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HomeMy WebLinkAbout02-03-20 City Commission Packet Materials - A3. Res 5126 Midtown Urban Renewal ProjectsCommission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: David Fine, Urban Renewal Program Manager SUBJECT: Public Hearing for Resolution 5126 Approving Certain Infrastructure Improvements in the Bozeman Midtown Urban Renewal District as an Urban Renewal Project, Making Findings with Respect Therto and Approving the Issuance of Tax Increment Urban Renewal Revenue Bonds to Pay Costs Thereof; Preliminarily Authorizing the Issuance and Private Sale of Bonds and Authorizing the Process for Selecting a Purchaser Thereof MEETING DATE: February 3, 2020 AGENDA ITEM TYPE: Action RECOMMENDATION: Approve Resolution 5126. SUGGESTED MOTION: Having reviewed and considered the Commission Memorandum, public comment, and all information presented, I hereby adopt the findings presented in the Commission Memorandum and move to approve Resolution 5126. BACKGROUND: On January 9, 2020, Midtown Urban Renewal Board (the “Board”) voted unanimously to approve Board Resolution 2020-01, a request that the City Commission designate several public infrastructure improvements within the Midtown Urban Renewal District (the “District”) as an Urban Renewal Project (the “Project”). The specific improvements were contained in several City Commission adopted plans including the 2006 Design and Connectivity Plan for the N. 7th Corridor, the 2015 Midtown Urban Renewal Plan and the 2017 Midtown Action Plan. The Project includes the following improvements: • Development of Aspen Street as a “festival” street, including sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to Aspen Street between North 5th Avenue and North 7th Avenue 174 • Installation of angle parking infrastructure along the western edge of the Westlake BMX Park • Street, sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to North 7th Avenue between Durston Road and Mendenhall Street • Construction of a multi-use path, allowing pedestrian and bike connectivity to the Westlake BMX Park, the Aspen Street improvements described above and a new mixed-use development in the District known as the Aspen Crossing Project The designation of the public infrastructure improvements recommended by the Board as an urban renewal project under the Montana Urban Renewal Law (the “Act”), as well as the issuance of tax increment revenue bonds requires City Commission action. As proposed, Resolution 5126 includes the following items: • The City Commission designates the infrastructure improvements recommended by the Board as an urban renewal project under the Act and finds that the Project is contemplated by and within the scope of the Midtown Urban Renewal Plan, and that the Project is eligible for tax increment financing under the Act. • The City Commission makes the required statutory findings for designation of an Urban Renewal Project. • The City Commission authorizes the City Manager and their designees to conduct a negotiated sale of bonds to finance the Project. The form of the Bonds and the final terms and conditions thereof shall be prescribed by a subsequent resolution to be adopted by the City Commission. REQUIRED FINDINGS: The Montana Urban Renewal Law requires, as a criterion for approval of an urban renewal project, that the City Commission make the following findings. These findings are included in Resolution 5126 in Section 3. a. A workable and feasible plan exists for making available adequate housing for the persons who will be displaced from their housing by the Project; • The proposed Project does not displace any persons from their housing. 175 b. The Plan and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; • The streetscape improvements on N. 7th Ave., Festival Street Improvements on W. Aspen St. and trail (multi-use path) improvements, are components of the original 2006 Urban Renewal Plan, which implements a neighborhood plan subsection of the Bozeman Community Plan called the Design and Connectivity Plan for the North 7th Avenue Corridor. The 2015 Midtown Urban Renewal Plan expanded the District to include the Westlake BMX Park and designated the park as a site for infrastructure improvements. c. The Plan and 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; • Quality infrastructure, multi-modal transportation options and quality places have demonstrated their value in stimulating investment by private enterprise. d. Taking into account the use of tax increment revenues or the proceeds of tax increment revenue bonds to pay or reimburse the Developer for all or a portion of the Eligible Costs, there is expected to be a sound and adequate financial program for the financing of the Project; and • The current tax increment revenues of the District provide for more than adequate debt service coverage for bond debt. e. The Project constitutes an urban renewal project within the meaning of the Act and the Plan. • The component infrastructure improvements of the Project are all mentioned in the urban renewal plans for the District. UNRESOLVED ISSUES: None. ALTERNATIVES: As determined by the City Commission. 