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10/10/2017 - Minutes MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 The Board of Directors of the Redevelopment Agency of Salt Lake City, Utah, met on Tuesday, October 10, 2017 at 2 : 13 p.m. in Room 326, Committee Room, City County Building, 451 South State. In Attendance: Directors Lisa Adams, Derek Kitchen, James Rogers, Erin Mendenhall, Stan Penfold, and Andrew Johnston. Absent: Director Charlie Luke Staff in Attendance: Cindy Gust-Jenson, Council Executive Director; Jennifer Bruno, Council Executive Deputy Director; Jacqueline Biskupski, Redevelopment Agency Executive Director; Margaret Plane, City Attorney; David Litvack, Mayor' s Deputy Chief of Staff; Danny Walz, Redevelopment Agency Chief Operating Officer; Benjamin Luedtke, Council Policy Analyst; Allison Rowland, Council Policy Analyst; Ed Butterfield, Senior Project Manager; Crayola Berger, Accountant II; Kort Utley, Senior Project Manager; Tammy Hunsaker, Project Manager; Susan Lundmark, Project Manager; Jill Wilkerson-Smith, Project Manager; Katie Lewis, Senior City Attorney; John Vuyk, Budget Director; Makayla Hardy, Deputy City Recorder; and Cindi Mansell, City Recorder. Director Adams presided at and conducted the meeting. The meeting was called to order at 2 : 13 p.m. A. COMMENTS #1 . 2:13:14 PM General Comments to the Board. The Redevelopment Agency (RDA) Board of Directors will receive public comments regarding Redevelopment Agency business. Director Adams shared comments received from George Chapman that included: winter approaching/potential for homeless deaths in the cold; urging consideration for an indoor camping area; proposed identification card discouraging use of fenced area near Rio Grande; State Street affordable housing concerns/engineering nightmare/urging independent analysis; and questioning the legality of the 24-hour notice for the Redevelopment Agency (RDA) Special Board Meeting. Ms . Lewis discussed requirements of the Utah Open & Public Meetings Act (24-hour minimum advance notice) and said the agenda for the Redevelopment Agency Special Meeting was appropriately noticed within that defined timeframe . She said the RDA also had bylaws which provided the ability to schedule special meetings as needed pursuant to the Open & Public Meetings Act. 17 - 1 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 B. REDEVELOPMENT AGENCY BUSINESS #1 . 2:16:54 PM Approval of Minutes Director Rogers moved and Director Johnston seconded to approve the minutes of the Redevelopment Agency Board meeting held September 12, 2017; and the revised meeting minutes of July 25, 2017, which motion carried, all directors voted aye. View Minutes #2 . 2:17:58 PM RDA Capital Improvement Program (CIP) Follow-Up Briefing. The Board will receive a follow-up briefing about the Mayor's proposed Fiscal Year 2018 RDA Capital Improvement Program projects, which typically involve the construction, purchase or redevelopment of buildings, infrastructure or public spaces. Generally, projects have a useful life of five or more years and cost $50, 000 or more. View Attachments Cindy Gust-Jenson, Jennifer Bruno, David Litvack, Ben Luedtke, Ed Butterfield, and Danny Walz briefed the Board with attachments . Mr. Luedtke said RDA, Council, and Finance Staff met with the City' s Financial Advisors (George K. Baum Company) . He said they were working with updated cash flow estimates for RDA project areas and the program income fund. He said based upon those updated cash flows, they developed potential bonding scenarios relative to maximum RDA bonding capacity. He said these were not currently included because the Financial Advisors were developing additional scenarios to return to the Board for consideration. Mr. Luedtke explained there were four potentially bond-eligible RDA Capital Projects with no funding target because there were no estimated project costs . He said this raised a policy question for the Board and Administration regarding the vision for these projects and what potential funding targets could be based upon that vision. He referenced the four projects listed that were likely not eligible for bonding: • $3 million Central Business District (CBD) Housing • $588, 808 Downtown Placemaking Incentive Program • $271, 402 Citywide Housing (legally required) • $19, 727 North Temple 100 of tax increment (legally required) Mr. Luedtke said without more details, it would be difficult to know if the two not legally required projects would be bond eligible . Director Penfold said he thought one charge of the new Cultural Core Consultant was placemaking. He said they might have funding already allocated, and asked how or if the RDA was coordinating with them. Mr. Walz indicated that Staff had not had this conversation but could reach out to them to determine their relative goals and objectives . Director Penfold expressed the potential need to pause on this item to ensure the 17 - 2 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 Board was not duplicating efforts (or possibly enhance their efforts) . Discussion followed regarding estimated funding amounts already set aside through sales tax and other allocations (could be up to $2 million) and the need to coordinate closely. Mr. Walz said his understanding was these funds were originally targeted as RDA budget to set up a program and then coordinate with developers . Director Mendenhall said she wanted to discuss allocating a portion of this funding towards the Excellence Performance Series which ceased in June due to programmatic