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Transmittal - 2/24/2023 REDEVELOPMENT AGENCY of SALT LAKE CITY WWW.SLCGOV.COM WWW.SLCRDA.COM WWW.SALTLAKEARTS.ORG MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director STAFF MEMO DATE: February 24, 2023 PREPARED BY: Lauren Parisi, Senior Project Manager & Makena Hawley, Project Manager RE: State Street Community Reinvestment Area (“CRA”) Budget Amendment REQUESTED ACTION: Consider the Adoption of the Proposed State Street CRA Budget as Amended BUDGET IMPACTS: State Street CRA 20-Year Consolidated Budget EXECUTIVE SUMMARY: On August 21, 2018, the Redevelopment Agency Board of Directors (“Board”) adopted the State Street Community Reinvestment Area (“State Street CRA”) plan and budget. Before the Redevelopment Agency of Salt Lake City (“RDA”) can begin to collect tax increment within a project area, an interlocal agreement must be approved by each contributing taxing entity detailing the terms of their participation. Interlocal agreements have now been finalized with all taxing entities contributing to the State Street CRA including Salt Lake City, Salt Lake County and Salt Lake City School District. These agreements were also reviewed and adopted by the Board. The purpose of this budget amendment is to align the State Street CRA budget adopted by the Board in August of 2018 with the terms of the executed interlocal agreements. ANALYSIS & ISSUES: Values within the State Street CRA budget as amended have been updated from the previously adopted budget as noted in the tables below. More specifically, these values reflect a reduced project area term from 25 to 20 years, fewer participating taxing entities (the Salt Lake Library, Salt Lake Metropolitan Water District, Salt Lake Mosquito Abatement District and the Central Utah Water Conservancy District are no longer participating), updated tax increment revenue projections to reflect denser, transit-oriented development patterns and specific terms requested by Salt Lake County. The complete State Street CRA budget as amended to be incorporated in the State Street CRA plan has been included under Attachment A. 2 PROJECTED AMOUNT OF TAX INCREMENT TABLE 2.1: INCREMENTAL PROPERTY TAX REVENUES GENERATED Current Budget – Incremental Tax Revenues - 100% Total - 25 Years Salt Lake County $12,655,703 Salt Lake City School District $32,987,028 Salt Lake City $24,323,930 Salt Lake Library $3,763,083 Salt Lake Metropolitan Water District $1,862,860 Salt Lake City Mosquito Abatement District $912,748 Central Utah Water Conservancy District $2,135,083 TOTAL $78,640,435 Budget as Amended – Incremental Tax Revenues - 100% Total – 20 Years Salt Lake County $24,298,120 Salt Lake City School District $67,790,876 Salt Lake City $48,747,083 TOTAL $140,836,079 PERCENTAGE OF TAX INCREMENT AUTHORIZED TO RECEIVE TABLE 2.3: PARTICIPATION FROM TAXING ENTITIES Current Budget – Taxing Entity Percentage Length Salt Lake County 75% 25 Years Salt Lake City School District 75% 25 Years Salt Lake City 75% 25 Years Salt Lake Library 75% 25 Years Salt Lake Metropolitan Water District 75% 25 Years Salt Lake City Mosquito Abatement District 75% 25 Years Central Utah Water Conservancy District 75% 25 Years 3 Budget as Amended – Taxing Entity Percentage Length Salt Lake County* 100% 20 Years Salt Lake City School District 75% 20 Years Salt Lake City 75% 20 Years *Note: The RDA will collect 100% of Salt Lake County tax increment and pay Salt Lake County a mitigation payment of 25% and an administrative fee of 2% up to a maximum of $156,092. Accordingly, the percentage retained by the RDA will be approximately 73% up to the contribution cap of $8,194,813 or the $8,350,905 including the County Administrative fee as specified in the interlocal agreement. MAXIMUM CUMULATIVE DOLLAR AMOUNT TABLE 2.4: TAX INCREMENT REVENUES TO RDA Current Budget – Incremental Tax Revenues to RDA Total – 25 Years Salt Lake County $9,491,777 Salt Lake City School District $24,740,271 Salt Lake City $18,242,948 Salt Lake