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04/10/2018 - Minutes MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10 , 2018 The Board of Directors of the Redevelopment Agency (RDA) of Salt Lake City, Utah, met on Tuesday, April 10, 2018 in Room 326, Committee Room, City County Building, 451 South State . In Attendance: Directors Derek Kitchen, James Rogers, Erin Mendenhall, Chris Wharton, Amy Fowler, Charlie Luke, and Andrew Johnston. Staff in Attendance: Jennifer Bruno, Council Executive Deputy Director; Patrick Leary, Mayor' s Chief of Staff; David Litvack, Mayor' s Deputy Chief of Staff; Danny Walz, RDA Chief Operating Officer; Tammy Hunsaker, RDA Project Manager; Susan Lundmark, RDA Project Manager; Jill Wilkerson- Smith, RDA Project Manager; Cara Lindsley, RDA Project Manager; Allison Rowland, Council Public Policy Analyst; Katherine Lewis, Senior City Attorney; DeeDee Robinson, Deputy City Recorder; and Cindi Mansell, City Recorder. Also Present: Susan Becker, Zion' s Public Finance, Inc. ; Jacob Splan, Stadler Rail Construction Manager; and Fabio Muller, Stadler Rail Director of Procurement and Logistics . Director Kitchen presided at and conducted the meeting. The meeting was called to order at 2 : 05 p.m. A. 2:05:19 PM GENERAL COMMENTS TO THE BOARD Terry Marasco spoke representing the west side communities and said they were the neediest part of Salt Lake. He referenced the Public Market Study and recent Inland Port, and said the most vocal support for the City in that regard was also the west side . He said they deserved attention and the Public Market at Fair Park would help greatly. B. PUBLIC HEARINGS #1 . 2:08:12 PM Stadler Rail Single-Property Community Reinvestment Area Plan. The Board will accept public comment about the creation of a single-property Community Reinvestment Area (CRA) to facilitate the development of Stadler Rail . View Attachments Director Mendenhall moved and Director Fowler seconded to close the public hearing, which motion carried, all directors voted aye . C. 2:08:51 PM REDEVELOPMENT AGENCY BUSINESS (RDA) #1 . Stadler Rail Single-Property Community Reinvestment Area Plan & Interlocal Agreement. The Board will discuss and consider approval of a resolution authorizing the adoption of a single-property Community 18 - 1 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10 , 2018 Reinvestment Area (CRA) to facilitate the development of Stadler Rail and a resolution approving the Interlocal Agreement authorizing use of a portion of Tax Increment to support the implementation of the Stadler Rail Community Reinvestment Area Plan. View Attachments Danny Walz, Jill Wilkerson-Smith, Allison Rowland, and Susan Becker briefed the Council with attachments and a Power Point presentation . Ms . Wilkerson-Smith provided background on the RDA Tax Increment Reimbursement Policy, project information, Stadler 90o participation request from Salt Lake City (SLC) , CRA Plan and Budget components . She said Stadler had made rail cars for the past 75 years . She said the company was based in Switzerland and currently had 20 locations with 7, 000 employees . She said the only Stadler location in the United States was located in SLC at 500 West 900 North. She said this facility employed 150 workers and the company planned to expand into a new facility located at 5600 West and Interstate 80 (I-80) in the Northwest Quadrant (NWQ) . Ms . Becker reviewed the Financial Benefit Analysis, including proposed development, 20-year property tax revenues at current valuation, 20-year property tax revenues with proposed development, and comparative development information. She reviewed 20-year revenues, expense calculations, Municipal cost of services (average year) , job creation, infrastructure and other benefits . She discussed 20-year tax increment distribution, Stadler infrastructure improvements, relative project gap (infrastructure costs) , and Finance Committee rankings at the 70, 80, and 900 levels . Ms . Becker referenced benefits of the proposed CRA and said the Stadler development would provide a ratio of at least 3 : 1 revenues to expenses for SLC' s General Fund; would provide significantly higher- than-average property values; the industrial development that would take place would include 976 jobs (150 of which were jobs retained from current operations) with average wages above the area median wage; there were significant infrastructure costs associated with the development at the SLC site; and upfront costs opened additional acres for development/accelerated development in the surrounding area. Director Mendenhall discussed being accountable for tax dollars and inquired if the third-party analysis took into consideration incentives from any other taxing entity. Ms . Becker referenced comparative development (taxable value per acre) and explained consideration was given to all potential arenas and there was still a gap resulting from extra-ordinary infrastructure costs . Ms . Wilkerson-Smith referenced project costs and infrastructure gap. Mr. Walz discussed requirements relative to ongoing monitoring and tax increment distribution and said funding allowed for areas slightly outside project area boundaries . 18 - 2 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10 , 2018 The Board expressed concern that participation by other taxing entities was unknown. Mr. Walz said any participation knowledge would not change the Staff recommendation because there would still be remaining burden to Stadler. Discussion followed regarding taxing entity participation not being taken into account by the Finance Committee and the financial analysis still demonstrating a gap. Inquiry was raised regarding typical process, with Mr. Walz stating typically it would involve all participation within the analysis . He said Staff felt the 90o was still warranted even though that information was not originally available . Further discussion followed regarding the 90o participation amount. Director Rogers referenced the map with the outlying CRA area (underneath I-80) and inquired how that would work to ensure fluidity with the Inland Port. Mr. Splan discussed the test track (allows freight line travel) and the shared-use industry spur that connects to the shoreline and would go through Stadler to serve all properties to the west to the Mountain View Corridor. He said open access was included in the purchase agreement for the NWQ and serving everything south of I-80 . He said to serve the area north of I-80 would be a separate conversation. Mr. Muller read a letter from Stadler Rail Chief Executive Officer Martin