HomeMy WebLinkAboutA042 - Motion direct staff on Development Outline for The BluffsITEM #:43
DATE:06-09-26
DEPT:P&H
SUBJECT:DEVELOPMENT OUTLINE FOR THE BLUFFS
COUNCIL ACTION FORM
BACKGROUND:
The Bluffs at Dankbar Farms is a development located adjacent to Cameron School
Road and George Washington Carver Avenue. In 2025, the City Council considered
developer incentives for this and several other development pending throughout the
City. The Bluffs development incentive is focused on a small 20-acre area of the overall
Bluffs at Dankbar Farms development that is being platted as The Bluffs.
The northeast corner of the site is subject to requirements from a 2022 Pre-annexation
agreement for: 1) frontage improvements that allow for turn lanes to be created to
access the new commercial area on the site, and 2) intersection improvements. The
developer has had a responsibility to complete these improvements at its cost since
2022. The improvements are required with the final plat approval to create the four
development lots in the 20-acre area. The Final Plat is on this same agenda (see that
report for the Developer's request for deferral of improvements pending the outcome of
this incentive discussion).
During 2025 the City Council considered incentive requests for five sperate projects that would
commit to the production of additional housing. The Bluffs site is one of those project and the
developer initially requested the City Council provide TIF rebates of up to $1.2 million to
reimburse the developer for construction of the frontage and turn lane improvements. The
developer offered in an email before the December 16th meeting to proceed with a planned
townhome and apartment development just to the east of the 20 acre site if the incentive was
approved.
On December 16, 2025 , City Council authorized up to $1 million of TIF rebates to the
developer over a ten-year period based upon planned commercial development within
The Bluffs. At that time, the planned commercial development would involve a Kwik
Star convenience store and two additional vacant lots for future development.
At the same meeting i n December , City Council also directed staff to pursue an option
for construction of a roundabout at Cameron School Road and George Washington
Carver in partnership with Story County, in lieu of the planned turn lane and signal
improvements that are a developer requirement and described above.
The budget for the roundabout project tried to match projected costs of a lane widening
project with the higher costs of a roundabout with partner funding of the County and a
state grant. The City assumed the use of $600,000 of TIF proceeds from the planned
commercial development and additional funding from the developer for up to $600,000
as needed to make the roundabout project equal in cost to the developer's initial
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roadway improvement obligations. The budget assumption was based upon a staff
projection of commercial TIF over 10 years with the construction of a Kwik Star project.
Since December, the City has entered into an agreement with Story County to share in the
cost of a preliminary engineering design for a roundabout. The design work is underway with
the intent to complete the preliminary design and to have a cost estimate by July 2026. At that
time, the City and Story County will make a decision about whether to proceed with the
roundabout project and apply for a grant in the fall of 2026 with its planned construction in
2027.
The developer has not commenced construction of any street improvements to
Cameron or GW Carver and is now seeking a modification to the original development
agreement and the preliminary incentive to address the off-site street improvement
requirement and the developer's financial obligations for either type of roadway
project.
PROPOSED MODIFIED INCENTIVE:
The developer no longer desires to receive a TIF rebate and instead requests that the City
Council: 1) remove the developer requirement to construct road improvements for the
Cameron/GW Carver intersection, and 2) have the City construct the roadway improvements,
regardless of whether those are a roundabout or a turn lane and signal.
Should the City Council agree with developer request to switch the responsibility to
construct the off-site road improvements to the City, the question of funding options
must also be decided to reconcile the original assumption from December with this
new approach.
Staff has created Alternatives for Funding of the project that revolve around use of
Commercial TIF and a developer contribution. More detail is provided within the Alternatives
Section.
