Those policies still need to be discussed with the Council and URA Finance Committees and will then be brought forth to Council. Boardmember Overbeck asked if Beckstead acknowledged there were misses made in the calculations. Beckstead replied in the affirmative. Boardmember Overbeck asked what types of scenarios will be considered other than interest rates. Beckstead replied there are two ways to miscalculate: the TIF revenue forecast or an interest rate rise. He went on to discuss an example of the possible future policy. Boardmember Campana agreed with Mr. Sutherland that the City and URA are independent in their obligations; however, assumptions were made when the URA Board made a commitment to Capstone regarding the value of the property, interest rates, and funding from the City. Boardmember Troxell made a motion, seconded by Boardmember Campana, to adopt Resolution No. 065. Boardmember Cunniff stated he would not support the motion and argued the project is not well liked by students. Additionally, he stated the developer should have known a parking structure would be needed. He disagreed the loan should have been made from the City and disagreed the reimbursement should be provided as the project is not what was agreed upon. Boardmember Troxell stated he would support the motion as this URA Board is obligated to fulfill the commitments made of previous URA Boards. Vice-Chair Horak disagreed with Boardmember Cunniff that student residents of the project are unhappy and noted the developer is undertaking the financial responsibility of the parking structure. The vote on the motion was as follows: Yeas: Poppaw, Horak, Campana and Troxell. Nays: Cunniff and Overbeck. THE MOTION CARRIED. Other Business Boardmember Cunniff discussed a letter from the Poudre River Public Library District expressing concern the URA is appropriating their property taxes to use for URA projects. He requested the 1.1 Packet Pg. 9 Attachment: November 5, 2013 (URA Minutes) November 5, 2013 260 indulgence of the Board to forward to the URA Finance Committee the option of excluding the Library District, Foothills Gateway, the Health District, and perhaps other smaller taxing entities from future TIF awards. Boardmember Overbeck and Vice-Chair Horak replied they would support that suggestion. Vice-Chair Horak noted he has discussed the issue with City Manager Atteberry. City Manager Atteberry stated staff members have been in contact with the Library District’s Executive Director and will be meeting with them in the near future. He stated discussions have been held at Leadership Planning Team regarding having deliberate conversations with each of those districts regarding the URA and tax increment financing. Adjournment The meeting adjourned at 10:34 p.m. _________________________________ Vice Chair ATTEST: _____________________________ Secretary 1.1 Packet Pg. 10 Attachment: November 5, 2013 (URA Minutes) Agenda Item 2 Item # 2 Page 1 AGENDA ITEM SUMMARY January 14, 2014 Urban Renewal Authority Board STAFF Josh Birks, Economic Health Director Darin Atteberry, City Manager Bruce Hendee, Chief Sustainability Officer Mike Beckstead, Chief Financial Officer SUBJECT Items Relating to the Redevelopment of Foothills Mall. EXECUTIVE SUMMARY A. Resolution No. 068 Approving an Updated Redevelopment and Reimbursement Agreement with the City of Fort Collins, Walton Foothills Holdings VI, L.L.C., and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. B. Resolution No. 067 Updating the Terms of Resolution No. 056 Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. The purpose of this item is to authorize and approve items relating to the redevelopment of Foothills Mall. Resolution No. 068 authorizes and approves the execution of a Reimbursement and Redevelopment Agreement to support the redevelopment of Foothills Mall. The Agreement was made available for public review on Friday, January 3. Revisions to the Agreement since that time include the addition of a new Subsection 12.3(g), related to Arc Thrift Store, as well as clarification of the minimum Mall square footage. Resolution 067 approves a time extension for developing a financial model with Larimer County for evaluating fiscal impacts associated with the formation of tax increment financing districts. STAFF RECOMMENDATION Staff recommends adoption of the Resolutions. BACKGROUND / DISCUSSION A. Resolution No. 068 Approving an Updated Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. NOTE: Please refer to the May 7, 2013 Agenda Item Summary for a project overview, description of public benefits, and other project details (See Attachment 1). Overview of Changes On November 8, 2012, exclusive negotiations between the URA and Walton/Alberta were initiated under an Agreement to Negotiate. On May 8, 2013, Fort Collins Urban Renewal Authority Board authorized and approved the execution of a Redevelopment and Reimbursement Agreement, by the Executive Director 2 Packet Pg. 11 Agenda Item 2 Item # 2 Page 2 of the Fort Collins Urban Renewal Authority, in connection with the redevelopment of the Foothills Mall. Since May, Alberta Development on behalf of Walton Foothills Holdings VI, L.L.C. has continued to refine the site plan and program for the redevelopment of Foothills Mall. The following summarizes the changes to the project since May. Mall Configuration The Planning and Zoning Board (P&Z) approved a Project Development Plan (PDP) for the redevelopment of Foothills Mall on February 7, 2013. On December 12, 2013, P&Z reviewed a major amendment to the PDP. The major amendment includes a change in the total square footage of the project of approximately 10 percent, Table 1 highlights the differences. The biggest change is a reduction of the theater of approximately 43,000 square feet. Only concessions are taxable at a theater and constitute approximately one-third of total sales; therefore this reduction does not have a one for one proportional impact on anticipated retail sales. In addition, the changes include a reduction in other commercial space of approximately 32,000 square feet (the difference between the increase of interior mall space and reduction of all other space). Table 1 Project Square Footage Comparison Feb. Dec. SF % Retained/Redeveloped Interior Mall 176,161 208,098 31,937 18.1% Macy's 127,971 127,971 0 0.0% Theater 86,754 43,655 -43,099 -49.7% Youth Activity Center 23,863 24,705 842 3.5% All Other Space 319,038 254,702 -64,336 -20.2% Total 733,787 659,131 -74,656 -10.2% Difference Eligible Costs Review Certain projects costs are eligible for public assistance per Colorado Revised Statutes relating to Urban Renewal and Special Districts (Title 32). The types of eligible costs for each (Urban Renewal Authority and Metro District) are relatively broad, overlap to some extent, and include such categories as: Acquisition of a blighted area; Demolition and removal of buildings and improvements; Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the objectives of the urban renewal plan; Carrying out plans for a program through voluntary action and the regulatory process for the 2 Packet Pg. 12 Agenda Item 2 Item # 2 Page 3 repair, alteration, and rehabilitation of buildings or other improvements in accordance with the urban renewal plan; Acquisition of any other property where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, lessen density, eliminate obsolete or other uses detrimental to the public welfare, or otherwise remove or prevent the spread of blight or deterioration or to provide land for needed public facilities. It is important to note that the total amount of eligible costs per the Colorado Revised Statutes may be as high as $108 million -- significantly higher than the $53 million in public assistance being offered, which is approximately 49 percent of the estimate of total eligible costs (see Table 2). However, the Developer and the City established a process to identify project costs that are extraordinary costs associated with remediating blighted conditions on the property, or costs associated with public improvements or public infrastructure. These are costs in which there is direct public benefit. The process of identifying the eligible costs balanced the need to maximize the public benefit while ensuring the public assistance was the minimum amount necessary to make the project financially viable. The following provides a brief description of each of the eligible costs summarized in Table 2 below: Land Acquisition: This amount represents the estimated value of the land underlying the portions of the project that include the public gathering spaces such as the east and west lawns, the Foothills Activity Center, and other green or public spaces on the site. Parking Structure: The parking structure allows for greater utilization of site; specifically the ability to create public gathering spaces and additional pedestrian and bicycle facilities/amenities. Demolition/Abatement: Demolition and deconstruction of the aging facility represents an extraordinary cost associated with remediating blight and mitigation the hazardous materials. Fixture and Amenities: This represents urban design enhancements to the public gathering spaces (east and west lawns) to provide high quality of place. Ditch Relocation: Relocating a segment of the Larimer No. 2 ditch to the west side of College Ave. represents an extraordinary cost associated with remediating blight and provides an opportunity for a pedestrian underpass (described below). Site Work: This cost is associated with earthwork (grade and fill), site walls to alleviate topographic constraints on the site, as well as asphalt paving, curb and gutter, and sidewalks. Utilities: This represents upgrades and improvements to sanitary sewer, storm water, water lines and fire water systems. Soft Costs: Architectural and engineering costs associated with activity center, parking structure, as well as materials testing, and environmental/abatement management. Foothills Activity Center: A publicly owned and operated activity center that includes gymnasium, public meeting rooms and after-school programs for youth. Pedestrian Crossing/Underpass: A pedestrian connection linking MAX BRT and Foothills Mall utilizing Larimer No. 2 Ditch alignment under College Ave. Originally the developer requested $72 million in cost reimbursement. Through the negotiation process outlined above this amount was reduced to the $53 million public finance package presented in this document. The most notable reductions from the requested assistance fall into three categories: (1) Land Acquisition, which the developer requested $16 million in reimbursement; and (2) Soft Costs, which the developer requested $7.1 million, and (3) Parking Structure, which the developer requested $12.8 million. 2 Packet Pg. 13 Agenda Item 2 Item # 2 Page 4 Table 2 Summary of Eligible Costs for Reimbursement, Comparison ($ Millions) The eligible costs have not changed significantly since May. The costs as site, utility, and public improvement costs remain fixed despite the change in the total square footage of the project. One change that has been specifically identified is the shift in the parking structure to 978 spaces and four stories from a larger six story structure. Staff queried the Developer regarding savings related to this shift. Alberta Partners indicates that the project budget has always assumed a smaller structure than was entitled and, therefore, the cost for this improvement has not changed. This is consistent with the Developer’s approach to the multifamily housing, which includes and entitlement for 800 units but has been modeled at 446 units based on developer input. Staff further evaluated the Developer’s statement by comparing the cost per space of a 4-story 978 space parking structure to current market costs. At the original cost estimate of $12.8 million this equates to $13,000 per space (excluding Architecture and Engineering Costs), which is consistent with costs for similar structures being constructed in the market today. Financial Investment Overview The following narrative summarizes the revised financing package and highlights changes since May. The public financing package still includes the pledge of four revenue sources in the following priority order: Sources Foothills Metropolitan District Capital Mills - The Metro District will pledge 50 mills of ad valorem real property tax revenue to the bond. This mill levy expires when the bond is fully repaid or within 25 years, whichever comes first. Property Tax Increment - The URA will pledge 100 percent of the annual ad valorem property tax increment revenue over the 25-year tax increment period or until the bond is fully repaid, if prior to expiration of the tax increment period, less an administrative fee up to a maximum of 1.5 percent of the gross property tax increment revenue received by the URA. 2 Packet Pg. 14 Agenda Item 2 Item # 2 Page 5 Public Improvement Fee - The Developer will impose a 1 percent Public Improvement Fee (PIF) on all taxable transactions within the Project and pledge these revenues to the bond. This revenue source terminates with the repayment of the bond. Sales Tax Increment – As the URA will pledge 100 percent of the annual sales tax increment generated above a base by the Project from the City’s 2.25 percent General Fund Sales Tax rate (the “Core Rate”), which is the sales tax increment established for the URA in the Midtown Urban Renewal Plan. The above priority order works such that the first revenue source pledged to bond repayment is the last revenue source out. Debt service is paid from all revenues collected and excess pledged revenues are released by the Bond Trustee if not needed to support Debt Service as provided in the agreement. Therefore, Tax increment revenues will be returned to the URA and the City when not needed for debt service on the bond. Therefore, the Sales Tax Increment Pledge, despite existing for all 25 years, is expected to result in the return of funds back to the City as early as 2018. Project Cost Summary The total redevelopment project is estimated to cost $313 million; down from the estimated $319 million in May (previously misstated in the May 7 Agenda Item Summary). These costs are split between the commercial/retail at approximately $231 million (down from $237 million in May) or 74 percent and 446 anticipated residential units at a total cost of $82 million or 26 percent. The eligible costs, which remain the same as described in May (See Table 3), total approximately $53 million or 17 percent of the total cost and 23 percent of the commercial/retail costs. The eligible costs represents the target amount of bond proceeds to be generated by the pledged revenues. Table 3 Summary of Eligible Costs for Reimbursement ($ Millions) Blight Removal Infrastructure City Infrastructure Total Public Land Acquisition $ 5.5 $ 5.5 Parking Structure 9.6 9.6 Demolition / Abatement 3.9 3.9 Fixture & Amenities 1.4 1.4 Ditch Relocation 2.8 2.8 Site Work 12.9 12.9 Utilities 4.5 4.5 Soft Costs 4.6 4.6 Foothills Activity Center 4.8 4.8 Pedestrian Crossing / Culvert 3.0 3.0 TOTAL $ 45.2 $ 7.8 $ 53.0 Slide 9 from the City Council staff presentation Assumptions The financial analysis resulting in the public finance investment contemplated in the proposed Redevelopment and Reimbursement Agreement relies on several key assumptions. Several of these assumptions have changed since May. Each of assumptions and the changes are described briefly below: 2 Packet Pg. 15 Agenda Item 2 Item # 2 Page 6 Project Timing - The financial analysis assumes a December 23 “go” date for commencement of construction activity. This result in a ground breaking in January/February 2014 and substantial completion of the project in November 2015, a delay of one year from the original schedule presented in May. Annual Sales Per Square Foot - The financial analysis assumes $378 per square foot in annual retail sales once the project stabilizes up from $350 per square foot in May (this rate excludes non-retail space and the anchor department store). The sale per square foot figure has increased due the increased confidence in anticipated retailers at the center. In addition, this assumption relies on several inputs: (a) the average annual sales per square foot figure for all Malls as provided by the International Council of Shopping Centers ($458 per square foot for 2012); and (b) Economic & Planning Systems full analysis of retail transfer, inflow and growth. Occupancy - The financial analysis assumes, based on the construction schedule, that 75 percent of the gross leasable area will be occupied by retail tenants by December 31, 2015. This number will grow to 95 percent occupancy and remain at this level by December 31, 2016. A delay of approximately one year. Retail Sales Growth - The financial analysis assumes that retail sales will grow by 2 percent annually. This pace of growth is consistent with historical growth rates in the City of Fort Collins of 5.4 percent annually since 1990. In addition, this rate falls short of the historic growth rate of inflation as measured by the Consumer Price Index, 2.9 percent annually since 1982. NO CHANGE SINCE MAY. Property Value Growth - The financial analysis assumes that real property values will increase by 2 percent every other year or 1 percent average annually. This pace of growth is conservative compared to the historical growth rate in of real property in Larimer County. NO CHANGE SINCE MAY. Public Finance Revenue Summary The Redevelopment and Reimbursement Agreement contemplates utilizing the pledged revenues, as described, to support the issuance of a bond by the Foothills Metro District. The proceeds from the bond issuance are intended to pay or reimburse the eligible costs and to pay cost of issuance. As described, the bond will be supported by four revenue sources. In May, a single public finance scenario was presented in the Agenda Item Summary and staff presentation. The staff presentation attached to the City Council Agenda Item Summary regarding Foothills Mall redevelopment presents several scenarios covering assumptions about interest rate and sales tax rate. Two scenarios are highlighted including: (1) a scenario based on an assumed 7.00 percent interest rate consistent with the May assumption and (2) a more conservative scenario assuming a 7.25 percent interest rate. These scenarios are compared to the single scenario presented in May below, see Table 4. These scenarios indicate that the City sales tax increment applied to debt service on the bonds will range between $9.0 and $12.0 million depending on interest rate. In addition, the net new Sales Tax revenue to the City after release of pledged revenues over the 25 year time period will range between $108 and $117 million, depending on assumptions about interest rate and inclusion versus exclusion of sales transfer changes. The more specific information provided in subsequent tables below relates to the first scenario assuming a 7.00 percent interest rate consistent with the May assumptions. For the remaining scenarios, please review the staff presentation attached to the City Council Agenda Item Summary for Resolution 2014-004. 2 Packet Pg. 16 Agenda Item 2 Item # 2 Page 7 Table 4 Project and Public Finance Summary Comparison Jan 14th Jan 14th @ 7.00% Bond @ 7.25% Bond Gross Leasable Area 711k + 24k Sales Per Square Foot $350 Total Project Cost - Retail $237 Open Assumption Nov '14 Bonds at Par Value $73 $71 $72 Cum Bond Payments $165 $159 $163 First Three Revenue Sources $170 $151 $151 Dedicates Sales Tax Revenue $105 $106 $106 GF Sales Tax Revenue $147 $149 $149 Estimated City ST Remitted $8.8 $9.0 $12.0 Net New ST Revenue $108 $117 $114 Net New w/o Addtl Transfer $111 $108 $231 Phases '14-'15 ($ Millions except Sales per Square Foot) May 7th 641k + 24k $378 Slide 8 from the City Council staff presentation The primary revenues supporting the bond will come from the Metro District in the form of annual ad valorem taxes on real property and from the Mall owner in the form of PIF revenues. These two revenue sources will generate $43.1 and $65.6 million respectively between 2014 and 2038. These revenues have decreased since May based on the changes to the project site plan and program; Table 5 shows a comparison. In addition, the pledged URA property tax increment will generate approximately $42.7 million during the same period. By 2020, these three revenue sources will represent $6.1 million in revenue annually. Based off the financial analysis, it is anticipated that sales tax increment contribution towards debt service and the supplemental reserve ends by 2018 until 2029 when additional sales tax increment contributions are required to meet the debt payments on the bond. The total sales tax increment contribution is anticipated to be $9 million. 2 Packet Pg. 17 Agenda Item 2 Item # 2 Page 8 Table 5 Comparison of Public Finance Revenues Generated by the Project, 2014-2038 ($ Millions) Cumulative Annual Funding 2020 Cumulative Annual Funding 2020 First Three Revenue Sources 25 years 25 years District Property Tax $ 50.0 $ 2.1 $ 43.1 $ 1.8 URA Property Tax Increment 55.2 2.3 42.7 1.9 Developer Sales PIF 64.7 2.3 65.6 2.4 Metro District Funding $ 169.9 $ 6.7 $ 151.4 $ 6.1 Today's Value $ 62.5 $ 55.3 May 7th Jan 14th Slide 22 from the City Council staff presentation In addition, sales tax increment has been pledged to support the issuance of a bond. There are three components to the sales tax generated by the Project, including: Base - Existing sales tax revenue generated by retailers in the Mall and surrounding Project Area. Transfer - Revenue from other areas of the city that shift to the Mall after redevelopment. New - The net new revenue, or revenue in excess of base and transfer, associated with the redeveloped mall project. In addition, the sales tax revenue can be broken by the various pieces of the effective 3.85 percent rate. There are two main pieces, including: Core City Sales Tax Rate - This corresponds to the long-standing 2.25 percent General Fund rate. Dedicated City Sales Tax Rate - This corresponds to the sum total of four dedicated sales taxes including: Transportation (0.25 percent), Natural Areas (0.25 percent), Building on Basics (0.25 percent), and Keep Fort Collins Great (0.85 percent) dedicated sales tax rates for a total of 1.60 percent. The revenue generated by the constituent pieces of the Sales Tax rates is summarized in Table 6. The base, transfer, and new components of the Dedicated City Sales Tax Rate will generate approximately $106 million between 2014 and 2038. In addition, the Core Rate base Sale Tax Revenue will generate approximately $44.5 million during the same period. Therefore, the total revenue generated by the project that is not pledged to the bond is approximately $150.5 million. 2 Packet Pg. 18 Agenda Item 2 Item # 2 Page 9 Table 6 Comparison of Sales Tax Revenue Generated by the Project, 2014-2038 ($ Millions) Cumulative Annual Funding 2016 Cumulative Annual Funding 2016 City Sales Tax Revenue 25 years First Full Year 25 years First Full Year Dedicated Base / Transfer / New $ 104.6 $ 3.5 $ 106.0 $ 3.6 Core Base 44.4 1.8 44.5 1.8 Core Transfer & New 102.7 3.1 104.6 3.2 City Sales Tax $ 251.7 $ 8.4 $ 255.1 $ 8.7 Today's Value $ 94.7 $ 94.8 May 7th Jan 14th Slide 23 from the City Council staff presentation The Agreement only pledges the transfer and new (together, the incremental) sales tax revenue related to the Core Rate. Based on the financial analysis, these sales tax increment revenues represent approximately $104.6 million (up from $102.7 million in May) or the anticipated pledged sales tax increment revenue. Public Finance Package Structure To better understand the structure of the public finance package, Table 7 summarizes the anticipated sales tax revenue split between the two rates (Core and Dedicated) by the three components (Base, Transfer, and New). In 2016, the total pledged sales tax increment revenue to the project (identified by the yellow) totals $3.2 million (up from $3.1 million in May) of the approximately $5.1 million generated by the Core Rate (2.25 percent). The City retains the remaining $5.4 million generated by the unpledged Dedicated Rate (1.60 percent) and Core Rate base. These numbers increase to $3.4 million in pledged increment revenue and $5.6 million in retained revenue by 2018. 2 Packet Pg. 19 Agenda Item 2 Item # 2 Page 10 Table 7 Comparison of Annual Sales Tax Revenue Generated by the Project, 2016 & 2018 ($ Millions) Base Transfer New Total Base Transfer New Total Core Tax - 2.25% 1.8 1.0 2.1 $ 4.9 1.8 0.9 2.3 $ 5.1 Dedicated Tax - 1.6% 1.3 0.7 1.5 $ 3.5 1.3 0.7 1.6 $ 3.6 Total $ 3.1 $ 1.7 $ 3.6 $ 8.4 $ 3.2 $ 1.6 $ 3.9 $ 8.6 Base Transfer New Total Base Transfer New Total Core Tax - 2.25% 1.8 1.1 2.2 $ 5.1 1.8 1.0 2.4 $ 5.3 Dedicated Tax - 1.6% 1.3 0.8 1.6 $ 3.7 1.3 0.7 1.7 $ 3.8 Total $ 3.1 $ 1.9 $ 3.8 $ 8.8 $ 3.2 $ 1.8 $ 4.2 $ 9.1 May 7th Sales Tax in 2016 Sales Tax in 2018 Jan 14th Sales Tax in 2016 Sales Tax in 2018 Slide 26 from the City Council staff presentation As stated, the pledged sales tax increment revenue serves as the last revenue source to support the issuance of the bond. Therefore, as the remaining three pledged revenues grow over time the need for pledged sales tax increment revenue to support the bonds diminishes. The financial analysis demonstrates this in the estimated cash flow presented in Table 8. The bond will likely be issued in 2014 with three years of capitalized interest. Based on forecasts, revenue will first be available to fund debt payments (including contributions to the supplemental reserve) of the bond in 2015. In 2015, the pledged revenue sources, excluding the sales tax increment revenue, will generate approximately $1.8 million towards bond repayment and reserve contributions. The pledged sales tax increment revenue will generate an additional $0.8 million. These two revenue sources combined will generate sufficient revenue (along with capitalized interest) to cover the debt payment and reserve contributions required by the bond. The pledged revenue sources, excluding the sales tax increment revenue, will grow to $4.9 million in 2017 largely due to the delay in property tax valuation and collection. The pledged sales tax increment revenue is anticipated to grow to $3.3 million. Together, these revenues will cover the debt payment and the last sizable portion of the supplemental reserve fund contribution. Starting in 2018, the pledged revenue sources, excluding sales tax increment revenue, are anticipated to cover the debt payment, which is anticipated to terminate in 2038. As a result, starting in 2018 the pledged sales tax increment revenue will not be required to meet debt payments or reserve contributions until 2029 when additional sales tax increment contributions will be required. These revenues will, according to the terms of the Agreement, be released back to the City. In 2018, the total sales tax revenue retained by the City and sales tax increment revenue released back to the City will rise to $9.0 million and continue at this rate with 2 percent growth per year. This constitutes a $4.2 million increase in net new revenues compared to the existing $4.8 million of sales tax revenue generated in 2012. Approximately $7.2 million of the pledge sales tax increment is used between 2015 and 2017 to support the debt payment and reserve contributions. Additional sales tax increment contributions will be required between 2029 and 2038 increasing the total estimated sales tax increment applied to the bonds to $9.0 million. 2 Packet Pg. 20 Agenda Item 2 Item # 2 Page 11 Table 8 Anticipated Public Finance Cash Flow, 2012-2019 ($Millions) May 7th First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax Sales Tax Revenue 2012 4.8 2015 2.1 2.5 4.6 --- 5.0 5.0 2016 2.3 3.1 5.4 --- 5.3 5.3 2017 6.5 3.2 9.7 --- 5.4 5.4 2018 6.5 3.3 6.0 3.3 + 5.5 = 8.8 2019 6.7 3.4 5.7 3.4 + 5.6 = 9.0 Jan 14th First 3 Revenue Sources Pledged Sales Tax Increment Bond Payments & Reserve Sales Tax Returned Base & Dedicated Sales Tax Sales Tax Revenue 2012 4.8 2015 1.8 0.8 2.7 --- 3.8 3.8 2016 2.4 3.2 5.6 --- 5.5 5.5 2017 4.9 3.3 8.1 0.2 5.5 5.7 2018 5.5 3.4 5.3 3.4 + 5.6 = 9.0 2019 5.5 3.5 5.4 3.5 + 5.7 = 9.2 Slide 25 from the City Council staff presentation One final change between the May financial package and the current version relates to the use of excess PIF revenue. The project financials are conservatively based on a sales estimate of $378 per square foot. The National average in 2012 for all malls was $455 per square foot and newer malls in Denver were $600 to $700 per square foot. Anticipating this upside potential, staff built into the May agreement the creation of a Foothills Mall Fund (FMF) where excess revenues from the PIF could be used for specific improvements associated with the Mall. The intent was to keep the Mall fresh and competitive in the retail market. On further reflection, staff considered the FMF provided additional value to the Developer and not the community. The Agreement requires the Developer to maintain the Mall as a “Class A” shopping Agenda Item 2 Item # 2 Page 12 Other Taxing Entities – Could benefit because the URA could elect to discontinue collecting property tax increment allowing these revenues to flow to the entities ahead of schedule. City – Benefits from early payment of the bonds and termination of the sales tax increment, as well as from the sales tax revenue generated by the increase from $378 to $478 per square foot. B. Resolution No. 067 Updating Prior Action Regarding the Redevelopment of Foothills Mall and Regarding Cooperation and Partnership with Larimer County on Economic Revitalization Efforts and the Use of Tax Increment Financing. Under Resolution 2013-045, the City committed to work with Larimer County to develop such agreements as may be necessary to develop a model for evaluating fiscal impacts associated with the formation of tax increment financing districts. Work was to be completed by December 15, 2013. For two reasons the work has not been completed - the County wants to involve multiple municipalities and when the floods hit, the County put this work on hold. The County has confirmed its desire to complete this work in 2014 and would like a one year extension. In light of the modification to the schedule for the Mall project, language regarding property tax increment to be shared with the County has been updated. FINANCIAL / ECONOMIC IMPACT Economic Impact Analysis Overview The Project will generate economic impacts during construction and operations. The construction activities, occurring while the Developer builds and renovates Foothills, will generate one-time impact for construction workers and businesses in the area. The on-going operations of the redeveloped mall and the occupying tenants will create annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. An economic impact analysis prepared by TIP Strategies and ImpactDataSource evaluates the plan to redevelop the Foothills Mall (Attachment 3). The analysis uses the Project Development Plan as approved by the Planning & Zoning (P&Z) Board, on February 7, 2013, as the input, assuming a $312 million project investment and 446 multi-family residential units. The one-time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these works, as shown in Table 8. The redeveloped mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200-300 workers but employment is trending lower. It is projected that tenants leasing space in the redeveloped mall will employ a total of 1,200 workers when fully leased. In total, the mall’s operations will support 1,434 total workers and $28.4 million in workers’ earnings annually. Table 8 Summary of One-Time and Annual Economic Impacts Construction (One-Time) One-Time Jobs 2,905 Earnings $160,096,057 Average Earnings per Job $55,111 Operations (On-going)** Annual Jobs 1,434 Earnings $28,375,412 Average Earnings per Job $19,785 In addition to economic impacts, the redevelopment of the mall will generate one-time revenues collected by the City of Fort Collins. These revenues will be generated by the construction and renovation 2 Packet Pg. 22 Agenda Item 2 Item # 2 Page 13 investment. Specifically, the redevelopment and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one-time revenue from Sales and Use Taxes will total approximately $5.1 million with approximately $4.8 million in construction materials sales and use tax revenue and $197,000 in sales and use tax from construction worker spending, as shown in Table 9. The total building permit and plan check fees, capital expansion fees, utility fees, and street oversizing fees will total approximately $12.4 million. Table 9 Summary of One-Time Fiscal Impacts Sales and Use Taxes - Construction Materials $4,870,250 Sales and Use Taxes - Construction Worker Spending $197,245 Total Sales & Use Taxes $5,067,495 Building Permit & Plan Check Fees $848,414 Capital Expansion Fees (Less Credits) $3,441,306 Stormwater, Water & Wastewater Fees (Less Credits) $6,332,604 Street Oversizing Fees $1,729,600 Total Permit, Plan Check, and Fees $12,351,924 If Foothills Parkway and a portion of Mathews Street are vacated, the City will no longer be responsible for the maintenance, and as such, the roadways can be eliminated from the City’s street maintenance program. Ongoing maintenance of the area being vacated is the responsibility of the abutting property owner; however, with redevelopment of Foothills Mall, a metro district has been established, and maintenance of the vacated area would be assigned to the metro district. ENVIRONMENTAL IMPACTS Triple Bottom Line Analysis City staff prepared a Triple Bottom Line Analysis Map (TBLAM) for the Foothills Mall Redevelopment Project. The purpose of looking at major projects through a triple bottom line lens is to identify opportunities and issues in an unbiased and broad way. The TBLAM is not used to make decisions but rather to identify and work to mitigate issues, to optimize solutions whenever possible, and to inform decisions. The Mall TBLAM is presented in Attachment 4. Carbon Footprint A carbon footprint analysis was completed for the Mall Redevelopment Project at City Council’s request, to evaluate the footprint of the proposed redeveloped mall and compare that to the footprint of the existing mall and to the existing mall if it were operating under thriving conditions. A local sustainability engineering consulting firm, The Brendle Group, prepared the analysis in conjunction with City staff. The footprint analysis was reviewed and refined at a May 3, 2013 mall charrette and was provided to City Council on May 3rd separate from the AIS. Storm Water Quality The Foothills Redevelopment is required to meet current storm water standards, which will result in significant upgrades to the site. Runoff will be captured and treated to remove pollutants and discharged off site at a much slower rate than the existing condition. The storm water management and treatment facilities will provide significant reductions in peak rates of runoff from the site seen during all storm events. The reductions will create improvements in the environment downstream of the site such as reductions in the erosion of channels and improved water quality in rivers and streams that receive the runoff from the site. 2 Packet Pg. 23 Agenda Item 2 Item # 2 Page 14 BOARD / COMMISSION RECOMMENDATION At its April 24 and May 1, 2013 meetings, the Economic Advisory Commission (EAC) recommended supporting the Redevelopment and Reimbursement Agreement. At its October 16, 2013 meeting, the EAC recommended supporting the revised Redevelopment and Reimbursement Agreement. PUBLIC OUTREACH The following lists outreach associated with all URA actions related to Foothills Mall. Outreach between 2007-2008 April 4, 2007 written notification to property owners and business interests April 6, 2007 published notification in the Coloradoan April 11, 2007 public open house April 17, 2007 City Council meeting, submitting the Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County April 19, 2007 Planning and Zoning Board meeting Written notification to taxing entities May 15, 2007 City Council meeting, adopting the Foothills Urban Renewal Plan November 18, 2008 City Council meeting, dissolving the Foothills Urban Renewal Plan Outreach between 2011-2013 January 21, 2011 written notification to property owners and business interests February 1, 2011 City Council meeting, authorizing staff to prepare an Existing Conditions Survey April 20, 2011 public open house May 17, 2011 City Council meeting, submitting Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County May 19, 2011 written notifications to taxing entities July 12, 2011 written notification to property owners and business interests 2011, general outreach was also provided throughout the year to community organizations, such as the South Fort Collins Business Association and Chamber of Commerce September 6, 2011 City Council meeting adopting the Midtown Urban Renewal Plan July 18, 2012 written notification to property owners and business interests (Mall area only) November 8, 2012 URA Board meeting, adopting an Agreement to Negotiate with mall Owner December 12, 2012 written notice to property owners and business interests December 12, 2012 published notification in the Coloradoan February 28, 2013 City Council meeting, reaffirming the Midtown Existing Conditions Survey and Urban Renewal Plan March 28, 2013 written notice to property owners and business interests regarding the plan amendment March 28, 2013 published notification in the Coloradoan regarding the plan amendment. General Outreach on the Financial Investment Package: Economic Advisory Commission Meeting, Special Session, April 24, 2013 and May 1, 2013 (Provided under separate cover as part of the City Council Packet on May 2, 2013) Fort Collins Area Chamber of Commerce, Local Legislative Affairs Committee, April 26, 2013 Open House for Board and Commission Chairs, April 30, 2013 Economic Advisory Commission Meeting, October 16, 2013 Council Finance Committee Meeting, October 21, 2013 Public Open House, October 30, 2013. 