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HomeMy WebLinkAboutPACKET Town Board Study Session 2007-12-11TOWN BOARD STUDY SESSION Tuesday, December 11, 2007 5:30 p.m. - 6:30 p.m. Room 201/202/203 170 MacGregor Ave. AGENDA 1. Town Board goal: Extend Urban Renewal beyond 2008. Reasons — Randy Repola and Wil Smith 2. The process of extending the Urban Renewal Authority — Jim Windholz, EPURA Attorney 3. Progress report — Lee Sammons and Wil Smith 4. Possible first project beyond 2008: Riverwalk extension and other amenities relative to the Elkhorn Lodge development 5. Decisions to be made by Town Board — EPURA Chairman Gerry Swank emo To: From: Date: Subject: Mayor Baudek and Town Trustees Randy Repola December 7, 2007 EPURA Study Session Administration Background The Estes Park Urban Renewal Authority has begun the process necessary to extend, or reconstitute the Urban Renewal Authority. However, the final decision will be up to the Town Board. During the study session staff and EPURA leadership will present the case for an extension of the entity. The material enclosed is only a portion of that which will be covered in the study session; other materials will be distributed and discussed Tuesday evening. Some time ago you each received a copy of the blight study conducted earlier in the year. It would be useful to bring that along with you to the study session. If you do not have a copy, please let us know and we will print one for you prior to the meeting. 0 N 69 0 $12,240,000 0 0 Moraine frontage, $750,200 Piccadilly Square Riverside $714,200 frontage, through to Moraine y o U cn O �' U • ^' 1111 Elkhorn lodge and downtown businesses Shops within structure and adjcaent properties Cleave Street frontage aJ f;2 r Q• r1 �R , ay� An allocation for upgrades and improvements to the Riverwalk. Includes projects previously listed as Tregent Park, Elkhorn Extension and Park Theatre Mall, plus unspecified future projects. Create a pedestrian link between douwtown and Elkhorn Lodge redevelopment Decking the Wiest parking lot and possible retail on ground level. Construction and design challenge Plan has been done. Make one way, add angle parking. Could spur redevelopment Elkhorn to Piccadilly Square Old houses, could combine w/Moraine frontages to create two level development Riverwalk Improvements and Enhancements West Elkhorn Streetscape Wiest Lot Parking Improvements Cleave Street Parking and Streetscape Moraine Avenue Streetscape Improvements West Riverside Drive Streetscape Improvements ~ CV t' I 4 kV ; 0 11/30/2007 "Jodo 0 (4 Cr)7 -0 Q $178,548 CD 2 00 oo a No direct private $8,400,000 development, broad -based improvement to district, increased visitation and expenditures Broad -based benefit throughout the district 9 .§ Broad -based benefit throughout the district Private redevelopment in the innediate area ,§ \ Q 2 cat g © 2 2 \ 7. ' .\ 6 o a o © cn / '\ 2 0.4 In town transit stop could use some amenities and definition. Is this EPURA role? Depends on long telui future of shuttle -both local and into RMNP Revitalize Bond Park as as gathering/events place and transit hub. Was to be a part of redevelopment of commercial propertied, but that deal fell through. Still a need to repair sidewalks and opportunity to add amenities. DSW did a plan but needs funding. Can CVB fund not EPURA? Largest possible assemblage for commercial development Fairgrounds as a site for events facility. EPURA role could expedite financing a facility Transit -related Amenities Bond Park Improvements Virginia Drive Streetscape Improvements Signage Plan Route 7 Area Improvements Stanley Park Improvements (EPURA Participation) . . k q d 11/30/2007 AA 4,44 6 ae '44,44 ;42r,p Ili/ 3-0 firo., 5"F � 3r k% a f �>s � ff5 �f�pa ,l§ O O O O O 00000 CM a) OP-' V) W O O ,— 00 N N Vl P-, Broadbased benefit throughout the district 00I`i7£I$ :Apado.zd 000`8IZ$ :sores Reconfiguration Sales: $292,000 of intersection? Property: $74,900 �sjr rid; 4Syf'g�(}: Riverwalk improvements, West Elkhorn connection Moraine Ave Streetscape Grants or loans to individual property owners or tenants Complementary, not catalytic, i.e. negotiated agreement a ' 7 of S fg Public improvements tied to redevelopment agreement. How Riverwalk connects to and through the property Public improvements tied to redevelopment agreement. Contunued inpprovement and maintenance of propertires in the core of downtown to protect the investment of past EPRUA actions Public improvements tied to redevelopment agreement. Pedestrial connnections through the site Public improvements tied to redevelopment agreement. Elkhorn Lodge Development Piccadilly Square Facade Maintenance and Improvements Lot 4 Development, Stanley Historic District Steamer Drive Intersection TO: Wil Smith, Executive Director Estes Park Urban Renewal Authority FROM: J. Lee Sammons Sammons/Dutton LLC DATE: November 2, 2007 SUBJECT: Estimation of Future Tax Increments Memorandum In this memo we deal with two separate types of tax generation: that due to baseline growth and that attributable to specific private development projects envisioned. The baseline growth is that which may occur in the district as a result of the widespread benefit of the public improvements such as streetscape, riverwalk and parking elements in the evolving plan. As applied to the sales tax, this is an "increment" only in the sense that it is over and above the projected tax level in 2008. Unlike the property tax, it is