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HomeMy WebLinkAboutResolution 3894 Calling a Public Hearing to Approve the Downtown Parking Garage Urban Renewal COMMISSION RESOLUTION NO. 3894 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CALLING A PUBLIC HEARING TO APPROVE THE DOWNTOWN PARKING GARAGE FACILITY AS AN URBAN RENEWAL PROJECT AND TO FINANCE THE PROJECT THROUGH THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL BONDS AND GRANT ANTICIPATION REVENUE NOTES. BE IT RESOLVED by the City Commission (the "Commission") of the City of Bozeman, Montana (the "City"), as follows: Section 1. Recitals. 1.01. Pursuant to Commission Resolution No. 3046, adopted on March 6, 1995, the Commission determined that blighted areas existed within the boundaries of the City and appointed an urban renewal planning committee to prepare an urban renewal plan. 1.02. The Commission pursuant to Ordinance No. 1409 (the "Ordinance") adopted on November 20, 1995, created an Urban Renewal District (the "District") and approved the City of Bozeman Urban Renewal Plan (the "Plan") for the District containing a tax increment financing provision all as set forth in the Ordinance and the Plan. 1.03. Pursuant to the Plan, tax increment financing would be used to pay the costs of public projects or the public portion of private projects. The Plan also provided that the City would not issue any tax increment bonds after either the 11 th year of the collection of tax increment revenues or the annual tax increment reached an inflation adjusted $750,000, whichever occurred first. 1.04. Pursuant to Commission Resolution No. 3718, adopted by the Commission on August 23, 2004, the Commission declared its intention to amend the Plan to extend the life of the tax increment provisions to fifteen years from the date of the original adoption to November 20, 2010. 1.05. A duly noticed public hearing was held by the Commission on September 20, 2004, at which time all persons were given an opportunity to speak on the extension of the tax increment financing provisions of the Plan. 1.06. On March 7, 2005, the Commission adopted Ordinance No. 1628, extending the life of the tax increment provisions of the Plan. 1.07. The City is authorized to issue bonds payable from tax increment revenues payable over a period of not to exceed twenty-five (25) years. The tax increment provisions of the Plan will terminate upon payment of such bonds. 1.08. One of the purposes of extending the life of the District was to enable the City to issue tax increment bonds payable from the District to pay the costs of a new parking garage to be located in the District to meet parking needs of the District. 1.09. On December 7,2003, the City solicited proposals for architectural and engineering services to assist in project design, bid document preparation, contractor selection, project oversight, and construction oversight for a parking/retail structure in downtown Bozeman, Montana (the "Parking Garage Facility" or the "Project"). 1.10. Responses to proposals were reviewed by a selection committee made up of City officers, the City of Bozeman Downtown Business Partnership, and City of Bozeman Parking Commission members (the "Selection Committee") and upon review, a recommendation was made to the City Commission. 1.11. On February 19, 2004; the Selection Committee recommended the Prugh & Lenon team to design and construct the Parking Garage Facility. The Prugh & Lenon team consisted of Prugh & Lenon Architects, Morrison-Maierle Engineers, and Richard C. Clotfelter ("Clotfelter") as Project Developer (the "Prugh & Lenon Team") 1.12. On March 1, 2004, the City Commission endorsed the Selection Committee's selection of Prugh & Lenon as consultants for the Parking Garage Facility, and authorized and directed staff to enter into contract negotiations. The original plans submitted by Prugh & Lenon proposed a three to six floor parking garage which would provide up to 400 spaces to be constructed in one or more phases by the City at an estimated cost of $6.3 million (the "Parking Garage"), and a ground floor retail component of approximately 13,000 square feet that would be developed by or leased to private parties at an estimated cost of $500,000 (the "Commercial Facility"). 1.13. At the time, it was anticipated that the amount of tax increment bonds that the City could issue to fund the Parking Garage would not be adequate to complete the Parking Garage and that it would be necessary to obtain bridge financing until the City could issue additional tax increment bonds or obtain other sources of funding to complete the Parking Garage. 1.14. Members of Lone Eagle Investments 10, LLC offered to assist the City in obtaining short term financing to complete the Parking Garage and agreed to develop the Commercial Facility to enable the Parking Garage Facility to proceed in a timely fashion. 1.15. The Garage at City Center ("TGCC") was incorporated as a public non- profit corporation which was to be established as a qualified 501 (c)( 3) organization under the Internal Revenue Code to construct and manage the construction of the Parking Garage Facility on behalf of the City. TGCC consisted of three members to be appointed by the Commission as follows: one representative of the Commission; one representative of the Bozeman Parking Commission; one representative of the Tax Increment Funding Board; and five members appointed by the Guarantors as hereinafter defined. 