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HomeMy WebLinkAboutA008 - Resolution No. 13-402 adopted August 27, 2013 RESOLUTION NO. 13-402 RESOLUTION APPROVING TAX INCREMENT FINANCING INCENTIVE FOR KINGLAND SYSTEMS FOR THE CITY OF AMES, IOWA WHEREAS,on March 26,2013,the City Council heard a presentation from representatives of Kingland Systems regarding its proposed redevelopment project along Lincoln Way in the Campustown Business District; and, WHEREAS,the development concept has now been solidified,and Kingland officials are prepared to share this information with the City Council; and, WHEREAS,the latest concept reflects a three-story 75,000 square foot building which will include 25,000 square feet of office space on the second floor for Kingland, 25,000 square feet of office space on the third floor for Iowa State University, and 25,000 square feet of retail space on the first floor for an anchor tenant and two small tenants; and, WHEREAS, the plan includes 72 surface parking spaces and a drive-thru facility to serve the retail anchor at the corner of Lincoln Way and Welch Avenue, and the concept drawings are based on an assumption of no step-back requirement for either the Lincoln Way or Welch Avenue frontages; and, WHEREAS,Kingland officials are now seeking a financial commitment from the City that would allow them to borrow $1,575,000 to be used for the funding gap they have identified to make their project financially viable before they move ahead to develop final construction design documents; and, WHEREAS, the company has indicated to City staff that its latest estimates reflect construction costs of$10,925,000 with an overall project cost of$18,740,000; and, WHEREAS,after accounting for an equity contribution from the company,proceeds from a conventional loan, and benefits from various federal tax credit programs,the funding gap for its project is $1,575,000; and, WHEREAS, the City currently has a Campustown Urban Revitalization Tax Abatement Program for the area in which this project will be located, however, to be eligible for tax abatement,projects need to involve such requirements as slum and blighted properties,structured parking, adaptive reuse of an existing building, including under-represented uses, and various design standards; and, WHEREAS, a review of the proposal indicates that the Kingland project will not qualify for incentives under our existing program; and, WHEREAS, Kingland officials have suggested that the City provide the requested $1,575,000 incentive through a Tax Increment Financing(TIF) rebate agreement, and under this proposal, no debt would be incurred by the City; and, WHEREAS, a development agreement would be finalized and TIF ordinance passed that would obligate the City to transmit all TIF qualified property tax revenue generated for the City, Ames School District, and Story County from the incremental assessed value of the new project to Kingland over a period of years agreed in advance, in this case 10 years; and, WHEREAS, Staff believes Kingland's incremental valuation estimates are very conservative and the level of incentives that are being sought will be satisfied in less than 10 years; and, WHEREAS, the guarantee of a TIF rebate will allow Kingland to borrow $1,575,000 for the project and use the rebated taxes to pay the principal and interest on the debt, therefore, its request will require an incentive total of$2,064,530($1,575,000 principal and$489,530 interest). NOW,THEREFORE,BE IT RESOLVED,by the City Council of the City of Ames,Iowa, that the provision of a 100% TIF rebate with a cap of $2,064,530 ($1,575,000 principle and $449,530 interest) up until the time the cap is reached or ten years have passed from the time of the development agreement, whichever comes first, is hereby approved. ADOPTED THIS 271h day of August, 2013. ,--I 4 Diane R. Voss, City Clerk Ann H. Campbell, Mayor f Introduced by: Orazem Seconded by: Larson Voting aye: Davis, Larson, Orazem, Szopinski Voting nay: None Abstaining: Goodman Absent: Wacha Resolution declared adopted and signed by the Mayor this 27`h day of August, 2013.