not a legally dedicated stream of funds for EPURA. It is the Town's revenue, and how much it chooses to direct toward EPURA's operations and projects is subject to negotiation, policy decisions, and ultimately an Intergovernmental Agreement (IGA). In a sense, the sales tax "increment" could be considered over the old base set in 1983, but for purposes of this analysis, we have considered it as if it resets in 2008. In this baseline growth, we do not consider any baseline growth in the property tax, since that legally resets to zero next April on the twenty-fifth anniversary of forming the district. In theory, any increase in value of existing properties would be offset by a decrease in the mill levy under the terms of the TABOR amendment. Therefore any property tax increment would come from new development or expansions. The second source of increment would come from those specific projects which we expect to be carried out by the private sector, which will benefit from EPURA's actions under the plan and may or may not seek additional assistance from EPURA: Elkhorn Lodge, Piccadilly Square, Lot 4, and SAMMONS/D UTTON LLC 1 Memorandum the area around Steamer Drive. The increment generated from these projects would, of course, be a part of the total increment available to EPURA, but it is useful to look at them separately in evaluating any specific improvement related directly to that project. Baseline Sales Tax Increment The sales tax generated within the EPURA has grown steadily since the district was foiiiied in 1983. As shown in Table 1, sales taxes within the district have grown from about $950,000 in 1983 to nearly $4.0 million in 2006, resulting in an "increment" of over $3.0 million. The EPURA district now accounts for 59 percent of the total sales tax collections in the Town. Of course, only a small portion of this increment has been designated for EPURA's use —about $200,000 per year recently. SAMMONS/D UTTON LLC Table 1. Historical Tax Increment, EPURA District Tax Increment District Total Property Annual Sales Tax Tax Sales Tax Growth 1983 949,008 1984 88,732 72,446 1,037,740 9.3% 1985 212,287 89,839 1,161,295 11.9% 1986 368,429 133,763 1,317,437 13.4% 1987 550,028 186,897 1,499,036 13.8% 1988 682,736 239,971 1,631,744 8.9% 1989 637,375 320,303 1,586,383 -2.8% 1990 834,649 352,151 1,783,657 12.4% 1991 1,129,088 332,902 2,078,096 16.5% 1992 1,292,265 307,633 2,241,273 7.9% 1993 1,344,354 307,238 2,293,362 2.3% 1994 1,614,835 291,537 2,563,843 11.8% 1995 1,671,997 317,762 2,621,005 2.2% 1996 1,773,008 335,855 2,722,016 3.9% 1997 1,865,420 396,948 2,814,428 3.4% 1998 2,286,297 394,677 3,235,305 15.0% 1999 2,377,959 472,892 3,326,967 2.8% 2000 2,478,520 496,650 3,427,528 3.0% 2001 2,694,320 552,201 3,643,328 6.3% 2002 2,542,834 588,748 3,491,842 -4.2% 2003 2,694,320 630,103 3,643,328 4.3% 2004 2,763,072 671,457 3,712,080 1.9% 2005 2,851,440 757,673 3,800,448 2.4% 2006 3,033,508 858,809 3,982,516 4.8% Source: Town of Estes Park Memorandum We can expect continued growth in this underlying sales base. Adjusted for inflation, the sales tax within the district increased by a compound annual average rate of 3.45 percent over the 23-year period. However, much of the growth in the early years was due to the completion of Stanley Village, the Town's largest shopping center, anchored by Safeway, the Town's only supermarket. Looking at sales tax growth only since 1991, after Stanley Village was essentially complete, the inflation -adjusted, compound annual growth rate was 1.75 percent. Since this factors out Stanley Village, we can interpret this as a baseline amount of growth in sales tax due to increasing sales volumes in existing stores, expansions, and scattered new construction on smaller sites. SAMMONS/DU'1'1'ON LLC 3 Memorandum Projecting this rate of growth into the future, the total sales tax generated within the district would be $6.5 million in 2033 (the end of the next 25-year cycle) and an increment of $2.2 million over the projected 2008 base. Of course, as in the past, little of the increment would need to be or is likely to be directed to EPURA projects, but it does demonstrate the ability of the district to generate substantial revenue for the Town, arguably as a result of its past and potential future actions. Development Project Related Tax Increments To the base sales tax increases we can add the taxes generated by specific development projects anticipated in the future. While there may be some double counting in that the projects may share in the base growth rather than adding to it, we have accounted for most of that by factoring out Stanley Village from the growth trend. (Collectively the projects are about twice the size of Stanley Village). Property tax increments are determined solely on these projects; although that is a conservative approach as there will undoubtedly be other new construction and expansions in other locations throughout the district. To aid in projecting the sales and property taxes generated by the development projects, the Town provided a tabulation of the aggregate sales tax and property tax generated by all businesses in each of two case -study projects: Stanley Village as representative of a community -oriented commercial area, and a full block along Elkhorn Avenue as representative of a more tourist -oriented area. The results are shown in Table 2 below. SAMMONS/D UTTON LLC Memorandum Table 2. Tax Generation, Representative Land Acres