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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/10/2016 - I-25/392 CORRIDOR ACTIVITY CENTER INTERGOVERNMENTADATE: STAFF: May 10, 2016 Tom Leeson, Director, Comm Dev & Neighborhood Svrs WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION I-25/SH 392 Corridor Activity Center Intergovernmental Agreement (IGA) Amendments. EXECUTIVE SUMMARY The purpose of this item is to review the proposed amendments by the Town of Windsor to the IGA between Windsor and Fort Collins with respect to development in the I-25/SH392 Corridor Activity Center and to provide input on the proposed amendments. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council support the proposed amendments to the IGA between Windsor and Fort Collins with respect to development in the I-25/SH392 Corridor Activity Center? BACKGROUND / DISCUSSION On November 7, 2015, members of the Town of Windsor Board and Fort Collins City Council held a joint work session to discuss potential amendments to the I-25/SH 392 Intergovernmental Agreement (IGA) pertaining to the allowance of prohibited uses (automobile dealerships and single family) within the Corridor Activity Center (CAC). The work session summary is attached for reference (Attachment 3). Subsequent to the joint work session, staff from Windsor and Fort Collins worked collaboratively to evaluate underlying design standards. Additionally, the Town of Windsor staff held public meetings to gain feedback from community members and held Board work sessions to discuss potential amendments to the IGA. On April 11, 2016, the Town of Windsor approved a resolution authorizing the town manager to propose to Fort Collins an amendment to the IGA with respect to development in the I-25/SH 392 CAC, and is seeking input on the proposed amendments. (Attachment 4) The following summarizes the proposed changes:  Amendment of Permitted Uses and Additional Definitions: “Automobile Dealerships” and “Single-Family Detached Residential” have been added to the list permitted uses for the east side of I-25. Those uses remain as prohibited uses to the west of I-25. Definitions for each have been added to Section 1 of the Agreement.  Limitations of Automobile Dealerships and Single-family Detached Residential: Section 2 of the agreement limits these uses to identified sites as depicted on attached exhibits. The automobile dealerships are limited to 38 acres on the northerly Moreland property. The single-family uses are limited to 45 acres on the far eastern edge of the Muth property north of SH 392 and just west of Larimer County Road 5. Staff Analysis and Recommendation: Staff supports allowing automobile dealerships as permitted uses on the 38 acres on the northerly Moreland property. Automobile dealerships are a less intense use than other uses permitted within that area; however, the proposal limits the extent of automobile dealerships and allows for other higher intense use, such as retail and entertainment uses. The enhanced design standards would help to mitigate any visual concerns from I-25 and is consistent with the original intent of the CAC to have an attractive gateway to both communities. Staff does not support the proposal to allow single-family detached housing on the 45 acres on the far eastern edge of the Muth property north of Highway 392 and just west of Larimer County Road 5. Allowing single- May 10, 2016 Page 2 family detached housing on 45 acres in this area significantly deviates from the original intent of the CAC for this area, which was a high intense activity center with a mix of commercial and higher-density residential uses. Additionally, consideration should be given to the financial implications of such a low-intensity use at this location. Under the March 2008 392 Interchange Intergovernmental Agreement, there was mention of significant annual sales tax revenue generated from an anticipated 650,000 square feet of retail development on the subject property, which was intended to offset the costs of design and construction of the interchange improvements.  Enhanced Design Standards: the Town of Windsor is proposing Enhanced Design Standards for the Windsor side of the CAC. The CAC Enhanced Design Standards are included within Attachment 1 and, in many respects, track established local practices (including Fort Collins), and are a product of numerous internal and public discussions with residents, landowners and staff. It should be noted that Sec. 3.3.1.b of the IGA includes the following language: “…except that the Enhanced CAC Design Standards may be modified by Town ordinance, adopted in accordance with the Town’s Home Rule Charter, notice of which shall be presented to the City no later than thirty (30) days prior to ordinance introduction.” Staff Analysis and Recommendation: Staff supports the new Enhanced Design Standards for the Windsor side of the CAC and would propose the same set of standards be applied to the Fort Collins side as well to ensure consistency within the entire CAC. It should be noted that the Enhanced Design Standards include an “Alternative Compliance” section allowing variations to the standards provided the variations meet certain criteria including: “The plan as submitted will not depart from the CAC design standards except in nominal, inconsequential way when considered from the perspective of the entire development plan, and will continue to advance the overall purposes of the CAC enhanced design standards as set forth herein.” Staff does not support the IGA language allowing Windsor to modify the Enhanced CAC Design Standards without Fort Collins input. A joint adoption process should be included in the IGA to allow Fort Collins input into amendments to the design standards.  