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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 06/19/2018 - RESOLUTION 2018-065 DISCONTINUING THE CITY COUNCILAgenda Item 15 Item # 15 Page 1 AGENDA ITEM SUMMARY June 19, 2018 City Council STAFF Josh Birks, Economic Health Director John Duval, Legal SUBJECT Resolution 2018-065 Discontinuing the City Council Mall Redevelopment Committee. EXECUTIVE SUMMARY The purpose of this item is to discontinue the City Council Mall Redevelopment Committee (the “Committee”) established by Resolution 2014-056 in July 2014. The Committee was created by Council to provide oversight and to be available to the City Manager to provide feedback concerning his administration of the Redevelopment and Reimbursement Agreement. Section 3 of the 2014 Resolution provides that it was City Council's "intent that upon completion of the redevelopment of the commercial portion of the Mall Project," the Committee would be discontinued. The commercial development portion of the Mall is now complete. The Committee is, therefore, no longer needed. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION In January 2014, the City, with City Council approval, entered into a Redevelopment and Reimbursement Agreement (the “Agreement”) with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. (the “Developer”) and the Foothills Metropolitan District regarding the Developer’s then proposed redevelopment of the Foothills Mall (the “Mall Project”). In July 2014, the City Council adopted Resolution 2014-56 to create the City Council Mall Redevelopment Committee (the Committee) and to appoint three Councilmembers to serve on the Committee. The Committee was created to provide oversight and to be available to the City Manager to provide feedback concerning his administration of the Agreement in light of the complexity of the Mall Project and the need for flexibility in future decision making concerning the Project. The Committee met as needed between 2014 and 2017 to address five amendments to the Agreement, and provide guidance on the construction of the Foothills Activity Center, and input on the design of an underpass beneath College Avenue south of Foothills Parkway. In addition, the Committee aided in monitoring the leasing activity at the Mall Project. Section 3 of Resolution 2014-056 (Attachment 1) provides that it was City Council’s “intent that upon completion of the redevelopment of the commercial portion of the Mall Project,” the Committee would be discontinued. On August 9, 2016, the City issued the final Building Permit for the construction of the commercial portion of the Mall Project (Permit #B1601150), which was completed on September 7, 2017. Therefore, commercial development at the Mall has been complete for nearly a year. No further commercial development is anticipated at the Mall Project (excepting tenant finish permits whether for unoccupied or currently occupied space). Therefore, discontinuing the Committee is consistent with the intent of the 2014 Resolution. Agenda Item 15 Item # 15 Page 2 BOARD / COMMISSION RECOMMENDATION No board or commission outreach was conducted in association with this resolution. PUBLIC OUTREACH No public outreach was conducted in association with this resolution. ATTACHMENTS 1. Resolution to Establish a City Council Mall Redevelopment Committee (PDF) 2. Mall Update Report Memo (PDF) ATTACHMENT 1 MEMORANDUM DATE: June 19, 2018 TO: Mayor and City Councilmembers THROUGH: Darin Atteberry, City Manager FROM: Josh Birks, Economic Health and Redevelopment Director RE: FOOTHILLS MALL UPDATE This memorandum responds to a request by the Leadership Planning Team on June 11, 2018 to provide an update on the Foothills Mall redevelopment project (the “Project”) as part of a Resolution to discontinue the Mall Redevelopment Committee (the “Committee”). Site, Building, & Sustainability Updates ▪ The commercial portion of the Project is substantially complete with the south mall expansion now open to the public. ▪ The Dicks Sporting Goods work is complete with an anticipated opening late July/early August. ▪ The Forever 21 space has been turned over to the tenant with an anticipated opening in June. ▪ The pedestrian/bike underpass is open to the public. The City has formed an Art committee to choose artwork to install on the retaining walls and tunnel surfaces – no established timeline for installation. ▪ Work continues to finalize the remaining punch list items on the underpass. ▪ Construction on 400 plus residential units continues. The project, called The Cycle, is actively leasing with 100 units already occupied. All units are anticipated to be complete by October 2018. ▪ The overall waste diversion rate as reported by the Institute for the Built Environment is 72% (through substantial completion). (Redevelopment Agreement requires a minimum overall diversion of 70% rate). ▪ The commercial project costs have exceeded $270 million and nearly all of the $53 million in bond proceeds have been disbursed through the Metro District (details below). ATTACHMENT 2 Financial Update Figure 1 ▪ Base year sales tax established May 2012 – April 2013 of $1.8 million and $1.3 million for Core and Dedicated taxes respectively. ▪ Sales tax collections through April 2018 (which represents sales activity through March 2018), at $2.1 million for Core and $1.5 million for dedicated, represent approximately 119 percent of the base year sales tax collections. ▪ Sales tax collections are up 6.2 percent through April 2018 compared to collections through April 2017. ▪ Sales tax collections have begun to slow as