HomeMy WebLinkAboutA009 - Council Action Form dated June 13, 2017 t•
ITEM # 43a-c
DATE 06-13-17
COUNCIL ACTION FORM
SUBJECT: PROPOSED BARILLA URBAN RENEWAL AREA AND TAX
INCREMENT FINANCING DISTRICT
BACKGROUND:
At the City Council meeting on February 28, 2017, the City Manager was directed to
initiate steps to provide an economic development incentive in the form of a rebate of
incremental property taxes for expansion of the Barilla manufacturing plant at 3303 and
3311 East Lincoln Way. Barilla proposes an expansion to add two additional production
lines, improved rail facilities, and new silos. The estimated cost of improvements is
$64,000,000, of which $16,320,000 will be in the form of increased taxable valuation.
The City Council directed staff to prepare a development agreement providing for a
rebate of incremental property taxes for a period of 10 years or $3,000,000, whichever
occurs first. The property tax rebate will be provided as an incentive for the Barilla
expansion project and requires that that company create 41 new jobs within three years
after completing the project and to agreeing to a minimum assessment of $16,320,000
of incremental new taxable property valuation to receive the City's incentive. In order to
provide a rebate of property taxes, an economic development Urban Renewal
Area must be created along with Tax Increment Financing (TIF) district. The
proposed Urban Renewal Area and tax increment district comprises 140 acres of
land zoned Planned Industrial (PI) owned by Barilla America, Inc.
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. That plan has been drafted and is now
being submitted to the City Council. The first step in the adoption of the plan is to
forward the 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 Council will also hold a consultation with the taxing entities that will be affected
by the establishment of tax increment financing district. These entities are the Ames
Community School District and the Story County Board of Supervisors. Upon receipt of
the Commission's recommendation and following the consultation, the City Council
must hold a public hearing. The Council then can 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.
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June 13
Staff presents the Plan to the City Council. The City Council refers it to the
Planning and Zoning Commission for a recommendation. The City Council also
appoints a representative for the consultation to be held June 22.
June 21
Ames Planning and Zoning Commission makes recommendation regarding
conformity with the Land Use Policy Plan.
June 22
The consultation between representatives of the City and the taxing entities is
held.
No later than June 29
The taxing entities may make recommendations for modifications to the plan
within 7 days of the consultation.
July 11
The City conducts a public hearing. The City then approves a resolution adopting
the plan, approves a resolution establishing an urban renewal area, and
approves first reading of an ordinance creating a TIF district. A draft development
agreement with the Barilla will be presented at that time. Approval of the
agreement is planned to coincide with the third reading of the ordinance.
URBAN RENEWAL PLAN:
Included with the City Council packet is a draft of the urban renewal plan. The 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 and the City's
limits on issuing debt.
Please note that the plan is still in draft form. Some portions of the plan may change
when tentative dates are confirmed and events happen. The appendices will be
completed as the process moves forward. All these draft items will be finalized prior to
the City Council being asked to adopt the plan on July 11.
REPRESENTATIVE TO CONSULTATION:
Since this proposed urban renewal area will also include tax increment financing, the
Code of Iowa requires the City to hold a consultation with the other affected taxing
entities (the school district and the county). Following the consultation, the taxing
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entities are allowed to make their recommendations for any changes to the urban
renewal plan. The City must then respond to those recommendations for changes. The
City Council may appoint a representative to attend the consultation and to respond
back to any requests for modifications to the plan by the taxing entities. The Planning
and Housing Director can be appointed to this role as the representative to the
consultation.
ALTERNATIVES:
1. The City Council can forward the draft urban renewal plan to the Planning and
Zoning Commission for a recommendation, set July 11 as the date of the public
hearing on the plan, direct staff to implement the other required procedures for
establishing an urban renewal area and a tax increment financing district, and
appoint the Planning and Housing Director as the representative to the consultation
with the other taxing entities.
2. The City Council can choose not to initiate the urban renewal plan for Barilla.
MANAGER'S RECOMMENDED ACTION:
Following the direction of the City Council at their February 28 meeting, staff has
prepared a draft of an urban renewal plan. The plan follows the requirements as set out
in Chapter 403, Code of Iowa, and is needed to allow the city to offer tax abatement
incentives for the Barilla expansion.
Staff will have a draft of the development agreement ready at the time of the public
hearing on July 11. A signed agreement will be needed prior to third reading of the TIF
ordinance expected on August 8.
Therefore, it is the recommendation of the City Manager that the City Council act in
accordance with Alternative 1, initiating the process for adoption of the urban renewal
plan. Future City Council actions will include approval of the urban renewal plan,
approving a development agreement with Barilla regarding the creation of new jobs and
minimum assessment, and establishment of the tax increment financing district.
