HomeMy WebLinkAboutA024 - Urban Renewal Areas and Tax Increment Financing ProjectsITEM #:25
DATE:02-24-26
DEPT:P&H
SUBJECT:FOLLOW UP ON IMPLEMENTATION OF DEVELOPMENT INCENTIVES
WITH ESTABLISHMENT OF URBAN RENEWAL AREAS AND TAX
INCREMENT FINANCING.
COUNCIL ACTION FORM
BACKGROUND:
City Council has recently indicated preliminary support for specific development incentives
with various forms of Tax Increment Financing (TIF) within Urban Renewal Plan (URP) Areas
as allowed under state law. Staff is requesting that City Council determine whether or
not to proceed at this time with the steps needed to support the incentive requests or to
defer the steps until a later date.
Initiating these steps now to run in parallel with standard rezoning, subdivision, and
site development plan review process does not commit the City Council to approval of
the specific project or incentive, but it does create efficiency with staff time to address
the large number of requests and can accelerate the overall process of approving a
project and related development agreements as needed.
Recently discussed projects and type of TIF incentive:
I. The Linc Redevelopment Project (Developer TIF Rebate of $19 million to $32 million
over 20 years)
II. Bluffs @ Dankba r Farms Commercial Development (City Public Improvement Funding
($600,000- $1,000,000) for Roundabout or Developer TIF Rebate of up to $1,000,000
over 10 years)
III. Ontario/Scholl Road Workforce Housing Residential Subdivision (Developer TIF Rebate
for Public Infrastructure with estimate of $660,000 + LMI set-aside over 10 years)
IV. Hayden's Preserve Residential Subdivision (Developer TIF Rebate for Public
Infrastructure estimate of $375,000 + LMI set-aside over 10 years)
V. Greenbriar Commercial (Developer TIF Rebate estimate of $900,000 over 10 years)
The Linc:
The Linc project is already within the existing Downtown Reinvestment District Urban Renewal
Area. The approved URP indicates that the City may utilize TIF for a variety of purposes,
including as an economic development incentive for the mixed use Linc redevelopment project
located along Lincoln Way between Clark Avenue and Kellogg Avenue.
The approved Urban Renewal Plan included an estimate of up to $32 million dollars of TIF
incentives to be provided as a developer rebate over 20 years, dependent upon improved
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value of the Linc property with its redevelopment. Although staff has not received any
information regarding the current TIF request from the developers, previous Linc
development concepts reviewed by the City included estimated TIF values of $19
million to $30+ million dollars generated over a 20-year time period, depending on final
project components and valuations.
Upon approval of the TIF ordinance, the actual collection of TIF would still be subject to
approval of a development agreement and construction of a project. No TIF would be
collected and distributed to the developer without City Council approval. However, it
does complete a necessary step in the process affirming the City Council's intent to
utilize a yet to be determined amount of TIF for the Linc project. Downtown URA TIF
could have an ordinance prepared for approval as early as March 10th.
NEW URBAN RENEWAL AREAS:
The other four projects require approval of an Urban Renewal Area, Plan, TIF ordinance, and
developer agreement in order to provide incentives for the the projects. The URA approval
process requires the City to first prepare a plan for City Council to review and approve a
resolution of necessity. Subsequent to the resolution, a date of public hearing is set for review
and approval of the URP, a taxing entity consultation meeting is held, the P&Z makes a
recommendation on consistency with the Comprehensive Plan, and staff prepares response to
comments from taxing entities, if any, one week before the public hearing with the City
Council. These steps require 6-8 weeks to complete in total for each proposed URA and Plan.
Bluffs @ Dankbar Farms Commercial
The Bluffs has a zoned area for commercial development at the corner of GW Carver and
Cameron School Road. There are three planned lots for commercial development that will
generate TIF revenue. This site is the most ready for a URA designation due to the approved
z o n ing. Staff is in the process of finalizing road improvement details for the site. Staff
and the developer need to finalize a Development Outline for Council acceptance and
then approve a development agreement to address requirements for a minimum
assessment agreement, developer obligations, and contingencies related to
construction of a GW Carver roundabout project or a lane widening and signal project.
Ontario Workforce Housing
City Council recently reviewed a request for an incentive for the reconstruction of Scholl Road
with the an upcoming planned residential subdivision creating moderate priced workforce
housing. The developer intends to move quickly with rezoning and platting of this site once
they complete the purchase of the site from ISU in the near future. The proposed URA would
be for the entire site and include all residential development. The proposed Residential TIF
Rebate is intended to support the reconstruction of a portion of Scholl Road and the
funding of a mandatory set-aside for low and moderate income (LMI) housing funds.
Hayden's Preserve Residential Subdivision
City Council indicated support for use of TIF related to infrastructure for a culvert to create an
additional street connection within the project site. The site has zoning in place for residential
development. Staff would create a URA based upon the description of a first phase of
development. The proposed Residential TIF Rebate is intended to support construction
of a culvert and the funding of a mandatory set-aside for low and moderate income
housing funds.
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Greenbriar Commercial
This site is currently not ready for a URA as no master plan or zoning has been established
for the sub-area of the site planned for commercial. The developer has a pending
Comprehensive Plan amendment intended to define a future commercial area at the
intersection of GW Carver and Cameron School Road. Once a more complete description of
the area planned for Commercial is understood, a URA and Plan for commercial development
could be created. The TIF is intended to assist in the funding of development costs related to
serving the planned commercial area.
ALTERNATIVES:
1. Direct staff to proceed with preparing Urban Renewal Areas, Plans, and TIF Ordinances
consistent with the project list and descriptions outlined above.
2. Direct staff to proceed with specific projects from the list above.
3. Direct staff to not proceed at this time, awaiting for project approvals before commencing
the incentive process.
CITY MANAGER'S RECOMMENDED ACTION:
Staff seeks Council direction to proceed with implementation of the needed URA and TIF
approval processes in order to effectively complete the incentive processes. Due to large
number of pending projects, staff desires to have Council initiate the necessary steps for the
projects at this time.
Completing the URA steps does not commit the City to approving any specific project
or level of incentive, but would expedite the overall process and efficiently utilize staff
time for these projects. Staff proposes to work on these projects in order of readiness,
beginning with the Linc. Staff will prepare required documents and place them on
future agenda as appropriate. Therefore, the City Manager recommends Alternative No. 1.
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