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05/10/2016 - Minutes MINUTES OF THE 769th MEETING OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY Tuesday, May 10, 2016 451 South State Street, Room 326 Salt Lake City, Utah 1:00 p.m. AGENDA 1. 12:48:11 PM Roll Call. The following members of the Board of Directors of the Redevelopment Agency of Salt Lake City were present: Lisa Adams, Chairperson Derek Kitchen, Vice-Chairperson Stan Penfold, Director Andrew Johnston, Director James Rogers, Director Erin Mendenhall, Director Charlie Luke, Director Also Present: Jackie Biskupski, Chief Administrative Officer Justin Belliveau, Interim Executive Director Others Attending: Ed Butterfield, Senior Project Manager Jill Wilkerson-Smith, Project Manager Kort Utley, Project Manager Ben Davis, Project Manager David Arteaga, Project Coordinator Cara Lindsley, Project Coordinator Tammy Hunsaker, Project Coordinator Amanda Holty, Marketing and Communications Coordinator Katie Lewis, Legal Counsel Crayola Berger, Accountant II Jolynn Walz, Office Manager Kalli Ruiz, Office Facilitator Katherine Potter, Senior Advisor Louise Gonzalez, Administrative Secretary Jim Sirrine, Property Manager Cindy Gust-Jensen, Salt Lake City Council Office Maria Garciaz,NeighborWorks RDA Board Meeting Minutes Tuesday,May 10,2016 Page 2 Matt Dahl, Housing and Neighborhood Development Mike Akerlow, Housing and Neighborhood Development 2. 1:10:06 PM Briefing by the Staff. 9-Line Open House Mr. Utley stated that in an effort to gather input from the neighborhood and surrounding community, the RDA will hold an open house for the proposed 9-Line Project Area on May 12, 2016 at the Sorenson Unity Center from 5:00 p.m. —7:00 p.m. State Street Open House Ms. Lundmark stated that the RDA held a second open house for the State Street project area on May 3, 2016 at the Salt Lake County Complex. Staff will continue its outreach efforts by holding individual stakeholder meetings and interviews. Introduction of New Staff Interim Executive Director Belliveau introduced Jim Sirrine, as the RDA's new Property Manager and Louise Gonzalez, as the RDA's new Administrative Secretary. 3. 1:14:21 PM Approval of the Minutes from the Meeting held April 12, 2016. Director Penfold made a motion to approve the minutes from the meeting held April 12, 2016. Director Johnston seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. View Minutes 4. Report of the Executive Director. None. 5. Report of the Chair&Vice-Chair. None. 6. Public Comments. None. 7. Redevelopment Business Action Items. A. 1:14:45 PM Consideration to Approve a Loan Waiver Request by NeighborWorks Salt Lake for the City Front Apartment Project The Board will consider a motion approving the waiver of an RDA loan to Neighbor Works Salt Lake for the City Front Apartment Project, located at 641 West North Temple. View Attachment Ms. Wilkerson-Smith provided background on the City Front Apartment project and two promissory notes with the RDA's loan. The RDA initially provided a $465,000 secured loan with a note between the RDA and NeighborWorks. The RDA loan provided that it would be forgivable, with no interest or principal payments due, if affordable housing requirements were RDA Board Meeting Minutes Tuesday,May 10,2016 Page 3 fulfilled on the project through June 2035. The loan further stipulates that NeighborWorks would repay the entire loan plus 8% interest in the event of refinance before that time. NeighborWorks subsequently provided a loan of these funds to City Front Partners at 1% simple interest. The note to City Front became due and payable through an early refinance of the Project, triggering a requirement that NeighborWorks repay the outstanding principal and interest on its loan from the RDA. In November 2015,NeighborWorks repaid the balance owed on its note to City Front, of $529,597. To assist the owner with its project refinance the RDA has issued a replacement note to NeighborWorks representing the remaining unpaid balance of interest. Ms. Wilkerson-Smith explained that NeighorWorks Salt Lake has approached the RDA requesting a waiver of the replacement note for the City Front Apartment Project and forgiveness of its $529,597 payment based on its need to reinvest in the project. 1:19:28 PM Director Johnston made a motion to approve the request from NeighborWorks Salt Lake to waive the Replacement Note of$422,266 and deny the request to forgive the entire loan by retaining the payment NeighborWorks Salt Lake previous made of principal and interest totaling $529,597. Vice-Chairperson Kitchen seconded the motion. 