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07/12/2016 - Minutes MINUTES OF THE 772nd MEETING OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY Tuesday, July 12, 2016 451 South State Street, Room 326 Salt Lake City, Utah 1:00 pm 1. 1:09:50 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 Not Present: Charlie Luke, Director Also Present: Jackie Biskupski, Executive Director Justin Belliveau, Chief Administrative Officer Others Attending: Ed Butterfield, Senior Project Manager Ben Davis, Project Manager Jill Wilkerson-Smith, Project Manager David Arteaga, Project Manager Cara Lindsley, Project Coordinator Susan Lundmark, Project Coordinator Tammy Hunsaker, Project Coordinator Amanda Holty, Marketing and Communications Coordinator Jim Sirrine, Property Manager Katherine Lewis, Legal Counsel Crayola Berger, Accountant II Jolynn Walz, Office Manager Kalli Ruiz, Office Facilitator Katherine Potter, Eccles Theater Manager Teresa Beckstrand, Finance Department RDA Board Meeting Minutes Tuesday,July 12,2016 Page 2 Cindy Gust-Jensen, Salt Lake City Council Lynn Pace, Senior Advisor Mayor's Office Jeff Tumlin,Nelson Nygaard Phil Olmstead,Nelson Nygaard 2. 1:10:06 PM Briefing by the Staff None. 3. 1:10:13 PM Approval of the Minutes from the Meeting held May 31, 2016 &June 14, 2016. Director Johnston made a motion to approve the minutes from the meeting held May 31, 2016 and June 14, 2016. Vice-Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. View Minutes (May 31) and View Minutes (June 14) 4. 1:10:42 PM Report of the Executive Director. None. 5. 1:10:50 PM Report of the Chair& Vice-Chair. Chairperson Adams suggested that Board members may need to meet more than once a month when crucial items need to be addressed or the quantity of items is too excessive for one agenda/meeting. 6. 1:12:36 PM Public Comments. None. 7. Redevelopment Business Action Items. A. 1:12:49 PM 2016/2017 Budget 1) Public Hearing for Adoption of the First Amendment to the 2016/2017 Annual Implementation Budget The RDA Board will hold a Public Hearing to accept comments from the public regarding the proposed First Amendment to the 2016-2017 RDA Budget. View Attachment Chairperson Adams opened the public hearing for the adoption of the First Amendment to the 2016-2017 Annual Implementation Budget and called for public comments. Director Penfold made a motion to close the public hearing. Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 2) 1:14:59 PM Review and approval of the Proposed First Amendment to the Annual Implementation Budget for the Fiscal Year Commencing July 1, 2016 and Ending June 30, 2017. The RDA Board will review and approve the proposed First Amendment to the 2016/2017 Annual Implementation Budget. View Attachment RDA Board Meeting Minutes Tuesday,July 12,2016 Page 3 Chief Administrative Officer Belliveau explained that the First Amendment identifies appropriations for ongoing expenditures that were discussed at the June 14, 2016 Board meeting, as well as certain other ongoing expenditures that had been identified since that meeting. Chief Administrative Officer Belliveau presented the following information that was requested by the Board. Chief Administrative Office Belliveau presented the First Amendment to the 2016/2017 Annual Implementation budget and per the Board's request provided additional information on the following projects: Central Business District -Gallivan Branding -222 South Main Reimbursement Depot District -Public Improvements and Marketing Chief Administrative Office Belliveau explained that when considering the adoption of the proposed budget amendment, it is important to point out the following additional obligations that were identified in the weeks following the June Board meeting: Central Business District: o Gallivan Utah Center-the proposed budget amendment includes an appropriation of $35,000 to fund unforeseen façade renovation costs related to work that must be completed to fulfill contractual commitments to tenants. West Temple Gateway: o Central 9th Development-the proposed budget amendment includes an appropriation of $45,000 to fulfill the final payment related to the RDA's purchase of the property located at 865-867 S 200 W that must be made by September 2017. Director Penfold requested that language be added to the RDA loan applications and agreements that prohibits the appeal of the property assessment. He recommended that the Board hold additional policy discussions on the matter. Director Penfold asked that going forward, Staff include dollar amounts on the spreadsheet with the descriptions of the funding requests. He added that a discussion on