HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/21/2018 - RESOLUTION 2018-074 APPROVING AND AUTHORIZING THEAgenda Item 19
Item # 19 Page 1
AGENDA ITEM SUMMARY August 21, 2018
City Council
STAFF
Brad Buckman, Manager, Civil Engineering
John Duval, Legal
SUBJECT
Resolution 2018-074 Approving and Authorizing the Execution of an Intergovernmental Agreement with the
Town of Timnath for Financial Participation in the I-25/Prospect Interchange Improvements.
EXECUTIVE SUMMARY
The purpose of this item is to enter into an Intergovernmental Agreement with the Town of Timnath and the
City of Fort Collins regarding Timnath’s portion ($2.5 million) of financial participation in the reconstruction of
the interchange at I-25 and Prospect Road.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BACKGROUND / DISCUSSION
The Colorado Department of Transportation (CDOT) is making improvements to Interstate Highway 25 (I-25) in
Northern Colorado beginning in 2018. These improvements were identified in the North I-25 Environmental
Impact Statement (Record of Decision 2011). The improvements include repair or replacement of two bridges,
expansion of a third managed lane in each direction, and bus slip ramps and a park and ride facility at Larry
Kendall Parkway in Loveland. The project boundaries are SH-14 (Mulberry) to the north and SH-402
(Loveland) to the south.
The interchange at Prospect Road and I-25 is aging infrastructure that is currently beyond its design lifespan
and is failing in level of service (congestion) at peak periods of travel. Existing and planned development in the
area are exacerbating congestion and safety issues. The interchange and Prospect Road are a critical
gateway into central Fort Collins, as well as Timnath. City of Fort Collins staff worked closely with CDOT during
preliminary design phases to ensure improvements to the interchange meet the City’s needs, design
standards, and integrates with the City’s road network.
City staff worked with CDOT Project Managers, Town of Timnath, and private property interests proximate to
the interchange throughout the past year and a half to develop a private-public funding partnership model to
share costs related to the interchange improvements. City of Fort Collins will act as primary agent with CDOT
on the funding agreement, with separate repay agreements to the City from Town of Timnath, and the private
property interests. Council is being asked in this agenda item to consider the Resolution to approve an
intergovernmental agreement between the Town of Timnath and the City of Fort Collins under which Timnath
will agree to pay, over a twenty (20) year period, $2.5 million toward the total reconstruction cost of the
interchange at I-25 and Prospect Road, with Fort Collins and Timnath also agreeing to share sales tax
revenues generated from certain privately-owned properties near the interchange (the “IGA”).
Agenda Item 19
Item # 19 Page 2
Fort Collins will begin issuing payment to CDOT in April 2019 and continue payments for a three-year period to
CDOT. City of Fort Collins’ share in the interchange improvements is $8.25 million. Details of these
agreements are outlined in the Financial Impacts Section below.
On July 24, 2018, the Timnath Town Council approved the IGA.
CITY FINANCIAL IMPACTS
Total cost for CDOT to improve the interchange is estimated at $31 million. This includes an additional $7
million (beyond CDOT’s basic interchange design standard) for urban design amenities required by the City of
Fort Collins and to be paid by Fort Collins, Timnath and private property interests. CDOT will share in 50% of
the base design portion, or $12 million. The remaining $19 million will be split across the City, property owners,
and Timnath at 43.4%, 43.4%, and 13.2%, respectively. Timnath’s share is based on traffic studies with the
City and property owners evenly splitting the remaining $16.5 million cost at $8.25 million each.
The City proposes to finance the cost of this project through Certificates of Participation (COPs). The principal
borrowed is the balance of the $19 million costs after accounting for right-of-way (ROW) contributions and
Transportation Capital Expansion Fees (TCEF). The net amount currently projected is $17.1 million but will
depend on final negotiations and ROW contributions. The City would be responsible for debt service in full and
then separately collect from Timnath and the property owners under the aforementioned repayment
agreements. The City share includes approximately $1.4 million contribution from Transportation Capital
Expansion Fees (TCEF).
There is a BFO offer in the 2019/2020 budget requesting annual funding that would meet the debt obligation of
the City for the COPs. Final approval of budget is in November of 2018 and final issuance of debt and
subsequent payments will not occur until 2019. A standalone ordinance will be needed for the debt issuance.