2 Packet Pg. 24 Agenda Item 2 Item # 2 Page 15 ATTACHMENTS 1. Agenda Item Summary, May 7, 2013 (w/o attachments) (PDF) 2. EPS memo on Sales per Square Foot Comparables (PDF) 3. ImpactDataSource Economic Impact Analysis (PDF) 4. Triple Bottom Line Analysis (PDF) 5. Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (PDF) 2 Packet Pg. 25 COPY COPY COPY ATTACHMENT 1 DATE: May 7, 2013 STAFF:Darin Atteberry, Mike Beckstead, Bruce Hendee, Josh Birks AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 28 SUBJECT Resolution 2013-042 Approving a Redevelopment and Reimbursement Agreement with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, LLC, and the Foothills Metropolitan District Regarding the Redevelopment of Foothills Mall. EXECUTIVE SUMMARY This resolution authorizes and approves the execution of a Redevelopment and Reimbursement Agreement, by the City Manager of the City of Fort Collins, in connection with the redevelopment of the Foothills Mall. BACKGROUND / DISCUSSION Project Overview Location Located within the Midtown Urban Renewal Plan (Adopted, September 2011), the Foothills Fashion Mall (“Foothills”) encompasses approximately 76.3 acres of property bounded generally on the north by Swallow Road, on the east by Stanford Road, on the south by Monroe Drive, and on the west by College Avenue. The project is zoned C-G General Commercial and is located in the Transit-Oriented Development Overlay District (the “TOD District”). History The original Foothills Fashion Mall opened in 1973 and was constructed, owned, and operated by a partnership that included the Everitt Companies. The Everitt Companies developed numerous real estate projects during the 1970s, 80s, and 90s throughout Fort Collins. In 1988, Foothills was expanded to include additional anchor stores (J.C. Penney, Mervyn’s). In 1995, Foothills changed further with an expansion of the Foley’s (now Macy’s) building. The Fort Collins Urban Renewal Authority (“URA”) was created by City Council in 1982 to prevent and eliminate conditions in the community related to certain “blight factors”, as defined in Sections 31-25-101, et seq., Colorado Revised Statutes (the “Urban Renewal Law”). Using tax increment financing (“TIF”), the URA is able to leverage public and private investment to remediate blight, which is complimentary to the City’s broader goal of promoting redevelopment and infill in targeted areas. Midtown Fort Collins has been identified as one of these targeted areas for infill and redevelopment, primarily because it includes a significant portion of the College Avenue commercial corridor and the Mason Corridor collectively referred to as the “Community Spine”. A major influence in Midtown is Foothills Mall. For the first decades of operation, the Mall was a major regional retail center that attracted shoppers from northern Colorado, southeastern Wyoming, and southwestern Nebraska. The mall underwent several expansions in 1980s and 1990s, but nevertheless has experienced declining sales and increasing vacancies, partly due to increasing competition from newer retail centers in northern Colorado. The loss of two major anchor stores, Mervyn’s and JC Penny, only further contributed to the mall’s decline and solidified the revitalization of the mall as a top City priority. General Growth Properties (GGP) purchased the aging mall in 2003 with plans to revitalize and redevelop the property. Recognizing the mall has significant barriers to redevelopment, the City early on explored TIF via the URA as a potential tool to assist with its redevelopment. In the City’s 2005 Economic Action Plan, the mall is identified as the “single most important retail redevelopment initiative in the City”, and identifies the establishment of an Urban Renewal Plan as the “most effective manner for the City to assist in the redevelopment”. In 2007, the City hired a consultant to conduct an Existing Conditions Survey to determine if the area contained sufficient conditions according to Urban Renewal Law to declare it blighted. The 2007 Survey affirmed blight factors exist and declared the area blighted. City Council ultimately adopted Resolution 2007-052 and 2007-053 declaring Foothills Mall blighted and approving the Foothills Mall Urban Renewal Plan, respectively. Unfortunately, GGP did 2.1 Packet Pg. 26 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -2- ITEM 28 not initiate any redevelopment activities and decided to postpone investment because of the economic environment at the time. In order to preserve the ability to use TIF in the future, City Council passed Resolution 2008-110 which repealed Resolution 2007-053 and dissolved the Foothills Mall Urban Renewal Plan. Despite this setback, redevelopment of the mall continued to be a top priority. In 2010, the City conducted a Redevelopment Study for Midtown; while this analyzed Midtown as a whole, a significant portion was dedicated to the mall and potential redevelopment scenarios that could occur. One of the action items from this Study was for staff to examine Midtown for conditions of blight and determine whether it met statutory qualifications for an Urban Renewal Area. In February 2011, as a result of the recommended action item, City Council adopted Resolution 2011-008 authorizing and directing staff to prepare an Urban Renewal Plan and Existing Conditions Survey (Survey) for the Midtown Area, including Foothills Mall. Since the mall had been previously examined in 2007, staff conducted a basic site evaluation and determined that the blight factors cited in 2007 remained present in 2011. Ultimately, City Council adopted Resolutions 2011-080 and 2011-081 adopting the Midtown Existing Conditions Survey and Midtown Urban Renewal Plan, respectively. Conversations between the City and GGP about redevelopment of the mall continued throughout this time. However, GGP decided not to invest in the property and sold Foothills Mall and adjacent properties to Walton Foothills Holdings IV, LLC (the “Developer”) in July 2012. Seeing redevelopment of Foothills Mall seemed imminent, the URA sent notice mid-July to property owners and tenants within and immediately adjacent to the mall informing those parties that ownership had changed. Additionally, the notice solicited redevelopment proposals for the URA to take into consideration. Although general inquiries were received, the URA only received a formal proposal from Walton/Alberta. In September 2012, the URA sent the Walton/Alberta a formal letter selecting them as the developer for the project. Project Description Alberta Development Partners in partnership with Walton Street Capital (the “Developers”) intend to undertake a comprehensive redevelopment of the Foothills Fashion Mall (the “Project”). The redevelopment will include a mixed- use redevelopment with a commercial/retail component (734,979 square feet), a commercial parking structure and up to 800 multi-family dwelling units on 76.3 acres. Retail The project proposes to deconstruct portions of existing Foothills and renovate the remaining original structure, for a 388,084 square foot, one-level, enclosed shopping mall. In addition, various free standing buildings including the Commons At Foothills Mall Building, the Shops at Foothills Mall buildings, The Plaza at Foothills Mall, the Corner Bakery, Christy Sports and the Youth Activity Center building would all be deconstructed. In their place, eight new retail buildings are proposed along South College Avenue, ranging from 9,300 square feet to 31,715 square feet in size. Internal to the site, five new retail building are proposed to be located northwest of the existing enclosed mall. These five building range from 7,636 square feet to 12,000 square feet in size. To the southeast of the existing mall, four new restaurants are proposed ranging in size from 8,088 square feet to 124,000 square feet as well as a new, two-story 24,000 square foot Foothills Activity Center to replace the Youth Activity Center. Additionally, a new 86,754 square foot entertainment and theater building is proposed located southeast of the new restaurants. The large east green area and smaller west green plazas anchor the pedestrian network. The commercial component provides a total of 3,581 parking spaces via a six level, 84,663 foot parking structure and surface parking spaces. Residential The residential component of the project proposes up to 800 multi-family units distributed among five buildings that will include a mix of studio, one, two, and three bedroom units. Current plans call for the construction of 446 residential units. The residential component of the project includes 1,422 parking space via three separate subterranean structures (858 spaces), an above ground structure (472 spaces) and 92 open surface parking stalls. The residential buildings will range in height from two- to five-stories. Generally, the residential building heights get taller as the project develops from the north to south along Stanford Road. 2.1 Packet Pg. 27 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -3- ITEM 28 Green Development Practices/Components The Developer is committed to developing an efficient and high performing project in an effort to meet or exceed many of the objectives identified in the City’s Climate Action Plan. It should be noted that redevelopment of the Foothills Mall will inherently achieve many significant improvements including the removal and mitigation of existing hazardous materials (Asbestos), a complete upgrade of stormwater facilities on-site, and the inclusion of updated HVAC and lighting systems, which are significantly more efficient than the existing systems. The Developer is currently engaged with the City of Fort Collins in a modified Integrated Design Assistance Program (IDAP) in an effort to identify opportunities for improved building performance. City staff and the Developer’s design team has a scheduled half-day design charrette on May 3 to identify design opportunities that will result in high- performance buildings that exceed building code requirements for energy performance. The objectives of that meeting are to identify proposed design elements that go above and beyond code requirements; to collaborate on new opportunities for enhanced design features to decrease the project’s carbon impact; to quantify the project’s carbon impact, and to identify and agree on a clear plan of action to achieve a high performance project. The results of the meeting will be provided to City Council under separate cover. The Developer has committed to numerous other “green” components within the project, which are included in Attachment 1 and titled “Foothills Mall Renovation and Fort Collins Green Code Compliance.” The City of Fort Collins has provided the Developer a response to that memo with a list of enhancements and additional measures to improve the environmental sustainability of the project (Attachment 2). The Developer has agreed to comply with those measures and will be updating their memo to include the enhancements. The updated memo will be provided to City Council under separate cover. The Climate Action Plan includes a goal of diverting 50% of waste from the landfills and Alberta addressed this policy in several ways. As part of the deconstruction/demolition of the existing mall, Alberta has committed to dismantle the existing structures in manner that diverts at least 50% (by weight) of all materials from the landfill. Alberta Development has provided a memo which articulates how this will be accomplished, which is included as Attachment 3. It should be noted that demolition and construction waste material diversion is included as an agenda item during the May 3 charrette to identify ways to increase the diversion amount even more. The recycling plan during operations of the mall is also a key component of the overall waste diversion goals and several recommendations have been made to the Developer by the City’s Environmental Services that address this issue. These recommendations are included within the enhancements and additional measures provided to the Developer to improve the environmental sustainability of the project (Attachment 2). An overall waste management plan will be developed for the project and is included as part of the May 3 charrette. Blight Conditions A first step in any Urban Renewal Authority project is the determination of whether an area constitutes a blighted area under Colorado Urban Renewal Law. The principle purpose of determining blight and creating the related urban renewal plan and programs and/or projects of redevelopment is to eliminate blight or prevent the spread of blight and/or the further deterioration of blight areas (Colorado Revised Statutes Section 31-25-107(4.5). In 2007, the City of Fort Collins commissioned Terrance Ware & Associates to conduct an Existing Conditions Study to determine if the Foothills Mall area met the statutory requirements to be determined a “blighted area”. The 2007 study concluded the area was blighted based on six blight conditions. Furthermore, all of the blight conditions were found to still be in existence in April 2011 when the City conducted a second existing conditions study as part of the Midtown Existing Conditions Survey, which was third-party verified by MTA Planning & Architecture. In addition to deterioration of structures, obsolescence of building systems and poor or unsafe ingress and egress, there were three site conditions that contributed to the determination of blight. These included: poor and hazardous pedestrian circulation; inadequate vehicular circulation; and, inadequate drainage facilities. The three site conditions were found to be present, independent of each other, in multiple locations; however, all three site conditions were found to exist on the southwestern portion of the site. The plan identified missing sidewalk connections along College Avenue, as well as a lack of pedestrian connections from College Avenue to the interior of the site; inadequate vehicular circulation within the interior of the site due to a lack of drive aisles and curb and gutter; as well as poor drainage as a result of the topography of the site. In particular, the site containing Sears is lower than the remaining mall site, and is immediately adjacent to a drainage ditch. The report states: “Drainage of the 72-acre parcel is highly 2.1 Packet Pg. 28 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -4- ITEM 28 inadequate. There are only six drains to facilitate drainage for the entire property. This causes significant back-ups often resulting in flooding during heavy rainstorms.” The site plan submitted to and approved by the Planning and Zoning Board on February 7, 2013, reflects an effort to meet the goals of City Plan, the Land Use Code, and remediate the blight conditions identified in the 2007 Existing Conditions Study. In addition to the meeting the goals of City Plan and the Land Use Code, the current site plan remediates the three highlighted blight conditions in the following manner. In relation to vehicular circulation, the plan reconfigures the site to provide definite drive aisles with curb and gutter. The proposed drive aisles provide clear sight lines, and are clearly delineated with landscaped islands. Additionally, the proposed new building does not extend as far to the west as the existing building, and the existing drainage ditch is to be accommodated with an underground culvert. This eliminates the “bottleneck” issue and provides ample space for overall vehicular circulation. The existing lack of adequate pedestrian connections is alleviated by addressing both the vertical and horizontal constraints on the site. In order to achieve adequate pedestrian connections to the interior of the site, a significant amount of fill (roughly eight 8 feet in some locations) is proposed on the site. The fill would allow the pedestrian connections from College Avenue to the interior of the site to meet ADA requirements. Additionally, new sidewalks are proposed along College Avenue, as well as the main entrance into the mall from College Avenue. Finally, the inadequate drainage on the site is remedied by adding the fill, which allows for improved flow to the exterior of the site, as well as adding new drainage structures where appropriate. Eligible Costs Certain projects costs are eligible for public assistance per Colorado Revised Statutes relating to Urban Renewal and Special Districts (Title 32). The types of eligible costs for each (Urban Renewal and Metro District) are relatively broad and include such categories as: • Acquisition of a blighted area; • Demolition and removal of buildings and improvements; • Installation, construction, or reconstruction of streets, utilities, parks, playgrounds, and other improvements necessary for carrying out the objectives of the urban renewal plan; • Carrying out plans for a program through voluntary action and the regulatory process for the repair, alteration, and rehabilitation of buildings or other improvements in accordance with the urban renewal plan; • Acquisition of any other property where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, lessen density, eliminate obsolete or other uses detrimental to the public welfare, or otherwise remove or prevent the spread of blight or deterioration or to provide land for needed public facilities. It is important to note that the total amount of eligible costs per the Colorado Revised Statutes is significantly higher than the $53 million in public assistance being offered. However, the Developer and the City of Fort Collins established a process to identify project costs that are extraordinary costs associated with remediating blighted conditions on the property, or costs associated with public improvements or public infrastructure. These are costs in which there is direct public benefit. The process of identifying the eligible costs balanced the need to maximize the public benefit while ensuring the public assistance was the minimum amount necessary to make the project financially viable. The following provides a brief description of each of the eligible costs summarized in Table 1 below: • Land Acquisition: This amount represents the estimated value of the land underlying the portions of the project that include the public gathering spaces such as the east and west lawns, the Foothills Activity Center, and other green or public spaces on the site. • Parking Structure: This cost represents 75% of the parking structure. The structure allows for greater utilization of site including the public gathering spaces. • Demolition/Abatement: Demolition and deconstruction of the aging facility represents an extraordinary cost associated with remediating blight and mitigation the hazardous materials. • Fixture and Amenities: This represents urban design enhancements to the public gathering spaces (east and west lawns) to provide high quality of place. 2.1 Packet Pg. 29 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -5- ITEM 28 • Ditch Relocation: Relocating a segment of the Larimer No. 2 ditch to the west side of College Ave. represents an extraordinary cost associated with remediating blight. • Site Work: This cost is associated with earthwork (grade and fill), site walls to alleviate topographic constraints on the site, as well as asphalt paving, curb and gutter, and sidewalks. • Utilities: This represents upgrades and improvements to sanitary sewer, storm water, water lines and fire water systems. • Soft Costs: Architectural and engineering costs associated with activity center, parking structure, as well as materials testing, and environmental/abatement management. • Foothills Activity Center: A publicly owned and operated activity center that includes gymnasium, public meeting rooms and after-school programs for youth. • Pedestrian Crossing/Underpass: A pedestrian connection linking MAX BRT and Foothills Mall utilizing Larimer No. 2 Ditch alignment under College Ave. Table 1 Summary of Eligible Costs for Reimbursement ($ Millions) Public Benefit Fort Collins provides a high quality of place attributed to the lively historic downtown and the city’s impressive parks, trails and open space networks. These community assets make Fort Collins an attractive place for both a well- educated workforce and diverse industries. The redevelopment of Foothills represents an opportunity to strengthen the existing high quality of place. The Project meets numerous City Plan policy objectives and occurs in a Targeted Redevelopment Area (as defined by City Plan). Thus, the project represents an opportunity to achieve more than economic outcomes but an opportunity to strengthen the overall community. City Plan Objectives The Project as proposed meets a variety of City Plan objectives, including but not limited to: Economic Health • EH 1.4 – Target the Use of Incentives to Achieve Community Goals: The project will achieve broader community goals as described, including redevelopment within a Targeted Infill Area, infrastructure upgrades, and support of transit. • EH 4.1 – Prioritize Targeted Redevelopment Areas: The Link-N-Greens site is within an identified targeted redevelopment area in City Plan. 2.1 Packet Pg. 30 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -6- ITEM 28 Community and Neighborhood Livability • LIV 5.1 – Encourage Targeted Redevelopment and Infill: The Foothills site is encompassed by the identified targeted redevelopment areas within City Plan. In addition, the Project meets the purpose of this principle because it: N Promotes the revitalization of existing, underutilized commercial and industrial areas; N Concentrates higher density housing and mixed-use development in locations that will be served by high frequency transit in the future; N Promotes reinvestment in an area where infrastructure already exists; and N Increases economic activity in the area to benefit existing residents and businesses and may provide the stimulus to redevelop. • LIV 5.2 – Target Public Investment along the Community Spine: Additionally, the project occurs in the identified “community spine,” which has been identified as the “highest priority area for public investment in streetscape and urban design improvements and other infrastructure upgrades to support infill and redevelopment and to promote the corridor’s transition to a series of transit-supportive, mixed-use activity centers”. • LIV 21.4 – Provide Access to Transit: The project includes access to bus stops along College Avenue, Foothills Parkway and Stanford Road. In addition, the Project lies within a short walking distance of both the Horsetooth and Swallow MAX stops. Furthermore, the project will include the construction of a pedestrian underpass across College Avenue facilitating a safe link to MAX and Mason Corridor. Transportation • T 3.3 – Transit Supportive Design: The proposed Project includes significant enhancements to pedestrian and bicycle connectivity around and thru the site. In addition, the underpass connection to MAX signifies a major opportunity to connect the Project to the MAX Bus Rapid Transit system. Economic Health Strategic Plan In addition, the project as proposed addresses one of the four goals of the Economic Health Strategic Plan adopted by City Council in June 2012. This goal is supported by several strategies, which this project addresses specifically. Goal 4: Develop community assets and infrastructure necessary to support the region’s employers and talent. • Targeted Infill & Redevelopment: This project falls in a defined targeted and infill area and delivers a significant redevelopment project as a catalyst in the area. Midtown Urban Renewal Area The Midtown Urban Renewal Plan, adopted in 2011 and ratified and confirmed in February 2013, is intended to stimulate private sector development in the Plan area using a combination of private and public investment and Urban Renewal Authority financing. Numerous objectives are identified to guide such investment, and the redevelopment of Foothills Mall accomplishes several, including: • Facilitate redevelopment by private enterprise through cooperation among developers and public agencies to plan, design, and build needed improvements. • Address and remedy conditions in the area that impair or arrest the sound growth of the City. • Implement the Comprehensive Plan. • Redevelop and rehabilitate the area in a manner which is compatible with and complementary to unique circumstances in the area. • Improve pedestrian, bicycle, vehicular and transit-related circulation and safety. • Contribute to increased revenues for all taxing entities. 2.1 Packet Pg. 31 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -7- ITEM 28 Financial Investment Overview On November 8, 2012, exclusive negotiations between the URA and Walton/Alberta were initiated under an Agreement to Negotiate. Negotiations with regard to the public financing package have been occurring since. The public financing package includes the dedication of four revenue sources in the following priority order: Sources • Foothills Metropolitan District Capital Mills – The Metro District will pledge 50 mills of ad valorem real property tax revenue to the bond. This mill levy expires when the bond is fully repaid or within 25 years, whichever comes first. • Property Tax Increment – The URA will pledge 100 percent of the annual ad valorem property tax increment revenue over a 25-year period, less an administrative fee up to a maximum of 1.5 percent of the gross property tax increment revenue received by the URA. • Public Improvement Fee – The Developer will impose a 1 percent Public Improvement Fee (PIF) on all taxable transactions within the Project and pledge these revenues to the bond. This revenue source sunsets after 30 years. • Sales Tax Increment – The URA will pledge 100 percent of the annual sales tax increment generated above a base by the Project related to the City’s 2.25 percent General Fund Sales Tax rate (the “Core Rate”). The above priority order works such that the first revenue source pledged to bond repayment is the last revenue source out. Therefore, the Sales Tax Increment Pledge, despite existing for all 25 years, will begin to release funds back the City as early as 2018. Project Cost Summary The total redevelopment project is estimated to cost $312 million. These costs are split between the commercial/retail at approximately $230 million or 74 percent and 446 anticipated residential units at a total cost of $82 million or 26 percent. The eligible costs described above total (See Table 1) approximately $53 million or 17 percent of the total cost and 23 percent of the commercial/retail costs. The eligible costs represents the target amount of bond proceeds to be generated by the pledged revenues. Assumptions The financial analysis resulting in the public finance investment contemplated in the proposed Redevelopment and Reimbursement Agreement relies on several key assumptions. Each of these assumptions is described briefly below: • Project Timing – The financial analysis assumes a May 8 “go” date for commencement of construction activity. This result in a ground breaking in June/July 2013 and substantial completion of the project in November 2014. Demolition of the old Sears building, and construction of the new building in place of Sears, along with the residential is not likely to be complete until sometime in 2015. • Annual Sales Per Square Foot – The financial analysis assumes $350 per square foot in annual retail sales once the project stabilizes, assumed to occur in 2016. This assumption relies on several inputs, including the average annual sales per square foot figure for all Malls as provided by the International Council of Shopping Centers ($458 per square foot for 2012). In addition, Economic & Planning Systems provided a full analysis of retail transfer, inflow and growth, which was used to project the anticipated retail sales level at the redeveloped mall (See Attachment 4 for more details). • Occupancy – The financial analysis assumes, based on the construction schedule, that 80 percent of the gross leasable area will be occupied by retail tenants by December 31, 2015. This number will grow to 95 percent occupancy and remain at this level by December 31, 2016. • Retail Sales Growth – The financial analysis assumes that retail sales will grow by 2 percent annually. This pace of growth is consistent with historical growth rates in the City of Fort Collins of 5.4 percent annually since 1990. In addition, this rate falls short of the historic growth rate of inflation as measured by the Consumer Price Index, 2.9 percent annually since 1982. • Property Value Growth – The financial analysis assumes that real property values will increase by 1 percent annually. This pace of growth is conservative compared to the historical growth rate in of real property in Larimer County. 