ura finance committee - urban renewal authority...urban renewal authority 222 laporte avenue po box...

Urban Renewal Authority 222 LaPorte Avenue PO Box 580 Fort Collins, CO 80522

970.416.2231 970.224.6107 – fax fcgov.com

AGENDA URA Finance Committee

January 10, 2019 10:00 am -11:00 am

1. Review Fiscal Impact Model

2. Watermark: Proposal on N. College

Other Business:

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URBAN RENEWAL FINANCE COMMITTEE AGENDA ITEM SUMMARY

Staff: Josh Birks

Date: January 10, 2019

SUBJECT FOR DISCUSSION

College & Drake Urban Renewal Area – Fiscal Impact Model Results Overview

EXECUTIVE SUMMARY

The purpose of this item is to present the results of a Fiscal Impact Model (“FIM”) prepared by Economic & Planning Systems, Inc. (“EPS”) evaluating the impacts of the proposed College and Drake Urban Renewal Plan. The purpose of the FIM is to evaluate the direct cost impacts to each of the taxing entities impacted by the proposed plan area. The FIM was developed jointly through a process led by Larimer County starting in 2014.

GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED

1. Does the Committee have any questions about the output from the FIM?

2. Does the Committee feel the Board will need additional information about the direct costimpacts before it can review proposed Tax Increment Revenue allocation agreements?

BACKGROUND/DISCUSSION

In May 2015, the Colorado General Assembly passed House Bill 2015-1348 make substantial changes to the statutes enabling Urban Renewal Authorities (the “Urban Renewal Law”) and later amended by Senate Bill 2016-177 and Senate Bill 2017-279. These changes require that the Fort Collins Urban Renewal Authority (the “Authority”) must negotiate an agreement with all affected taxing entities (e.g., Larimer County, Poudre River Library District, etc.) determining how property tax increment generated under any new Urban Renewal Plan (“URP”) will be allocated between the Authority and the taxing entity - “Representatives of the authority and the governing body of each taxing entity shall then meet and attempt to negotiate an agreement governing the sharing of incremental property tax revenue…” C.R.S. 31-25-107 (9.5)

LARIMER COUNTY TAX INCREMENT FINANCING STUDY GROUP:

In 2014, the Larimer County Tax Increment Financing Study Group (the “TIF Study Group”) was formed of representatives from Larimer County, municipalities in the county currently using urban renewal (Fort Collins, Loveland, and Timnath), five other municipalities, and selected taxing districts and special districts. The TIF Study group:

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Acknowledged the positive impact of TIF in providing needed financial support for

redevelopment and economic development investments in the County; and Convened because of concerns about requirements to provide services to the new

development created by urban renewal supported by TIF. The TIF Study Group had three primary objectives:

1. Develop a method to qualify and quantify the fiscal and economic impacts and financial risks of TIF proposals;

2. Develop a way to evaluate the indirect impacts of TIF projects and corresponding financial effects on taxing entities; and

3. Establish a framework for formal agreements that balance the benefits and risks among participating entities in Larimer County.

The TIF Study Group completed a significant portion of its work prior to the changes made to the Urban Renewal Law in 2015, 2016 and 2017 - the final report issued by the group is dated June 20, 2016. As a result, the Fiscal Impact Model (“FIM”) developed by the group can play a significant role in evaluating the “estimated impacts” of a proposed urban renewal plan. The TIF Study Group recommendations included the appointment of County, municipal, and special district representatives to draft and implement an Intergovernmental Agreement (“IGA”) “on the use of TIF, a process for evaluating new TIF projects, and specific procedures to carry out the process.” FISCAL IMPACT MODEL: The FIM provides an objective estimate of the revenue and annual service costs to the County and other taxing entities before (without) and after (with) TIF. It also estimates the percentage of property tax that would need to be retained (exclude from the TIF) in order to maintain a fiscally neutral position for the impacted taxing entities. The FIM therefore provides an objective evaluation of the statutory requirement to estimate “impacts of the urban renewal plan on county or district services associated solely with the urban renewal plan.” C.R.S. 31-25-107 (9.5) (emphasis added). The FIM estimates the impact of an URP by comparing the estimated revenues generated by new development in the URP to the estimated cost of public services required by the same development. Revenues and costs are estimated based on the most recent actual budget data available for each taxing entity and an assessment of potential effects of different types of development on each department or budget category for that entity. This is accomplished by applying several different methods for estimating the impact on revenues and costs from development, including: Case Study Approach – Based on subject specific data, for example, property tax is

based on the estimated assessed value of proposed development multiplied by the applicable tax rate; and

Per Capita Approach – Revenues or costs are aggregated and then divided by the relevant unit – population, persons served, total commercial units, equivalent residential unit, or County maintained road miles.