The below table displays both cost sharing and debt service sharing, subject to final negotiations:
Total FC Property Timnath
Overpass Cost $ 19.00 $ 8.25 $ 8.25 $ 2.50
% Share of Cost 43.4% 43.4% 13.2%
Less ROW Value $ 0.5
Less TCEF $ 0.7 $ 0.7
Debt Obligation $ 17.10 $ 7.55 $ 7.05 $ 2.50
% Share of Debt 44.2% 41.2% 14.6%
Borrow - Principle $ 17.10
Term 20
Interest 4.50%
Payment Share (unrounded) $ 1,314,582 $ 580,415 $ 541,977 $ 192,190
Partners Share Allocation ($ in millions)
Per Resolution 2018-004, approved on January 2, 2018, the City agreed to remit $17 million to CDOT, spread
over the next three years, beginning in April 2019. These funds represent the total public-private share for
improving the I-25 interchange at Prospect Road ($12 million for interchange improvements; $5 million for
urban design elements). While the total urban design requirement is $7 million, $5 million would be included in
the CDOT IGA and managed during the CDOT Corridor Improvements Project. The remaining $2 million for
urban design will be included in a City-managed project to complete the irrigation and landscaping after the
CDOT project is completed. CDOT will provide $12 million towards the interchange improvements, to be
included in the overall North I-25 Corridor Improvements Project, segments 7 and 8.
Agenda Item 19
Item # 19 Page 3
Per Resolution 2018-005, approved on January 2, 2018, the property owners of land on each quadrant of the
interchange agreed to remit $8.25 million plus applicable interest minus any contributions of rights-of-way to
the City of Fort Collins. Property owners will pay for their share of the interchange improvements through a
combination of mill levy, impact fees, and public improvement fees.
TIMNATH’S SHARE
Under the IGA, Timnath will pay Fort Collins a total of $2.5 million over twenty (20) years in fully amortized
payments accruing interest at the rate the City will incur in the COPs transaction. Timnath’s first payment to
Fort Collins for the Timnath Share under the IGA shall be due and payable one (1) year after the date Fort
Collins closes on its COPs financing. The COPs Interest Rate shall begin to accrue on the principal of the
Timnath Share on the date Fort Collins closes on its COPs financing. The IGA also includes a sharing of sales
tax revenues as detailed in Section 3 of the IGA. This obligation to share collected sales tax revenues shall
begin in the first calendar year that the total gross taxable sales generated from the Timnath Properties is
equal to or greater than ten million dollars ($10,000,000).
BOARD / COMMISSION RECOMMENDATION
City staff regularly presents updates to the I-25 Corridor Improvements Project, including the Prospect
interchange funding proposal, to the Transportation Board (to date February 2016, November 2016, March
2017, September 2017). While no action is taken, the Board is generally supportive of steps to improve I-25
and the Prospect interchange, and appreciates efforts to include design elements for bicycle, pedestrian and
transit users.
PUBLIC OUTREACH
CDOT has conducted numerous public meetings regarding the I-25 Improvements Project throughout Northern
Colorado. CDOT Project Managers also attended Fort Collins Council work sessions in December 2016 and
January 2018.
ATTACHMENTS
1. Resolution 2018-004 (PDF)
2. Resolution 2018-005 (PDF)
ATTACHMENT 1
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STATE OF COLORADO AMENDMENT
Amendment #: 1 Project #: 21506
SIGNATURE AND COVER PAGE
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CONTRACTOR
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STATE OF COLORADO
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North I-25
Fort Collins - $12M Contribution for Interchange; $5M Contribution for the urban design elements
(aesthetic/landscape enhancements) for the interchange ($17M Total Contribution)
Scope of Work
Reconstruct the existing diamond interchange at I-25 and Prospect Road, including reconstruction of the
ramps, bridge, and Prospect Road. Prospect Road will be reconstructed to a configuration with four
through lanes, with a raised median, left turn lanes, and pedestrian and bicycle facilities. Work is
expected to start on the interchange after July 1, 2018.
Urban design elements to be included in the North I-25 Project are per the “CDOT Project” column in the
table below.
ITEM DESCRIPTION CDOT
PROJECT
CITY/TOWN
PROJECT
BRIDGE ENHANCEMENTS
Structural Concrete Stain on Bridge Curb, Girders, MSE Walls X
Upgraded Pedestrian Rail on Bridge X
Median & Pork Chop Island Cover Material (Color Concrete) X
Irrigation Sleeves and Pull Boxes X
GORE AREAS AND RAMPS
Earthwork/Import (related to Landscape/Urban Design) X
Stone Outcrops (including design, mock ups, installation) X
Boulders X
Cobble Swales X
Landscape Design X
Soil Conditioning X
Fine Grading X
Turf Reinforcement Mat X X
Seed X X
Boulders X
Landscaping (Trees, Shrubs, Ornamental Grasses, Perennials, Mulch, etc) X
Irrigation Design X
Irrigation Tap, Meter & Backflow X
Irrigation Sleeves X
Irrigation System X
PROSPECT ROAD
Prospect Rd. Median - Perforated Pipe Underdrain X
Prospect Rd. Median – Membrane X
Prospect Rd. Median – Rock Filter Material X
Prospect Rd. Median - Topsoil X
Prospect Rd. Median – Double Curb X
Electrical conduit for City Street Lights X
Electrical controls and service for City Street Lights X
City Street Lights/Electrical X
Landscape Design X
Soil Conditioning X
Fine Grading X
Seed X X
Turf Reinforcement Mat X X
Boulders X
Trees, Shrubs, Ornamental Grasses & Perennials, Mulch, etc X
Irrigation Design X
Irrigation Tap, Meter & Backflow X
Irrigation Sleeves X
Irrigation Sleeves X
Monument Sign - Fort Collins X
Monument Sign - Timnath X
Technical Requirements:
Design:
- CDOT shall consult with the Local Agency throughout the preparation of the Plans and submit to the
Local Agency for its review the proposed Plans prior to CDOT's acceptance of Release for Construction
Plans. The Local Agency must provide comments on the proposed Plans within 10 calendar days after
the proposed Plans are referred to it. CDOT will require the Design Build Contractor to address all issues
identified by the Local Agency provided those issues are not in conformance with the Contract
Documents.
