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Om AN ORDINANCE MODIFYING THE BOUNDARIES OF
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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
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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
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File Stad in Reat Estate
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Number 2005-00004799
Bete arn
Circus Clerk
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ETTEVI&E #wy 71
THE CITY OF FAYETTEVILLE, ARKANSAS /- J 7.Y_ ./x/ep Y1I I
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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
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� 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.