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04/23/2019 - Minutes (7) MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 The Board of Directors of the Redevelopment Agency (RDA) of Salt Lake City, Utah, met on Tuesday, April 23, 2019 in Room 326, Committee Room, City County Building, 451 South State . In Attendance: Directors Erin Mendenhall, Amy Fowler, Charlie Luke, Chris Wharton, Analia Valdemoros, and Andrew Johnston. Absent: Director James Rogers Staff in Attendance: Jennifer Bruno, Council Executive Deputy Director; David Litvack, Mayor' s Deputy Chief of Staff; Danny Walz, RDA Chief Operating Officer; Jill Wilkerson-Smith, RDA Deputy Chief Operating Officer; Katherine Lewis, Senior City Attorney; Kort Utley, RDA Senior Project Manager; Cara Lindsley, RDA Project Manager; Tammy Hunsaker, RDA Project Manager; Corinne Piazza, RDA Project Coordinator; Susan Lundmark, RDA Project Coordinator; Jonathan Goates, RDA Project Manager; Jennifer McGrath, Deputy Community & Neighborhoods Development Director; Tom Millar, Transportation Planner; Benjamin Luedtke, Council Public Policy Analyst; Allison Rowland, Council Public Policy Analyst; and Cindi Mansell, City Recorder. Guests in Attendance: Athens Hotel Development Team: Mark Sanford, Director of Development; Robert McIver, Chief Financial Officer; and Scott Howell, Developer. Director Fowler presided at and conducted the meeting. The meeting was called to order at 2 : 07 p.m. A. GENERAL COMMENTS TO THE BOARD 2:07:48 PM Kasandra VerBruggnen, Spy Hop Executive Director, said they looked forward to seeing the 900 South Street Improvement Project become a reality. She discussed being part of the Central 9th Community Neighborhood Area and the desired amenities and improvements that would attract more visitors . She encouraged the Board to approve the 900 South Streetscape and undergrounding improvements . B. PUBLIC HEARINGS #1. 2:09:45 PM RDA Budget Amendment No. 4 for Fiscal Year 2018-19 . The Board will accept public comment about a resolution amending the final budget of the Redevelopment Agency of Salt Lake City for Fiscal Year 2018-19. Budget amendments happen several times each year to reflect adjustments in the Redevelopment Agency's budget, including proposed project additions and modifications. The proposed amendment includes funding for Station Center, streetscape improvements and power line 19 - 1 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 undergrounding on 900 South, a new housing notice of funding availability (NOFA) round, and seed funding for the recently created 9-Line and State Street projects areas, among other changes. View Attachments Director Mendenhall moved and Director Johnston seconded to close the public hearing and defer action to a future meeting, which motion carried, all directors present voted aye . C. REDEVELOPMENT AGENCY BUSINESS #1 . 2:10:34 PM Approval of Minutes . Director Wharton moved and Director Mendenhall seconded to approve the minutes of the RDA Board meeting held Tuesday, March 26, 2019, which motion carried, all directors present voted aye. View Minutes (M 19-6) #2 . 2:10:54 PM Central Ninth Streetscape Improvements and Undergrounding Follow-up. The Board will receive a follow-up briefing about street improvements and power line undergrounding in the Central Ninth neighborhood as part of the West Temple Gateway project area . View Attachments Benjamin Luedtke, Danny Walz, Kort Utley, Tom Millar, and Jonathan Goates briefed the Board with attachments . Mr. Luedtke referenced previous discussion elements, including discussion of consolidation of 10 projects across departments into one large coordinated 900 South project. He said discussion also included a working group to compile a City Policy for undergrounding power lines, along with the possibility of salvaging traffic signals . Mr. Luedtke referenced the chart update of 10 projects showing existing funding, gaps, and current status . He said the plan entailed hiring a consultant team to decrease Staff workload. He addressed the various funding gaps and sources, and caveats on Public Utilities projects in that some were listed as TBD (to-be-determined) because it was too early in the design phase to have refined cost estimates (some of these projects may need to be designed in a closely coordinated versus designed effort) . He said additional utility costs would not be known until further into construction. He reviewed the policy questions on consolidation (periodic updates, potential funding sources to be used to fill the funding gap, etc. ) Mr. Luedtke reviewed the alternative funding chart, and discussion followed regarding including the $1 . 3 million requested in new funding as part of Budget Amendment No. 4 (BAM 4) . Director Johnston expressed concern relative to potential project cost increases . He said he was 19 - 2 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 supportive but was in favor of having that discussion and making a specific plan. Discussion followed regarding allocation of $1 . 3 million and maintenance coming in substantially higher. Director Johnson expressed concern they would be stuck with that allocation and then have to figure out funding for the remainder. The Board discussed that while they supported the consolidated plan idea, there were items/projects/systems that were not necessarily part of what the RDA was doing. Although the Board wanted the project to move forward, they did not want to make commitment for a certain project and then have to back fund additional maintenance or other expenses with General Fund monies . Mr. Walz said there appeared to be a mix up of projects the Board and Council would have . He said as far as approving BAM 4 and the $1 . 