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02/01/2005 - Minutes PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 The City Council of Salt Lake City, Utah, met in Regular Session on Tuesday, February 1, 2005 at 6:00 p.m. in Room 315, City Council Chambers, City County Building, 451 South State. The following Council Members were present: Carlton Christensen Van Turner Jill Remington Love Eric Jergensen Dave Buhler Nancy Saxton Dale Lambert Cindy Gust-Jenson, Executive Council Director; Mayor Ross C. "Rocky" Anderson; Edwin Rutan, City Attorney; and Beverly Jones, Deputy City Recorder, were present. Councilmember Lambert presided at and conducted the meeting. #1. The Council led the Pledge of Allegiance. PROPOSED SOCCER STADIUM DISCUSSION/HEARING #1. RE: The Salt Lake City Council and the Redevelopment Agency of Salt Lake City will convene jointly for a fact finding discussion regarding the proposed soccer stadium. View Attachment Councilmember Lambert welcomed the public and Real Salt Lake (RSL) . He said the Council wanted RSL to be a success and felt they would be an asset to Salt Lake City. He said the Council needed to understand potential costs and risks of having RSL in Salt Lake City. He turned the time over to Councilmember Jergensen as the Redevelopment Agency (RDA) Board Chair to conduct the fact-finding meeting. Councilmember Jergensen said State law allowed cities and counties to form RDA's in order to redevelop rundown areas through the use of tax increments. He said Council Members sat as the Board of Directors of the RDA. He said they had to define how areas could be renewed, updated, improved and returned to vitality through increments and private dollars. Councilmember Jergensen said the fact-finding discussion regarded potential use of RDA funds to purchase Block 22 between 600 and 700 South and Main Street and West Temple for the proposed soccer stadium. a) RSL PRESENTATION AND COUNCIL/BOARD MEMBERS' QUESTIONS. Dave Checketts, Owner of Real Salt Lake Soccer Team, Josh Ewing, Real Salt Lake, Tom Love, Love Communications, and Dean Howes, Chief Executive Officer of Real Salt Lake, briefed the Council. Mr. Checketts said he was the Chairman of the National Television Committee to advance Major League Soccer (MLS) . Councilmember Lambert asked why MLS would succeed because in the league's ten year history the majority of teams had lost money. Mr. Checkett' s said most professional sports teams lost money. Councilmember Lambert asked why 600 of the funding needed to come from the public. Mr. Checkett's said they had requested that Salt Lake City have RDA purchase the land and turn it over to RSL to build a stadium. He said they estimated it would cost $60 to $65 million to build a stadium. He said RSL could put up approximately half of that cost. He said the rest would have to be voted on by the public. 05 - 13 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 Councilmember Lambert asked why RSL believed the stadium would result in a significant net economic impact. Mr. Checketts said it would affect the City's self esteem. He said people would attend a game and then patronize restaurants. Councilmember Buhler asked if 16 home games were typical. Mr. Checketts said there would be approximately one game a week. He said he felt the home schedule would increase. He said in order to compete for talent, 30 or more home games would need to be played. Councilmember Buhler asked if that meant there would be more games in the league as a whole. Mr. Checketts said that was correct. Councilmember Buhler asked why not use Rice Eccles Stadium for two or three years to see if there was fan support before going to taxpayers for a public/private partnership. Mr. Checketts said the soccer teams making it work were in soccer specific stadiums. Councilmember Love asked what other uses there were for the stadium. Mr. Checketts said they saw the stadium as a community asset. He said elementary, junior high, high schools and college tournaments could be played there. He said the stadium could be used for concerts, conventions, and graduations. Councilmember Love asked if other amenities could be built on the block such as a track and field. Mr. Checketts said in additional to a soccer field he wanted to put some retail, office space, and a television studio on the ground floor. He said there could also be some mixed use. He said a retractable roof might be needed so activities could be held during the winter. Councilmember Saxton said she felt MLS should be in Salt Lake City. Councilmember Turner said people would travel by TRAX and personal vehicles to the soccer field. He said parking stalls could be used at Little America and Grand America but those hotels were often busy with conventions. He asked if Mr. Checketts was comfortable with the number of identified parking