elements . She said acknowledging potentially $2 million yet to be deployed for placemaking in this same space, she would not be interested in $588, 000 to do the same thing. She said the Gallivan Center already needed support and there were other ways to use the funding. She said that same $200, 000 allocated for the Excellence in Performance series program efforts could be utilized differently/other opportunities for financial support (such as advertising or non-program efforts) to enable the concert series to continue . She said that program fulfilled a unique component of the Arts and Cultural Core downtown because it was all local entertainment . She said the Director of the Excellence in the Community 501C3 program would be happy to meet and coordinate with Legal to ensure appropriate funding use. A unanimous Straw Poll was conducted to request Administration look into the Excellence in the Community Program to consider a budget amendment or provide additional information for the Board to consider. Director Rogers said each year, there was a line item in the General Fund for arts matching funds; he inquired how or when that would be spent. Ms . Bruno said a Request for Proposal (RFP) had been issued for expenditure and the County and City Councils had to approve how those funds were spent (approximately $1, 000, 000) . It was stated the County was managing the contract. The Board requested a follow-up on this item. Discussion followed regarding Central Business District housing. Director Mendenhall expressed concern these funds would not be coordinated with the unallocated $21 million Affordable Housing Funds . She said the Grow SLC document was incomplete and inquired if funding priorities were being considered across departments . Mr. Walz explained the purpose of submitting the RDA Housing Strategy Plan now was in anticipation of discussion at the November meeting. He said when there was opportunity to go through the Plan, it would be reflected that it mirrored priorities pulled from Grow SLC. He said the two documents were moving ahead together and not in separate directions . He said as for funding, that involved solving the bigger issue of the affordable housing crisis and how both the City and the RDA move forward to spend $21 million together via established policies and objectives . He said the $3 million for CBD was separate but the goal was to carry out the full 17 - 3 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10 , 2017 objective and the plan of the RDA and City. He said the intent was not to make it sound like the two were not coordinated but somewhat defining a way of release and expenditure of these funds . Director Penfold said there were recommendations coming out of the Blue Ribbon Commission to purchase property. He expressed concern as to a comprehensive strategy in how to manage those competing demands for reserve housing money. Mr. Walz responded that was the question that Staff hoped to address in the Plan. He said there would be a number of projects requesting direction and decisions from the Board. Director Penfold said the challenge appeared to be three different entities looking at housing. Mr. Litvack discussed ongoing efforts and conversations between various stakeholders . He said he would be the main person to coordinate and bring together the Blue Ribbon Commission ideas, Housing and Neighborhood Development (HAND) , Housing Authority, and the RDA. He said the first draft of the Housing Strategy Plan was transmitted from Administration to the RDA today and some aspects of that Plan had been reviewed by other stakeholders . Director Mendenhall inquired if the Blue Ribbon Commission, HAND, and the Housing Authority would be involved in the $3 million CBD housing. Mr. Walz said the goal of the $3 million was to carry out the RDA goal of housing in the CBD. Director Mendenhall discussed RDA objectives, and said work needed to be done "in crisis mode" and yet work being presented was status quo. She said the situation was beyond that, needs were much greater, and they needed to be lock stepped with HAND and the Housing Authority in crisis mode . She said strategically targeting those funds to meet those goals really meant that any project that came to RDA could qualify. Mr. Litvack said that was the Administration' s direction. He said the stakeholders were working closely and had a sense of urgency to focus on a tactical approach and not a broad strategy. He said the issue was actually a $150 million problem and there was need for a much broader conversation. Director Mendenhall discussed the needs assessment, updated market reality, other housing types and income needs to be addressed. She said Directors Adams, Kitchen, and herself had expressed the need to have family-sized housing in the downtown. She discussed the lack of a public school and keen interest on having discussion with the School District regarding creation of a school for the downtown. She said during consideration of CBD housing dollars, she would request RDA Staff have those conversations with the School District to determine analytics . Director Penfold discussed a potential RDA role to zero in on this population or potential supportive service to keep families in housing (other than the 400) . Mr. Litvack discussed income levels, available 17 - 4 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 programs and support systems for the various populations . Discussion followed regarding the importance of people moving into the downtown core and the need for long-term stability