Modifications to Revenue Sharing: The current IGA requires sixty-five percent (65%) of the property and sales tax increment revenues generated in the CAC to be retained by each party and the remaining thirty-five percent (35%) of such revenues to be transferred to the other party to help reimburse each party for the original investment into the I-25/SH 392 intersection improvements. The amended agreement proposes no revenue sharing for the automobile dealerships and the single-family detached residential uses. The modifications to the revenue sharing language in Section 4 reflect Windsor’s desire to capture all the sales and property tax increment generated by the new uses on the Windsor side of the interchange. Based on the March 2015 BBC study (Attachment 5) Windsor believes, particularly with respect to automobile dealerships, there will be increased costs which will not be mitigated under the current 65/35 revenue-sharing formula. The sale of automobiles does not generate use tax or sales tax revenue to Windsor, and the sole source of sales tax revenue would be service and parts related. Staff Analysis: See attached analysis by Josh Birks with Economic Health. (Attachment 6)  Transit Site Identification: Section 6.3 contains new language requiring the City to condition annexation on landowner agreements to identify (but not dedicate or reserve) a future transit site parallel to that being identified on the Windsor side. This term is tied to the vision for bus rapid transit captured in the 2008 I-25/392 Improvements plan commissioned by the City and the Town. Windsor feels that, if it is requiring a Windsor landowner to identify a future transit site, Fort Collins should require a future transit site as well. Staff Analysis and Recommendation: Staff supports the additional language to require a future transit site on the west side of I-25. There is sufficient area to accommodate such a use on the west side and identifying a future transit site upon annexation would help to promote the City’s transportation goals for the area. May 10, 2016 Page 3 ATTACHMENTS 1. First Amended IGA, November 13, 2012 (PDF) 2. Amending Certain Provisions of the First Amended IGA, May 9, 2013 (PDF) 3. Joint Work Session Summary, November 2, 2015 (PDF) 4. Letter from Windsor re: proposed amendment to I-25/392 IGA, April 21, 2016 (PDF) 5. BBC Research & Consulting Report, March 4, 2015 (PDF) 6. Economic Health Office Analysis of Amendments to the Revenue Sharing Agreement (DOCX) 7. Powerpoint presentation (PDF) ATTACHMENT 1 ATTACHMENT 2 Community Development & Neighborhood Services 281 North College Avenue P.O. Box 580 Fort Collins, CO 80522.0580 970.416.2740 970.224.6134- fax fcgov.com Planning, Development & Transportation Services MEMORANDUM Date: November 7, 2015 To: Mayors and Members of Windsor Town Board and Fort Collins City Council From: Laurie Kadrich, Planning, Development & Transportation Services Director Through: Kelly Arnold, Town of Windsor Town Manager Darin Atteberry, Fort Collins City Manager Re: 11-02-15 Joint Elected Officials Work Session Summary – Amendment to I-25/SH 392 Intersection IGA Elected Officials in Attendance: Fort Collins City Council Windsor Town Board Wade Troxell, Mayor John Vasquez, Mayor Gerry Horak, Mayor Pro Tem Ivan Adams Gino Campana Myles Baker Ross Cunniff Robert Bishop-Cotner Ray Martinez Kristie Melendez Bob Overbeck Christian Morgan Kristin Stephens Jeremy Rose Meeting Purpose: To discuss potential amendments to the Intergovernmental Agreement (IGA) pertaining to the allowance of prohibited uses (automobile dealerships) within the Corridor Activity Center (CAC). The Town of Windsor provided some background on the IGA and the purpose of looking at this issue now. Representatives of local auto dealerships brought this issue to the Town of Windsor due to the constraints the dealerships are experiencing on their current locations. This issue was not initiated by the Town of Windsor. Auto dealerships were not originally permitted within the CAC for three primary reasons: (1) relative to other uses, auto dealerships do not generate as much sales tax. In an effort to reimburse Windsor and - 2 - Fort Collins for the costs associated with the I-25/392 interchange, higher sales tax generating uses were desired. (2) The underlying zoning in Windsor allowed for more employment uses, so the uses permitted in the CAC were intended to be consistent with the underlying zoning. (3) The importance of the gateway to both communities, as well as compatibility with surrounding uses and views to the west were part of the decision. There was agreement that very little had changed in the area since the original IGA; however, it should be recognized that no development activity has occurred in the last five (5) years. There is still a strong desire for a high level of design standards in the area and recognition that the IGA should include a recurring review period. It was also acknowledged that more specificity should be provided with regards to the definition of the some of the listed permitted uses in the CAC. Both entities agreed there should be an evaluation of compatibility standards within each community’s respective land use codes and understanding of how those compatibility standards could be applied to the CAC. There was consensus that staff from both communities should get together to look at potential standards (buffer yards, lighting, landscaping) to be included within the IGA prior to looking at the inclusion of specific uses. The original intent of the IGA should be maintained. Windsor Town Board and Fort Collins City Council agreed the following should occur in a timely manner:  Mutual intent statement drafted to identify process  Evaluate recurring review period for IGA  Include definitions of uses and more specificity where needed  Evaluate inclusion of appeal process  Identify joint public outreach process  Identify mutually agreeable compatibility/design standards to include within IGA ATTACHMENT 4 March 4, 2015 Mr. Mike Downey Vice President Fort Collins Dodge Chrysler Jeep Ram Mr. David Swanson CEO Tynan’s Nissan and Tynan’s