Library $2,822,312 Salt Lake Metropolitan Water District $1,397,145 Salt Lake Mosquito Abatement District $684,561 Salt Lake Utah Water Conservancy District $1,601,312 TOTAL $58,980,326 Budget as Amended – Incremental Tax Revenues to RDA Total - 20 Years Salt Lake County* $8,194,813 Salt Lake City School District $50,843,157 Salt Lake City $36,560,312 TOTAL $95,598,282 *Based upon the maximum contribution cap as specified in the County interlocal agreement. REQUESTED ACTION: Pursuant to State Code, the RDA Board must hold a public hearing and should consider adopting the amended budget by resolution. Public notices regarding the budget amendment hearing were sent to all property owners within the State Street project area boundaries on February 6, 2023 and posted on the Utah Public Notice website as well as Salt Lake City’s website. Notices were also sent to the State Tax Commission, Salt Lake County Assessor, Salt Lake County Auditor and all participating taxing entities. 4 PREVIOUS BOARD ACTION: • March 2015: The Board approved a list of several areas to be evaluated and adopted evaluation criteria. • April 2015: The Board shortlisted six potential project areas for further staff analysis. • May 2015: Staff provided a recap of previous policy direction on the project area creation process, including clarification of the potential project area boundaries and the short-list evaluation criteria. • June 2015: Staff provided a written status update on the project area creation process. • August 2015: Staff presented its research on seven short-listed potential project areas to the RDA Board. The Board requested staff return with a matrix to assist in an informed discussion and project area selection prioritization in September. • September 2015: The Board selected the State Street, Ball Park, and 9-Line areas as the top ranked potential project areas. Staff commenced meeting with the Salt Lake City School District and Salt Lake County taxing entities to discuss the three areas and collect feedback on the potential terms of new project areas. • November 2015: The Board amended the State Street project area boundaries to include portions of the Ball Park project area. The Board approved the State Street and 9 Line project areas to move forward in the Community Development Area creation process. • December 2015: The Board authorized staff to proceed with the draft community development area plans for the 9 Line and State Street Project Areas. • April 2016: The Board authorized staff to proceed with the draft community reinvestment area plans for the 9 Line and State Street Project Areas as redefined in Utah Title 17C. • November 2016: Staff presented an update to the Board regarding the State Street and 9 Line proposed project areas, including schedule and scope of work; results of a community outreach campaign; and draft project area redevelopment activities and geographic target areas. • January 2017: Staff presented to the Board regarding the following: the Board’s roles and opportunities for input during the project area creation process, including drafting the project area plan; the basis and components of the project area plans, including the purpose and components of the public benefits analysis; and an updated proposed timeline for next steps in the project area creation process. • February 2017: Staff presented to the Board plan components, including a statement of existing conditions and reasons for selecting the project area. • October 2017: Staff presented to the Board regarding the updated timeline for creating the 9 Line and State Street project areas. • November 2017: Staff provided an update on the Public Benefit Analyses for the proposed 9 Line and State Street Community Reinvestment Areas. • February 2018: The Board adopted a resolution authorizing the expansion of the Community Reinvestment Area boundary for the proposed State Street Project Area. • May 2018: The Board gave preliminary approval of the draft State Street and 9 Line Community Reinvestment Area (CRA) plans, allowing RDA staff to draft legal descriptions of the CRA, provide public notice of 30-day comment period and public hearing, and conduct a second round of community outreach on the draft CRA Plans. • August 2018: The Board approved resolutions adopting the State Street and 9 Line CRA Plans • August 2018: The City Council approved ordinances adopting the State Street and 9 Line CRA Plans. 