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Finally, applying the average factors derived from the above analysis to new growth can overstate cost impacts, especially for small projects. Adjustments are necessary because many governmental functions have fixed costs, which do not change as growth occurs. Such fixed costs can include rent, building and facility costs, some administrative costs. Therefore, the FIM contains several assumptions and factors regarding the ratio of fixed to variable cost by budget category or governmental function. These factors combined with the averages derived through the Case Study and Per Capita approach result in the revenue and costs used by the FIM to estimate the impacts to a taxing entity and the resulting percentage of property tax to allocate to achieve fiscal neutrality from a proposed URP. Authority staff feel confident in the process to update and maintain the FIM and the overall assumptions of the FIM. Therefore, staff feel confident that the resulting estimates of the FIM should form the basis for negotiations with taxing entities regarding the allocation of incremental property tax revenues between the Authority and those taxing entities. Finally, it seems clear that the result of the FIM meet the statutory requirements to estimate impacts solely associated with a proposed URP. COLLEGE AND DRAKE FIM RESULTS: On December 13, 2018, EPS presented the results of the FIM for the proposed College and Drake URP, see Attachment 2. The results provide an estimate of the direct cost of the proposed development on Larimer County, the Northern Larimer County Health District, Poudre River Library District, and Foothills Gateway (revenue collected by the County and remitted to the entity). The analysis follows the general process below:

1. Determine the current base value of the property including land and improvements 2. Estimate the new property tax value based on current market conditions 3. Estimate new property tax revenues and revenues from other sources generated by the

proposed development 4. Subtract from Item #3 existing property tax revenues and forecasted cost to serve the

proposed development 5. Resulting in an estimate of the net property tax increment revenue over and above any

projected cost to serve The resulting output meets the statutory requirements to estimate impacts solely associated with a proposed URP. The results of the FIM analysis are summarized in Table 1 below. Overall, the estimated net new increment to the Authority (excluding the Poudre School District and Northern Water Conservation District) is approximately 60 percent of the total increment or approximately $175,000 annually. An estimate of PSD revenue is provided later in this document based on the current PSD proposal.

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Table 1

FIM Output by Taxing Entity (excluding PSD and Northern Water)

Poudre School District (“PSD”) did not participate in the TIF Study Group and therefore was not included in the FIM. EPS provided a separate estimate of existing property tax revenues and estimated incremental property tax revenues, see Attachment 3. However, PSD has provided an initial proposed allocation of tax increment, described below:

1. Set aside and exclude any Mill Levy Override and Bond Mill 2. Split the remaining amount 1/3 to PSD and 2/3 to the Authority 3. Make any allocation subject to the State backfill payments

PSD currently levies 52.630 mills with 27.000 mills of General Fund State Levy or just over half. The remaining 25.630 mills include Mill Levy Overrides dating back to 1988 and Bond Redemption mills. Table 2 below provides a break out of the existing and estimated new revenue by mill source.

Taxing Entity Total RevenueLess: Existing Property Tax

Revenue

Net Incremental Revenue

Less: Cost to Serve

Net New Increment

Percent of Increment

Larimer County 284,917$ 55,318$ 229,599$ 90,790$ 138,810$ 60%

Health District 27,010$ 5,689$ 21,321$ 7,328$ 13,993$ 66%

Library District 36,292$ 7,876$ 28,417$ 9,715$ 18,701$ 66%

Foothillls Gateway 9,382$ 1,969$ 7,414$ 3,475$ 3,938$ 53%

Subtotal 357,601$ 70,852$ 286,751$ 111,308$ 175,442$ 61%

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Table 2 PSD Property Tax Revenue by Mill Source

PSD proposes sharing only 2/3 of the $247,000 in increment associated with the State Levy of 27.000 mills. Therefore, PSD has offered to share approximately $164,000 annually or approximately 34 percent of total incremental property tax revenue. Authority staff continue to evaluate the PSD proposal. Given the Board’s direction to staff for the FIM to form the basis of an allocation and PSD’s exclusion from the existing FIM. Staff is seeking a similar analytical approach to determining the correct allocation of property tax increment. Based on discussions at the December 20, 2018 Authority Board meeting, staff intends to start negotiations based on the results of the FIM. Additional considerations will be included in the negotiations based on each party’s perspective of other circumstances impacting the entities. ATTACHMENTS