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LOCATION MAP
—Uon pacific Eta1►road
East-Lincoln-Way
o goo 1,200 A m e s-
N Feet
4
Bar'llia
Urban enewa
Plan
Draft Prepared by the
Ames "
Dept. of Planning and Housing
A l l e s and
Presented to the Ames City Council
on June 13, 2017
Table of Contents
UrbanRenewal Plan .......................................................................................2
Plan Preparation and Adoption .....................................................................2
PropertyDescription ......................................................................................3
Urban Renewal Project Description ..............................................................3
Urban Renewal Plan Objectives ....................................................................4
Conformance with Land Use Policy Plan......................................................4
Conformance with Zoning and Current Use.................................................6
City's Debt Obligations...................................................................................6
Map 1 Location and Project Area ..................................................................8
Map 2 Land Use Policy Plan Map ..................................................................9
Appendix A: Recommendation of the Ames Planning and Zoning
Commission ..................................................................................................10
Appendix B: Affected Taxing Entities and their Representatives ............11
Appendix C: Notice of Consultation to Affected Taxing Entities..............12
Appendix D: Notice of public hearing published the Ames Tribune and
mailed to the Affected Taxing Entities........................................................13
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Urban Renewal Plan
This Urban Renewal Plan for Barilla Urban Renewal Area (the Plan) was prepared
at the direction of the Ames City Council and in conformance with the Code of
Iowa Chapter 403 Urban Renewal. This Plan comprises the necessary
components as described in Chapter 403.17(24). In addition, it describes and
documents the procedures followed in bringing the Plan forward, in approving the
Plan, and in allowing the division of revenues from taxation (tax increment
financing).
This Plan designates the proposed urban renewal area as an economic
development area as defined in Chapter 403.17(10).
Plan Preparation and Adoption
PREPARATION AND COMMISSION ACTION
The City of Ames Department of Planning and Housing (the Department) prepared
this draft Plan, presenting it to the Ames City Council on June 13, 2017. The City
Council is asked to direct the Department to submit the Plan to the Planning and
Zoning Commission (the Commission) for their review and to provide a
recommendation as to its conformity with the general plan of the City—the Ames
Land Use Policy Plan.
The Commission will meet on June 21, 2017 and hear a summary of the report
and a recommendation from the Department. The Commission will then formulate
their recommendation for the City Council. The written recommendation of the
Commission will be found in the Appendix.
NOTIFICATION AND CONSULTATIONS
During the preparation of this Plan, the City will meet the notification and
consultation requirements of Code of Iowa Chapter 403.5. Notice will be provided
to the affected taxing entities as required when the urban renewal area includes an
allowance for the division of revenues from taxation (tax increment financing).
Notice will be provided to the Story County Board of Supervisors, and the Ames
Community School District. The notice of a consultation and a copy of the Plan will
be sent by regular mail to the taxing entities on June 14 for a consultation to be
held on June 22. The taxing entities, their addresses and their designated
representatives will be listed in the appendix.
The taxing entities will be notified that they have seven days following the
consultation to provide any recommendations for modifications of the Plan.
CITY COUNCIL ACTION
The Ames City Council will hold a public hearing on July 11, 2017 to consider the
adoption of the Plan, the resolution to establish the urban renewal area and the
ordinance to allow for the division of revenue from taxation (tax increment
financing). Notification for the public hearing will be as prescribed by Code of Iowa
Chapter 403.5(3). Public notice will be published in the Ames Tribune between
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June 21 and July 7, a copy of which will be included in the appendix. In addition, a
copy of the notice will be sent by regular mail to the affected taxing entities.
At the public hearing, the City Manager will present a summary of the report and a
recommendation to the City Council. The City Council will be presented with the
written recommendation of the Planning and Zoning Commission. Following the
public hearing, the City Council is asked to act on the Plan.
Property Description
The proposed urban renewal area comprises two parcels. The legal descriptions
are:
3311 East Lincoln Way (10-06-400-010)
Parcel "B" being a part of the Southeast Quarter (SE '/4) and East Half (E '/z) of the
Southwest Quarter (SW '/4), Section Six (6), Township Eighty-three (83) North,
Range Twenty-three (23) West of the 5th P.M., City of Ames, Story County, Iowa
as described in a Plat of Survey filed in the office of the Recorder of Story County,
Iowa, on July 22, 1997, in Certificate & Field Notes Book 15, Page 18.
and
3303 East Lincoln Way (10-06-450-020)
Beginning at a point on the South Line of the Southeast Quarter (SE %) of Section
Six (6), Township Eighty-three (83) North, Range Twenty-three (23) West of the 5th
P.M., Story County, Iowa, Four Hundred Seventy-seven (477) Feet East of the
South Quarter (S '/4) Corner of said Section Six (6); thence North 2° 03' East Four
Hundred Fifty Five (455) Feet; thence East Three Hundred Sixty-eight (368) Feet;
thence South 20 03' West Four Hundred Fifty-five (455) Feet; thence West along
the Section line Three Hundred Sixty-eight (368) Feet to the Point of Beginning,
now in the City of Ames, Iowa, subject to easements to the State of Iowa recorded
in Book 98, Page 123 and Book 88, Page 295.