Kia Via email Re: Fort Collins Dodge Chrysler Jeep Ram and Tynan’s Economic and Fiscal Impact Analysis Mr. Downey and Mr. Swanson: This letter documents the projected economic and fiscal impacts of the proposed relocation and development of Fort Collins Dodge Chrysler Jeep Ram (DCJR), Tynan’s Nissan and Tynan’s Kia (collectively Tynan’s auto dealerships) on the Town of Windsor, Colorado (Town). The analysis also considers development of four adjacent commercial pad sites. Our analysis is based on the most recent site development plans; the auto dealership’s current and projected sales revenue data; Larimer County assessor data; conversations with local commercial real estate brokers; the Town’s development fee schedule; and the Town’s fiscal model. Background Fort Collins DCJR and Tynan’s auto dealerships are considering a relocation and expansion of their respective facilities; a result of increased demand for their products and services. Fort Collins DCJR and Tynan’s have identified a 53-acre commercially zoned land parcel within the Town of Windsor as a viable location for the auto dealerships, shown in Figure 1.1 This land parcel is located to the southeast of the Interstate 25/State Highway 392 Interchange. The site 1 The site is comprised of two individual land parcels. The northern parcel (# 86221-47-002) is 22.81 acres and the southern parcel (# 86220-00-003) is 30.00 acres. ATTACHMENT 5 PAGE 2 was chosen due to its high visibility from major roadways; ease of access; traffic volume; and strategic location in Northern Colorado. Along with the construction of the auto dealership facilities, four commercial pad sites are included in the site plan (Figure 2). Figure 1. Map of Proposed Development Site Source: BBC Research & Consulting; ArcGIS. Corridor activity center. The 53-acre land parcel is located within the Corridor Activity Center (CAC), an area created through an intergovernmental agreement between the City of Fort Collins and the Town of Windsor.2 Properties within the CAC are located in close proximity to the Interstate 25/State Highway 392 Interchange (Interchange) and subject to a special one- time fee to recover the infrastructure costs associated with the Interchange improvement.3 The special fee imposed on the “Benefitted Properties” results from the anticipated appreciation in value due to the construction of the Interchange, as well as to offset improvement costs 2 Town of Windsor, Ordinance NO. 2012-1440. 3 The CAC special one-time fee is to be paid in quarterly installments over seven years. PAGE 3 associated with Benefitted Property development, as well as the subsequent increase in vehicular trips. The type of development allowed on a property within the CAC is restricted to a set of permitted land uses. Currently, auto dealerships are not listed as a permitted use. As such, allowance of auto dealership development within the CAC would require an amendment to the intergovernmental agreement between the City of Fort Collins and the Town of Windsor. Fiscal Impact Findings The proposed auto dealership and commercial development would create an annual net surplus between $105,000 (auto dealerships only) and $290,000 (auto dealerships plus commercial space). Additionally, the development will generate between $740,000 and $1 million in one- time construction use tax and development fees for the Town, depending on the specific characteristics of the pad development.4 The development of the land parcel will also recover over $347,000 in one-time special fee assessments associated with the CAC.5 Methodology BBC’s economic and fiscal impact analysis models municipal revenue and expenditure associated with the development and operation of the auto dealerships and adjacent commercial space. These revenue sources include sales tax, property tax, construction use tax, development fees (impact fees and building permit fees) and CAC special fees. For other municipal revenues and the expenditures component,6 BBC coordinated with the Town of Windsor to utilize their existing fiscal model to estimate Town operating expenditures associated with the auto dealerships and commercial space. Development assumptions. The auto dealerships are expected to occupy approximately 30 acres, or 60 percent of the site. The Fort Collins DCJR auto dealership will occupy a 40,000 square foot facility, while Tynan’s Nissan and Tynan’s Kia will each require a 24,000 square foot facility. The total built square footage of the auto dealerships on the development site is expected to be 88,000 square feet. The current site plan designates 9.9 acres, across four pad sites, for retail and/or office space. Figure 2 presents the current site plan. 4 Development fees include building permit fees and impact fees. Impact fees are assessed on commercial development for sewer plant investment, water plant investment, storm drainage and road impacts. 5 The original CAC special fee assessment for both parcels totaled $317,675 in 2012. Adjusted for inflation at 3.05%, specified in the Town of Windsor Ordinance, the total fee amounts to $347,638 in 2015 dollars. 