2.1 Packet Pg. 32 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -8- ITEM 28 Public Finance Revenue Summary The Redevelopment and Reimbursement Agreement before the URA Board for consideration contemplates utilizing the pledged revenues, as described, to support the issuance of a bond by the Foothills Metro District. The proceeds from the bond issuance are intended to pay or reimburse the eligible costs and to pay cost of issuance. As described, the bond will be supported by four revenue sources. The primary revenues supporting the bond will come from the Metro District in the form of annual ad valorem taxes on real property and a PIF. These two revenue sources will generate $50.0 and $64.7 million respectively between 2015 and 2038, as shown in Table 2, over the 25 year anticipated life of the bond. In addition, the pledged URA property tax increment will generate approximately $55.2 million during the same period. By 2017, these three revenue sources will represent $6.4 million in revenue annually, the first full year of stabilized Metro District ad valorem tax, PIF and property tax increment. Based off the financial analysis, it is anticipated that these three revenue sources will be able to cover the full debt payment of the bond by the end of 2017. Table 2 Summary of Public Finance Revenues Generated by the Project, 2015-2038 ($ Millions) In addition, sales tax increment has been pledged to support the issuance of a bond. There are three components to the sales tax generated by the Project, including: • Base – Existing sales tax revenue generated by retailers in the Mall and surrounding Project Area. • Transfer – Revenue from other areas of the city that shift to the Mall after redevelopment. • New – The net new revenue, or revenue in excess of base and transfer, associated with the redeveloped mall project. In addition, the sales tax revenue can be broken by the various pieces of the effective 3.85 percent rate. There are two main pieces, including: • Core City Sales Tax Rate – This corresponds to the long-standing 2.25 percent General Fund rate. • Dedicated City Sales Tax Rate – This corresponds to the sum total of four dedicated sales taxes including: Transportation (0.25 percent), Natural Areas (0.25 percent), Building on Basics (0.25 percent), and Keep Fort Collins Great (0.85 percent) dedicated sales tax rates for a total of 1.60 percent. The revenue generated by the constituent pieces of the Sales Tax rates is summarized in Table 3. The base, transfer, and new components of the Dedicated City Sales Tax Rate will generate approximately $104.6 million between 2015 and 2038. In addition, the Core Rate base Sale Tax Revenue will generate approximately $44.4 million during the same period. Therefore, the total revenue generated by the project that is not pledged to the bond is approximately $149.0 million. 2.1 Packet Pg. 33 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -9- ITEM 28 Table 3 Summary of Sales Tax Revenue Generated by the Project, 2015-2038 ($ Millions) The Agreement only pledges the transfer and new sales tax revenue related to the Core Rate. Based on the financial analysis, these sales tax revenues represent approximately $102.7 million or the anticipated pledge sales tax revenue. However, the Agreement distinguishes between sales tax pledge and remittance/share. Each item is described below: • Sales Tax Pledge – The Agreement pledges only tax revenues generated by the Core Rate, only the tax revenue in excess of the base and defines the base as the 12 months prior to the modification of the Plan to authorize tax increment. • Sales Tax Share/Remittance – The Agreement recognizes that the sales tax pledge is only the extent necessary to support debt service and reserve contributions after all other revenue sources contribute completely to support the bond. Public Finance Package Structure To better understand the structure of the public finance package, Table 4 summarizes the anticipated sales tax revenue split between the two rates (Core and Dedicated) by the three components (Base, Transfer, and New). In 2016, the total pledged sales tax revenue to the project (identified by the yellow) totals $3.1 million of the approximately $4.9 million generated by the Core Rate (2.25 percent). The City retains the remaining $5.3 million generated by the unpledged Dedicated Rate (1.60 percent) and Core Rate base. These numbers increase to $3.3 million in pledged revenue and $5.5 million in retained revenue by 2018. Table 4 Annual Summary of Sales Tax Revenue Generated by the Project, 2016 & 2018 As stated, the pledged sales tax revenue serves as the last revenue source to support the issuance of the bond. Therefore, as the remaining three pledge revenues grow over time the need for pledged sales tax revenue to support the bonds diminishes to zero. The financial analysis demonstrates this in the estimated cash flow presented in Table 5. 2.1 Packet Pg. 34 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -10- ITEM 28 The bond will likely be issued in 2013 with three years of capitalized interest. Based on forecasts, revenue will first be available to fund the debt service of the bond in 2015. In 2015, the pledged revenue sources, excluding the sales tax revenue, will generate approximately $2.1 million towards bond repayment and reserve contributions. The pledged sales tax revenue will generate an additional $2.5 million. These two revenue sources combined will generate sufficient revenue (along with capitalized interest) to cover the debt payment and reserve contributions required by the bond. The pledged revenue sources, excluding the sales tax revenue, will grow to $6.5 million in 2017 largely due to the delay in property tax valuation and collection. The pledged sales tax revenue is anticipated to grow to $3.2 million. Together, these revenues will cover the debt payment and the last sizable portion of the supplemental reserve fund contribution. Starting in 2018, the pledged revenue sources, excluding sales tax revenue, are anticipated to cover the debt payment thru the rest of the bond term, which is anticipated to terminate in 2038. As a result, starting in 2018 the pledged sales tax revenue will not be required to meet debt payments or reserve contributions. These revenues will, according to the terms of the Agreement, be released back to the City. At that point, the total sales tax revenue retained by the City will rise to $8.8 million and continue at this rate with 2 percent growth per year. This constitutes a $4.0 million increase in net new revenues compared to the existing $3.2 million base (both Core and Dedicate Rates) and estimated $1.6 million in transfer. As a result approximately $8.8 million of the pledge sales tax is used between 2013 and 2017 to support the debt payment and reserve contributions. Table 5 Anticipated Public Finance Cash Flow, 2015-2019 ($ Millions) FINANCIAL / ECONOMIC IMPACTS Financial Impact to the City Net Revenue to the City The financial analysis evaluated the impact of the sales tax pledge over the full 25 years of the bond term. This provides a fuller understanding of the impact to the City of the sales tax pledge. The total anticipated sales tax revenue generated by the Core Rate between 2015 and 2038 is approximately $147 million with $103 million pledged toward the bond issuance (Transfer and New; shown in yellow), as shown in Table 6. The Dedicated Rate generates approximately $105 million between 2015 and 2038. The grand total of anticipated sales tax is approximately $252 million. The estimated new revenue between 2015 and 2038 is approximately $117 million. Subtracting the estimated $8.8 million in tax used to make debt payments and reserve contributions between 2013 and 2017 leaves approximately $108 million in net new to the City or approximately $4.3 million annually on average. 2.1 Packet Pg. 35 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -11- ITEM 28 Table 6 Summary of Sales Tax Revenue Generated by the Project, 2015-2038 ($ Millions) Sensitivity/Risk Analysis Staff has evaluated 3 risk scenarios that are summarized in Table 7. Scenario I – current assumptions on the District bond assume a non-rated issue with a term of 25 years at a 7% interest rate supported by the four pledged revenues as previously discussed. If the interest rate were to increase to 8%, debt service would increase by $17M and cause an $11M reduction in the Net New City Revenue. Scenario II – assumes a 10% reduction in sales per square foot (a reduction from the current assumption of $350 sq. ft. to $315 sq. ft.) and a reduction in assessed property values of 10%. Metro District revenues would decline by $20M, Remitted Sales Tax Revenue would increase by $6M, and Net New City Revenue would decline by $23M, largely driven by the reduction in sales tax receipts. Scenario III – assume a 20% reduction in sales per square foot (a reduction from the current assumption of $350 sq. ft. to $280 sq. ft.) and no change to assumed property valuations. Metro District revenue would decline by $13M, Remitted Sales Tax Revenue would increase by $2M, and Net New City Revenue would decline by $35M. In summary, the most significant risk to the City occurs with from a shortfall in sales per square foot. As previously stated, staff believe the sales per square foot assumption of $350 is conservative compared with other retail activity benchmark data. Table 7 Summary of Sensitivity Analysis ($ Millions) Economic Impact Analysis Overview The Project will generate economic impacts during construction and operations. The construction activities, occurring while the Developer builds and renovates Foothills, will generate one-time impact for construction workers and businesses in the area. The on-going operations of the redeveloped mall and the occupying tenants will create annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. 2.1 Packet Pg. 36 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -12- ITEM 28 An economic impact analysis prepared by TIP Strategies and ImpactDataSource evaluates the plan to redevelop the Foothills Mall (Attachment 5). The analysis uses the Project Development Plan as approved by the Planning & Zoning (P&Z) Board, on February 7, 2013, as the input, assuming a $312 million project investment and 446 multi-family residential units. The one-time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these works, as shown in Table 8. The redeveloped mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200-300 workers but employment is trending lower. It is projected that tenants leasing space in the redeveloped mall will employ a total of 1,200 workers when fully leased. In total, the mall’s operations will support 1,434 total workers and $28.4 million in workers’ earnings annually. Table 8 Summary of One-Time and Annual Economic Impacts Construction (One-Time) One-Time Jobs 2,905 Earnings $160,096,057 Average Earnings per Job $55,111 Operations (On-going)** Annual Jobs 1,434 Earnings $28,375,412 Average Earnings per Job $19,785 In addition to economic impacts, the redevelopment of the mall will generate one-time revenues collected by the City of Fort Collins. These revenues will be generated by the construction and renovation investment. Specifically, the redevelopment and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one-time revenue from Sales and Use Taxes will total approximately $5.1 million with approximately $4.8 million in construction materials sales and use tax revenue and $197,000 in sales and use tax from construction worker spending, as shown in Table 9. The total building permit and plan check fees, capital expansion fees, utility fees, and street oversizing fees will total approximately $12.4 million. Table 9 Summary of One-Time Fiscal Impacts Sales and Use Taxes – Construction Materials $4,870,250 Sales and Use Taxes – Construction Worker Spending $197,245 Total Sales & Use Taxes $5,067,495 Building Permit & Plan Check Fees $848,414 Capital Expansion Fees (Less Credits) $3,441,306 Stormwater, Water & Wastewater Fees (Less Credits) $6,332,604 Street Oversizing Fees $1,729,600 Total Permit, Plan Check, and Fees $12,351,924 ENVIRONMENTAL IMPACTS Triple Bottom Line Analysis City staff prepared a Triple Bottom Line Analysis Map (TBLAM) for the Foothills Mall Redevelopment Project. The purpose of looking at major projects through a triple bottom line lens is to identify opportunities and issues in an unbiased and broad way. The TBLAM is not used to make decisions but rather to identify and work to mitigate issues, to optimize solutions whenever possible, and to inform decisions. The Mall TBLAM is presented in Attachment 6. 2.1 Packet Pg. 37 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -13- ITEM 28 The City of Fort Collins is committed to analyzing major projects using a triple bottom line approach. Over the next several months, the Sustainability Services Area will be working to identify and optimize the set of tools and approaches to conduct these analyses in conjunction with the development of the community sustainability plan. Carbon Footprint A carbon footprint analysis is being completed for the Mall Redevelopment Project at City Council’s request. The analysis will evaluate the footprint of the proposed redeveloped mall and compare that to the footprint of the existing mall and to the existing mall if it were operating under thriving conditions. A local sustainability engineering consulting firm, The Brendle Group, has been retained to prepare the analysis in conjunction with City staff. The footprint analysis will be reviewed and refined at the May 3, 2013 mall charrette and will be provided to City Council by close of business on May 3rd under separate cover. Storm Water Quality The Foothills Redevelopment is required to meet current storm water standards, which will result in significant upgrades to the site. Runoff will be captured and treated to remove pollutants and discharged off site at a much slower rate than the existing condition. The storm water management and treatment facilities will provide significant reductions in peak rates of runoff from the site seen during all storm events. The reductions will create improvements in the environment downstream of the site such as reductions in the erosion of channels and improved water quality in rivers and streams that receive the runoff from the site. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BOARD / COMMISSION RECOMMENDATION The Economic Advisory Commission met April 24 and May 1, 2013 and voted 6-1 to recommend the following: “The Economic Advisory Commission believes that the Foothills Mal redevelopment is an important part of the Fort Collins City Plan and economic vision. As such, the EAC supports the public finance assistance package for the Foothills Redevelopment Project as described by City staff. As part iof this recommendation ,the EAC highly recommends good faith efforts by the City in order to understand the full revenue and cost implications for, and to collaborate with other taxing entities based on forthcoming rigorous analysis of the forecasted and eventually actual impacts of redevelopment.” PUBLIC OUTREACH The following lists outreach associated with all URA actions related to Foothills Mall. Outreach between 2007-2008 • April 4, 2007 written notification to property owners and business interests • April 6, 2007 published notification in the Coloradoan • April 11, 2007 public open house • April 17, 2007 City Council meeting, submitting the Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County • April 19, 2007 Planning and Zoning Board meeting • Written notification to taxing entities • May 15, 2007 City Council meeting, adopting the Foothills Urban Renewal Plan • November 18, 2008 City Council meeting, dissolving the Foothills Urban Renewal Plan 2.1 Packet Pg. 38 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) COPY COPY COPY May 21, 2013 -14- ITEM 28 Outreach between 2011-2013 • January 21, 2011 written notification to property owners and business interests • February 1, 2011 City Council meeting, authorizing staff to prepare an Existing Conditions Survey • April 20, 2011 public open house • May 17, 2011 City Council meeting, submitting Existing Conditions Survey to the Planning and Zoning Board, Poudre School District, and Larimer County • May 19, 2011 written notifications to taxing entities • July 12, 2011 written notification to property owners and business interests • 2011, general outreach was also provided throughout the year to community organizations, such as the South Fort Collins Business Association and Chamber of Commerce • September 6, 2011 City Council meeting adopting the Midtown Urban Renewal Plan • July 18, 2012 written notification to property owners and business interests (Mall area only) • November 8, 2012 URA Board meeting, adopting an Agreement to Negotiate with mall Owner • December 12, 2012 written notice to property owners and business interests • December 12, 2012 published notification in the Coloradoan • February 28, 2013 City Council meeting, reaffirming the Midtown Existing Conditions Survey and Urban Renewal Plan • March 28, 2013 written notice to property owners and business interests regarding the plan amendment • March 28, 2013 published notification in the Coloradoan regarding the plan amendment General Outreach on the Financial Investment Package: • Economic Advisory Meeting, Special Session, April 24, 2013 and May 1, 2013 (See Attachment 8) • Fort Collins Area Chamber of Commerce, Local Legislative Affairs Committee, April 26, 2013 • Open House for Board and Commission Chairs, April 30, 2013 ATTACHMENTS 1. Memorandum from JPRA Architects RE: Foothills Mall Renovation and Fort Collins Green Code Compliance, March 13, 2013. (Update under separate cover) 2. Memorandum RE: Recommendations to Enhance Environmental Sustainability of the Foothills Mall Redevelopment Project, April 23, 2013. 3. Memorandum from Alberta Development Corporation RE: Deconstruction Plan for Foothills Mall Redevelopment, April 22, 2013 4. Memorandum from Economic & Planning Systems RE: Foothills Redevelopment Sales Forecasts, April 30, 2013. 5. Economic Impact Analysis, Foothills Mall Redevelopment, April 30, 2013 6. Fort Collins Triple Bottom Line Analysis Map, Prepared by City/URA Staff, May 1, 2013 7. Preliminary Pedestrian Crossing Design, April 19, 2013 8. Economic Advisory Commission, Minutes, May 1, 2013 9. South Fort Collins Business Association, Letter of Support, 10. Boards/Commissions Session Summary, April 30, 2013 2.1 Packet Pg. 39 Attachment: Agenda Item Summary, May 7, 2013 (w/o attachments) (URA-Foothills Mall) M EMORANDUM To: Joshua Birks, Economic Health Director From: Dan Guimond and Chris Leutzinger Subject: Foothills Development Sales Forecasts Date: April 30, 2013 This memorandum summarizes EPS’ sales performance assumptions used in the public financing model for the proposed Foothills Mall Development Plan. Retail sales levels are first estimated by store category. The projected sales performance levels are compared to other area shopping centers to validate that the assumptions used are reasonably conservative. The sources of 2015 annual store sales are then estimated including the recapture of existing leakage by trade area residents, sales attributable to new trade area growth, and new inflow to Fort Collins to calculate net new sales to the City. Sales Performance The average sales performance by retail store category was derived through a three step estimation process: • Existing stores remaining in the project were estimated to increase their average annual sales by 25 percent over current (2011) levels based on the greater market attraction of an expanded and fully leased project. • Newly signed tenants, as well as other specified tenants on Alberta’s leasing plan identified as likely to be signed were estimated to perform at the average national sales level. • The remaining unleased spaced was estimated to achieve an overall average of $325 per square foot. Based on these factors, total annual retail sales are estimated at $229.2 million on 710,979 square feet (734,979 square feet minus 24,000 square foot Foothills Activity Center) which equates to $322 per square foot. Shopping centers typically calculate their average sales not including department stores. Excluding Macy’s, average sales rise to $349 per square foot based on $203.5 million in annual sales on 582,429 square feet as shown in Table 1 on the following page. ATTACHMENT 2 2.2 Packet Pg. 40 Attachment: EPS memo on Sales per Square Foot Comparables (URA-Foothills Mall) Joshua Birks April 30, 2013 Foothills Development Sales Forecasts Page 2 123078_Sales Memo_4-30 Table 1 Estimated Annual Sales Foothills Redevelopment Individual shopping center sales figures are closely held. Private firms such as Alberta Development Partners do not publish their figures. EPS compiled average sales per square foot numbers for specified centers from multiple sources including IRS 10-K annual reports for publicly traded companies and discussions with officials at the major shopping center REITs as shown in Table 2. Table 2 Shopping Mall Sales Comparables Size $ PSF New Sales Existing Sales Net Sales New Stores Sq. Ft. Avg. $ Total $ Total $ Total Convenience Goods 45,822 $447 $20,473,806 $6,202,640 $14,271,166 Shopper's Goods General Merchandise 128,550 $200 $25,710,000 $24,935,261 $774,739 Other Shopper's Goods 314,054 $392 $122,995,686 $64,274,798 $58,720,887 Subtotal 442,604 $336 $148,705,686 $89,210,060 $59,495,626 Eating and Drinking 222,553 $270 $60,016,925 $5,775,707 $54,241,218 Building Material & Garden 0 $0 $0 $0 $0 Total Retail Goods 710,979 $322 $229,196,417 $101,188,406 $128,008,011 Total Excluding Dept. Stores and F 582,429 $349 $203,486,417 Source: Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Models\Foothills-Alberta\Sales Flow Model\[123078-SalesFlows-TPI_030613.xlsx]Net New Summary (2) Mall $ PSF Year EPS estimate for Foothills Mall $349 Colorado Malls Cherry Creek 1 $721 2012 Park Meadows $650 2011 FlatIron Crossing $548 2012 Twenty Ninth Street (Boulder) $588 2012 ICSC National Mall Average National Average $365 2009 National Average $386 2010 National Average $417 2011 National Average $455 2012 % Change 2009 - 2012 25% ICSC Regional Averages Mountain $534 2012 1 Based on average of Taubman 23 mall portfolio Source: ICSC; Industry Sources; Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Data\Foothills\[123078-Mall Sales data_2012.xlsx]Mall Sales 2.2 Packet Pg. 41 Attachment: EPS memo on Sales per Square Foot Comparables (URA-Foothills Mall) Joshua Birks April 30, 2013 Foothills Development Sales Forecasts Page 3 123078_Sales Memo_4-30 According to ICSC, average national mall sales reached $455 per square foot in 2012. This is up about 24.7 percent over average sales of $365 per square foot in 2009. In general sales in the western US are higher than the national averages; the ICSC Mountain Region average was $534 per square foot in 2012. Locally, Park Meadows sales were $650 per square foot in 2011 which is up 8.9 percent over 2009 sales of $597 per square foot. FlatIron Crossing sales were $548 per square foot, up 36 percent from $403 per square foot in 2009. Twenty Ninth Street, an outdoor lifestyle center in Boulder, experienced average sales of $588 in 2012, up almost 41 percent from $389 in 2009. Cherry Creek Mall sales are conservatively estimated at $721 per square foot which is the average for Taubman’s portfolio of 23 centers nationwide. EPS is therefore comfortable that its sales estimates are reasonably conservative for purposes of evaluating public financing options. Sales by Source EPS also estimated the portion of new annual retail sales (excludes existing store sales) by source including Leakage Recapture, Sales from New Growth, and New Inflow. The total of these sources equal net new sales to the City. The remaining portion of sales is assumed to be sales transfers (Cannibalization) from existing stores. The expanded Foothills Mall development is projected to generate $229.2 million in sales which is comprised of $101.2 million in existing store sales and $128.0 in new store sales. These new store sales are expected to be derived from approximately 27 percent Leakage Recapture, 9 percent New Growth, and 30 percent New Inflow resulting in an estimated 67 percent Net New Sales or $85.2 million in annual sales. The remaining $42.8 million is estimated to be sales transfers as shown in Table 3. Table 3 Estimated Annual Net New Sales Foothills Mall Redevelopment Net Sales Leakage Capture New Growth New Inflow Net New Cannibalized New Stores $ Total % of Net Sales from Leakage Capture % of Net Sales from New Growth % of Net Sales from New Inflow $ $ Convenience Goods $14,271,166 10% 10% 14% $4,797,014 $9,474,152 Shopper's Goods General Merchandise $774,739 30% 20% 30% $619,791 $154,948 Other Shopper's Goods $58,720,887 39% 8% 39% $49,912,754 $8,808,133 Subtotal $59,495,626 39% 8% 39% $50,532,545 $8,963,081 Eating and Drinking $54,241,218 20% 10% 25% $29,832,670 $24,408,548 Building Material & Garden $0 0% 0% 0% $0 $0 Total Retail Goods $128,008,011 27% 9% 30% $85,162,230 $42,845,781 % of Net Sales 67% 33% Source: Economic & Planning Systems H:\123078-Fort Collins On-Call Financial Services\Models\Foothills-Alberta\Sales Flow Model\[123078-SalesFlows-TPI_030613.xlsx]Net New Summary (2) 2.2 Packet Pg. 42 Attachment: EPS memo on Sales per Square Foot Comparables (URA-Foothills Mall) Prepared for: City of Fort Collins 300 LaPorte Avenue Fort Collins, Colorado 80522 Prepared by: Impact DataSource, LLC 4709 Cap Rock Drive Austin, Texas 78735 www.impactdatasource.com A REPORT OF THE ECONOMIC IMPACT OF THE FOOTHILLS MALL RENOVATION IN FORT COLLINS, CO April 30, 2013 ATTACHMENT 3 2.3 Packet Pg. 43 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) TABLE OF CONTENTS Executive Summary………………………………………………...………………………………………………………………3 Project Summary Introduction………………………………………………...………………………………………………………………………5 Description of The Project……………………………………………………………………………………………………5 Summary of the Economic Impact of the Project…………………………………………………………………5 Analysis of Temporary Construction Activity Activities During Renovation and Construction at Foothills Mall………………………………………… 6 Revenues Collected During Renovation and Construction at Foothills Mall…………………………6 Analysis of Worker & New Household Spending Additional Taxable Sales During Operations…………………………………………………………………………7 Additional Sales Tax Collections During Operations………………………………………………………………7 METHODOLOGY Conduct of the Analysis……………………………………………………………………………………………………… 8 Discussion of Economic Impact Calculations…………………………………………………………………………8 Page 2 2.3 Packet Pg. 44 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) EXECUTIVE SUMMARY Project Background Alberta Development Partners plan to significantly renovate the Foothills Mall and develop 460 residential apartment units on the site. The developer plans to invest $318 million in new renovation and construction including soft costs. The project is expected to provide a one‐of‐a‐kind shopping, entertainment and community gathering experience featuring contemporary architecture that honors Fort Collins' vibrant, outdoor‐centric and sustainability‐minded community. The mall will draw shoppers from across northern Colorado and southern Wyoming, resulting in significant fiscal benefits for Fort Collins. Economic Impact The renovation of Foothills Mall and construction of multi‐family residential units will generate temporary economic impacts during construction and on‐going impacts by tenants operating in the renovated mall. The construction activities will generate a one‐time impact for construction workers and businesses in the area. The renovated mall will create on‐going annual economic impacts, employing workers in the community and supporting additional economic activity throughout the region. The one‐time construction activity will support 2,905 workers in the area and support $160.1 million in new earnings for these workers. The renovated mall operations represent the restaurant and retail employment and earnings supported by tenants at the mall. Currently, mall tenants employ 200‐300 workers but employment is trending lower. It is projected that tenants leasing space in the renovated mall will employ a total of 1,200 workers when fully leased. In total, the mall's operations will support 1,434 total workers and $28.4 million in workers' earnings annually. Economic Impact Construction (One‐Time): Total Total Change in Jobs 2,905 Total Change in Earnings $160,096,057 Average Earnings per Job $55,111 Renovated Mall Operations (On‐going)* Total Total Change in Jobs 1,434 Total Change in Earnings $28,375,412 Average Earnings per Job $19,784.84 * Total employment and earnings at the mall during the first year of leased‐up activity. One‐Time Revenues Collected by Fort Collins During Construction/Renovation The Foothills Mall renovation will generate one‐time fiscal impacts for Fort Collins. Specifically, the renovation and construction project will result in sales and use tax collections, capital expansion fees, building permits and plan check fees. The one‐time revenues collected by Fort Collins during construction and renovation related to the Foothills Mall project is summarized below. One‐Time Revenues Collected by Fort Collins During Construction/Renovation Sales and Use Taxes ‐ Construction Materials $4,870,250 Sales and Use Taxes ‐ Construction Worker Spending $197,245 Capital Expansion Fees TBD Building Permits TBD Plan Check Fees TBD Total $5,067,495 Page 3 2.3 Packet Pg. 45 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) EXECUTIVE SUMMARY On‐Going Revenues Collected by Fort Collins as a Result of the Foothills Mall Project Fort Collins has negotiated a development plan that includes revenue sharing between the City and the developer to help finance a portion of the project costs using the incremental real and business personal property tax collections at the site and incremental sales tax collections at the mall over the next 25 years. In addition, the workers employed directly or indirectly by mall tenants as well as new residential households residing in a portion of the 460 residential units will generate additional sales tax revenue for Fort Collins on an on‐going basis. An estimate of the additional sales tax collections generated through worker spending and new household spending is summarized below. On‐Going Revenues Collected by Fort Collins Related to Worker Spending and New Household Spending Sales and Use Taxes ‐ Worker Spending $146,006 Sales and Use Taxes ‐ New Household Spending $75,355 Total $221,362 While the above is a summary of the results of this analysis, details are on the following pages. Page 4 2.3 Packet Pg. 46 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) PROJECT SUMMARY Introduction This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas based economic consulting, research and analysis firm. The report estimates some of the impacts associated with the construction and renovation of the Foothills Mall. The report summarizes the one‐time economic and fiscal benefits related to the construction and renovation activity. In addition, some new on‐going revenues are estimated related to worker spending and new household spending. Description of the Project Alberta Development Partners plan to significantly renovate the Foothills Mall and develop 460 residential apartment units on the site. The developer plans to invest $318 million in new renovation and construction including soft costs. The project is expected to provide a one‐of‐a‐kind shopping, entertainment and community gathering experience featuring contemporary architecture that honors Fort Collins' vibrant, outdoor‐centric and sustainability‐minded community. The mall will draw shoppers from across northern Colorado and southern Wyoming, resulting in significant fiscal benefits for Fort Collins. Fort Collins has negotiated a development plan that includes revenue sharing between the City and the developer to help finance a portion of the project costs using the incremental real and business personal property tax collections at the site and incremental sales tax collections at the mall over the next 25 years. Summary of the Economic Impact of the Project The project will have the following economic impact on the City of Fort Collins area: Annual On‐Going Economic Impact Direct Indirect & Induced Total Total number of permanent direct and indirect jobs to be created 1,200 234 1,434 Salaries to be paid to direct and indirect workers $20,128,536 $8,246,876 $28,375,412 Average Salaries to be paid to direct and indirect workers $16,774 $35,213 $19,785 Number of new residential apartment units to be built in the City as a part of the project 460 0 460 Number of new households who will move to the City (50% of new units) 230 0 230 Number of new residents in the City 575 0 575 Number of new students expected to attend local school district 220 0 220 Summary of Taxable Spending Total One‐Time Taxable Sales During Construction $131,623,250 Annual On‐Going Taxable Sales related to Worker and New Household Spending $5,749,650 How this economic activity translates into additional costs and benefits for local taxing districts is summarized next. Page 5 2.3 Packet Pg. 47 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) ANALYSIS OF TEMPORARY CONSTRUCTION ACTIVITY Activities During Renovation and Construction at Foothills Mall The construction activity at the Foothills Mall will result in purchases subject to the use tax in Fort Collins. The projected use tax collections are summarized below. Construction Purchases Subject to Use Taxes Taxable Purchases Construction Purchases Subject to Use Taxes $126,500,000 Total Construction Expenditures $253,000,000 % Spent on Materials 50% % Purchases Subject to Use Taxes 100% Construction Purchases Subject to Use Tax $126,500,000 In addition, a portion of the wages paid to construction workers will likely be spent in Fort Collins and generate additional sales taxes for the City. Taxable Spending by Construction Workers Taxable Retail Sales Direct and spin‐off construction worker taxable spending $5,123,250 Total Construction Expenditures $253,000,000 % Spent on Labor (Const. Worker Earnings) 50% % Spent on taxable items 27% % Spent within Fort Collins 15% Taxable Spending by Construction Workers $5,123,250 Revenues Collected During Renovation and Construction at Foothills Mall Fort Collins will collect use taxes on construction material purchases and on local taxable spending by construction workers. Also, the construction activity will require capital expansion fees, building permits and plan check fees to be paid to the city. A summary of the one‐time revenues collected by Fort Collins related to the construction and renovation is presented below. One‐Time Revenues Collected by Fort Collins During Construction/Renovation Sales and Use Taxes ‐ Construction Materials $4,870,250 Sales and Use Taxes ‐ Construction Worker Spending $197,245 Capital Expansion Fees TBD Building Permits TBD Plan Check Fees TBD Total $5,067,495 Page 6 2.3 Packet Pg. 48 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) ANALYSIS OF WORKER & NEW HOUSEHOLD SPENDING Additional Taxable Sales During Operations While the city and development district have made assumptions about the taxable sales at the mall, the on‐going activity at the mall will support additional taxable sales in Fort Collins. For example, the direct and spin‐off workers supported by the mall employers will spend a portion of their earnings on taxable goods and services. A portion of this spending will occur in Fort Collins outside of the mall area. Also, the new households to Fort Collins will also result in additional taxable sales. Therefore, the table below summarizes some of the estimated additional taxable sales supported by the mall renovation and residential construction. Additional Annual Taxable Spending Supported by Workers and New Households Taxable Retail Sales Direct and spin‐off worker taxable spending $3,792,374 Total Workers' Earnings $28,375,412 % Spent on taxable items 27% % Spent within Fort Collins 55% % Spent outside of Mall site 90% New Household Spending $1,957,276 Number of new Housing Units 460 % of units occupied by net new households* 50% Average household income in Fort Collins $63,673 % Spent on taxable items 27% % Spent within Fort Collins 55% % Spent outside of Mall site 90% Additional Taxable Retail Sales in Area $5,749,650 * Impact DataSource assumes that 50% of the new residential units will be occupied by new residents to the city and therefore these households will support additional taxable sales. See the explanation detailed in the Methodology Section. In total, workers and new households are projected to support $5.7 million in taxable sales each year after renovation and construction. These taxable sales have thus far not been considered in the analysis of the project and represent taxable sales in existing businesses not located at the mall. Additional Sales Tax Collections During Operations The additional taxable spending by workers and new households will result in tax revenue for Fort Collins. The table below summarizes the annual revenue collected by Fort Collins not related to sales at the Foothills Mall site. On‐Going Revenues Collected by Fort Collins Related to Worker Spending and New Household Spending Sales and Use Taxes ‐ Worker Spending $146,006 Sales and Use Taxes ‐ New Household Spending $75,355 Total $221,362 Page 7 2.3 Packet Pg. 49 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) METHODOLOGY Conduct of the Analysis This analysis was conducted by Impact DataSource using estimates provided to the City of Fort Collins by the firm, local rates and information and assumptions by Impact DataSource. Using this data, the economic impact from the project and some revenues to be collected by Fort Collins were estimated. Discussion of Economic Impact Calculations The economic impact as calculated in this report can be categorized into two main types of impacts. 