3 million, that had already been budgeted/was being held, and was already subject to the approval with the caveat of contingencies to add and Staff would have to return with that amount in order to release funds . He said costs included consolidation, information for future, and maintenance, and the Board would be authorizing Staff to proceed and carry forward with the design. He said it was important to set aside funds so that Staff knew the Board recognized the need to move forward and they had authority to begin compiling design information. The Board expressed concern with continuing to fund cool projects that become extremely expensive to maintain. Discussion followed regarding positives of the consolidation piece, with sentiment expressed that this should be done across the City, and not just for the RDA. Director Mendenhall said there was need for policy and a systematic approach to attaching maintenance, but she did not want to burden the neighborhood with the weight of undone policy. She said that could kill the success and this neighborhood could fail . She said if policy lends to the need to implement a special assessment area like the Central Business District, these businesses could not afford it. She said she would be supportive of making allocations to get through 1000 of the design work in order to have solid numbers . Further discussion followed regarding support of individual Board Members . Mr. Utley explained that Staff would work with Transportation and Engineering for the entire corridor. Mr. Millar_discussed timeframe and explained the consolidated design approach study would begin as soon as the City Council budget amendment (#5) was approved to incorporate funds being received from Salt Lake County. He said it would begin with doing all projects possible beginning this summer and having design finished within a year to ensure any bids were best prices . He said they could move forward with the Request-for-Proposal/advertising, but not the contract selection until the budget amendment was approved. 19 - 3 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 Director Fowler encouraged Staff to figure out a maintenance plan for the entire corridor before returning with design. Ms . Bruno said Mr. Luedtke had forwarded updated information from RDA Staff about Administrative Staff estimates relative to baseline costs for the 9-line Trail (expected typical City maintenance could help form future conversations) . The Board conducted a unanimous Straw Poll in favor of allocating and setting aside the $1 . 316 million requested in BAM 4 for the Central 9th Streetscape Improvements and Undergrounding project, with the understanding Staff would need to return with the maintenance plan and final costs . The Board conducted a unanimous Straw Poll in favor of the consolidated plan proposal as outlined by RDA Staff. #3. 2:53:56 PM RDA Budget Amendment No . 4 for Fiscal Year 2018-19. The Board will receive a follow-up briefing about, and will consider adopting, a resolution amending the final budget of the Redevelopment Agency of Salt Lake City for Fiscal Year 2018-19. Budget amendments happen several times each year to reflect adjustments in the Redevelopment Agency's budget, including proposed project additions and modifications. The proposed amendment includes funding for Station Center, streetscape improvements and power line undergrounding on 900 South, a new housing notice of funding availability (NOFA) round, and seed funding for the recently created 9-Line and State Street projects areas, among other changes. View Attachments Benjamin Luedtke and Danny Walz briefed the Board with attachments . Mr. Luedtke provided a discussion recap from March 26 and said the Board could determine to take action on any/all items today. He referenced the Board' s desire for a maintenance policy. Discussion followed regarding the projects and funding, with Director Mendenhall inquiring how these improvements leveraged other area investments . She said daylighting and trails could offer fabulous comparative information to know going forward when having to consider reductions . Mr. Luedtke reviewed the Folsom Trail, Lucy Avenue, and 300 North Pedestrian Overpass and TIGER Grant funding. He said funding was reduced and the Lucy Avenue project was pulled. He said given the lower funding amount and overall cost increases, the funding shifted. He reviewed relative policy questions (scope reductions, coordination with other projects, and next steps for Daylighting Feasibility Study) and said the Folsom Trail touched upon several RDA projects . Director Mendenhall discussed bonding for catalytic projects in new project areas . Mr. Walz said Staff was not to the level to recommend a specific bond eligible project. He said they had held off until the 19 - 4 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 project areas were established and Staff was definitely interested in hearing ideas as this concept was part of a larger strategy. He said since approval of the Community Reinvestment Area (CRA) , Staff reached out to the County and other districts to initiate their process to initiate interlocal agreements . He said with regards to the School District, they had indicated support of the 9-Line project as proposed, as well as strategies and goals . He said they provided input and comment of what they wanted the RDA to focus on, would encourage housing that would support and be available for families/maintaining those options as well as housing at the area median income (AMI) level targeted for teachers to stay and live in the City. He said for State Street, the School was supportive of the corridor and idea of arterial, opportunities for development, significance of impacts/barriers for school, and wanted to ensure a plan that supported