6 Other municipal revenues include charges for services, fines and forfeitures, licenses and permits, intergovernmental revenue and other miscellaneous tax revenues. PAGE 4 Figure 2. Site Plan Source: Ripley Design Inc. PAGE 5 BBC has created two scenarios for commercial pad development: Commercial Scenario 1 includes construction of four retail structures, averaging 5,000 square feet each (20,000 square feet total). Commercial Scenario 2 also assumes construction of four structures averaging 5,000 square feet each, but two retail structures (10,000 square feet total) and two office structures (10,000 square feet total). The below analysis considers both of the commercial pad development scenarios. Municipal Revenues BBC’s analysis focuses on impacts to the General Fund, Capital Improvement Fund and Community and Recreation Center Fund. Projections of one-time revenue are included for the Water Fund, Sewer Fund and Storm Drainage Fund. The Town of Windsor imposes a 3.95 percent sales and use tax. This tax rate is broken into two components: 3 percent for the General Fund and Capital Improvement Fund and 0.95 percent dedicated to the Community and Recreation Center Fund. The 3 percent is split between the General Fund (60 percent) and the Capital Improvement Fund (40 percent). The General Fund is also supported by property tax revenues and building permit fees. Road impact fees go to the Capital Improvement Fund, while other capital expansion fees go towards specific enterprise funds (i.e. sewer plant investment fees go to the sewer fund). Annual sales tax. In Colorado, sales tax imposed on motor vehicle purchases accrues to the municipality of the purchaser’s residence, not the location of purchase. In 2011, the Town of Windsor enacted an ordinance that “imposed a sales tax exemption on motor vehicles purchased from dealerships located within the city limits [outside of the city limits was already exempted] if the buyer is a Town of Windsor resident.”7 Consequently, sales tax is not collected by the Town on any motor vehicle purchases. However, automotive parts sales are taxed by the Town at the standard 3.95 percent. Figure 3 on the following page presents the annual sales tax collected from the auto dealerships and new retail development. The sales tax revenues attributable to the auto dealerships only represent parts sales, for the reasons discussed above. BBC’s calculation for the auto dealerships is based upon data and projections provided by Fort Collins DCJR and Tynan’s. BBC estimates total annual sales tax revenues of almost $160,000 from the auto dealerships. In addition to the assumptions made regarding total square footage and use, retail sales per square foot is assumed to be $250 for both commercial development scenarios. New commercial retail sales tax is almost $200,000 under Commercial Scenario 1 and around $100,000 under Commercial Scenario 2. 7 Town of Windsor – Sales Tax FAQ, 2014. PAGE 6 Figure 3. Annual Sales Tax Revenue Notes: (1) The General Fund receives 60% of the 3% sales tax rate. (2) The Capital Improvement Fund (CIF) receives 40% of the 3% sales tax rate. (3) The Community and Recreation Center Fund receives 100% of the 0.95% sales tax rate. Source: Town of Windsor – Overview of Funds Structure; BBC Research & Consulting. Auto Dealerships (parts sales only) Fort Collins Dodge Chrysler Jeep Ram $2,517,756 $45,320 $30,213 $23,919 $99,451 Tynan's Nissan and Tynan's Kia $1,487,617 $26,777 $17,851 $14,132 $58,761 Total Auto Dealerships $4,005,373 $72,097 $48,064 $38,051 $158,212 Commercial Pad Development Commerial Scenario 1 Retail 20,000 $250 $5,000,000 $90,000 $60,000 $47,500 $197,500 Office - - - - - - - Total 20,000 $5,000,000 $90,000 $60,000 $47,500 $197,500 Commercial Scenario 2 Retail 10,000 $250 $2,500,000 $45,000 $30,000 $23,750 $98,750 Office 10,000 N/A N/A N/A N/A N/A N/A Total 20,000 $2,500,000 $45,000 $30,000 $23,750 $98,750 Total Sales Tax Revenues Auto Dealerships + Commercial Scenario 1 $9,005,373 $162,097 $108,064 $85,551 $355,712 Auto Dealerships + Commercial Scenario 2 $6,505,373 $117,097 $78,064 $61,801 $256,962 General Fund Tax Collected (1) Retail Sales / Independent Calculation Independent Calculation Sq Ft Sq Ft Revenue Tax Collected (2) Tax Collected (3) Tax Collected Total Sales CIF Rec Center Fund Total Windsor Sales Sales Tax Source PAGE 7 Construction material spending. For construction costs, BBC assumed market value costs of $175 per square foot for auto dealership construction and $250 per square foot for commercial retail/office construction. For all construction, cost related to materials is assumed to be 40 percent of the overall construction cost. Construction use tax within the Town is 3.95 percent. Figure 4 below presents the development’s impact on funds that are supported by construction use tax. Construction related to the auto dealerships is estimated to generate over $120,000 in construction use tax. Commercial construction under both scenarios (constant construction cost per square foot) would generate $40,000 in one-time construction use taxes. The Town would collect over $160,000 in one-time construction use tax from the project. Figure 4. Construction Use Tax Revenue (One-Time) Note: (1) The Capital Improvement Fund (CIF) receives 100% of the 3% use tax rate. (2) The Community and Recreation Center Fund receives 100% of the 0.95% use tax rate. Source: Town of Windsor—Overview of Funds Structure; BBC Research & Consulting. Annual property tax. Real property taxes collected by the Town are based upon the assessed value of the property, which is 29 percent of the actual value for commercial properties. BBC projected future real property values by adding the material cost of the development (40 percent of construction costs) to the existing real property values reported by the Larimer County Assessor.8 The real property tax estimated for the auto dealerships is consistent with other recently built auto dealerships in the area. In addition to real property tax, the auto dealerships and commercial retailers will be taxed on personal property within their respective facilities, also assessed at 29 percent of actual value. Fort Collins DCJR and Tynan’s provided BBC with 8 The 53 acre land parcel was recently purchased by the developer pursuing the auto dealership development. For the purposes of this analysis, BBC used the 2015 Larimer County Assessor reported data. Auto Dealerships Fort Collins Dodge Chrysler Jeep Ram 40,000 $175 40% $42,000 $13,300 $55,300 Tynan's Nissan and Tynan's Kia 48,000 $175 40% $50,400 $15,960 $66,360 Total Auto Dealerships 88,000 $175 40% $92,400 $29,260 $121,660 Commercial Pad Development Commercial Scenario 1 Retail 20,000 $250 40% $30,000 $9,500 $39,500 Office - - - - - - Total 20,000 $30,000 $9,500 $39,500 Commercial Scenario 2 Retail 10,000 $250 40% $15,000 $4,750 $19,750 Office 10,000 $250 40% $15,000 $4,750 $19,750 Total 20,000 $30,000 $9,500 $39,500 Total Construction Use Tax Auto Dealerships + Commercial Scenario 1 108,000 - - $122,400 $38,760 $161,160 Auto Dealerships + Commercial Scenario 2 108,000 - - $122,400 $38,760 $161,160 Total Building Tax Collected (1) Rec Center Fund Tax Collected (2) % Material CIF Total Windsor Use Construction Description Sq Ft Cost / Sq Ft Cost Tax Collected PAGE 8 personal property estimates. For commercial retail and office, BBC gathered personal property data on properties throughout Larimer County that resemble the expected scenario development. The Town mill levy is 12.03, which is applied to both real and personal property. Figure 5 below presents the assessed value and tax revenues for real and personal property under the different scenarios. The auto dealerships are estimated to generate over $40,000 in annual property tax revenues, with pad development in either Commercial Scenario 1 or Commercial Scenario 2 contributing an additional $8,000. Figure 6 compares existing property tax revenue ($10,000) to the projected annual property tax amounts associated with the development. The project is expected to increase property tax by $40,000 per year. Figure 5. Projected Annual Property Tax Revenue Note: (1) Commercial assessed value is 29% of actual value. Source: BBC Research & Consulting. Figure 6. Annual Property Tax Revenue Comparison—Current and Projected Note: (1) Commercial assessed value is 29% of actual value. Source: Larimer County Assessor; BBC Research & Consulting. Other annual municipal revenues. BBC utilized the Town’s existing fiscal model to estimate other recurring municipal revenues associated with site development and operation, as well as municipal expenditures (see following page). These revenues include charges for services, fines and forfeitures, licenses and permits, intergovernmental revenue and other ++ Commercial Commercial Assessed Value (1) Real Property $3,153,911 $3,733,911 $3,733,911 Personal Property $261,000 $304,500 $348,000 Annual Property Tax Collected Real Property $37,942 $44,919 $44,919 Personal Property 3,140 3,663 4,186 Total Annual Property Tax Collected $41,081 $48,582 $49,105 Auto Dealerships Scenario 2 Auto Dealerships Auto Dealerships Property Tax Description Scenario 1 Current Conditions $833,920 $10,032 - Auto Dealerships + Commercial Scenario 1 $4,038,411 $48,582 $38,550 Auto Dealerships + Commercial Scenario 2 $4,081,911 $49,105 $39,073 Tax Revenue Assessed Tax Revenue Increase Over Current Property Tax Situation Value (1) (General Fund) PAGE 9 miscellaneous tax revenues.9 The Town’s fiscal model derives the commercial component of these additional revenues on a per full-time employee basis. The Town’s model assumes each full-time employee will generate $208.36 in other municipal revenues. 10 The auto dealerships provided BBC with estimates for the number of full-time employees. For number of full-time employees under various commercial development scenarios, BBC used 400 square feet per employee for commercial retail and 250 square feet per employee for office space.11 Figure 7 shows the anticipated number of full-time employees on the development under various situations and the corresponding annual municipal revenues generated, which are not captured elsewhere in the revenue model. The Town is expected to collect an additional $40,000 per year in General Fund revenues as a result of the auto dealerships operational activity.12 The inclusion of commercial activity increases the amount to roughly $55,000 per year under both commercial development scenarios. Figure 7. Other Annual Municipal Revenues Note: It is assumed that all other annual municipal revenues support the Town of Windsor General Fund. Source: Town of Windsor Fiscal Model Output; BBC Research & Consulting. Capital expansion fees. The Town assesses capital expansion fees on new construction. Capital expansion fees are assessed for sewer plant investment, water plant investment, storm drainage and road impacts. These fees are an important revenue source for Town capital projects. Capital expansion fees assessed on the development will generate substantial revenue for the Town, estimated to be between $830,000 and $840,000 depending on the pad development use mix (retail vs. office). The auto dealerships are estimated to account for roughly three-quarters of capital expansion fee revenues ($615,000). Figure 8 on the following page presents the revenue generated from each capital expansion fee. 9 Only revenues not captured elsewhere in the model are included. See footnote 10 (below) for additional details. 10 In the Town’s fiscal model, employees are used as a proxy for the scale of a commercial operation, production of certain municipal revenues and demand for municipal services. BBC excluded the following the following revenues from the annual municipal revenues calculation, so not to double count revenues: building permits; planning fees; SAFEbuilt collection fees; and traffic impact fees. These adjustments reduce the annual revenue per employee from $246.85 (default amount in Town’s fiscal model) to $208.36 . 11 The square footage per employee values come from the Town of Windsor Fiscal Model default assumptions. 