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HomeMy WebLinkAboutOrdinance 4673 T O1L�190 � Y O m 0 0 0 we nm •• � C) 0N N •• d _ O om n�NO mom= oo� = 4673 ORDINANCE NO. OO - wow =— Y O OO D � pmwoo = Om AN ORDINANCE MODIFYING THE BOUNDARIES OF ; �; O THE HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NUMBER ONE PURSUANT TO A.C.A. §14-168-305 (f) 11 om AND A.C.A. §14-168-307 (c) AND DECLARING AN EMERGENCY co co WHEREAS, several public hearings were held concerning the boundaries of the Highway 71 East Square Redevelopment District Number One (which was created and its boundaries adopted by Ordinance No. 4662, December 28, 2004); and WHEREAS, a public hearing was also held concerning the possible formation of a redevelopment district of the remainder of the Downtown Master Plan study area, but such creation has been indefinitely tabled in light of budgetary concerns when the Attorney General's Opinion removed the 25 mills authorized by Amendment 74 from tax incremental financing districts; and WHEREAS, to adequately finance a reduced project plan to remove the blighted area of an surrounding the Mountain Inn and to finance important transportation improvements on the western side of the Downtown Master Planning area, the boundaries of the Highway 71 East Square Redevelopment District No. One should be expanded to include the entire Downtown Master Planning Area as permitted in A.C.A. § 14-168-305 (f). NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 : That the City Council of the City of Fayetteville, Arkansas hereby modifies the boundaries of the Highway 71 East Square Redevelopment District No. One of Fayetteville, Arkansas to expand this district to the west to include the area of the Downtown Master Plan as shown on the map attached as "Exhibit A". Section 2: That the City Council hereby finds that the real property within the modified boundaries of the Highway 71 East Square Redevelopment District Number One of Fayetteville, Arkansas, will be benefited by the redevelopment project by eliminating or preventing the development or spread of blighted, deteriorated, or deteriorating areas, or discouraging the loss of commerce, or employment, or increasing employment, or any combination thereof. 1 I* • Section 3: Emergency Clause. If this ordinance is not immediately effective, the goal of the Redevelopment District and its Project Plan to remove a dangerous, dilapidated firetrap could fail due to lack of time-sensitive funding. The City Council, therefore, determines and declares an emergency exists which would imperil the public peace, health or safety, and consequently this ordinance shall be in full force and effect from the date of its passage and approval. PASSED and APPROVED this 25th day of January, 2005. APPROVED: N% 90&1Y olev4l 00- ; FAYETTEVILLE ; = BY ' DAN GOODY, May ATTEST: ''i.,dNGTON By: SONDRA SMITH, City Clerk r Washington Count , 1 certify this ' YAR , 02/01/2005 instrument was filed on antl reco 02:20:07 pryl File Stad in Reat Estate t Number 2005-00004799 Bete arn Circus Clerk by a �, b p �T t z5 105 ETTEVI&E #wy 71 THE CITY OF FAYETTEVILLE, ARKANSAS /- J 7.Y_ ./x/ep Y1I I • �(/S�/fin KIT WILLIAMS, CITY ATTORNEY , DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT TO : Dan Coody, Mayor City Council CC : Steve Davis, Finance & Internal Services Director FROM : Kit Williams, City Attorney DATE: January 24, 2005 RE: Amendment to "Mountain Ind' TIF District Plan OPTIONS The City Council will have several options to consider during your special City Council meeting on January 25"'. One thing appears certain, the original Project Plan adopted by ordinance cannot now be considered financially feasible and must be changed or repealed. OPTION ONE — REPEAL The City Council is not bound to attempt to continue the Project Plan with the loss of use of the 25 mills required for school funding by Amendment 74 to the Arkansas Constitution. Repealing the Project Plan ordinance would likely end the Project of removing the Mountain Inn and Courts Building and replacing them with a $20 million plus hotel, condominium, convention and parking complex. It would not end our responsibility to do something to eliminate the dangerous and debilitated Mountain Inn building. We would probably need to issue a raze and removal order through an ordinance. I would expect litigation from the current owner. If successful, we would have to use general funds to pay for the demolition of the Mountain Inn (which would be more expensive if done between the Courts Building and adjoining shelter to the west) . Once condemned and demolished, we would have a (million dollar?) lien for our costs, but not be the actual owner of the land. It would be unlikely that we would ever recoup the demolition costs. There would then be a block long brown field along College Avenue. OPTION TWO — TIF CONDEMNATION If the City Council chooses not to enlarge the boarders nor go forward with the original Mountain Inn Project Plan, only abut a million dollars in TIF bonds could be marketed successfully until the issue of debt service ad valorem rate is resolved by the Courts. The Plan would be modified to use all TIF proceeds to remove the blighted Mountain Inn through eminent domain (if necessary) . Since most of the available TIF funds would be needed for demolition costs, we could probably only offer (at most) the appraised "brown field" appraisal we received from the developers ' appraiser. Again, I expect litigation over the current value of the Mountain Inn. We probably could not do any demolition until a jury verdict about how much we have to pay for the Mountain Inn. If that amount was substantial, we could not both buy the Mountain Inn and pay to demolish it with TIF funds. At best, the jury would determine the value of this dilapidated fire trap was not worth the cost to demolish it so we could then tear it down with TIF funds, but would again be left with an empty brown field along College Avenue. OPTION THREE — REDUCED PROJECT PLAN This option is only viable if the developers agree to: ( 1 ) buy the secondary bonds on notes above the primary bonds supported by the undisputed 3 . 