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06/14/2016 - Minutes MINUTES OF THE 771 st MEETING OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY Tuesday, June 14, 2016 451 South State Street, Room 326 Salt Lake City, Utah 1:00 pm 1. 1:19:16 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 Charlie Luke, Director Erin Mendenhall, Director (via phone, only present for 7.A. discussion) Not Present: James Rogers, Director Also Present: Jackie Biskupski, Executive Director Justin Belliveau, Chief Administrative Officer Others Attending: Ed Butterfield, Senior Project Manager Kort Utley, Project Manager Ben Davis, Project Manager David Arteaga, Project Coordinator 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 Kalli Ruiz, Office Facilitator Louise Garcia, Administrative Secretary Cindy Gust-Jensen, City Council Staff RDA Board Meeting Minutes Tuesday,June 14,2016 Page 2 Jennifer Bruno, City Council Staff Jason Mathis, Downtown Alliance Steve Sparks, Vivint Smart Home Arena Steve Miller, Vivint Smart Home Arena Christine Richmond, Vivint Smart Home Arena Jim Olsen, Vivint Smart Home Arena George Chapman, Salt Lake City Resident Evelyn Everton, Americans for Prosperity Billy Hesterman, Utah Tax Payers Association Jason Mathis, Downtown Alliance Madeline Baker, Salt Lake City Resident Chris Harelson, Salt Lake City Resident Bryon Hill, Gateway Mall Retail Aaron Andersen, Cicero Group Some items may be discussed in an order different than listed on the agenda, time stamps shown indicate when items were discussed. 2. 1:19:43 PM Briefing by the Staff Update on 208 W. 900 So. Ms. Hunsaker stated that Spyhop Productions was selected as the developer for a multi-use facility located at 208 West 900 South. She explained environmental remediation efforts had begun on the site due to petroleum contaminants found in the soil. Ms. Hunsaker said that the excavation would be completed by the end of the month and that any additional treatment would be determined at that time. She also pointed out that this work is being funded by the State of Utah program for underground storage tanks. Life on State Street Grants Ms. Lundmark explained the Redevelopment Agency will match the Wasatch Front Regional Counsel contribution of$15,000 towards the Life on State Street Grant. This Grant will fund a study to evaluate land uses and zoning along the State Street Corridor, and will be useful as a resource in creating the Project Area Plan. Eccles Broadway Announcement Ms. Potter gave an overview of the upcoming and scheduled events at the Eccles Theater. She informed the Board about a significant development with the announcement that the production Hamilton will be coming to the theater in the 2017-18 Season, and that this is generating high interest in Broadway series subscriptions. 3. 1:27:59 PM Approval of the Minutes from the Meeting held May 10, 2016. Director Penfold made a motion to approve the minutes from the meeting held May 10, 2016. Director Johnston seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. View Attachment 4. Report of the Executive Director. RDA Board Meeting Minutes Tuesday,June 14,2016 Page 3 None. 5. Report of the Chair&Vice-Chair. None. 6. 1:29:37 PM Public Comments. Vivint Smart Home Arena George Chapman expressed his concern of the lack of public input regarding the Vivint Smart Home Arena project and felt that discussions and decisions were happening behind closed doors. He added that he felt it was inappropriate for public funds be used to support the business needs of the Miller family. Mr. Chapman said that Salt Lake City's homeless population should instead be the main focus and priority. Evelyn Everton said although she applauded the success of the Miller Group and its efforts to update Vivint Smart Home Arena, she was concerned about using public tax dollars from Salt Lake City to fund the improvements. Billy Hesterman explained that the Utah Taxpayers Association has a long standing position on Tax Increment Financing. These tools should only be used in cases of blight or attracting economic activity that is not already occurring within the State. He said that Utah Taxpayers Association has analyzed the proposal and they are not opposed to the RDA moving forward with the project, due to the Utah Jazz and the Arena bringing significant economic activity to the State. Jason Mathis said he felt that the Utah Jazz is an important component to Salt Lake City's downtown area and its economy. He read a statement prepared by Lane Beattie with the Salt Lake City Chamber supporting and encouraging the RDA support for the Vivint Smart Home Arena Project. Madeline Baker expressed concern about providing a$22 million tax break based on the jobs and revenue it brings to the state. She felt that if the same percentage of support were given to small business owners the capital could be used towards their employees and building renovation needs. Chris Harelson expressed concern about the union between individual corporations and the State of Utah and explained he is opposed to the tax increment reimbursement for the Miller Corporation. Bryon Hill expressed his full support for the project and he felt there would be a positive economic impact to the community. Aaron Andersen offered his full support of the tax reimbursement for Vivint Smart Home Arena. 