Urban Renewal Project Description
This urban renewal area is being created to facilitate the expansion of the Barilla
manufacturing facility at 3303 and 3311 East Lincoln Way. Barilla is proposing an
expansion of 71 ,000 square feet to house two additional processing lines, a rail
yard expansion allowing the unloading of 100-car trains in 35 hours, and six
additional silos capable of 10,000 metric tons of grain storage. The total
investment is estimated at $64 million with the taxable value estimated at
$16,320,000.
The project does not anticipate any changes to the zoning designation, acquisition
of property by the City of Ames, or improvements to public infrastructure to be
borne by the City of Ames.
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Urban Renewal Plan Objectives
The City is offering a rebate of incremental property taxes for a period of 10 years
or $3 million, whichever comes first, for the creation of 41 new jobs within 3 years
and a minimum assessment agreement for the estimated taxable value
($16,320,000) of the new improvements.
Conformance with Land Use Policy Plan
The Land Use Policy Plan, adopted by the City Council in 1997 and subsequently
amended, provides guidance on the adoption of an urban renewal plan.
GOALS FOR A NEW VISION (LUPP PP. 14-23)
Goals for a New Vision of the Land Use Policy Plan describe ten goals in broad
categories, as well as a number of objectives to meet those goals. Those that
more greatly influence the development of an industrial urban renewal area are
quoted below. Some goals are not included as they bear little relationship to this
economic development issue.
Goal No. 1. Recognizing that additional population and economic growth is likely, it is
the goal of Ames to plan for and manage growth within the context of the community's
capacity and preferences. It is the further goal of the community to manage its growth so
that it is more sustainable, predictable and assures quality of life.
Objectives. In managing growth, Ames seeks the following objectives.
I.C. Ames seeks to manage a population and employment base that can be
supported by the community's capacity for growth. A population base of
61,000-73,000 and an employment base of up to 34,000 is targeted within
the City. Additionally, it is estimated that the population in the combined
City and unincorporated Planning Area could be as much as 67,000 and the
employment base could be as much as 38,000 by the year 2030.
Goal No. 2. In preparing for the target population and employment growth, it is the goal
of Ames to assure the adequate provision and availability of developable land. It is the
further goal of the community to guide the character, location, and compatibility of growth
with the area's natural resources and rural areas.
Objectives. In assuring and guiding areas for growth, Ames seeks the following
objectives.
2.A. Ames seeks to provide at least 600 to 2,500 acres of additional developable
land within the present City and Planning Area by the year 2030. Since the
potential demand exceeds the supply within the current corporate limits,
alternate sources shall be sought by the community through limited
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intensification of existing areas while concentrating on the annexation and
development of new areas. The use of existing and new areas should be
selective rather than general.
Goal No. 9. It is the goal of Ames to promote expansion and diversification of the
economy in creating a base that is more self-sufficient and that is more sustainable with
regard to the environment.
Objectives. In creating an economic base that is more self-sufficient and environmentally
sustainable, Ames seeks the following objectives.
9.A. Ames seeks more diversified regional employment opportunities involving
technology-related services and production, office centers and retail centers.
9.B. Ames seeks to attract and support a small- and medium-size business center
that utilizes the skills and products of the area's trained workforce.
9.C. Ames seeks to expand its research and technology development through
greater private, public and university coordination and cooperation.
9.D. Ames seeks economic activities that are compatible and sustainable with its
environment.
FUTURE LAND USE POLICY PLAN MAP (LUPP FOLLOWING P. 36)
The area of the proposed urban renewal area is identified on the Land Use Policy
Plan Map as Planned Industrial.
• Planned Industrial - Industrial uses that involve a clustered/industrial park setting in
order to achieve greater integration of uses, access and appearance. Locations
should be near limited-access thoroughfares.
SUMMARY
The urban renewal plan and the proposed urban renewal project within the
proposed urban renewal area are consistent with and supported by the goals of
the Ames Land Use Policy Plan. This is demonstrated by:
• The Project will support an increased employment base moving the City
closer to its 2030 employment projections.
• The Project provides intensification of development in the industrial area.
• The Project leverages private development with its investment of public
resources.
• The Project supports and the Area is within an industrial infill area where
public infrastructure is immediately adjacent.
• The Project will allow for the expansion of the industrial base.
• The Area lies within a Planned Industrial designation of the Land Use Policy
Plan Map.
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• There are no identified issues that make the development of the Project
within this Area inconsistent with the Land Use Policy Plan.