12 Other annual municipal revenues are assumed to support the Town of Windsor General Fund. Development Scenario Auto Dealerships Only 204 $42,505 Auto Dealerships + Commercial Scenario 1 254 $52,923 Auto Dealerships + Commercial Scenario 2 269 $56,049 Projected Number Town of Windsor of Site FTE Municipal Revenues (1) PAGE 10 Figure 8. Capital Expansion Fees (One-Time) Note: (1) Storm drainage fee is based upon the following equation: New Growth Basin Impact Fee = (Impervious Rate Factor) X (New Growth Basin Impact Fee Factor) X (Area in sq ft) Commercial Impervious Rate Factor = 0.95, New Growth Basin Impact Fee Factor = $0.1838 per sq ft. Source: Town of Windsor Development Fee Schedule 2015; BBC Research & Consulting. Permit fees. Town building inspections are completed by a private contractor.13 BBC consulted the contractor to estimate building and electrical permit fees associated with the development. The Town receives 25 percent of the administered building, electrical and plan review fees. Figure 9 displays the estimated building, electrical and plan review fees, as well as the revenues that would accrue to the Town.14 Permit fees paid by the auto dealerships are estimated to total over $7,500, with total development permit fees expected to generate $11,000, conditional on specific pad development characteristics. 13 The Town of Windsor contracts with SAFEbuilt for building permits. 14 BBC removed building, electrical and planning fees from the Other Annual Revenues calculation to ensure no double counting of permit related revenues. SAFEbuilt collection fees were also removed from the Other Annual Revenues calculation. Sewer Plant Investment Fee Auto Dealership Meter Size - 1.5" $16,808 3 $50,424 Commercial Pad Development Meter Size - 1" $7,128 4 $28,512 Total 7 $78,936 Water Plant Investment Fee Auto Dealership Meter Size - 1.5" $30,801 3 $92,403 Commercial Pad Development Meter Size - 1" $13,062 4 $52,248 Total 7 $144,651 Storm Drainage Fee (1) Auto Dealership 30 Impervious Acres 1,306,800 $228,180 Commercial Pad Development 9.9 Impervious Acres 95% x 0.1838 x sq ft 431,244 $75,300 Total 39.9 Impervious Acres 1,738,044 $303,480 Road Impact Fee per 1,000 sq ft Auto Dealership $2,760 88,000 $242,880 Commercial Scenario 1 General Retail $3,476 20,000 $69,520 Commercial Scenario 2 General Retail $3,476 10,000 $34,760 Office General $2,840 10,000 $28,400 Total Capital Expansion Fees Auto Dealerships $613,887 Auto Dealerships + Commercial Scenario 1 $839,467 Auto Dealerships + Commercial Scenario 2 $833,107 Assumption Capital Expansion Fee Type Detail or Sq Ft or Sq Ft Fee Cost per Structure # of Structures Total PAGE 11 Figure 9. Permit Fee Revenue (One-Time) Note: (1) Building permit fees are based upon the structure’s valuation. SAFEbuilt provided general estimates, which BBC then adjusted based on anticipated valuation. (2) Electrical permit fees are based upon the structure’s valuation and electrical requirements. SAFEbuilt provided general estimates, which BBC then adjusted based on anticipated valuation. Source: BBC Research & Consulting. CAC special fees. As discussed above, the land parcel under consideration for development is located in the Corridor Activity Center (CAC). Town of Windsor Ordinance No. 2012-1440 identifies CAC parcels and presents the total to be assessed on each. Figure 10 shows the original CAC fee total for each parcel, the current total amount owed (3.05 percent annual inflation applied—2012 original year) and the expected one-time payment due to the Town of Windsor; the CAC fee will be completely repaid in seven years. Figure 10. CAC Special Fees (One-Time) Note: (1) Adjusted for inflation at an annual rate of 3.05% as stated in the Town of Windsor Ordinance, original year was 2012. Totals represent the net present value in 2015 dollars. (2) Assumes repayment of special fees over seven year period. Actual payments are in quarterly installments. Annual payment total is the net present value in 2015 dollars. Source: Town of Windsor Ordinance NO. 2012-1440; BBC Research & Consulting. Building Permit Fees (1) Auto Dealership $13,022 Commercial Pad Development $6,543 Electrical Permit Fees (2) Auto Dealership $8,970 Commercial Pad Development $2,760 Plan Review Fees Auto Dealership $8,464 Commercial Pad Development $4,253 Total Permit Fees Auto Dealerships $30,456 Auto Dealerships + Commercial Scenario 1 / Scenario 2 $44,012 Total Permit Fee Revenue Collected by Town (25% of Building, Electrical, Plan Review Fees) Auto Dealerships $7,614 Auto Dealerships + Commercial Scenario 1 / Scenario 2 $11,003 Development Fee Type Detail Tax Collected Assumption General Fund 65% of Building Permit Fee Independent Calculation Independent Calculation Land Parcel 22.8 Acre Parcel (North) $189,847 $207,753 $29,679 30.0 Acre Parcel (South) $127,828 $139,885 $19,984 Total $317,675 $347,638 $49,663 Original Fee 2015 Fee 2015 Annual Total Amount Total Amount (1) Payment Amount (2) PAGE 12 Revenue Summary. Figure 11 presents a summary of annual municipal revenues under various development scenarios. Each scenario anticipates the auto dealership and commercial retail/office space development to contribute significantly to the Town of Windsor’s General Fund, Capital Improvement Fund and Community and Recreation Center Fund. Under the most conservative development scenario (auto dealership development only), the Town of Windsor is estimated to collect over $240,000 in annual taxes, excluding the CAC fee. With commercial retail/office space development, annual tax revenues are estimated to be between $360,000 and $455,000. Figure 11. Annual Revenue Summary Source: BBC Research & Consulting. In addition to annual municipal revenues, the development would lead to significant one-time payments to the Town. Figure 12 shows the contribution to various funds under the three development scenarios, ranging from $740,000 to $1 million. The CAC total fee amount is presented independently and would result in an additional $350,000, paid over seven years. Figure 12. One-Time Fiscal Revenue Summary Note: (1) Adjusted for inflation at an annual rate of 3.05% as stated in the Town of Windsor Ordinance, original year was 2012. Totals represent the net present value in 2015 dollars. Source: BBC Research & Consulting. Development Scenario Auto Dealerships Only $155,684 $48,064 $38,051 $241,799 Auto Dealerships + Commercial Scenario 1 $263,602 $108,064 $85,551 $457,218 Auto Dealerships + Commercial Scenario 2 $222,251 $78,064 $61,801 $362,116 Annual General Fund