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HomeMy WebLinkAbout1993-161-10/19/1993-DOWNTOWN DEVELOPMENT AUTH IGA IMPLEMENTATION AGREEMENT OLD TOWN LLC OLD TOWN PLAZA OLD TOWN PROJECT RESOLUTION 93-161 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING AN INTERGOVERNMENTAL AGREEMENT AMONG THE CITY OF FORT COLLINS, THE DOWNTOWN DEVELOPMENT AUTHORITY AND THE FORT COLLINS OLD TOWN LIMITED LIABILITY COMPANY REGARDING THE MAINTENANCE AND MANAGEMENT OF OLD TOWN PLAZA AND THE TAX INCREMENT REVENUES GENERATED BY THE OLD TOWN PROJECT WHEREAS, on July 5, 1983, the Fort Collins Downtown Development Authority ("the DDA") entered into an Implementation Agreement ("the Agreement") with the owners of certain real property located in Old Town Square, which agreement dealt with the development of The Old Town Project (the "Project") ; WHEREAS, the City issued tax increment bonds to finance certain public improvements in connection with the development of the Project and pledged City sales tax revenues to guarantee the repayment of such bonds; and WHEREAS, the Implementation Agreement required, among other things, that the then current owners of the Old Town properties certify to the Larimer County Assessor a particular assessed valuation for their properties, in order to establish an on-going assessed valuation of the Old Town Square which would generate sufficient monies for the City to pay the bonds which had been issued to finance the Project; and WHEREAS, a dispute has arisen between the DDA and the current owners of the private parcels of property in Old Town Square as to the parties' obligations under the Implementation Agreement; and WHEREAS, the City is potentially affected by the provisions of the Implementation Agreement and the enforcement thereof, because of the City's ongoing obligation to retire the aforementioned bonds in the event that property tax revenues generated from the Project prove to be insufficient for that purpose; and WHEREAS, it is in the best interest of all of the affected parties to enter into a new agreement regarding the tax increment revenues to be generated by the Project and other issues relating to the management and maintenance of the Project; and WHEREAS, the parties have negotiated such an Agreement, a draft of which is attached hereto as Exhibit "A" and incorporated herein by this reference. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the Mayor be, and hereby is, authorized to execute an agreement among the City, the DDA and the Fort Collins Old Town Limited Liability Company upon substantially the same terms and conditions as are contained in Exhibit "A," with such changes in form or substance as may be deemed necessary by the City Manager and City Attorney in order to protect the interests of the City and effectuate the purposes of the Agreement. Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 19th day of October, A.D. 1993. s ayor ATTEST; City Clerk Exhibit A DRAFT AGREEMENT This Agreement is made and entered into this day of , 1993, by and among The Fort Collins Downtown Development Authority, a body corporate and politic established pursuant to Title 31, Article 25, Part 8 of the 1973 Colorado Revised Statutes, as amended, having its principal offices at One West Art Center, 201 S. College Avenue, Fort Collins, Colorado 80524 (the "DDA") , the City of Fort Collins, Colorado, a municipal corporation, having its principal offices at 300 Laporte Avenue, Fort Collins, Colorado 80521 (the "City") , and Fort Collins Old Town Limited Liability Company, a Colorado limited liability company, having its principal offices at 1405 S. College Avenue, Fort Collins, Colorado 80524 (the "Owner") . WITNESSETH: WHEREAS, the Owner is the owner of certain real property located in Old Town Square in The City of Fort Collins, Larimer County, Colorado, more particularly described on Exhibit A attached hereto and by this reference incorporated herein (the "Private Parcel") ; and WHEREAS, the DDA is the owner of certain real property also located in Old Town Square in The City of Fort Collins, Larimer County, Colorado, more particularly described on Exhibit B attached hereto and by this reference incorporated herein (the "Old Town Plaza") ; and WHEREAS, the City is the owner of certain rights-of-way adjacent to and abutting both the Private Parcel and the Old Town Plaza; the various ownership interests of the parties being depicted on Exhibit C attached hereto and by this reference incorporated herein; and WHEREAS, on July 5, 1983 the DDA and Old Town Associates Ltd. , the Owner's predecessor in title (the "Previous Owner") , entered into an agreement placed of record August 9 , 1991 with the Clerk and Recorder of Larimer County at Reception No. 91037453 (the "Implementation Agreement") for the development of Old Town Square on the Private Parcel and the Old Town Plaza (together referred to as the "Project") which sets forth the duties and responsibilities of each party in connection with the Project; and WHEREAS, the City issued tax increment bonds to finance certain public improvements in connection with development of the Project and pledged City sales tax revenues to guarantee repayment of such bonds; and WHEREAS, the Implementation Agreement required the Previous Owner to certify to the Larimer County Assessor that the completed Project added value of not less than $8, 105,848. 