and offset the area. He said they had concern with the size of the State Street Project Area; particularly, the area to the west that becomes more industrial . They did not know if that supported their goals as a School District . He said Staff wanted to return for further discussion with options as to background and history of the project area. Director Mendenhall said there was a lengthy time frame involved in the creation of the State Street Project Area. She said there were preliminary discussions with the School District, and going forward, she wanted to have conversation about incorporating those taxing entities into more of the development process (at least for updates along the way) . She said these could be opportunities for leadership to hear where they were at in the process (more regular and frequent communication) . Mr. Walz said Staff involved them on the process and idea, but did recognize that deeper conversations or negotiations were necessary in the development of that plan. Director Mendenhall inquired about fund balance for Project Areas with ongoing funding obligations . She said when discussing operations and maintenance, she wanted a summary of ongoing obligations per project area. Mr. Walz said this was an ongoing question with Finance and split into two different types of funding and obligation reserves . He said the bulk of obligations were bonding for Eccles Theater and the Central Business District . He said that was information Staff hoped to return to the Board for discussion on the potential for debt service obligations shortfall . He said reimbursement agreements were generally tied to tax increment and others tied to more specific properties . He said ideally, the Agency would have reserve (similar to the General Fund) but should target and verify an amount relative to policy. Ms . Bruno said although the RDA was not governed the same as the City (best practices/good financial management and not State Law requirements) , it made sense to consult with the Finance Department and possibly operate the same as the City from a financial practice . 19 - 5 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 Director Johnston discussed light pole banners and community interest to replace light-pole banners along North Temple and other neighborhoods . He said he wanted to see a process, partnership, cost estimates, or future discussion for this concept. He said the issue was not purchase of the banners, rather placement, access or maintenance. He said for a small funding amount, this could build morale for the project areas and payoff in public goodwill . Director Valdemoros inquired as to the $4 . 5 million housing Notice of Funding Availability (NOFA) for Areas of High Opportunity. Mr. Walz said nothing submitted had been viable, and Staff was prepared to present options to go forward (relative to not having success) . Discussion followed regarding various marketing efforts . Director Valdemoros inquired as to expanding the Adaptive Reuse Grant Program. Mr. Walz said Staff was proposing additional funding because the program had been very successful in terms of accomplishing the purpose of targeting adaptive reuse of buildings . He said Staff would consider variations or continuation of this program. Director Wharton moved and Director Mendenhall seconded to approve Resolution R-4-2019 approving Budget Amendment No. 4 as proposed by Administration contingent upon Administration returning to the Board with a proposed maintenance funding plan for the Central 9c' Streetscape Improvements as well as an update on final project costs, which motion carried, all directors present voted aye. Director Rogers was absent and Director Johnston was not present for this vote. #4 . 3:22:21 PM Union Station Hotel Loan for $7 million. The Board will be briefed about, and will consider adopting, a resolution that would approve the term sheet for the loan of up to $7 million to Athens Hotel Development, LLC for construction of a hotel located at 18 North Rio Grande Street. View Attachments Danny Walz and Cara Lindsley briefed the Board with attachments . Mr. Walz said this exciting opportunity could activate, restore, and adaptively reuse the Union Pacific Depot (cornerstone of original Gateway Plan) . Ms . Lindsley provided an overview and background of the project : boutique hotel, 210-225 guest rooms, ground floor of Union Station Building would be historically preserved and renovated to include a restaurant and spaces on the ground floor as well as signature hotel suites, cost $80 million, and developers anticipated breaking ground in 2020 with less than a two-year construction timeframe . She provided a financial overview of the project and loan terms, stating the applicant anticipated attracting about 600 of loan to cost from its senior lender 19 - 6 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 and was also anticipating a commitment of approximately $25, 000, 000 . She said gap financing would be $7, 000, 000 (about 9%) through the RDA Loan Program. Inquiry was raised regarding the gap financing percentage, with Mr. Walz stating they typically prefer to be under 10% . He further discussed how that determination was made when considering scope, gap, and public benefit. He said relative to collateral and guarantees, this project was different in that collateral on structures themselves included over 300 equity commitment, 60o traditional financing, as well as a corporate guarantee . Director Mendenhall discussed public benefit and transit alternatives . She said proximity adjacent to TRAX was a natural when considering a multi-model transit approach. She said perhaps not for this loan, but she wanted more detail or stringency regarding what transit alternatives qualified