176 FISCAL EFFECTS: The engineers’ estimates of probable cost for the infrastructure improvements total $5,010,000. The Resolution formally allows for up to $5,500,000 of debt issuance to allow for inflation of construction costs. The District has more than adequate bonding capacity to issue bonds and meet debt service coverage requirements for bonds in this amount. Issuance of tax increment revenue bonds will require further Commission action. ATTACHMENTS: • Resolution 5126 • Midtown Urban Renewal Board Resolution 2020-01 LINKS: • Design and Connectivity Plan for the North 7th Avenue Corridor (2006) • Midtown Urban Renewal Plan (2015) 177 RESOLUTION NO. 5126 RESOLUTION APPROVING CERTAIN INFRASTRUCTURE IMPROVEMENTS IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT, MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL REVENUE BONDS TO PAY COSTS THEREOF; PRELIMINARILY AUTHORIZING THE ISSUANCE AND PRIVATE NEGOTIATED SALE OF BONDS AND AUTHORIZING THE PROCESS FOR SELECTING A PURCHASER THEREOF BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Recitals. 1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43 (the “Act”), the City is authorized to create an urban renewal area, prepare and adopt a redevelopment plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to taxes collected in such area, issue its bonds to pay the costs of such projects and to refund bonds previously issued under the Act and pledge to the repayment of the bonds the tax increment and other revenues derived from projects undertaken within the urban renewal area. 1.02. Pursuant to the Act and Ordinance No. 1685 adopted by the Commission on November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015 (collectively, the “Ordinance”), the City has created the Bozeman Midtown 178 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 2 Urban Renewal District (the “District”) as an urban renewal district and has approved the Bozeman Midtown 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. The Plan details conditions of blight in the District, including physical deterioration of public improvements, including with respect to streets, curbs, gutters, sidewalks, storm drainage, lighting and landscaping. In addition, the Plan outlines goals and initiatives for the District, including installing signage, lighting, landscaping and sidewalk, curb, gutter and street improvements, to promote economic development, improve multi-modal transportation and improve, maintain and support innovation in infrastructure. 1.04. On January 13, 2020, the Commission adopted Resolution No. 5125, calling a public hearing to approve the design, engineering and construction of various public infrastructure improvements within the District, including (i) development of Aspen Street as a “festival” street, including sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to Aspen Street between North 5th Avenue and North 7th Avenue; (ii) installation of angle parking infrastructure along the western edge of the Westlake BMX Park; (iii) street, sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to North 7th Avenue between Durston Road and Mendenhall Street; and (iv) construction of a multi-use path, allowing pedestrian and bike connectivity to the Westlake BMX Park, the Aspen Street improvements described above and a new mixed-use development in the District known as the Aspen Crossing Project (such public infrastructure improvements, collectively, the “Project”) and the expenditure of tax increment revenues or the issuance of tax increment revenue bonds to pay all or a portion of the costs of the Project. On February 3, 2020, a duly noticed public hearing was held on the approval of the Project and the use of tax increment revenues to pay or finance all or a portion of the costs of the Project and all persons appearing were given an opportunity to speak at the public hearing. Section 2 Approval of the Project as an Urban Renewal Project. 179 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 3 The Commission hereby approves the Project as an urban renewal project under the Act. The Project is contemplated by and within the scope of the Plan, and is eligible for tax increment financing under the Act. Section 3 Findings. 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 and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; c. the Plan and 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. there is expected to be a sound and adequate financial program for the financing of the Project; and e. the Project constitutes an urban renewal project within the meaning of the Act and the Plan. Section 4 Authorization; Sale of Bonds. 