16 mills and (2) absorb one million dollars that the TIF Project Plan had envisioned to be paid for with TIF funds. If the developers would agree to both proposals, then the Project Plan would be amended to remove the purchase of the Red Bird Cafe and Niblock Law Office building and to use the purchase price of the raw land as a payment on the TIF debt. Both options three and four require an injunction or declaratory judgment action be taken to Court to resolve the issue of the debt service ad valorem rate. Whether or not the developers will take on the risk that the Supreme Court will eventually decide the debt service ad valoem rate is as proposed by the Fayetteville School District and the additional one million dollars in costs for this project is for them to say. OPTION FOUR — EXPAND THE DISTRICT BORDERS This option requires two vital components. First, the City Council must be willing to expand the boundaries of the East Square Highway 71 Redevelopment District to the west to absorb the remainder of the Downtown Master Plan area. Second, the developers will have to agree to purchase the secondary bonds and notes at their risk for the disputed millage (between 3 . 16 and 7.66). The developers ' notes or bonds would be paid only after the bonds secured by 3 . 16 mills were paid. However, once the Supreme Court rules on the debt service rate, the secondary bonds might become payable if the tax increment is then sufficient. No other definite project is planned for the enlarged district at this time. Although there should be funds available for relatively modest projects like the trail corridor from Frisco Trail to the Scull Creek Trail. This would help complete a bicycle thoroughfare from 6`h Street to the Mall and Mud Creek Trail. Such a safe and level thoroughfare could reduce motorized vehicle volume and parking problems for the entire Downtown area. Depending upon millage available a cooperative parking deck with the University or business might also become feasible. CONCLUSION The first ordinance that will be presented to the City Council for consideration will be the expansion of the borders of the redevelopment district since option four can only be considered if you chose to enlarge the district. After this decision, the City Council will have three options: 1 , 2, and either 3 or 4 depending upon whether you enlarged the district's border and whether the developers agree to the financing to make option 3 or 4 feasible. w � ORDINANCE NO, AN ORDINANCE MODIFYING THE BOUNDARIES OF THE HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NUMBER ONE PURSUANT TO A.C.A. §14-168-305 (f) AND A.C.A. §14-168 307 (c) AND DECLARING AN EMERGENCY WHEREAS, several public hearings were held concerning the boundaries of the Highway 71 East Square Redevelopment District Number One (which was created and its boundaries adopted by Ordinance No. 4662, December 28, 2004); and WHEREAS, a public hearing was also held concerning the possible formation of a redevelopment district of the remainder of the Downtown Master Plan study area, but such creation has been indefinitely tabled in light of budgetary concerns when the Attorney General's Opinion removed the 25 mills authorized by Amendment 74 from tax incremental financing districts; and WHEREAS, to adequately finance a reduced project plan to remove the blighted area of an surrounding the Mountain Inn and to finance important transportation improvements on the western side of the Downtown Master Planning area, the boundaries of the Highway 71 East Square Redevelopment District No. One should be expanded to include the entire Downtown Master Planning Area as permitted in A.C.A. § 14-168-305 (f). NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 : That the City Council of the City of Fayetteville, Arkansas hereby modifies the boundaries of the Highway 71 East Square Redevelopment District No. One of Fayetteville, Arkansas to expand this district to the west to include the area of the Downtown Master Plan as shown on the map attached as "Exhibit A". Section 2: That the City Council hereby finds that the real property within the modified boundaries of the Highway 71 East Square Redevelopment District Number One of Fayetteville, Arkansas, will be benefited by the redevelopment project by eliminating or preventing the development or spread of blighted, deteriorated, or deteriorating areas, or discouraging the loss of commerce, or employment, or increasing employment, or any combination thereof. Section 3: Emergency Clause. If this ordinance is not immediately effective, the goal of the Redevelopment District and its Project Plan to remove a dangerous, dilapidated firetrap could fail due to lack of time-sensitive funding. The City Council, therefore, determines and declares an emergency exists which would imperil the public peace, health or safety, and consequently this ordinance shall be in full force and effect from the date of its passage and approval. PASSED and APPROVED this 25th day of January, 2005. APPROVED: By: VV DAN COODY, Mayor ATTEST: By: SONDRA SMITH, City Clerk Lu A, - ,: v " * Z i ILA ST .. �:Z; m¢ " p `n in' ._, :� s vDAVIDSON T J -inny 0 `J �r _ x O " ¢ „ ¢ # J w 3 ALLEY 519'- ,1 j °a x.F (I1 j a �i ' :W .. . -:y k �. . 