temporary property expenses (TPE) should be had and recommended that each project area cover its own TPE. Director Mendenhall asked for a future policy discussion on the Program Income Fund and its uses. Director Penfold made a motion to adopt the First Amendment to the 2016/2017 Annual Implementation Budget (Resolution R-28-2016). Vice-Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. RDA Board Meeting Minutes Tuesday,July 12,2016 Page 4 B. 1:34:23 PM Consideration and adoption of a Resolution of the Board of Directors of the Redevelopment Agency of Salt Lake City authorizing the preparation of a Draft Community Reinvestment Project Area Plan for the Northwest Quadrant Project Area. The Redevelopment Agency requests that the Board consider adopting a Resolution authorizing the preparation of a Draft Community Reinvestment Project Area Plan as the first step in the creation of a Northwest Quadrant Community Reinvestment Area. View Attachment Mr. Butterfield introduced Lynn Pace, Senior Advisor to the Mayor. Mr. Pace presented information on a proposed new Northwest Quadrant Project Area. Mr. Pace explained that with the relocation of the State Prison the State of Utah has offered the City an opportunity to expand its economic development initiative west of the airport. Mr. Pace stated that if the Resolution is approved it would allow the City to share in the vision of development in the quadrant that would otherwise be left to the State's discretion. He added that the RDA would be the financing side of the process of the project area. Mr. Pace emphasized the importance of having a funding mechanism, and the RDA as a critical tool in the financing. Director Penfold expressed concern about approving the resolution prior to the public hearing for this project area. Mr. Butterfield assured the Board that the Resolution is solely to draft the project area plan and that no formal action could be taken without returning to the Board first. He stated that the timeline from now through September would begin with a public benefit analysis and an economic analysis, after which discussions will begin with the taxing entity partners to determine the amount of tax increment available for the area. Director Penfold asked about the existing two new project areas and how this may affect Staff's availability. Chief Administrative Officer Belliveau stated that this area would take priority over the creation of the two new project areas, however once the Northwest Quadrant is formally created it may not require as much Staff attention. He added that he felt any current project areas should not be effected. Director Rogers commended Staff for their efforts and expressed urgency in moving forward on approval of the project. Executive Director Biskupski urged the Board to quickly move forward to retain the control of the development of the Northwest Quadrant area. Director Penfold stated that he wanted to make sure this was done in conjunction with the Master Plan process. Director Rogers made a motion to adopt a Resolution authorizing the preparation of a Draft Community Reinvestment Project Area Plan for the Northwest Quadrant Project Area (Resolution R-29-2016). Vice-Chairperson Kitchen seconded the motion. Director Mendenhall suggested that there be some exploration of expanding Staff to sufficiently cover all project area needs. Upon roll call, Chairperson Adams declared the motion unanimously approved. RDA Board Meeting Minutes Tuesday,July 12,2016 Page 5 C. 1:55:33 PM Consideration and Adoption of a Resolution to Negotiate an Agreement with the Joint Venture of Hines Interests Limited Partnership and the LaSalle Group for the Redevelopment of RDA-owned Property Located at 144 and 156 South Main Street The Board will consider entering a new Exclusive Negotiations Agreement for the development of the Utah Theater property located at 144 and 156 South Main with a joint-venture to be formed between the LaSalle Group and Hines Interests Limited Partnership. View Attachment Mr. Davis said that in December 2015 the Board approved an Exclusive Negotiation Agreement with the LaSalle Group for the property located at 144 and 156 South Main. That agreement has since expired and Staff is seeking to enter into a new Exclusive Negotiations Agreement with the LaSalle Group, which would include a joint-venture with Hines Interests Limited Partnership as the lead. Mr. Davis explained that both parties are working closely with the Utah Heritage Foundation(UHF)to ensure that the renovation of the Utah Theater portion of the property meets UHF's preservation easement requirements, and are committed to activating Main