1. Direct economic impacts are the immediate economic activities generated by the firm or project. These impacts include the employment at the firm and salaries paid to the firm's workers as well as expenditures made by the firm. 2. Indirect and induced economic impacts represent the additional economic activity that is supported by the firm or project. Indirect jobs and salaries are created in new or existing area firms, such as maintenance companies and service firms that may supply goods and services to the firm. In addition, induced jobs and salaries are created in new or existing local businesses, such as retail stores, gas stations, banks, restaurants, and service companies that may supply goods and services to new workers and their families. Note: This report labels the combined indirect and induced impacts as simply "Indirect". To estimate the indirect and induced economic impact of the firm and its employees on the area, regional economic multipliers were used. This economic analysis utilized economic impact multipliers obtained an input/output model produced by from Economic Modeling Specialists Inc. (EMSI). The EMSI multipliers used in this analysis are specific to Larimer County and various industries. Two types of regional economic multipliers were used in this analysis: an employment multiplier and an earnings multiplier. An employment multiplier was used to estimate the number of indirect and induced jobs created and supported in the area. An earnings multiplier was used to estimate the amount of salaries to be paid to workers in these new indirect and induced jobs. The multipliers show the estimated number of indirect and induced jobs created for every one direct job at the firm and the amount of salaries paid to these workers for every dollar paid to a direct worker at the firm. The multipliers used in this analysis are listed below: Industry (NAICS) Earnings Employment Commercial and Institutional Building Construction (236220) 0.33 0.62 New Multifamily Housing Construction (236116) 0.32 0.50 Family Clothing Stores (448140) 0.41 0.18 Department Stores (except Discount Department Stores) (452111) 0.41 0.22 Motion Picture Theaters (except Drive‐Ins) (512131) 0.49 0.18 Full‐Service Restaurants (722110) 0.41 0.22 Limited‐Service Restaurants (722211) 0.40 0.17 Explanation of New Households in Fort Collins Residential impact studies often argue that 100% of newly constructed residential units will be occupied by new‐to‐the‐ area households. This argument is based on the assumption that if local household moves into the newly constructed unit, a household from outside of the area will occupy the unit vacated by the first household. Alternatively, it is argued that it may be that the new home allows the local area to retain a household that would otherwise move out of the area for lack of suitable housing. Opposing this view is the argument that employment drives household formation and the impetus behind new households in the local area is new jobs, not new residential units. Impact DataSource believes that the supply of housing is an important role in household formation and that the attraction of Fort Collins' quality of life supports the assumption that 50% of the new residential units will be occupied by new‐to‐the area households. Page 8 2.3 Packet Pg. 50 Attachment: ImpactDataSource Economic Impact Analysis (URA-Foothills Mall) Triple Bottom Line Analysis Map (TBLAM) Evaluated by: Adapted from the City of Olympia and Evergreen State College Sustainable Action Map (SAM). Economic Notes: Environmental Strengths Limitations Opportunities Threats Project/Decision: Social Strengths Limitations Opportunities Threats Community Municipal Strengths Limitations Opportunities Threats Strengths Limitations Opportunities Threats ATTACHMENT 4 2.4 Packet Pg. 51 2.5 Packet Pg. 52 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 53 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 54 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 55 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 56 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 57 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) 2.5 Packet Pg. 58 Attachment: Economic Advisory Commission minutes, April 17, May 1 and October 16, 2013 (URA-Foothills Mall) - 1 - RESOLUTION NO. 068 OF THE BOARD OF COMMISSIONERS OF THE FORT COLLINS URBAN RENEWAL AUTHORITY APPROVING AN UPDATED REDEVELOPMENT AND REIMBURSEMENT AGREEMENT WITH THE CITY OF FORT COLLINS, WALTON FOOTHILLS HOLDINGS VI, L.L.C., AND THE FOOTHILLS METROPOLITAN DISTRICT REGARDING THE REDEVELOPMENT OF FOOTHILLS MALL WHEREAS, the Board of Commissioners of the Authority (the “Board”) and the City Council have determined that it is in the best interests of the City and its citizens to assist in the redevelopment of the Mall in order to remedy blighted conditions within and around the Mall pursuant to the Urban Renewal Plan, using certain property and sales tax increment revenues in accordance with the Act, together with certain available revenues of the District and the Developer, to provide a catalyst for redevelopment in the Midtown Area, to increase sales tax revenues and job opportunities, and to provide other economic and social benefits to the Midtown Area and to the City and surrounding community; and WHEREAS, on May 8, 2013, the Board of Commissioners of the Authority (the “Board”) adopted Resolution No. 055, approving a Redevelopment and Reimbursement Agreement with the City of Fort Collins, Walton Foothills Holdings VI, L.L.C. (the “Developer”), and the Foothills Metropolitan District (the “District”) regarding the redevelopment of Foothills Mall (the “Agreement”); and WHEREAS, following the adoption of Resolution No. 055, final planning and analysis, and ongoing work to carry out the Foothills Mall redevelopment project (the “Mall Project”) that is the subject matter of the Agreement have resulted in further negotiations between the parties to the Agreement regarding project details and schedule; and WHEREAS, in addition to a change in the total square footage of the buildings to be constructed as part of the Mall Project and an adjustment to the schedule to reflect the delayed start of construction of the Mall Project, details related to the Foothills Activity Center and portions of the Project fronting on College Avenue have been more fully developed and agreed upon by the parties to the Agreement; and WHEREAS, in light of these developments, the parties have negotiated certain modifications to the Agreement; and WHEREAS, these updated terms and conditions are incorporated into the Redevelopment and Reimbursement Agreement attached hereto as Exhibit “A” and incorporated herein by this reference (the “Updated Agreement”); and WHEREAS, the Board has determined that it is in the best interests of the Authority to provide financial assistance to the Mall Project in order to remedy blighted conditions within and around the Mall pursuant to the Midtown Urban Renewal Plan, using certain property and sales Packet Pg. 59 - 2 - tax increment revenues in accordance with the Act, together with certain available revenues of the District and the Developer, to provide a catalyst for redevelopment in the Midtown Urban Renewal Area, to increase sales tax revenues and job opportunities, and to provide other economic and social benefits to the City and surrounding community; and WHEREAS, the recitals described in Resolution No. 055, except as superseded by the terms of this Resolution, are incorporated herein by this reference; and WHEREAS, in light of the foregoing, the Board desires to approve the Updated Agreement, and authorize certain related actions. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE FORT COLLINS URBAN RENEWAL AUTHORITY, as follows: Section 1. Ratification and Approval of Prior Actions. All action heretofore taken (not inconsistent with the provisions of this Resolution) by the Board or the officers of the Board or the Authority named in this Resolution relating to the redevelopment of the Mall Project, the execution and delivery of the Agreement, and the performance of the Authority’s obligations under the Agreement and related documents is hereby ratified, approved and confirmed. Section 2. Finding of Best Interests and Public Purpose. The Authority hereby finds and determines, pursuant to the Constitution, the laws of the State, and in accordance with the foregoing recitals, that adopting this Resolution, providing the specified assistance for the Mall Project, and entering into the Updated Agreement and performing all obligations set forth therein, are necessary, convenient, and in furtherance of the Authority’s purposes, and will serve the important public purposes of remedying blighted conditions within and around the Foothills Mall pursuant to the Midtown Urban Renewal Plan, providing a catalyst for redevelopment in the Midtown Urban Renewal Area, increasing sales tax revenues and job opportunities, and providing other economic and social benefits to the Midtown Urban Renewal Area and surrounding community, and the Board hereby authorizes and approves the same. Section 3. Approval of Updated Agreement. The Updated Agreement, in substantially the form attached hereto as Exhibit “A”, is in all respects approved, authorized and confirmed. Section 4. Authorization to Execute. The Board President is hereby authorized and directed to execute and deliver the Agreement, for and on behalf of the Authority, in substantially the form and with substantially the same content as attached, provided that the approval hereby given to the Updated Agreement includes an approval of such additional details therein, deletions therefrom, or additions thereto as the Authority Executive Director, in consultation with the Authority’s legal counsel, determines to be necessary and appropriate for its completion, or desirable to protect the interests of the Authority. The execution of the Updated Agreement by the Board President shall be conclusive evidence of the approval by the Board of the same in accordance with the terms of this Resolution and the Updated Agreement. Packet Pg. 60 - 3 - Section 5. Direction to Act. The City Clerk, acting as Secretary of the Board, is hereby authorized and directed to attest all signatures and acts of any official of the Authority in connection with the matters authorized by this Resolution. The Board President, the Board Vice President, the Executive Director of the Authority, the Secretary of the Board, and other appropriate officials or employees of the Authority are hereby authorized and directed to execute and deliver for and on behalf of the Authority any and all additional certificates, documents, instruments and other papers, and to perform all other acts that they deem necessary or appropriate, in order to implement and carry out the transactions and other matters authorized by this Resolution. The execution of any instrument by the aforementioned officers or members of the Authority shall be conclusive evidence of the approval by the Authority of such instrument in accordance with the terms of this Resolution and the Updated Agreement. Section 6. Severability. If any section, subsection, paragraph, clause or provision of this Resolution or the Updated Agreement hereby authorized and approved shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution or the Agreement, the intent being that the same are severable. Section 7. Repealer. All prior resolutions, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. Section 8. Effectiveness. This Resolution shall take effect immediately upon its passage. Passed and adopted at a regular meeting of the Board of Commissioners of the Fort Collins Urban Renewal Authority this 14th day of January A.D. 2014. _________________________________________ Vice-Chairperson ATTEST: ________ Secretary Packet Pg. 61 REDEVELOPMENT AND REIMBURSEMENT AGREEMENT THIS REDEVELOPMENT AND REIMBURSEMENT AGREEMENT (the “Agreement”) dated as of January __, 2014, is made by and among the FORT COLLINS URBAN RENEWAL AUTHORITY, a body corporate and politic of the State of Colorado (the “Authority”), WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company (the “Developer”), the CITY OF FORT COLLINS, COLORADO, a municipal corporation (the “City”), and FOOTHILLS METROPOLITAN DISTRICT, a quasi-municipal corporation organized and existing in accordance with Title 32, Article 1, C.R.S. (the “District”). The Authority, the Developer, the City and the District are sometimes collectively called the “Parties,” and individually, a “Party.” RECITALS All capitalized terms used, but not defined, in these Recitals, have the meanings ascribed to them in this Agreement. The Recitals are incorporated to this Agreement as though fully set forth in the body of this Agreement. WHEREAS, Developer or District owns or has the right to construct improvements on the real property described in Exhibit A, which is known as the Foothills Mall (the “Property”) and desires to redevelop the Property. Developer has submitted a proposal to the Authority and the City to redevelop the Property by constructing no fewer than 641,000 square feet of commercial development (which minimum size does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property (the “Project”). WHEREAS, the Authority is carrying out the Midtown Urban Renewal Plan approved by the City Council on September 6, 2011, as amended on May 8, 2013, and as further defined hereinafter (the “Urban Renewal Plan”), which includes the Property, by entering into this Agreement with the City, the District and the Developer to implement the Project in the manner described herein. The District is expected to provide services and facilities to assist the Authority in carrying out the Urban Renewal Plan. WHEREAS, the Authority has selected the Developer for exclusive negotiations based on the proposal submitted to the Authority and pursuant to that certain Agreement to Negotiate, dated as of November 16, 2012, by and between the Authority and Developer (the “Agreement to Negotiate”). WHEREAS, the City has determined that it is in the best interests of the City and its inhabitants to assist in the redevelopment of the Property in order to remedy blighted conditions within and around the Property pursuant to the Urban Renewal Plan, as hereinafter set forth, and to provide a catalyst for development, increase sales tax revenues and job opportunities, and provide other economic and social benefits to the City. WHEREAS, the District was organized by Order and Decree Creating District issued on November 30, 2012, and recorded on January 10, 2013. The City approved the original Service EXHIBIT A TO RESOLUTION 1 Packet Pg. 62 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 2 Plan of the District on September 4, 2012, as amended and restated pursuant to City Council approval on May 8, 2013. WHEREAS, the Parties have agreed to enter into this Agreement for the redevelopment of the Property in accordance with the Urban Renewal Plan, the Act (defined hereinafter), the description of the Project as set forth herein, and the Development Approvals. WHEREAS, the District was organized for the purpose of, inter alia, issuing the District Bonds (defined hereinafter), the proceeds of which are intended to pay or reimburse the costs of the Eligible Improvements and to pay Costs of Issuance (defined hereinafter). NOW THEREFORE, in consideration of the mutual covenants and promises of the Parties contained in this Agreement, and other valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree to the terms and conditions in this Agreement. AGREEMENT 1. DEFINITIONS. In this Agreement, unless a different meaning clearly appears from the context, capitalized terms mean: “Act” means the Colorado Urban Renewal Law, Part 1 of Article 25 of Title 31 of the Colorado Revised Statutes. “Add-On PIF” means the public improvement fee in the amount of 1.00% as set forth in the PIF Covenant, which will be collected in accordance with the terms of the PIF Covenant, and will be imposed on retail sales that are occurring on the Property that are subject to the City’s Sales Tax, subject to the terms and provisions of this Agreement. “Add-On PIF Revenues” means the revenues generated by the Add-On PIF. The full amount of the Add-On PIF will remain pledged to payment of the District Bonds for so long as such District Bonds are outstanding. “Agreement” means this Redevelopment and Reimbursement Agreement, as it may be amended or supplemented in writing. References to sections or exhibits are to this Agreement unless otherwise qualified. All exhibits are incorporated into and made a part of this Agreement. “Agreement to Negotiate” means the Agreement to Negotiate between the Authority and the Developer dated as of November 16, 2012. “Authority” means the Fort Collins Urban Renewal Authority, a body corporate and politic of the State of Colorado which has been duly created, organized, established and authorized by the City to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Act, and its successors and assigns. “Authority Administrative Fee” means a fee up to a maximum of 1.5% of the gross property tax increment revenue received by the Authority from the Larimer County Treasurer each year, which fee includes all amounts required to pay collection, enforcement, disbursement, and 1 Packet Pg. 63 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 3 administrative fees and costs required to carry out the Urban Renewal Plan, including, without limitation, collection and disbursement of the Pledged Property Tax Increment Revenue. “Authority Pledged Revenues” means, collectively, the Pledged Property Tax Increment Revenues and the Pledged Sales Tax Increment Revenues. “Cap Amount” means an amount equal to $53,000,000 (Fifty-Three Million US Dollars), which is the maximum amount of Eligible Costs that shall be paid from the net proceeds of the District Bonds. “City” means the City of Fort Collins, Colorado, a home rule municipal corporation. “City Manager” means the City Manager of the City. “Commence Construction” or “Commencement of Construction” means the commencement by the District or the Developer of actual physical work, including, but not limited to, deconstruction, demolition, site grading, and construction, on the Property as required to carry out the Project. “Complete Construction” or “Completion of Construction” means: (a) With respect to the public improvements, construction acceptance in accordance with the City Requirements, applicable laws, ordinances, and regulations of the City, the District, and any other governmental entity or public utility with jurisdiction, subject to any applicable conditions of maintenance and warranty, including; (b) With respect to any specifically identified portion of the Project, the issuance of a certificate of occupancy by the City so that the portion of the Project described in such certificate may open for permanent occupancy and utilization for its intended purposes; or (c) With respect to the Project, the completion of all Eligible Improvements and the issuance of a certificate of occupancy by the City so that no less than ninety-five percent (95%) of the leasable area within the Project may open for permanent occupancy and utilization for its intended purposes. “Costs of Issuance” means the reasonable and necessary costs incurred in connection with the issuance of the District Bonds, including, without limitation, reserve funds, capitalized interest, underwriter’s compensation, financial consultant fees, fees and expenses of bond counsel, counsel to the underwriter, counsel to the District, fees and third party out-of-pocket expenses of the City, including but not limited to counsel to, and economic analysis and financial consulting services for, the City, fees and third party out-of-pocket expenses of the Authority, including but not limited to counsel to, and economic analysis and financial consulting services for, the Authority, credit enhancement fees and expenses, fees and expenses of the District Bond Trustee, bond registrar, paying agent, transfer agent, remarketing agent and rating agency fees. Costs of Issuance shall be approved by the District’s bond counsel and shall be reasonable and in accordance with market standards. 1 Packet Pg. 64 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 4 “Default” or “Event of Default” means any of the events described in Section 18; provided, however, that such events will not give rise to any remedy until effect has been given to all grace periods, cure periods and periods of enforced delay provided for in this Agreement. “Developer” means Walton Foothills Holdings VI, L.L.C., a Delaware limited liability company and any successors and assigns approved in accordance with this Agreement. “Developer Advances” means, collectively, amounts advanced or incurred by the Developer to pay any Eligible Costs. Developer Advances shall include, without limitation, (a) Eligible Costs paid directly or advanced by the Developer, (b) advances to the District for design and construction by the District of Eligible Improvements, and (c) Authority Reimbursable Costs (as defined in the Agreement to Negotiate) from the Developer to the Authority in compliance with the requirements of the Agreement to Negotiate. All Developer Advances to the District must be made in accordance with the provisions of the Reimbursement and Infrastructure Acquisition Agreement. “Development Approvals” means the regulatory approvals issued by the City for the Project, including the Overall Development Plan (ODP), Project Development Plan (PDP), Final Development Plans (FDPs), Development Agreement or Agreements, Subdivision Plat, and all other plats, plans and requirements included in or incorporated into the City’s approval of the Project under the City Land Use Code. Because multiple FDPs will be submitted and reviewed for up to 3 phases of the Project, with respect to any particular portion of the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for that particular portion of the Project. With respect to the Project, the term “Development Approvals” shall mean all of the applicable approvals set forth in this definition for all phases of the Project. “District” means the Foothills Metropolitan District, formed pursuant to Sections 32-1-101, et seq., C.R.S., and its successors and assigns. “District Administrative Account” means an account established by the Authority into which the Authority shall deposit all of the incremental District Operating Revenue and District Debt Service Mill Levy received by the Authority from time to time pursuant to Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado. “District Bond Documents” means, collectively, the documents pursuant to which the District Bonds are issued. “District Bond Indenture” means any indenture or similar documents pursuant to which the District Bonds are issued. “District Bond Trustee” means the trustee in connection with the issuance of any District Bonds. “District Bonds” means any bonds, certificates of participation, securities or other obligations issued or incurred by the District to finance or refinance the Eligible Costs in accordance with the terms and provisions of this Agreement, including any bonds, debt in the form 1 Packet Pg. 65 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 5 of a loan, certificates of participation, or securities issued or incurred by the District to refund any such Bonds, or any related obligations to reimburse the provider of a guaranty, insurance policy, liquidity instrument or credit enhancement for the District Bonds. Notwithstanding the foregoing or any provision to the contrary contained herein, District Bonds shall not include any obligation by the District to reimburse the Developer for Developer Advances pursuant to reimbursement agreements or similar agreements between the Developer and the District regarding such matters. “District Debt Service Mill Levy” means a property tax levy of fifty (50) mills levied by the District on the taxable property of the District. The District Debt Service Mill Levy rate may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Debt Service Mill Levy is neither diminished nor enhanced as a result of such changes. The District Debt Service Mill Levy shall be imposed only so long as there are outstanding District Bonds. “District Debt Service Mill Levy Revenue” means the revenue generated from the District Debt Service Mill Levy, net of the County Treasurer’s cost of collection. “District Operating Mill Levy” means a property tax imposed by the District in an amount not exceeding ten (10) mills, except as hereinafter provided, separate and apart from the District Debt Service Mill Levy, for the purpose of paying the administrative, operations and maintenance expenses of the District, including all amounts required to be paid to the City for the maintenance of Larimer County Canal No. 2. Notwithstanding the foregoing, the District Operating Mill Levy may be imposed by the District in an amount up to fifteen (15) mills upon the written consent of the City Manager upon receipt of evidence satisfactory to the City Manager that such an increase in the District Operating Mill Levy is necessary for the District to comply with its operation and maintenance obligations under the Service Plan. The District Operating Mill Levy may be adjusted as set forth in the Service Plan to take into account legislative or constitutionally imposed adjustments in assessed values or their method of calculation so that, to the extent possible, the revenue produced by such District Operating Mill Levy is neither diminished nor enhanced as a result of such changes. “District Operating Revenue” means the revenue produced by the District’s Operating Mill Levy and the Specific Ownership Taxes attributable to the District Operating Mill Levy. “District Pledged Revenue” means, collectively, (a) the District Debt Service Mill Levy Revenue, (b) the revenue from the Pledged District Specific Ownership Taxes, and (c) Add-On PIF Revenue. “Effective Date” means the date of this Agreement. “Eligible Costs” means, collectively, the reasonable and customary expenditures for the design and construction of the Eligible Improvements as set forth in Exhibit D, which shall be certified and approved in accordance with Exhibit E. Eligible Costs shall include, without limitation, reimbursement to the Developer for Authority Reimbursable Costs (as defined in the Agreement to Negotiate) made by the Developer to the Authority. Eligible Costs shall be paid from the net proceeds of the Bonds, subject to the Cap Amount. District Bond proceeds shall not 1 Packet Pg. 66 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 6 be used to pay, and Eligible Costs shall not include, any accrued interest on unreimbursed Developer Advances. “Eligible Improvements” means the public improvements described in Exhibit D that are to be acquired, constructed or installed as part of the Project. “Estimated Revenues from Property Taxes” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from property taxes on the Property. “Estimated Revenues from Residential Property” means the amount set forth on Exhibit G hereto, which is the amount of Pledged Revenues estimated to be generated from the residential component of the Property beginning January 1, 2019, assuming that the residential component of the Property is constructed in accordance with the schedule set forth in Section 4.3 hereof. “Exhibits” The following Exhibits are a part of this Agreement: Exhibit A: Legal Description of the Property Exhibit B: Description of TIF Area Exhibit C: Description of the Project Exhibit D: Eligible Costs and Eligible Improvements Exhibit E: Procedure for Documenting, Certifying and Paying Eligible Costs Exhibit F City Specifications for Foothills Activity Center Exhibit G Estimated Revenues from Property Taxes and Estimated Revenues from Residential Property Exhibit H Permitted Uses of Foothills Mall Fund Exhibit I Maximum Annual Net Debt Service on the District Bonds “Financing Plan” means a plan prepared by the Developer and the District for review and approval by the City and the Authority demonstrating that there will be sufficient Pledged Revenues to service the debt service requirements on the District Bonds. Approval of the Financing Plan by the City and the Authority shall be a condition precedent to the issuance of the District Bonds. “Foothills Activity Center” means the Foothills Activity Center to be constructed on the Project in accordance with Section 4.4 hereof. “Foothills Mall Fund” means the fund to be held by the District and applied in accordance with the terms and provisions of this Agreement. 1 Packet Pg. 67 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 7 “Force Majeure” means any delays in or failure of performance by any Party of its obligations under this Agreement as a result of acts of God; fires; floods; earthquake; strikes; labor disputes; regulation or order of civil or military authorities; or other causes, similar or dissimilar, which are beyond the control of such Party. “Larimer County Canal No 2” means that portion of the canal or ditch, owned by The Larimer County Canal No. 2 Irrigation Company, commonly known as the Larimer County Canal No. 2, in the location to which it will be moved as part of the Project, lying between the west boundary of the South College Avenue right-of-way and the west boundary of the McClelland Drive right-of-way, and thence south along and under the west frontage road of College Avenue past the south boundary of the West Monroe Drive right-of-way, and thence continuing due south for an approximate distance of 130+\- feet to where the relocated portion of the ditch intersects the existing Larimer County Canal No. 2 ditch alignment. “Net Debt Service” means the total payments of principal and interest on the District Bonds, less the amounts that are paid from funds held by the District Bond Trustee as capitalized interest and reserve funds, including interest earnings on any such funds. “Original PDP” means the Project Development Plan relating to the Project approved by the City’s Planning and Zoning Board on February 7, 2013. “Party” or “Parties” means one or all of the parties to this Agreement. “PIF Covenant” means a declaration of covenants by Developer imposing and implementing the Add-On PIF within the Property. “Pledged District Specific Ownership Taxes” means the specific ownership tax revenues received by the District in each year pursuant to § 42-3-107, C.R.S. that is attributable to the dollar amount of ad valorem taxes generated from the District Debt Service Mill Levy. “Pledged Property Tax Increment Revenue” means 100% of the annual ad valorem property tax revenue received by the Authority from the Larimer County Treasurer in excess of the amount produced by the levy of those taxing bodies that levy property taxes against the Property Tax Base Amount in the TIF Area in accordance Colorado law, but not including, (a) the District Operating Revenue, (b) the District Debt Service Mill Levy Revenue, (c) the Authority Administrative Fee, (d) mill levy override payments approved by the electors of Poudre School District in 2012 and subsequent years, (e) any offsets collected by the Larimer County Treasurer for return of overpayments or any reserve funds retained by the Authority for such purposes in accordance with Sections 31-25-107(9)(a)(III) and (b) of the Act, and (f) $60,000 each year of such annual revenues. “Pledged Sales Tax Increment Revenues” means 100% of the Sales Tax Increment Revenues received annually by the Authority from the City during the period in which taxes are divided in the TIF Area pursuant to the Act. “Pledged Revenue” means, collectively, the District Pledged Revenue and the Authority Pledged Revenue. 