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PRIVATE 421 w W Q F _- 3anI �z Ira Iniial l * v n1 K `� xi rQ __ , ,� '' > 8TH ST. W a O ¢ ' F h W k � �.- ,✓� = Y `fa - S fie > 11 Iz to l , a.Z p , Q : m. 7THST . . ae _2 ALLEY-799 .,. �.L' ".np = a . all w ocmmwa rwwn® `n.m owrm.nnrs V. > N ,} V.0, 5 . . � a. ::.9TH ST:.. ORDINANCE NO. AN ORDINANCE AMENDING THE PROJECT PLAN FOR THE HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NUMBER ONE, FINDING THE PLAN IS ECONOMICALLY FEASIBLE, AND DECLARING AN EMERGENCY WHEREAS, on July 27, 2004, the Fayetteville City Council held a Public Hearing concerning the creation of the Highway 71 East Square Redevelopment District; and WHEREAS, on August 17, 2004, the City Council passed Ordinance No. 4608 creating the Highway 71 East Square Redevelopment District and authorized preparation of a Redevelopment Project Plan; and WHEREAS, the City with input from the proposed redevelopers of a Twenty- Two Million Dollar hotel project to be constructed after removal of the blighted Mountain Inn has prepared a proposed Project Plan; and WHEREAS, on November 30, 2004, the City held a Public Hearing on this initial Project Plan proposed for the Redevelopment District; and WHEREAS, on December 7, 2004, the City had a further public hearing on this Project Plan and passed Ordinance 4646 adopting the Project Plan; and WHEREAS, because of a minor, technical notification discrepancy, the City determined the need to renotify all statutorily required officials and republish notice of the public hearings for the Redevelopment District; and WHEREAS, the City Council after 15 day published notice held another public hearing on December 28, 2004 at which all interested parties were given the opportunity to express their views on the proposed adoption of the Project Plan for the Highway 71 East Square Redevelopment District Number One of Fayetteville, Arkansas; and WHEREAS, the City Council adopted this Project Plan on December 28, 2004 by Ordinance No. 4663 ; and WHEREAS, the Arkansas Attorney General in January 2005 has opined that the 25 mills required by Amendment 74 to be sent to the State may not be used for tax incremental financing; and WHEREAS, removing the 25 mills from the tax increment requires amendment of the Project Plan; and WHEREAS, the required fifteen day statutory notification of taxing entities and two publications of notice of the intent to amend the Project Plan have been accomplished prior to the public hearing for the Amendment to the Project Plan on January 25, 2005 ; and WHEREAS, the Amendment to the Project Plan complies with all statutory requirements of A.C.A. § 14-168-306 and 307. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 : That the City Council of the City of Fayetteville, Arkansas hereby finds that the Amended Project Plan for the Highway 71 East Square Redevelopment District (attached as Exhibit A) is economically feasible. Section 2: That the City Council of the City of Fayetteville, Arkansas hereby adopts the Amended Project Plan for the Highway 71 East Square Redevelopment District and determines it has complied with all requirements set forth in A.C.A. § 14- 168-306. Section 3 : Emergency Clause. If this ordinance is not immediately effective, the goal of the Redevelopment District and its Amended Project Plan to remove a dangerous, dilapidated firetrap could fail due to lack of time-sensitive funding. The City Council, therefore, determines and declares an emergency exists which would imperil the public peace, health or safety, and consequently this ordinance shall be in full force and effect from the date of its passage and approval. PASSED and APPROVED this 25t° day of January, 2005. APPROVED: F� By: DAN COODY, Mayor ATTEST: By: SONDRA SMITH, City Clerk M i Fayettev i I I e Partners January 24, 2005 Fayetteville City Council 113 W. Mountain St. Fayetteville, AR 72701 Dear City Council, On January 18'", the Fayetteville Downtown Partners Board of Directors met and unanimously voted to support the Mountain Inn redevelopment project. We believe this project is an integral component to our Downtown Master Plan and will contribute greatly to the health and vitality of our community. We are not alone in this sentiment. In the Downtown Master Plan , the citizens of Fayetteville identified the Mountain Inn as one of their top priorities on the immediate project listings. We urge the City Council to provide the leadership needed to assist in the implementation of the redevelopment. For years, this abandoned building has greeted visitors to our downtown area--- its dilapidated appearance sending a message of apathy, indigence, and instability. We envision a new and vibrant hotel complex that will restore our eastern downtown border, while creating a special place that all of Fayetteville can enjoy. Fayetteville Downtown Partners' looks forward to working with the City and its citizens as we continue to develop the most exciting downtown experience in Northwest Arkansas. Best Regards, Won Hoover President, Fayetteville Downtown Partners Our mission is to ensure a dynamic downtown area through economic development initiatives, capital improvements and effective marketing of the district.