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Home My WebLink AboutA002 - Council Action form dated September 23, 1997 ITEM#: 27i/ DATE: 09/23/97 COUNCIL ACTION FORM SUBJECT: RESOLUTION APPROVING THE URBAN REVITALIZATION PLAN FOR URBAN REVITALIZATION AREA NO. 7, AND APPROVING THE ORDINANCE DESIGNATING AREA NO. 7. ACTION FORM SUMMARY: Staff has prepared a Plan for the area proposed to be designated as Urban Revitalization Area No. 7. The purpose for designation of the area as an Urban Revitalization Area is to stimulate commercial development of a neighborhood scale, and to assist with the development of low and moderate cost housing. The Planning and Zoning Commission and staff recommend that the Council approve the Plan for Urban Revitalization Area No. 7 and adopt the ordinance designating the Revitalization Area. BACKGROUND: On April 8, 1997, the City Council approved a Zoning Change Agreement for the Somerset Subdivision. One of the provisions of the agreement was the willingness of the City to consider designating the commercially zoned area as an Urban Revitalization Area, which would make the availability of tax abatement possible. Staff has prepared a Plan for the proposed Urban Revitalization Area, which documents the following information. • Goals for designating the area as an Urban Revitalization Area; • An inventory of the existing conditions on the property; • Qualifications for tax exemption and the standard exemption schedules; and • Other information as required by State Code. ANALYSIS: In preparing the Plan for the designation of Urban Revitalization Area No. 7, staff was guided to a great degree by the content of the Zoning Change Agreement for the Somerset Subdivision. In negotiating the final design of the subdivision, staff was influenced by several broad concepts that have contributed to the specific approach to utilizing the Urban Revitalization Tax Abatement incentive in Somerset. These include: 1 • The viability of the Commercial Core will lead directly to the overall success of the entire village concept in the Somerset Subdivision; • Enticing specific types of retail business that will draw neighborhood residents to the Commercial Core will lead to the success of the area; • The viability of the Commercial Core can best be assured if there are specific retail attractions that locate in the Commercial Core that will lead to other neighborhood scale business investment in the area; • A neighborhood scale grocery and a neighborhood scale sit down restaurant/eatery will attract residents to the Commercial Core; and • The housing types that are constructed in the Somerset Subdivision should include a variety of housing types that will be marketable for a broad range of people in various income levels. With these concepts, staff has prepared an Urban Revitalization Plan that makes available the tax abatement incentive to specific types of land uses in the designated area, which is in contrast to other Urban Revitalization areas where any permitted use is eligible for the tax incentive, regardless of where it is located in the designated area. The specific types of land use that will qualify for tax abatement is proposed to include: • A neighborhood scale grocery; • A neighborhood scale sit-down restaurant; and • Any retail use that also has a residential dwelling unit(s) on the second floor that is rented to a tenant of low and moderate income, as established by the Department of Housing and Urban Development for Story County. The result of this approach is that the tax abatement is available only in the commercial area, and will not be available for other areas of the Somerset Subdivision. Additionally, the Plan for Urban Revitalization Area No. 7 contains a recapture provision for both the retail grocery and sit-down restaurant uses, as well as the low and moderate income housing use. This recapture provision requires that all of the real estate taxes that have been abated by the City must be paid to the City if one of the following events occur. Low and Moderate Income Housing Use. 1. The owner of the property knowingly rents to a person who does not meet the low and moderate income test. 2 2. The residential dwelling unit is vacant for a period of 120 days or longer, and there is no reasonable explanation. 3. The dwelling unit is used for some alternate use for a period of 30 days or longer. 4. The rents charged for the dwelling unit exceed 30% of 80% of the established medium income for Story County. The rationale for these recapture provisions, which are truly meant to be punitive, is that the owner of the property has received a tax abatement for the retail use, as well as the residential use on the property. Secondly, the City is clearly insistent that low and moderate income tenants benefit from the tax abatement given by the City. Grocery and Sit-Down Restaurant Use. 1. The use of properties changes from a retail use, a grocery or a sit-down restaurant to some other use. The rationale for this recapture provision is meant to be punitive and the change in use from grocery or a sit-down restaurant could limit the viability of the commercial core. STAFF COMMENTS.- The approach taken in the Urban Revitalization Plan for proposed Area No. 7 is quite different from the other areas of the city. Other areas have focused on goals for enticing investment in underutilized and relatively blighted areas. In Somerset Subdivision, the Urban Revitalization Plan focuses goals for attracting commercial development in a village concept and low and moderate income housing. The use of the tax abatement incentive is strictly voluntary. Owners of retail space in the commercial core are not required to rent to low and moderate income tenants, nor are property owner required to construct a grocery or a sit-down neighborhood scale restaurant. Conversely, if these types of land uses are not developed, the use of tax abatement by the City will not occur. PLANNING AND ZONING COMMISSION RECOMMENDATION: The Planning and Zoning Commission reviewed this request at their meeting of July 3, 1997 and recommended that The City Council create Urban Revitalization No. 7 and adopt the Urban Revitalization Plan for the proposed Area No.7 ALTERNATIVES: 1. The City Council can approve the Plan for Urban Revitalization Area No.7, and adopt the ordinance designating the area as an Urban Revitalization Area. 2. The City Council can decide not to create Urban Revitalization Area No. 7. 3 3. Action on this agenda item can be postponed and referred back to City staff for additional information. RECOMMENDED ACTION: It is the recommendation of the City Manager that the City Council adopt Alternative #1. This will approve the Urban Revitalization Plan for Area No. 7 and approve the ordinance designating the area as an Urban Revitalization area. Attachment 4 �J a ---'- _� w �Alllry .. Yeti . 0 M ----- - � w Q� �"f! 1iS� 4• oti q S� q N ♦♦ . bb o 30VTTMIDOZ CAICI,E o T p}pRl'19R•,,,�F� CaRCLIE u J ♦ \`♦ " , ^ L w Q ♦♦ ♦♦ _ L y . - NCO'OTJ 1'E / �../ hCt?19t77'W 1J/J.77 t3EOR(iC 11,A&7FtlOTOitl _ 1'.•fir �t-J''"('' I -1 i It its ,.` �- _L__ mat N it yam►) O / ♦ X Y O .40 a y » Ry 7 �W� ' -v' N-'\I111\Y 1 h vi . ,�.• ` K '� rz rr �! 3K3 '-+ -------ROAD I ------- --- 46 _. —3 7JJ(.b I<r>�. � � r'+-•.•+��„-- r. 1 � 'I I I I I I I I I I I I I I I I I I I I I - - - � V, q� 10'l9�Eq I- i � � . 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