and housing options . A unanimous Straw Poll was conducted for the RDA to contact the School District regarding a downtown school and return with information. Further discussion followed regarding various point persons due to each stakeholder working on specific projects and properties, and the need for someone additional to help organize the roles and coordination. Director Penfold said a broader/long-term discussion was needed to assist all Staff in moving forward with clear direction. Mr. Litvack said issues raised by Director Penfold entailed providing stabilization for partnership in the community. He said a broader context housing conversation was being addressed by HAND with the RDA being a critical component. He clarified the approach for the $21 million was that HAND would be the coordination point on new housing. Director Mendenhall said she wanted to see the Mayor appoint a "Housing Czar", (someone with an incredible amount of experience, understanding of City resources, and that had authority) . Discussion followed regarding a clear and accurate inventory of all RDA properties, potential to conduct a fact-finding night on different types of developments not seen in the City to start conversations/ask questions, potential to bring in developers that have had success in other areas, and identify different types of developments and opportunities to make them affordable and successful . The Board discussed how a project was determined to be bond eligible, with Ms . Bruno stating that depended on the type of bond (taxable or tax exempt) . Ms . Gust-Jenson addressed the different proposals being discussed at this meeting and said that RDA, HAND, and the Blue Ribbon Commission each had a different charge . She said the Board had confusion on how priorities of the Council and RDA would be incorporated (such as mixed income, equal division on the east and west side/affordable housing spread throughout the community, emphasis on areas of opportunity) . She said if there could be a future housing conversation to obtain clarity on those items, that might help Staff understand how the pieces fit together. Discussion followed regarding whether projects were impact fee eligible, with Director Adams stating it would be beneficial for an impact fee analysis to be completed first when requests were brought forward. Mr. Luedtke reported on the 900 South utility undergrounding status . He said Staff had a quote of $58, 000 to have a contract-ready cost estimate for burying the power lines and to analyze the alternatives to utility undergrounding. Ms . Gust-Jenson clarified the Board had already 17 - 5 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10 , 2017 appropriated funding and this was Staff confirming known costs . A unanimous Straw Poll was conducted to confirm approval of the total project costs including the $8, 000 to have Rocky Mountain Power conduct the alternatives study and $50, 000 for undergrounding finalization of those costs. Director Mendenhall moved and Director Kitchen seconded to adopt the legally required two of the four identified projects not eligible for bonding (Citywide Housing and North Temple 10%) as part of the CIP and that projects eligible for bonding could be added to the larger bonding discussion scheduled for November, which motion carried, all directors voted aye . #3 . 3:23:08 PM Tax Increment (TI) Reimbursement Policy Follow-Up Discussion. The Board will receive a follow-up briefing and consider adopting of the TI Reimbursement Policy items related to the Single Property Owner Retention Tool . The Board adopted the TI Reimbursement Policy in June 2017. View Attachments Danny Walz, Cindy Gust-Jenson, Jill Wilkerson-Smith, and Allison Rowland briefed the Board from attachments . Ms . Rowland said the Board reviewed a draft policy at their September meeting and conducted several Straw Polls . She said the policy before the Board represented those changes as well as addressing the policy questions raised including; final approval authority for single property business retention areas, annual application limit, capital expenditure limit, required third- party financial analysis, reporting requirements, etc. She referenced the public information sheet to be produced and flow chart included with the resolution. She highlighted the overarching goal of the revisions to help establish a standardized and transparent program for tax increment reimbursement that contributed to economic development. Inquiry was raised regarding the private funding capital amount of $12 million, property owner and lessee both being eligible to apply, economic and public benefit incentive criteria (such as permanent versus significant job creation) and how that distinction was made . Mr. Walz reviewed defined standards, including the minimum creation of one full- time permanent job. Director Penfold expressed concern when considering areas where the program could have been implemented (particularly new areas like the Northwest quadrant) , such as significant increase to a facility resulting in significant demands on infrastructure and revenue deferment. He inquired how to analyze deferment and benefit over infrastructure needs . Mr. Walz discussed participation rate calculations, intent to continue to receive the base value, and not to impact or burden existing 17 - 6 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10 , 2017 resources . He said the Board could consider assigning different criteria values or evaluate the proposed cap of 900 of City tax increment . Director