7. Redevelopment Business Action Items. A. 1:43:26 PM Consideration and Approval of a Term Sheet for a Tax RDA Board Meeting Minutes Tuesday,June 14,2016 Page 4 Increment Reimbursement and Funding Agreement Related to Improvements to the Vivint Smart Home Arena. The Vivint Smart Home Arena Corporation is seeking approval of a term sheet for a Tax Increment Reimbursement and Funding Agreement term sheet related to improvements to the Vivint Smart Home Arena. View Attachment Mr. Davis said Vivint Smart Home Arena Corporation has approached the RDA with a Tax Increment Reimbursement request and Funding Agreement to be used for the renovations to the Arena located on RDA-owned property at 301 West South Temple. The request asks the RDA to provide up to $22,700,000 of tax increment generated by the proposed $125 million project. The Applicant is seeking support from the RDA and possibly other public sources. If approved, support from the RDA would provide 18% of the funding for the arena renovation. He added that the proposed $125 million renovation will update the facility to today's standards for sports arenas, and will include upgrades to the public plaza, safety and security, energy efficiency and environmentally sustainable improvements, and amenities to enhance patron experience. Mr. Davis introduced the following representatives from Vivint Smart Home Arena; Steve Starks, Steve Miller, Christine Richmond, and Jim Olsen. Mr. Olsen and Ms. Richmond presented background on the arena, the economic impact it provides, the proposed upgrades to the property, and a breakdown of the funding request. Vice-Chairperson Kitchen stated that the arena is a facility that is used by people state wide. He felt the State of Utah should participate in the funding of the project and not just the taxpayers of Salt Lake City. He asked if the State would be an additional funding source for the project. Mr. Starks stated that discussions have taken place with the City, County, and State, and all are generally supportive of the project. However, at this time, the State has not yet committed to funding the project, but discussion will continue with them throughout the project. Vice-Chairperson Kitchen said he is concerned with pulling the $6.7 million from other Central Business District accounts to help pay this request. He asked if a loan would be a better option. Chief Administrative Officer Belliveau explained that the magnitude of the need that has been demonstrated by this project would exceed the RDA's lending capacity. The RDA has never approved a loan of that magnitude. Vice-Chairperson Kitchen stated that he felt that the $6.7 million should be covered by the State of Utah, and again encouraged the applicant to seek the State's support for the project. 2:20:28 PM Director Penfold made a motion to approve the Term Sheet for a tax increment reimbursement and funding agreement related to improvements to the Vivint Smart Home Arena (Resolution R-23-2016). Director Luke seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the resolutions adopted. Vice- Chairperson Kitchen was not present for the vote. B. 2:22:52 PM Discussion and Prioritization of Redevelopment Agency Policies. RDA Board Meeting Minutes Tuesday,June 14,2016 Page 5 The Board will review a proposed list of RDA policies that it may wish to evaluate, update, and formulate at upcoming meetings, as well as a proposed timeline for engaging in these discussions. View Attachment Chief Administrative Officer Belliveau presented the following proposed schedule for the discussion of RDA policies: o Icy Prop so ed Thiti - Proposeoard Board Review Adoption 1. Real Property Disposition July 12, 2016 September 13, 2016 2. Budget July 12, 2016 September 13, 2016 3. Loan Forgiveness September 13, 2016 October 18, 2016 4. Loan Review and September 13, 2016 October 18, 2016 Approval Process 5. Role of the September 13, 2016 October 18, 2016 Redevelopment Advisory Committee 6. Interim Use of RDA Real October 18, 2016 November 15, 2016 Property 7. Tax Increment October 18, 2016 November 15, 2016 Reimbursement Program 8. Housing November 15, 2016 December 13, 2016 9. Project-wide Design November 15, 2016 December 13, 2016 Guidelines 10. Use of RDA Funds for December 13, 2016 January 10, 2017 City Infrastructure 11. Cultural Asset December 13, 2016 January 10, 2017 Management After a brief discussion, Board members asked staff to move the Housing and Infrastructure discussions