Table: Approved and Proposed Alternatives
Lane
Widening
100%
Developer
Cost
(December
2025)
Roundabout
City Project
(December
2025)
Alternative
#1-City
Projects with
Initial
Developer
Contribution
Alternative #2-
City Projects
with Deferred
Developer
Contribution
Alternative #3-
City Project with
Split
Commercial TIF
Developer
Financial
Obligation
Estimated $1.2
million
Up to
$600,000
$200,000 up
front
$200,000 at end
of project if
project exceeds
other local
sources
Up front
contribution of
$400,000 to
$600,000
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Developer
TIF Rebate
Up to $ 1
million for 10
years with
commercial lot
development
None None None
50% of Increment
for 10 years with
Commercial Lots,
up to defined
amount
City
Funding
with TIF
None
$600,000
assumed 10
years with
commercial
lots
$1,000,000 $1,000,000 $600,000
Fundamentally, the proposed change coordinates any and all improvements along GW
Carver as a City project. It also includes a change in assumption of use of TIF, which
creates some additional burden of risk and potentially additional cost to the City.
Staff initially identified only using $600,000 of TIF for the roundabout project because of staff's
projection of TIF revenues over ten years from the commercial development of the Kwik Star,
as there are no other commercial improvements identified at this time to help fund the TIF. In
the $1 million developer rebate scenario, the risk was for the developer to generate additional
TIF to fulfill the rebate obligations or there would be no incentive.
In this new scenario being proposed by the developer, the City would have to assume
the risk that there will be $1 million in TIF revenue to pay off the road improvement
debt. The staff believes can be accomplished in a variety of ways, but in the worst case
scenario the payoff would be approximately a 20 year period if only the Kwik Star is the
source of funding at a $2 million minimum assessment value.
HOUSING DEVELOPMENT PROPOSAL UPDATE:
In December, the incentive for the The Bluffs was connected to development of 96 total u nits
as townhomes and apartments along Everest adjacent to the Bluffs. The developer stated they
would do a mix of owner and rental housing units with no other details.
The developer has recently moved forward with a rezoning request for said parcel located
along Everest to change the allowed use from townhomes to a mix of housing types. The
developer now plans for multi-family development of 48 apartment dwellings along
with other single family attached or detached housing types on the remainder of the
site. Precise timing and commitment to platting is not known, but expected later this
year.
ALTERNATIVES:
1. Direct staff to prepare a modified Development Agreement where the City constructs
the roadway improvement (lane widening or roundabout) and the developer provides
an up front contribution of $200,000 for the project, regardless of project costs and
other sources of funding.
This alternative assumes the City collects $1 million of TIF revenue to fund the intersection
improvements, while the developer would be responsible for the original estimated difference
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of $200,000 for lane widening without a TIF rebate. The developer would provide their
share of funding at the time of award of contract for the construction of the intersection
as part of the project budget regardless of overall cost.
A cash contribution or financial security from the Developer would be needed in order to
coordinate the obligation with the timing of construction of the project.
This option assumes a relatively similar amount of financial participation by the developer for a
lane widening project, but removes risk for the developer of securing the TIF rebate in 10
years. However, it increases the assumed City responsibility from the $600,000 of the original
roundabout project to $1million.
2. Direct staff to prepare a modified Development Agreement where the City constructs
the roadway improvement ( lane widening or roundabout) and the developer provides
financial security for $200,000 to be spent if the costs exceed the other projected local
sources.
The difference between Alternative 1 and 2 is the timing of the developer contribution. This
alternative has the City take over roadway improvements for any type of roadway
improvement for up to $1 million of dollars of TIF $(830,000 of principal and $170,000 of
interest). The developer requirement is a $200,000 contribution only if the total project cost
exceeds other identified funding sources, estimated at $2,855,000 for a roundabout or
$1,955,000 for the lane widening and signal, subject to refined engineering and financial
estimates.
If the project does not exceed the roadway project cost for either improvement types,
the developer would have no additional responsibilities. Financial security would be
maintained by the developer for their share until completion of the project. This approach has
increased incentive value to the developer compared to original December option, because of
the potential for no additional contribution to the improvements beyond the initial $135,000
traffic sign payment made previously.