1.16. Three individual citizens agreed to serve as Guarantors to a $2,850,000 loan to be obtained by TGCC (the "Guarantors"), which, along with the Bonds, would enable the Parking Garage to be built. 1.17. TGCC entered into contracts with Prugh & Lenon and Morrison & Maierle and other firms and individuals for the design and engineering of the Parking Garage Facility. 1 .18. It was contemplated that the City would enter into a Memorandum of Agreement with TGCC which would establish the terms and conditions for the construction, financing and eventual ownership and operation of the Parking Garage Facility. On June 23, 2004, the City, and TGCC entered into a Memorandum of Understanding to facilitate the construction of the Parking Garage Facility. 1.19. The City currently owns Lots 16 to 24, Block F, Original Plat of the City of Bozeman, more commonly described as being a portion of that area north of the alley between North Black and North Tracy Avenues on the south side of East Mendenhall Street, City of Bozeman, Gallatin County, Montana (the "City Land"). 1.20. TGCC was unable to obtain a determination letter of 501 (c)(3) status from the Internal Revenue Service. 1.21. It was proposed that the Parking Garage Facility would be constructed on the City Land and the Powderhorn Property, as hereafter defined. -2- 1.22. Lone Eagle Investments 10, LLC, the members of which, including Clotfelter, acquired (on behalf of TGCC) Lots 13 to 15, Block F, Original Plat of the City of Bozeman, between North Black Avenue and North Tracy Avenue on the south side of East Mendenhall Street in the City, hereinafter referred to as the "Powderhorn Property," which property along with the City Land would be necessary for the completion of the Parking Garage Facility. 1.23. Lone Eagle Investments 10, LLC also advanced money to TGCC to pay costs of the Project and assisted the City in applying for federal funding for a portion of the Parking Garage Facility. 1.24. On July 26, 2005, the City was notified that it would receive a grant from the Federal Department of Transportation (the "DOT") in the amount of $4,034,000 (the "Grant") to be applied to the costs of the Parking Garage Facility. 1.25. The City has determined that in order to assure the tax exemption on the Bonds and to assure compliance with the terms and conditions of the Grant, it is in the best interests of the City that the Parking Garage Facility be constructed and supervised as other public works projects in the City. 1.26. Lone Eagle Investments 10, LLC, and Clotfelter have advised the City that they do not want to develop the Commercial Facility, or participate further in the development and financing of the Parking Garage Facility. 1 .27. The City, TGCC, Lone Eagle Investments 10, LLC, and Clotfelter have negotiated an Agreement releasing Lone Eagle Investments 10, LLC and Clotfelter of any further obligations for the Parking Garage Facility or the Commercial Space, and proViding for the payment or reimbursement of certain costs to Clotfelter and Lone Eagle Investments 10, LLC, and settling any claims and accounts between the Parties (the "Memorandum of Agreement"). 1.28. The City has determined the Parking Garage Facility as designed by Prugh & Lenon and previously approved by the City Commission as shown on the plans and specifications, a copy of which is on file at the office of the City Clerk is a good and workable design and is in the best interests of the City. 1.29. Contracts with Prugh & Lenon and Morrison Maierle Engineers will be transferred to the City and the City will enter into a project manager agreement with Martel Construction to complete the design, bidding, and supervision of construction of the Parking Garage Facility. Section 2. Proiect. 2.01. The Parking Garage Facility as proposed to be undertaken shall consist of a three to six floor parking garage which would provide up to 400 spaces to be owned and operated by the City (the "Parking Garage"), and a ground floor retail or commercial component of approximately 13,000 square feet that will be sold and developed by a private party (the "Commercial Facility") (together, the "Project"). Based on current projections, the estimated costs of the Parking Garage Facility is anticipated to be approximately $9,800,000. The City proposes to issue $4,760,000 of its Tax Increment Urban Renewal Bonds (the "Bonds"), of which approximately $4,300,000 will be used to pay a portion of the costs of designing and constructing the Project, and the remainder will be used to establish the necessary reserves and pay for the costs of the sale and issuance of the Bonds. The City's underwriter has determined that the City can issue approximately $4,760,000 in its Urban Renewal Tax Increment Revenue Bonds (the "Bonds") based on the increase in available tax increment revenues, and can issue $4,034,000 of its Grant Anticipation Notes based on the Grant. -3- The Grant has been awarded in the amount of $4,034,000 and which will be payable to the City in four annual installments due September 30, 2006, September 30, 2007, September 30,2008, and September 30,2009. The City proposes to issue Grant Anticipation Notes in the estimated amount of $4,034,000 (the "Notes") for the purpose of paying a portion of the costs of construction of the Project and related costs, which Notes will be repaid from the proceeds of the Grant as received. The City has approximately $1,150,000 of tax increment and parking funds available to complete the Project. 