stalls. Mr. Checketts said parking was an issue and would need to be addressed. Councilmember Turner asked if the Murray location was contingent on bonding. Mr. Checketts said Murray would need the same assurances for bonding and paying for the stadium as Salt Lake City. Councilmember Turner said a covered stadium would let people use it year round. Mr. Checketts said a retractable roof would add as much as 50% to the cost of the stadium. Councilmember Turner said the noise level would be too high to use the stadium for concerts unless it was covered or had a controlled sound system. Mr. Checketts said that issue had not been addressed. Councilmember Christensen asked how much money a typical fan spent. Mr. Checketts said their target customers were families. He said they would have discount tickets in the single digits for students, senior citizens and military personnel. He said the most expensive seats were $25. Councilmember Christensen asked about salary ranges for players. Mr. Checketts said one advantage MLS had over other startup leagues around the country was that it was a single entity and salary caps were controlled by the league itself. He said that way they would not get into a bidding war with larger marketplaces. He said the salary caps were under $300,000 for top range MLS players. He said salaries went down from there. Councilmember Christensen asked what kind of outreach was planned for youth play. Mr. Checketts said within five years kids would be wearing RSL on their game jerseys. He said they could give kids discounts if they wore their soccer jerseys to the stadium. Councilmember Christensen asked if RSL was still in discussions with Murray. Mr. Checketts said yes because many details needed to be negotiated. 05 - 14 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 Councilmember Jergensen said spending public money was one issue the Council took seriously. He said he was interested in having RSL in Salt Lake City because certain economic development opportunities could be realized. He said attendance averages were critical to the stadium. He said sports stadiums did not always provide positive cash flow. He asked what was anticipated to increase or expand both soccer game attendance and venue attendance for concerts and other activities. Mr. Checketts said baseball played more games than the soccer league so season tickets for baseball games would be more expensive. He said there was a number of compelling reasons to watch a soccer team. He said the team was good and it was the highest level of soccer in the country. b) SALT LAKE CITY ADMINISTRATION AND REDEVELOPMENT AGENCY OF SALT LAKE CITY STAFF PRESENTATION AND COUNCIL/BOARD MEMBERS QUESTIONS. Louis Zunguze, Joel Paterson, Mayor Anderson, Dave Oka and Alison McFarlane briefed the Council. Mayor Anderson said some residents might not be aware that the City engaged in many different kinds of public/private partnerships. He said the City would not have a National Basketball Association (NBA) team or the Delta Center if it were not for a public/private partnership. He said there was always opposition when discussing a partnership. He said they had worked hard for many months to find a location that would work for the stadium. He said RDA had provided affordable housing opportunities throughout the City and helped to strengthen the downtown area. Mr. Zunguze said the project was discussed in wide context to get more than a stadium for the community. He said a Small Area Plan outlined a process for taking advantage of the opportunity. He said during the process they wanted to fine tune land use policies and regulations. Mr. Zunguze said currently the City had a plan for downtown from I-15 and 700 East and from North Temple to 900 South. He said the plan encouraged growth west and south of downtown. He said locations in the south end would be more critical from a leveraging standpoint. He said synergies needed to be created for redevelopment of the area. He said Block 22 had opportunities for limited retail which would compliment uses in the stadium. He said the City had invested $300,000 in land acquisition for mixed income housing on Block 14. Mr. Zunguze said the Small Area Master Plan needed to be reviewed. He said the zoning classification for Block 22 needed to be amended. He said D-1 zoning would intensify opportunities in the area for mixed use. He said it was important to follow through with long range plans already in place. Dave Oka said as RDA invested money in blighted areas, taxes produced as an increase in value were called tax increments. He said one funding source was the tax increment of $500, 000 generated from the West Temple Gateway area. He said that amount would be available for 13 years and then the district would sunset. He said Kelly Murdock, the City' s bond underwriter, said the