1. Staff Presentation 2. Overview Presentation to the Plan Area Review Committee prepared by Economic &

Planning Systems, Inc. – Presented on December 13, 2018 3. Poudre School District Impact Summary – College & Drake URA by Economic &

Planning Systems, Inc. – November 30, 2018

Base New Increment

State Levy 27.000 46,925$ 293,635$ 246,710$

Mill Levy Override & Senate Bill 184 Allowance

11.683 20,305$ 127,057$ 106,752$

Bond Redemption 13.947 24,239$ 151,679$ 127,439$

Total 52.630 91,469$ 572,371$ 480,901$

Property Tax RevenueMill Levy Mills

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1College & Drake URA: Financial Impact Model Results

Josh Birks

January 10, 2019

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Questions for the Board


2. Does the Committee feel the Board will need additional information about the direct cost impacts before it can review proposed Tax Increment Revenue allocation agreements?

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Current Status

Updated FIM data and assumptions

Plan Area Review Committee (PRC) considers FIM final

Finalizing Project Evaluation Criteria

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Fiscal Impact Model (FIM)

Analysis Output

FactorsFixed

vs. Variable

Persons Served*

Revenues

Expenses

Net Impact

Inputs

4* Or similar basis (e.g., population, total commercial units, equivalent residential units, or County maintained road miles)10

FIM Results

5FIM: Authority can expect approximately 60% of increment. 11

Poudre School District Overview

6Current Offer: Authority can expect approximately $164k of increment.12

Project Evaluation Criteria

Proposal Criteria1. But for2. Addresses blight,

obsolescence, inefficient land utilization

3. Equitable deal structure4. Municipal effort & risk

Indirect Impacts1. Net new base jobs2. Net new economic

activity3. Living wage jobs4. Increase surrounding

property values5. Cumulative impacts

713



2. Does the Committee feel the Board will need additional information about the direct cost impacts before it can review proposed Tax Increment Revenue allocation agreements?

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The Economics of Land Use

O a k l a n d S a c r a m e n t o D e n v e r L o s A n g e l e s

730 17th Street, Suite 630 § Denver, CO 80202303.623.3557 § www.epsys.com

COLLEGE AND DRAKE URA

County Fiscal Model Impacts

Updated December 11, 2018

Presented by:Dan Guimond, Principal Tim Morzel, Vice PresidentRachel Shindman, Senior Associate

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College and Drake URA | 2

AGENDA

Anticipated redevelopment projects

Fiscal impact model overview

Tax increment estimates– Base assessed value– Fiscal impact model cost estimates by taxing entity– Percent of TIF required

Other model and impact considerations

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ANTICIPATED DEVELOPMENT

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TWO PLANNED DEVELOPMENTS

Description Size

1. Dillon Companies Property (vacant Kmart)Grocery (King Soopers) 92,000 sq. ft.Ancillary Retail 8,100 sq. ft.Existing Retail 5,500 sq. ft.Parking 433 spaces

2. Dracol Property (Spradley Barr Mazda)Residential

Building A 110 unitsBuilding B 82 units

Retail 15,854 sq. ft.Hotel 110 rooms

Source: Economic & Planning Systems

1

2

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FISCAL IMPACT MODEL OVERVIEW

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FISCAL IMPACT MODEL BACKGROUND

In 2016, EPS was contracted by Larimer County to study the impacts of the use of TIF on the County and other taxing districts and entities.

The model was developed with input from groups made up of representatives from the Cities of Fort Collins and Loveland, the County, and staff from two special districts’ budget and finance departments.

The factors used in the model reflect a significant amount of input the groups that were involved in this process.

The purpose of the model is to provide an objective estimate of the costs and revenue impacts to each entity and to inform future evaluations of and negotiations around TIF projects.

The model was recently updated to reflect up-to-date demographic data in the County and updated County and district budgets (the nexus to growth and variability factors remain the same).