1:22:24 PM Director Penfold made a substitute motion to refund the loan payment of$529,597 and grant the request to waive the Replacement Note. Motion dies for lack of a second. Maria Garciaz of NeighborWorks is invited to the presenters table. Director Johnston asked Ms. Garciaz if the intent of requesting the loan forgiveness is to use the funds for the conversion and renovation of the project. Ms. Garciaz said yes, explaining the commercial units have been a burden on the cash flow and that converting the units to housing would be a better use of the space. If the funds are not refunded, it would take approximately three to five years to complete the renovation of the ground floor. Director Rogers said that the main goal for in the TSA area was to have more commercial, and for this reason he stated he is concerned about taking out the retail space. Interim Executive Director Belliveau said that when evaluating this request the Board should be aware that the contract between the RDA and NeighborWorks clearly specified in the loan agreement that if a refinance were to take place a repayment of principal and interest would be due back to the RDA. However, there may be reasonable arguments concerning the waiver of the interest component of the loan, given that the Note between NeighborWorks and City Front had a different interest rate associated with it than the Note between the RDA and NeighborWorks. 1:30:34 PM Director Rogers made a substitute motion to table this item until further discussions take place to formalize the Board's policy on loan forgiveness. Director Luke seconded the motion. Upon roll call, Chairperson Adams declared the motion approved with Director Johnston, Director Mendenhall, and Director Penfold voting nay. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 4 B. 1:35:45 PM Consideration and Adoption of a Resolution Approving the Terms for an Option to Purchase Agreement, Development Agreement, Schedule of Development, and Other Agreements with Land-Forge, Inc. for the Development of RDA Owned Property at 863, 865 and 873 South 200 West The Board will consider a motion approving the Terms for an Option to Purchase Agreement, Development Agreement, Schedule of Development, and Other Agreements with Land-Forge, Inc. View Attachment Mr. Arteaga provided background on the property and Central 9 Lofts project that Land-Forge is proposing. He explained staff recognizes that the developer is taking substantial risk by developing a high quality, residential/retail for sale condominium project in a market and location where for sale condos are untested. Staff is proposing to sell the land in a way that minimizes the initial risk to the development and makes the project financially viable by setting the initial purchase price for the land at $100,005 dollars, with the remaining $359,995 be recovered through proceeds from the sale of the units depending on the project's success in the marketplace. Mr. Arteaga explained that to further spur development, the RDA has committed to designing and constructing the 900 South Street Improvements running from West Temple to 300 West. The RDA has also committed to exploring infrastructure deficiencies posing a constraint to this and other development projects in the West Temple Gateway and Granary project areas. He added that the Developer for the Central 9 Lofts has identified burial of overhead power lines and upgrades to the water lines as infrastructure issues that, if addressed, would alleviate constraints on the project. Director Rogers, Director Mendenhall, Vice-Chairperson Kitchen, and Chairperson Adams thanked the developer for the community outreach they initiated, the beautiful design presented, and for taking a risk developing owner-occupied project in this area. Director Rogers urged the Developer to look at development opportunities in the North Temple area. Vice-Chairperson Kitchen agreed. 1:43:39 PM Director Penfold made a motion to adopt the resolution (Resolution R-18-2016) approving the terms for an Option to Purchase Agreement, Development Agreement, Schedule of Development, and Other Agreements with Land-Forge, Inc. for the Development of RDA Owned Property at 863, 865 and 873 South 200 West. Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. C. 1:46:52 PM Consideration and adoption of a resolution authorizing a loan to Benchmark Modern for the construction of the Jefferson Walkway project located at 830 & 836 South Jefferson Street, and 833 & 839 South 200 West. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 5 The RDA Board will consider adopting a resolution approving a$1,994,922 loan to construct the Jefferson Walkway project, which includes a public mid-block walkway connecting Jefferson Street to the 900 South TRAX Station and seven single family homes. View Attachment Mr. Utley said Benchmark Modern is applying for a$1,994,922 loan to construct the Jefferson Walkway project, which includes a public mid-block walkway connecting Jefferson Street to the 900 South TRAX Station and seven for sale single family homes. The proposed loan meets the RDA Loan Program's lending criteria and the Project aligns with the West Temple Gateway Strategic Plan. Mr. Utley added that the loan was presented to the RDA Loan Committee where there was a split vote,with one Loan Committee member voting in favor of the loan and one Loan Committee Member voting against it. Mr. Utley added that the Loan Committee member who was against the loan thought the project may be too risky in this transitional neighborhood. Director Penfold stated that this project truly illustrates why the RDA is working in this area, with this project demonstrating the important role that its funding can play in supporting development. 1:53:07 PM Director Penfold made a motion to adopt a resolution(Resolution R-19-2016) authorizing a loan to Benchmark Modern for the construction of the Jefferson Walkway project located at 830 & 836 South Jefferson Street, and 833 & 839 South 200 West. Vice-Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. D. Granary Project Area 1. 1:54:47 PM Fleet Block Redevelopment Update The Housing and Neighborhood Development Division will provide an update on the redevelopment of the Fleet Block. View Attachment Mr. Utley introduced Matt Dahl from Housing and Neighborhood Development Division. Mr. Dahl provided a presentation on the upcoming redevelopment of the Fleet Block property and overall vision for the area. Chairperson Adams reminded Board members that the Fleet Block property is owned by Salt Lake City Corporation and not the RDA, and this update is to help board members see how this project fits into the Granary Strategic Plan. Vice-Chairperson Kitchen said housing is a priority for the Salt Lake City Council this year and he would like to leverage the Fleet Block for affordable housing. However, he is concerned that the development of the Fleet Block would go to one developer and felt that a more granular approach may be better and select multiple developers for the site. Vice-Chairperson Kitchen said he sees the Fleet Block as a catalytic project for the area and encouraged the City's Real Estate Services to move quickly on this project. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 6 Director Mendenhall asked for Real Estate Services to look at incorporating critical mass and programming as part of the overall vision and design and to contemplate financially sustainable shared space and use. 2. 2:29:59 PM Consideration of a motion to approve the updated Granary District Strategic Plan. The Board will consider a motion approving the updated Granary District Strategic Plan. View Attachment Mr. Utley presented the Granary District Strategic Plan and highlighted the changes that had been requested by the RDA Board at the April 2016 meeting. Vice-Chairperson Kitchen said that due to the expiration of the Granary Project Area, he would like to see movement in the project area this year. He suggested not limiting art to just development projects and making art a broad goal in the project area. He would like to see RDA staff empowered through the Strategic Plan to pursue art opportunities. 2:34:26 PM Vice-Chairperson Kitchen made a motion to approve the Granary District Strategic Plan with a change of making art a priority project within the Implementation Schedule and remove the restriction of art being tied to a particular development project. Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. E. Bylaws & Board Policies 1. 2:35:58 PM Proposed Revisions to Redevelopmeswent Agency Board of Directors' Bylaws; Proposed Resolution Creating the Redevelopment Advisory Committee and the Redevelopment Loan Committee Proposed revisions to the RDA bylaws and a resolution for the continued operation of the Redevelopment Advisory Committee (RAC) and Loan Committee will be presented by Salt Lake City's Attorney's Office. View Attachment Ms. Lewis reviewed the proposed revisions to the Redevelopment Agency Board of Directors' Bylaws and the proposed resolution creating the Redevelopment Advisory Committee and the Redevelopment Agency's Loan Committee. Director Penfold requested information and comparison on the RDA's loan program with Housing and Neighborhood Development's Housing Trust Fund, and the Economic Development Loan Fund regarding structures and procedures. 