3. Direct staff to prepare a modified Development Agreement where the City constructs
a roadway (lane widening or roundabout), with shared costs between the City and
developer by utilizing TIF as a funding source from commercial lots over 10 years.
In this alternative, the City takes over roadway improvements for either lane widening and
traffic signal project or a roundabout with a shared financing of the improvements. The
developer would contribute up front to the project at a defined amount and be reimbursed with
TIF split equally with the City for the first 10 years. This scenario approximates the original
roundabout cost assumptions, but instead allows the developer to recoup their costs as they
would have with the lane widening rebate option.
Based upon the original assumption of $1.2 million cost, the split would be $600,000 of TIF
directly collected for the City and $465,000 contributed by the developer up front and
recouped by a TIF rebate. The $465,000 accounts for giving the developer credit for their
previous $135,000 contribution for a traffic signal at this intersection towards their share of the
$1.2 million.
This alternative only partially addresses the developer's request by ensuring the City
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constructs the roadway project. However, while it potentially reduces the developers
financial participation in a project as an incentive compared to the original alternatives,
it also splits the risk of generating TIF proceeds with the developer as a rebate based
upon commercial development for ten years.
4. Indicate support for City construction of the roadway project, but defer direction to
staff until after July 2026 when an engineer's estimate of cost for a roundabout are
known.
Under this alternative the City Council would commit to the City assuming responsibility for
constructing a roadway improvement (either a lane widening or roundabout project), but a final
decision about the project type and its funding options would both be deferred.
The developer could proceed with having their Final Plat approved later in this meeting,
however, the Council would need to specify an appropriate financial security requirement for a
developer contribution to the project until there is a final determination.
5. Take no action on a modified proposal and direct staff to prepare a development
agreement based upon the original December Incentive Options for lane widening or
roundabout funding assumptions.
The developer would need to update the Final Plat documents to reflect the requirement of
developer constructing the roadway improvements. The developer would have three years to
complete the lane widening requirement. They would be eligible for TIF rebate from
commercial lots for 10 years.
If the City Council eventually committed to a roundabout project, the developer would not have
to construct the roadway, but would make financial contributions to the roundabout project.
CITY MANAGER'S RECOMMENDED ACTION:
The developer asks that the amount of TIF assumed as funding for a roundabout or a lane
widening and signal project be equalized between the two options and for the City to be
responsible for the ultimate construction of either improvement. In their view the cost to the
developer is likely greater in the roundabout option than the lane widening and signal option.
Although the feasibility of the roundabout project has advanced with shared costs on the
preliminary engineering study, at this time an engineer's estimate for the roadway project
does not exist and staff is working from high level estimates created in December to compare
the options. A an engineer's estimate of cost is expected in July 2026.
The Public Works Department is in favor of the roadway project becoming a City project
to avoid piecemealing of improvements since their now appears to be a need to
coordinate the Bluffs project with future Greenbriar improvements at the intersection.
The key question remaining for staff is how to allocate and account for the developer incentive
in a project now proposed to be constructed by the City. The options described above look at
three ways to approach the incentive from different perspectives of risks and benefits.
The developer desires to Final Plat The Bluffs regardless of the outcome of the decision on the
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development outline in order to complete a planned sale of land for the assisted living (Dover)
in June. The final development agreement amendment would not be completed until after the
approval of the proposed The Bluffs Final Plat.
If the City Council believes an up front $200,000 contribution by the developer is
appropriate balancing of developer incentives and contributions to the project in
response to the City assuming the responsibility of constructing either the lane
widening and signal project or a roundabout, the City Manager recommends Alternative
#1.
However, if the City Council is undecided on the appropriate developer contribution in
response to the City assuming the responsibility for construction of either a lane
widening and signal project or a roundabout, the City Manager recommends Alternative
#4.
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