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12/18/2018 - Formal Meeting - Minutes MINUTES OF THE SALT LAKE CITY COUNCIL TUESDAY, DECEMBER 18, 2018 The City Council of Salt Lake City, Utah, met in Limited Formal Session on Tuesday, December 18, 2018 in Room 326, Council Work Room, City County Building, 451 South State . The following Council Members were present: James Rogers Amy Fowler Chris Wharton Erin Mendenhall Charlie Luke Andrew Johnston Derek Kitchen Cindy Gust-Jenson, Council Executive Director; Jennifer Bruno, Council Executive Deputy Director; Patrick Leary, Mayor' s Chief of Staff; David Litvack, Mayor' s Deputy Chief of Staff; Margaret Plane, City Attorney; Benjamin Luedtke, Council Public Policy Analyst, and Cindi Mansell, City Recorder; were present. Also present: Chris Papamichael, Developer Councilmember Mendenhall presided at and conducted the meeting. 12:09:55 PM The meeting was called to order at 12 : 09 p.m. OPENING CEREMONY Not held. PUBLIC HEARINGS #1 . 12:10:27 PM Public Benefits Analysis of Disposition of Real Property at 320 East 400 South and 338 East 400 South (The Exchange) and resolution authorizing below-market seller-financing loan terms and a reduced purchase price to Downtown Partners, LLC, for development of affordable housing. This would allow for the development of a mixed-use affordable housing project located at approximately 320 East 400 South and 338 East 400 South. A partnership between Domain Companies and Giv Development was chosen by the Mayor after a unanimous recommendation by the Selection Committee. The development would include a variety of housing options and commercial spaces. View Attachment Councilmember Johnston moved and Councilmember Luke seconded to close the public hearing, which motion carried, all members voted aye. Jennifer Bruno, David Litvack, and Chris Papamichael referenced the new proposed resolution and term sheet provided by the Administration. Ms . Bruno said the deal points were included in the resolution and the term sheet included details regarding the three components of the project on the property as well as details relative to the Redevelopment Agency 18 - 1 MINUTES OF THE SALT LAKE CITY COUNCIL TUESDAY, DECEMBER 18 , 2018 (RDA) loan. She further reviewed key changes, maximize buyer deferred development lending fee, purchase price reduction terms, terms of seller notes and RDA notes illustrating this being the City' s best deal and any subsequent changes would start from that point. She said there were other contingencies discussed and included on the motion sheet . She said the Straw Polls taken last week seemed to fall better under Legislative Intents versus conditions of the resolution approval . She said those were listed separately for the Council' s review. Councilmember Mendenhall inquired if there were concerns to the developer that would require additional discussion. She expressed concern that future funding requests should always include a consolidated term sheet. Chris Papamichael, developer, said there were no concerns . Inquiry was raised regarding Housing Trust Fund Advisory Board recommendations . Mr. Litvack clarified the recommendations only included items coming to the City Council/not Administrative (including current items in the pipeline) . Ms . Gust-Jenson said this would not include items already in Council possession but items getting ready to send. She said this particular item was different. Councilmember Fowler moved and Councilmember Wharton seconded to approve Resolution 55 of 2018 approving the public benefits analysis authorizing below-market seller-financing loan terms and a reduced purchase price to Downtown Partners , LLC, for development of Affordable Housing, on the following conditions : • That the land write-down amount is contingent upon performance of all obligations under the seller note . • That the seller note balloon payment is considered hard debt. • That the developer maximize their deferred developer fee . • That the developer understands that this should not be considered a forgivable loan. • That the developer file a pro-forma authorized by the Developer on each of the three components that clearly demonstrates the need for City gap financing, and that this pro-forma be consistent with the one filed with the RDA. The Council also requests that the developer file a pro-forma that shows the effect if the City did not grant these favorable terms . • That the contract include language that the City has inspection rights of financial records upon request, and that this information be made available to the City Administration and Legislative branch. The review would focus on expenses that may fall outside of accounting and building management and maintenance norms, to ensure the project is appropriately providing adequate cash flow to repay the seller note . • That a finalized term sheet (showing the deal points and key 18 - 2 MINUTES OF THE SALT LAKE CITY COUNCIL TUESDAY, DECEMBER 18 , 2018 metrics) be attached as an exhibit to the resolution, and that if it differs materially from what has been discussed with the Council, the Administration will resubmit a revised public benefits analysis and/or RDA loan proposal . And further move that the