2:49:29 PM Director Mendenhall made motion to adopt the resolution approving the proposed revisions to the RDA bylaws and remove the section pertaining to the Loan Committee for further review. Director Penfold stated he is concerned that decisions on the Redevelopment RDA Board Meeting Minutes Tuesday,May 10,2016 Page 7 Advisory Committee (RAC) and Loan Committee are taking place before the Board has had an opportunity of hold a policy discussion on their roles and responsibilities. Director Rogers agreed. Motion fails due to lack of a second. 2:52:51 PM Director Penfold made motion to adopt the resolution approving the proposed revisions to the RDA bylaws, with the exception of the section pertaining to the Redevelopment Advisory Committee (RAC) and Loan Committee. Director Rogers seconded the motion. Upon roll call, the motion Chairperson Adams declared the motion unanimously approved. Ms. Lewis cautioned Board members that with the approval of the stated motion, it would eliminate RAC and the Loan Committee completely. These groups would cease to exist and need to be recreated and appointed. Ms. Plane provided the suggestion of approving the resolution with the changes to the bylaws and approve the resolution concerning RAC and Loan Committee. Then, at a later date, the Board could have a policy discussion of the roles and responsibilities for each of the committees. 2:58:16 PM Director Penfold made a motion to reconsider the previous motion. Director Mendenhall seconded the motion. Upon roll call, the motion Chairperson Adams declared the motion unanimously approved. 3:00:13 PM Director Penfold made a motion to revoke the previous motion. Director Mendenhall seconded the motion. Upon roll call, the motion Chairperson Adams declared the motion unanimously approved. 3:01:58 PM Director Penfold made motion to adopt the resolution (Resolution R-20-2016) approving the proposed revisions to the RDA bylaws and approve the resolution approving the RAC and Loan Committee, but remove the paragraph concerning the Loan Committee's authority. Director Johnston seconded the motion. Upon roll call, the motion Chairperson Adams declared the motion unanimously approved. 2. 3:02:46 PM Proposed Resolution to Adopt Salt Lake City Corporation's Procurement Code and Rules Salt Lake City Attorney's Office will present the City's Procurement Code and Rules. View Attachment Ms. Lewis explained that the City's Attorney's office is recommending the RDA Board adopt the City's procurement code and rules when procuring goods and services. Ms. Lewis briefed Board members on the City's procurement rules. Director Penfold said he felt there may be unusual circumstances on projects where following the City's procurement policy would hinder a RDA Project and asked if the RDA has the ability to revise or exempt itself if and when needed. Ms. Lewis stated there is always the option to revise or be exempt and there is also the option of requesting a waiver. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 8 3:16:55 PM Director Mendenhall made a motion to adopt the resolution(Resolution R-21-2016) with language added pertaining to a reporting mechanism be included in the process when a waiver is requested and that the reporting to the Board take place prior to the waiver being considered by the Chief Procurement Officer. Director Penfold seconded the motion. Upon roll call, the motion Chairperson Adams declared the motion unanimously approved. 3. 3:18:01 PM Proposed Resolution Regarding Designation of Executive Director and Chief Administrative Officer Salt Lake City Attorney's Office will present a resolution regarding designation of Executive Director and Chief Administrative Officer for the RDA Board to adopt. View Attachment 3:18:01 PM Director Penfold made a motion to adopt the resolution (Resolution R-22-2016)that clarifies the language and titles in the bylaws by designating the Mayor as Executive Director, and re-designating the current Executive Director to Chief Administrative Officer. Vice- Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 4. 