5 • September 2020: City Council approved resolutions authorizing the terms of the interlocal agreements between the City and the RDA for the State Street and 9 Line CRAs • October 2020: RDA Board approved resolutions adopting the interlocal agreements between the School District and the RDA as well as the City and the RDA for the State Street and 9 Line CRAs • January 2021: RDA Board approved a resolution adopting the interlocal agreement between Salt Lake County and the RDA for the 9 Line CRA • March 2021: RDA Board approved resolution to amend the 9 Line CRA budget • January 2023: RDA Board approved a resolution adopting the interlocal agreement between Salt Lake County and the RDA for the State Street CRA • February 2023: RDA Board set Public Hearing date to approve the State Street CRA Budget Amendment Resolution ATTACHMENTS: Attachment A: State Street CRA Budget Amendment Resolution with Attachment 1 REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO__________ State Street Community Reinvestment Area Budget Amendment RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY AMENDING THE STATE STREET COMMUNITY REINVESTMENT AREA BUDGET WHEREAS, on August 21, 2018, the Redevelopment Agency of Salt Lake City Board of Directors (“Board”) adopted the State Street Community Reinvestment Area (“State Street CRA”) budget, effective at the beginning of the CRA’s funds collection period, in accordance with the requirements of Section 17C-5-302 of the Utah Code. WHEREAS, after the State Street CRA budget was adopted, Salt Lake City, Salt Lake County, and Salt Lake City School District each negotiated and executed interlocal agreements with the Redevelopment Agency of Salt Lake City (“RDA”) in accordance with the requirements of Section 17-5-204 of the Utah Code, which allows the RDA to receive a portion of the taxing entities’ tax increment within the project area for the term of the collection period. WHEREAS, the State Street CRA budget must now be amended to reflect the same terms in the executed interlocal agreements with Salt Lake City, Salt Lake County and Salt Lake City School District. WHEREAS, all conditions precedent to amend the CRA budget have been accomplished. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Redevelopment Agency of Salt Lake City: 1. Purpose. The purpose of this Resolution is to amend the State Street CRA budget, as approved by the RDA Board on August 21, 2018. 2. Adoption of Amended State Street CRA Budget. The amended State Street CRA budget attached as Exhibit A is hereby adopted as the State Street CRA budget and shall be incorporated into the State Street CRA project area plan. 3. Filing of copies of the Budget Amendments. The Salt Lake City Finance Department, on behalf of the RDA, is authorized and directed to certify and file a copy of said budget amendments in the office of the Finance Department, the RDA, and the office of the City Recorder which amendments shall be available for public inspection. Pursuant to Section 17C-5- 305 of the Utah Code, the RDA shall cause a copy of the budget amendments to be filed with the State Tax Commission, the State Board of Education, the state auditor, the Salt Lake County Auditor, and the taxing entities party to the State Street CRA interlocal agreements. 