leasing activity has slowed at the mall. The opening of Dicks Sporting Goods, Forever 21, and the rest of the south mall expansion is anticipated to push sales tax collections up again. ▪ As of February 2018, collections for January 2018 sales activity the City has begun to remit sales tax increment to the Metro District per the terms of the Redevelopment Agreement. The remittance year follows a May to April calendar. Starting May 1 of each year the amount is reset against the base. Therefore no sales tax increment remittance is occurring and will not likely occur again until January/February 2019. Table 1 ▪ The project has paid approximately $9,321,068 in use tax and fees to date with $81,955 paid in during 2018 year-to-date. These are May numbers which represent collections for activity through April 2018. Bond Proceeds Utilization ▪ 35 draw requests were approved through the end of May 2018 for a total of $52.7 million. This leaves a balance of $300,000 of available bond proceeds. Draw request 36 was submitted in May to be processed and reviewed in June 2018. Foothills Leasing Update Table 2 Foothills Lease Status Summary, June 2018 ▪ As of June 2018, the project has leased 370,308 square feet with 258,256 of that amount in tenants new to Fort Collins (as per the Redevelopment Agreement definition). FEE TYPE CURRENT QTR YEAR TO DATE PROJECT TO DATE City Use Tax $15,258 $15,258 $2,350,439 County Use Tax 8,956 8,956 395,983 Permit/Development Review Fees 57,741 57,741 4,760,302 CIE & Street Oversizing Fees 0 0 1,755,921 Utility PIFS 0 0 58,424 Total $81,955 $81,955 $9,321,068 Mall Area Redevelopment Use Tax and Fees As of 4/30/18 Figure 2 ▪ Figure 2 shows the historic lease-up pattern for the Foothills redevelopment project. As of the end of the second quarter 2018, the property has leased 72 percent of the total target. Foothills Property Tax Performance At the request of Council, the Economic Health Office (“EHO”) has evaluated the current total assessed valuation adjacent to the mall. The analysis estimates the impact of the Project as a catalyst on adjacent areas compared to a citywide average baseline (the analysis focuses on commercial development). NOTE: The analysis is incomplete due to limitations in historic data availability. EHO continues to work with Larimer County to obtain data for 2012 and 2014. Table 3 Foothills Property Valuation & Tax Performance Comparison, 2016-2018 The analysis, shown in Table 3 above, was conducted for a primary and secondary area, shown in Figure 3 below. Area 1, the primary analysis area, includes the Project property and immediately adjacent commercial parcels. Area 2, the secondary analysis area, includes commercial property in Midtown along the College Avenue corridor both north and south of the Project. The analysis provides the following observations regarding performance and impact of the investment in the Project: ▪ The primary area has outperformed property valuation and tax generation growing by 73 percent since 2016 compared to a 15 percent citywide baseline (NOTE: the baseline only includes commercial property; the residential baseline has been higher). ▪ The secondary area has grown more rapidly than the baseline, though less significantly than the primary area, at 21 percent compared to 15 percent – showing a catalytic impact of the Project’s investment; ▪ Finally, this analysis – due in part to the lag in property valuations and availability of historic data – is incomplete as it does not show the complete impact of the Project. An analysis that includes 2012, 2014, and 2020 valuations will provide a more complete picture of the impact. EHO continues to work with Larimer County to obtain historic data. 2016 2018 Increase in Assessed Value Primary $ 55,580,498 $ 96,149,176 73% Secondary $ 61,228,471 $ 73,939,478 21% Baseline $ 2,162,720,870 $ 2,497,044,667 15% Figure 3 Property Valuation Performance Map -1- RESOLUTION 2018-065 OF THE COUNCIL OF THE CITY OF FORT COLLINS DISCONTINUING THE CITY COUNCIL MALL REDEVELOPMENT COMMITTEE WHEREAS, in January 2014, the City, with City Council approval, entered into a Redevelopment and Reimbursement Agreement (the “Agreement”) with the Fort Collins Urban Renewal Authority, Walton Foothills Holdings VI, L.L.C. (the “Developer”) and the Foothills Metropolitan District regarding the Developer’s then proposed redevelopment of the Foothills Mall (the “Mall Project”); and WHEREAS, in July 2014, the City Council adopted Resolution 2014-056 (the “2014 Resolution”) to create the City Council Mall Redevelopment Committee (the “Committee”) and to appoint three Councilmembers to serve on the Committee; and WHEREAS, the Committee was created by Council to provide oversight and to be available to the City Manager to provide feedback concerning his administration of the Agreement in light of the complexity of the Mall Project and the need for flexibility in future decision making concerning the Project; and WHEREAS, Section 3 of the 2014 Resolution provides that it was City Council’s “intent that upon completion of the redevelopment of the commercial portion of the Mall Project,” the Committee would be discontinued; and WHEREAS, the commercial portion of the Mall Project has been completed for over a year and, therefore, the Council hereby finds and determines that the Committee is no longer needed. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the Committee is hereby discontinued. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 19th day of June, A.D. 2018. _________________________________ Mayor ATTEST: _____________________________ City Clerk