Council adopt the following intents : • That this agreement not be construed as precedent for future City incentive packages . • (From the Council' s Straw Poll) That the Administration and Council Staff convene a working group to address long-term and interim solutions to address the policy and procedure issues (details outlined in the Council Staff report) , which may include initiating a number of changes to clarify City Code and outlining expectations as it relates to components of Administrative transmittals for future transactions or Public Benefits Analyses . • (From the Council' s Straw Poll) That until ordinances can be changed to clarify the scope and role of the Housing Trust Fund Advisory Board, the board will review all applications for housing funding or financing tools, including Public Benefits Analyses that may need eventual Council approval, and provide their written recommendation to the Council, which motion carried, all members voted aye . (R 18-24) POTENTIAL ACTION ITEMS #1 . 12 :27 :35 PM Adopting an ordinance that would amend the Final Budget of Salt Lake City, including the employment staffing document, for Fiscal Year 2018-2019 . Budget amendments happen several times each year to reflect adjustments to the City's budgets, including proposed project additions and modifications. The Council will consider the portion of the amendment relating to City office space. View Attachment Benjamin Luedtke and Patrick Leary briefed the Council with attachments . Mr . Luedtke said the combined Motion Sheet had three options for consideration and each included motions for both the RDA and City budget amendments . He said there was also a Staff note that included policy considerations . He reminded the Council they had approved $100, 000 in City Budget Amendment No . 2 for a Building Space and Needs Assessment . Councilmember Luke moved and Councilmember Johnston seconded to adopt Ordinance 77 of 2018 to close Budget Amendment No. 2 and appropriate $250 , 000 from Fund Balance to relocate a department(s) other than the RDA to the fifth floor of Plaza 349; up to $50,000 of the appropriation might be used to reimburse the RDA for costs spent on renovating the fifth floor of Plaza 349; and the Council also requests that the Administration provide a written report back to the Council in 18 - 3 MINUTES OF THE SALT LAKE CITY COUNCIL TUESDAY, DECEMBER 18 , 2018 March (2019) on the status of implementing this policy approach, which motion carried, all members voted aye . Councilmember Mendenhall said she hoped this approach could provide opportunity for the Administration to work with the Council prior to initiation of a space survey. Mr. Leary said the Administration wanted to proceed with Budget Amendment No. 2 and intended to work jointly to identify building use survey work before it happened. Ms . Gust-Jenson said companion to the adopted Motion 3 was a Staff Memo outlining a third option which included the Council identifying backbone services that were perceived best located in the City & County building for policy and budget oversight. She said suggested departments (based on Council conversations) included: Economic Development Department, Redevelopment Agency, Finance Department, Attorney, Recorder, and possibly the Community and Neighborhoods Department. Councilmember Johnston said he wanted to include a larger discussion relative to open space, City buildings, and properties . He said it would be worthwhile going forward not to just isolate these two properties . He discussed utilization of properties and maximizing assets, including overall fund balance discussions . Councilmember Luke said the City and County Building was out of space . He said the 5th floor space was not renovated and not useable largely due to cost. He said he wanted to finally resolve future space- related issues . He said although it might be more expensive to renovate the City and County Building than others, the decision was made in 1989 to rightfully preserve the building. He said outside renovation had recently been completed and it was the responsibility of the City Council to consider funding for these types of space options . Councilmember Johnston moved and Councilmember Wharton seconded that the Council schedule a work session policy discussion with the Administration to identify the values and operational deficiencies regarding which City departments and functions should remain at City Hall and other City-owned properties, which motion carried, all members voted aye . Councilmember Johnston moved and Councilmember Luke seconded to change funding (from previously adopted Motion 3) from the Facilities Division to Non-departmental, which motion carried, all members voted aye . (B 18-11) The meeting adjourned at 12 : 41 p .m. 18 - 4 MINUTES OF THE SALT LAKE CITY COUNCIL TUESDAY, DECEMBER 18 , 2018 Council Chair City Recorder This document is not intended to serve as a full transcript as additional discussion may have been held; please refer to the audio or video for entire content pursuant to Utah Code §52-4-203 (2) (b) . This document along with the digital recording constitute the official minutes of the Limited Salt Lake City Council meeting held December 18, 2018 . clm 18 - 5