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HomeMy WebLinkAboutUpdated Resolution - 3/13/20251 COMMUNITY REINVESTMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. ___________ Pickle & Hide Tax Increment Reimbursement Agreement RESOLUTION OF THE BOARD OF DIRECTORS OF THE COMMUNITY REINVESTMENT AGENCY OF SALT LAKE CITY APPROVING A TAX INCREMENT REIMBURSEMENT AGREEMENT WITH MOUNTAIN WEST DEVELOPMENT, LLC FOR ITS PICKLE AND HIDE DEVELOPMENT WHEREAS, the Utah Housing and Transit Reinvestment Zone Act (HTRZ Act) was enacted to further a number of objectives including promoting a higher utilization of public transit and increasing the availability of housing including affordable housing. WHEREAS, on November 8, 2023, and pursuant to Utah Code Section 63N-3-605, the state’s Housing and Transit Reinvestment Zone Committee conditionally approved the CRA’s 900 South Housing Transit Reinvestment Zone (Project Area). WHEREAS, pursuant to the Act, the Salt Lake City Community Reinvestment Agency (CRA) administers the tax increment, including entering into reimbursement agreements (also known as tax increment reimbursement agreements) with project developers or property owners associated with an HTRZ Committee approved Housing and Transit Reinvestment Zone (HTRZ) for the purpose of utilizing the funds as allowed by the HTRZ Act. WHEREAS, pursuant to CRA Resolution No. R-16-2023, the CRA has established a tax increment reimbursement policy for Housing and Transit Reinvestment Areas (TI Policy) that sets forth the policies and procedures for entering into an Agreement with developers. WHEREAS, Mountain West Development, LLC (Developer) intends to develop land at approximately 800 South and 400 West within the Project Area (Property) and more particularly described in Exhibit B, with a mixed-use affordable housing development known as Pickle & Hide which incorporates affordable housing and adaptive reuse of historic buildings. WHEREAS, Developer submitted an application for tax increment reimbursement for its Picke & Hide project which CRA staff determined meets the TI Policy’s threshold requirements. WHEREAS, on February 12, 2025, the CRA Finance Committee evaluated Developer’s application materials and other documentation, and based on that evaluation, recommended to the Board that the Board approve a reimbursement of HTRZ increment from the Property to Developer in the maximum amount of $6,094,254. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY, that the term sheet for the tax increment reimbursement between the CRA and Developer which is attached hereto as Exhibit A is hereby approved. 2 The Board hereby authorizes the Executive Director to negotiate and execute a tax increment reimbursement agreement with Developer pursuant to the terms of the attached term sheet. The documents shall also incorporate such other terms as recommended by the Salt Lake City Attorney’s Office. Passed by the Board of Directors of the Salt Lake City Community Reinvestment Agency, this _______ day of March 2025. ________________________________ Darin Mano, Chair Approved as to form: __________________________________ Salt Lake City Attorney’s Office Jennifer Huntsman Date:____________________________ The Executive Director: ____ does not request reconsideration ____ requests reconsideration at the next regular Agency meeting. ________________________________ Erin Mendenhall, Executive Director Attest: ________________________ City Recorder 2/28/2025 3 EXHIBIT A Mountain West Development, LLC Tax Increment Reimbursement Agreement TERM SHEET Parties: Mountain West Development, LLC (“Developer”) and the Community Reinvestment Agency of Salt Lake City (“CRA”) Scope: The Pickle and Hide