1 Packet Pg. 68 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 8 “Project” means the acquisition, construction and installation of no fewer than 641,000 square feet of commercial development (which minimum does not include the Foothills Activity Center space) and up to 800 multifamily residential units, together with related amenities and uses on the Property, in accordance with the Development Approvals, this Agreement and Exhibit C.. The Project includes off-site improvements provided for and required under this Agreement or the Development Approvals. Notwithstanding the foregoing, however, for purposes of determining whether Construction of the Project has been Completed, the Residential Component of the Project shall be deemed to include 446 multifamily residential units. “Project Fund” means the fund to be created pursuant to the District Bond Indenture into which net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) will be deposited to pay Eligible Costs. “Property” means the real property described in Exhibit A, which is either owned by Developer or on which the Developer otherwise has the right or will have the right to construct the Project. “Property Tax Base Amount” means the amount certified by the Larimer County Assessor as the valuation for assessment of all taxable property with the TIF Area in accordance with Section 31-25-107(9)(a)(I) of the Act. The Property Tax Base Amount and increment value shall be calculated and adjusted from time to time by the Larimer County Assessor in accordance with Colorado law. “Reimbursement and Infrastructure Agreement” means that certain agreement between the District and Developer dated as of April 26, 2013, that requires the District to reimburse the Developer for the Eligible Costs and sets forth the procedures under which Eligible Improvements constructed by the Developer for the benefit of the District may be acquired by the District. “Residential Component of the Project” means the portion of the Project intended to be developed for residential uses. The Residential Portion of the Project will generally occur on the area shown as Blocks 3, 4,5 and 6 on the Original PDP. “Sales Tax” means the municipal sales tax of the City imposed at the rate of 2.25% on sales of goods and services that are subject to municipal sales taxes pursuant to Chapter 25, Article 3 of the Fort Collins Municipal Code. “Sales Tax Base Amount” means the total collection of sales taxes levied at the rate of 2.25% within the TIF Area for the applicable twelve-month period in accordance with Colorado law. “Sales Tax Increment” means Sales Tax Revenues collected by the City in excess of the Sales Tax Base Amount during the period in which taxes are divided in the TIF Area pursuant to the Act. “Sales Tax Revenues” means the funds generated by imposition of the Sales Tax collected within the TIF Area. 1 Packet Pg. 69 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 9 “Service Plan” means the service plan for the District approved by the City on September 4, 2012, as amended and restated. “Special Fund” means the fund defined in Section 107(9)(a)(II) of the Act. “TIF” means tax increment financing to which the tax increment provisions of Section 31-25-107(9) of the Act apply. “TIF Area” means that part of the urban renewal area described in the Urban Renewal Plan as described and depicted in Exhibit B, within which the tax increment provisions of Section 31-25-107(9) of the Act apply. “Underpass” means the pedestrian underpass at the current Larimer County Canal No. 2 ditch alignment under College Avenue for the purpose of connecting the Project to the Mason Corridor and MAX transit facility. “Urban Renewal Plan” means the Midtown Urban Renewal Plan adopted and approved by the City Council on September 6, 2011, as amended on May 8, 2013, and as may hereinafter be amended from time to time; provided, however, that if, prior to June 1, 2014, the City elects to exclude the Property from the Midtown Urban Renewal Plan and adopts a new urban renewal plan for the Property, such new plan shall, upon written notice to all Parties, become the “Urban Renewal Plan” for the purposes of this Agreement as long as: (a) all property included within such new plan is acceptable to the Developer and the District, and (b) such new plan is consistent with the Act and with the terms and conditions of this Agreement. 2. FINANCING AND CONSTRUCTION OF PROJECT. 2.1 Construction of Project. The Developer and/or the District, in accordance with the provisions of this Agreement, shall (i) construct the Project, including without limitation, all Eligible Improvements, (ii) be responsible for compliance in all respects with the Development Approvals, and (iii) be responsible for payment of fees related to redevelopment of the Property and the construction of the Project. The Project may be constructed in phases. 2.2 Financing the Costs of the Project. The Eligible Improvements shall be financed from the net proceeds of the District Bonds, up to the Cap Amount. The remainder of the Project, including the cost of any Eligible Improvements that exceed the Cap Amount, shall be financed by the Developer. The Parties agree that the Urban Renewal Plan provides that one of the methods of financing the Eligible Improvements shall be the use of property tax and sales tax increment financing pursuant to Section 31-25-107(9), C.R.S., as more fully described in the Urban Renewal Plan and that this Agreement implements the tax increment financing provisions of the Urban Renewal Plan. 3. ISSUANCE OF DISTRICT BONDS. Subject to the terms and provisions hereinafter set forth, the District will issue the District Bonds to pay or reimburse the Developer or the District for Eligible Costs, up to the Cap Amount, and to pay the Costs of Issuance related to the District Bonds. The District Bonds shall be issued in one or more series in a combined aggregate principal amount sufficient to generate net proceeds of the District Bonds in the amount of $53,000,000 1 Packet Pg. 70 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 10 (Fifty-Three Million US Dollars) to be deposited in the Project Fund and applied to the payment or reimbursement of Eligible Costs. 3.1 Conditions Precedent to Issuance of District Bonds. The following conditions shall be satisfied on or prior to the issuance of the District Bonds: (a) The Developer and the District shall prepare the Financing Plan and the City Manager and the Executive Director of the Authority shall have approved the Financing Plan. The Financing Plan shall also be in form and substance satisfactory to the District’s bond counsel and the underwriter of the District Bonds. The Financing Plan shall demonstrate that there is expected to be sufficient Pledged Revenues derived from the construction of the Project to pay the debt service requirements on the District Bonds when due. (b) The Developer shall provide to the City Manager evidence satisfactory to the City Manager that the Developer has obtained all equity and private financing necessary to construct the non-residential components of the Project. (c) The Developer shall have obtained executed lease agreements, excluding the existing department store located on Larimer County Parcel Number 9725391002, totaling at least 240,000 square footage of the retail area of the Project with tenants that, in the aggregate, have an average sales per square foot of at least $375 based on average national sales performance, and, except as hereinafter provided, of which at least 120,000 square feet shall be leased to tenants new to the City of Fort Collins. Notwithstanding the foregoing, however, in the event that at least 60,000 of such square footage is leased to tenants that are new to Fort Collins, then this condition shall be deemed satisfied with the prior written consent of the City Manager, which consent shall not be unreasonably withheld, conditioned or delayed, provided that in determining whether to give such consent the City Manager may consider the impact on the proposed financing from a reduced percentage of tenants new to the City. (d) The Developer shall have imposed the Add-On PIF in accordance with Section 4.7 hereof. (e) The Developer shall have obtained the Development Approvals for the Project, as described in this Agreement and in Exhibit C. (f) The City and the Authority shall receive an opinion of the District’s bond counsel that the District Bonds have been validly issued and opining as to the tax-exempt status of the bonds, which opinion shall be addressed to the City and the Authority, or the City and the Authority shall receive a reliance letter from the District’s bond counsel. (g) No event of default hereunder shall have occurred and be continuing hereunder, unless such Event of Default has been cured, remedied or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. 3.2 Provisions to be Included in District Bond Documents. The District Bond Documents shall contain the following provisions: 1 Packet Pg. 71 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 11 (a) The District Bonds shall be payable from the Pledged Revenues in the following order of priority: (i) the District Debt Service Mill Levy Revenues; (ii) the Pledged District Specific Ownership Taxes; (iii) the Pledged Property Tax Increment Revenues; (iv) the Add-On PIF Revenues; and (iii) the Pledged Sales Tax Increment Revenues. (b) After the debt service requirements on the District Bonds have been paid or provided for in each fiscal year, and after all payments have been made to replenish the reserve fund for the District Bonds and to make any payments into any required rebate funds for the District Bonds, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (i) To the extent required by the underwriter of the District Bonds based on market conditions, the District Bond Documents may establish a supplemental reserve fund (the “Supplemental Reserve Fund”) and provide that any excess Pledged Revenue shall be deposited into the Supplemental Reserve Fund to be maintained in an amount that is not more than 10% of the original aggregate principal amount of the District Bonds. The District Bond Trustee shall keep a record of the sources of the Pledged Revenue that are used to fund and maintain the Supplemental Reserve Fund, if any. (ii) After the Supplemental Reserve Fund, if any, has been fully funded, any excess Pledged Revenues shall be applied by the District Bond Trustee as follows: (A) The District, the City and the Authority hereby agree pursuant to Section 31-25-107(11) C.R.S. that any such excess Sales Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the City. The District Bond Documents shall provide that the City is a third-party beneficiary under the District Bond Documents with respect to this provision relating to the requirement of remitting any excess Sales Tax Increment Revenues to the City as set forth above. (B) Any excess Add-On PIF Revenues shall be applied by the District Bond Trustee to prepay principal on the District Bonds upon payment of all scheduled debt service for the year in which said Add-On PIF Revenues were collected. In the event that Add-On PIF Revenues are used to fund or maintain the Supplemental Reserve and are released after full payment of the 1 Packet Pg. 72 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 12 District Bonds, excess Add-On PIF Revenues shall be remitted to the District for deposit in the Foothills Mall Fund. (C) Any excess Pledged Property Tax Increment Revenues shall be released from the lien of the District Bond Documents and remitted to the Authority. (D) Any excess Pledged District Specific Ownership Taxes and District Debt Service Mill Levy Revenues shall be applied by the District Bond Trustee to debt service payments on the District Bonds in the following year. (c) The District Bond Documents shall provide that moneys on deposit in the Supplemental Reserve Fund shall be applied solely to pay the debt service requirements on the District Bonds in the event of an insufficiency of Pledged Revenues to make such payments, provided, however, that moneys on deposit in the reserve fund for the District Bonds shall be applied to the payment of the debt service requirements on the District Bonds prior to applying any funds on deposit in the Supplemental Reserve Fund to such payment. Upon termination of the Supplemental Reserve Fund, the moneys on deposit in the Supplemental Reserve Fund shall be remitted by the District Bond Trustee based on the source of Pledged Revenues used to fund and maintain the Supplemental Reserve Fund in accordance with the provisions set forth in subparagraph (b)(ii) above. (d) The District Bond Documents shall provide that the net proceeds of the Bonds shall be deposited in the Project Fund and requisitioned by the District to pay Eligible Costs as set forth in Exhibit D hereof, with such requisitions to be made substantially in accordance with Exhibit E hereof. The District Bond Documents shall provide that any requisition remitted to the District Bond Trustee shall simultaneously be remitted to the City Manager, or the City Manager’s designee. In the event that the City provides written notice to the Developer and the District that it disputes that all or any portion of the requisition qualifies as an Eligible Cost or otherwise fails to comply with the requisition requirements in Exhibit E, then the City, the Developer and the District agree to act in good faith to attempt to resolve any such dispute. (e) Without the prior written consent of the City Manager, the District Bonds shall mature no later than 25 years after the date of issuance thereof, and shall not contain a pledge of Pledged Property Tax Increment Revenues or Pledged Sales Tax Revenues that extends beyond the final payment of said revenues to the Authority; the total Net Debt Service of the District Bonds shall not exceed $180,000,000, and the maximum annual Net Debt Service on the District Bonds shall not exceed the amounts set forth in Exhibit I hereto. 3.3 Approval by City of District Bond Documents. Prior to the issuance of any District Bonds, including any bonds issued to refund any District Bonds, the District Bond Documents shall have been approved by the City. The City will have ten (10) business days after receipt of such District Bond Documents by the City Attorney and the City’s bond counsel to notify the District in writing if it objects to any provisions set forth in such District Bond Documents, setting 1 Packet Pg. 73 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 13 forth its specific objections. If the City does not object in writing to the District Bond Documents within such ten (10) business day period, then the City will be deemed to have consented to the form and substance of such District Bond Documents. In addition, the District Bond Documents shall provide that any material amendments to the District Bond Documents shall be subject to approval by the City. 3.4 Refunding Bonds. Notwithstanding anything to the contrary contained herein, to the extent that District Bonds are issued to refund outstanding District Bonds, the Authority shall have the right to determine whether, and to what extent, it will pledge the Authority Pledged Revenues to such refunding District Bonds. In the event that all or a portion of the Authority Pledged Revenues are to be pledged to the payment of such refunding District Bonds, as a condition to such pledge, the Authority may in its discretion impose conditions and limitations in any such refunding District Bonds that were not applicable to the District Bonds being refunded. Any such refunding District Bonds that are secured in part by the Authority Pledged Revenues shall also be subject to review and approval by the City Attorney and the City’s bond counsel. 4. OBLIGATIONS OF THE DEVELOPER. 4.1 Construction of Project. As set forth in Section 2.1 hereof, the Developer and/or the District shall construct the Project. The Project shall be constructed substantially in accordance with the Development Approvals and Exhibit C attached hereto. 4.2 Construction of Eligible Improvements. The Developer shall construct, or cause the District to construct, the Eligible Improvements set forth in Exhibit D hereto. Such Eligible Improvements shall be financed with the net proceeds of the Bonds, subject to the Cap Amount, and, if necessary, other financing sources obtained by the Developer. 4.3 Construction of Residential Component of Project; Affordable Housing. The Developer shall Complete Construction of the residential components of the Project, subject to Force Majeure, as follows: (a) on or prior to December 31, 2016, the Developer shall Complete Construction of the first phase of the residential component of the Project consisting of a minimum of 200 units; (b) on or prior to December 31, 2018, the Developer shall Complete Construction of the second phase of the residential component of the Project consisting of at least an additional 246 units. Failure to Complete Construction of the residential components of the Project in accordance with this Section 4.3 shall not be deemed to be an Event of Default under this Agreement, provided, however, that if Construction of the residential components of the Project is not Completed as set forth above, then beginning with the 2020 fiscal year, the Developer shall be obligated to pay in such fiscal year and each fiscal year thereafter, regardless of whether the Developer is the owner of the Property on which the residential component of the Project is to be constructed, an amount equal to 50% of the difference between the Pledged Revenues generated from the residential component of the Project and the Estimated Revenues from the Residential Property, as follows: (i) such payment shall be made to the City to the extent that any Pledged 1 Packet Pg. 74 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 14 Sales Tax Increment Revenues are applied in such fiscal year to the payment of the debt service requirements on the District Bonds; and (ii) to the extent that such payment is not due and owing to the City in any fiscal year, the balance of any such amount to be paid by the Developer in such fiscal year shall be deposited in the Foothills Mall Fund. The Project shall pay any affordable housing fees that may be enacted by the City Council on or before December 1, 2014, as if such fees had been in place and applicable to the Project. Any affordable housing impact fee that may be adopted as part of such requirements shall be paid by the Developer when due for the Project, except that for any portion of the Project developed prior to the imposition of the fee, such fee shall be paid no later than sixty days after adoption. 4.4 Construction and Transfer of Foothills Activity Center. (a) The Developer and/or District, as applicable, shall construct the Foothills Activity Center in substantial conformance with the specifications set forth on Exhibit F (the “City Specifications”). The construction of the Foothills Activity Center shall be completed no later than March 31, 2015. (b) The Developer shall transfer to the City the Foothills Activity Center within thirty (30) days after the occurrence of (i) Completion of Construction of the Foothills Activity Center; (ii) acceptance of the same by the City in writing as consistent with the requirements of this Agreement, (iii) payment by the City of any Excess Costs, as defined below, and (vi) approval by the City Manager and the Developer of the instruments hereinafter described or to be used, in connection with transfer of the Foothills Activity Center as and to the extent said approvals are specifically required in this Section 4.4. (c) The Developer will transfer the Foothills Activity Center and the underlying real estate to the City by a special warranty deed in a form reasonably satisfactory to the City, together with appropriate reciprocal easements and other easements to provide for access to the Foothills Activity Center, as well as for utilities, shared walls and other similar necessary arrangements for use of the property, as a separately platted lot. (d) In lieu of the form of transfer described in subsection (c), the Developer may transfer the Foothills Activity Center to the City as a separate property interest within a common interest community established by declaration of covenant reasonably satisfactory to the City and consistent with Exhibit F, together with such easement and access rights and other appurtenances as the City may reasonably request. The City shall review and respond to a request for approval with reasonable promptness, and shall be obligated to approve said declaration of covenant if: (i) It burdens the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate itself, and (B) that does not unreasonably interfere with, impair or burden the City’s right or ability to operate the Foothills Activity Center (“FAC”) as a public recreation facility with related 1 Packet Pg. 75 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 15 accessory uses and activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement; (ii) It allocates to the Foothills Activity Center only costs for the operation, maintenance, repair and replacement of common areas of and benefitting the building in which the Foothills Activity Center is located and structural elements of such building required for the Foothills Activity Center space, excluding: 1) real property taxes and personal property taxes; 2) operations, maintenance, repair and replacement paid for by the District; and 3) operations, maintenance, repair and replacement of common facilities that are duplicative of facilities provided in the FAC (“Operating Expenses”), allocated fairly to the Foothills Activity Center as a proportion of all space within the building and other buildings within the relevant Operating Expense measurement area, excluding common areas, with the FAC square footage amount deemed for the purpose of this Section to be capped at 18,000 square feet (the “FAC Allocation of Expenses”). The FAC Allocation of Expenses hereunder shall not exceed $2.25 per square foot of the Foothills Activity Center space per year, with no increase in that rate during the first three (3) calendar years following transfer of the Foothills Activity Center to the City. After the end of the third (3 rd ) full calendar year after transfer to the City, the FAC Allocation of Expenses shall not increase by more than three percent (3%) in any calendar year. (e) The City and Developer and/or District, as applicable, will coordinate the construction and tenant finish of the Foothills Activity Center to ensure that it meets the City Specifications; however, in no event shall the total cost (hard costs, soft costs and permit costs) of constructing the Foothills Activity Center in accordance with the City Specifications for the Foothills Activity Center that Developer and/or District, as applicable, is required to expend, exceed $5.1 million. The Developer and/or the District agree to keep the City informed of any potential cost overruns exceeding $5.1 million. In the event that such potential cost overruns are identified, the City shall be responsible for designating, in consultation with the Developer/District, sufficient modifications to the City Specifications to reduce the total costs of the Foothills Activity Center to $5.1 million, or to such other amount as the City may, in its discretion, agree may be incurred. Any such City-approved costs in excess of $5.1 million will either require that the City will pay to the Developer or the District, as the case may be, the difference between the costs of the updated City Specifications and the $5.1 million (“Excess Costs”), within 90 days of written demand by the Developer or District accompanied by reasonable documentation, subject to annual appropriation by the City Council at its sole discretion. (f) The City agrees that the Foothills Activity Center will be subject to any covenants, easements or other documents recorded against the Property as of the date of this Agreement, any other documents, covenants or easements recorded in the normal course of the development of the Project, including a declaration of covenant as described above, and certain use restrictions relating to tenant leases entered into prior to said date of transfer, provided any such covenants, easements or other documents burden the Foothills Activity Center interest only in a manner (A) not inconsistent with the constitutions, statutes, charter and other applicable laws constraining the City’s authority to obligate 1 Packet Pg. 76 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 16 itself, and (B) that does not unreasonably interfere with, impair or burden the City’s right or ability to operate the FAC as a public recreation facility with related accessory uses and activities activities consistent with other recreation facilities operated by the City, or conflict with the terms of this Agreement. Any such documents, covenants or easements shall be subject to the City’s review and approval of the same solely for compliance with the requirements of this Agreement. No covenants, easements or declarations recorded after transfer of the Foothills Activity Center to the City shall be effective as against the City without the City’s express written approval, which shall be subject to the action of the City Council, in its discretion. The City shall review and respond to a request for approval with reasonable promptness. (g) The Developer and/or District agree to cooperate with the City in connection with any applicable procedural requirements of the City related to the construction of the Foothills Activity Center. In connection with design and construction of the Foothills Activity Center, the Developer and/or District shall use good faith efforts to require that all available third-party contractor and material warranties to the extent that they relate to labor or materials supplied for the Foothills Activity Center, extend to the benefit of the City in a form reasonably satisfactory to the City. 4.5 Solar and Other Energy Efficiency Improvements. The Developer and/or the District, as applicable, agree to construct the Project to accommodate the addition of solar panels to the roof tops of the principal non-residential components subsequent to the Completion of Construction of the Project. The City agrees that funds in the Foothills Mall Fund may be applied by the Developer to pay the costs of installing solar panels or other energy efficiency improvements within the Project upon reasonable documentation being provided to the City. Within five (5) years after the issuance of the last Certificate of Occupancy for the non-residential component of the Project, Developer agrees to make application to the City for the addition of one or more solar panels or other energy efficiency improvements to the Project. 4.6 Compliance with Design and Construction Regulations; Payment of Fees and Costs. The design and construction of the Project will comply with all applicable codes and regulations of entities having jurisdiction, including the City Requirements. The Developer and/or the District will pay or cause to be paid all required fees and costs, including those imposed by the City, in connection with the design, construction, applicable warranty requirements, and use of the Project. 4.7 Imposition of Add-On PIF. On or prior to the issuance of the District Bonds, the Developer shall impose the Add-On PIF on retail sales occurring on the Property that are subject to the City’s Sales Tax, provided, however, that in connection with any property that is not owned by the Developer, the Developer shall use its best efforts to impose such Add-On PIF on such retail sales occurring on any such Property, subject to the consent of the owners of such Property. All property under the Developer’s control as of the Effective Date shall be made subject to the Add-On PIF, and any property within the Project acquired by the Developer subsequent to the Effective Date shall become subject to this requirement. The Add-On PIF shall be imposed only for so long as the District Bonds are outstanding. So long as the District Bonds are outstanding, the Developer covenants to cause all Add-On PIF Revenues to be remitted to the District Bond Trustee and such Add-On PIF Revenues shall be pledged to the payment of the District Bonds. To the 1 Packet Pg. 77 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 17 extent that the Add-On PIF is imposed prior to the initial issuance of the District Bonds, the Developer covenants to cause all Add-On PIF Revenues to be held in a trust account and remitted to the District Bond Trustee upon the initial issuance of the District Bonds. The Developer agrees that it shall be responsible for enforcing the placard requirements and for the implementation of the Add-On PIF with the retailers in the Project. 4.8 Access to Property. Developer will permit representatives of the City and the Authority access to the Property and the Project at reasonable times during regular business hours and with prior notice as necessary for the purpose of carrying out or determining compliance with the Agreement, the Urban Renewal Plan, or any City code or ordinance, including, without limitation, inspection of any work being conducted. No compensation will be payable for such access. The City and the Authority, as applicable, agree to restore the Property and any component of the Project to its condition prior to any tests or inspections made by the City and further agree that they shall be responsible for any damage that results from the City or the Authority, as applicable, accessing the Property pursuant to their respective rights under this Agreement, to the extent permitted by law and, in the case of the City, subject to annual appropriation of funds by the City Council, in its sole discretion. 4.9 Class A Shopping Center. The Developer represents and warrants that, following Completion of Construction of the Project, the physical condition of the Project will be maintained as a “Class A” shopping center, in a manner consistent with comparable shopping centers in the State of Colorado. 4.10 Maintenance of Project. The Developer and/or District shall be responsible for the maintenance of the Project, except for the Foothills Activity Center, the Underpass and the Larimer County Canal No. 2 (which shall be maintained by the City), provided that the District shall provide funding for the City to maintain Larimer County Canal No. 2. The City shall pay for the costs of maintaining the Foothills Activity Center and the Underpass. The costs incurred by the Developer and/or the District in maintaining the Project shall be paid from the District Operating Revenue. The City’s obligations shall be subject to the annual appropriation of funds by the City Council, in its sole discretion. 4.11 Appeal of Property Taxes. In the event that the Developer seeks a reduction in all or any portion of the Property’s real property tax assessed valuation or seeks an abatement of real property taxes on all or any portion of the Property, and any such reduction or abatement results in the Pledged Revenues generated from the real property taxes on the Property being less than the Estimated Revenues from Property Taxes such that the Pledged Sales Tax Increment Revenues that would otherwise be remitted to the City are needed to pay the debt service requirements on the District Bonds, then beginning with the fiscal year in which such reduction or abatement becomes effective, the Developer shall be obligated to pay to the City in such fiscal year and each fiscal year thereafter where such reduction or abatement results in the property taxes on the Property being less than the Estimated Revenues from Property Taxes, an amount equal to 50% of the amount of Pledged Sales Tax Increment Revenues applied to the payment of the District Bonds in such fiscal year. Notwithstanding the foregoing, in any fiscal year that the Pledged Sales Tax Increment Revenues are not applied to the payment of the debt service requirements on the District Bonds, no payments shall be due and owing from the Developer to the City pursuant to this Section 4.11. In the event that the Developer who sought the reduction or abatement sells all or a portion of the 1 Packet Pg. 78 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 18 Property, the subsequent owner shall be obligated to make any payments to the City required by this Section 4.11. A memorandum of this covenant satisfactory to the City and the Authority shall be recorded with the Larimer County Clerk and Recorder's Office. The Developer shall provide written notice to the City and to the Authority of any requested reduction in any portion of the Property’s real property tax assessed valuation or abatement of any portion of the Property’s real property taxes. 