as public benefits . She inquired if there were guarantee regarding a hotel' s maintenance of a transit program for employees (not just create but maintain) . Mr. Walz said Staff was considering not just transit, but all public benefits across projects . Director Mendenhall said the design process put mechanical factors in place . Mr. McIver provided a quick overview of the site plan and renderings to provide project context. He said the Athens Group were excited about the opportunity to redevelop and re-energize the train station. Director Wharton inquired as to thoughts to engage/enhance the Gateway or contribute to the area (in addition to visitors staying at the hotel or taking the train) . Mr. McIver said they anticipated and needed to be the center of activity for the community. He said the current Grand Hall was open from 10-5 (yet appeared closed/not inviting) . He said as an active hotel, these hours would be vastly expanded, including food and beverage options, gatherings, fun activities within the Grand Hall (envisioned as a flexible space that could be used for different purposes throughout the year) . He said the ultimate goal was to create an upscale boutique hotel that provided a level of sophistication as well as interactive fun that was lacking in the SLC lodging market today. He said the historic nature of the Union Station Building provided great competitive advantage for long-term viability that could not be replicated. He said the project was envisioned to be a great return for the community as well as investors . Director Johnston discussed the renderings and building placement (circular east/west elevation/missing front historic tie) . Mr. McIver said the result was the best they could possibly provide on the existing space available while meeting all site plan requirements . 19 - 7 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23, 2019 Director Valdemoros moved and Director Luke seconded to approve Resolution R-5-2019 approving the term sheet for the loan to Athens Hotel Development, LLC for construction of a hotel located at 18 North Rio Grande Street, which motion carried, all directors present voted aye. #5. 4:01:12 PM Project Area Creation Priorities. The Board will be briefed about project area creation priorities. A primary function of the RDA Board is to create community reinvestment areas, otherwise known as CRAs or project areas. The Board will discuss the prioritization of new and extended project areas currently under consideration, and will receive an update on the 9-Line and State Street project areas. View Attachments Danny Walz and Susan Lundmark briefed the Board with attachments . Mr. Walz said this was part of an ongoing conversation. He said Staff proposed ideas in February 2018 and received Board direction on finalizing and creating the 9-Line, Northwest Quadrant, and State Street areas . He said it was time to return to the Board for direction. Ms . Lundmark reviewed the Project Area Creation Overview (13 total, 3 in process, 10 potential ideas) . Inquiry was raised as to the number of additional projects that could be completed with additional Staff. Mr. Walz said there were variables associated with each project, but he would guess 3-5 additional projects . He said Staff was asking and encouraging the Board to review the list, ask questions off line, and be prepared to conduct a meaningful discussion regarding top priorities . #6. 4:08:15 PM Guiding Framework and Project Evaluation Process. The Board will be briefed about RDA Staff's proposed guiding framework and evaluation process for prioritizing various redevelopment projects. The intent of the framework would be to clarify the organization's purpose and outline a methodology for prioritizing projects that align most closely with the RDA's goals. In addition, Staff is seeking input on a project evaluation process that would help determine a project's priority level based on the public benefits it creates. View Attachments Director Fowler said this item had been pulled from the agenda due to timing. She encouraged the Board to read through the report, come up with questions, and be prepared to provide input next month. #7 . Report and Announcements from the Executive Director. Report of the Executive Director, including a review of information items, announcements, and scheduling items. The Board of Directors may give feedback or policy input. None . 19 - 8 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23, 2019 #8 . 4 :09:34 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: • National Development Council Training; • Public Market Feasibility Study; • RDA Anniversary Monday June 10, 2019 - 50 year anniversary; and • Scheduling Items . #9 . Report of the Chair and Vice Chair. None . D. WRITTEN BRIEFINGS None . E. 4 :11:01 PM CONSENT Director Luke moved and Director Wharton seconded to approve the Consent Items as presented, which motion carried, all directors present voted aye . #1 . Set Date - Resolution: Budget for the Redevelopment Agency of Salt Lake City for Fiscal Year 2019-20 . The Board will set the dates of Tuesday, May 21 , 2019 and Tuesday, June 4, 2019 at 7: 00 p.m. to accept public comment and consider approving a resolution adopting the final budget for the Redevelopment Agency of Salt Lake City, Utah for Fiscal Year 2019-20. View Attachments F. (TENTATIVE) CLOSED EXECUTIVE SESSION. The Board will consider a motion to enter into Closed Session, in keeping with Utah Code §52-4- 205 for any allowed purpose . Item not held. The meeting adjourned at 4 : 11 p .m. Redevelopment Agency Chair Secretary 19 - 9 MINUTES OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY TUESDAY, APRIL 23 , 2019 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 23, 2019 . clm 19 - 10