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HomeMy WebLinkAbout2020-07-20-G02 Waukee Consolidated URP Amendment 3_PH AGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: July 20, 2020 AGENDA ITEM: Public Hearing on a proposed Urban Renewal Plan for an Amendment No. 3 of the Waukee Consolidated Urban Renewal Plan in the City of Waukee, State of Iowa FORMAT: Public Hearing SYNOPSIS INCLUDING PRO & CON: The City Council adopted Amendment No. 1 to the Waukee Consolidated Urban Renewal Plan in early November 2019 followed by Amendment No. 2 in January 2020. The proposed Amendment No. 3 includes an update to the list of previously approved projects as well as an update to the list of eligible urban renewal projects. The amendment adds no new land to the area. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: Staff held a consultation meeting with the County and the affected school district(s) involved in the Plan area to review the proposal on June 22, 2020. No one attended the meeting. RECOMMENDATION: Hold the Public Hearing. ATTACHMENTS: I. Proposed Amendment No. 3 to Waukee Consolidated Urban Renewal Plan PREPARED BY: Brad Deets REVIEWED BY: PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: Dallas County News DATE OF PUBLICATION: July 9, 2020 G2 - 1 - FINAL 061120 AMENDMENT NO. 3 to the WAUKEE CONSOLIDATED URBAN RENEWAL PLAN for the WAUKEE CONSOLIDATED URBAN RENEWAL AREA Gateway Economic Development Urban Renewal Area, Waukee West Urban Renewal Area, and Waukee Central Urban Renewal Area CITY OF WAUKEE, IOWA Amendment No. 1 – November 2019 Amendment No. 2 – January 2020 Amendment No. 3 – July 2020 - 2 - FINAL 061120 AMENDMENT NO. 3 to WAUKEE CONSOLIDATED URBAN RENEWAL PLAN CITY OF WAUKEE, IOWA INTRODUCTION The City of Waukee, Iowa (the “City”) adopted Amendment No. 1 to the Waukee Consolidated Urban Renewal Plan (“Plan” or “Urban Renewal Plan”) by Resolution No. 19-402 on November 4, 2019, in order to consolidate the City’s previously established Gateway Economic Development Urban Renewal Area, Waukee West Urban Renewal Area, and Waukee Central Urban Renewal Area into the Waukee Consolidated Urban Renewal Area (“Area” or “Urban Renewal Area”). The Urban Renewal Plan was amended in January 2020 (Amendment No. 2). The Plan is being further amended by this Amendment No. 3 (“Amendment” or “Amendment No. 3”) to update the list of previously approved projects and the list of eligible urban renewal projects. This Amendment adds no new land to the Area. Except as modified by this Amendment, the provisions of the Urban Renewal Plan, as previously amended, are hereby ratified, confirmed, and approved and shall remain in full force and effect as provided herein. In case of any conflict or uncertainty, the terms of this Amendment shall control. Any subsections in the Plan, as previously amended, not mentioned in this Amendment shall continue to apply to the Plan, as amended. DEVELOPMENT PLAN The City has a general plan for the physical development of the City as a whole outlined in the Waukee Comprehensive Land Use Plan, adopted by the City in 2019. The goals and objectives of the Urban Renewal Plan, and this Amendment, including the urban renewal projects described herein, are in conformity with the 2019 Comprehensive Plan. The Urban Renewal Plan, as amended, does not in any way replace or modify the City’s current land use planning or zoning regulation process. The need for improved traffic, public transportation, public utilities, recreational and community facilities, or other public improvements within the Urban Renewal Area is set forth in this Plan, as amended. As the Area develops, the need for public infrastructure extensions and upgrades will be evaluated and planned for by the City. - 3 - FINAL 061120 UPDATE TO PREVIOUSLY APPROVED URBAN RENEWAL PROJECTS Numerous urban renewal projects were authorized prior to the date of this Amendment No. 3 and are continuing, including but not limited to the following (with updates as applicable): A. Development Agreement with Midtown Waukee Holdings, LLC: The City previously approved a development agreement (“Original Agreement”) with Midtown Waukee Holdings, LLC (“Original Developer”), under the Development Agreements (Future) project authorization included in Amendment No. 1 to the Plan, which project description was updated in Amendment No. 2 to the Plan. Pursuant to the Original Agreement, Original Developer agreed to construct six commercial buildings comprising an approximately 255,000 square feet entertainment district, together with all related site improvements (the “Original Minimum Improvements”), on certain real property located within the Urban Renewal