Body
Department of Development
Reference: Third Amendment to the Comprehensive Agreement with Prairie Center
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Prepared By: Marv Falconburg, Assistant City Manager of Development
Date Prepared: May 12, 2015
OVERVIEW
Attached, for your consideration is an Ordinance amending the Comprehensive Funding Plan for Prairie Center. The original Comprehensive Funding Plan, Master Development Agreement, Pre-Annexation Agreement, and Intergovernmental Agreement was approved in December of 2005. Two amendments have taken place since the original adoption to address specific issues that have arisen.
The Comprehensive Agreement provides for, among other things, the establishment of a Cap Amount for the Primary Public Improvements for the Unincorporated Property and the incorporation of an overall adjusted Cap Amount for the Primary Public Improvements for the Project in connection with the Unincorporated Property to the City through an amendment to the Comprehensive Agreement. Prairie Center has built approximately $100,000,000 in infrastructure at this time. "Primary Public Improvements" as specified in the Comprehensive Agreement consist of the following categories:
· Major and minor arterial streets, together with associated landscaping and trails
· Collector streets, together with associated landscaping and trails
· Traffic signals
· Certain potable and non-potable water distribution and transmission lines
· Certain sanitary sewer collection lines
· Regional drainage detention facilities
· Capital facilities, regional parks, extraordinary additions to landscaping, community parks, neighborhood parks, trails and open space
Summarized below are highlights of the provisions in the Third Amendment:
The City and the Developer have determined that the development of residential housing in Prairie Center will help create a catalyst that will benefit retail development and retail sales in Prairie Center. In connection with Phase One of a proposed residential development of approximately 333 homes in Prairie Center Residential Village One, the City has determined to provide certain one-time concessions to help facilitate retail development. The 333 homes represent approximately 7.3% of the total residential homes of 4,500 proposed for Prairie Center.
The Third Amendment to Comprehensive Agreement contains the following provisions that are designed to facilitate the development of Phase One of residential housing in Prairie Center and re-energize retail development:
a. The City currently collects approximately $40,000 in various building and permit fees in connection with a residential home. Under the Third Amendment, the City will provide a rebate to Prairie Center Metropolitan District of various fees and taxes collected in connection with the application for a building permit or certificate of occupancy in the total amount of $2.5 million, or approximately $7,500 per home, subject to annual appropriation by the City. The City would retain approximately $32,500 of building and permit fees per residential home in Phase One, or a total of approximately $10.75 million for Phase One. The rebates would be granted with respect to a portion of the Building Permit Fee, the Traffic Impact Fee, the Bridge/ Crossing Impact Fee and Use Taxes collected by the City in connection with the construction of each home in Phase One. The Bridge/Crossing Impact Permit Fees that would be rebated would be in the total approximate amount of $200,000 and would be applied by the District to reimburse costs incurred by the District in connection with the underpass that has been constructed at 144th and Buckley. The Traffic Impact Fees that would be rebated would be in the total approximate amount of $500,000 and are expected to be applied by the District to the future construction of 148th Avenue/Telluride Road. The remaining fees and taxes would be rebated from the Building Permit Fees and Use Taxes, and do not need to be allocated to a specific public improvement.
b. Under the Comprehensive Agreement, the Developer is currently obligated to provide a loan to the City in the amount of $7.5 million, at an interest rate of 5.00%, to finance improvements at the Adult Recreation Center after one million square feet of retail space within the project has been constructed, leased and occupied. The loan would be repaid by the City from the 0.25% Credit PIF Revenues that are generated by the retail sales at Prairie Center and attributable to the City's Parks and Recreation Capital Improvement Fund (the "0.25% Park and Rec Credit PIF"). The loan from the Developer in the amount of $7.5 million was to be used to construct the first phase of the Adult Recreation Center. However, the City has already financed the first phase of the Adult Recreation Center in 2009 through the issuance of Certificates of Participation and this facility is currently in operation. Under the Third Amendment, upon meeting the one million square feet threshold, at the City's request, the Developer would be obligated to loan the City $2.5 million, at an interest rate of 5.00% and payable from the 0.25% Park and Rec Credit PIF, and the City would apply the proceeds of the loan to design and construct phase two of the Adult Recreation Center.