2.02. Upon completion of construction of the Project, the City will offer the Commercial Facility to a qualified purchaser submitting the highest and best offer. Proceeds of the sale of the Commercial Facility will be deposited in the City's Tax Increment Fund or General Fund, as the case may be, to reimburse it for the costs attributable to the Commercial Facility. The City's Request for Proposal of Qualification for the Development of the Commercial Facility (the "RFP") will request a proposal from a qualified firm or individual who would agree to pay the costs attributable to the design and construction of the commercial space, and be responsible for the development and build-out of the retail space and pay costs of the City Land. Section 3. Findinas. The Commission hereby finds, with respect to the Project as follows: a. no persons will be displaced from their housing by the Project; b. the Plan, as modified to include the Project, conforms to the comprehensive plan or parts thereof of the City; c. the Plan, as modified to include the Project, will afford maximum opportunity, consistent with the needs of the City as a whole, for the rehabilitation or redevelopment of the District by private enterprise; d. the issuance of $4,760,000 of Bonds and $4,034,000 in Grant Anticipation Notes, and together with other available amounts in the Tax Increment Fund and parking revenues are adequate to cover the costs of the Parking Garage Facility and constitute a workable plan of financing for the Project based on construction estimates as of the date of this Resolution; and e. the Project constitutes an urban renewal project within the meaning of the Act and the Plan. Section 4. Public Hearina. A public hearing is hereby called and shall be held on Monday, March 27, 2006 at 6:00 p.m. in the Community Room at the County Courthouse at 311 West Main Street, Bozeman, Montana on the approval of the Project and the City's proposed issue of the Bonds. The Bonds will be payable from the tax increment collected within the District. Section 5. Notice. Notice of the publiC hearing shall be published in the Bozeman Daily Chronicle on March 5 and March 12, 2006, in sUbstantially the form attached as Exhibit A hereto (which is incorporated by reference and made a part hereof). -4- PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, this 27th day of February 2006. ~J~ R .. L. SULLIVAN City Clerk ATTEST: -5- EXHIBIT A NOTICE OF PUBLIC HEARING ON BOZEMAN URBAN RENEWAL PLAN TO APPROVE A CERTAIN PROJECT AS AN URBAN RENEWAL PROJECT NOTICE IS HEREBY GIVEN that the City Commission (the "Commission") ofthe City of Bozeman, Montana (the "City") will hold a public hearing on the proposed modification of the City's Urban Renewal Plan (the "Urban Renewal Plan") on Monday, March 27, 2006 at 6:00 p.m. in the Community Room at the County Courthouse, 311 West Main Street, Bozeman, Montana. It is proposed that the City will issue and sell its urban renewal tax increment bonds (the "Bonds") in an estimated amount of $4,760,000, to fund all or a portion of the project as hereinafter described, if the modification of the Urban Renewal Plan is approved. The proposed modification is the approval of the Downtown Plan as an Urban Renewal Project, which will include design, engineering, and construction of a three level parking garage facility, with a design capacity to support six levels of parking and a retail ground level component of approximately 12,000 square feet. Any interested persons may appear and will be heard or may file written comments with the City Clerk prior to such hearing. Dated: February 27,2006. BY ORDER OF THE CITY COMMISSION Robin L. Sullivan City Clerk City of Bozeman, Montana Legal Ad Publish: Sunday, March 5, 2006 Sunday, March 12, 2006 A-1 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman, Montana (the "City"), hereby certify that the attached resolution is a true copy of a Commission Resolution No. 3894 entitled: "A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA. CALLING A PUBLIC HEARING TO APPROVE THE DOWNTOWN PARKING GARAGE FACILITY AS AN URBAN RENEWAL PROJECT AND TO FINANCE THE PROJECT THROUGH THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL BONDS AND GRANT ANTICIPATION REVENUE NOTES" (the "Resolution"), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission of the City at a regular meeting on February 27, 2006, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commissioners voted in favor thereof: Commissioner Rupp, Commissioner Jacobson. Commissioner Becker and Mavor Krauss ; voted against the same: None ; abstained from voting thereon: None ; or were absent: Commissioner Kirchhoff WITNESS my hand and seal officially this 28th day of February 2006. (SEAL) rJ~c/ ~ City Clerk