Area. In consideration for Original Developer’s obligations under the Original Agreement, the City agreed to make up to twelve (12) annual payments to Original Developer, each consisting of 80% of the Tax Increments pursuant to the Iowa Code Section 403.19 and generated by the construction of the Original Minimum Improvements, under the terms and following satisfaction of the conditions set forth in the Original Agreement, up to a cumulative total for all such payments to Original Developer not to exceed $19,700,000. The City anticipates entering into an Amended and Restated Agreement, which will replace the Original Agreement. The property subject to the Original Agreement was transferred to The Quarter at Waukee, L.L.C, which will now be the developer of the project (“Developer”). The Amended and Restated Agreement is anticipated to include changes to the parties, description of the Development Property and Minimum Improvements, and to the terms for construction, assessed value and operation of the Minimum Improvements on the Development Property. It is anticipated that additional property is being added to the Development Property to support the project, which additional property will be acquired by Waukee Prairie Apartments LLC. Subject to the terms and conditions set forth in the anticipated Amended and Restated Agreement, the City will provide Developer with Economic Development Grants to incentivize a total of an anticipated eighteen (18) commercial buildings and related site improvements, with a total investment of approximately $100,000,000. The City expects to make Economic Development Grants to Developer in the form of rebates of varying percentages of incremental taxes generated by the separate buildings over a period of twelve (12), sixteen (16) or twenty (20) years, depending on the nature of the specific commercial building as described in the Amended and Restated Agreement. The cost of such grants shall not exceed $32,500,000 and are subject to the terms and conditions of a detailed development agreement. B. Agreement with Kettleview, L.L.C. Under authority granted by the Gateway Economic Development Urban Renewal Plan, as previously amended, the City entered into a Development Agreement (the "Original Agreement") with Kettleview, L.L.C. (the “Developer”), pursuant to which the Developer agreed to cause certain Minimum Improvements to be constructed on certain real property located within the Gateway Economic Development Urban Renewal Area and to use commercially reasonable efforts to obtain tenants or purchasers to employ employees in the Minimum Improvements. On November 4, 2019, the City approved an Amended and Restated Agreement which replaced the Original Agreement and made changes to terms relating - 4 - FINAL 061120 to the description of the Minimum Improvements, the completion dates, the Economic Development Grant schedules, and the Minimum Assessment Agreement. Pursuant to the Amended and Restated Agreement, the City agreed to construct certain Public Improvements and provide Developer with Economic Development Grants for five (5) distinct phases of development as further described in the Amended and Restated Agreement, with the Grants for each phase to be made as five (5) consecutive annual payments, each annual payment in the amount of 100% of the Tax Increment generated by the commercial development in that particular phase, not to exceed $4,100,000 in the aggregate, under the terms and conditions of the Amended and Restated Agreement. The aggregate Grant maximum included in the Amended and Restated Agreement was a reduction from the Original Agreement which included a $5,300,000 maximum. The Amended and Restated Minimum Assessment Agreement established an aggregate value for the completed Minimum Improvements at $53,900,000. On June 15, 2020, the City approved an Amendment to the Amended and Restated Agreement, which made changes to terms relating to: (i) the description of the Minimum Improvements, (ii) the Economic Development Grant schedules, (iii) the property included as part of the Development Property, and (iv) the minimum assessed values included in the Amended and Restated Minimum Assessment Agreement. The Amendment to the Amended and Restated Agreement did not alter the aggregate maximum Grant payment amount. The Amendment to the Amended and Restated Minimum Assessment Agreement establishes a minimum aggregate value for the completed Minimum Improvements, as revised, at $33,200,000. C.Waukee Crossing, LLC: Under authority granted by Amendment No. 2 to the Plan, the City entered into a development agreement with Waukee Crossing, LLC (“Developer”), pursuant to which Developer will construct