00 to the Private Parcel in order to establish an assessed valuation of the Private Parcel which would generate sufficient monies for the City to pay bonds issued to finance the Project; and WHEREAS, the Private Parcel was initially valued at $8,600,000.00 by the Larimer County Treasurer, which generated an actual annual tax increment sufficient to pay tax increment bonds used to finance certain public improvements benefitting the Project; and WHEREAS, the valuation of the Private Parcel, for tax assessment purposes, was thereafter reduced to $4, 472 , 586. 00 by the Larimer County Treasurer, resulting in a corresponding reduction of annual tax increment from the Project; and WHEREAS, in 1991, the Owner filed, and later withdrew after objections by the DDA and the City, an appeal of the $4 , 472 , 586. 00 valuation of the Private Parcel, seeking to have the assessed valuation further reduced, which would have resulted in a corresponding reduction in annual tax increment from the Private Parcel; and WHEREAS, it is the DDA's position that the Implementation Agreement, which incorporates by reference an earlier agreement executed by the DDA and the Previous Owner on March 24 , 1983 , contemplated that the owner of the Private Parcel would annually certify to the Larimer County Treasurer a value for the Project of not less than $8, 105, 848 . 00 until such time as the tax increment bonds issued to finance the Project were paid in full in order to ensure sufficient revenues were available to the City to pay such bonds and, further, that the Implementation Agreement includes other provisions which are binding on the Owner; and WHEREAS, the Owner has disputed the DDA's position regarding the Implementation Agreement and continues to assert its right to request further reductions in assessed valuation of the Private Parcel below its present valuation of $4 , 472 , 586. 00; and WHEREAS, the parties realize that it is necessary to have sufficient tax increment monies to pay the bonds issued for the Project in order for the DDA and the City to be able to continue to support the Project; and WHEREAS, the Project serves an important public purpose by contributing to the economic and aesthetic viability of downtown Fort Collins; and WHEREAS, the parties desire to enter into a new agreement which sets forth the continuing rights and obligations of the 2 parties in connection with the Project and which establishes a payment in lieu of taxes by the Owner in the event that the City and DDA do not receive the specified minimum tax increment from the Private Parcel -for a five (5) year period. NOW, THEREFORE, by and in consideration of the above premises and the within terms and conditions, the parties hereto agree as follows: 1. 0 SUPERSEDE IMPLEMENTATION AGREEMENT This Agreement shall supersede any and all provisions of the Implementation Agreement, provided that nothing herein shall be deemed to have any effect on the Declaration of Covenants, Conditions, Restrictions and Easements for the Old Town Project, filed of record with the Clerk and Recorder of Larimer County, Colorado on March 20, 1984 at Book 2264 , Page 0116, Reception No. 556240 (the "Declaration") , which shall remain in full force and effect and continue to bind the properties described on Exhibits A and B. 2 . 0 TAX INCREMENT 2 . 1 The requirements of the following subparagraphs of this paragraph 2 . 0 shall be effective for a five (5) -year tax period, commencing with tax year 1992 (payable in 1993) and continuing through tax year 1997 (payable in 1998) . 2. 2 Upon execution of this Agreement, the DDA, the City and the Owner shall certify in writing to the Larimer County Treasurer a valuation of the Private Parcel of $4 , 472 , 586. 00 for tax year 1993 and to thereafter so certify the same valuation of the Private Parcel no later than February 1 following each such tax year through 1997 . 2 . 3 The valuation of the Private Parcel for tax assessment purposes for tax year 1991 generated a tax increment of $115, 667 . 00 (the "Anticipated Annual Tax Increment") . In the event that real property taxes assessed against the Private Parcel are reduced for any reason whatsoever, which reduction causes the annual tax increment generated by the Private Parcel to fall below the Anticipated Annual Tax Increment of $115, 667 . 00 for any tax year between 1992 and 1997, the Owner shall make a payment in lieu of taxes directly to the City in each year in which such shortfall occurs in an amount equal to the difference between the Anticipated Annual Tax Increment of $115, 667 . 