Annual Town of Windsor Tax Collected Tax Collected Annual CIF Tax Collected Annual Rec Center Fund Tax Collected Development Scenario Auto Dealerships Only $7,614 $335,280 $29,260 $371,007 $743,161 Auto Dealerships + Commercial Scenario 1 $11,003 $122,400 $38,760 $839,467 $1,011,630 Auto Dealerships + Commercial Scenario 2 $11,003 $122,400 $38,760 $833,107 $1,005,270 CAC Fee (1) CAC Fee (Collected Over 7 Years) - - - - $347,638 General Fund CIF Rec Center Fund Town of Windsor Tax Collected Tax Collected Tax Collected Tax Collected Enterprise Funds (1) Tax Collected PAGE 13 Municipal Expenditures BBC coordinated with the Town of Windsor to utilize the Town’s existing fiscal model for estimating municipal expenditures. Town expenditures related to the development are forecasted on a full-time employee basis, meaning that the model distributes and estimates Town expenditures based upon the number of employees expected to work at the site. The Town of Windsor fiscal model assumes $658.58 of commercial related municipal expenditure per full-time employee. Figure 13 presents projected full-time employees and the estimated annual cost to the Town of Windsor under various scenarios.15 Municipal expenditure related only to the auto dealerships is estimated at around $135,000 per year. The highest anticipated fiscal expenditure is roughly $175,000 per year, which includes an additional 65 full-time employees, associated with commercial/office development. Figure 13. Annual Fiscal Expenditure Summary Source: Town of Windsor Fiscal Model Output; BBC Research & Consulting. Summary of Fiscal Impact BBC estimates that the auto dealerships and associated commercial retail/office space will produce net fiscal benefits to the Town of Windsor under all development scenarios considered for this analysis (Figure 14). The auto dealerships are expected to generate an annual net fiscal benefit of over $105,000. Including the CAC fee, each development scenario is estimated to generate at least $1.1 million in one-time tax and fee revenues for the Town of Windsor. Figure 14. Overall Fiscal Summary Note: (1) CAC fee included in one-time taxes collected, however, this fee is expected to be paid over seven years. Source: BBC Research & Consulting. 15 The Town of Windsor Fiscal Model also estimates the number of employees expected to reside within the Town (any existing Windsor residents working at the auto dealerships would be excluded), which is then used to calculate the Town’s increased residential expenditure. BBC has not incorporated the residential expenditure component of the Town’s model because the revenue model does not quantify residential revenues (property tax, sales tax, fines and fees, etc.). Additionally, given the close proximity of the auto dealerships’ current locations and the proposed site, it is unlikely that the auto dealerships existing labor force would relocate to the Town of Windsor. Development Scenario Auto Dealerships Only 204 $134,350 Auto Dealerships + Commercial Scenario 1 254 $167,279 Auto Dealerships + Commercial Scenario 2 269 $177,158 Municipal Expenditures Projected Number Town of Windsor of Site FTE Development Scenario Auto Dealerships Only $241,799 $134,350 $107,449 $1,090,799 Auto Dealerships + Commercial Scenario 1 $457,218 $167,279 $289,938 $1,359,268 Auto Dealerships + Commercial Scenario 2 $362,116 $177,158 $184,958 $1,352,908 Revenues Expenditures Outcome Tax Collected (1) Annual Municipal Annual Municipal Net Municipal One-Time PAGE 14 Other public benefits. In addition to the model’s quantified fiscal revenue estimates, the development of the auto dealerships and commercial retail/office space will generate secondary benefits that will stimulate the local economy and lead to additional fiscal revenue sources. From data provided by Fort Collins DCJR, customers travel throughout the western United States for automotive purchases. With customers traveling from as far away as North Dakota, it is likely that a portion of customers to the auto dealerships will spend a night within the Town of Windsor, generating lodging and dining expenditures that result in taxable revenues. Even on a local customer scale, customers visiting the dealerships are likely to frequent nearby retail and dining (existing and/or future) while visiting the auto dealerships. Also, the employees working at the auto dealerships, retailers or offices will stimulate the local economy through regular meal purchases and retail shopping. The Westgate Retail Center, located directly north of the proposed development, currently has roughly 8,000 square feet of vacancy (40 percent of the entire property). Due to the increased traffic volume associated with the auto dealerships, as well as the commercial space, it is likely that the center will become a more attractive business location. One commercial real estate broker stated that any non-competing development would be welcomed, as properties and businesses located off of the Interchange are in need of increased traffic and patronage. Each new business to the Town of Windsor represents additional tax revenue through sales, property tax and permitting fees. Lastly, a Fiat auto dealership will likely be constructed on the site, which is not expected to impede the construction of commercial development. The 20,000 square foot Fiat auto dealership would increase the annual net fiscal benefit to about $130,000 (auto dealerships only), an increase of $25,000 per year. BBC also estimates the Fiat auto dealership would generate around $165,000 in one-time tax and fee revenues. We hope this analysis is useful in assessing the net fiscal consequences of the auto dealership and commercial retail/office space development. Please feel free to contact us with any questions. Sincerely, Adam D. Orens Managing Director Amendments to Revenue Sharing Agreement – Economic Health Office Analysis April 29, 2016 The Economic Health Office (“EHO”) was requested