4.01. The Bonds. Pursuant to the approval and findings in Sections 2 and 3 hereof, it is hereby determined that it is in the best interests of the City to offer for sale and issue its Tax Increment Urban Renewal Revenue Bonds (Bozeman Midtown Urban Renewal District), Series 2020 (the “Bonds”), in the maximum aggregate principal amount of $5,500,000, for the purpose of paying costs of the Project and, if necessary or desirable, paying costs associated with the sale and issuance of the Bonds. 180 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 4 4.02. Negotiated Sale. Pursuant to Montana Code Annotated, Section 7-15-4322, the City may sell the Bonds at a public or a private negotiated sale as the governing body shall determine. The Commission determines it is in the best interest of the City to sell the Bonds at a private negotiated sale and desires to contract with a placement agent to privately place the Bonds with a bank or banks. The Interim City Manager and City Finance Director or their designees (including, without limitation, the Director of Economic Development) are authorized to select a placement agent with respect to the Bonds (the “Placement Agent”). 4.03. Pricing and Terms. The Bonds are authorized to be sold to the purchaser of the Bonds (the “Purchaser”) that provides the City the most favorable interest rate and other terms and conditions, as determined in the sole discretion of the City, in consultation with the Placement Agent. The Interim City Manager and City Finance Director are hereby authorized to provide or make available, directly or through the Placement Agent, the terms and conditions relating to the sale of the Bonds to banks and other financial institutions and solicit proposals to purchase the Bonds. The City may, in its sole discretion, in consultation with the Placement Agent, accept a proposal to purchase the Bonds, negotiate further with any proposer, or reject any and all such proposals. All costs of issuing the Bonds (including, without limitation, the fees and expenses of Bond Counsel) shall be paid by the City as part of the financing, from proceeds of the Bonds or other available sources. 4.04. Bond Purchase Agreement. The Interim City Manager or his designee (including, without limitation, the Director of Economic Development) is hereby authorized and directed to approve the final principal amount of the Bonds, dated date, term, whether all principal of the Bonds is advanced at closing or in increments over time, payment dates and installment amounts, interest rates, and redemption provisions of the Bonds, subject to the limitations contained in the preceding paragraphs and the Act. Upon approving such terms, the Interim City Manager or his designee (including, without limitation, the Director of Economic Development) is hereby authorized and directed to negotiate, approve, execute and deliver to the Purchaser a bond purchase agreement (the “Bond Purchase Agreement”), containing the agreement of the City to sell, and the 181 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 5 agreement of the Purchaser to purchase, the Bonds on the terms so approved, and containing such other provisions as the Interim City Manager or his designee shall deem necessary and appropriate. The execution and delivery of the Bond Purchase Agreement by the Interim City Manager or his designee shall be conclusive as to the approval of such officer of the terms of the Bonds and the agreement of the City to sell the Bonds on such terms in accordance with the provisions thereof. The form of the Bonds and the final terms and conditions thereof shall be prescribed by a subsequent resolution to be adopted by this Commission. 182 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 6 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 3rd day of February, 2020. ___________________________________ CHRIS MEHL Mayor ATTEST: ___________________________________ MIKE MAAS Interim City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 183 Resolution 5126, Approving a Project in the Midtown URD, Known as Midtown Infrastructure Improvements 7 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 Resolution No. 5126, entitled: “RESOLUTION APPROVING CERTAIN INFRASTRUCTURE IMPROVEMENTS IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT, MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL REVENUE BONDS TO PAY COSTS THEREOF; PRELIMINARILY AUTHORIZING THE ISSUANCE AND PRIVATE NEGOTIATED SALE OF BONDS AND AUTHORIZING THE PROCESS FOR SELECTING A PURCHASER THEREOF” (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 3, 2020, 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: ; voted against the same: ; abstained from voting thereon: ; or were absent: . WITNESS my hand officially this 3rd day of February, 2020. MIKE MAAS Interim City Clerk 184