00 and the actual annual tax increment received in the particular year on account of the Private Parcel. Such sums shall be paid no later than September 1 in each 3 year in which such a shortfall exists and, upon payment, shall be deposited into the DDA Tax Increment Fund of the City. 2 .4 For the five (5) -year tax period specified herein, the Owner shall not seek any reduction in assessed valuation of the Private Parcel, either by way of appeal or abatement, which would generate less than $115, 667 . 00 in annual actual tax increment. The Owner, for itself, its successors and assigns, further agrees not to seek state or local property tax exemption status for the Private Parcel during such period. 2 .5 The Owner shall not file any request for abatement of property taxes assessed against the Private Parcel for any tax year prior to 1992 . 2 . 6 The Owner expressly agrees that it and its successors and assigns shall be estopped from asserting that any provision of this paragraph 2 . 0 is void, voidable or in any way legally unenforceable. 3. 0 MAINTENANCE AND MANAGEMENT OF PUBLIC IMPROVEMENTS 3 . 1 Except as otherwise provided in this paragraph 3 . 0, the Owner, its successors and assigns, shall be obligated to provide for the maintenance, repair and replacement of all improvements located in the Old Town Plaza. The Owner shall further be obligated to provide for the routine maintenance of those portions of the Mountain Avenue, Walnut Street and Linden Street rights-of- way adjacent to the Old Town Plaza (the "Rights-of-Way") and the permanent fixtures thereon, provided that in the event the City issues a vending permit or a concessionaire's license for a use in the Rights-of-Way, then the City shall require as a condition of such permit or license that such user shall keep the area covered by the permit or license in a clean and neat condition, free of litter, food spills and rubbish. The Owner's maintenance and repair obligation shall be limited to physical premises maintenance and repair and shall not cover police, fire or other normal municipal services provided by the City. 3 . 2 As a part of its normal maintenance program for public areas and subject to annual appropriation, the City shall provide all snow removal services for the Old Town Plaza and the Rights-of- Way. The City shall further annually provide all flowers and other ornamental plants for the planters and planting areas now located on the Old Town Plaza and in the Rights-of-Way. The obligation of the City to supply plants shall specifically not include any obligation to perform any labor associated with planting such flowers and other ornamental plants. The level of snow removal services and the quantity, quality and type of plants shall be that normally and customarily provided by the City in its maintenance program. 4 3 . 3 The City shall be responsible for necessary repair and replacement (as opposed to routine maintenance) of the surfaced areas of the Rights-of-Way and those permanent fixtures within the Rights-of-Way as depicted on Exhibit C. This obligation shall specifically not include an obligation to repair or replace any planters, benches or similar improvements which may be located in such areas but do not have a permanent foundation. The determination of whether repair or replacement to the surfaced areas of the Rights-of-Way and any permanent fixtures thereon is needed and the type and manner of such repair or replacement shall be in the sole determination of the City, subject to the requirement that any repairs or replacements be generally consistent with the design of similar improvements in such Rights- of-Way and on the Old Town Plaza. Nothing in this subparagraph 3 .3 shall be construed to relieve the Owner of its continuing obligation to provide for such maintenance, repair and replacement on the Old Town Plaza and the Rights-of-Way as required by subparagraph 3 . 1 hereof (other than the snow removal and plantings to be provided by the City as described above) . 3 . 4 In the event that the City fails in any given year to appropriate monies for the above-described services, the Owner shall have no obligation in that year to make a payment in lieu of taxes if one is required pursuant to paragraph 2 . 3 of this Agreement. Notwithstanding the foregoing provision, once an annual appropriation for such items has been made, the Owner shall be obligated to fully perform in accordance with the terms and conditions of this Agreement. Specifically, Owner's disagreement with the level of service provided by the City shall not relieve it from its obligation to so perform. 3 . 5 Concurrently with the execution of this Agreement, the parties intend to execute a Memorandum of Understanding defining various public and private uses of Old Town Plaza and the maintenance obligations of the parties flowing from such uses. Upon the execution of such memorandum, the provisions therein pertaining to maintenance obligations arising from the specified uses shall be controlling. 4. 0 INSURANCE 4 . 