3:18:51 PM Proposed Joint Resolution Regarding Advice and Consent for Appointment of the Chief Administrative Officer Salt Lake City Attorney's Office will present a joint resolution giving the RDA Board advice and consent authority on the appointment of the Agency's Chief Administrative Officer prior to the appointment. View Attachment 3:18:51 PM Vice-Chairperson Kitchen made a motion to defer the item until more information is obtained from the Administration concerning the appointment of the new Economic Development Director and to look more broadly at the Chief Administrative Officer position and the Economic Development Department's fiscal year 2016/2017 budget. Director Rogers seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. F. Interview of Justin Belliveau for Chief Administrative Officer. The RDA Board will Interview of Justin Belliveau for the RDA's Chief Administrative Officer Position. This item was pulled from the agenda. 8. Redevelopment Business Briefings. A. 2015/2016 Budget 1) 3:20:53 PM Public Hearing for Adoption of the Third Amendment to the 2015-2016 Annual Implementation Budget The RDA Board will hold a Public Hearing to accept comments from the public regarding the proposed Third Amendment to the 2015-2016 RDA Budget. View Attachment RDA Board Meeting Minutes Tuesday,May 10,2016 Page 9 3:20:53 PM Director Penfold made a motion open the Public Hearing and continue until a future meeting. Director Johnston seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 2) 3:21:31 PM Review of the Proposed Third Amendment to the Annual Implementation Budget for the Fiscal Year Commencing July 1, 2015 and Ending June 30, 2016. The RDA Board will review the proposed Third Amendment to the 2015/2016 Annual Implementation Budget. View Attachment Interim Executive Director Belliveau reviewed the proposed Third Amendment to the Annual Implementation Budget for the Fiscal Year Commencing July 1, 2015 and Ending June 30, 2016. He stated that while most of the changes are routine, he highlighted the reallocation of the Statutory Allocation Reduction Revenue (SARR). He said that one option to distribute the remaining balance of$1,312,800 is to distribute 60%to the Taxing Entities and 40% to the CBD project area. Interim Executive Director Belliveau added that staff has been asked by the City Council Office to consider the option of allocating the 40% toward the City's remaining debt service obligations that relate to the Steiner Ice Sheet. Director Mendenhall asked staff to investigate options pertaining to the reallocating interest accrued from SARR funds during the contract period. Chairperson Adams invited Cindy Gust-Jensen to the table. Ms. Gust-Jensen asked Board members if they would like City Council Staff to request information on behalf of the Board from RDA staff to facilitate a resolution of this matter. Chairperson Adams conducted a straw poll concerning City Council staff making requests to RDA staff on behalf of the RDA Board on this matter. All Board members were in support. Director Penfold asked staff to look at all options and restrictions pertaining to SARR funds, options for reallocation, and the interest accrued. Director Rogers agreed and suggested that the discussion of how to allocate these funds be discussed later, once all options have been presented. Chairperson Adams requested that as RDA staff look at options and legal restriction to also come up with a list of potential ways to spend these funds, being sensitive to the taxing entities, and any other RDA obligations. B. 3:50:35 PM 2016/2017 Funding Allocation Budget The RDA Board will Review the proposed administrative budget and the staffing document to be included in the 2016-2017 Annual Implementation Budget. View Attachment RDA Board Meeting Minutes Tuesday,May 10,2016 Page 10 Mr. Butterfield and Mr. Utley presented the Draft 2016-2017 Funding Allocation Budget for each project area for the Board's review and explained that the funding Allocation Budget is based on tax increment and other revenue sources minus recurring uses like administration for each project area. The Allocation Budget also includes the RDA's City-Wide Housing, Project Area Housing, and Program Income Funds. The Program Income Fund's source of funding is income-generating properties and loan repayments. The City-Wide and Project Area Housing Funds are funded from tax increment proceeds allocated to them from project area funds. Director Mendenhall asked that once there is a more activated use at Station Center if staff would look at converting the park strip into diagonal parking. Mr. Butterfield stated that staff is already working with the City's Transportation Division to conduct a circulation study and that option would be explored within the study. Director Penfold expressed concern with the RDA funding infrastructure projects that could be covered under the City's general maintenance funds. He added that he would be interested in seeing