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MODEL INPUTS AND OUTPUTS

Proposed development program

Value assumptions

Property tax base (external to model)

Property tax revenue

Other revenue

Cost to serve

INPUTS OUTPUTS

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INPUTS AND ASSUMPTIONS

Base accounts for existing development value (land and buildings)

Development value from County Assessor or comparable properties

2018 assessment rates

“Net New”– Development– Jobs– Sales – Adjusted to account for existing

S. College King Soopers store (50,000 sf)

Calculation of increment external to model (not looking at “with TIF” within the model)

Personal property estimated at 10% of value

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BASE VALUES

DescriptionActual Value

Assessment Rate

Assessed Value

Larimer County

Health District

Poudre River Library

Foothills Gateway Total

21.071 mills 2.167 mills 3.000 mills 0.750 mills

Dillon Companies SiteParcel 9723410004 $1,180,000 29.0% $342,200 $7,210 $742 $1,027 $257 $9,235Parcel 9723410002 $4,071,990 29.0% $1,180,877 $24,882 $2,559 $3,543 $886 $31,870Dillon Companies Total $5,251,990 $1,523,077 $32,093 $3,301 $4,569 $1,142 $41,105

Dracol, LLC SiteParcel 9726114001 $1,855,000 29.0% $537,950 $11,335 $1,166 $1,614 $403 $14,518Parcel 9726100023 $413,800 29.0% $120,002 $2,529 $260 $360 $90 $3,239Parcel 9726100016 $1,234,960 29.0% $358,138 $7,546 $776 $1,074 $269 $9,665Parcel 9726120001 $22,000 29.0% $6,380 $134 $14 $19 $5 $172Parcel 9726120002 $275,000 29.0% $79,750 $1,680 $173 $239 $60 $2,152Dracol, LLC Total $3,800,760 $1,102,220 $23,225 $2,389 $3,307 $827 $29,747

TOTAL $9,052,750 $2,625,298 $55,318 $5,689 $7,876 $1,969 $70,852

Source: Larimer County Assessor; Economic & Planning Systems

Base Property Tax Revenue

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LARIMER COUNTY

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LARIMER COUNTY REVENUE

Description M ill Levy Base2New -

Property TaxNew -

Other3Total New

Net New (Increment)

Dillon Companies SiteGeneral Fund 18.109 Mills $27,581 $71,058 $14,582 $85,641 $58,059Road and Bridge1 0.500 Mills $762 $1,962 $0 $1,962 $1,200Health and Environment 0.673 Mills $1,025 $2,641 $319 $2,960 $1,935Human Services 1.789 Mills $2,725 $7,020 $0 $7,020 $4,295Dillon Companies Site Total $32,093 $82,681 $14,902 $97,583 $65,490

Dracol, LLC SiteGeneral Fund 18.109 Mills $19,960 $140,071 $16,824 $156,894 $136,934Road and Bridge1 0.500 Mills $551 $3,867 $7,008 $10,875 $10,324Health and Environment 0.673 Mills $742 $5,206 $521 $5,727 $4,985Human Services 1.789 Mills $1,972 $13,838 $0 $13,838 $11,866Dracol, LLC Site Total $23,225 $162,981 $24,353 $187,334 $164,109

Plan Area Total $55,318 $245,662 $39,255 $284,917 $229,599

1 The County receives 50% and the cities receive the other 50%. This model only accounts for the County share.2 Includes personal property records for Loaf N Jug, Sherwin Williams3 Accounts for transfer from sales tax (dedicated to County jail)


Revenue

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LARIMER COUNTY COST TO SERVE

DescriptionCost

to Serve

Dillon Companies SiteGeneral Fund -$5,544Road and Bridge1 -$1,513Health and Environment -$577Human Services $0Dillon Companies Site Total -$7,634

Dracol, LLC SiteGeneral Fund -$67,660Road and Bridge1 -$7,570Health and Environment -$2,647Human Services -$5,280Dracol, LLC Site Total -$83,156

Plan Area Total -$90,790

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ANNUAL REVENUE – ANNUAL COST TO SERVE

LARIMER COUNTY NET NEW INCREMENT


Property TaxNew -

Other3Total New

Net New (Increment)

Costto Serve Total % of Net New

Dillon Companies SiteGeneral Fund 18.109 Mills $27,581 $71,058 $14,582 $85,641 $58,059 -$5,544 $52,515 90%Road and Bridge1 0.500 Mills $762 $1,962 $0 $1,962 $1,200 -$1,513 -$312 -26%Health and Environment 0.673 Mills $1,025 $2,641 $319 $2,960 $1,935 -$577 $1,359 70%Human Services 1.789 Mills $2,725 $7,020 $0 $7,020 $4,295 $0 $4,295 100%Dillon Companies Site Total $32,093 $82,681 $14,902 $97,583 $65,490 -$7,634 $57,856 88%