development is a mixed-use project located in the CRA’s 900 South HTRZ to be constructed in two phases located at approximately 739 S. 400 West. Phase I includes the renovation of the Bissinger Co. Hides building, including the preservation of its front façade and a portion of its side walls for a total of 40% of the exterior, to accommodate 5,500 square feet of commercial space and a multifamily addition to the rear. The residential addition will include 141 units, 28 of which are affordable at 60% of the area median income (AMI) and below and 26 of which are affordable at 80% AMI. Phase II includes the renovation of the Utah Pickle Co. building to accommodate 17,000 square feet of commercial space as well as the renovation of the existing building known as Ed’s Restaurant located at 345 W. 700 South for additional commercial space. Each of the buildings include an activated ground floor use where at least 50% of the ground floor, street- facing building facades contain an active use not exclusive to building tenants. The Developer has provided sufficient evidence that tax increment is necessary for the project to succeed to subsize a portion of revenue loss from affordable rental rates and increased buildings costs associated with adaptive reuse projects. Property: Developer desires to carry out development activities on three existing parcels including P.I.N.s: 15-12-130-037, 15-12-130-034, and 15-12-130-03. Legal descriptions to be included within final agreement. CRA Participation: The CRA will agree to reimburse the Developer 90% of the annual tax increment (“TI”) the CRA is entitled to receive from the taxing entities, subject to the terms of the Reimbursement Agreement, for a term of 15 years or the sum of the remaining collection years of the Housing and Transit Reinvestment Zone, whichever is less. To obtain this 90% reimbursement, the project has included three additional public benefits above and beyond the CRA HTRZ Tax Increment Reimbursement policy’s thresholds, each worth an additional 10% reimbursement including: 1) Adaptive Reuse 2) Walkability 3) Neighborhood Commercial and Services (FY25 annual housing funding priority) Maximum Reimbursement The maximum amount available for reimbursement shall be $6,094,254 (“Maximum Reimbursement”). The annual TI Payment may be lower or higher than the projected amount based on actual increment generated from the Property, provided, however, the maximum total amount of the Reimbursement shall not exceed the Maximum Reimbursement. 4 CRA Policy Waivers 1. Section 2.c.i. of the CRA’s HTRZ Tax Increment Reimbursement Program Policy that requires a deed restriction be recorded against the property to ensure housing affordability for a minimum term of 30 years may be waived and reduced to a minimum term of 15 years. 2. Section 3.a.b. of the CRA’s Sustainable Development Policy that requires emission-free building operation for all adaptive reuse projects receiving over $900,000 in CRA funding may be waived for the designated restaurant spaces in Phase I and Phase II of the project to accommodate gas stovetops. The rest of the project must comply with the policy and operate without on-site fossil fuel combustion. 3. Section 4.a.ii. of the CRA’s Sustainable Development Policy that requires projects to achieve “on-site net zero” operation may be waived; however, the project must achieve “off-site net zero” standards in this requirement’s place at the level described as part of the conditions of approval. Conditions for Agreement Execution: 1. CRA approves all terms of the agreement. 2. Developer must submit a Statement of Energy Design Intent for both the “Pickle” and “Ed’s Restaurant” buildings achieving a score of 90 or higher, or, provide evidence the buildings achieve an Energy Use Intensity (EUI) value corresponding with this score. 