4.12 Notification of Sale of Property. The Developer shall provide written notice to the City and the Authority of any sale of all or any portion of the Property. 4.13 Payment of City and URA Expenses. The Developer agrees that it shall pay or reimburse the City and the Authority for all fees, costs and out-of-pocket third party expenses incurred by them in connection with developing, negotiating and preparing this Agreement and related documents and issuing the District Bonds, including without limitation, all legal fees and out-of-pocket third party expenses, provided that, to the extent that such fees and expenses qualify as Costs of Issuance, such fees and expenses may be paid from the proceeds of the District Bonds. In the event that the District Bonds are not issued on or prior to March 31, 2014, the Developer shall pay or reimburse the City and the Authority for such fees and expenses no later than April 15, 2014. In addition, to the extent that the District’s Bond Counsel determines that not all such fees and expenses qualify as Costs of Issuance hereunder, then the Developer shall pay or reimburse the City and the Authority for any such fees and expenses not paid from proceeds of the District Bonds as Costs of Issuance. Upon satisfaction of the reimbursement obligation pursuant to this Section, the Agreement to Negotiate shall be deemed to be terminated and to have no further force or effect. 5. THE DISTRICT. 5.1 Compliance with Service Plan and Applicable Law. At all times the District will comply with the requirements of the Service Plan as it may be amended from time to time. To the extent authorized by its Service Plan, the District may design, construct, finance, own, acquire, maintain, and operate Eligible Improvements in accordance with all applicable laws, ordinances, standards, policies, and specifications of the State of Colorado, the City, and any other entity with jurisdiction. 5.2 District Bonds. Subject to the terms and provisions of this Agreement, the District shall issue the District Bonds within ninety (90) days of the satisfaction of the conditions precedent set forth in Section 3.1 hereof. Net proceeds of the District Bonds in the amount of $53,000,000 (Fifty-Three Million US Dollars) shall be deposited to the Project Fund and used to pay or reimburse the Developer for Eligible Costs, as further set forth herein and in the District Bond Documents. The District agrees to irrevocably pledge the District Pledged Revenue to the payment of such District Bonds. The District Bonds shall be issued in compliance with Section 3 hereof. 5.3 District Pledged Revenue. The District covenants to impose the District Debt Service Mill Levy so that such District Debt Service Mill Levy will be in effect no later than January 1, 2015, and the District covenants to continue to impose the District Debt Service Mill Levy for so long as any District Bonds remain outstanding. The District further covenants that so 1 Packet Pg. 79 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 19 long as any District Bonds remain outstanding, that the District will remit all District Pledged Revenues to the District Bond Trustee for such outstanding District Bonds. Notwithstanding expiration of the time or times that the Pledged Property Tax Increment Revenue may be collected pursuant to the Act, the District agrees that the full amount of the District Debt Service Mill Levy shall at all times remain pledged to the payment of any outstanding Bonds to the extent required by the District Bond Documents or to the payment of any outstanding District Bonds to the extent required by the District Bond Documents. In the event that the District Pledged Revenues are imposed and collected by the District after all outstanding District Bonds have been paid or defeased, the District shall thereafter deposit all District Pledged Revenues in the Foothills Mall Fund. 5.4 District Operating Revenue; Maintenance Expenses. The District will use the District Operating Revenue to pay its normal and reasonable operating and maintenance expenses, to pay the City for the maintenance of Larimer County Canal No. 2, and for any other lawful purpose. The District covenants that, upon the written request of the City, it shall use District Operating Revenues to pay all costs incurred by the City in maintaining Larimer County Canal No. 2. 5.5 Reimbursement and Infrastructure Agreement. The District will acquire certain tracts of the Property and/or easements as necessary, as designated in the Development Approvals, from Developer (the “District Property”) and will manage the District Property in accordance with the Service Plan. 5.6 Foothills Mall Fund. The District covenants to deposit any Add-On PIF Revenues released from the lien of the District Bond Documents and remitted by the District Bond Trustee to the District pursuant to Section 3.2 hereof into the Foothills Mall Fund. Without the prior written consent of the City Manager, the District shall apply or disburse moneys on deposit in the Foothills Mall Fund only in accordance with Exhibit H. The Parties acknowledge and agree that any expenditure of funds on deposit in the Foothills Mall Fund shall be constrained by and must be in compliance with applicable State and federal law governing the use of such funds, which, in part, will be governed by the source of such funds. In addition, the Parties acknowledge that the District may only undertake activities and expend funds for purposes authorized by the Special District Act and the approved Service Plan of the District. The District shall provide the City with all documentation relating to the application of moneys on deposit in the Foothills Mall Fund. 5.7 No Impairment. The District will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive, apply and pledge District Pledged Revenue to payment of the District Bonds. 6. THE AUTHORITY. 6.1 Authority Pledged Revenues. The Authority covenants and agrees that it will pledge the Authority Pledged Revenues to the payment of the District Bonds in accordance with the terms and provisions of this Agreement. The Authority agrees to establish the Special Fund in accordance with the provisions of the Act and deposit the Authority Pledged Revenues into the Special Fund upon receipt. All moneys on deposit in the Special Fund, and any other Pledged Property Tax Increment Revenues or Pledged Sales Tax Increment Revenues received by the 1 Packet Pg. 80 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 20 Authority, will be remitted to the District Bond Trustee in accordance with the terms and provisions of the District Bond Indenture so long as any District Bonds remain outstanding. 6.2 District Debt Service Mill Levy and District Operating Revenue. The Authority hereby irrevocably pledges any amounts received from the District Debt Service Mill Levy and the District Operating Revenue to the District. The District Debt Service Mill Levy and the District Operating Revenue, when and as received by the Authority, will be subject to the lien of such pledge without any physical delivery, filing, or further act. The Authority will deposit into the District Administrative Account any and all of the District Debt Service Mill Levy and/or District Operating Revenue received by the Authority from time to time in accordance with Section 31-25-107(9)(a)(II) of the Act and the rules and regulations of the Property Tax Administrator of the State of Colorado from the levy of the District on taxable property within the TIF Area. The Authority will transfer all of the revenue in the District Administrative Account to the District on or before the 20 th day of each month. The obligation of the Authority to make deposits in the District Administrative Account and to transfer such revenue to the District shall expire when the Authority’s right to receive such revenue expires pursuant to the Act. The District shall use the District Operating Revenue to pay its normal and reasonable administrative, operating and maintenance expenses. The District shall pledge the District Debt Service Mill Levy Revenue to payment of the District Bonds. 6.3 Multi-Fiscal Year Obligation. The Parties acknowledge that, according to the decision of the Colorado Court of Appeals in Olson v. City of Golden, 53 P.3d 747 (2002), an urban renewal authority is not a local government and therefore is not subject to the provisions of Article X, Section 20 of the Colorado Constitution. Accordingly, the Authority’s obligation to remit the Authority Pledged Revenue to the District Bond Trustee in accordance with the provisions of this agreement does not require electoral authorization and is not subject to annual appropriation. 6.4 No Impairment. The Authority will not enter into any agreement or transaction that impairs the rights of the Parties, including, without limitation, the right to receive and apply Authority Pledged Revenue in accordance with the terms and provisions of this Agreement. 6.5 Cooperation with District and Developer. The Authority agrees to cooperate in a reasonable manner to assist the District in issuing District Bonds and to pledge the Authority Pledged Revenue to the payment of such District Bonds in accordance with the provisions of this Agreement and the District Bond Documents. 7. THE CITY. 7.1 Collection of Authority Pledged Revenue. The City agrees that is will not amend or modify the Urban Renewal Plan as it relates to this Agreement without the consent of all of the other Parties. 7.2 Underpass. The City agrees to accept ownership of the Underpass from the Developer or the District upon Completion of Construction of the Underpass in accordance with this Agreement. 1 Packet Pg. 81 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 21 8. PAYMENT OR REIMBURSEMENT OF ELIGIBLE COSTS. The Developer or District, as applicable, will be paid or reimbursed for Eligible Costs from the net proceeds of the District Bonds on deposit in the Project Fund upon compliance with the requisition process set forth in the District Bond Documents, which shall substantially comply with the requirements set forth in Exhibit E hereto. Such payment or reimbursement of Eligible Costs shall also comply with the Reimbursement and Infrastructure Agreement between the Developer and the District. Cost savings in the line items listed in Exhibit D may be allocated to cost overruns in other line items only in accordance with the provisions set forth in Exhibit D. 9. BOOKS AND ACCOUNTS; FINANCIAL STATEMENTS. The Authority and District will keep proper and current itemized records, books, and accounts in which complete and accurate entries will be made of the receipt and use of all amounts of revenue received from any and all sources and such other calculations required by this Agreement, the District Bond Documents, and any applicable law or regulation. The Authority and the District will prepare after the close of each fiscal year, a complete financial statement prepared in accordance with generally accepted accounting principles accepted in the United States of America for such year in reasonable detail covering the above information, and if required by statute, certified by a public accountant, and will furnish a copy of such statement to the other Parties within two hundred and ten (210) days after the close of each fiscal year of the Authority and the District or upon such earlier date as may be required by the District Bond Documents. 9.1 Inspection of Records. All books, records and reports (except those allowed or required by applicable law to be kept confidential) in the possession of the City, the Authority, and the District, including, without limitation, those relating to the Pledged Revenue, the Authority Administration Fee, Eligible Improvements, Eligible Costs, District Pledged Revenue, District Operating Revenue, District Bonds will at all reasonable times be open to inspection by such accountants or other agents as the respective Parties may from time to time designate. 10. INSURANCE. At all times prior to Completion of Construction of the Project, the District and the Developer, within ten (10) days after request by the City or the Authority, will provide the City or the Authority, as the case may be, with proof of payment of premiums and certificates of insurance showing that the District and the Developer are carrying, or causing prime contractors to carry, builder's risk insurance (if appropriate), commercial general liability, automobile, and worker's compensation insurance policies in commercially reasonable amounts and coverages approved by the City Manager or the Executive Director of the Authority. Such policies of insurance shall be placed with financially sound and reputable insurers. 11. INDEMNIFICATION. For each Eligible Improvement, from Commencement of Construction through Completion of Construction, and for any action arising during that time period, Developer agrees to indemnify, defend and hold harmless the City and the Authority, its officers, agents and employees, from and against all liability, claims, demands, and expenses, including fines imposed by any applicable state or federal regulatory agency, court costs and attorney fees, on account of any injury, loss, or damage, which arise out of or are in any manner connected with any of the work to be performed by Developer, any subcontractor of Developer, or any officer, employee, agent, successor or assign of Developer under this Agreement, if such injury, loss, or damage is caused in whole or in part by, the negligent act or omission, error, professional error, mistake, accident, or other fault of Developer, any subcontractor of Developer, 1 Packet Pg. 82 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 22 or any officer, employee, agent, successor or assign of Developer, but excluding any injuries, losses or damages which are due to the gross negligence, breach of contract or willful misconduct of the City or the Authority, as the case may be. 12. REPRESENTATIONS, WARRANTIES AND COVENANTS. 12.1 Representations and Warranties by the Authority. The Authority represents and warrants as follows: (a) The Authority is a body corporate and politic of the State of Colorado, duly organized under the Act, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations. (b) The Authority knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the Authority or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the Authority or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the Authority is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the Authority. (d) The Authority Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the Authority will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of any District Bonds. (e) This Agreement constitutes a valid and binding obligation of the Authority, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.2 Representations and Warranties by the District. The District represents and warrants as follows: (a) The District is a quasi-municipal corporation and political subdivision of the State of Colorado, organized and existing in accordance with Title 32, Article 1, C.R.S., and has the legal capacity and the authority to enter into and perform its obligations under this Agreement and the documents to be executed and delivered pursuant hereto. (b) The execution and delivery of this Agreement and such documents and the performance and observance of their terms, conditions and obligations have been duly and validly authorized by all necessary action on its part, and such documents and such performance and observance are valid and binding upon the District. 1 Packet Pg. 83 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 23 (c) The execution and delivery of this Agreement and the documents required and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the District or to the District’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the District is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the District. (d) The District knows of no litigation, proceeding, initiative, referendum, or investigation or threat of any of the same contesting the powers of the Authority, the District or any of its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (e) The District Pledged Revenue is not subject to any other or prior pledge or encumbrance, and the District will not pledge or encumber it except as specified herein or as may be provided in the District Bond Documents or the documents related to the issuance of the District Bonds. (f) This Agreement constitutes a valid and binding obligation of the District, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 12.3 Representations, Warranties and Covenants by the Developer. Developer represents and warrants as follows: (a) Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and in good standing and authorized to do business in the State of Colorado and has the power and the authority to enter into and perform in a timely manner its obligations under this Agreement. (b) The execution and delivery of this Agreement have been duly and validly authorized by all necessary action on its part to make this Agreement and are valid and binding upon Developer. (c) The execution and delivery of this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to Developer or to Developer’s governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which Developer is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of Developer. (d) Developer knows of no litigation, proceeding, initiative, referendum, or investigation or threat or any of the same contesting the powers of the Developer or any of its principals or officials with respect to this Agreement that has not been disclosed in writing to the other Parties. (e) Developer agrees that it shall enforce the imposition and collection of the Add-On PIF and the remittance of the Add-On PIF to the District Bond Trustee. 1 Packet Pg. 84 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 24 (f) Developer covenants and agrees that it shall complete the Project in strict conformance with the terms of this Agreement, and Exhibit C, including but not limited to high quality architectural and landscape design exceeding the City of Fort Collins Land Use Code minimum standards and consistent in character with the approved Project Development Plan dated February 7, 2013, and the environmental sustainability measures set forth in Exhibit C, except as approved in writing by the City Manager. (g) Except with regard to the signature pages from ARC, as defined below, in escrow with Fidelity National Title Company (“Fidelity”) are: (i) a Termination and Relocation Agreement between the Developer and arc Thrift Stores (“ARC”), (ii) an Estoppel Agreement between the Developer, ARC, Crown Financial, LLC (“Crown”) and Larimer Park Associates (“LPA”), (iii) an Escrow Agreement, between the Developer, ARC and Fidelity (collectively the “ARC Escrow Documents”), (iv) assignments between Crown and the Developer and LPA and the Developer, and (v) funds in an amount sufficient to cover the payment obligations to Crown and LPA pursuant to the separate assignment agreements with Crown and LPA and the escrow deposit required under the Escrow Agreement. Provided ARC has delivered fully executed copies of the ARC Escrow Documents with instructions to permit the completion of the escrow as hereinafter described, the Developer covenants and agrees that on or before Noon on January 15, 2014, the Developer shall deliver confirmation to Fidelity to complete the escrow so that fully-executed copies of the ARC Escrow Documents are delivered to the applicable parties and funding related to the same occurs in accordance with each applicable document. 12.4 Representations and Warranties by the City. The City represents and warrants as follows: (a) The City is a body corporate and politic and a home rule municipality of the State of Colorado, and has the power to enter into and has taken all actions to date required to authorize this Agreement and to carry out its obligations under this Agreement. (b) The City knows of no litigation, proceeding, initiative, referendum, investigation or threat of any of the same contesting the powers of the City or its officials with respect to this Agreement that has not been disclosed in writing to the Parties. (c) The execution and delivery of this Agreement and the documents required hereunder and the consummation of the transactions contemplated by this Agreement will not (a) conflict with or contravene any law, order, rule or regulation applicable to the City or to its governing documents, (b) result in the breach of any of the terms or provisions or constitute a default under any agreement or other instrument to which the City is a party or by which it may be bound or affected, or (c) permit any party to terminate any such agreement or instruments or to accelerate the maturity of any indebtedness or other obligation of the City. (d) This Agreement constitutes a valid and binding obligation of the City, enforceable according to its terms, except to the extent limited by bankruptcy, insolvency and other laws of general application affecting creditors’ rights and by equitable principles, whether considered at law or in equity. 1 Packet Pg. 85 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 25 13. TERM. The term of this Agreement is the period commencing on the Effective Date and terminating on the later of: (i) the date of payment in full of the District Bonds, or (ii) thirty years from the Effective Date; provided, however, that the Authority’s obligation to remit the Authority Pledged Revenue to the District Bond Trustee shall terminate upon the expiration of the time period that the Authority is authorized pursuant to the Act to receive the Authority Pledged Revenue, and provided, further, that the following provisions, without limitation, shall continue beyond the term of this Agreement: (A) the District’s and Developer’s obligation to operate and maintain the Project in accordance with the standards set forth herein, (B) the District’s obligation to reimburse the City for the costs of maintaining Larimer County Canal No. 2, (C) the limitation on the imposition of the Add-on PIF for only so long as any District Bonds are outstanding without the written consent of the City, (D) the Developer’s indemnification obligations under Section 11 hereof, (E) any rights and remedies that a Party has for an Event of Default hereunder, and (F) any rights that a Party has to inspect books and records as set forth in Section 9 hereof. 14. CONFLICTS OF INTEREST. None of the following will have any personal interest, direct or indirect, in this Agreement: a member of the governing body of the Authority or the City, an employee of the Authority or of the City who exercises responsibility concerning the Urban Renewal Plan, or an individual or firm retained by the City or the Authority who has performed consulting services to the Authority in connection with the Urban Renewal Plan, this Agreement, or the Authority Financing. None of the above persons or entities will participate in any decision relating to the Agreement that affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 15. ANTIDISCRIMINATION. Developer, for itself and its successors and assigns, agrees that in the construction of the Eligible Improvements and in the use and occupancy of the Property and the Eligible Improvements, Developer will not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, sexual preference, disability, marital status, ancestry, or national origin. 16. NOTICES. Any notice required or permitted by this Agreement will be in writing and will be deemed to have been sufficiently given for all purposes if delivered in person, by prepaid overnight express mail or overnight courier service, by certified mail or registered mail, postage prepaid return receipt requested, addressed to the Party to whom such notice is to be given at the address set forth on the signature page below or at such other or additional addresses as may be furnished in writing to the other Parties. Additionally, the Parties agree to provide concurrent notice via electronic mail. 17. DELAYS; FORCE MAJEURE. Subject to the following provisions, time is of the essence. Any delays in or failure of performance by any Party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires, floods, earthquake, strikes, labor disputes, regulation or order of civil or military authorities, or other causes, similar or dissimilar, which are beyond the control of such Party. 1 Packet Pg. 86 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 26 18. EVENTS OF DEFAULT. The following events shall constitute an Event of Default under this Agreement: (a) Failure by the Authority to pledge the Authority Pledged Revenue to any outstanding District Bonds in accordance with the District Bond Documents or failure to remit any such Authority Pledged Revenues within five (5) business days of the date they are required to be remitted; (b) Failure by the District to impose the District Debt Service Mill Levy or to remit the District Pledged Revenues within five (5) business days of the date they are required to be remitted; (c) Any representation or warranty made by any Party in this Agreement proves to have been untrue or incomplete in any material respect when made and which untruth or incompletion would have a material adverse effect upon any other Party; (d) Any Party fails in the performance of any other covenant in this Agreement and such default continues for thirty (30) days after written notice specifying such default and requiring the same to be remedied is given by a non-defaulting Party to the defaulting Party. If such default is not of a type which can be cured within such thirty (30) day period and the defaulting Party gives written notice to the non-defaulting Party or Parties within such thirty (30) day period that it is actively and diligently pursuing such cure, the defaulting Party shall have a reasonable period of time given the nature of the default following the end of such thirty (30) day period to cure such default, provided that such defaulting Party is at all times within such additional time period actively and diligently pursuing such cure in good faith; (e) The Developer fails in the timely performance of its obligations under Section 12.3(g). 19. REMEDIES. To the extent that an Event of Default has occurred and is continuing hereunder, and District Bonds have not yet been issued, no District Bonds shall be issued until such Event of Default has been cured, or remedied, or waived, or a remedy has been agreed upon by the Parties which will become effective with the passage of time. Upon the occurrence and continuation of an Event of Default, the non-defaulting Party’s remedies will be limited to the right to enforce the defaulting Party’s obligations by an action for injunction, specific performance, or other appropriate equitable remedy or for mandamus, or by an action to collect and enforce payment of sums owing hereunder, and no other remedy, and no Party will be entitled to or claim damages for an Event of Default by the defaulting Party, including, without limitation, lost profits, economic damages, or actual, direct, incidental, consequential, punitive or exemplary damages. In the event of any litigation or other proceeding to enforce any of the terms, covenants or conditions of this Agreement, the prevailing party in such litigation or other proceeding will receive, as part of its judgment or award, its reasonable attorneys’ fees and costs. The occurrence and continuation of an Event of Default will not affect the obligation of the Authority or the District to collect and remit Pledged Revenues or the obligation of the Authority 1 Packet Pg. 87 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 27 to remit the District Debt Service Mill Levy Revenue or the District Operating Revenue to the District in accordance with the terms and provisions of this Agreement. 20. TERMINATION. Upon the occurrence of any of the following events, this Agreement may be terminated in accordance with the provisions hereinafter set forth: (a) In the event that the District Bonds are not issued on or prior to June 30, 2014, then any Party shall have the option to terminate this Agreement. (b) In the event that the District Bonds have not been issued and the Developer or the District have not Commenced Construction of any portion of the Project on or prior to March 1, 2014, then any Party shall have the option to terminate this Agreement. In order to terminate this Agreement, a Party shall provide written notice of such termination to the other Parties. Such termination shall be effective thirty (30) days after the date of such notice unless prior to such time, the Parties are able to negotiate in good faith to reach an agreement to avoid such termination. Upon such termination, this Agreement shall be null and void and of no effect, and no action, claim or demand may be based on any term or provision of this Agreement. In addition the Parties agree to execute a mutual release or other instruments reasonably required to effectuate and give notice of such termination. In the event that this agreement is terminated pursuant to this Section 20, the Developer agrees that it shall continue to be obligated to pay or reimburse the Authority for Authority Reimbursable Costs in accordance with the Agreement to Negotiate and shall continue to be obligated to pay or reimburse the City and the Authority for its costs, fees and expenses as set forth in Section 4.11 hereof. 21. NONLIABILITY OF OFFICIALS, AGENTS, MEMBERS, AND EMPLOYEES. Except for willful or wanton actions, no trustee, board member, commissioner, official, employee, consultant, manager, member, shareholder, attorney or agent of any Party, nor any lender to any Party or to the Project, will be personally liable under the Agreement or in the event of any default or for any amount that may become due to any Party. 22. ASSIGNMENT. Except for a District Bond Trustee in connection with the issuance of the District Bonds, this Agreement will not be assigned in whole or in part by any Party without the prior written consent of the other Parties; provided, however, the following assignments and transfers will not require any such consent: (a) Developer may assign all or a portion of this Agreement to the District; (b) subject to written notice to the City and the Authority from Developer containing the name and address of the lender or other party, Developer may pledge, collaterally assign or otherwise encumber all or any part of its rights under this Agreement, including its right to receive any payment or reimbursement, to any lender or other party that provides acquisition, construction, working capital, tenant improvement or other financing to Developer in connection with development of the Property and/or construction of the Eligible Improvements; and (c) on and after Completion of Construction of the Project and subject to written notice to the City and the Authority, the Developer may assign all or any part of its rights under this Agreement to any purchaser of all or any portion of the Project. On and after Completion of Construction of the Project and in the event that the Developer sells all or a portion 1 Packet Pg. 88 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 28 of the Project to a purchaser, and such purchaser accepts all or a part of the Developer’s obligations hereunder, then Developer shall be released from all of its obligations hereunder that have been assumed or accepted by such purchaser, provided, however, that no such release shall be effective until the City and the Authority have received written confirmation that such purchaser has assumed or accepted any such obligations hereunder. The Authority recognizes that Developer may form, together with investors, a separate, special purpose entity to develop, own and/or operate all or a portion of the Property or of the Eligible Improvements to be constructed thereon and that one or more assignments of all or a portion of this Agreement may be required in connection with such activities and such transfer(s) will not require any consent by the Parties. Except as otherwise specifically set forth in Section 4.11 hereof, no covenants or obligations of the Developer or the District hereunder shall run with the land. 23. COOPERATION REGARDING DEFENSE. In the event of any litigation or other legal challenge involving this Agreement, the District Bonds, the validity of the Urban Renewal Plan, the District, or any other material part or provision of this Agreement or the ability of any Party to enter into this Agreement, the Parties will cooperate and jointly defend against such action or challenge, to the extent permitted by law. 24. SECTION CAPTIONS. The captions of the sections are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit, or describe the scope or intent of this Agreement. 1 Packet Pg. 89 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 29 25. ADDITIONAL DOCUMENTS OR ACTION. 25.1 The Parties agree to execute any additional documents or take any additional action, including but not limited to estoppel documents requested or required by third parties, including without limitation, lenders, tenants or potential purchasers, that is necessary to carry out this Agreement or is reasonably requested by any Party to confirm or clarify the intent of the provisions of this Agreement and to effectuate the agreements and the intent. Notwithstanding the foregoing, however, no Party shall be obligated to execute any additional document or take any additional action unless such document or action is reasonably acceptable to such Party. 