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ITEM 1 - CALL TO ORDER

ITEM 2 - ROLL CALL

ITEM 3 - PRESENTATION - COLFAX/WADSWORTH PUBLIC FINANCE AGREEMENT

STAFF PERSON: Michael J. Rock, City Manager

ITEM 5 - MAYOR, COUNCIL, AND PLANNING COMMISSION REPORTS

ITEM 6 - STAFF REPORTS

ITEM 7 - ADJOURNMENT

City of Lakewood

M E M O R A N D U M

TO: Mayor and City Council

FROM: Mike Rock, City Manager

DATE: July 12, 2002

SUBJECT: Colfax/Wadsworth Public Finance Agreement

On Monday, July 15, we will conduct a televised study session to review the public finance agreement for Colfax and Wadsworth. The agreement is summarized in bullet form below.

Every project is first evaluated to determine if financial participation is necessary. The lack of private sector redevelopment on this site over the past 10 years, coupled with the complicated ownership, underscores the need for City and LRA involvement. This Public Finance Agreement has been negotiated to protect Lakewood's interests while insuring that the property is redeveloped into a productive community asset.

Please call if you have any questions.

Public Finance Agreement Summary

· ALL DEVELOPER INCENTIVES ARE TIED DIRECTLY TO PUBLIC/PUBLIC-RELATED IMPROVEMENTS.
· Two metropolitan districts have been created to provide limited service to the plan area (one district is specifically required for on-going maintenance of the public improvements, and one district is specifically created as the financing body).
· The metropolitan districts may legally issue tax-exempt debt for costs associated with public improvements.
· The Districts anticipate issuing roughly $26M in bonds to finance the public improvements.
· The City will authorize a temporary waiver of the 2% sales tax in the Plan area through the life of the debt (estimated to be 20 years).
· The Developer (Districts) will impose a 3.5% Public Improvement Fee (PIF), and the PIF revenue will be pledged for the annual debt service. The 3.5% PIF rate will be competitive with metro-area local sales tax rates.
· The developer will pay the City $1,000,000 annually, throughout the term of the debt.
· ½ of the excess PIF revenue above the proforma projections will be distributed back to the City.
· The Developers ½ of the PIF revenues received in excess of the proforma projections will be placed in a bond redemption fund for early pay-off of the debt. The sooner the debt is paid off, the sooner the City will re-impose the 2% sales tax.
· The City will receive sales tax revenues from the redevelopment of the existing Wal-Mart site.
· The Developer will reimburse the LRA for all costs associated with the redevelopment project, including consulting, appraisals, legal, etc. These costs are currently estimated at $116,000.
· The Developer will pay to the LRA development fees totaling $100,000 over 2002/03 (3 installments)
· The Developer is subject to planning and permit fees on the project.
· If the construction work is performed for the metropolitan districts, it will be exempt from sales/use tax. All other building use tax on non-exempt projects will be paid directly to City.
· The LRA will pledge all property tax increment (less a 1% operations fee) received from all districts within the Plan area for debt service and will make annual appropriations of such.
· If for any reason the City would not be able to re-impose the 2% sales tax, the Developer will continue to impose a 2% PIF on all transactions and pay these revenues to the City.
· The Developer will impose a PIF covenant on the lease tenants and other Real Estate Agreements (REAs) within the project to ensure that the PIF will be collected as required.
· The City and the developer will enter into a Collections Agreement to have the City collect PIF revenues and distribute funds directly to the Trustee. The Developer will reimburse the City all direct costs and associated fees.
· Under a separate agreement with the Lakewood Housing Authority, the Developer will contribute $2.6M to the replacement facility for the Vance Terrace Housing project (to be located at 1575 Kipling).
· The Developer will also contribute $80,000 to the Lakewood Housing Authority to assist in tenant relocations.
· The Developer will reimburse the City for the actual cost of sanitary sewer relocation included in CDOT's Wadsworth/Colfax project.
· The Developer and the City will continue to work with CDOT to incorporate Wadsworth and Colfax Phase II improvements into CDOT's intersection construction contract. Costs will be the re-developments. Phase II improvements are those required along Wadsworth and Colfax that are beyond the scope of CDOT's project.
· A Public Improvements Agreement is required. The PIA will be a stand-alone agreement that is also an attachment to the Re-development Agreement.