- The Local Agency shall waive all review fees for design.
- The Local Agency shall not require additional design reviews beyond those required by the contract.
Construction:
- The Local Agency shall waive all permit fees for street use permits.
- The Local Agency requires that Infrastructure that becomes City of Fort Collins inventory follow
inspection requirements per LCUASS Standards.
- The Local Agency requires that infrastructure within City of Fort Collins Right-of-Way be follow final
acceptance requirements per LCUASS Standards.
- CDOT shall consult with the Local Agency for its review of traffic control plans related to road closures.
- The Local Agency requires 7 calendar days of advance notification for road closures.
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CITY OF FORT COLLINS - TOTAL $19,250,000.00
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ATTACHMENT 2
MEMORANDUM OF UNDERSTANDING PERTAINING TO DEVELOPMENT OF
INTERSTATE HIGHWAY 25 AND PROSPECT ROAD INTERCHANGE
THIS MEMORANDUM OF UNDERSTANDING is made and entered into this _____ day
of January, 2018, (this “MOU”) by and between the City of Fort Collins, Colorado, a Colorado
home rule municipality (the “City”); Fort Collins/I-25 Interchange Corner, LLC, a Colorado
limited liability company (“FCIC”); Gateway at Prospect Apartments, LLC, a Colorado limited
liability company (“GAPA”); Land Acquisition and Management, LLC, a Colorado limited
liability company (“LAAM”) representing a group of tenants in common (collectively, the
“LAAM Owners”); Paradigm Properties LLC, a California limited liability company
(“Paradigm”); and Colorado State University Research Foundation, a Colorado non-profit
corporation (“CSURF”). The City, FCIC, GAPA, the LAAM Owners, Paradigm and CSURF
shall hereafter be collectively referred to as the “Parties.”
RECITALS
WHEREAS, the interchange at Interstate Highway 25 and Prospect Road (the
“Interchange”) is owned by the State of Colorado and operated and maintained by the Colorado
Department of Transportation (“CDOT”); and
WHEREAS, the Interchange is within the City’s boundaries and adjacent to its four (4)
corners are several undeveloped parcels of privately-owned land, which parcels are also within the
City’s boundaries; and
WHEREAS, FCIC is the fee title owner of a parcel of land adjacent to the northwest corner
of the Interchange, which parcel is legally described and depicted in the attached Exhibit “A”
incorporated herein (the “FCIC Parcel”); and
WHEREAS, GAPA is the fee title owner of a parcel of land adjacent to the northwest
corner of the Interchange, which parcel is legally described and depicted in the attached Exhibit
“B” incorporated herein (the “GAPA Parcel”); and
WHEREAS, the LAAM Owners are the fee title owners of the three (3) parcels of land
adjacent to the northeast corner of the Interchange, which parcels are legally described and
depicted in the attached Exhibit “C” incorporated herein (the “LAAM Owners Parcels”); and
WHEREAS, Paradigm is the fee title owner of the two (2) parcels of land adjacent to the
southeast corner of the Interchange, which parcels are legally described and depicted in the
attached Exhibit “D” incorporated herein (the “Paradigm Parcels”); and
WHEREAS, CSURF is the fee title owner of the two (2) parcels of land adjacent to the
southwest corner of the Interchange, which parcels are legally described and depicted in the
attached Exhibit “E” incorporated herein (the “CSURF Parcels”); and
WHEREAS, hereafter, FCIC, GAPA, the LAAM Owners, Paradigm and CSURF shall be
collectively referred to as the “Property Owners” and the FCIC Parcel, GAPA Parcel, the LAAM
Owners Parcels, Paradigm Parcels and CSURF Parcels shall be collectively referred to as the
“Properties”; and
EXHIBIT A
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WHEREAS, CDOT has notified the City that it is planning a project to significantly modify
and improve the Interchange by reconstructing its ramps and bridge and by reconstructing Prospect
Road to a configuration with four (4) through lanes, a raised median, left turn lanes and pedestrian
and bicycle facilities, with this work to include certain enhanced urban design elements, and
expected to begin construction after July 1, 2018 (the “Project”); and
WHEREAS, the Project will provide significant public benefits to the City and its residents,
and it will benefit the Property Owners by materially increasing the value of the Properties; and
WHEREAS, the City, the Property Owners and the Town of Timnath, Colorado
(“Timnath”) intend to share in the cost of certain urban design improvements in the Project
required under the City’s development standards (the “Urban Design Features”); and
WHEREAS, CDOT estimates that the total cost of the Project, as originally proposed by
it, will be approximately $24 million, but it has indicated that it will only provide $12 million to
fund the Project, leaving a $12 million deficit; and
WHEREAS, the Urban Design Features planned by the City will add an additional $7
million to the cost of the Project, bringing the total Project cost to $31 million; and
WHEREAS, CDOT has asked the City to participate in the Project by funding the $12