City could finance based on revenue. He said $100, 000 would buy the City approximately $1 million in bond proceeds. He said $500, 000 tax increment would be worth approximately $5 million in bond proceeds. He said funds generated in a particular redevelopment area had to stay in that area. Mr. Oka said the only other RDA fund was the Program Income Fund. He said that fund generated approximately $1 million per year. He said that translated into bond proceeds of approximately $10 million. He said $10 million from Program Income and $5 million from the West Temple Gateway' s existing tax increment would give the City $15 million. He said funds from Program Income and West Temple Gateway existing revenues were not reliable enough to get a good bond rating. He said that would translate into 05 - 15 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 higher interest rates for RDA. He said the City could consider issuing sales tax bonds. He said RDA would service those bonds from the Program Income Fund and the West Temple Gateway tax increment. Mr. Oka said to fund anything above $15 million RDA would have to look at other resources. He said some resources were available through restructuring reserve accounts for different bond issues. He said RDA could borrow monies from the City for costs above $15 million and repay the City through tax increment generated by the stadium itself. Mr. Oka said in 2008 they had anticipated funding the $800,000 per year expense for the Gallivan Center from the Program Income Fund. He said if those monies were needed for the proposed stadium, RDA would have to find another source of funding for the Gallivan Center. He said the Gallivan Center was located in the Central Business District (CBD) , so money could come from CBD revenues. He said paying $800,000 out of CBD would reduce that amount to $200,000 the first year. Alison McFarlane said within the last 10 years, 70 new or expanded facilities had come to the United States. She said without exception they all had some level of public funding. She said in 26 cities since 1998, public funding for stadiums ranged from $11 million to $479 million. She said the trend in these facilities while specific to one sport were being used for multi-uses. She said some were used for field sports, equestrian, family shows and Lacrosse, one of the fastest growing sports in the region. Ms. McFarlane said these facilities were about economic development because of new tax dollars, revenue, and job creation. She said they were a catalyst for more development in a surrounding area. She said economic impact could come from outside or inside the stadium and by the team. She said at 100% of development costs the property tax on the proposed facility would be approximately $600, 000 per year. She said retail sales tax would be approximately $87, 000 per year. She said 175 jobs would come from the stadium project without construction figured in. She said on Blocks 14 and 15 there was potential for approximately 2000 housing units and mixed space. She said the City had already invested in the 700 South 200 West project to include more affordable and mixed use housing. Ms. McFarlane said information RSL had provided and that Economic Development Corporation of Utah (EDCU) had available showed that in ten years time RSL would bring $180 million to the State's economy. She said $29 million in tax revenues would come for State and local government over the next ten years. She said based on national and international sources Love Communications had estimated an economic impact of media exposure for Utah, Salt Lake City and RSL of $95 million in the first year of operation. Councilmember Christensen said the City had made some substantial loans from the Revolving Loan Fund in CBD. He asked if the City would know in the next ten years how much money would be available for lending within the CBD from that fund. Mr. Oka said currently they had $2.1 million to lend. He said through interest and loan repayments, they generated approximately $600,000 per year back into the fund. He said when that fund was not able to support larger loans, they relied on the Program Income Fund. Councilmember Turner said there were 14 years left in the West Temple Gateway area before it would sunset. He said it would take approximately two years to build a stadium and they could be three or four years out from any increment. He asked what that would do as far as payback. Mr. Oka said they would have to backload the bonds so small payments were made up front until the project was on line and stabilized. He said payments would increase at that time. Councilmember Turner asked what increment was expected from the stadium. Mr. Oka said approximately $579, 000. He said in the event the team ceased to do business the increment could cease. He said that was a