Street. Director Rogers expressed his appreciation for the new agreement. Director Penfold made a motion to enter into an Exclusive Negotiation Agreement with the joint- venture of Hines Interests Limited Partnership and the LaSalle Group for the Redevelopment of RDA-owned Property Located at 144 and 156 South Main Street (Resolution R-30-2016). Director Rogers seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. D. Policy Discussion 1) 2:00:30 PM Discussion and Formation of a Real Property Disposition Policy Preliminary Review of Policies for Disposition of Real Property Staff will present an overview of proposed policy updates to inform a discussion on the RDA's real property disposition policy. View Attachment Mr. Arteaga stated that due to the recent Bylaw changes, many of the RDA policies need to be revised. One of the priority policies requiring revision is the RDA's Real Property Disposition. He explained that Staff has been working closely with legal counsel as well as researching disposition methods employed by other RDA's across the Nation to create the framework for the new policy in order to better coordinate with the separation of powers outlined in the revised Bylaws. Mr. Arteaga said that the RDA's land disposition policy has been drafted to reflect the unique role of the RDA in revitalizing, redeveloping and encouraging economic development in its adopted project areas. Mr. Arteaga presented the draft Property Disposition Policy and the following framework steps: 1)Administration&Approval Process; 2) Scope; 3) Categorization; 4) Reporting; 5) Methods of Disposition; and 6) Sales Price. Mr. Arteaga added that the final structure of this policy would hopefully become a catalyst for the RDA to accomplish its mission in a more efficient way. Chairperson Adams asked Staff to elaborate on the property Categorization and how a property would be designated into the two tiers. Mr. Arteaga detailed two tiers: RDA Board Meeting Minutes Tuesday,July 12,2016 Page 6 A. Tier 1 Real properties that are RDA-owned and meet at least one of the following definitions: a. Property is specifically identified in an adopted Salt Lake City master plan. b. Property is a parcel or parcel assemblage that totals two (2) or more contiguous acres in size. c. Property is listed on the local or national register of historic places as historically significant. d. Property is fronting or adjacent to city-owned property of at least 0.5 acres in size. B. Tier 2 Real properties that are RDA-owned and are not otherwise included in Tier 1. Director Mendenhall stated that she is concerned there may not be the correct checks and balances between the Executive and Legislative branches. Mr. Arteaga said there would be several reporting mechanisms in place to create the appropriate checks and balances. Ms. Hunsaker explained the reporting framework for each category of property. A semiannual report would be provided for Both Tier 1 and Tier 2 properties. Additional reporting requirements would be triggered for Tier 2 properties. This would include an update to the Board at the following steps of the disposition process: pre-disposition, developer selection, and development agreement. Ms. Hunsaker proceeded to explain the proposed methods of disposition,which would be either competitively marketed or exclusively negotiated. Regardless of the method of disposition, staff would ensure that the disposition process supports city master plans and policies, RDA strategic plans, and affordable housing needs. Methods of competitively marketing property include RFQ, RFP, or marketing the property on an open-ended basis. An exclusively negotiated sale would only be available only under one of the following criteria: a. The property is landlocked. b. Sale to an adjacent property owner to facilitate redevelopment objectives as defined in a project area strategic plan. c. Sale to a non-profit or governmental agency for a community development or public use. d. Sale of property that has been competitively offered with no competitive responses received. e. Sale of property that has previously been used as a right of way that is no longer required. f. Property exchanges to facilitate redevelopment objectives as defined in a project area strategic plan. Chairperson Adams questioned whether or not the RDA would be too restrictive in options for disposition if the disposition policy is tied to RDA strategic plans. Ms. Hunsaker explained the proposed process for determining sales price during the disposition process. The sales price of the property would be fair market value as determined by an Agency- commissioned appraisal. Property may be discounted below fair market value to support the RDA Board Meeting Minutes Tuesday,July 12,2016 Page 7 implementation of project area strategic plans, and discounts would be subject to approval by a majority vote of the Board if a property is to be sold at a discount greater than 10% off of appraised fair market value. After a brief discussion, Director Penfold requested that staff provide additional information on the need for and benefits of a property categorization system that classifies each RDA-owned property as either Tier 1 or Tier 2. Ms. Hunsaker stated that staff would return with the information at the next Board meeting. 