earlier in the year in order to coordinate with the timing of similar discussions with the City Council. Chief Administrative Officer Belliveau said staff would work with the City Council office to coordinate those discussions and shift any other meetings accordingly. C. 2:32:10 PM Public Market Feasibility and Fit Study. Consideration of approval of funds for a Public Market Feasibility and Fit Study. View Attachment Mr. Butterfield introduced a request for funding a Feasibility and Fit Study for the Public Market in the Station Center project. He stated that staff is seeking approval of$175,000 in funds for this purpose, and added that the RDA has partnered with the Downtown Alliance on this project and RDA Board Meeting Minutes Tuesday,June 14,2016 Page 6 that the study will help include recommendations on the ownership, management, and marketing aspects of the project, as well as cost estimates, and parking options for the Public Market. Jason Mathis added that the Public Market and the Farmer's Markets will have a symbiotic relationship, where the Public Market would incorporate the Farmer's Market weekly. 2:43:41 PM Director Penfold made a motion to approve the request of funds for a Public Market Feasibility and Fit Study. Director Luke seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the resolutions adopted. Vice- Chairperson Kitchen was not present for the vote. D. 2:43:58 PM Identification of Ongoing Projects and Associated Funding for the Period from June through October 2016. RDA staff will present a summary of its ongoing projects and funding sources for these projects for the period running through October 2016. View Attachment Chief Administrative Officer Belliveau stated that the Board directed staff to identify ongoing projects and funding sources for the period spanning June 2016 through October 2016. The narrative in the packet describes each ongoing project and its contractual commitment that requires the expenditure of funds during this period, designates the cost center and fiscal year of the account that will be used to fund these expenditures, and also identifies the Board's previous action that approved the use of these funds. Mr. Butterfield added the RDA staff has been coordinating with the City's Finance Department in order to bring the RDA's budget process more in line with the City's process. Chairperson Adams invited Cindy Gust-Jensen and Jennifer Bruno from the City Council Office to join RDA staff members at the presenters table. Mr. Butterfield and Mr. Utley reviewed all of the ongoing projects and funding sources for the Central Business District, Sugar House, West Temple Gateway, West Capitol Hill, Depot District,North Temple, Granary, Program Income Fund, Project Area Housing, and City Wide Housing. Chairperson Adams called for a straw poll on each of the ongoing projects and funding sources within each of the project areas. All Board members supported moving forward with funding the projects identified, except for the following: Central Business District • Gallivan Branding • 222 So. Main Reimbursement Depot District • Station Center -Public Improvements -Marketing RDA Board Meeting Minutes Tuesday,June 14,2016 Page 7 Board members directed staff to bring additional information concerning these items to the July Board meeting. Chairperson Adams requested that staff prepare a future policy discussion concerning the Quiet Zone project and how the RDA can utilize Project Area Housing funds within its project areas. E. 4:32:09 PM 2015/2016 Budget: Consideration and Adoption of the Third Amendment to the Annual Implementation Budget for the Fiscal Year Commencing July 1, 2015 and Ending June 30, 2016. RDA staff will present for the Board's review and approval the third amendment to the Annual Implementation Budget. This amendment acknowledges receipt of tax increment funds for the current fiscal year,finalizes tax increment reimbursement payments, and options of funds for several new and previously approved projects. View Attachment Chief Administrative Officer Belliveau presented the Third Amendment to the 2015-2016 Annual Implementation Budget. 4:47:42 PM Vice-Chairperson Kitchen made motion to adopt the proposed amendment to the Redevelopment Agency 2015-2016 Annual Implementation Budget, (Resolution R-24-2016) as follows: A. Accept, as proposed by staff on May 31, 2016, the proposed reconciliations for actual tax increment received and the revised contractually-obligated reimbursements and payments to entities and other reimbursement recipients. B. Any additional revenue, which is not currently obligated by previously executed contracts, will be directed to an "unappropriated reserve" account to be considered later in the year. C. No SARR funds will be allocated at this time. These funds will be directed to an "unappropriated reserve" account to be considered later in the year when a legal opinion is available. D. That the following changes will be made to the budget amendment proposal prior to adoption: 1. That the staffing document on attachment B be amended to remove reference to the Financial Analyst IV position, and that the administrative budget be adjusted accordingly. 