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Home My WebLink AboutA012 - Council Action Form dated October 22, 2013 ITEM # 24b DATE: 10/22/13 COUNCIL ACTION FORM SUBJECT: PROPOSED CAMPUSTOWN URBAN RENEWAL AREA AND TAX INCREMENT FINANCING DISTRICT BACKGROUND: At the August 27, 2013 City Council meeting, the City Manager was directed to initiate steps to provide tax increment "rebate" financing to support the redevelopment of properties in Campustown in and adjacent to the 2400 Block of Lincoln Way. This incentive will provide a rebate to the developer of 100% of eligible incremental property taxes for a period of ten years or an amount not to exceed $2,064,530, whichever comes first. The request for a tax increment financing (TIF) district was made by Kingland Systems, which proposes to develop new street level retail space, new offices for its expanding business, and additional office space for lease to other entities. The proposed tax increment district comprises 1.42 acres of land zoned Campustown Service Center (CSC). A map of the proposed urban renewal area is attached. URBAN RENEWAL AREA: Code of Iowa Chapter 403 allows cities to establish tax increment financing districts through the creation of an urban renewal area. The creation of an urban renewal area requires the adoption of an Urban Renewal Plan. A draft Plan will be provided on Monday, October 21 so that Council comments can be received prior to its approval. At this time, the City Council is being asked to set the date for the public hearing on the proposed Urban Renewal Plan to facilitate Kingland's redevelopment project. The City Council is also being asked to refer the Urban Renewal Plan to the Planning and Zoning Commission for a recommendation. The Commission's role is to make a recommendation as to whether the Plan conforms to the intent and purposes of the Land Use Policy Plan. The City will also hold a consultation with the taxing entities that would be affected by the establishment of Tax Increment Financing District. These entities are the Ames Community School District Board of Education, Des Moines Area Community College Board of Directors, and the Story County Board of Supervisors. The City Council is also being asked to appoint the Director of Planning and Housing to represent the City at this consultation meeting, which is not part of a City Council meeting. Upon receipt of the Commission's recommendation and following the consultation, the City Council will hold a public hearing to gather public input on the Urban Renewal Plan. After following these procedures, the Council will be in a position to approve a resolution adopting the Urban Renewal Plan, approve a resolution establishing the Urban Renewal Area, and approve an ordinance creating a Tax Increment Financing District. The necessary steps are outlined and a time line is established below. The City Council is also being asked to direct staff to initiate these steps. November 6 Planning and Zoning Commission reviews the Urban Renewal Plan, hears any public input and makes recommendation to the City Council regarding the conformance of the Urban Renewal Plan to the City's Land Use Policy Plan. Prior to this date, notice of the public hearing on the Urban Renewal Plan is published. The Plan is also mailed to the affected taxing entities inviting them to a consultation meeting. The taxing entities may appoint a representative to attend and make recommendations for modifications to the Plan. The City Council's appointed representative will respond to those recommendations no later than November 5. November 12 The City Council conducts a public hearing on the Urban Renewal Plan and then may approve: • Resolution adopting the Urban Renewal Plan • Resolution establishing the Urban Renewal Area • First reading of an ordinance creating a Tax Increment Financing District • December 10 as the date for the public hearing on the Tax Increment Financing Development Agreement providing the rebate to the developer. At this meeting the City Council also will review the basic terms for this Development Agreement as well as the specific redevelopment plan for the Kingland project including floor plans, architectural elevations, site plans and renderings of the project's appearance. At this November 12 meeting, the City Council may request that the developer make modifications to the basic terms of the proposed TIF Development Agreement and to the specific redevelopment plan. An important issue to the developers is the modification to the step-back requirement. In accordance with the revised schedule, the Council also will be asked to consider passage of this zoning text amendment on first reading. November 26 The City Council may approve the second reading of ordinances creating the Tax Increment Financing District and amending the zoning code. December 10 The City Council will conduct the public hearing on the Tax Increment Financing Development Agreement and may approve: • Third reading of an ordinance creating a Tax Increment Financing District 2 • Tax Increment Financing Development Agreement providing the rebate to the developer • Third reading of an ordinance modifying the building height step-back requirement At this meeting the City Council may also approve a Plat of Survey consolidating the properties for the Kingland redevelopment project. Following publication of the ordinance amending the zoning code, Kingland Systems will submit the Minor Site Development Plan for staff review and subsequently the application for a building permit. These do not require City Council action. URBAN RENEWAL PLAN: The proposed Urban Renewal Plan includes the necessary components described by the Code of Iowa. It describes the project and its objectives and includes a summary of the process of its preparation and adoption. The Plan identifies those components of the Land Use Policy Plan that are supported by the proposed Urban Renewal Area. The Plan also contains a summary of the City's current debt obligations, the City's limits on issuing debt, and an estimate of the amount of tax increment financed debt that would be incurred due to this project. It should be noted that the Urban Renewal Plan does not include a specific site plan and building elevations for the Kingland redevelopment project, nor will it include this type of information when submitted for approval. Rather, this information will be included as part of the TIF Development Agreement. ALTERNATIVES: 1. The City Council can adopt a resolution approving the following steps: a. setting November 12 as the date of the public hearing on the Urban Renewal Plan, and b. forwarding the draft Urban Renewal Plan to the Planning and Zoning Commission for a recommendation, and c. appointing the Director of Planning and Housing as the representative who will respond to any recommendations made by the other affected taxing entities following the consultation. This alternative is necessary if the City Council wishes to use tax increment financing as requested by Kingland Systems for their redevelopment project in Campustown. 2. The City Council can decide to provide a tax increment rebate financing total in an amount less than the $2,064,530 requested by Kingland Systems. 3 3. The City Council can choose not to approve the above steps for the Urban Renewal Plan. This is the option if the City Council does not wish to use tax increment financing for the Kingland redevelopment project in Campustown. MANAGER'S RECOMMENDED ACTION: Following the City Council action on August 27 to initiate the process for Tax Increment Financing as an incentive for Campustown revitalization, City staff has been working with Kingland Systems and its design team on the specific redevelopment plan. The Kingland Systems team has been very responsive to the City staff's requests for information and design suggestions. That specific redevelopment plan, including conceptual plans for the site and the building will be presented to the City Council for comment at the public hearing on the Urban Renewal Plan on November 12, although it is not part of the Urban Renewal Plan. The specific redevelopment plan, reflecting City Council input, will be presented for approval on December 10 as part of the agreement for Tax Increment Financing. At this time the City Council is not being asked to give approval to the Kingland Plan or to Tax Increment Financing. On November 12 the City Council will review the plan for Kingland's project and provide input. At that time, City Council will decide if the City is ready to proceed with the project or if further work and discussion is needed. In order to move forward toward that decision, the City Council should direct staff to proceed with the statutory steps described above that are necessary to establish the Tax Increment Financing District. Therefore, it is the recommendation of the City Manager that the City Council accept Alternative #1, thereby adopting a resolution approving the following steps: a. setting November 12 as the date of the public hearing on the draft Urban Renewal Plan, and b. forwarding the draft Urban Renewal Plan to the Planning and Zoning Commission for a recommendation, and c. appointing the Director of Planning and Housing as the representative who will respond to any recommendations made by the other affected taxing entities following the consultation. Under this alternative, on November 12 City Council will conduct a public hearing and review the specific redevelopment plan for the Kingland project and then make final decisions on the project on December 10. 4 Campustown Urban Renewal Area A Moir. 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