25.2 If all or any portion of this Agreement, or other agreements approved in connection with this Agreement are asserted or determined to be invalid, illegal or are otherwise precluded, the Parties, within the scope of their powers and duties, will cooperate in the joint defense of such documents and, if such defense is unsuccessful, the Parties will use reasonable, diligent good faith efforts to amend, reform or replace such precluded items to assure, to the extent legally permissible, that each Party substantially receives the benefits that it would have received under this Agreement. 25.3 At the time of issuance of the District Bonds, each of the Authority and the City shall deliver an opinion of counsel addressed to the District, or with a reliance letter delivered to the District, with respect to this Agreement and the Urban Renewal Plan, which opinions shall state in substance that the Agreement and the Urban Renewal Plan have been duly authorized, executed, and delivered by the Authority and the City, as applicable, constitute valid and binding agreements of the Authority and the City, as applicable, and are enforceable according to their terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.4 At the time of issuance of the District Bonds, the District shall deliver an opinion of counsel addressed to the City and the Authority, or with a reliance letter delivered to the City and the Authority, with respect to this Agreement, which opinion shall state in substance that the Agreement has been duly authorized, executed, and delivered by the District, constitutes a valid and binding agreement of the District, and is enforceable according to its terms, subject to any applicable bankruptcy, reorganization, insolvency, moratorium, or other law affecting the enforcement of creditors rights generally and subject to the application of general principles of equity. 25.5 The City Manager shall have the authority to act on behalf of the City under this Agreement and the Executive Director shall have the authority to act on behalf of the Authority under this Agreement. 26. AMENDMENT. This Agreement may be amended only by an instrument in writing signed by the Parties. 27. WAIVER OF BREACH. A waiver by any Party to this Agreement of the breach of any term or provision of this Agreement must be in writing and will not operate or be construed as a waiver of any subsequent breach by any Party. 1 Packet Pg. 90 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 30 28. GOVERNING LAW. The laws of the State of Colorado govern this Agreement. The District Court of Larimer County will be the exclusive venue for any litigation. 29. BINDING EFFECT. This Agreement will inure to the benefit of and be binding upon the Parties and their respective legal representatives, successors, heirs, and assigns, provided that nothing in this paragraph permits the assignment of this Agreement except as set forth in Section 22. 30. EXECUTION IN COUNTERPARTS. This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which will constitute but one and the same instrument. 31. LIMITED THIRD-PARTY BENEFICIARIES. Except for the District Bond Trustee for any District Bonds, direct lenders to the District that have been assigned rights hereunder in accordance with Section 22, or any provider of credit enhancement for the District Bonds, this Agreement is not intended and shall not be deemed to confer any rights on any person or entity not named as a Party to this Agreement. 32. NO PRESUMPTION. The Parties and their attorneys have had a full opportunity to review and participate in the drafting of the final form of this Agreement. Accordingly, this Agreement will be construed without regard to any presumption or other rule of construction against the Party causing the Agreement to be drafted. 33. SEVERABILITY. If any provision of this Agreement as applied to any Party or to any circumstance is adjudged by a court to be void or unenforceable, the same will in no way affect any other provision of this Agreement, the application of any such provision in any other circumstances or the validity, or enforceability of the Agreement as a whole. 34. DAYS. If the day for any performance or event provided for herein is a Saturday, a Sunday, a day on which national banks are not open for the regular transactions of business, or a legal holiday pursuant to Section 24-11-101(1), C.R.S., such day will be extended until the next day on which such banks and state offices are open for the transaction of business. 35. GOOD FAITH OF PARTIES. In the performance of this Agreement or in considering any requested approval, consent, acceptance, or extension of time, the Parties agree that each will act in good faith and will not act unreasonably, arbitrarily, capriciously, or unreasonably withhold, condition, or delay any approval, acceptance, or extension of time required or requested pursuant to this Agreement. 36. PARTIES NOT PARTNERS. Notwithstanding any language in this Agreement or any other agreement, representation, or warranty to the contrary, the Parties will not be deemed to be partners or joint venturers, and no Party is responsible for any debt or liability of any other Party. 37. NO WAIVER OF IMMUNITY. Nothing contained in this Agreement constitutes a waiver of sovereign immunity or governmental immunity by any Party under applicable state law. 1 Packet Pg. 91 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 31 IN WITNESS WHEREOF, this Agreement is executed by the Parties as of January __, 2014. FORT COLLINS URBAN RENEWAL AUTHORITY _____________________________________ ATTEST: Gerry Horak, Vice Chairperson _____________________________ Darin Atteberry, Executive Director Notice Address: Fort Collins Urban Renewal Authority 300 LaPorte Avenue P.O. Box 580 Fort Collins, CO 80522 Attention: Darin Atteberry, Executive Director Email: DATTEBERRY@fcgov.com 1 Packet Pg. 92 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 32 CITY OF FORT COLLINS, COLORADO By: Gerry Horak, Mayor Pro Tem (SEAL) Attest: _______________________ Wanda Nelson, City Clerk APPROVED AS TO FORM _______________________ Steve Roy, City Attorney Notice Address: City of Fort Collins 300 LaPorte Avenue P.O. Box 580 Fort Collins, Colorado 80522 Attention: Steve Roy, Esq., City Attorney Email: SROY@fcgov.com 1 Packet Pg. 93 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 33 FOOTHILLS METROPOLITAN DISTRICT _________________________________ ATTEST: ________________________, President _____________________________ Secretary Notice Address: c/o White, Bear and Ankele, P.C. The Streets at Southglenn 2154 E.Commons Avenue, Suite 2000 Centennial, CO 80122 Attention: Kristen Bear Email: kbear@wbapc.com 1 Packet Pg. 94 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) 34 WALTON FOOTHILLS HOLDINGS VI, L.L.C., a Delaware limited liability company By: Foothills Alberta Management, LLC, a Colorado limited liability company Its: Authorized Agent By: ____________________________ Donald G. Provost Its: Manager Notice Address: Walton Foothills Holdings VI, L.L.C. 5750 DTC Pkwy, Suite 210 Greenwood Village, CO 80111 Attention: Donald G. Provost Email: dgp@albdev.com With a copy to: Brownstein Hyatt Farber Schreck, LLP 410 Seventeenth Street, Suite 2200 Denver, CO 80202 Attention: Carolynne C. White, Esq. Email: cwhite@bhfs.com 1 Packet Pg. 95 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Foothills Mall: PARCEL I - FEE SIMPLE: Tract 2, The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL II - FEE SIMPLE: Tract 3, The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL III - FEE SIMPLE: Lot #1 of Replat of Tracts F, G and J and Vacated Service Road, Southmoor Village Fifth Filing, City of Fort Collins, Colorado, a municipal corporation, according to the replat filed December 13, 1973, except that portion conveyed to the City of Fort Collins, for public use by Deed of Dedication recorded April 21, 1989, as Reception No. 890178208, more particularly described as follows: A part of Lot 1 of the Replat of Tracts F, G and J and Vacated Service Road, Southmoor Village, Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at a point which bears South 00°12' East 105.36 feet from the Northeast corner of said Lot 1, and runs thence South 00°12' East 137.44 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 17.77 feet, the long chord of which bears South 33°43'30" West 16.75 feet; Thence along the arc of a 360.77 foot radius curve to the left a distance of 146.61 feet, the long chord of which bears South 56°01'30" West 145.60 feet; Thence North 44°23' East 85.72 feet; thence along the arc of a 243.83 foot radius curve to the left a distance of 189.80 feet, the long chord of which bears North 22°05' East 185.04 feet to the Point of Beginning. PARCEL IV - FEE SIMPLE: A part of Tract T and U and a part of the vacated frontage road adjacent to said Tract U, Southmoor Village Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at a point on the West line of said Tract T which bears South 01°57' East 7.19 feet and again South 12°17'30" West 180.10 feet from the Northwest corner of said Tract T, and run thence North 89°45'30" East 243.55 feet to a point on the Northerly line of East Monroe Drive; Thence along said Northerly right-of-way line, South 51°45' West 231.73 feet and again along the arc of a 193.41 foot radius curve to the right a distance of 127.73 feet, the long chord of which bears South 70°40'06" West 125.42 feet and again South 89°35'15" West 137.00 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 23.56 feet, the long chord of which bears North 1 Packet Pg. 96 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) A1 - 2 45°24'45" West 21.21 feet; Thence North 00°24'45" West 169.17 feet along the East line of South College Avenue; Thence North 89°45'30" East, 210.10 feet to the point of beginning. Also: A part of Tract T of Southmoor Village, Fifth Filing which begins at the Northwest corner of said Tract T and run thence North 89°45'30" East 227.00 feet; Thence South 74°54' East 170.06 feet; Thence South 00°14'30" East 24.45 feet to a point on the North line of Monroe Drive; Thence along said North line along the arc of a 301.32 foot radius curve to the left a distance of 124.25 feet, the long chord of which bears South 63°33'47" West 123.37 feet, and again South 51°45' West 95.97 feet; Thence South 89°45'30" West 243.55 feet; Thence North 12°17'30" East 180.10 feet; Thence North 01°57' West 7.19 feet to the point of beginning: AND a part of Tract U of Southmoor Village, Fifth Filing, and a part of the vacated frontage road adjacent to said Tract U which begins at the Northeast corner of said Tract U and run thence South 01°57' East 7.19 feet; Thence South 12°17'30" West 180.10 feet; Thence South 89°45'30" West 210.10 feet to a point on the East right-of-way line of South College Avenue; Thence North 00°24'45" West 183.00 feet; Thence North 89°45'30" East 249.52 feet to the point of beginning; City of Fort Collins, County of Larimer, State of Colorado. EXCEPT that portion described in Partial Release recorded August 19, 1988 as Reception No. 88039190. The above described Parcel IV is also known as: A part of Tract T, Tract U and the vacated frontage road adjacent to the West side of Tract U, all in Southmoor Village, Fifth Filing, City of Fort Collins, County of Larimer, State of Colorado, which begins at the Northwest corner of said Tract T and runs thence North 89°45'30" East 225.25 feet; Thence along the arc of a 140.00 foot radius curve to the right a distance of 61.50 feet, the long chord of which bears South 12°49'33" East 61.00 feet; Thence South 00°14'30" East 97.00 feet; Thence South 51°45' West 274.70 feet; Thence along the arc of a 193.41 foot radius curve to the right a distance of 127.73 feet, the long chord of which bears South 70°40'06" West 125.42 feet; Thence South 89°35'15" West 137.00 feet; Thence along the arc of a 15.00 foot radius curve to the right a distance of 23.56 feet, the long chord of which bears North 45°24'45" West 21.21 feet; Thence North 00°24'45" West 352.17 feet; Thence North 89°45'30" East 249.52 feet to the Point of Beginning. PARCEL V - FEE SIMPLE: Tract A, The Foothills Fashion Mall Foley's Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL VI - FEE SIMPLE: Tract 1 and Tract 7 of The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. 1 Packet Pg. 97 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) A1 - 3 PARCEL VII - FEE SIMPLE: Tract 10 of The Foothills Fashion Mall Expansion, City of Fort Collins, County of Larimer, State of Colorado. PARCEL VIII - FEE SIMPLE: Tract E, Southmoor Village, Fifth Filing, together with a tract of land beginning at the Southwest corner of Tract E of Southmoor Village Fifth Filing and runs: Thence South 89°45'30" West, 50.00 feet; Thence North 00°24'45" West, 414.93 feet; Thence North 89°35'15" East, 50.00 feet; Thence South 00°24'45" East, 415.08 feet to the beginning, Larimer County, Colorado. PARCEL IX - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Easement Agreement recorded June 23, 1972 in Book 1509 at Page 306, Amended Agreement recorded June 23, 1972 in Book 1509 at Page 316, Amended Construction, Operation Reciprocal Easement Agreement recorded June 23, 1972 in Book 1509 at Page 201, Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded May 31, 1979, in Book 1956 at Page 796, Amendment No. 1 to Restatement of Amended Construction, Operation and Reciprocal Easement Agreement, recorded September 27, 1988 at Reception No. 88042996, and Amendment No. 2 to Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded September 7, 1999 at Reception No. 99079223, Assignment and Assumption of Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded December 19, 2003 at Reception No. 20030158946, and Assignment and Assumption of Restatement of Amended Construction, Operation and Reciprocal Easement Agreement recorded January 30, 2004 at Reception No. 2004009265. PARCEL X - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Cross-Easement Agreement recorded September 7, 1988 at Reception No. 88042989, Grant of Easement recorded September 7, 1988 at Reception No. 88042997 and Grant of Easement recorded January 26, 1993 at Reception No. 93005028. PARCEL XI - EASEMENTS: Together with those rights and easements constituting rights in real property created, defined and limited by that certain Easement Agreement recorded April 24, 1997 at Reception No. 97025069. 1 Packet Pg. 98 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) A1 - 4 Macy's: Tract "B" of The Foothills Fashion Mall Foley's Expansion, located in the Southwest Quarter of Section 25, Township 7 North, Range 69 West of the 6th Principal Meridian, City of Fort Collins, County of Larimer, State of Colorado, being more particularly described as follows: Considering the North line of said Tract "B" as bearing North 89°47'08" East with all bearings contained herein relative thereto: Beginning at the Northwest corner of said Tract "B"; thence along said North line, North 89°47'08" East, 147.00 feet to the Northwest corner of Tract "A" of said The Foothills Fashion Mall Foley's Expansion; thence along the West and Southerly lines of said Tract "A" by the following four (4) courses and distances, South 00°12'52" East, 180.00 feet; thence North 89°47'08" East 714.79 feet; thence North 00°12'52" West,1 28.00 feet; thence North 89°47'08" East, 132.28 feet to a point on the West right-of-way line of Stanford Road, said point being on a non-tangent curve concave to the Northwest having a central angle of 14°33'25", a radius of 1319.21 feet and a long chord which bears South 09°19'18" West, 334.27 feet; thence along the arc of said curve 335.17 feet; thence South 16°36'00" West, 93.03 feet to a point being on a non tangent curve concave to the Southwest having a central angle of 89°58'58", a radius of 15.00 feet and a long chord which bears North 28°24'00" West, 21.21 feet; thence along the arc of said curve 23.56 feet; thence North 73°24'00" West, 242.72 feet; thence South 00°14;39: East, 306.31 feet; thence South 89°45'30" West, 329.50 feet; thence South 44°45'30" West, 98.72 feet; thence North 45°14'30" West, 48.00 feet; thence South 44°45'30" West, 93.53 feet; thence North 45°14'30" West, 151.44 feet; thence South 44°45'30" West, 47.26 feet; thence North 00°14'30" West, 332.20 feet; thence North 89°47'00" East, 99.70 feet; thence North 00°13'00" West, 280.13 feet to the Point of Beginning. Sears: Tract 8, The Foothills Fashion Mall Expansion to the city of Fort Collins, County of Larimer, State of Colorado Christy Sports: Parcel One: Tract "D" Southmoor Village Fifth Filing AND the following described portion of the vacated frontage road vacated by Ordinance No. 98 as recorded in Book 1580 at page 897, which begins at the Southwest corner of said Tract "D" and run thence N 00°00'45" West 143.71 feet along the West line of said Tract D; thence S 44°59'15" West 70.71 feet; thence S 00°00'45" East 93.71 feet; thence N 89°59'15" East 50.00 feet to the Point of Beginning, together with the following described easement: 1 Packet Pg. 99 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) A1 - 5 Parcel Two: (easement) A portion of Tract 8, Foothills Fashion Mall Expansion, formerly known as a part of Tract "C" of Southmoor Village, Fifth Filing, in the City of Fort Collins, which begins at the Northeast corner of Tract "D" of said Southmoor Village, Fifth Filing, and run thence S 00°00'45" East 158.71 feet; thence S 89°59'15" West 158.71 feet; thence S 00°00'45" East 50.00 feet; thence N 89°59'15" East 185.00 feet; thence N 13°44 East 130.45 feet; thence along the Arc of a 200 foot radius curve to the left a distance of 55.72 feet; thence along the arc of a 35-foot radius curve to the right a distance of 31.81 feet; thence along the Southerly line of Foothills Parkway, on the arc of a 359.23 foot radius curve to the right a distance of 43.81 feet, and again along the Southerly line of Foothills Parkway South 89°59'15" West 29.29 feet to the Point of Beginning. Subject to the terms, agreements, provisions, conditions and obligations as contained in Easement Agreement recorded December 11, 1972, in Book 1532 at Page 904 and Assignment recorded January 8, 1973, in Book 1536 at Page 448. 1 Packet Pg. 100 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT B DESCRIPTION OF THE FOOTHILLS TAX INCREMENT FINANCING DISTRICT A TRACT OF LAND LOCATED IN THE SOUTHWEST QUARTER OF SECTION 25 AND THE SOUTHEAST QUARTER OF SECTION 26, TOWNSHIP 7 NORTH, RANGE 69 WEST OF THE SIXTH P.M.; CITY OF FORT COLLINS, COUNTY OF LARIMER, STATE OF COLORADO; BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE WEST QUARTER CORNER OF SAID SECTION 25, AND CONSIDERING THE WEST LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 25 AS HAVING AN ASSUMED BEARING OF S00°04’53”W, SAID LINE BEING MONUMENTED ON ITS NORTH END BY A 3" ALUMINUM CAP STAMPED LS 20123, AND ON ITS SOUTH END BY A 2-1/2" ALUMINUM CAP STAMPED LS 14823, WITH ALL BEARINGS CONTAINED HEREIN RELATIVE THERETO; THENCE ALONG THE NORTHERLY BOUNDARY OF LOT 1 OF THE “REPLAT OF TRACTS F, G, AND J, AND VACATED SERVICE ROAD, SOUTHMOOR VILLAGE, FIFTH FILING” AND THE WESTERLY EXTENSION THEREOF, N89°52'45"E, A DISTANCE OF 314.48 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF REMINGTON STREET; THENCE CONTINUING ALONG SAID NORTHERLY BOUNDARY THE FOLLOWING FIVE (5) COURSES: 1) ALONG THE WESTERLY RIGHT OF WAY LINE OF REMINGTON STREET, S00°05'37"W, A DISTANCE OF 50.00 FEET; 2) ALONG THE SOUTHERLY RIGHT OF WAY LINE OF REMINGTON STREET, N89°52'45"E, A DISTANCE OF 60.00 FEET; 3) S51°41'04"E, A DISTANCE OF 145.40 FEET; 4) S89°35'23"E, A DISTANCE OF 138.50 FEET; 5) N00°05'37"E, A DISTANCE OF 141.63 FEET; THENCE CONTINUING ALONG SAID NORTHERLY BOUNDARY AND ITS EASTERLY EXTENSION, N89°52'45"E, A DISTANCE OF 357.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF MATHEWS STREET, SAID POINT ALSO BEING THE NORTHWEST CORNER OF TRACT K, SOUTHMOOR VILLAGE, FIFTH FILING; THENCE ALONG THE WESTERLY, SOUTHERLY, AND EASTERLY BOUNDARIES OF SAID TRACT K THE FOLLOWING FIVE (5) COURSES: 1) ALONG SAID EASTERLY RIGHT OF WAY LINE OF MATHEWS STREET, S00°14'56"E, A DISTANCE OF 215.33 FEET; 2) 23.98 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 91°36'53", AND A CHORD WHICH BEARS S46°03'22"E A DISTANCE OF 21.51 FEET; 1 Packet Pg. 101 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) B - 2 3) 11.02 FEET ALONG THE ARC OF A REVERSE CURVE, HAVING A RADIUS OF 360.77 FEET, A CENTRAL ANGLE OF 01°45'00", AND A CHORD WHICH BEARS N89°00'07"E A DISTANCE OF 11.02 FEET; 4) N89°52'37"E, A DISTANCE OF 173.52 FEET; 5) N00°07'23"W, A DISTANCE OF 230.12 FEET TO THE NORTHWEST CORNER OF TRACT B OF THE FOOTHILLS FASHION MALL FOLEY’S EXPANSION; THENCE ALONG THE NORTHERLY BOUNDARY OF TRACTS B AND A OF SAID FOOTHILLS FASHION MALL FOLEY’S EXPANSION, N89°52'46"E, A DISTANCE OF 996.10 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF STANFORD ROAD; THENCE ALONG SAID WESTERLY RIGHT OF WAY LINE THE FOLLOWING SEVEN (7) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF TRACT B OF SAID FOOTHILLS FASHION MALL FOLEY’S EXPANSION, 387.18 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 1,319.30 FEET, A CENTRAL ANGLE OF 16°48'53", AND A CHORD WHICH BEARS S08°17'12"W A DISTANCE OF 385.79 FEET; 2) CONTINUING ALONG SAID EASTERLY BOUNDARY, S16°41'39"W, A DISTANCE OF 93.03 FEET; 3) ALONG THE EASTERLY BOUNDARY OF THE FOOTHILLS FASHION MALL EXPANSION, S16°41'36"W, A DISTANCE OF 482.09 FEET; 4) CONTINUING ALONG SAID EASTERLY BOUNDARY, 327.62 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 1,114.57 FEET, A CENTRAL ANGLE OF 16°50'30", AND A CHORD WHICH BEARS S08°16'21"W A DISTANCE OF 326.44 FEET; 5) CONTINUING ALONG SAID EASTERLY BOUNDARY, S00°08'53"E, A DISTANCE OF 170.00 FEET; 6) CONTINUING ALONG SAID EASTERLY BOUNDARY, S05°51'32"E, A DISTANCE OF 110.54 FEET; 7) CONTINUING ALONG SAID EASTERLY BOUNDARY AND ITS SOUTHERLY EXTENSION, S00°08'53"E, A DISTANCE OF 451.00 FEET TO A POINT ON THE SOUTHERLY BOUNDARY OF THAT TRACT OF LAND DESCRIBED IN THE SPECIAL WARRANTY DEED RECORDED OCTOBER 30, 2012 AT RECEPTION NO. 20120076539 IN THE OFFICE OF THE LARIMER COUNTY CLERK AND RECORDER; THENCE ALONG THE SOUTHERLY BOUNDARY OF THE TRACTS DESCRIBED IN THE DEEDS RECORDED AT RECEPTION NO. 20120076539, RECEPTION NO. 20050022855, AND RECEPTION NO. 2001099396, THE FOLLOWING SEVEN (7) COURSES: 1 Packet Pg. 102 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) B - 3 1) 23.56 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS N45°08'53"W A DISTANCE OF 21.21 FEET; 2) S89°51'07"W, A DISTANCE OF 214.00 FEET; 3) 312.91 FEET ALONG THE ARC OF A TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 398.41 FEET, A CENTRAL ANGLE OF 44°59'59", AND A CHORD WHICH BEARS N67°38'53"W A DISTANCE OF 304.93 FEET; 4) N45°08'54"W, A DISTANCE OF 129.24 FEET; 5) 275.94 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 351.34 FEET, A CENTRAL ANGLE OF 45°00'00", AND A CHORD WHICH BEARS N67°38'54"W A DISTANCE OF 268.90 FEET; 6) S89°51'06"W, A DISTANCE OF 199.36 FEET; 7) 23.56 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS S44°51'06"W A DISTANCE OF 21.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF JOHN F. KENNEDY PARKWAY; THENCE S89°51'06"W, A DISTANCE OF 66.00 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF JOHN F. KENNEDY PARKWAY; THENCE 23.56 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS N45°08'54"W A DISTANCE OF 21.21 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF EAST MONROE DRIVE; THENCE ALONG SAID SOUTHERLY RIGHT OF WAY LINE THE FOLLOWING FIVE (5) COURSES: 1) S89°51'06"W, A DISTANCE OF 12.16 FEET; 2) 146.82 FEET ALONG THE ARC OF A TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 221.32 FEET, A CENTRAL ANGLE OF 38°00'29", AND A CHORD WHICH BEARS S70°50'52"W A DISTANCE OF 144.14 FEET; 3) S51°50'37"W, A DISTANCE OF 327.70 FEET; 4) 179.17 FEET ALONG THE ARC OF A TANGENT CURVE TO THE RIGHT, HAVING A RADIUS OF 273.41 FEET, A CENTRAL ANGLE OF 37°32'46", AND A CHORD WHICH BEARS S70°37'00"W A DISTANCE OF 175.98 FEET; 5) S89°23'22"W, A DISTANCE OF 138.44 FEET; THENCE 23.56 FEET ALONG THE ARC OF CURVE TO THE LEFT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 90°00'00", AND A CHORD WHICH BEARS S44°23'23"W A DISTANCE OF 21.21 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE; 1 Packet Pg. 103 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) B - 4 THENCE ALONG SAID EASTERLY RIGHT OF WAY LINE THE FOLLOWING TWO (2) COURSES: 1) ALONG THE WESTERLY BOUNDARY OF STRACHAN SUBDIVISION, SECOND FILING, S00°19'07"E, A DISTANCE OF 576.93 FEET; 2) CONTINUING ALONG SAID WESTERLY BOUNDARY, S45°28'37"E, A DISTANCE OF 44.78 FEET TO A POINT ON THE NORTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AS SHOWN ON THE PLAT OF SAID STRACHAN SUBDIVISION, SECOND FILING; THENCE S03°26'10"W, A DISTANCE OF 105.31 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AS SHOWN ON THE FIRST REPLAT OF 1ST CHOICE BANK OF FORT COLLINS; THENCE N88°14'59"W, A DISTANCE OF 154.42 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF HORSETOOTH ROAD AND THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE REPLAT OF LOTS 1, 2, 3 & 4 – CREGER PLAZA SUBDIVISION; THENCE N00°32'51"W, A DISTANCE OF 100.00 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE PLAT OF MATTERHORN P.U.D.; THENCE ALONG THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE THE FOLLOWING TEN (10) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF LOT 1, MATTERHORN P.U.D., N44°33'53"E, A DISTANCE OF 9.22 FEET; 2) ALONG THE EASTERLY BOUNDARY OF LOTS 1 AND 2, MATTERHORN P.U.D., N00°19'07"W, A DISTANCE OF 503.93 FEET; 3) ALONG THE NORTHERLY BOUNDARY OF LOT 2, MATTERHORN P.U.D., S53°56'23"W, A DISTANCE OF 44.81 FEET; 4) ALONG THE EASTERLY BOUNDARY OF LOTS 2, 3, 4, 5 AND 11 OF SOUTH MESA SUBDIVISION AND THE SOUTHERLY EXTENSION THEREOF, N00°19'07"W, A DISTANCE OF 561.00 FEET; 5) N89°51'53"E, A DISTANCE OF 10.71 FEET; 6) N09°43'23"E, A DISTANCE OF 22.91 FEET; 7) 29.36 FEET ALONG THE ARC OF A NON-TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 167.50 FEET, A CENTRAL ANGLE OF 10°02'32", AND A CHORD WHICH BEARS N04°42'09"E A DISTANCE OF 29.32 FEET; 8) N00°19'07"W, A DISTANCE OF 198.22 FEET; 9) S89°58'15"W, A DISTANCE OF 7.27 FEET TO THE SOUTHEAST CORNER OF LOT B, VILLA P.U.D.; 10) ALONG THE EASTERLY BOUNDARY OF SAID LOT B, N00°19'07"W, A DISTANCE OF 226.70 FEET TO A POINT ON THE SOUTHERLY BOUNDARY OF TRACT A, RICHIE’S EXPRESS CARWASH SUBDIVISION; THENCE ALONG SAID SOUTHERLY BOUNDARY OF TRACT A, AND ALONG THE SOUTHERLY BOUNDARY OF TRACT A, MOURNING SUBDIVISION, N89°59'07"W, A DISTANCE OF 665.15 FEET TO A POINT ON THE EASTERLY RIGHT OF WAY LINE OF MCCLELLAND DRIVE AS SHOWN ON THE PLAT OF SAID MOURNING SUBDIVISION; THENCE ALONG SAID EASTERLY RIGHT OF WAY LINE, N00°39'53"E, A DISTANCE OF 20.17 FEET; THENCE 23.39 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, HAVING A RADIUS OF 15.00 FEET, A CENTRAL ANGLE OF 89°21'00", AND A CHORD WHICH BEARS N45°20'23"E A 1 Packet Pg. 104 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) B - 5 DISTANCE OF 21.09 FEET TO A POINT ON THE SOUTHERLY RIGHT OF WAY LINE OF WEST FOOTHILLS PARKWAY AS SHOWN ON SAID MOURNING SUBDIVISION PLAT; THENCE ALONG SAID SOUTHERLY RIGHT OF WAY LINE, S89°59'07"E, A DISTANCE OF 213.00 FEET; THENCE CONTINUING ALONG SAID SOUTHERLY RIGHT OF WAY LINE, 69.10 FEET ALONG THE ARC OF A CURVE TO THE LEFT, HAVING A RADIUS OF 160.00 FEET, A CENTRAL ANGLE OF 24°44'46", AND A CHORD WHICH BEARS N77°38'30"E A DISTANCE OF 68.57 FEET TO THE WESTERLY BOUNDARY OF LOT 1, RICHIE’S EXPRESS CARWASH SUBDIVISION; THENCE ALONG SAID WESTERLY BOUNDARY, S00°04'53"W, A DISTANCE OF 14.69 FEET; THENCE ALONG THE SOUTHERLY BOUNDARY OF SAID LOT 1, S89°59'07"E, A DISTANCE OF 407.26 FEET TO A POINT ON THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE; THENCE ALONG THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE THE FOLLOWING FOUR (4) COURSES: 1) ALONG THE EASTERLY BOUNDARY OF SAID LOT 1, N00°19'07"W, A DISTANCE OF 78.17 FEET; 2) CONTINUING ALONG SAID EASTERLY BOUNDARY, N00°04'53"E, A DISTANCE OF 86.83 FEET; 3) ALONG THE NORTHERLY BOUNDARY OF SAID LOT 1, N89°59'07"W, A DISTANCE OF 37.50 FEET TO THE SOUTHEAST CORNER OF LOT 3, MOURNING SUBDIVISION; 4) N00°04'53"E, A DISTANCE OF 870.84 FEET (BEING THE WESTERLY RIGHT OF WAY LINE OF SOUTH COLLEGE AVENUE AS SHOWN ON THE MOURNING SUBDIVISION, THE POUDRE VALLEY MOTORS SUBDIVISION, AND THE REPLAT OF THE SWALLOW SUBDIVISION); THENCE S89°57'07"E, A DISTANCE OF 100.00 FEET TO THE POINT OF BEGINNING. CONTAINING 89.729 ACRES MORE OR LESS AND BEING SUBJECT TO ALL EASEMENTS AND RIGHTS-OF-WAY OF RECORD OR THAT NOW EXIST ON THE GROUND. I HEREBY STATE THAT THE ABOVE DESCRIPTION WAS PREPARED BY ME AND IS TRUE AND CORRECT TO THE BEST OF MY PROFESSIONAL KNOWLEDGE, BELIEF, AND OPINION. THE ABOVE DESCRIBED TRACT IS BASED UPON PREVIOUSLY RECORDED PLATS AND DEEDS AND NOT UPON AN ACTUAL FIELD SURVEY. JOHN STEVEN VON NIEDA, COLORADO P.L.S. 31169 FOR AND ON BEHALF OF THE CITY OF FORT COLLINS P.O. BOX 580, FORT COLLINS, CO 80522 1 Packet Pg. 105 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT C DESCRIPTION OF THE PROJECT The Project is a mixed-use redevelopment of the existing Foothills Fashion Mall, which will include a commercial/retail component, a commercial parking structure and up to 800 multi-family dwelling units on the Property. In its final form, the Project may include additional land adjoining the Property. The Project will deliver the following components: 1. Demolish portions of the existing Foothills Fashion Mall and renovate the original structure into a one-level, enclosed shopping mall with no less than 358,003square feet of habitable space. Any portions of the Mall which are removed shall be processed in such a way as to safely remove all asbestos and lead paint contaminants. Where possible all remaining materials shall be recycled such as doors, windows, cabinets, and fixtures, concrete and masonry, wood, metals, and cardboard. Compliance shall be certified by the hauler through receipts and signed affidavits. 2. Demolish various free standing buildings including the Commons at Foothills Mall buildings, the Shops at Foothills Mall buildings, the Plaza at Foothills Mall, The Corner Bakery, Christy Sports, Tres Margaritas and the Youth Activity Center building. Buildings or portions of buildings which are removed shall be processed in such a way as to safely remove all asbestos and lead paint contaminants. Where possible all remaining materials shall be recycled such as doors, windows, cabinets, and fixtures, concrete and masonry, wood, metals, and cardboard. Compliance shall be certified by the hauler through receipts and signed affidavits. 3. Construct eight new commercial buildings along South College Avenue, ranging from approximately 6,300 square feet to 38,000 square feet of gross building area. 4. Construct six new retail buildings internal to the site northwest of the existing enclosed mall ranging in size from approximately 8,500 square feet to 17,000 square feet of gross building area. 5. Construct four new restaurants ranging in size from approximately 6,000 square feet to 8,000 square feet of gross building area. 6. Construct a new Foothills Activity Center to replace the Youth Activity Center, as described in the Agreement and Exhibit F. 7. Construct a new theater building with no less than 42,500 square feet of gross building area located southeast of the new restaurants. 8. Construct a large east green area and smaller west green plazas providing no less than 14,000 square feet of landscaped park for use by the general public, to anchor the pedestrian network. 9. Construct no fewer than 978 parking spaces via a four level parking structure, and additional surface parking spaces. 10. Construct no less than 446 and up to 800 multi-family units distributed among five building ranging in height from two to five stories, and including a mix of subterranean, C - 1 1 Packet Pg. 106 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) surface, and structured parking spaces, all to be located in the Residential Component of the Project. 11. High quality architectural and landscape design exceeding the City of Fort Collins Land Use Code minimum standards and consistent in character with the approved Project Development Plan dated February 7, 2013, including but not limited to, the following: a. Fully shielded street, parking, pedestrian, and ornamental lighting; b. Pedestrian oriented site amenities; c. Hardscape materials and design; d. Site drainage design incorporating runoff reduction measures and water quality treatment, as described in the Fort Collins Stormwater Criteria Manual, to the maximum extent practicable; and e. Variety of high-quality building materials. 12. The final building detailing, materials, colors, and other site design details for the Project are subject to Development Review staff review at the time of Final Plan and building permit to assure the approved architecture and design and high quality materials. 13. The Project shall comply with the 2012 International Building Code, as approved by the International Code Council, in addition to all other applicable City codes and legal requirements. 14. All new construction activities and deconstruction activities for the Project shall utilize the following standards that are used by the City of Fort Collins Operations Services Department for the remodeling or demolition of City buildings: (i) recycle 100% of the concrete, rock, asphalt, dirt, bricks and metal (excluding those containing hazardous materials) and (ii) achieve 70% diversion by weight or volume of all other materials. 