2) 2:17:14 PM Discussion and Formation of Policy concerning the Redevelopment Agency's Annual Budget. The Board will discuss the formation of policy that will govern the Agency's annual budget, and may consider adopting a resolution or to defer action to a future meeting. View Attachment Chief Administrative Officer Belliveau explained that as a part of the recent changes to the Agency's bylaws, the RDA Board identified and prioritized a series of policies to be revised. The budget policy ranked as a high priority. He said that the primary objective of the budget policy revision is to align the RDA budget process and practices with those related to Salt Lake City's Budget. In an effort to draft a budget policy, staff researched existing Agency budget practices, Salt Lake City budget ordinances, and the best practices of Redevelopment Agencies throughout Utah. Chief Administrative Officer Belliveau stated staff is proposing changes to several aspects of the RDA's budget. He presented the following: 1) Utah Fiscal Procedures Act The RDA is not currently obligated to comply with the Utah Fiscal Procedures Act, however, its budget practices have been consistent with the act. The purpose of the budget policy is therefore to clarify that conformance with the act is required, but should have no practical impact on how the RDA establishes its annual budget, other than to ensure that it will be prepared,presented, and administered in a manner that is consistent with the rest of the City's budget. Staff from the Department of Finance will also be closely involved to ensure that terminology and practices related to budget preparation, as well as purchasing and procurement practices align with the City's, and will advise staff and the Board on any exceptions that may apply to the RDA. 2) Budget Presentation The RDA budget will include a full and complete narrative of all accounts and will be presented to the Board as a component of the Mayor's submittal of the City budget on the first Tuesday of May. Currently, the RDA initiates is budget process on a distinct track from the rest of the City's budget. Incorporating the RDA's budget as part of the City's will promote greater alignment of resources and collaboration among various City Departments and Divisions in achieving goals in RDA project areas. RDA Board Meeting Minutes Tuesday,July 12,2016 Page 8 3) Operations Funds Funding for ongoing contractual obligations and commitments, as well as for projects or other activities anticipated to be commenced and funded during the fiscal year, will be established through appropriations identified as "Operations Funds." The appropriation of Operations Funds when the budget is established would provide the Agency the ability to expend these funds without further authorization from the Board of Directors. Any Operations Funds that are unspent at the end of the fiscal year will become part of a reserve, identified as "Unallocated Budget" and will not be available for expenditure until re- appropriated by the Board. Currently, the RDA's practice is that funds designated for a particular project retain that designation, regardless of whether the funds are expended. Consequently, the RDA's financial statements include numerous project accounts that contain unspent funds. The proposed budget policy will eliminate that potential, and will improve the legibility and transparency of the RDA's financial reports. 