Rogers said he wanted to see that cap lowered with potential for additional incentive being made possible by meeting the various nine criteria/objectives as defined. Mr. Walz said Staff preferred to have flexibility relative to criteria (without detailed specifics) as long as the Board had ultimate approval . Director Mendenhall said she appreciated the Board having the final authority throughout the process . She inquired about analysis of deferred costs and justification on each project, such as working with transportation, public utilities, public safety, etc. including how/if impact fees were a factor, cost of expansion, percentage of public benefit, etc. She said she wanted a threshold built into the policy. Mr. Walz said those aspects would already be addressed within the analysis scope, and statutorily required in conjunction with creation of a project area. Ms . Gust-Jenson suggested language to spell out the clarity of expectation. She said approval would be tentative with the understanding that Staff would return to finalize the language as adjusted. Director Kitchen inquired as to other uses of this tool relative to moving housing goals further along (in the same way this policy would utilize the RDA and tax increment) to address economic development. He referenced the Grow SLC Plan entailing Tax Abatement for Affordable Housing as a potential third option for housing (that involved its own objectives and criteria) . A unanimous Straw Poll was conducted for Staff to return as soon as possible with a proposed plan for Affordable Housing Single-Property Tax Increment Reimbursement. Further discussion followed regarding recapturing or claw back provisions within the reimbursement agreements and annual verification requirements, and gap/overpayment for property. Mr. Walz said if a third- party evaluation returned with a discrepancy, the agreement would outline a certain percentage of tax increment and then cap/not-to-exceed amount . He said if there was concern that part of the funding/reimbursement amount was going towards overpayment of land, it could be reduced accordingly and any discrepancy of a third-party valuation of market rate become a discussion point. He said there was not typically reimbursement for land acquisition and it was important to know how that may/may not fit into the overall budget (focus on hard construction costs) . 17 - 7 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10 , 2017 A unanimous Straw Poll was conducted for any discrepancy of a third- party valuation of market rate and actual price paid to come back before the Board for discussion and/or review process. The Board considered whether an applicant should pay the fee to offset costs of a third-party analysis . Mr. Walz said that would not be traditional RDA practice and considered part of the cost of doing business . He suggested seeing how the program went and that perhaps it could be part of a larger conversation. A unanimous Straw Poll was conducted to hold off on the aspect of having the applicant pay the fee to offset costs of a third-party analysis at this time. The Board suggested allowing Staff discretion as to whether they received adequate definition/parameters today to work within or needed to return with ideas . Mr. Walz said Staff would incorporate the concepts into negotiations with developers, with the last 10% remaining completely undecided and based on the various criteria. Director Penfold moved and Director Rogers seconded to tentatively approve Resolution R-9-2017 adopting the Tax Increment Policy Program with the modifications that were straw polled as part of this meeting, which motion carried, all directors voted aye. #4 . 4:03:19 PM Update on Project Area creation for 9 Line and State Street. The Board will receive an update from RDA Staff on the various new project areas. View Attachments Danny Walz, Susan Lundmark, and Ed Butterfield briefed the Board with attachments . Ms . Lundmark reviewed the proposed project area creation timelines and components . Discussion followed regarding set aside of seed money amounts and how the length of time was determined for a project area. Mr. Walz explained traditionally, project areas were 25 or 30 years; however, there was no maximum or minimum now with the creation of Community Reinvestment Areas . He said it was completely dependent on the project area itself and ultimately allowed for partnership with taxing entities . He provided background on the creation of these areas, including cost-benefit analysis and how that budget would be applied and used. He said that data would be used to establish an area and then tied into the ultimate life of the project. Inquiry was raised as to timeframe when the other taxing entities were briefed or incorporated. Mr. Walz said Staff anticipated beginning discussions or negotiations with the entities once information was received at the November meeting. He said the taxing entities were an entirely separate entity with an entirely separate process and governing 17 - 8 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 body. Ms . Lundmark said as the process evolved, Staff would incorporate policy direction provided by the Board and adjust the timeframe as necessary. She said as proposed, the two new project areas could likely be established in the spring of 2018 . #5. 