2. That in the spreadsheet titled"Budget attachment A, Reallocation Worksheet..." the expense of"SARR Reallocation" of$525,120 be removed until a legal opinion can be obtained as to the use of SARR funds. E. All excess funds in all project areas will be directed to an"unappropriated reserve" account in those areas, to be assessed later in the year(and as referenced in the motion for the 2016/2017 Budget). 4:47:42 PM Director Penfold seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. RDA Board Meeting Minutes Tuesday,June 14,2016 Page 8 Chief Administrative Officer Belliveau requested confirmation that this motion also intended to exclude the discretionary items listed in the memo. Director Penfold confirmed this to be the case, and asked that RDA Staff to work with the Council Office on the discretionary items not approved if there are any questions. F. 4:52:12 PM 2016/2017 Budget: Consideration and Adoption of the Annual Implementation Budget for the Fiscal Year Commencing July 1, 2016 and Ending June 30, 2017. RDA staff will present for the Board's review and approval the RDA's Annual Implementation Budget for the 2016-2017 fiscal year. View Attachment Chief Administrative Officer Belliveau presented the 2016-2017 Annual Implementation Budget. He explained that, aside from an update to the projected tax increment for Block 70CDA, the proposed budget matches that which was presented to the Board on May 31st. 5:00:57 PM Director Penfold made a two-part motion, he moved that the board approve a basic operating budget for the Redevelopment Agency of Salt Lake City FY 2017 (Resolution R-25- 2016), with the intent that this motion authorizes the Administration to spend only those funds specifically designated by the Board for the basic operational, legally obligated and Board- determined essential expenditures through October, 2016, This includes budget to cover: A. salaries and expenses for Administrative Staff, with the adjustments as outlined below in item G; B. on-going projects approved by the board as of June 30 of 2016 including time sensitive projects outlined in the memo, also the board may wish to go through various project areas and projects to be specific about which projects are in this category; C. on-going project-specific consulting projects as of June 30 2016; D. executed/approved agreements with taxing entities and any other legally obligated payments; E. receipt of revenue as outlined in state law (establishing revenue budgets, not expenditure authority); F. payments on debt previously approved by the board; G. Include the following changes prior to adoption: 1. Administration Budget - Remove references in all spreadsheets, attachments, narratives, and associated budgets to a new Financial Analyst IV position, which is now funded in the City finance department. Increase administrative fees budget to accommodate for payment of half of this position. RDA Board Meeting Minutes Tuesday,June 14,2016 Page 9 2. Administration Budget- Remove references in all spreadsheets, attachments, narratives, and associated budgets to assigning a 0.5 FTE to the Economic Development Department Director position. Based on Council decision during budget amendment#4, and straw poll during the FY 17 annual budget discussion, that position was funded and the FTE was fully allocated in the general fund. 3. Administration Budget—consider a mid-year budget amendment to adjust administrative fees to compensate for the time that will likely be charged to the RDA because of these positions and other City departments as a result of the transition. 4. CBD—that no budget appropriated for Administration, Maintenance or programming of Gallivan be spent on re-branding the Gallivan Center, until further discussion of the board can be held and considered in context with the branding of other nearby RDA-involved public spaces such as Regent Street. 5. Block 70 CDA - Place the revenue from the "City amended interlocal" ($598,891), in a restricted placeholder account to be considered by the board at a later date in conjunction with information from RDA staff demonstrating that those funds are necessary for the payment of debt in that fiscal year, given other actual Block 70 CDA revenues. 