Conformance with Zoning and Current Use
The Area is currently zoned PI Planned Industrial. This zoning designation is
consistent with the Land Use Policy Plan Map. It is also consistent with the current
use (Barilla).
City's Debt Obligations
This urban renewal area will include a provision for tax increment financing. In
accordance with Code of Iowa Chapter 403.17(24)(c), the following financial
information is provided.
CURRENT GENERAL OBLIGATION AND REVENUE BOND DEBT
Governmental Activities
Interest Outstanding
Sale Original Rates to Final June 30,
General Obligation Bonds Date Borrowing Maturity Maturity 2016
Corporate purpose 2008 $ 5,855,000 3.75-4.150 % 2020 $ 2,295,000
Corporate purpose 2009 11,165,000 2.00-3.500 2021 5,265,000
Corporate purpose 2010 6,690,000 2.00-2.500 2022 3,655,000
Refunding 2011 5,980,000 2.00-3.350 2021 1,190,000
Corporate purpose 2011 6,675,000 1.00-2.400 2023 4,045,000
Corporate purpose 2012 11,325,000 1.50-3.000 2032 8,530,000
Corporate purpose/refunding 2013 21,220,000 2.00-3.125 2032 16,440,000
Corporate purpose 2014 9,395,000 2.00-2.500 2026 7,870,000
Corporate purpose/refunding 2015 16,585,000 3.00-5.000 2035 14,405,404
$ 94,890,000 $ 63,695,404
Business-Type Activities
Interest Outstanding
Sale Original Rates to Final June 30,
General Obligation Bonds Date Borrowing Maturity Maturity 2016
Corporate purpose 2008 $ 2,500,000 1.00-2.40 % 2023 $ 995,000
Corporate purpose 2012 1,335,000 1.50-3.00 2024 935,000
Corporate purpose 2013 1,320,000 2.00-3.00 2025 1,020,000
Corporate purpose 2014 300,000 2.00-2.50 2024 250,000
Corporate purpose/refunding 2015 2,061,714 3.00-5.00 2027 1,929,596
$ 7,516,714 $ 5,129,596
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CURRENT CONSTITUTIONAL DEBT LIMIT AND CAPACITY
Legal debt margin for the fiscal year ended June 30, 2016:
Assessed value $3,789,598,226
Debt limit (5% of actual value) $ 189,479,911
Debt applicable to limit:
General obligation bonds 68,825,000
Legal debt margin $ 120,654,911
Percentage of net debt margin available 63.68%
Percentage of net debt margin exhausted 36.32%
Proposed Amount of Tax Increment Financing
The City intends to enter into a Tax Increment Financing (TIF) rebate agreement
with the developer of the project to provide a rebate of 100 percent of eligible
incremental property taxes for a period of ten years or an amount not exceed
$3,000,000, whichever comes first. The TIF agreement will provide for annual City
Council approval of each TIF rebate, which will enable the City to count only the
amount of each rebate payment against the City's constitutional debt limit rather
than the full $3,000,000.
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MAP 1: LOCATION AND PROJECT AREA
h
rU ��►pacific Raiiroad
East-Lincoin•Way
0 600 1,200
ames-
N Feet
8
MAP 2: LAND USE POLICY PLAN [EXCERPT]
uv i on-p actflc Ftailr°ad
� f
,
' f GENERAL-INDUSTRIAL, r// ✓ ,"
Fl
East•Lincoln-Way
. Ames
0 600 1,200
N Feet
9
Appendix A
Recommendation of the Planning and Zoning Commission of June 21 , 2017.
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Appendix B
Affected Taxing Entities, their addresses, and representatives to the consultation.
Affected Taxing Entity Mailing Address Representative to
Consultation
City of Ames PO Box 811 Kelly Diekmann, Planning and
Ames, IA 50010 Housing Director
Ames Community School 200524 InStreet TBD
District Ames, IA 50014
Story County 900 6th Street TBD
Nevada, IA 50201
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Appendix C
Notice of consultation to Affected Taxing Entities
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Appendix D
Notice of public hearing to be published in the Ames Tribune one time between
June 18 and July 11 , 2107 and mailed to the Affected Taxing Entities.
LEGAL NOTICE
NOTICE IS HEREBY GIVEN that the Ames City Council will hold a public hearing in
the Council Chambers at Ames City Hall, 515 Clark Avenue, Ames, Iowa at 6:00 p.m. on
July 11, regarding the proposed adoption of an urban renewal plan for the Barilla Urban
Renewal Area pursuant to Iowa Code Section 403.5.
The proposed urban renewal area comprises 140 acres of land east of Interstate Highway
35 and north of East Lincoln Way. This urban renewal area is being created to facilitate the
expansion of the Barilla manufacturing facility at 3303 and 3311 East Lincoln Way.
Diane Voss, City Clerk
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