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Council Provided Information - 7/22/2022CITY COUNCIL OF SALT LAKE CITY 451 SOUTH STATE STREET, ROOM 304 P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476 COUNCIL.SLCGOV.COM TEL 801-535-7600 FAX 801-535-7651 COUNCIL STAFF REPORT CITY COUNCIL of SALT LAKE CITY TO:RDA Board Members FROM: Ben Luedtke Budget and Policy Analyst DATE:August 9, 2022 RE: Redevelopment Agency (RDA) Budget Amendment Number One FY2023 ________________________________________________________________________________ ISSUE AT-A-GLANCE RDA Budget Amendment Number One includes requested changes to budgets in the West Capitol Hill project area, Depot District project area and the Revolving Loan Fund. Total expenditures are $4.9 million for two items in this amendment. The additional and background information section near the end of this staff report includes project area expiration dates and allowable uses of RDA funds per state law. $1 Million Additional Funding to Complete Marmalade Plaza in West Capitol Hill Project Area The plaza would be located just north of the Marmalade branch library and is surrounded on the other three sides by residential developments. It would serve as a connection point for pedestrian routes through the block in multiple directions. The project is planned to go out to bid later this year. The plaza is currently going through the building permit process. The budget amendment request would add to the existing budget to cover expected increases due to inflation and supply chain issues. There are two sources for the $1 million: -$720,000 from the Revolving Loan Fund which would leave an available to lend balance of nearly $3 million and -$280,000 from the Arctic Court infill housing budget which would need new funding identified for the new single-family home to be built and sold. Note the designs of the home have been finalized and approved by the Historic Landmark Commission. If the additional funding is approved, then the total project budget is estimated at $3,945,600 which is a 34% increase. This project uses RDA funds and City funds. The existing budget includes $1,145,394 of parks impact fees approved by the Council. Policy Question: Maximize Park Impact Fees – The Board could ask the Administration to determine if the project is eligible for additional park impact fees and what is the maximum allowable amount. Using more parks impact fees could avoid defunding the Arctic Court home and/or leave more funding available to lend in the Revolving Loan Fund. Project Timeline: Set Date & 1st Briefing: August 9, 2022 Public Hearing & 2nd Briefing: Sept. 13, 2022 Potential Action: Sept. 13, 2022 Page | 2 $3.9 Million to Purchase Station Center Property in Depot District Project Area Over the years, the RDA has purchased multiple properties in the Station Center area which is defined as two blocks of west downtown located between 500 West to 600 West and 200 South to 400 South. Concepts for the area have included an innovation district, transit-oriented development, new city streets and a festival street. The RDA has a contractual option to purchase three parcels owned by the State of Utah at the corner of 300 South and 500 West (Site #4). Two of the parcels are needed for public right of way to create a new street: Woodbine South. The Administration is proposing the $3.9 million come from the existing $9.5 million budget that has been set aside over the years for public infrastructure projects in the area. This would increase the funding gap for the public infrastructure projects, which is estimated to be $15 million, although that could change. The Administration’s plans are to use proceeds from land sales to fund some of the infrastructure improvements. The infrastructure improvements include creation of new street segments to create smaller block sizes, utility upgrades to allow greater building densities, and Festival Street (300 South) amenities. Station Center Site Plan Map (Three Parcels in Development Site #4 are Proposed for Purchase) Page | 3 Status of RDA’s Station Center Property Disposition The Administration provided the following status update on disposition of the RDA’s Station Center property: “Following a change in leadership and staffing at the University [of Utah], the Agency has continued to coordinate with the new staff as part of their task to become familiar with the joint effort and consultant team’s development of a vision/implementation plan for a community of innovation at Station Center. Despite this pause in the process and discussions, the Station Center project remains a priority for the Agency as we continue to move forward with other aspects of the overall development. It is our intention to finalize the vision and work with potential partners to implement a plan to move the project forward.” Ongoing Maintenance and Programming Costs Maintenance and programming of enhanced assets in Station Center such as the Festival Street (300 South) may become the responsibility of the University of Utah, potentially through an SAA which requires majority property owner support. In October 2020, an SAA analysis estimated the annual cost for maintenance at $425,000. Policy Questions: Timeline for Final Designs – The Board may wish to ask the Administration when final designs for Station Center may be available. Prior designs reached 70% completion but were significantly redesigned starting in 2019. The designs determine the total cost of public infrastructure projects. Transportation Impact Fees to Fill Funding Gap – The Board may wish to ask the Administration how much of the public infrastructure improvements such as the three new streets are eligible for transportation impact fees which could help fill the funding gap. According to the July impact fee report, there is $8 million of available to spend transportation impact fees. The Council is currently considering spending $1.5 million of that in FY2023 CIP. Existing Building Reuse or Demolition – The Board may wish to ask the Administration what the current use of the property is and whether existing buildings would be reused or