Building Square Feet Sales Tax Elkhorn Block 3.10 135,100 Total $388,284 Per Square Foot $2,87 Assessed Value Total $5,278,000 Per Square Foot $39.07 Projects Stanley Village 13.91 125,592 $1,219,946 $9.71 $4,047,830 $32.23 Source: Town of Estes Park As shown, the two areas are similar in terms of the assessed value per square foot of building space, but vary widely in sales tax generation per square foot. That is likely because of the seasonal nature of the businesses along Elkhorn and the presence of the high -volume Safeway store and other businesses more oriented toward the year-round population at Stanley Village. Note that these are averages over the entire center and block and as such include a mix of office and service establishments in addition to retail and restaurant businesses, which is appropriate as we use these figures to estimate the performance of future projects that will have similarly mixed tenancy. These figures were not used directly, but as a basis for choosing a reasonable, rounded figure for each of the development projects. The next step in the analysis is to estimate the characteristics of the development projects. In the case of the Elkhorn property redevelopment, we have used preliminary figures provided by the developer (at the EPURA board meeting October 17, 2007). For the other projects we have assumed a floor area ratio (FAR) of 0.25 square feet of building space for every 1.00 square feet of land area, applied to the size of each parcel. The Elkhorn redevelopment assumes 40 apartment units and 60 lodge rooms in addition to the commercial space, but the land area for each use is not separated out. Table 3 below summarizes the development assumptions. SAMMONS/DU'1'l'ON LLC Memorandum Table 3. Project Development Assumptions Building Assessed Land Sq Ft Value per Sq Sales Tax Acres (Units) Ft (Unit) per Sq Ft Elkhorn Lodge Commercial - 120,000 $40 $4.00 Lodging (Units) 60 $43,500 Residential (Units) 40 $15,800 Total 22.02 Piccadilly Square Commercial 1.81 19,700 $35 $3.00 Lot 4 Commercial 6.88 74,900 $35 $3.00 Steamer Drive Commercial 3.35 36,500 $35 $8.00 Source: Sammons/Dutton LLC Table 3 also shows the assumptions regarding the per square foot assessed value and sales tax generation for each project. In general, assessed values are in the range indicated in the case studies, with the additional assumption that the Elkhorn development will be a higher end project, assessed at a higher value per square foot than the others. The values for the lodging and apartments reflect an assumed market value ($150,000 and $200,000 per unit respectively) with the appropriate assessment ratio for commercial (29 percent) and residential (7.9 percent) properties. The sales tax generation per square foot reflects the experience of the case studies with variations to take into account the different markets served and character for each project. As a result, the sales tax increment for each of the projects is shown in Table 4 below. This overstates somewhat the increment for the Piccadilly Square project since there are some taxpaying uses on the site now, but the exact amount is not known due to confidentiality rules. But the overall generation of sales tax by the development projects would be $1.06 million per year once all were built. Of course, the timing of these projects is unknown; but since any direct support by EPURA would be negotiated only when development were imminent, these estimates can be used in that light and be revisited at that time. SAMMONS/D UTTON LLC 6 Table 4. Future Sales Tax Increment from Projects Elkhorn Lodge $480,000 Piccadilly Square $59,100 Lot 4 $224,700 Steamer Drive $292,000 Total $1,055,800 Source: Sammons/Dutton LLC Memorandum For the property tax calculation there is more of an issue with the current level of tax generation. Current assessed value must be netted out from the future assessed value since the current level will be included in the base over which the increment will be calculated. Table 5 below shows this calculation and the resulting net tax increment derived by applying the current mill levy (70.291) to the net increase in assessed value. When completed, the four projects would produce a total increment of $815,200 annually. By comparison, this is only slightly less than the 2006 property tax increment of $858,800. As with the sales tax increment, the timing of the projects is unknown, but the estimates can be evaluated and revisited as appropriate. Table 5. Future Property Tax Increment Current AV Tax Future AV AV Increment Increment Elkhorn Lodge $8,042,000 $388,310 $7,653,690 $537,986 Piccadilly Square $689,500 $433,510 $255,990 $17,991 Lot 4 . $2,621,500 $0. $2,621,500 $184,268 Steamer Drive $1,277,500 $211,780 $1,065,720 $74,911 Total $815,158 Source: Sammons/Dutton LLC SAMMONS/D Ul '1 ON LLC Memorandum Given the mill levy of the various tax entities, about, about 2.5 percent of this increment already would accrue to the Town. The Park R-3 School District accounts for the largest share (46 percent) followed by Latimer County (32 percent) and several smaller entities. In summary, the baseline sales tax growth provides an "increment" as at least as great in real dollar terms (that is, adjusted for inflation.) as over the past life of EPURA. The specific private development projects alone could provide nearly the same level of property tax increment by the end of the next 25 years, as in the past. SAMMONS/D U'11 'ON LLC 8