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HomeMy Public PortalAbout2019.03.15 Council Special MinutesMINUTES McCall City Council Special Meeting with the McCall Redevelopment Agency Board McCall City Hall -- Legion Hall March 15, 2019 Call to Order and Roll Call Work Session Adjournment CALL TO ORDER AND ROLL CALL Mayor Aymon called the special meeting of the McCall City Council to order at 9:00 a.m. Mayor Aymon, Council Member Giles, Council Member Holmes, Council Member Nielsen, and Council Member Sowers all answered roll call. City staff members present were Anette Spickard, City Manager; BessieJo Wagner, City Clerk; Michelle Groenevelt, Community Development Director; Rachel Santiago-Govier, Permit Tech; Nathan Stewart, Public Works Director McCall Redevelopment Agency board members present were Rick Fereday; Nic Swanson; Mike Maciaszek; Monty Moore Also, in attendance was Phil Kushlan, Kushlan & Associates; Meghan Conrad, Elam & Burke WORK SESSION Community & Economic Development (CED) Director Michelle Groenevelt presented the Urban Renewal District workshop and introduced the consultants. She explained the process of how the two district options came to pass and the purpose of the workshop. Through 2018, the McCall Redevelopment Agency (MRA) has been pursuing the establishment of a second urban renewal district within the city of McCall. Legal Counsel (Elam and Burke) was retained by the MRA to guide the development of the legally required elements and a consultant (Kushlan Associates) was retained to prepare the required Eligibility Report and Economic Feasibility Report. In preparing the Eligibility Report, Kushlan recommended dividing the large area under consideration into two separate areas for consideration and designated them as Area 2A and Area 2B. The MRA Board concurred in this recommendation and two separate Eligibility Reports were prepared and ultimately approved by the Board and City Council. As part of their approval resolution, the MRA was directed by the City Council to develop two distinct urban renewal plans for their consideration. In developing the data needed for the economic feasibility report required for inclusion in the Urban Renewal Plans, the methodology for estimating revenue allocation income was presented to the MRA Board and the City Council, receiving the independent concurrence of both bodies. MCCALL CITY COUNCIL Page 1 of 4 March 15, 2019 Special Meeting Twenty-year revenue estimates were developed and compared with a list of capital investments derived from City of McCall plans for the areas under review to determine economic viability. The result of those analyses is presented as McCall Area 2A Urban Renewal District Cash Flow Analysis and McCall Area 2B Urban Renewal District Cash Flow Analysis. The Area 2A Cash Flow Analysis shows a positive cash position over the life of the district, reflecting a small positive cash balance at the end of the twenty-year term. Area 2B, however shows a significant negative cash position due, primarily, to inclusion of the 3rd Street improvements to full City of McCall standards from Stibnite to Deinhard Lane, an improvement estimated to cost approximately $11,000,000. As a result of these reviews, the consultant sought direction as to whether to continue with the development of two Plans since one (Area 2B) could not be determined to be economically feasible without substantial modification. Concern was expressed about committing Agency resources to a Plan that may not be adopted. This issue was presented to the MRA Board at its October meeting. The Board elected to take the issue under advisement and bring it back for full Board consideration at its meeting of December 4, 2018. At that meeting, the consultant pointed out a subsidiary issue that warranted consideration by the Board and City Council. That issue was the fact that adopting both Areas 2A and 2B would include the vast majority of the City's commercial assessed value in revenue allocation areas making any inflationary growth and new construction value within the areas unavailable for general taxation purposes for the twenty-year life of the district. While there is no prohibition to this situation, it could produce difficult fiscal issues in years ahead. These two issues were discussed in great detail at the MRA Board meeting of December 4, 2018. There was general agreement among the five MRA Commissioners the inclusion of that much of the total commercial assessed value in revenue allocation areas could likely create difficulties for the City Council in future years. They felt they should not put the City Council in that position. They then addressed the issue of which of the two districts they wanted to move forward to the full Urban Renewal Plan stage. One view suggested a reduced plan of work for Area 2B bringing it into fiscal balance and proceeding with that single district. The alternate view was to continue forward motion on Area 2A Commercial Building District (CBD) and seek alternate means of refining and addressing the investment needs of the area represented in Area 2B. The MRA Board recognized that the latest direction from the City Council was to prepare two plans (Area 2A and Area 2B) for their consideration. However, based upon the more recent information presented, they believe that committing Agency resources to the development of two plans may not be prudent use of limited resources. They voted to recommend to the City Council they develop only one Plan focused on Area 2A (CBD) and the City should continue to define and pursue non -urban renewal funding for the needs represented in Area 2B and to seek City Council concurrence in that determination. That motion was approved 3-1 with one abstention. At this juncture, CED Director Groenevelt turned the presentation over to Phil Kushlan, consultant from Kushlan & Associates who gave a brief background/history of Urban Renewal and examples of some districts in Idaho. Megan Conrad, attorney at Elam & Burke then explained how urban renewal district operate and covered the legal aspects of a district. She also went over the financing MCCALL CITY COUNCIL Page 2 of 4 March 15, 2019 Special Meeting components explaining increment taxable value as the land value increases that can bond by vote of the