Dracol, LLC SiteGeneral Fund 18.109 Mills $19,960 $140,071 $16,824 $156,894 $136,934 -$67,660 $69,274 51%Road and Bridge1 0.500 Mills $551 $3,867 $7,008 $10,875 $10,324 -$7,570 $2,755 27%Health and Environment 0.673 Mills $742 $5,206 $521 $5,727 $4,985 -$2,647 $2,339 47%Human Services 1.789 Mills $1,972 $13,838 $0 $13,838 $11,866 -$5,280 $6,586 56%Dracol, LLC Site Total $23,225 $162,981 $24,353 $187,334 $164,109 -$83,156 $80,953 49%

Plan Area Total $55,318 $245,662 $39,255 $284,917 $229,599 -$90,790 $138,810 60%

1 The County receives 50% and the cities receive the other 50%. This model only accounts for the County share.2 Includes personal property records for Loaf N Jug, Sherwin Williams3 Accounts for transfer from sales tax (dedicated to County jail)


Revenue Net New Revenue (Increment) - Cost

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LARIMER COUNTY IMPACT

Costs to serve account for 40% of net new revenue

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HEALTH DISTRICT

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HEALTH DISTRICT REVENUE


Property TaxNew - Other

Total New

Net New (Increment)

Dillon Companies Site 2.167 Mills $3,301 $8,503 $0 $8,503 $5,203

Dracol, LLC Site 2.167 Mills $2,389 $16,761 $1,745 $18,507 $16,118

Plan Area Total $5,689 $25,265 $1,745 $27,010 $21,321

1 Includes personal property records for Loaf N Jug, Sherwin Williams


Revenue

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HEALTH DISTRICT COST TO SERVE

DescriptionCost

to Serve

Dillon Companies Site $0

Dracol, LLC Site -$7,328


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HEALTH DISTRICT NET NEW INCREMENT



Total New

Net New (Increment)


Dillon Companies Site 2.167 Mills $3,301 $8,503 $0 $8,503 $5,203 $0 $5,203 100%

Dracol, LLC Site 2.167 Mills $2,389 $16,761 $1,745 $18,507 $16,118 -$7,328 $8,790 55%

Plan Area Total $5,689 $25,265 $1,745 $27,010 $21,321 -$7,328 $13,993 66%




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HEALTH DISTRICT IMPACT


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LIBRARY DISTRICT

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LIBRARY DISTRICT REVENUE



Total New

Net New (Increment)


Dracol, LLC Site 3.000 Mills $3,307 $23,205 $1,316 $24,521 $21,214

URA Total $7,876 $34,976 $1,316 $36,292 $28,417



Revenue

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LIBRARY DISTRICT COST TO SERVE

DescriptionCost

to Serve



URA Total -$9,715

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LIBRARY DISTRICT NET NEW INCREMENT



Total New

Net New (Increment)



Dracol, LLC Site 3.000 Mills $3,307 $23,205 $1,316 $24,521 $21,214 -$9,715 $11,499 54%

URA Total $7,876 $34,976 $1,316 $36,292 $28,417 -$9,715 $18,701 66%




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LIBRARY DISTRICT IMPACT


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FOOTHILLS GATEWAY

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FOOTHILLS GATEWAY REVENUE



Total New

Net New (Increment)


Dracol, LLC Site 0.750 Mills $827 $5,801 $638 $6,439 $5,612

Plan Area Total $1,969 $8,744 $638 $9,382 $7,413



Revenue

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FOOTHILLS GATEWAY COST TO SERVE

DescriptionCost

to Serve




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FOOTHILLS GATEWAY NET NEW INCREMENT



Total New

Net New (Increment)



Dracol, LLC Site 0.750 Mills $827 $5,801 $638 $6,439 $5,612 -$3,475 $2,137 38%

Plan Area Total $1,969 $8,744 $638 $9,382 $7,413 -$3,475 $3,938 53%




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FOOTHILLS GATEWAY IMPACT


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QUESTIONS & DISCUSSION

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M E M O R A N D U M

To: Josh Birks, City of Fort Collins

From: Dan Guimond and Rachel Shindman, Economic & Planning Systems

Subject: Poudre School District Impact Summary – College and Drake URA

Date: November 30, 2018

This memorandum summarizes EPS’s analysis of property tax increment revenues from the Poudre School District associated with the proposed College and Drake Urban Renewal Plan Area.

The Poudre School District collects property tax revenues based on 8 mill levies totaling 52.630 mills, as shown in Table 1. For the purposes of this analysis, only the General Fund State Levy is being considered as available for TIF.