6. Various Project Areas - Remove reference to "Tax Refund Liability" 7. Per RDA Agenda item 7D, ongoing projects funded with prior year funding are included only as straw polled by the board. H. Any new applications for loans shall be considered by the board as they are received on a case by case basis until a larger pool of funds can be appropriated for on-going, consistent with to-be-determined board approved policies. Director Penfold further moved that: A. All prior year and ongoing funds associated with the RDA that have been previously allocated, appropriated or otherwise labeled by the RDA Board, staff or Administration be directed to an"unappropriated reserve" account within their project or category area; B. That FY 16-17 revenue of all types that is not specifically appropriated in expenditure budgets by the Board on June 14, 2016 to address expenses shall be placed in these unappropriated reserve accounts within project or category area; C. For the purposes of this discussion, "Unappropriated reserve"means both of the following things: • Funds of the agency that have been recognized and set aside and allocated to a holding account but not approved by the board for a specific project; RDA Board Meeting Minutes Tuesday,June 14,2016 Page 10 • funds of the agency that have been recognized as revenue but have not yet been appropriated by the board for any purpose, sometimes referred to as "fund balance". D. That the RDA Administration provide on or before July 10, 2016 the full list of all RDA accounts/funds together with a clear narrative of the funding source and purpose of the funding as specifically designated by the Board through any designation, set aside, allocation or appropriation. In cases where designations have been made by staff, those designations will be shared with the Board at this same time so that information on all RDA funding, past and present, is available for review of the Board and Executive Director/Mayor(City elected officials). E. That the following will be reviewed further in the coming months and will be formally appropriated through properly noticed budget openings: i. Any funds that have typically been carried over from previous years; ii. Any funds approved for projects in the past, that were not spent or encumbered in the fiscal year in which they were allocated/appropriated; iii. Fund balances for each project area; iv. Loan funds for each project area. 5:00:57 PM Vice-Chairperson Kitchen seconded the two-part motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 5:12:00 PM Vice-Chaiperson Kitchen made a motion that the RDA Board adopt the following guiding policy statements regarding the RDA Budget process and the Board's role in that process: A. That the RDA abide by all processes/procedures outlined in the fiscal procedures act to the extent possible; or follow the base concepts to the extent possible, in consultation with the City Finance Department, City Attorney, Board and Mayor in the event they do not apply, with a goal of increasing consistency and transparency for the Board and public; B. That in keeping with the above statement, the RDA budget, including a full and complete narrative of all accounts and all requests/recommendations, must be presented no later than the date of the Mayor's budget submittal (the first Tuesday in May), and that an operating budget for the following fiscal year shall be adopted by the board no later than June 22nd; C. That all operations funds not spent in the fiscal year for which they were approved shall automatically drop to the "unappropriated reserve" of that project area as of June 30 in that year, and shall not be spent unless/until they are specifically re- appropriated by the Board. This does not apply to specific capital projects, which will be separately identified by the board, to allow for multi-year funding of larger capital projects, or agreements with other taxing entities that stretch beyond the fiscal RDA Board Meeting Minutes Tuesday,June 14,2016 Page 11 year. The concept of"unappropriated reserve" in the context of the RDA shall be equivalent to the concept of"fund balance" in the general fund. D. The above policy language is not intended to impede or interfere with existing contracts with taxing entities and other third parties. 5:12:00 PM Director Penfold seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved. 8. Redevelopment Business Updates. None. 9. Redevelopment Business Written Briefings. None. 10. 5:14:17 PM Consent. A. Utah Paperbox Exclusive Negotiations Agreement Amendment. The Developer for the Utah Paperbox project requests to extend the exclusive negotiation period for 30 days (Resolution R-26-2016). View Attachment B. Benchmark Modern Purchase and Sale Amendment. The RDA Board will consider an amendment to its Purchase &Sale Agreement with Benchmark Modern that would extend the project's outside closing date by 30 days (Resolution R-27-2016). View Attachment Director Penfold made a motion to approve the consent items. Director Luke seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the resolutions adopted. 11. Closed Meeting. None. 12. 5:14:40 PM Adjournment. There being no further business the meeting was adjourned. 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 June 14, 2016.