4) Capital Project The Board may designate certain RDA projects that will require funding over several years as a "Capital Project." The Board may allow for multi-year funding for designated capital projects, the funding of which may stretch beyond the fiscal year in which the initial capital project's account was created. These initiatives will be clearly identified as such on the RDA's financial statements and in the budget narrative in order to promote transparency. This will be further advanced by creating a single cost center for a Capital Project to which funding will be allocated and from which expenditures will be made each year. It is currently the RDA's practice to establish a new cost center each time that a particular project is funded, the result of which is that there may be several cost centers associated with one particular project on the RDA's financial statements. The budget process would also allow the Board and the Mayor the opportunity to re- appropriate funding from a particular Capital Project account to a different RDA project. This would involve the Board making policy findings providing reasons why the previously- funded Capital Project is no longer necessary for project area development. Director Mendenhall expressed her appreciation of the proposed changes. Director Johnston made a motion to approve the Policy concerning the Redevelopment Agency's Annual Budget(Resolution R-31-2016). Director Mendenhall seconded the motion. Upon roll call, Vice-Chairperson Kitchen declared the motion unanimously approved. Chairperson Adams was absent for the vote. E. 2:23:30 PM Amendment to UPAC (Utah Performing Arts Center) Operating Agreement RDA Board Meeting Minutes Tuesday,July 12,2016 Page 9 The Board will discuss the proposed Amendment to the UPAC Operating Agreement that will extend the Salt Lake County Center for the Arts'role as Operator of the Eccles Theater, now limited to the main performance hall and its support spaces, to include all spaces within the Eccles Theater. The Board may adopt a resolution to approve this Amendment or defer action to a future meeting. View Attachment Ms. Potter explained that Staff is seeking an amendment to the UPAC Operating Agreement, which would to extend the role of the Salt Lake County Center for the Arts (CFA)to be the Operator for the entire Eccles Theater, incorporating UPAC Site as well as UPAC Building. Ms. Potter highlighted the terms of the agreement and stated that the Utah Performing Arts Center Agency Board recommends the authorization of the CFA as the Operator of the UPAC Site, to best fulfill the ongoing facility needs to effectively manage UPAC. Director Penfold voiced concern about an ongoing five year commitment as listed in the terms for the RDA and/or City to fund any deficit from UPAC Site operations on an annual basis. He recommended having termination revision as a fail-safe if there were to be a reoccurring operational deficit. Director Penfold made a motion to adopt the resolution approving the amendment to the UPAC Operating Agreement, provided that legal language be incorporated in the contract which allows the opportunity to renegotiate or terminate, if there is an operational deficit. Director Rogers seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. (See July 19, 2016 minutes for resolution- Resolution R-32-2016) 8. Redevelopment Business Updates. A. 2:42:01 PM Presentation of the Downtown and Sugar House Parking Study Representatives from Salt Lake City Transportation and Nelson Nygaard will present the Downtown and Sugar House Parking Study. View Attachment Ms. Wilkerson-Smith reminded the Board that the RDA funded $90,000 for a Downtown/Sugar House Parking Study during its 2013-2014 budget process. She said the study, undertaken by Salt Lake City's Transportation Division identifies existing parking conditions and states recommendations for future parking strategies in both Downtown Salt Lake City and Sugarhouse. She introduced Jeff Tumlin and Phil Olmstead of Nelson Nygaard to give a brief presentation of its findings. Mr. Tumlin presented a summary of the Downtown and Sugar House Parking Study and explained that the finalization of the study should be complete in August 2016. Mr. Tumlin suggested coordinating both privately owned and City owned parking by governing them both through one association, such as the Downtown Alliance and/or the Sugarhouse Business/Merchants Association. Salt Lake City Transportation will propose recommended next steps to the City Council in the Fall. B. 3:35:03 PM Presentation and Summary of RDA Financial Statements RDA Board Meeting Minutes Tuesday,July 12,2016 Page 10 RDA staff will provide an overview of all accounts indicated on the RDA's Financial Statements as of May 31, 2016. View Attachment Chief Administrative Officer Belliveau stated that at the June 14th meeting, the Board requested a full list of all RDA accounts and an explanation of the funding sources and purposed project funding designated by the Board and/or RDA Staff, so that the information on all RDA funding, past and present, is available for review by the Board and Executive Director. Chairperson Adams noted that the SARR account was not included in the financials. Chief Administrative Officer Belliveau explained that it had been an oversight by Staff, and added that the SARR funds had been set aside until the City Attorney's Office could identify options and the potential uses of those remaining funds. Director Mendenhall explained that after reviewing the RDA financials, she felt there was approximately$4.5 million that could be used toward affordable housing and asked that Staff return at the September meeting with a proposal for identifying funds that could be invested on the east side of Salt Lake City for this purpose. Director Rogers agreed. 