1 Insurance. Through December 31, 2006, the Owner, its successors and assigns, shall, during their ownership of the Private Parcel, purchase, at their sole cost and expense, and continuously maintain in effect, insurance against such risk, both generally and specifically, with respect to improvements on the Private Parcel (the "Private Improvements") as are customarily insured against in developments of like size and character, including, but not limited to: (a) Casualty Insurance. Casualty insurance insuring the Private Improvements to their full 5 replacement value against any loss or damage, including, but not limited to, damage by fire, lightning, wind storm, hail, explosion, collapse, vandalism, smoke damage and such other risks as are from time to time included in standard All Risk Coverage Endorsements in the State of Colorado. The minimum amount of Owner's coverage of the premises comprising the Private Improvements shall be the insurable value of the Private Improvements as determined by the replacement cost approach without allowance for depreciation. (b) Boiler and Pressure Vessel Insurance. Boiler and Pressure Vessel Insurance in an amount sufficient to protect the Private Improvements. (c) Comprehensive General Liability Insurance. Comprehensive General Liability Insurance, including Blanket Contractual Liability Insurance and Comprehensive Automobile Insurance against liability for personal injury, including death resulting from injuries occurring on or in any way related to the Private Improvements in a minimum amount of $3 , 000, 000. 00 per occurrence and against liability for damage to property occurring on or in or relating in any way due to the Private Improvements in the minimum amount of $3 , 000, 000. 00 per occurrence. (d) Physical Damage Insurance. Physical Damage Insurance insuring the full fair-market value of the Private Improvements. 4 .2 Insurance Requirements. Such insurance coverage may consist of a combination of primary and umbrella policies with deductibles of no greater than $50, 000 . 00 . Each policy obtained pursuant to this section as outlined above shall name the DDA and the City as additional insureds as their interests may appear. The insurance coverage to be provided by owner shall also be extended to cover the indemnities provided for in paragraph 5. 0 hereof. All insurance policies required under this section shall be taken out and maintained with generally recognized responsible insurance companies authorized to do business in the State of Colorado and to assume the respective risks undertaken. Such policies of insurance may be written without deductible amounts and with the exceptions and exclusions comparable in similar policies carried by other companies similarly situated. Each such policy of insurance shall contain a provision that each insurer shall give the DDA at least thirty (30) days prior written notice of cancellation, non-renewal or material change in the policy. In the event of the proposed cancellation, non-renewal or material change in such policy by an insurance company, the Owner shall secure adequate replacement insurance policies prior to the effective date of such cancellation, non-renewal or material change. If the 6 Private Improvements, or any portion thereof, shall be damaged or partially or totally destroyed for a period from the date of execution of this Agreement through December 31, 2006, the Owner shall promptly repair, rebuild and restore that which it owns and which has been damaged or destroyed in a manner substantially consistent with the final plans and specifications for the original structures, subject to the inability to restore historic structures. Upon the happening of such event, the Owner shall promptly give written notice thereof to the DDA. Proceeds from insurance policies resulting from claims for such losses shall be deposited in a trust account approved by the DDA to be held for the sole purpose of paying the cost of such repair or rebuilding or restoration. If said net proceeds are insufficient to pay in full the cost of such repair, rebuilding or restoration, it shall be the responsibility of the Owner to complete the work thereof and provide for payment of the portion of the cost thereof which is in excess of the amount of said proceeds; provided, however, that following the DDA's recapture of the Project costs, such net proceeds shall be utilized at the Owner's discretion. The Owner, for itself, its successors and assigns, to the extent permitted by its respective All Risk Fire Insurance policies, hereby waives all rights of recovery and causes of action as against the DDA or any of its officers, agents, employees, invitees and guests, for any damage to the Private Improvements, except when such waiver is not permitted under Colorado law. The Owner further agrees that its policies of All Risk Fire Insurance covering the Private Improvements shall provide for waivers of subrogation against the DDA, its officers, agents and employees and all others claiming by, through or under or unless such a provision is prohibited at the time by the State of Colorado. If the Owner shall sell all or any part of the Private Improvements, for a period from the date of execution of this Agreement through December 31, 2006, the conveyance