Ritter (who could not be present) . Summary of the letter (not provided) includes : this project was a tremendous opportunity for Stadler, SLC, and the surrounding communities; encouraging support of a privately-owned company; importance of presence in the NWQ; vision to build state-of-the-art trains by transferring industry leading common sense technology from Switzerland to Utah; development would create skilled jobs, future hiring, infrastructure improvements, road connections, utilities, and state-of-the-art transit solutions; training and education programs in conjunction with local educational facilities to facilitate a skilled workforce; Stadler being committed to the United States market; referencing importance of timing; and encouraging adoption of the CRA and Interlocal Agreement. Director Fowler thanked the RDA and Stadler Staff for the opportunity to meet, tour, and discuss questions . She said the concern was not about the partnership, but the unknown ability to collect tax increment. Mr. Walz said Stadler realized the risk involved. Director Wharton said the Board had previously heard from other businesses that wanted to be included in the area, but were told amending the area could impact legislation. Mr. Walz said Staff heard that some property owners to the south felt they were not included and/or offered the same opportunity. He said Staff had done their best efforts to convey commitment to create additional project areas south of I-80; specifically, with regard to this single property CRA process . He said 18 - 3 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10, 2018 this process was available to any property owner in SLC and was created for the purpose of encouraging business retention and job growth. He said some areas were also within the Inland Port Authority jurisdiction and subject to losing tax increment, but the program was also offered citywide . The Board discussed Senate Bill 234 and its effects . Mr. Walz reviewed the tax increment, allocations, other taxing entities involved, SLC municipal costs of services/average per year, and overall financial benefit goal . He said the program was constructed to ensure not giving away too much tax increment to a use that could create additional City expenses . He discussed this particular project and said the revenue potential was more than the undeveloped area property. Discussion followed regarding the vocational training program (apprenticeship) with the Applied Technology Center in conjunction with Salt Lake Community College . Director Rogers suggested recruitment techniques be associated or partnered with the West High School Science, Technology, Engineering and Math (STEM) Program students . Further discussion followed regarding the wage median comparison, with Ms . Becker stating she was surprised at the consistent high salary range with a low end of $14 hourly. Director Fowler moved and Director Mendenhall seconded to approve Resolution R-12-2018 adopting the Stadler Rail Community Reinvestment Area Plan and Resolution R-13-2018 authorizing the RDA Executive Director to execute the Interlocal Agreement between Salt Lake City Corporation and the Redevelopment Agency committing the City' s increment to the RDA at a 90% participation rate, with the following additional language to be added to the interlocal agreement: City and RDA acknowledge that the City' s commitment of tax increment to RDA for the project area development was subject to the Utah Inland Port Authority' s right to take up to 100% of the tax increment generated within the project area for the purposes set forth in Utah Code 11-58-602, enacted by the Utah Legislature as SB234 in the 2018 Legislative session, which motion carried, all directors voted aye . Director Luke was absent for the vote. #2 . Report and Announcements from the Executive Director. Report of the Executive Director, including a review information items, announcements, and scheduling items. The Board of Directors may give feedback or policy input. Item not held. #3. 2:58:28 PM Report and Announcements from RDA Staff. The Board may review Board information and announcements. The Board may give feedback on any item related to City business, including but not limited to: • Update on Request For Proposals 18 - 4 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10 , 2018 • Scheduling items Mr. Walz provided a quick update on properties, including the 255 South State Street property and the Overniter Motel . Inquiry was raised as to whether Open Houses or tours were being held at these locations, with Mr. Walz stating they could if questions were received and it was warranted. Director Rogers said the market was flush with opportunities and suggested that might be a good way to start marketing. Mr. Walz said there were still tenants in the Overniter and Staff was engaged in relocation efforts . Mr. Walz provided a quick update on property disposition, including Jefferson corner, 156 West 900 South, West Temple Gateway, and 208 West 900 South. The Board requested study materials prior to their upcoming Minneapolis Tour to review projects relative to SLC's State Street. #4 . 3:05:26 PM Report of the Chair and Vice Chair. The Chair may review the minutes of a previous Board meeting. Director Kitchen discussed unintended consequences of SB234 and drafting letter to the taxing entities and those with authority for Inland Port Board Authority. He said draft copies would be distributed and encouraged Board feedback. He encouraged budget feedback if the Board had any thoughts, ideas, or special interests leading into the budget cycle . D. WRITTEN BRIEFINGS None . E. 3:0 6:43 PM CONSENT Director Mendenhall moved and Director Luke seconded to approve the Consent Agenda, which motion carried, all directors voted aye . #1 . Set the date - RDA Budget Amendment No. 4 for Fiscal Year 2017- 18 . The Board will set the date of Tuesday, May 8, 2018 at 2: 00 p.m. to accept public comment about a resolution amending the final budget of the Redevelopment Agency for Fiscal Year 2017-18. View Attachments F. TENTATIVE CLOSED SESSION. The Board will consider a motion to enter into Closed Session, in keeping with Utah Code §52-4-205 for any allowed purpose . 18 - 5 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 10 , 2018 Item not held. The meeting adjourned at 3 : 06 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 pursuant to Utah Code §52-4-203 (2) (b) . This document along with the digital recording constitute the official minutes of the Salt Lake City Redevelopment Agency meeting held April 10, 2018 . clm 18 - 6