2 Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, Utah, this ___ day of ______________, 2023, to be effective upon adoption. ________________________________ Alejandro Puy, Chair Approved as to form: __________________________________ Salt Lake City Attorney’s Office Allison Parks Date: The Executive Director: ____ does not request reconsideration. ____ requests reconsideration at the next regular Agency meeting. _________________________________ Erin Mendenhall, Executive Director Attest: _________________________ City Recorder January 26, 2023 3 EXHIBIT A TO RESOLUTION [Attach Budget Amendment] STATE STREET PROJECT AREA BUDGET 1 State Street PROJECT AREA BUDGET AS AMENDED Section 2 of this CRA Plan conforms with the requirements of 17C-5-303, and includes the following information: 1) Receipt of Tax Increment a. Base taxable value; b. Projected amount of tax increment to be generated within the CRA; c. Each project area funds collection period; d. Projected amount of tax increment to be paid to other taxing entities in accordance with Section 17C-1-410 (if applicable); e. If the area from which tax increment is collected is less than the entire community reinvestment project area: i. a boundary description of the portion or portions of the community reinvestment project area from which the agency receives tax increment; and ii. for each portion described in Subsection (1)(e)(i), the period of time during which tax increment is collected; f. Percentage of tax increment the agency is authorized to receive from the community reinvestment project area; and g. Maximum cumulative dollar amount of tax increment the agency is authorized to receive from the community reinvestment project area. 2) Receipt of Sales and Use Tax Revenue 3) Project Area Funds to Implement this CRA Plan 4) RDA’s Combined Incremental Value 5) Amount for Administration 6) Property Owned and Expected to Sell STATE STREET PROJECT AREA BUDGET 2 2.1: RECEIPT OF TAX INCREMENT 2.1(a): BASE TAXABLE VALUE • The base year for Salt Lake City and Salt Lake City School District is 2016, with a base taxable value of $889,305,536. • The base year for Salt Lake County is 2021, with a base taxable value of $1,420,601,199. 2.1(b): PROJECTED AMOUNT OF TAX INCREMENT TABLE 2.1: INCREMENTAL PROPERTY TAX REVENUES GENERATED - 20 YEARS Incremental Tax Revenues - 100% Total – 20 Years Salt Lake County $24,298,120 Salt Lake City School District $67,790,876 Salt Lake City $48,747,083 TOTAL $140,836,079 2.1(c): COLLECTION PERIOD The collection period shall be 20 years. 2.1(d): TAX INCREMENT PAID TO OTHER TAXING ENTITIES TABLE 2.2: INCREMENTAL PROPERTY TAX REVENUES TO TAXING ENTITIES - 20 YEARS Incremental Tax Revenues to Taxing Entities Total – 20 Years Salt Lake County $16,103,307 Salt Lake City School District $16,947,719 Salt Lake City $12,186,771 TOTAL $45,237,797 2.1(e ): IF TAX INCREMENT COLLECTION AREA IS LESS THAN CRA BOUNDARY Not applicable; the Tax Increment collection area is the entire CRA boundary. STATE STREET PROJECT AREA BUDGET 3 2.1(f ): PERCENTAGE OF TAX INCREMENT AUTHORIZED TO RECEIVE TABLE 2.3: PARTICIPATION FROM TAXING ENTITIES Taxing Entity Percentage Length Salt Lake County* 100% 20 Years Salt Lake City School District 75% 20 Years Salt Lake City 75% 20 Years *Note: The RDA will collect 100% of Salt Lake County tax increment and pay Salt Lake County a mitigation payment of 25% and an administrative fee of 2% up to a maximum of $156,092. Accordingly, the percentage retained by the RDA will be approximately 73% up to the contribution cap of $8,194,813 or $8,350,905 including the County’s Administrative Fee as specified in the interlocal agreement. 2.1(g): MA XIMUM CUMUL ATIVE A MOUNT RECEIVED B Y THE RDA The maximum cumulative amount to be received and retained by the RDA is as follows: TABLE 2.4: TAX INCREMENT REVENUES RETAINED BY RDA - 20-YEARS Incremental Tax Revenues to RDA Total – 20 Years Salt Lake County* $8,194,813 Salt Lake City School District $50,843,157 Salt Lake City $36,560,312 TOTAL $95,598,282 *Based upon the maximum contribution cap as specified in the County interlocal agreement. 2.2: SALES AND USE TAX REVENUE: Not applicable . 