commercial buildings and related parking and site improvements on certain real property within the Urban Renewal Area. The commercial buildings are anticipated to house various commercial and retail businesses. The agreement also requires the construction of certain public improvements including NW 2nd Street from Hickman Road through and including its intersection with NW Venture Drive, and the north turning lane on east bound Hickman Road. Construction is expected to be completed in 2022. The City expects to make Economic Development Grants to Developer in the form of rebates of incremental taxes generated by the project, over period of nine (9) years. The cost of such grants shall not exceed $500,000 and are subject to the terms and conditions of a detailed development agreement. ELIGIBLE URBAN RENEWAL PROJECTS (Amendment No. 3) Although certain project activities may occur over a period of years, the Eligible Urban Renewal Projects under this Amendment No. 3 include: 1.Development Agreements: A. Future Development Agreements: The City expects to consider requests for development agreements for projects that are consistent with the Plan, in the City’s sole discretion. Such - 5 - FINAL 061120 agreements are unknown at this time, but based on past history, and dependent on development opportunities and climate, the City expects to consider incentives as authorized by the Plan, including but not limited to land, loans, grants, rebates, public infrastructure assistance and other incentives. The costs of such development agreements will not exceed $15,000,000 - $20,000,000. FINANCIAL DATA 1. July 1, 2019, constitutional debt limit: $104,866,529 2. Current outstanding general obligation debt: $75,885,000 3. Proposed amount of indebtedness to be incurred (Amendment No. 3): A specific amount of debt to be incurred for the Eligible Urban Renewal Projects (Amendment No. 3) described in this Amendment has not yet been determined. This document is for planning purposes. The estimated project costs in this Amendment are estimates only and will be incurred and spent over a number of years. In no event will the City’s constitutional debt limit be exceeded. The City Council will consider each project proposal on a case- by-case basis to determine if it is in the City’s best interest to participate before approving an urban renewal project or expense. It is further expected that such indebtedness, including interest on the same, may be financed in whole or in part with tax increment revenues from the Urban Renewal Area. Subject to the foregoing, it is estimated that the cost of the Eligible Urban Renewal Projects (Amendment No. 3) as described above will be approximately: $15,000,000 – $20,000,000 This estimate does not include financing costs which may be incurred over the life of the Plan REPEALER AND SEVERABILITY Any parts of the Urban Renewal Plan in conflict with this Amendment No. 3, are hereby repealed. In the event one or more provisions contained in the Urban Renewal Plan or this Amendment No. 3 shall be held for any reason to be invalid, illegal, unauthorized or unenforceable in any respect, such invalidity, illegality, unauthorization or enforceability shall not affect any other provision of the Plan or this Amendment No. 3, and the Plan and this Amendment No. 3 shall be construed and implemented as if such provisions had never been contained herein. EFFECTIVE PERIOD This Amendment No. 3 will become effective upon its adoption by the City Council. The Urban Renewal Plan, as amended, shall remain in effect until repealed by the City Council. - 6 - FINAL 061120 During the life of the Plan, the City Council may designate by ordinance all or any portion of the property covered by the Plan as a “tax increment area.” With respect to any property covered by this Plan which is included in an ordinance which designates that property as a tax increment area, the use of incremental property tax revenues, or the “division of revenue,” as those words are used in Chapter 403 of the Code of Iowa, is limited to twenty (20) years from the calendar year following the calendar year in which the City first certifies to the County Auditor the amount of any loans, advances, indebtedness, or bonds which qualify for payment from the incremental property tax revenue attributable to the portion of the Area within the ordinance. It is anticipated that separate ordinances for separate tax increment areas may be adopted as development in the Area warrants, in which case each separate tax increment area may have a separate base and separate sunset. The division of revenues shall continue within any tax increment area, for the maximum period allowed by law.