Table 1 Poudre School District Mill Levy Summary

Description Mill Levy

General Fund State Levy 27.000 mills

Override Election Levy and Senate Bill 184 Allowance

11.683 mills

1988 Override Election Levy 0.936 mills





Senate Bill 184 Allowance 0.151 mills

Bond Redemption 13.947 mills

Total Levy 52.630 mills

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Memorandum November 30, 2018 Poudre School District TIF Impact Summary Page 2

173061- School District Impact Summary_11-30-18.docx

Using the same method as the impact analysis for other taxing entities, the following analysis assumes base value for the two subject projects is land value only; value for the new development is based on valuation assumptions from the Larimer County Assessor and comparable developments. The assessed values for the base (land value only) and new development are summarized in Table 2.

Table 2 Project Base and Redevelopment Assessed Valuation

Based on this land value of $1.7 million, the Poudre School District is currently collecting approximately $91,500 annually in property tax revenue from these two sites; $46,900 from the 27.000 mill General Fund State Levy, $20,300 from the combined 11.683 mill Override Election Levy and Senate Bill 184 Allowance, and $24,300 from the 13.947 mill Bond Redemption levy, as shown in Table 3.

Table 3 URA Sites 2017 Base Property Tax Revenue – Poudre School District

The proposed new development for these two sites is expected to be valued at $10.9 million - $7.3 million for the mixed use development on the Brinkman site, and $3.6 million for the King Soopers Marketplace development on the former K-Mart site. These new developments will result in approximately $572,400 annually in property tax revenue for the school district; $293,600 from the 27.000 mill General Fund State Levy, $127,100 from the combined 11.683 mill

DescriptionBase

(Land Value)New

Development

Brinkman $524,262 $7,308,172

King Soopers $1,213,708 $3,567,198

Total URA $1,737,970 $10,875,370


Assessed Value

DescriptionGeneral Fund

State LevyOverride Election Levy and Senate Bill 184 Allowance

Bond Redemption Total Levy


Brinkman $14,155 $6,125 $7,312 $27,592

King Soopers $32,770 $14,180 $16,928 $63,877

Total URA $46,925 $20,305 $24,239 $91,469


H:\173061-Fort Collins Urban Renewal Authority\Models\[173061- School District Revenue.xlsx]Tax Revenue Summary

Base

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Override Election Levy and Senate Bill 184 Allowance, and $151,700 from the 13.947 mill Bond Redemption levy, as shown in Table 4.

Table 4 URA Sites Property Tax Revenue from Proposed Development – Poudre School District

Accounting for the existing revenue being collected from the base value, these new developments will result in $480,900 of net new revenue to the school district annually, as shown in Table 5. Of this net new revenue, $246,700 is collected from the General Fund State Levy and being considered as eligible for TIF.

Table 5 URA Sites Net New Property Tax Revenue from Proposed Development – Poudre School District

Over the 25 year horizon, annual TIF revenues total of $6.17 million in net new property tax revenue to the Poudre School District from the 27.000 mill General Fund State Levy, as shown in Table 6.





Brinkman $197,321 $85,381 $101,927 $384,629

King Soopers $96,314 $41,676 $49,752 $187,742

Total URA $293,635 $127,057 $151,679 $572,371



New Development





Brinkman $183,166 $79,256 $94,615 $357,037

King Soopers $63,544 $27,496 $32,824 $123,864

Total URA $246,710 $106,752 $127,439 $480,901



Net New Revenue

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Table 6 URA Sites 25-Year Total Net New Property Tax Revenue – Poudre School District General Fund State Levy

25 -Year Increment Total

Description General Fund State Levy27.000 mills

Brinkman $4,579,139

King Soopers $1,588,606

Total URA $6,167,745



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URBAN RENEWAL FINANCE COMMITTEE AGENDA ITEM SUMMARY

Staff: Josh Birks Please Note: Chris Alexander and Mike Margason from Watermark Residential will be in attendance if the Committee would like to direct questions to the Developer. Date: January 10, 2019 SUBJECT FOR DISCUSSION Conceptual Project Overview – 501 Spaulding – North College Urban Renewal Area EXECUTIVE SUMMARY The purpose of this item is to present a project concept for the property located in the North College Urban Renewal Area (“North College URA”) to the Urban Renewal Finance Committee (the “Committee”). Watermark Residential (the “Developer”) is evaluating the approximately 18.3 acres at 501 Spaulding for residential development to include approximately 300 apartments. The site presents several barriers and uncertainties to development. The Developer would like to present their concept and associated challenges to the Committee for input. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED

1. Does the proposed project deliver on URA goals and objectives for the area?

2. What additional information does the Committee need to fully appraise TIF support for the proposed redevelopment at this location?