to prepare an initial assessment of the proposed changes to the IGA between Windsor and Fort Collins with respect to development in the I-25/SH392 Corridor Activity Center (IGA), specifically the proposed changes to the revenue sharing portion. The results of the initial assessment are summarized below:  Original Revenue Share Analysis – EHO staff prepared a summary memorandum used during negotiations of the revenue sharing agreement that relied on an analysis prepared by BBC Research & Consulting (“BBC”). The BBC analysis estimated annual revenues generated in the area subject to the IGA would grow to $6.3 million at full development. Approximately 21 percent of these revenues would be generated on the west side of I-25 in the City of Fort Collins. The remaining would be generated on the east side in the Town of Windsor. The agreed upon revenue share agreement calls for each community to retain 65 percent of the eligible revenue and share 35 percent. Simple math indicates that Fort Collins would gain more than it shares if development met expectations used in the BBC model.  Rezoning of Retail Land to Residential – The rezoning of 45 acres of previously retail land to residential for single family development will reduce the amount of sales tax generated for revenue sharing. A specific amount was not estimated as part of the initial assessment; however, the proposed 45 acres represents nine percent of the total acreage on the east side of the interchange. This can act as a proxy for the magnitude of the potential impact.  Car Dealership Exclusion – Adding Car Dealerships as an allowed use and enabling their development on 38 acres of land will also reduce the potential sales tax from the original estimates. Car dealerships generate less sales tax revenue per square foot of development then retail uses; only parts are subject to sales tax. In addition, Car Dealerships generate Use Tax through the sale of vehicles; however, these revenues are always remitted to the place of residence in Colorado and, therefore, will continue to flow to the City. Initial estimates suggest that Car dealerships will generate between 75 and 80 percent less sales tax then retail uses on the proposed sites.  Loss from Relocation of Car Dealerships – The City will not only loose some potential revenue through the reduction of sales tax subject to the revenue sharing agreement with Windsor. The City will also loose sales tax revenue if the dealerships relocate to Windsor and halt all operations in Fort Collins. This revenue loss would likely be much larger than the loss of revenue from excluding the Car Dealerships from the revenue sharing portion of the IGA. This of course is a risk that exists regardless of the proposed changes to the IGA, as the dealers have not been able to identify suitable sites to relocate or expand in the City of Fort Collins. At most, requiring revenue sharing for the car dealerships will recover about a third of the lost revenue from relocation. The initial analysis completed by the EHO does not provide a complete estimate of the potential loss of shared revenue from the proposed changes to the IGA. However, it does provide some useful insight into the potential impact. Clearly proposed changes, single family and car dealerships both exempt, will result in less revenue generated for sharing. However, it’s unclear if these changes will fully erode the benefit Fort Collins originally estimated to gain given the disparity in sales tax generation on the two sides of I-25. 1 I-25/SH 392 Intergovernmental Agreement Amendments Tom Leeson, Community Development & Neighborhood Services Director 5-10-16 ATTACHMENT 7 I-25/SH 392 IGAAmendments 2 November 7, 2015 Joint Work Session • Amend IGA to allow Automobile Dealerships and Single Family • Add Definitions • Enhance Design Standards • Maintain Original Intent I-25/SH 392 IGAAmendments 3 • Staff from Fort Collins and Windsor worked on Enhanced Design Standards • Town of Windsor held public meetings and Board work sessions • Fort Collins received formal proposal from Windsor on April 11, 2016 I-25/SH 392 IGAAmendments 4 Town of Windsor Proposed Amendments • Add “Single-Family Detached Residential” and “Automobile Dealerships” to list of permitted uses and definitions • East of I-25 only – remain prohibited uses west of I-25 • Limitations on additional permitted uses I-2392 IGAAmendments 5 Town of Windsor Proposed Amendments • Automobile Dealership Limitations • 38 acres • Northerly Moreland property I-2392 IGAAmendments 6 Town of Windsor Proposed Amendments • Automobile Dealership Limitations • 38 acres • Northerly Moreland property I-25/SH 392 IGAAmendments 7 Town of Windsor Proposed Amendments • Enhanced Design Standards: • Site Design • Landscaping • Parking Lot Screening • Buffer Yards • Building Design • Lighting • Noise • Outdoor Display • Alternative Compliance I-25/SH 392 IGAAmendments 8 Town of Windsor Proposed Amendments • Enhanced Design Standards: • IGA Sec. 3.3.1.b • “…except that the Enhanced CAC Design Standards may be modified by Town ordinance, adopted in accordance with the Town’s Home Rule Charter, notice of which shall be presented to the City no later than thirty (30) days prior to ordinance introduction.” I-25/SH 392 IGAAmendments 9 Town of Windsor Proposed Amendments • Modifications to Revenue Sharing • No Revenue Sharing for Automobile Dealership and Single-family Residential Uses • BBC Study • Revenue will not cover costs I-25/SH 392 IGAAmendments 10 Town of Windsor Proposed Amendments • Transit Site Identification • Condition annexation on landowner agreements to identify (but not dedicate or reserve) a future transit site parallel to that being identified on the Windsor side. I-25/SH 392 IGAAmendments 11 Specific Question to be Answered: Does Council support the proposed amendments to the IGA between Windsor and Fort Collins with respect to development in the I-25/SH392 Corridor Activity Center?