million deficit originally identified by CDOT, but the City is only willing to consider funding this
deficit if the additional $7 million of Urban Design Features are included in the Project and if the
Property Owners share in funding this $19 million deficit; and
WHEREAS, the City has also asked Timnath to share in funding this deficit because
Timnath will also experience significant public benefits from the Project; and
WHEREAS, the City and Timnath are attempting to negotiate a separate agreement in
which Timnath would reimburse the City for $2.5 million of the $19 million deficit to be paid over
a twenty (20) year period, a copy of which agreement is attached as Exhibit “F” and incorporated
herein, (the “Timnath Agreement”) thereby leaving a $16.5 million deficit (the “Remaining
Deficit”); and
WHEREAS, the City and the Property Owners have agreed to equally share the Remaining
Deficit by the Property Owners agreeing to reimburse the City over time a collective fifty-percent
(50%) share estimated to be approximately $8.25 million, plus interest as hereinafter provided,
from a combination of property tax, public improvement fees (“PIF”) and Project Fees (defined
below), as will be set forth in the service Plan of the I-25/Prospect Interchange Metro District
(defined below), imposed on and collected from development occurring on the Properties (the
“Shared Deficit”); and
WHEREAS, the City has also agreed, as described in Sections 3 and 4 below, to credit
against the Property Owners’ portion of the Shared Deficit the value of the Property Owners’ land
dedicated to CDOT for the Project, including the dedication of rights of way for the Project and
Urban Design Features, and a share of the transportation capital expansion fees that are anticipated
to be paid to the City pursuant to Fort Collins Code Section 7.5-32 related to the future
development of the Properties (the “Owners’ Share”); and
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WHEREAS, the Property Owners wish to fund their payment of the Owners’ Share by
including all of the Properties in a master metropolitan district (the “I-25/Prospect Interchange
Metro District”), which will be created, organized and operated under Title 32 of the Colorado
Revised Statutes (“District Act”); and
WHEREAS, the Property Owners also wish to use other metropolitan districts to construct
and fund some or all of the basic public infrastructure that will be needed in connection with the
future development of their individual Properties, whether such development is commercial or
residential in nature, as well as for maintenance of such infrastructure and for all other purposes
allowed by the District Act (the “Development Metro Districts”); and
WHEREAS, the I-25/Prospect Interchange Metro District and the Development Metro
Districts shall be collectively referred to herein as the “Metro Districts”; and
WHEREAS, because the formation of each of the Metro Districts contemplated hereby will
affect the development and tax base of the Properties and will provide funding for the Project and
other public improvements, each of the Metro Districts will contribute to essential regional and
local public infrastructure that will have significant community benefits, including the provision
of transportation improvements within the City; and
WHEREAS, under the District Act the Metro Districts cannot be created without the
Council of the City of Fort Collins (the “City Council”) approving a service plan for each of the
Metro Districts (each a “Service Plan” and collectively “Service Plans”) which, together with the
District Act, will govern the operation of the Metro Districts and, among other things, their
authority to impose, collect, spend and pledge property taxes and Project and District Fees; and
WHEREAS, the Service Plans will also delineate the type of basic public infrastructure
and services the Metro Districts are authorized to provide and how the Metro Districts are intended
to cooperate with each other, the City and the Property Owners to fund regional and local
infrastructure; and
WHEREAS, the Property Owners are further willing, subject to the City Council’s
approval of the Service Plans, to record against their respective Properties for the benefit of a party
to be determined in accordance with applicable law, a covenant, free and clear of all prior liens
and encumbrances, except real property taxes, imposing a PIF at a rate from 0.5 % to 1.0%, net of
any administrative fees for collection, on all future retail sales on the Properties that are also subject
to the City’s sales tax under Article III of City Code Chapter 25, (the “PIF Covenant”) and for
that collected PIF to be irrevocably pledged, either in the PIF Covenant itself or in a separate
assignment and pledge document executed by the original beneficiary of the PIF Covenant, for the
payment of the Owners’ Share; and
WHEREAS, the actual amounts of the PIF, Project Fees and property tax to be paid to the
City on an annual basis for the Owners’ Share will be calculated based on a payout of
approximately twenty (20) years; and
WHEREAS, this MOU sets forth the Parties’ understanding of how the Owners’ Share will
be funded and paid over time to the City from the sources identified herein.