15. The Developer and/or the District shall comply with the following commitments as discussed at the City workshop for the Project environmental sustainability: a. Implement dust control measures, such as spraying water or covering stockpiles on all construction areas where there will be significant soil disturbances or heavy equipment activity, covering all loads, and minimizing airborne emissions associated with loading and unloading materials; b. Implement construction equipment emissions controls, such as using lower emissions equipment performing at Tier IV emissions levels, minimizing the use of diesel generators, avoiding residential areas with construction equipment emissions, and minimizing warm-up time for construction equipment and vehicles; c. Consider on-site renewables; d. Incorporate sustainable building materials and local materials in the Project, such as flagstone from local sources, to the extent feasible; e. Incorporate low energy use lighting, such as LED or compact fluorescents, wherever feasible in site and building functions; f. Ensure no-VOC or low-VOC emissions products are used in the Project; g. Install at least two plug-in electric vehicle charging stations and conduit for additional stations on the Project site; h. Minimize the use of asbestos containing materials in the Project; C - 2 1 Packet Pg. 107 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) i. Incorporate water conservation measures in the Project, such as indoor high efficiency water fixtures and outdoor water features designed to maximum sustainability and water conservation; j. Minimize or prohibit vehicle idling on the Project site, including such measures as avoiding the use of drive-throughs, and installing reminder signs regarding the harmfulness of idling in delivery, parking and drop-off/pick up areas, along with other efforts to encourage reduction in vehicle idling; k. Develop and implement a master plan for waste diversion from Mall operations and public use, including establishment of a waste diversion goal that includes retailer activities, residential areas and waste generation and minimization and recycling by the general public using the Mall; l. Incorporate features to promote multifamily recycling that exceed local and industry standards; m. Install and operate recycling depots for consolidation and processing of materials in order to increase efficiency of recycling of materials from the Mall, and establish and implement a plan for reuse of cardboard generated at the Mall site; n. Install and operate public recycling containers within the public space at the Mall, and ensure that tandem recycling and trash bins are provided throughout; o. Encourage composting of food scraps from food-related activities and establishments, and install small-scale on-site composting units, such as “Earth Tubs;” p. Encourage the use of compostable materials by food vendors at the Mall, and discourage the use of Styrofoam and other non-compostable materials; q. Construct the Project using measures that will accommodate ease of future deconstruction, such as using screws instead of nails; r. Utilize soil amendments as required in the City Code; s. Use native plants as required in the Land Use Code; t. Increase the transplanting of trees so as to maximize the number of existing trees on the Mall site that are relocated on the site and preserved; u. Create an underpass from the Mall site to MAX BRT system, as provided in the Development Approvals; v. Install and operate additional bike racks/lockers at the Mall and near the bus stops, including capacity for no fewer than 1,400 bikes; and w. Promote citizen and visitor education about environmental sustainability, particularly in areas of public activities and events. x. For all portions of the Project under the control of the Developer or the District, the Project shall use the services of a single provider for recycling and waste hauling services. C - 3 1 Packet Pg. 108 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) y. The Developer shall establish a Tenant Criteria Manual in collaboration with the City to detail specific existing City Code requirements that may apply to tenant finish projects and to highlight goals and objectives for tenant opportunities for sustainable projects. 16. In addition, the Project shall include the following off-site improvements, together with other off-site improvements as required by the Development Approvals: a. Construct pedestrian connection, for the purpose of connecting the Project to the Mason Corridor and MAX transit facility, from the Project along the existing alignment of the Larimer No. 2 Ditch extending from McClelland Street to the western property line of the Property. Pedestrian connection shall consist of a 12-foot wide concrete sidewalk, as well as a pedestrian underpass under College Avenue that is a minimum of 12’ wide with 8’ of clearance, internally illuminated, and constructed of concrete. b. Realign Larimer No. 2 Ditch from its from its current location immediately north of Red Lobster restaurant so that it flows underground in a box culvert, south within the College Avenue frontage road and day lighting at its current location immediately south of Monroe Avenue. C - 4 1 Packet Pg. 109 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT D ELIGIBLE COSTS AND ELIGIBLE IMPROVEMENTS ELIGIBLE IMPROVEMENTS ELIGIBLE COSTS Land Acquisition (for land underlying District public improvements) $ 5.5 million (Maximum amount; any surplus from other line items may not be transferred to this line item) Parking Structure 9.6 million* Demolition/ Abatement 3.9 million* Furniture, Fixture & Amenities 1.4 million* Foothills Activity Center 4.8 million (To the extent that Construction is Completed on the Foothills Activity Center and such construction conforms to the City Specifications set forth in Exhibit F hereto, as confirmed by the City Manager, any cost savings may be transferred to another line item) Pedestrian Crossing / Culvert 3.0 million (Actual cost must be paid, even if it exceeds this amount, which may require a transfer from another line item) Relocation of Larimer County Canal No. 2 (including related land acquisition costs) 2.8 million* Site Work 12.9 million* Earthwork 2.3 Site Walls 0.7 Asphalt Paving 2.5 Striping & Signage 0.3 Curb & Gutter 0.5 Sidewalks 1.5 Landscaping/Irrigation 0.6 East Lawn – Landscaping & Irrigation 2.1 East Lawn – Sidewalks/Hardscapes 0.3 West Lawn – Landscaping & Irrigation 0.9 West Lawn – Sidewalks/Hardscapes 0.1 Tree Salvage/Storage/Maintenance Replant 0.3 Off-Site Work Asphalt Patching 0.2 Off-Site Work Signals/Right Turn Lanes 0.6 Utilities 4.5 million* Sanitary Sewer 0.8 Storm Water 2.0 Water 1.0 Fire Water 0.7 D - 1 1 Packet Pg. 110 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) Soft Costs 4.6 million (Maximum amount; any surplus from other line items may not be transferred to this line item; amounts may be adjusted among subcategories of this line item) Parking Structure A&E 0.7 FAC A&E 0.3 Engineering 1.3 Environmental/Abatement Management 1.3 Materials Testing & Geotechnical 0.6 Fort Collins URA 0.4 TOTAL $ 53.0 Million * Within the asterisked line items amounts may shift due to (1) actual costs of construction, and cost savings in one line item may be applied to cost overruns in other line items and/or (2) based on final determination by Bond Counsel of the eligible amount of public use. D - 2 1 Packet Pg. 111 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT E PROCEDURE FOR DOCUMENTING, CERTIFYING AND PAYING ELIGIBLE COSTS 1. Applicability. All capitalized terms that are not specifically defined in this Exhibit E will have the same meaning as defined in the Agreement. The Parties recognize and acknowledge that in connection with issuance and sale of District Bonds, the District Bond Documents related to such District Bonds may establish a different procedure for the requisition of District Bond proceeds, in which event that procedure shall be substituted for the procedure in this Exhibit E to the extent that they conflict with the procedures in this Exhibit E; provided, however, the Parties agree to cooperate so that the District Bond Documents or bond documents related to District Bonds will include a procedure for certifying the Eligible Costs payable under in-process construction and other contracts to permit District Bond proceeds to be applied to direct payments under such contracts. 2. Engineer. The District will select an independent licensed engineer experienced in the design and construction of public improvements in the Fort Collins metropolitan area (the “Engineer”). The Engineer shall be responsible for reviewing, approving, and providing the certificate required by paragraph 3. 3. Documentation. The District or Developer as applicable will be responsible for documenting all Eligible Costs. Eligible Costs may be certified when a pay application has been submitted by a contractor that complies with the procedure set forth in this Exhibit E or upon Completion of Construction of an Eligible Improvement. All such submissions shall include a certification signed by both the Engineer and an authorized representative of the District or Developer, as applicable. The certificate shall state that the information contained therein is true and accurate to the best of each individual’s information and belief and, to the best knowledge of such individual, qualifies as Eligible Costs. Such submissions will include copies of backup documentation supporting the listed cost items, including bills, statements, pay request forms from first-tier contractors and suppliers, conditional lien waivers, and copies of each check issued by the District or the Developer for each item listed on the statement. The District or the Developer, as the case may be, will allocate the Eligible Costs to the Eligible Improvements according to the category for each listed in Exhibit D, and each requisition shall contain an aggregate running total of the Eligible Costs in each category. Unless required by a District or Developer construction contract then being performed, statements for payment of Eligible Costs shall not include advance payments of any kind for unperformed work or materials not delivered and stored on the Property. 4. Verification, Submission, and Payment. Each payment request will be submitted to the applicable District representative and the District Bond Trustee for review within ten (10) business days. Such review is for the purpose of verifying that the work represented in each payment request and supporting documentation complies with the requirements of this Agreement. Upon the earlier of approval of such documentation or expiration of the ten (10) business day period, the District Bond Trustee will make payments of Eligible Costs as set forth in such requisition request from moneys on deposit in the Project Fund. A copy of each payment request will also be sent to the City concurrently with submittal to the Bond Trustee. E - 1 1 Packet Pg. 112 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F CITY SPECIFICATIONS FOR FOOTHILLS ACTIVITY CENTER The Foothills Activity Center (also referred to as “FAC”) shall be constructed consistent with Resolution 2006-096, of the City Council of the City of Fort Collins, which established a “Leadership in Energy and Environmental Design” green building certification goal for new municipal buildings. The FAC shall include a minimum total of 24,705 square feet (usable programming space plus circulation space). The FAC shall incorporate the following programming spaces following the schematic layout that is attached to determine space needs. The terms of this Exhibit F shall govern the design and specifications for the FAC, except as otherwise agreed in writing by the parties as the final design and construction of the FAC proceeds. Program Square Feet (*) Lobby Area (Including stairs and elevator) 1535 sf Front Desk 180 sf IT Closet 200 sf Offices (x4), work & copy area 900 sf (2) Child Development Rooms 900 sf 1 Multi-Purpose Room (lower level) 1000 sf Lower level storage 200 sf Lower Level Restrooms 400 sf 2-3 Multi-Purpose Rooms (2 nd Floor) 2700 sf 2 nd floor storage room 400 sf 2 nd floor restrooms & IT space 700 sf 3 rd floor Fitness/Dance Room with Storage 1690 sf Cardio/Weight Room 2300 sf Gymnasium 5820 sf Changing Room (2) with lockers 600 sf Gym Storage 300 sf Top floor tumbling room 2165 sf 21,990 sf *Excludes Circulation The Foothills Activity Center must meet or exceed the following criteria: • The FAC must meet City approved design standards: http://www.fcgov.com/opserv/design-standards.php -- LEED GOLD certifiable at a minimum. Building to be certifiable as meeting the LEED GOLD standard, with all required documentation and assurances provided to the City in a manner and time that would allow for possible certification. • The Developer must coordinate weekly and upon request with the City of Fort Collins, Operation Services Department to ensure the project management team has access to all information regarding this project. F - 1 1 Packet Pg. 113 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) • The Developer must participate in an integrated design program for the FAC, and conform to the new requirements for Fort Collins Utilities Integrated Design Assistance Program (IDAP) described at: http://www.fcgov.com/utilities/business/conserve/rebates- incentives/integrated-design-assistance • Design lobby area so as to discourage loitering in that space. (Parents waiting to pick up their child will be accommodated in an alternative area.) • Interior finishes must meet or exceed the quality of finishes at NACC (Northside Aztlan Community Center). o Fitness/Dance floor and Gymnasium floor must meet or exceed the Ponder quality of the wood floor. o All finishes will be approved by the City Recreation Director o The specification for the gym floor at Northside Aztlan Center is attached • All spaces must be designed so as to be suitable for usage by both youth and adults (Furniture sizes, restroom fixture heights, etc.) • A space study is attached for planning and discussion purposes only. Final design of FAC space shall be subject to review and approval by the City Recreation Director. • Upon completion of record drawings, the electronic media (cad or revit) files must be provided to the City of Fort Collins, Operation Services Department. • All building systems (such as, for example, plumbing, mechanical and heating, ventilation and air conditioning) shall be designed and constructed to be independent and separate from the systems for the remainder of the Mall A commissioning process to demonstrate and inform appropriate City staff regarding all such building systems shall be carried out in advance of transfer of the FAC to the City. • Gymnasium Equipment must include a keypad controlled Porter system or equivalent and 6 basketball standards, wrestling mat hoist, volleyball standard and divider net that can be stored in the ceiling of the gymnasium. • Gymnasium acoustical sound barrier system must be agreed upon in advance by the City Recreation Director. • Signage must be provided on FAC entryways and on both sides of the exterior of the FAC Gymnasium with the City of Fort Collins logo and the words Foothills Activity Center, and must be consistent with the standards for signage on City facilities, all to the extent allowed by City of Fort Collins sign code. • The FAC must be designed and constructed to allow the City to secure it with the City’s access control system. • City fiber must be provided to allow City staff access to City network system. o This must be closely coordinated with City’s IT department. o Installation must be carried out by H&H Data, the City’s fiber contractor. • Conduit must be installed throughout the FAC to enable the City to add security cameras and wiring during a designated time in the construction process. • Casework must be provided for a front desk that meets the quality standards at NACC. • Cabinets and sinks must be provided in child development rooms and multi- purpose rooms that meet the quality standards at NACC. F - 2 1 Packet Pg. 114 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) • Data ports and electrical outlets must be provided throughout the FAC as specified by the City Recreation Director. • HVAC communication system must be provided that ties into the current City Operation Services system, which is from Johnson Controls. • IT closets must be provided that meet City standards. • Full public access from the FAC to the parking structure walkway, and access to and from the Mall Common Area during hours when the Mall is open to the public. If determined to be technically feasible, the City may include in the City Specifications an exterior doorway on the ground level to provide direct access to and from the FAC lobby, or may add such a doorway in the future. • Cardio/Weight Equipment satisfactory to the City must be provided to accessorize the 2000 sq. ft.cardio area (Cardio equipment to meet or exceed Star Tek recumbent bike model E-RB, upright bike model E-UB, stairmill model E-SM, treadmill model E-TRx, cross trainer model E-CT, impact strength selectorize equipment, dumbbells 5 lbs. – 80 lbs. plus rack, free weight equipment specified by staff). The cardio area will require 4 wired TV’ outlets by the cardio area. F - 3 1 Packet Pg. 115 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) FDP MAJOR AMENDMENT PLANNING AREA 2 DECEMBER 20, 2013 Do not scale prints. Use figured dimensions. ©Architects 2013 JPRA A204 Bulding Elevations Main Mall - East Match Line Match Line Match Line Match Line 6 Scale: East Mall 1/8”=Elevation 1’-0” 5 Scale: East Mall 1/8”=Elevation 1’-0” KEY PLAN SCALE - Not to Scale 20’-0" 20’-4" E-4 E-9 E-7 C-1 C-2 E-9 S-1 Transformer Truck Dock Service Area (shielded by Parking Garage in foreground) 59’-0" 27’-6" W-1 E-15 B-1 P-8 P-2 S-6 Section cut through FAC 40’-8" 40’-8" 30’-9" 59’-0" 27’-6" 20’-0" 20’-0" 20’-4" 26’-6" 41’-0" 26’-6" 21’-6" 22’-0" 24’-0" 20’-0" 20’-0" 20’-0" 22’-0" 23’-0" 25’-0" 22’-0" S-2 S-2 E-9 P-13 B-1 E-13 E-9 P-12 P-12 E-2 E-8 C-3 T-1 B-1 C-2 B-4 E-9 E-5 E-8 FDP MAJOR AMENDMENT PLANNING AREA 2 DECEMBER 20, 2013 Do not scale prints. Use figured dimensions. ©Architects 2013 JPRA A211 Bulding Elevations FAC 1 Scale: North FAC 1/8”=Elevation 1’-0” 2 Scale: South 1/FAC 8”=1’-Elevation 0” KEY PLAN SCALE - Not to Scale 100’-0" First Level Parapet 160’-4" 100’-0" First Level Parapet 154’-6" Parapet 154’-6" Parapet 160’-4" P-2 P-6 E-13 P-2 E-1 E-13 P-2 E-1 E-13 P-2 P-6 E-13 Main Mall Main Mall Parking Deck Parking Deck P-9 Matthews Paint to match B.M. Willow Creek 1468 General Notes: 1. Roof mounted mechanical to be located in designated mid-roof zone to allow building parapet to provide required screening. 2. Wall mounted meters to be located within building passage ways which are not facing College Ave. Meters will be screened by locating behind changes in building wall offsets. RE: 505 Materials & Elevations package 3. Transformers will be screened by landscaping beds. RE: 505 Materials & Elevations package RE: Studio Outside landscape package E-13 Sto Corp or Dryvit to match B.M. Squirrel Tail 1476 EXHIBIT F Page 5 of 16 F - 5 F - 6 1 Packet Pg. 118 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) F - 7 1 Packet Pg. 119 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) F - 8 1 Packet Pg. 120 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) F - 9 1 Packet Pg. 121 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) F - 10 1 Packet Pg. 122 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) F - 11 1 Packet Pg. 123 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F Page 12 of 16 F - 12 1 Packet Pg. 124 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F Page 13 of 16 F - 13 1 Packet Pg. 125 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F Page 14 of 16 F - 14 1 Packet Pg. 126 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F Page 15 of 16 F - 15 1 Packet Pg. 127 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT F Page 16 of 16 F - 16 1 Packet Pg. 128 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT G ESTIMATED REVENUES FROM DISTRICT PROPERTY TAXES AND PROPERTY TAX INCREMENT Year 50 mills Retail Property Tax 50 Mills Residential Property Tax Retail Property Tax TIF Residential Property Tax TIF 2013 -- - - - 2014 $ 650,079 - - - 2015 650,079 - - - 2016 171,815 - - - 2017 1,410,397 - $ 1,242,559 - 2018 1,478,038 $ 136,533 1,357,058 $ 231,115 2019 1,478,038 136,533 1,334,161 231,115 2020 1,507,599 280,785 1,384,199 475,294 2021 1,507,599 280,785 1,360,844 475,294 2022 1,537,751 286,401 1,411,883 484,800 2023 1,537,751 286,401 1,388,061 484,800 2024 1,568,506 292,129 1,440,121 494,496 2025 1,568,506 292,129 1,415,822 494,496 2026 1,599,876 297,971 1,468,923 504,386 2027 1,599,876 297,971 1,444,139 504,386 2028 1,631,874 303,931 1,498,302 514,474 2029 1,631,874 303,931 1,473,021 514,474 2030 1,664,511 310,009 1,528,268 524,763 2031 1,664,511 310,009 1,502,482 524,763 2032 1,697,801 316,209 1,558,833 535,259 2033 1,697,801 316,209 1,532,531 535,259 2034 1,731,757 322,534 1,590,010 545,964 2035 1,731,757 322,534 1,563,182 545,964 2036 1,766,393 328,984 1,621,810 556,883 2037 1,766,393 328,984 1,594,446 556,883 2038 1,801,720 335,564 1,654,246 568,021 G - 1 1 Packet Pg. 129 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT H PERMITTED USES OF FOOTHILLS MALL FUND The Parties agree that the long-term viability and success of the Project will be improved by creating a Foothills Mall Fund to be held by the District. It is the purpose of this fund to provide resources for the continued upgrade and enhancement of the Project. Specifically the upgrades and enhancements are intended to preserve the competitive position of the Project in the market and maintain and/or enhance the overall aesthetic quality of the Project. The Parties acknowledge and agree that any expenditure of funds on deposit in the Foothills Mall Fund shall be constrained by and must be in compliance with applicable State and federal law governing the use of such funds, which, in part, will be governed by the source of such funds. In addition, the Parties acknowledge that the District may only undertake activities and expend funds for purposes authorized by the Special District Act. Subject to the foregoing limitations, the following improvements are eligible for reimbursement from the Foothills Mall Fund: • Energy efficiency, renewable energy, and similar upgrades or improvements that reduce the environmental impact of the project; • Upgrades and improvements to or additional public amenities such as parks, plazas, community gathering areas and streetscapes that enhance the aesthetics of the Project; • Upgrades and improvements to the pedestrian, bicycle, and vehicular circulation and accessibility of the site, both interior and exterior to the Project site; • Upgrades and improvements to the Project for public health and safety, either to comply with new standards/regulations or to address unforeseen issues on the site or from the development of the Project; • Capital costs associated with the construction of additional gross leasable area, as approved by the City Manager; • In entirety or part, contributing to Capital Improvement Projects as identified by the City of Fort Collins in the adopted Capital Improvement Plan; and • Upgrades, improvements, or replacement of essential infrastructure required to maintain the overall character of the Project, including: o Replacement or maintenance of the roof, o Maintenance of significant exterior common area features, such as fountains, ice rinks, or similar features o Maintenance of significant interior common area features, including fountains, fire places, or similar features The following improvements are not eligible for reimbursement from the Foothills Mall Fund: • Any operating or maintenance costs typically funded by the District from the District Operating Revenues, except as set forth above; • Any operating or maintenance costs typically funded by the Developer from common area maintenance fees, charges, or assessments, except as set forth above; H - 1 1 Packet Pg. 130 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) • Any capital cost typically associated with the on-going maintenance of the Project, including but not limited to: o Repaving of parking lots; o Replacement of landscaping identified on the Development Approvals; o Replacement of site lighting, signs, or other decorations; and o Any capital cost associated with releasing the original Gross Leasable Area, unless otherwise noted. H - 2 1 Packet Pg. 131 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) EXHIBIT I MAXIMUM ANNUAL NET DEBT SERVICE ON THE DISTRICT BONDS Without the prior written consent of the City Manager, the District Bonds shall be structured so that the debt service requirements on the District Bonds do not exceed the maximum annual Net Debt Service amounts set forth below. Neither the total maximum nor the maximum annual Net Debt Service are intended to limit the amount of Pledged Revenue that can be collected in any year and used to pay debt service payments then due on the District Bonds or deposited to a Supplemental Reserve Fund, if required by the District Bond Documents. Year Maximum Annual Net Debt Service Requirements 2013 $ 0(1) 2014 0(1) 2015 0(1) 2016 6,270,450 2017 6,270,450 2018 6,280,450 2019 6,369,598 2020 6,806,078 2021 6,899,644 2022 7,081,282 2023 7,182,472 2024 7,368,326 2025 7,470,324 2026 7,663,578 2027 7,768,716 2028 7,970,850 2029 8,079,756 2030 8,285,546 2031 8,402,570 2032 8,615,088 2033 8,737,024 2034 8,957,212 2035 9,083,724 2036 9,314,968 2037 9,442,738 2038 9,678,442 (2) Total: $ 179,999,286 ________________ (1) The debt service on the District Bonds in these years is expected to be paid from capitalized interest. (2) Additional debt service requirements on the District Bonds are expected to be paid from amounts on deposit in the reserve fund securing the District Bonds. I - 1 1 Packet Pg. 132 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) - 1 - RESOLUTION NO. 067 OF THE BOARD OF COMMISSIONERS OF THE FORT COLLINS URBAN RENEWAL AUTHORITY UPDATING THE TERMS OF RESOLUTION NO. 056 REGARDING COOPERATION AND PARTNERSHIP WITH LARIMER COUNTY ON ECONOMIC REVITALIZATION EFFORTS AND THE USE OF TAX INCREMENT FINANCING WHEREAS, on May 8, 2013, the Board of Commissioners (the “Board”) of the Fort Collins Urban Renewal Authority (the “Authority”), adopted Resolution No. 056, regarding the redevelopment of Foothills Mall and cooperation and partnership with Larimer County (the “County”) on economic revitalization efforts and the use of tax increment financing; and WHEREAS, Resolution No. 056 provided for arrangements to be made with the County to share certain revenues generated by the redevelopment of Foothills Mall; and WHEREAS, in light of the modification to the schedule for redevelopment of Foothills Mall, clarification of the terms of Resolution No. 056 is needed; and WHEREAS, the Board is authorized under Section 31-25-112, C.R.S., to work cooperatively with the City in connection with planning and undertaking the Authority’s plans, projects, programs works, operations and activities, and to enter into cooperation agreements with respect to the same; and WHEREAS, the Board is authorized under Section 31-25-107(11), C.R.S., to enter into an agreement with the County regarding the payment of costs of additional County infrastructure and services to offset impacts to the County of an urban renewal plan. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE FORT COLLINS URBAN RENEWAL AUTHORITY, AS FOLLOWS: Section 1. The Board acknowledges that, in light of the magnitude of the residential portion of the Foothills Mall redevelopment, the City Council has agreed that the City will remit to the County an amount equal to fifty percent (50%) of the real property tax increment generated from the residential units that are within the Foothills Mall Project, in each year that those tax increment revenues are received for those new units and to the extent they are available after payment of debt service requirements for the Foothills Metropolitan District Bonds to be issued in connection with the Foothills Mall Project. Section 2. The Board hereby directs the Executive Director of the Authority to work with the City and the County to develop an agreement through which the City and the Authority will agree to remit to the County annually the amount of $60,000 from property tax increment received by the Authority from the Foothills Mall Tax Increment District, for each year the Authority receives such property tax increment for the fully redeveloped Foothills Mall. This Packet Pg. 133 - 2 - amount is intended to represent the County’s share of the personal property tax increment paid from the Foothills Mall Tax Increment District. Said agreement may include such other implementation and administrative provisions as the Executive Director determines to be necessary or appropriate. The Board hereby authorizes the President of the Board to execute said intergovernmental agreement in a form determined by the Executive Director, in consultation with Authority legal counsel, to carry out the intended purposes of this Resolution. Passed and adopted at a regular meeting of the Board of Commissioners of the Fort Collins Urban Renewal Authority this 14th day of January, A.D. 2014. __________________________________________ Vice-Chairperson ATTEST: _______________ Secretary Packet Pg. 134 1 Packet Pg. 117 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) S-3 W-1 E-9 E-21 E-21 E-7 E-4 E-9 E-7 P-2 W-1 E-15 B-1 P-8 P-2 T-4 C-3 C-1 C-2 E-9 T-4 S-1 S-3 P-2 P-2 E-14 S-5 B-4 C-2 C-2 S-6 S-6 P-9 E-14 C-2 Section cut through FAC Service Area (shielded by Building 1F/ gate in foreground) Transformer Service Area (shielded by Building 1F in foreground) Service Area (shielded by Building 1F in foreground) Service Area (shielded by Building 1J in foreground) Truck Dock Service Area (shielded by Parking Garage in foreground) 59’-0" 27’-6" 20’-0" 20’-4" E-4 E-9 E-7 W-1 E-15 B-1 P-8 P-2 C-1 C-2 E-9 S-1 S-6 Section cut through FAC TTransformer Truck Dock Service Area (shielded by Parking Garage in foreground) General Notes: 1. Roof mounted mechanical to be located in designated mid-roof zone to allow building parapet to provide required screening. 2. Wall mounted meters to be located within building passage ways which are not facing College Ave. Meters will be screened by locating behind changes in building wall offsets. RE: 505 Materials & Elevations package 3. Transformers will be screened by landscaping beds. RE: 505 Materials & Elevations package RE: Studio Outside landscape package EXHIBIT F Page 4 of 16 F - 4 1 Packet Pg. 116 Attachment: Exhibit A (URA - Foothills Mall Redevelopment Agreement - URA RESO) center after completion of construction. The current Agreement requires the Bond Trustee to apply excess PIF revenue not needed for debt service (which is expected to result from retail sales upside) to pay down the principal on the bonds in the year the excess revenue is generated by the project. This will lower the overall interest payment and shorten the bond term by approximately four to five years assuming sales increase to $478 per square foot. Staff believes this would be beneficial to multiple constituents: Tenants/Developer – Benefit from early termination of the Metro District Debt property tax of 50 mills reducing overall property tax costs at the site. Citizens – Benefit from the early termination of the 1.00 percent PIF, which is required to terminate when the bonds are repaid. 2 Packet Pg. 21 1 Packet Pg. 201 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) S-3 W-1 E-9 E-21 E-21 E-7 E-4 E-9 E-7 P-2 W-1 E-15 B-1 P-8 P-2 T-4 C-3 C-1 C-2 E-9 T-4 S-1 S-3 P-2 P-2 E-14 S-5 B-4 C-2 C-2 S-6 S-6 P-9 E-14 C-2 Section cut through FAC Service Area (shielded by Building 1F/ gate in foreground) Transformer Service Area (shielded by Building 1F in foreground) Service Area (shielded by Building 1F in foreground) Service Area (shielded by Building 1J in foreground) Truck Dock Service Area (shielded by Parking Garage in foreground) 59’-0" 27’-6" 20’-0" 20’-4" E-4 E-9 E-7 W-1 E-15 B-1 P-8 P-2 C-1 C-2 E-9 S-1 S-6 Section cut through FAC TTransformer Truck Dock Service Area (shielded by Parking Garage in foreground) General Notes: 1. Roof mounted mechanical to be located in designated mid-roof zone to allow building parapet to provide required screening. 2. Wall mounted meters to be located within building passage ways which are not facing College Ave. Meters will be screened by locating behind changes in building wall offsets. RE: 505 Materials & Elevations package 3. Transformers will be screened by landscaping beds. RE: 505 Materials & Elevations package RE: Studio Outside landscape package EXHIBIT F Page 4 of 16 F - 4 1 Packet Pg. 200 Attachment: Exhibit A (Foothills Mall Redevelopment Agreement - City Coucil RESO) Dedicated Sales Tax 1.7 Packet Pg. 91 Attachment: Powerpoint presentation (Foothills Mall) May 7th 1.7 Packet Pg. 84 Attachment: Powerpoint presentation (Foothills Mall) center after completion of construction. The current Agreement requires the Bond Trustee to apply excess PIF revenue not needed for debt service (which is expected to result from retail sales upside) to pay down the principal on the bonds in the year the excess revenue is generated by the project. This will lower the overall interest payment and shorten the bond term by approximately four to five years assuming sales increase to $478 per square foot. Staff believes this would be beneficial to multiple constituents: Tenants/Developer – Benefit from early termination of the Metro District Debt property tax of 50 mills reducing overall property tax costs at the site. Citizens – Benefit from the early termination of the 1.00 percent PIF, which is required to terminate when the bonds are repaid. 1 Packet Pg. 14