BACKGROUND/DISCUSSION Watermark Residential (the “Developer”), established in 2008, develops multifamily projects across the Midwest, Southwest and Southeast. They focus on construction and operation of Class “A” apartment developments in suburban locations. PROJECT DESCRIPTION: The Developer identified property in Fort Collins at 501 Spaulding in the North College Urban Renewal Area (“North College URA”) as a potential development site, see Attachment 2. The property is generally located north of Willox Lane east of the King Soopers Marketplace project. Access to the property will primarily be off an extension of Redwood Street, which must cross an irrigation ditch. The Developer is evaluating the site for constructability of up to 300 apartments along with a clubhouse and up to 50 attached garage units.

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POTENTIAL IMPEDIMENTS: In evaluating the feasibility of the project, the Developer has encountered several potential barriers and uncertainties, see Attachment 3. Each barrier/uncertainty is briefly described below: Bridge Crossing/Redwood Street – Extension of Redwood Street to enable access

requires a bridge crossing of an irrigation ditch. The bridge itself will have impacts to adjacent properties and Red Wing Marsh that will need to be mitigated during and after construction (Item 1a - d on the Attachment).

Ditch Crossing – Extending Redwood Street will require a crossing of the Larimer Weld Irrigation Company ditch running along the southern edge of the property. Approval for this crossing will likely require improvements to the ditch and access throughout the site (Item 3a-c).

Utility Connections – Obtaining utility service to the site will require several system extensions, including:

o Sanitary Sewer Connection – The site is within Cherry Hills Sanitation District service area and will require the extension of the sanitary sewer as well as several easements and agreements (Item 2a-d).

o Potable Water Redundancy – East Larimer County Water District serves the site and is requiring a redundant water line in addition to the required water to serve the project (Item 5a & b).

o Transformer Relocation – As a result of the planned alignment of Redwood Street two large transformers and an electrical pole will need to be relocated prior to construction (Item 7a).

Stormwater Management – The site design and stormwater management approach will require cooperation from the Larimer Weld Irrigation Company, owner of the irrigation canal running along the south edge of the property (Item 4).

Easement Impacts– The site currently has both a water line easement (Item 1e) and an electric line easement (Item 7b) crossing through the site. If one or both cannot be relocated through development, then they will impact the overall density and constructability of the site.

FEMA/Natural Resource Area – The site is impacted by a Federal Emergency Management Agency (“FEMA”) floodplain. A Letter of Map Revisions process (“LOMR”) may be needed as a part of the project. In addition, the presence of the irrigation ditch may present an opportunity to provide new natural areas and habitat through the deployment of a preservation easement (Item 8a & b).

Access – Accessing the site, both during construction and by residents, will require the cooperation of several adjacent property owners (Item 9a-d).

POTENTIAL URA PARTICIPATION: The Developer believes that collectively the barriers and uncertainties of the site combine to present a significant challenge to the potential development. The Developer understands they must pay their own way; however, they believe that without some level of assistance from the Fort Collins Urban Renewal Authority (the “Authority”) the project will not proceed. The Developer would like to explore the ability of the Authority to assist in funding several items:

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1. Redwood Extension & Bridge – Extending Redwood Street and the associated bridge over the Larimer Weld Irrigation Company ditch presents a cost not typically encountered by this type of development. In addition, it provides an opportunity to increase access to the site and area. As a public improvement, the road extension and bridge represent the type of project costs that have been supported with URA tax increment funding in the past. Associated costs to mitigate impacts may also be included along with the road itself.

2. Relocation of Transformers – In order to clear the way for the extension of Redwood Street, two larger transformers and an electric pole will need to be relocated during construction. This type of cost is consistent with past support by the URA.

3. Natural Area – Finally, the site presents an opportunity to potentially deliver Nature in the City through the creation/extension of natural habitat adjacent to the irrigation ditch. The Developer may seek assistance for constructing and preserving this opportunity. This type of support is consistent with past URA projects.

NEXT STEPS: The proposed project is conceptual. A significant amount of due diligence, planning, and analysis remains before the project can proceed. However, the Developer requested an opportunity to get early input from the Committee on the project concept before proceeding. Based on input from the Committee, staff will engage with the developer to undertaking the following next steps:

1. Complete a Formal Application – The first step in the process to receive Authority assistance is for the Developer to a complete a formal application. This application requires the developer provide several key documents, including: site plan, financial pro forma, construction costs, and request for assistance. The Developer will need to complete additional work before these documents can be provided to the Authority.