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NOW, THEREFORE, the Parties hereby set forth their acknowledgements, understandings
and intentions under this MOU:
1. Purpose. The Parties acknowledge and agree that, except as specifically set forth below,
the purpose of this MOU is not to bind the Parties to any obligation but to set forth the Parties’
intention to cooperate in good faith to negotiate a binding agreement under which the Property
Owners will pay the Owners’ Share to the City (the “Binding Agreement”), including how the
Property Owners intend to use the Metro Districts to pay eligible Project and other public
improvement costs.
2. Metro Districts.
a. The Parties agree that the Binding Agreement will set out the process and timeline
by which the Property Owners will submit to the City a Service Plan for each of the
Metro Districts for City staff review and City Council’s subsequent formal
consideration. Nothing contained herein or in the Binding Agreement shall be
deemed to limit the discretion of the City Council in the public hearing process as
it considers resolutions of approval of the Service Plans. Each Property Owner may
prepare Service Plans and petition the formation of Development Metro Districts
as separate “taxing” and “service” districts. Such Service Plans shall be consistent
with and satisfy the requirements of the District Act and include, without limitation,
the following provisions:
i. Authority for the Development Metro Districts to impose a property tax levy
of up to 80 mills less the amount of the Project Mill Levy (defined below)
on the Properties and all other taxable property within the boundaries of the
Development Metro Districts to be used to fund the construction, operation
and maintenance of public improvements, including basic infrastructure,
related to the future development of the Properties (the “Development Mill
Levy”);
ii. Authority for the I-25/Prospect Interchange Metro District to impose a
property tax mill levy at a rate not less than 5.0 mills nor greater than 10.0
mills, net of administrative costs of collection, on the Properties and all
other taxable property within the boundaries of the I-25/Prospect
Interchange Metro District (the “Project Mill Levy”).
iii. Authority for the I-25/Prospect Interchange Metro District to impose
development fees on future development on the Properties in amounts
agreed to in the Binding Agreement, in an amount to be determined but not
to exceed $5,000 per net developable acre, payable at the time of issuance
of each vertical development permit, (“Project Fees”) and to enter into an
intergovernmental agreement with the City to irrevocably pledge all of the
revenues from the Project Mill Levy, the Project Fees and the PIF received
by the I-25/Prospect Interchange Metro District to the payment of the costs
of the Project in an amount not greater than the Owners’ Share (the “Capital
Pledge Agreement”). The Parties agree to proceed in good faith to
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negotiate substantially final forms of the Capital Pledge Agreement and the
Binding Agreement for attachment as exhibits to the Service Plan for the I-
25/Prospect Interchange Metro District, giving specific attention to (a) the
method of calculation and adjustment, if any, of the Owners’ Share, (b) the
timing, duration, and terms of payment from the above-referenced sources
of the obligation of the I-25/Prospect Interchange Metro District under the
Capital Pledge Agreement; and (c) the effect of delays, if any, in the
issuance and publication by the Federal Emergency Management Agency
of a final Letter of Map Revisions for the Boxelder Creek Drainage upon
such payments. The Binding Agreement and the Service Plans will also
reserve to each Metro District the right to charge additional fees or charges
for services, programs or facilities furnished by such Metro Districts in
addition to those identified herein as being related to the Project (“District
Fees”), the revenue from which shall not be pledged to the City;
iv. Condition that the I-25/Prospect Interchange Metro District must submit a
ballot issue to its electorate at a May 8, 2018, organizational election that
complies with all applicable requirements of Colorado’s Taxpayer’s Bill of
Rights (known as “TABOR”) and any other applicable law in order to
authorize the I-25/Prospect Interchange Metro District to impose the Project
Mill Levy and to approve the Capital Pledge Agreement as a binding
multiple-fiscal year obligation for payment of the Owners’ Share from all
or any combination of proceeds of the Project Mill Levy, the Project Fees
and the portion of the PIF received by the I-25/Prospect Interchange Metro
District, and the voters of the I-25/Prospect Interchange Metro District must
approve such ballot issue;
v. Condition that the Development Metro Districts cannot impose any of the
Development Mill Levy, impose any Project or District Fees or issue any
debt unless and until the I-25/Prospect Interchange Metro District and the
City have entered into the Capital Pledge Agreement;
vi. Condition that the Development Metro Districts cannot impose any of the
Development Mill Levy, impose any Project or District Fees or issue any
debt without the Property Owners recording against each of their respective
Properties the PIF Covenant, in a form first approved by and acceptable to
the City, to be in effect until the Owners’ Share is paid in full to the City;
vii. Condition that the Capital Pledge Agreement shall not be entered into and
no Project Mill Levy or Project or District Fees shall be imposed or
collected unless and until any proposed Metro District Service Plans,
containing the authorities referenced above, that have been duly filed with
the City are approved as contemplated in this MOU;
viii. Requirement that the Project Mill Levy and the Project Fees collected by
the I-25/Prospect Interchange Metro District to pay the Owners’ Share as
required by the Capital Pledge Agreement shall expire when the Owners’
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Share is paid in full to the City. The Property Owners and/or each
Development Metro District shall retain the right to continue to impose,
collect, receive and apply the PIF and any District Fees deemed appropriate
by such Property Owner and/or Development Metro District to the extent
authorized in the Service Plans and the District Act; and
ix. Requirement that the I-25/Prospect Interchange Metro District and its right
to impose taxes and fees shall terminate upon the payment in full of the
Owners’ Share.