2.3: PROJEC T AREA FUNDS T O IMPLEMENT THIS CRA PLA N TABLE 2.5.1: BUDGET FOR TAX INCREMENT REVENUES FROM SALT LAKE CITY AND SALT LAKE CITY SCHOOL DISTRICT TO RDA - 20-YEARS Activity Percentage Amount RDA Administration & Operations 10% $8,740,347 Income Targeted Housing – Citywide 10% $8,740,347 Redevelopment Activities 80% $69,922,775 Total 100% $87,403,469 TABLE 2.5.2: BUDGET FOR TAX INCREMENT REVENUES FROM SALT LAKE COUNTY TO RDA - 20-YEARS Activity Percentage Amount* RDA Administration & Operations 5% $390,229 Income Targeted Housing – Citywide 23% $1,901,286 Income Targeted Housing – State Street CRA 70% $5,700,258 Environmental Remediation 2% $203,040 Total 100% $8,194,813 *Note: The amount of funds designated to each budget activity shall not exceed the maximum allocation over STATE STREET PROJECT AREA BUDGET 4 the course of the project area term as specified in the interlocal agreement. Per section 4(a) of the interlocal agreement with the Agency, the County has agreed to provide "the lesser of: a) 18% of the Agency's total expenditures for income targeted housing projects in the Project Area; and b) $5,700,258." For example, for this amount to equal $5,700,258, the RDA must spend at least $31,668,199 on income targeted housing projects within the State Street Project Area. If the RDA cannot document expenses of at least $31,668,199 for income targeted housing projects within the State Street Project Area, then the total amount of County tax increment that the RDA may use in the Project Area on income targeted housing may be less than $5,700,258 and will be dictated by the terms of the interlocal agreement. If there are any income targeted housing funds remaining after 2044, the RDA must return those funds to the County as provided in the interlocal agreement. County funds may not be used by the RDA in a revolving loan fund or for any other loan product. The RDA shall implement this plan through the following activities: • REDEVELOPMENT ACTIVITIES: The tax increment expected to be used to carry out project development activities as further described in this CRA Plan. Activities may include, but not be limited to, land acquisition, public improvements, infrastructure improvements, loans, grants, and other incentives to public and private entities. • RDA ADMINISTRATION & OPERATIONS: The tax increment expected to be used to cover the operating costs of administering and implementing the CRA Plan. • INCOME TARGETED HOUSING – CITYWIDE: The tax increment allocation required to be used for housing activities pursuant to Utah Code Section 17C- 2-203, 17C-3-202, or 17C-5-307 for the purposes described in Section 17C-1-412. • INCOME TARGETED HOUSING – STATE STREET CRA: The tax increment expected to be used for income targeted housing projects within the State Street Project Area pursuant to Utah Code 17C-1-412. • ENVIRONMENTAL REMEDIATION: The tax increment expected to be used to pay the costs of environmental assessment and remediation that do not qualify for EPA assistance through Salt Lake Brownfields Coalition Grant program or Wasatch Brownfields Coalition Revolving Loan Fund. STATE STREET PROJECT AREA BUDGET 5 2.4: RDA’S C OMBINED INCREMEN TAL VAL UE TABLE 2.6: RDA’s COMBINED INCREMENTAL VALUE AS OF DATE OF THIS CRA PLAN PROJECT AREA ASSESSED PROPERTY VALUE BASE TAXABLE VALUE INCREMENTAL VALUE SLC CBD In 2,630,997,631 136,894,100 2,494,103,531 Depot District 586,694,437 27,476,425 559,218,012 Granary 126,292,575 48,813,397 77,479,178 North Temple Viaduct 175,640,215 36,499,680 139,140,535 North Temple 139,375,192 84,073,572 55,301,620 Block 70 262,153,766 58,757,937 203,395,829 Stadler Rail 20,357,600 3,710 20,353,890 State Street CRA 1,158,719,413 889,305,536 269,413,877 9 Line CRA 321,647,261 228,048,136 93,599,125 Northwest Quadrant CRA 230,643,587 735,791 229,907,796 COMBINED VALUE $5,652,521,677 $1,510,608,284 $4,141,913,393 2.5: PROJEC T AREA FUNDS USED FOR ADMINISTR ATION The RDA anticipates utilizing between 5-10 percent of the funds captured and retained by the RDA, which is estimated to be $9,130,576. 2.6: EXPEC TED SALE PRICE FOR PROPER TY THE RDA OWNS The RDA does not own property within the Project Area.