2. Prepare a Financial Analysis – After receiving a formal application and financial pro forma, the Authority will commission an independent third-party evaluation of the financial need or “but for” of the project. This analysis will form the basis of negotiations with the Developer.

3. Develop Initial Terms of Assistance – Once a financial gap has been determined, Authority staff and the Developer will negotiate the terms of assistance. These terms will include the amount of assistance, the percentage of property tax increment to share, and other conditions as necessary.

4. Present Terms to the Committee – Finally, Authority staff will present the terms of assistance to the Committee for review and input before presenting a complete Redevelopment and Reimbursement Agreement (the “Agreement”) to the Authority Board.

ATTACHMENTS

1. Staff Presentation 2. Site Vicinity Map 3. Developer Exhibit – 501 Spaulding Lane, Fort Collins, CO

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1Conceptual Review: 501 Spaulding Apartment Project

Josh Birks

January 10, 2019

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What is Urban Renewal?

Revitalization of urban areas and the removal of economic impediments

deteriorated • obsolete • lacking re-investment • missing / inadequate public

infrastructure • unsanitary • unsafe • faulty street layout • contaminated

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Presenter

Presentation Notes

Infill & Redevelopment

Project Description

18.3 Acre Site

Approximately 300 Apartment Units

Club House & Amenities

50 Attached Garages

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Potential Barriers/Uncertainties

Redwood Street/Bridge

Ditch Crossing

Utility Connections Sanitary Sewer Potable Water Transformer Relocation

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Potential Barriers/Uncertainties

Stormwater Management

Easement Impacts

FEMA/Natural Areas

Access

758

Potential URA Assistance

1. Redwood Extension & Bridge

2. Relocation of Transformers

3. Natural Area

859

Next Steps

1. Application

2. Financial Analysis

3. Initial Terms

4. Present to Committee

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1. Bridge Crossing (City of Fort Collins) a. Road Connection/City Code b. Red Wing Marsh impact c. Adjacent property owner and road easements. d. Inability to reach Spaulding e. Water line Crossing our site.

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2. Sanitary Sewer Connection (Cherry Hills Sanitation District) a. Petitioning into Cherry Hills b. Easement through the Larimer Weld Irrigation's Easement c. Easement through Jerry Davis Parcel d. Potential storm connection if Cherry Hills unable to serve

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3. Ditch Crossing (Larimer Weld Irrigation Company) a. Approval from the Larimer Weld Board of directors. Will need to go through a request for approval process b. In order to recommend approval the LWIC is looking for paved access across the north side of the canal c. utility crossings (Power/Cable/Gas)

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4. Storm Water (Larimer Weld Irrigation Company) a. Will need an agreement with the LWIC. This will require another approval process

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5. ELCO (East Larimer County Water District) a. ELCO will require us to create a redundancy in the water line. We will need to extend a water main roughly 1,200' along Spaulding. b. Water Rights/Water Lawyer/Water Broker

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6. URA (Urban Renewal Authority) a. There is a URA board meeting on 1/10/19. This meeting will provide the opportunity to ask for funding on the bridge, the road, and potentially the relocation of transformers.

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7. REA (Rural Electric District) a. There are two large transformers and an electrical pole that will need to be relocated as they are unavoidable. REA will need to weigh in on process and cost b. Relocation of electrical easement through site

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8. FEMA/Natural Resource Area a. FEMA floodplain proccess b. Potential preservation easement

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9. Access a. Lyle Carpenter property b. County owned land on the north side c. City owned land on the south side d. City owned Redwing Marsh Parcel

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[2a, 2b 2c]

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[5]

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[2d]

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[3a,3c]

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Existing

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Required

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[7a]

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[8a]

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[8b]

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[9a]

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[9c,9d]

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[9b]

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501 Spaulding Lane. Fort Collins, CO

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CONTACTS: Fort Collins: - Environmental Planning: Stephanie Blochowiak---(970) 416-4290 - Engineering: Morgan Uhlman---(970) 416-4344 Cherry Hills Sanitation District: - Jeri Vessey---(970) 493 - 6130 Larimer Weld Irrigation Company - Field Manager: Mike Phelps---(970) 454-3377 - Attorney: Tim Dow---(970) 498-9900 ELCO: - General Manager: Mike Scheid---(970) 493-2044 - District Engineer: Randy Siddens---(970) 493-2044 URA - Poudre Valley REA -

ura finance committee - urban renewal authority...urban renewal authority 222 laporte avenue po box...

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