3. Property Owners’ Right-of-Way Credit. The Parties understand that CDOT will be
seeking to acquire from one or more of the Property Owners portions of their Properties to be used
as right-of-way for the Project (“Project ROW”). The Binding Agreement will provide that
affected Property Owners may elect, in lieu of collecting direct compensation from CDOT, to
dedicate their portion of the Project ROW compensation to CDOT and the value of that dedication
will be applied as a credit against the Owners’ Share (“ROW Credit”). The value of the ROW
Credit is not currently known by the Parties, but is currently estimated to be within a range of
$500,000 to $1,000,000. The agreed value of the ROW Credit (solely for purposes of the Binding
Agreement) will be addressed in the Binding Agreement. None of the Property Owners intends,
by the execution of this MOU or any document contemplated hereby, to waive its rights to full and
just compensation for the taking of its property or to due process with respect to such right of way
acquisition.
4. Property Owners’ Credit for Transportation Capital Expansion Fees. The City
currently has $1.4 million of transportation capital expansion fee revenues (“TCEFs”) available
to help fund this Project. In recognition of the TCEFs that the Property Owners are likely to pay
to the City when they develop their Properties, the City is willing to agree in the Binding
Agreement to credit one half of these available TCEFs, or $700,000, to the payment of the Owners’
Share, so long as the Property Owners are not in default of any applicable terms and conditions of
the Binding Agreement (“TCEF Credit”).
5. Owners’ Share after Credits. The Parties anticipate that if the Binding Agreement grants
to the Property Owners a ROW Credit of $500,000 and the TCEF Credit of $700,000, the
remaining balance of the Owners’ Share will be approximately $7.05 million plus interest as
provided in paragraph 6 below.
6. I-25/Prospect Interchange Metro District’s Obligation to Fund Owners’ Share. The
Project Mill Levy, the Project Fees and any PIF revenues received by the I-25/Prospect Metro
District shall be imposed, secured and collected in the manner provided by law, and the revenues
derived from such taxes and fees shall be pledged pursuant to the Capital Pledge Agreement for
payment of the Owners’ Share. The obligation of the I-25/Prospect Interchange Metro District to
pay the Owners’ Share under the Capital Pledge Agreement shall be approved by the electors of
the I-25/Prospect Interchange Metro District as provided in Section 2(a)(iv) hereof and shall
constitute the unconditional, valid and binding limited tax general obligation of the I-25/Prospect
Interchange Metro District, secured by its covenant to impose general ad valorem property taxes
at a rate not to exceed 10.0 mills in each year, net of administrative costs of collection, together
with the proceeds of PIFs and other available funds and revenues to pay an amount equal to each
7
annual installment of the Owners’ Share identified in the Capital Pledge Agreement. Nothing
herein prevents agreements among the Property Owners for the allocation or sharing of all or a
portion of the Owners’ Share, provided that any agreement among and between the Property
Owners or among and between the Metro Districts for the allocation of liability or rights of
contribution for payment of the Owners’ Share, will be pursuant to separate agreement(s) to which
the City will not be a party nor bound to in any way. In the event that revenues allocated in the
Capital Pledge Agreement to pay any annual installment of the Owners’ Share are not sufficient,
the unpaid amount of that installment shall accrue interest from the date payment is due until paid
at the interest rate the City charges under its “Inter-agency Loan Program” found in Section 8.8 of
its “Financial Management Policy 8.”
7. Future Negotiations. Upon the full execution of this MOU, the Parties intend to proceed
diligently and in good faith to negotiate the Binding Agreement consistent with the
acknowledgements, understandings and intentions stated in this MOU. The primary
representatives and legal counsel in these negotiations for the City and each of the Property Owners
shall be those persons designated in Section 10(a). It is the Parties’ intention to complete these
negotiations and enter into the Binding Agreement by March 7, 2018.
8. Capped Costs. The Parties acknowledge and agree that for purposes of the Property
Owners’ obligations under this MOU, the Binding Agreement and all other agreements
contemplated herein, total Project cost and the total cost of the Urban Design Feature shall be
capped at the amounts set forth in the Recitals.