instrument shall require, as a condition, that the subsequent owner shall maintain similar insurance throughout said same period of time. In the case of a taking resulting from the exercise of the power of Eminent Domain ("Taking") (other than for temporary use) of the entire Private Improvements, this Agreement shall terminate as of the date on which such Taking shall be effective. In the case of a Taking (other than for temporary use) of such substantial part of the Private Improvements as shall have the result that the portion of the Private Improvements remaining after such Taking (even if restoration were made) will be unsuitable for the prior use, this Agreement may be terminated by written notice given to the DDA within ten (10) days after such Taking. Any Taking of the Private Improvements of the character referred to herein which results in the termination of this Agreement is referred to as a "Total Taking" . 7 In the event of a Taking of a portion of the Private Improvements which is not a Total Taking, then and in that event: (a) This Agreement shall remain in full force and effect as to the portion of the Private Improvements remaining immediately after such Taking, except that any payments payable hereunder shall be reduced in the same proportion that the square footage of the Private Improvements has been reduced on account of such Taking and the certification of valuation required hereunder shall also be proportionally reduced in the same manner; and (b) Utilizing the award for such Taking, the Owner shall restore, or cause the restoration of, the remainder of the Private Improvements in a good and workmanlike manner as nearly as practicable to its condition and character immediately prior to such Taking, except for any reduction in area caused thereby, provided that, in the case of a Taking for temporary use, the parties shall not be required to effect such restoration until such Taking is terminated. Awards and other payments on account of a Taking shall be applied as follows: (a) Awards and payments received on account of a Taking, other than (i) a Taking for temporary use or (ii) a Total Taking, shall be paid to the trust account hereinabove provided for and thereafter applied to pay the cost of restoration of the remaining portion of the Private Improvements. (b) Awards and payments received on account of a Taking for temporary use shall be paid to the Owner and applied in its sole discretion. (c) Awards and payments received on account of a Total Taking shall be paid to the Owner and applied in its sole discretion. 5.0 INDEMNIFICATION The Owner, its successors and assigns, agree to indemnify, save harmless and defend the DDA and the City, their officers, agents and employees from any and all liability, suits, actions, 8 claims, demands, losses, costs, damages and expenses of every kind and description for claims of any character, including liability and expenses in connection with the loss of life, personal injury or damage to property, or any of them, brought because of any injuries or damages received or sustained by any person, persons or property on account of or arising out of the operation of the Private Parcel occasioned wholly or in part by any act or omission on the Owner's part or on the part of its tenants, agents, contractors, invitees or employees or at any time occurring on, at or in that portion of the Project comprising the Private Parcel. This requirement shall apply with equal force to work performed by the Owner, an architect, contractors or any subcontractors or any other party directly or indirectly employed by or retained by the Owner. Nothing herein shall be deemed to indemnify the DDA and the City, their officers, agents or employees against their own acts or failure to act. 6.0 OLD TOWN PLAZA MAINTENANCE DISTRICT The Owner shall have the right to petition for the creation of a special maintenance district to include the Old Town Plaza and additional public improvements and such other extended boundaries as may reasonably be included in such special maintenance district. The DDA agrees to assist in the formation of such special maintenance district and agrees to an assignment to and assumption by said district of the maintenance and repair obligation provided herein and in the Declaration. 7 . 0 TERM/EXTENSIONS The term of this Agreement shall be for a period of twenty- five (25) years, commencing upon execution hereof. This Agreement shall be automatically renewed without notice for two (2) successive ten (10) -year periods unless any party hereto shall give written notice of non-renewal to the other parties at least six (6) months prior to the expiration of the then-current term. 8. 0 COLORADO LAW This Agreement shall be governed by, and its terms construed under, the laws of the State of Colorado. 9. 0 NOTICES All notices which may be given to parties hereunder shall be in writing and shall be sent by registered or certified mail to the addresses specified below: 9 DDA: Downtown Development Authority One West Art Center 201 S. College Avenue Fort Collins, CO 80524 CITY: City of Fort Collins P. O. Box 580 Fort Collins, CO 80522 OWNER: Fort Collins Old Town Limited Liability Company 1405 S. College Avenue Fort Collins, CO 80524 10. 