demolished. ADDITIONAL & BACKGROUND INFORMATION Project Area Expiration Dates Project areas have a designated expiration (aka sunset) date. State law allows RDAs to continue spending tax increment already collected in expired project areas such as Sugar House. Sometimes project areas can be extended/renewed for a longer length which happened to the Central Business District. The table below summarizes project area timeframes from creation to expiration. Project Area Initial Collection Year Last Collection Year Central Business District*†1983 2042 West Capitol Hill**1998 2022 Depot District†1999 2024 Granary District†2000 2025 North Temple†2012 2039 North Temple Viaduct CDA 2012 2037 Northwest Quadrant 2019 2038 Block 70 CDA 2016 2040 Stadler Rail 2019 2038 Block 67 2021 2040 9-Line 2021 2040 State Street 2021 2040 NOTE: Only project areas that generate tax increment are listed in the table *The RDA Board extended the CBD from the original expiration year of 2007 ** The RDA Board extended the original expiration year to focus on 300 West streetscape improvements Page | 4 †In October 2021 the Board approved two-year extensions for these project areas. State law was changed to allow extensions for projects areas negatively impacted by the COVID-19 pandemic Statutory Definition of Project Area Development (Utah Code 17C-1-102(48)) The section of Utah Code below is a key list of allowable uses of RDA funds. The Utah Legislature updated this statute in the 2016 General Session. (47)"Project area development" means activity within a project area that, as determined by the board, encourages, promotes, or provides development or redevelopment for the purpose of implementing a project area plan, including: (a)promoting, creating, or retaining public or private jobs within the state or a community; (b)providing office, manufacturing, warehousing, distribution, parking, or other facilities or improvements; (c)planning, designing, demolishing, clearing, constructing, rehabilitating, or remediating environmental issues; (d)providing residential, commercial, industrial, public, or other structures or spaces, including recreational and other facilities incidental or appurtenant to the structures or spaces; (e)altering, improving, modernizing, demolishing, reconstructing, or rehabilitating existing structures; (f)providing open space, including streets or other public grounds or space around buildings; (g)providing public or private buildings, infrastructure, structures, or improvements; (h)relocating a business; (i)improving public or private recreation areas or other public grounds; (j)eliminating blight or the causes of blight; (k)redevelopment as defined under the law in effect before May 1, 2006; or (l)any activity described in Subsections (48)(a) through (k) outside of a project area that the board determines to be a benefit to the project area. ATTACHMENTS 1. RDA Guiding Framework ACRONYMS CBD – Central Business District CIP – Capital Improvement Program FY – Fiscal Year PIF – Program Income Fund RDA – Redevelopment Agency SAA – Special Assessment Area TBD – To Be Determined 11.24.21 Guiding Framework This Guiding Framework is a strategic operational document outlining the methodology for evaluating and prioritizing projects requesting RDA financial assistance. The RDA’s Mission and Values form the foundation of the Guiding Framework, declaring the RDA’s purpose and the intended economic, social, and physical outcomes expected of RDA projects and partnerships. MISSION: The Redevelopment Agency of Salt Lake City strengthens neighborhoods and business districts to improve livability, create economic opportunity and foster authentic, equitable communities, serving as a catalyst for strategic development projects that enhance the City’s housing opportunities, commercial vitality, public spaces, and environmental sustainability. VALUES: Economic Opportunity- We invest in the long-term prosperity and growth of our local economy. Equity & Inclusion- We prioritize people-focused projects and programs that encourage everyone to participate in and benefit from development decisions that shape their communities. Neighborhood Vibrancy- We cultivate distinct and livable places that are contextually sensitive, durable, connected, and sustainable. PROJECT EVALUATION PROCESS: The RDA prioritizes projects that demonstrate a commitment to the Mission and Values , evaluating projects via three steps, which answer the following questions: 1.) Does the project meet the minimum THRESHOLDS required for RDA participation? 2.) To what degree does the project benefit the public by achieving defined LIVABILITY BENCHMARKS, thereby warranting RDA assistance? 3.) Does the project meet the CRITERIA outlined in existing RDA programs and policies, such as the RDA Loan Program or Tax Increment Reimbursement Program? *Spanning a 1-3 year time frame, Project Area Work Plans identify redevelopment objectives and strategic redevelopment projects for each project area, along with a corresponding schedule & budget for each project. The Project Area Work Plans will be based on relevant City policies and plans and the Project Area Plans that were adopted when the project area was created and will provide direction for the annual RDA budget process. Step 1: THRESHOLDS Alignment with adopted City policies & plans Alignment with RDA Project Area Work Plans* Financial viability with a demonstrated and reasonable need for public assistance Step 2: LIVABILITY BENCHMARKS Economic Opportunity Leveraging Timeliness Return of Investment Permanent Job Creation & Retention Affordable Commercial Spaces Ownership Equity & Inclusion Transit Opportunities Mixed-Income Neighborhoods Neighborhood Safety Community Engagement & Support Housing for Everyone Displacement Mitigation Affordable Housing Preservation Neighborhood Vibrancy Public Space Public Art Architecture & Urban Design Sustainability Walkability Building Preservation, rehabilitation, or adaptive reuse Missing Middle & Unique Building Types Step 3: PROGRAM CRITERIA Evaluation of project according to respective RDA policies, programs and procedures Exhibit A to the Resolution