9. Miscellaneous.
a. Representatives and Notice. The Parties’ respective designated representatives and
legal counsel for negotiations and communications concerning the Binding
Agreement, and their contact information, are as follows:
For the City: Mike Beckstead
Chief Financial Officer
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80524
970-221-6795
mbeckstead@fcgov.com
John Duval
Deputy City Attorney
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80524
970-416-2488
jduval@fcgov.com
For FCIC and GAPA: Fort Collins/I-25 Interchange Corner, LLC and/or
8
Gateway at Prospect Apartments, LLC
c/o Neihart Land Company, LLC
580 Hidden Valley Road
Colorado Springs, CO 80919
Attn: R. Tim McKenna
719-641-6527
tim.mckenna@neihartland.com
With a copy to: Brownstein Hyatt Farber Schreck, LLP
410 17
th
Street, Suite 2200
Denver, CO 80202
Attn: Carolynne C. White, Esq.
303-223-1197
CWhite@BHFS.com
For LAAM: Land Acquisition and Management, LLC
#4 West Dry Creek Cr, Suite 100
Littleton, CO 80120
Attn: Rick White
303-601-5463
rwhite@laam.biz
With a copy to: Kutak Rock LLP
1801 California Street, Suite 3100
Denver, Colorado 80202
Attn: Daniel C. Lynch, Esq.
303-292-7875
dan.lynch@kutakrock.com
And a copy to: Kutak Rock LLP
1801 California Street, Suite 3100
Denver, Colorado 80202
Attn: Robert C. Roth, Jr., Esq.,
(303) 292-7802
Robert.RothJr@KutakRock.com
For Paradigm: Paradigm Properties, LLC
2300 Knoll Drive, Suite A, 2
nd
Floor
Ventura, CA 93003
Attn: Jeffrey Hill
jeffreyahill@gmail.com
With a copy to: Kutak Rock LLP
1801 California Street, Suite 3100
Denver, Colorado 80202
Attn: Daniel C. Lynch, Esq.
9
303-292-7875
dan.lynch@kutakrock.com
For CSURF: Colorado State University Research Foundation
2537 Research Boulevard, Suite 200
Fort Collins, CO 80526
Attn: Rick Callan
Senior Real Estate Analyst
970-492-4502
Rick.Callan@colostate.edu
With a copy to: Colorado State University Research Foundation
2537 Research Boulevard, Suite 200
Fort Collins, CO 80526
Attn: Donna Baily, Esq.
Senior Legal Counsel
970-492-4506
Donna.Baily@colostate.edu
b. Execution in Counterparts and Facsimile Signatures. This MOU may be
executed in multiple counterparts and with facsimile signatures; each of which
will be deemed an original and all of which taken together will constitute one and
the same memorandum of understanding.
c. Recordation of Agreement. This MOU shall not be recorded in the office of the
Larimer County Clerk and Recorder.
IN WITNESS WHEREOF, the Parties have executed this MOU as the date and year first
above written.
FCIC:
FORT COLLINS/I-25 INTERCHANGE CORNER, LLC,
a Colorado limited liability company
By: MCKENNA MANAGEMENT, LLC,
a Colorado limited liability company
its co-Manager
By: _____________________________
Name: R. Tim McKenna
Title: Manager
[Signatures continue on following page(s)]
GAPA:
GATEWAY AT PROSPECT APARTMENTS, LLC,
a Colorado limited liability company
By: MCKENNA MANAGEMENT, LLC,
a Colorado limited liability company
its co-Manager
By: _____________________________
Name: R. Tim McKenna
Title: Manager
[Signatures continue on following page(s)]
LAAM:
LAND ACQUISITION AND MANAGEMENT, LLC,
a Colorado limited liability company, as representative of
100% of the ownership interests in the LAAM Owners Parcels
By: ______________________________
Name: ____________________________
Title: Manager
[Signatures continue on following page(s)]
Paradigm:
PARADIGM PROPERTIES, LLC,
a California limited liability company
By: ______________________________
Name: Jeffrey A. Hill
Title: Managing Member
[Signatures continue on following page(s)]
CSURF:
COLORADO STATE UNIVERSITY RESEARCH FOUNDATION,
a Colorado nonprofit corporation
By: ______________________________
Name: Kathleen Henry
Title: CEO and President
-1-
RESOLUTION 2018-074
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING AND AUTHORIZING THE EXECUTION OF AN
INTERGOVERNMENTAL AGREEMENT WITH THE TOWN OF
TIMNATH FOR FINANCIAL PARTICIPATION IN THE
I-25/PROSPECT INTERCHANGE IMPROVEMENTS
WHEREAS, the interchange at Interstate Highway 25 and Prospect Road (the
“Interchange”) is owned by the State of Colorado (the “State”) and operated and maintained
by the Colorado Department of Transportation (“CDOT”); and
WHEREAS, CDOT is in the process of implementing a construction project to
significantly modify and improve the Interchange by reconstructing its ramps and bridge and
by reconstructing Prospect Road to a configuration with four through lanes, a raised median, left
turn lanes and pedestrian and bicycle facilities, with this work to include certain enhanced urban
design elements and expected to begin after July 1, 2018 (the “Project”); and
WHEREAS, CDOT has estimated that the total cost of the Project will be
approximately $31 million, but it has indicated that it will only provide $12 million to fund