4:15:59 PM Land Disposition Proceeds Policy Discussion. The Board will receive a follow-up briefing about a draft resolution for a Real Property Disposition Proceeds Policy, which would set guidelines for the utilization of proceeds subject to the budget appropriation process. View Attachments Ben Luedtke, Danny Walz, and Ed Butterfield briefed the Board from attachments . Mr. Luedtke discussed policy considerations for real property disposition proceeds options, including centralized "Surplus Land" Account, Dedicated Proceeds to Citywide Housing Fund, and Place Proceeds into Program Income Fund. He said this was for discussion only at this point and would return for official adoption. Note: At this time, the Board recessed as the RDA to conduct a City Council Work Session Meeting. Following the Work Session, the RDA Board reconvened to conduct remaining business. #6 . 7:17:36 PM Affordable Housing Funding Opportunity and Acquisition. Funding of potential purchase at foreclosure sale of real property located at 245, 255, and 265 South State Street for the purpose of affordable housing. Danny Walz briefed the Board regarding the proposed property purchase . He explained the dynamics of the foreclosure process changed when it was determined it would have allowed release of all affordable housing restrictions in place on the property. He discussed the Agency' s interest in retaining the affordable housing component. Discussion followed regarding cost estimates on demolition for the existing structure . Mr. Walz said he would estimate $250, 000-$300, 000 and would request the RDA perform demolition as part of the funding allocation for demolition and acquisition. Further discussion followed regarding funding sources, with Mr. Walz proposing utilization of the $3 million in CBD housing and $1 . 3 million to come from the Revolving Loan Fund. He said upon property sale, those proceeds would be earmarked to go back directly. He said the specific acquisition terms would return to the Board for approval as discussion incorporated with the disposition of property. Director Rogers expressed concern with the last-minute process this negotiation involved and caused Staff to carry out. Mr. Walz said moving forward, such would not be the intention for projects . He said the RDA 17 - 9 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 did not intend to be a bidder but the removal of the affordable housing requirement changed the dynamics and Staff appreciated the cooperation Citywide to make that happen. Director Rogers said he had issue in the RDA bidding up against an investor willing to invest $4 million in the City. He said although he understood trying to preserve affordable housing stock, he was uncomfortable with government spending $4 million without any idea for a project. He said the RDA had no interest in the property and there were many other opportunities Citywide for affordable housing. Mr. Walz said Staff prioritized the concept that nothing had been done with the failed property for almost three years, it was an eyesore/nuisance, and the pros appeared to outweigh the cons . Director Rogers discussed other buildings the RDA owned that also had zero movement within years . Director Kitchen said he shared the concerns of Director Rogers relative to the stress and pressure on Staff; however, it was a successful representation of Administration and Council Staff working together in a not-ideal situation. He said he hoped to see the property secured, a plan put together, and housing result in the same expedient manner. He expressed concern that when the original project began several years ago, people were displaced at that time . Ms . Gust-Jenson said it seemed worth preserving the option so Staff strongly encouraged the RDA Director to look for options and a path forward. She said they recognized the downsides with the process but wanted to also move forward. Discussion followed regarding the Board now being asked to conduct an extra meeting on October 24, 2017 to move forward. Director Penfold moved and Director Kitchen seconded to allocate $3 million from the RDA CIP CBD Housing Fund, and an additional $1 . 325 million from the Revolving Loan Fund for the property at 255 South State Street (note : $300 , 000 of the $1 . 325 million from the Revolving Loan Fund available to go towards demolition) , which motion carried, all directors voted aye, except Director Rogers, who voted nay. C. WRITTEN BRIEFINGS There were no written briefings . D. 7 :51:15 PM CONSENT Director Penfold moved and Director Rogers seconded to adopt Consent Agenda Items D1 and D2, with the addition to Item D1 to set the date for a public hearing amending the RDA Budget for potential use of RDA funding for Housing Projects on Tuesday, October 24, 2017, in addition to the other hearings as noted, which motion carried, all directors voted aye . 17 - 10 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, OCTOBER 10, 2017 #1. Set Date for RDA Budget Amendment No. 1 for Fiscal Year 2017- 2018 . The Board will set the date of Tuesday, November 14, 2017 at 2: 00 p.m. to accept public comment and consider adopting a resolution amending the final budget of the Redevelopment Agency for Fiscal Year 2017-2018. #2 . Set Date for RDA Housing Funding. The Board will set the date of Tuesday, November 14, 2017 at 2: 00 p.m. to accept public comment and consider adopting a resolution approving funding for potential projects relating to housing. The Redevelopment Agency meetings adjourned at 7 : 56 p .m. Redevelopment Agency Chair Secretary 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. This document along with the digital recording constitute the official minutes of the Salt Lake City Redevelopment Agency meeting held October 10, 2017 . clm 17 - 11