3. Developer must participate in Rocky Mountain Blue Sky renewable energy program at a level to cover energy needs for the commercial space, common areas, and parking garage a part of Phase I of the project for a minimum contribution of $350 a month. 4. Developer must submit a copy of the executed easement granting public access to the midblock walkway between the Pickle and Hide building. 5. Developer obtains all required City approvals. 6. Developer and CRA execute legal documents as deemed necessary by the CRA and its legal counsel. 7. Developer receives approval from the CRA and its legal counsel of all matters pertaining to title, legality of the request, and the legality, sufficiency, and the form and substance of all documents that are deemed reasonably necessary for the transaction. 8. Such other terms as recommended by the CRA’s legal counsel and staff. 5 EXHIBIT B Pickle & Hide Development – Legal Description PARCEL 1: A PARCEL OF LAND LOCATED IN LOT 6, BLOCK 12, PLAT A, SALT LAKE CITY SURVEY, SAID PARCEL BEING DESCRIBED MORE PARTICULARLY AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 6, AND RUNNING THENCE NORTH 89°56'38" EAST 121.00 FEET ALONG THE NORTH LINE OF SAID LOT 6; THENCE SOUTH 0°01'22" EAST 212.00 FEET; THENCE SOUTH 89°58'39" WEST 121.01 FEET TO A POINT ON THE WEST LINE OF SAID LOT 6; THENCE NORTH 0°01'09" WEST 211.93 FEET ALONG SAID WEST LINE TO THE POINT OF BEGINNING. PARCEL 2: A PARCEL OF LAND LOCATED IN LOTS 4, 5 & 6, BLOCK 12, PLAT A, SALT LAKE CITY SURVEY, SAID PARCEL BEING DESCRIBED MORE PARTICULARLY AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID LOT 4, SAID POINT ALSO BEING THE SOUTHWEST CORNER OF SAID LOT 5, AND RUNNING THENCE SOUTH 89°56'39" WEST 5.42 FEET ALONG THE WEST EXTENSION OF THE COMMON LINE OF SAID LOTS 4 AND 5 TO THE EAST RIGHT OF WAY LINE OF 400 WEST STREET; THENCE NORTH 0°00'58" WEST 147.30 FEET ALONG SAID RIGHT OF WAY LINE; THENCE NORTH 89°54'38" EAST 170.43 FEET TO A POINT ON THE EAST LINE OF SAID LOT 5, SAID POINT BEING SOUTH 0°01'09" EAST 185.22 FEET ALONG SAID EAST LINE FROM THE NORTHEAST CORNER OF SAID LOT 5; THENCE SOUTH 0°01'09" EAST 29.21 FEET ALONG THE EAST LINE OF SAID LOT 5; THENCE NORTH 89°58'39" EAST 121.01 FEET; THENCE NORTH 89°56'38" EAST 44.00 FEET TO A POINT ON THE EAST LINE OF SAID LOT 6, SAID POINT BEING SOUTH 0°01'21'' EAST 212.00 FEET ALONG SAID EAST LINE FROM THE NORTHEAST CORNER OF SAID LOT 6; THENCE SOUTH 0°01'21" EAST 118.11 FEET ALONG SAID EAST LINE TO THE SOUTHEAST CORNER THEREOF; THENCE SOUTH 89°56'39" WEST 190.31 FEET ALONG THE COMMON LOT LINES OF SAID LOTS 4, 5 & 6; THENCE SOUTH 0°00'05" WEST 30.11 FEET; THENCE NORTH 76°31'25" WEST 67.50 FEET; THENCE SOUTH 80°00'58" WEST 75.23 FEET TO A POINT ON THE WEST LINE OF SAID LOT 4; THENCE NORTH 0°00'58" WEST 27.29 FEET ALONG SAID WEST LINE TO THE POINT OF BEGINNING. PARCEL 3: A PARCEL OF LAND LOCATED IN LOTS 3 & 4, BLOCK 12, PLAT A, SALT LAKE CITY SURVEY, SAID PARCEL BEING DESCRIBED MORE PARTICULARLY AS FOLLOWS: BEGINNING AT A POINT ON THE WEST LINE OF SAID LOT 4, SAID POINT BEING SOUTH 0°00'58" EAST 27.29 FEET ALONG SAID WEST LINE FROM THE NORTHWEST CORNER OF SAID LOT 4, AND RUNNING THENCE NORTH 80°00'58" EAST 75.23 FEET; THENCE SOUTH 76°31'25" EAST 67.50 FEET; THENCE NORTH 0°00'05'' EAST 30.11 FEET TO A POINT ON THE NORTH LINE OF SAID LOT 4; THENCE NORTH 89°56'39'' EAST 107.80 FEET ALONG THE NORTH LINE OF SAID LOTS 3 & 4; THENCE SOUTH 0°01'15" EAST 165.06 FEET; THENCE SOUTH 89°56'40" WEST 247.54 FEET TO A POINT ON SAID WEST LINE OF LOT 4; THENCE NORTH 0°00'58" WEST 137.76 FEET ALONG SAID WEST LINE TO THE POINT OF BEGINNING.