0 COUNTERPARTS This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which, taken together, shall constitute one and the same document. 11. 0 BENEFIT, BINDING EFFECT, COVENANT The property described on Exhibit A shall be held, sold and conveyed subject to the terms, conditions, restrictions and covenants of this Agreement which shall run with the land and which shall be binding on and inure to the benefit of all parties having any right, title or interest in the described property or any part thereof and their heirs, successors and assigns. 12 . 0 REMEDIES 12 . 1 In General. In the event of any default in or breach of this Agreement or any of its terms or conditions by either party hereto or any successor in interest to such party, such party (or successor) shall, upon written notice from the other, proceed immediately to cure or remedy such default or breach, and, in any event, shall cure any such default or breach within sixty (60) days of receipt of such notice. In case such action is not taken or is not diligently pursued or the default or breach cannot be cured or remedied within the aforesaid time, the aggrieved party may institute such proceedings as may be necessary or desirable, in its opinion, to cure the default or breach, including, but not limited to, proceedings to compel specific performance by the party in default or breach of its obligations. 12 . 2 Other Rights and Remedies of DDA and City - No Waiver by Delay. The DDA and the City shall each have the right to institute such actions or proceedings as they may deem desirable for effectuating the purposes of this Agreement, provided that any delay by the DDA or the City in instituting or prosecuting any such 10 actions or proceedings or otherwise asserting their rights under this section shall not operate as a waiver of such rights or to deprive them of or to limit such rights in any way (it being the intent of this provision that the DDA and the City should not be constrained so as to avoid the risk of being deprived of or limited in the exercise of the remedy provided in this section because of concepts of waiver, laches or otherwise, to exercise such remedy at a time when they may still hope otherwise to resolve the problems created by the default involved; nor shall any waiver in fact made by the DDA or the City, with respect to any specific default by the Owner under this section, be considered or treated as the waiver of the rights of the DDA or the City, with respect to any other defaults by the Owner under this section or with respect to the particular default, except to the extent specifically waived in writing. 12. 3 Rights and Remedies Cumulative. The rights and remedies of the parties to this Agreement, whether provided by law or provided by the Agreement, shall be cumulative, and the exercise by any party of any one or more of such remedies shall not preclude the exercise by it at the same or different times of any other such remedies for the same event of default or breach by any other party. No waiver made by either such party, with respect to the performance or manner or time thereof or any obligation of any other party or any condition to its own obligation under the Agreement, shall be considered a waiver of any rights of the party making the waiver or any other obligations of any other party. 13. 0 ATTORNEYS' FEES AND COSTS In the event either party defaults in any of the covenants or obligations in this Agreement, the defaulting party will pay all reasonable expenses of enforcing this Agreement, including reasonable attorneys' fees. 14 .0 SEVERABILITY If any provision of this Agreement is held invalid, the remainder of the Agreement shall not be affected thereby, and such remainder would then continue to conform to the requirements of applicable laws and the Plan of Development, except that, in the event that any provision of paragraph 2 . 0 of this Agreement relating to tax increment is held invalid, the parties hereto expressly agree that the City's maintenance obligation for snow removal and supplying of plants provided in paragraph 3 . 0 hereof shall thereupon terminate, and the City shall thereafter have no responsibility for such maintenance, it being specifically acknowledged by the parties that the consideration for the assumption by the City of such maintenance obligations was the agreement by the Owner to make payments in lieu of taxes and to 11 commit not to seek reassessment or abatement of taxes in accordance with paragraph 3 . 0. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above. FORT COLLINS OLD TOWN LIMITED LIABILITY COMPANY, a Colorado limited liability company By: Brian T. Soukup, Managing Member THE FORT COLLINS DOWNTOWN DEVELOPMENT AUTHORITY, a body corporate and politic By: Robert L. Steiner, Executive Director CITY OF FORT COLLINS, COLORADO, a municipal corporation By: Steven C. Burkett, City Manager 12