people. Mr. Kushlan shared there has been a move away from bonding, as it is expensive, and a move toward project financing. In project financing, the private developer would privately fund a project with a reimbursement agreement which can be slow progress for a district. Another option is gaining a line of credit for the city, so it could loan money to the new district paid back over time with interest. It is either pay as you go or accrue debt for reimbursement. Rick Fereday gave a history of the McCall Urban Renewal District and shared lessons that were learned along the way. CED Director Michelle Groenevelt discussed the public involvement for the Legacy Park project, and how the District teamed up with the City to fund some of the projects, primarily public space improvements. She shared that the general public does not understand the difference between the Urban Renewal District and the City. There was additional discussion on funding and projects. Mr. Kushlan gave examples of other urban renewal district in Idaho and how successful those have been. Because the number of years a district can operate has been reduced from 30 years to 20 years, it has cut into the tax revenue a district can generate making it challenging to operate. It will require a better focus on what is wanted for accomplishment which is why he suggested all projects that may want to be done be put on the list. It is not necessary to do all projects listed but it is not allowed to add any later if suddenly there is a need for something to be done. Ms. Conrad addressed questions about the changes in State HB217 and how it will affect the urban renewal district. CED Director Michelle Groenevelt addressed the discussion for a new renewal district. As the downtown project was being brought together several years ago, there was a need to find funding sources and it made sense to move over to the next few blocks. Staff went through the comprehensive plan looking for possible projects that could be part of the new urban renewal district list. Mr. Kushlan presented the overview of the financial feasibility of the two new districts. City Manager Anette Spickard spoke to the options the Council could approach creating these districts. Public Works Director Stewart talked about the 3rd Street redevelopment, a feasibility study, and the truck route bypass conversations with Idaho Transportation Department (ITD). CED Director Groenevelt gave an overview of the process of developing the two new districts. Council Member Nielsen shared he was in favor of 2B or some form of 2B. His concern is there is no long-term plan for the southern end of town. Public Works Director Stewart addressed his concern. He felt the City does have a good vision in place for 3rd Street and has been in close communication with ITD on how to address issues. He stated implementation will require a number of integrated steps such as all utility companies have to be on board in order to make the necessary changes. It boils down to what is in the best financial interest of the community as a whole. He summarized Council Member Nielsen's interest to be the creation of a smaller project like 2B for 3rd Street that could be accomplished without creating a negative number. There was a discussion on boundaries and the possible creation of a 2C district. Mr. Kushlan touched on the State owned 80 acres and extending a district to cover that area of town in the future. Public Works Director Stewart leans towards the Urban Renewal District for the downtown MCCALL CITY COUNCIL Page 3 of 4 March 15, 2019 Special Meeting area because it gives the City financial assurance that those facilities in that area can be adequately taken care of whereas 3rd Street is not an asset the City owns and is the responsibility of the State and is why it is not listed for the local option tax funds. Another issue to be considered is the City may need to do some improvements to Deinhard and Boydstun Streets in order to ask the State to make a swap for 3rd Street. There was a discussion about future infrastructure, commercial development, future capital improvement projects, development of the waterfront along with the downtown, the Deinhard intersection and ITD. Mr. Kushlan advised to not start a district in the southern part of town too soon because it is going to take awhile to bring all the pieces together and running out of time becomes an issue as the 20-year lifespan of the district will begin to sunset before projects are completed. He made the suggestion to spend some time in first partnering with the businesses and owners in the area about development and then build a base to launch from for a possible district for the southern end of town. Each MRA board member shared their thoughts about the two districts and were unanimous in their recommendation of 2A. Items pointed out to explain their support of 2A were: no ground work in place in 2B like there is in 2A, complexities with 3rd Street, issues with the financial shortfall of 2B, and the desire for completion of the downtown core area before moving to another section of town. Council Member Holmes expressed concerned with the unknowns of the State's 80 acres and how it will be developed in the future. There was a brief discussion. Staff asked the Council for their thoughts and to give direction. Council Member Sowers would like to move forward with 2A. He feels there is too much speculation with 2B to address it yet. Council Member Nielsen agreed with moving forward with 2A but start looking at a 2B project in the future. He would like to hear from some of specific commercial property owners of 2B about their thoughts on developing their area. Council Member Holmes would like to move forward with 2A and investigate adding 2B in future and what it would mean to overlap the two districts. Council Member Giles would like to move forward with 2A only. Mayor Aymon would like to move forward with 2A and to look to the future development of the southern end of town with a possible 2B district. ADJOURNMENT Without further business, Mayor Aymon adjourned the meeting at 11:20 a.m. A q,of 'Mee '''''' �� ~he �el��j I. 7, �l > : kie J. A on, ayor VO O �ti 9 �� l� . D A����`�� glumly"' ATTEST: BessieJo Wgner, C MCCALL CITY COUNCIL March 15, 2019 Special Meeting Page 4 of 4