3:57:44 PM Director Penfold made a motion to reopen the Budget Amendment to discuss the affordable housing funds. Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 9. Redevelopment Business Written Briefings. A. 4:00:16 PM Status Report on RDA Loan Portfolio Semiannually, staff provides an update to the Board on the current status of the Agency's loan portfolio. View Attachment B. 4:00:20 PM Gallivan Center Expenditure Summary for Retail Space Repairs and Marketing The memorandum provides a summary of costs associated with Gallivan Avenue repair projects and a Phase 1 marketing project. View Attachment C. 4:00:25 PM Summary of Pending Tax Appeal for 222 South Main Written briefing describing the RDA's 2014 and 2015 tax increment 0 reimbursement to the owners of 222 South Main. View Attachment Chairperson Adams stated that there were three written briefings provided by RDA Staff She asked if any of the Board members had questions. There were none. 10. Consent. A. 4:00:36 PM Consideration and Approval of an Amendment to the Exclusive Negotiations Agreement Regarding the Redevelopment of RDA-owned Property at 340 West 200 South. (Note: No resolution was prepared by RDA/Legal) The Board will consider extending the Exclusive Negotiations Agreement with the joint-venture of PEG Development and Clearwater Homes for the redevelopment of the Utah Paperbox property located at 340 West 200 South. View Attachment RDA Board Meeting Minutes Tuesday,July 12,2016 Page 11 Director Penfold made a motion to approve the Consent Agenda. Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 11. Closed Meeting. 4:00:55 PM A. Consider Adopting A Motion To Enter Into A Closed Meeting In Keeping With Utah Code To Discuss Pending Litigation and/or The Acquisition/Disposition Of Real Property and/or Attorney-Client Matters That Are Privileged Pursuant To Utah Code Ann. § 78b-1-137(2). Director Mendenhall made a motion to enter into a closed meeting to discuss matters of pending litigation and/or the acquisition/disposition of real property and/or attorney-client matters and that the Board meeting would stand adjourned at the conclusion of the closed meeting. Director Rogers seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. The closed meeting of the Board of Directors of the Redevelopment Agency of Salt Lake City was held at the City and County Building, 451 South State Street, in Room 326 at 4:06 PM on Tuesday, July 12, 2016. 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; Andrew Johnston, Director; James Rogers, Director; Erin Mendenhall, Director; Stan Penfold, Director. The following Board member was not in attendance Charlie Luke, Director. The following members of the staff of the Redevelopment Agency of Salt Lake City were present: Jacqueline Biskupski, Executive Director; Justin Belliveau, Chief Administrative Officer; Crayola Berger, Accountant II; Jolynn Walz, Office Manager; Kalli Ruiz, Office Facilitator; Tammy Hunsaker, Project Coordinator. Others present: Tom Berggren, RDA Legal Counsel; Katie Lewis, Legal Counsel; Margaret Plane, Legal Counsel; Kate Bapson, Legal Counsel; Cindy Gust-Jensen, Salt Lake City Council Office; Jennifer Bruno, Salt Lake City Council Office; David Litvack, Deputy Chief of Staff; Patrick Leary, Chief of Staff; Lara Fritts, Economic Development Director. The Board discussed the acquisition/disposition of real property and attorney client matters that are privileged pursuant to Utah Code. There being no further business, Chairperson Adams called for a motion to exit the closed meeting. Director Rogers made a motion to exit the closed meeting, Vice-Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the closed meeting. The meeting was adjourned at 4:30 PM. 12. Adjournment. There being no further business the meeting was adjourned. RDA Board Meeting Minutes Tuesday,July 12,2016 Page 12 Lisa R. Adams, Chairperson This document along with the digital recording constitute the official minutes of the Redevelopment Agency of Salt Lake City Board of Directors meeting held July 12, 2016.