potential risk. 05 - 16 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 Councilmember Saxton asked what kind of return the City needed from the stadium. Mr. Oka said the return would not be realized until after the West Temple Gateway District sunset and the return went to the City as opposed to RDA. He said RDA would look to break even in this case. Councilmember Saxton said it was important to educate the public. She said she wanted a break down on an annual basis the money that would be invested to pay off bonds. Councilmember Saxton asked what the height limit was in a D-2 zone. Mr. Zunguze said it was 65 feet. Councilmember Saxton asked what the proposed height was for the stadium. Mr. Zunguze said he did not know at this time. Councilmember Saxton said the Council might need to consider amending the height restriction to allow taller buildings within a D-2 area. Mr. Zunguze said proposed zoning for the area which included the stadium was D-1. He said that zoning allowed additional height for buildings. Councilmember Love said the City struggled to find projects in the West Temple Gateway area. Mr. Oka said projects in that area were smaller housing projects. He said they had acquired some parcels for single family residential or condominium projects. Councilmember Love said the City had a housing fund which could be used anywhere in the City so housing would not have to be neglected if they used all the project money. Mr. Oka said that was correct. Councilmember Buhler asked if the new increment could be obligated. Mr. Oka said because the money was not a reliable source of funding it was doubtful the money could be used to bond. He said there were other resources of money the City could generate and lend to RDA. He said RDA could repay those monies from increments generated by the stadium itself. Councilmember Buhler said there would not be any money left in the West Temple Gateway to help with projects included in the Small Area Master Plan. Mr. Oka said the primary tool used for future development would be tax rebate programs. He said there would be some limited funds. Councilmember Buhler said there would be less money for housing even though money generated in the CBD could be used. Councilmember Lambert said the City' s participation could be approximately $15 to $20 million. Mr. Oka said that was correct. Councilmember Lambert said the West Temple Gateway program contributed to the overall general housing fund. Mr. Oka said that program contributed approximately $40,000 a year to housing. Councilmember Lambert said if the City approved funding the stadium all other housing and mixed use development would be lost because all the money would be tied up to acquire land. Mr. Oka said with the exception of tax increment rebates. He said there would be some ancillary development which could produce additional increment but the district would sunset in 13 years. Councilmember Lambert asked about interest rates. Mr. Murdock said because there were still outstanding questions as to whether the bonds would be issued on a tax exempt or taxable basis. He said currently they felt the bonds being issued without the tax exempt status would cost approximately 150 to 160 basis points more than a tax exempt option. Councilmember Jergensen asked what the actual cost of issuance would be for a $15 million bond. Mr. Murdock said 2%. Councilmember Jergensen said there was discussion about retail in the stadium. He said downtown business strategy discussions showed the City was over retailed. He asked what total square footage was anticipated for retail. Mr. Zunguze said it was hard to 05 - 17 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 tell. He said they did not see much duplication with retail on the north end of Main Street. Councilmember Jergensen turned the meeting back to Councilmember Lambert. #2. RE: Accept public comment regarding the proposed soccer stadium. The following people spoke or submitted cards in support of the soccer stadium: Bruce Bingham, Hamilton Partners and representing the Salt Lake Chamber of Commerce; Jake Garn, former Salt Lake City Mayor; Paul Holmes; Dale Christianson; Jim Bringhurst; Luke Garrett; and Terrall Budget. The following people spoke or submitted cards in opposition to the soccer stadium: Jay Ingleby; Ross Andra; Ana Archuleta; and Douglas Cotant. Councilmember Lambert said the public hearing would not be closed in case the Council wanted to continue the public hearing at a later date. #3. RE: Salt Lake City Council and the Salt Lake City Redevelopment Agency Board closing remarks. Not held. PUBLIC HEARING #1. RE: Accept public comment and consider adopting a resolution approving the expenditure of up to $10, 000 per fiscal year from the City' s Water Enterprise Fund to fund shortfalls in the Project Water Assist Program operated by