the $900,000 in the CBD project area that is proposed for West Temple upgrades, be used elsewhere. Director Penfold asked staff to provide a report on other projects that currently do not have funding or are not listed as a current priority in order for the Board to decide if any of the priorities need to be changed. Director Penfold requested that staff contact Public Utilities concerning its Master Planning process and upgrades or improvements to utilities in the WTG Project Area. Director Kitchen suggested the street construction funds in the Granary District be used for Public Art. Director Penfold agreed and encouraged the RDA Board to start thinking of other mechanisms for funding the reconstruction of 400 West and making it a priority. C. 4:26:17 PM Preliminary Review of RDA Housing Guidelines and Standards Staff will present an overview of housing policy highlights and recommendations, to inform a discussion on the RDA's Draft Housing Guidelines and Standards. View Attachment Ms. Hunsaker said that RDA staff has been working with Housing and Neighborhood Development(HAND), to clarify and streamline housing policies. She explained that the policies outlined in the draft guidelines and standards include existing policies as well as policy shifts to strengthen the RDA's commitment to housing. Ms. Hunsaker highlighted the following seven policies within the RDA Draft Housing Guidelines and Standards: Property Disposition; Programs; Budget Allocations; Citywide Housing; Project Area Housing; Homeless, Transitional, and Special Needs Housing; and Affordable Housing Retention and Replacement. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 11 Ms. Hunsaker introduced Mike Akerlow, Director of Housing and Neighborhood Development to answer any questions. Director Penfold requested that staff clearly identify and define when the RDA is willing to discount property. Ms. Hunsaker explained that those steps will be incorporated within the Housing Policy once the Board has finalized the RDA's Land Disposition Policy. Director Mendenhall encouraged RDA and HAND staff to focus on the Special Needs Housing component in order to move more quickly toward finalizing that component of the policy. Mr. Akerlow explained that both the RDA and HAND are searching for more tools and resources to incentivize work with the development community. Director Penfold asked staff to evaluate ways to incentivize affordable housing development through the land disposition process and the use of tax increment reimbursement financing. Chairperson Adams stated that although she is in favor of the micro-unit concept, she is concerned with having SROs in areas that have an existing concentration of persons living below the poverty level. Chairperson Adams thanked staff for the hard work and efforts to refine the housing policy, and expressed interest in continuing to refine this as policy going forward. D. 4:51:26 PM Proposed Policies for Disposition of Real Property Salt Lake City Attorney's Office will provide a briefing on policies for the disposition of RDA owned property. View Attachment Ms. Lewis stated as a component of clarifying the roles of the Board and Administration, the Board requested recommendations on a new real property disposition policy that conforms with separation of powers principles. Ms. Lewis reviewed the City's ordinances for disposition of City-owned property and presented a list of potential items for the Board's policy on RDA property disposition. Director Penfold stated he would like to look at ways to evaluate "triggers" for discounting or gifting property and added that he would also like to keep the option of selling property to adjacent property owners within the disposition policy. Vice-Chairperson Kitchen requested a written report of any RDA Property sited for deposition. Vice-Chairperson Kitchen said he would like to preserve RDA staff's flexibility concerning direct sale negotiations and look at a mechanism as to when this type of transaction is appropriate. 9. Redevelopment Business Written Briefings. RDA Board Meeting Minutes Tuesday,May 10,2016 Page 12 A. Feedback from North Temple Developer Advisory Forum An overview on the feedback that was gathered during the North Temple Developer Forum. View Attachment Director Rogers asked staff to identify properties along North Temple that are available for development and provide a list of the properties and property owners to developers. 10. Consent. None. 11. Closed Meeting. None. 12. Adjournment. There being no further business the meeting was adjourned. Lisa R. Adams, Chairperson