the Project, leaving a $19 million deficit (the “Deficit”); and
WHEREAS, CDOT has asked Fort Collins to participate in the Project by funding
the Deficit and, to memorialize Fort Collins’ obligation to fund the Deficit, CDOT and Fort
Collins have entered into the “State of Colorado Amendment, Amendment #:1, Project #:
21506” (the “CDOT IGA”); and
WHEREAS, while the Interchange is within Fort Collins’ boundaries and the Project
will provide significant transportation and economic benefits to Fort Collins and its
residents, others will experience significant direct benefits from the Project as well,
including Timnath and five private entities (the “Property Owners”) that own several parcels
of real property located within Fort Collins’ boundaries that are adjacent to the four corners
of the Interchange (the “Fort Collins Properties”); and
WHEREAS, Timnath will benefit from the Project because the Interchange serves as
a gateway into Timnath and the Project will benefit several other privately-owned properties
located to the east of Interstate Highway 25 along and near Prospect Road, which are now
either in Timnath’s boundaries or in its growth management area to be annexed into
Timnath when developed (the “Timnath Properties”); and
WHEREAS, Fort Collins has entered into the CDOT IGA and agreed to pay the
Deficit to CDOT with the understanding that Timnath and the Property Owners will share in
funding the Deficit; and
WHEREAS, Fort Collins has therefore asked Timnath, and Timnath has agreed, to
share in funding the Deficit by a reimbursing Fort Collins for $2.5 million of the Deficit,
plus an interest rate factor, to be paid in annual payments and fully amortized over a twenty
-2-
year period (“Timnath’s Share”), thereby leaving a deficit of approximately $16.5 million
(the “Remaining Deficit”); and
WHEREAS, Fort Collins and the Property Owners have also agreed in a “Binding
Agreement Pertaining to Development of Interstate Highway 25 and Prospect Road” to equally
share this Remaining Deficit by the Property Owners agreeing to reimburse the Fort Collins over
time their fifty-percent share, plus interest (“Owners’ Share”); and
WHEREAS, as the Binding Agreement provides, the Owners’ Share will be reduced
by a $500,000 credit the Property Owners will receive for the value of rights-of-way they
will dedicate to CDOT for the Project without receiving compensation (the “ROW Credit”)
and for $700,000 representing one-half of the transportation capital expansion fees the Fort
Collins has available to contribute to the Project (the “TCEF Credit”); and
WHEREAS, Fort Collins and Timnath have agreed that the annual payments for
Timnath’s Share will include an interest rate factor that will be determined based on the
interest rate factor that Fort Collins will incur in financing the Deficit less the ROW Credit
and the TCEF Credit (“Financed Deficit”), which Fort Collins currently anticipates funding
by issuing tax-exempt certificates of participation (“COPs”); and
WHEREAS, this interest rate factor will be applied to Timnath’s Share to calculate
Timnath’s annual payments to be fully amortized over twenty years as hereafter provided;
and
WHEREAS, as further consideration for this Agreement, Fort Collins and Timnath
have also agreed to share in sales tax revenues collected by them from the Fort Collins
Properties and the Timnath Properties (“Revenue Sharing”); and
WHEREAS, the terms and conditions for payment of Timnath’s Share and the
Revenue Sharing are set forth in the “Intergovernmental Agreement Between the Town of
Timnath and the City of Fort Collins Pertaining to the Reconstruction of the Interchange at
Interstate Highway 25 and Prospect Road,” attached as Exhibit “A” and incorporated herein
by reference (the “IGA”); and
WHEREAS, the City Council hereby finds that the IGA is necessary for the public’s
health, safety and welfare and is in the best interests of the City and its residents, businesses and
public and private organizations.
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 IGA is hereby approved and the Mayor is authorized to execute
the IGA in substantially the form attached hereto as Exhibit “A,” together with such
additional terms and conditions as the City Manager, in consultation with the City Attorney,
-3-
determines to be necessary and appropriate to protect the interests of the City or to
effectuate the purposes of this Resolution.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this
21st day of August, A.D. 2018.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
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STATE OF COLORADO
John W. Hickenlooper, Governor
Department of Transportation
Colorado Bridge Enterprise
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STATE OF COLORADO
STATE CONTROLLER
Robert Jaros, CPA, MBA, JD
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