the American Red Cross. View Attachment Councilmember Jergensen moved and Councilmember Saxton seconded to close the public hearing, which motion carried, all members voted aye. Councilmember Turner moved and Councilmember Saxton seconded to adopt Resolution 4 of 2005, which motion carried, all members voted aye. (R 05-2) COMMENTS TO THE CITY COUNCIL Fred Mauney spoke about his educational bicycle ride aimed at college students. Douglas Cotant spoke about a meeting he attended about Citizen's Day. UNFINISHED BUSINESS #1. RE: Setting the protest hearing date of March 8, 2005 at 7:00 p.m. to consider adopting a resolution declaring the intention of the City Council of Salt Lake City, Salt Lake County, Utah, to construct improvements within the City consisting of the reconstruction of roadway pavement, and to construct and install concrete angle parking, concrete curbs, sidewalks, driveway approaches, median islands, sidewalk ramps, storm drainage facilities, site furnishing, street lighting, traffic signals, landscaping, and all other miscellaneous work necessary to complete the improvements in a proper and workmanlike manner; to create the Salt Lake City, Utah 900 South 900 East streetscape upgrade Special Improvement District, Job No. 106018 (the "District") ; to pay the acquisition and installation costs and expenses by special assessments to be levied 05 - 18 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 against the property benefited by such improvements; to provide notice of intention to authorize such improvements and to fix a time and place for protests against such improvements, assessments or the creation of the district; to declare the City' s official intent to reimburse itself for expenditures paid by it prior to the sale of bonds; and to authorize advertisement of construction bids and related matters. View Attachment Councilmember Saxton moved and Councilmember Love seconded to set the date, which motion carried, all members voted aye. David Dobbins, John Naser and Jan Aramaki briefed the Council. Mr. Naser said the protest hearing would be held on March 2, 2005 at 7:00 p.m. He said during construction there would always be parking and pedestrian access to businesses. (Q 05-2) CONSENT AGENDA Councilmember Jergensen moved and Councilmember Christensen seconded to approve the Consent Agenda, which motion carried, all members voted aye. #1. RE: Adopting a motion authorizing the Council Chair to sign a letter of engagement with Matrix Consulting Group, Inc. to conduct a management and operational audit for Salt Lake City' s Justice Court. View Attachment (G 05-5) #2. RE: Requesting that the Administration not hold a hearing regarding a request to transfer a lease agreement to Prisa Hotel, the new owners of the Hotel Monaco, for existing encroachments in the public way. Compensation will be tendered. View Attachment (W 05-4) #3. RE: Setting the date of February 15, 2005 at 7:00 p.m. to accept public comment and consider adopting an ordinance amending the Salt Lake City Zoning Code to remove the sunset provision regarding portable signs pursuant to Petition No. 400-04-47. (P 05-2) #4. RE: Setting the date of February 15, 2005 at 7:00 p.m. to accept public comment and consider adopting an ordinance rezoning properties located at 1003 and 1005 West Euclid Avenue from Community Business (CB) to Moderate Density Multi-Family Residential (RMF-35) , and to amend the West Salt Lake Community Master Plan (adopted 1995) to reflect the proposed residential zoning pursuant to Petition No. 400-04-30. (P 05-4) #5. RE: Setting the date of February 15, 2005 at 7:00 p.m. to accept public comment and consider adopting an ordinance amending the zoning for property located at approximately 635 North F Street, (formerly Veteran' s Administration Hospital) and amend the Avenues Community Master Plan pursuant to Petition No. 400-04-38. (P 05-3) #6. RE: Approving the appointment of Paul Torres to the Business Advisory Board for a term extending through December 29, 2008. (I 05-7) #7. RE: Approving the appointment of Dean Offret to the Business Advisory Board for a term extending through December 29, 2008. (I 05-7) 05 - 19 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, FEBRUARY 1 , 2005 #8. RE: Approving the appointment of Paula Carl to the Historic Landmark Commission for a term extending through July 14, 2007. (I 05-8) #9. RE: Approving the reappointment of Noreen Heid to the Historic Landmark Commission for a term extending through July 14, 2007. (I 05-8) #10. RE: Approving the reappointment of Karen Cahoon to the Housing Trust Fund Advisory Board for a term extending through December 31, 2007. (I 05-5) #11. RE: Approving the appointment of Emma E. Houston to the Housing Authority for a term extending through October 27, 2009. (I 05-9) The meeting adjourned at 9:27 p.m. bj 05 - 20