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HomeMy WebLinkAbout2005-03-01 - Agendas - Final Aldermen Ward I Position I - Robert Reynolds Mayor Dan Coody e;i le Ward 1 Position 2 - Brenda Thiel Ward 2 Position I - Kyle B. Cook City Attorney Kit Williams Ward 2 Position 2 - Don Marr Ci Clerk Sondra SmithTayve Ward3 Position 1 - Robert K. Rhoads tY Ward 3 Position 2 — Bobby Ferrel I ARKANSAS Ward 4 Position I - Shirley Lucas Ward 4 Position 2 - Lioneld Jordan Final Agenda City of Fayetteville Arkansas City Council Meeting March 1 , 2005 A meeting of the Fayetteville City Council will be held on March 1 , 2005 at 6:00 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Call to Order Roll Call Pledge of Allegiance A. CONSENT: 1. Approval of the Minutes: Approval of the January 25, February 8 and the February 15, 2005 City Council meeting minutes. APPROVED, 2. Premier Home Services Bid Award: A resolution awarding a bid in the amount of $ 14,274.00 to Premier Home Services for the rehabilitation of the residence at 443 West North Street; and approving a contingency in the amount of $ 1 ,000.00. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 35-05, 3. Arkansans For Drug Free Youth Grant: A resolution authorizing the Fayetteville Police Department to accept an Arkansans For Drug Free Youth Grant in the amount of $20,000 to fund training and overtime for officers performing underage drinking patrol, compliance checks of merchants selling alcohol and community presentations; and approving a Budget Adjustment recognizing the grant revenue. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 36-05, 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 41-05, 3. IFWorld Maintenance Approval: An ordinance waiving the requirements of formal competitive bidding and approving payments not to exceed $20,000.00 to IFWorld for maintenance and enhancement of the City website's Content Management System. PASSED AND SHALL BE RECORDED AS ORDINANCE NO. 4681, 4. Reappropriate Capital Improvement Funds: A resolution approving a Budget Adjustment to reappropriate $ 130,334,454.00 in order to retain current fiscal year project funding for identified and scheduled capital improvements. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 42-05, 5. Ford Motor Company General Release and Waiver: A resolution to approve the General Release and Waiver from Ford Motor Company and to authorize the Mayor to sign the General Release and Waiver. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 43-05. 6. Fayetteville Downtown Partners Contract: An ordinance waiving the requirements of formal competitive bidding and approving a contract for services with Fayetteville Downtown Partners in the amount of $ 150,000.00 to assist in the implementation of the Downtown Master Plan. PASSED AND SHALL BE RECORDED AS ORDINANCE NO. 4682. D. PUBLIC HEARINGS: 1 . Brinkley's Limo Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Brinkley's Limo Service for the operation of five (5) limousines within the City of Fayetteville, Arkansas. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 44-05, 2. Jones Transportation Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Jones Transportation Service for the operation of four (4) Limousines within the City of Fayetteville, Arkansas. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 45-05, E. INFORMATIONAL: Council Tour: NONE MEETING ADJOURNED AT 7:25 P.M. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 41-05, 3. IFWorld Maintenance Approval: An ordinance waiving the requirements of formal competitive bidding and approving payments not to exceed $20,000.00 to IFWorld for maintenance and enhancement of the City website's Content Management System. PASSED AND SHALL BE RECORDED AS ORDINANCE NO. 4681, 4. Reappropriate Capital Improvement Funds: A resolution approving a Budget Adjustment to reappropriate $ 130,334,454.00 in order to retain current fiscal year project funding for identified and scheduled capital improvements. PASSED AND SHALL BE RECORDED AS RESOLUTION NO, 42-05, 5. Ford Motor Company General Release and Waiver: A resolution to approve the General Release and Waiver from Ford Motor Company and to authorize the Mayor to sign the General Release and Waiver. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 43-05. 6. Fayetteville Downtown Partners Contract: An ordinance waiving the requirements of formal competitive bidding and approving a contract for services with Fayetteville Downtown Partners in the amount of $ 150,000.00 to assist in the implementation of the Downtown Master Plan. PASSED AND SHALL BE RECORDED AS ORDINANCE NO, 4682, D. PUBLIC HEARINGS: 1 . Brinkley's Limo Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Brinkley' s Limo Service for the operation of five (5) limousines within the City of Fayetteville, Arkansas. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 44-05, 2. Jones Transportation Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Jones Transportation Service for the operation of four (4) Limousines within the City of Fayetteville, Arkansas. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 45-05, E. INFORMATIONAL: Council Tour: NONE MEETING ADJOURNED AT 7:25 P.M. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Meeting March 1 , 2005 • • , 1S A'/ Subject: s ® V Motion To: Motion By: Seconded: Cook Marr ✓ Rhoads Ferrell Lucas Jordan ✓ Reynolds Thiel t/ Mayor Coody Subject: Motion To: Motion By: Seconded: Cook ✓ Marr � Rhoads r/ Ferrell ✓ Lucas ✓ Jordan ✓ 3 1 - O Reynolds ✓ Thiel Mayor Coody City Council Meeting March 1 , 2005 • • Subject: STA, C,4 Motion To: Motion By: MQArL NCC Seconded: Cook Marr ✓ Rhoads ✓ Ferrell v Lucas ✓ Jordan � Reynolds ✓ Thiel ✓ Oa � Mayor Coody Subject: Motion To: Motion By: Seconded: Cook Marr NDRhoads t/ Ferrell 4' m d Lucas ✓ JJ Jordan ✓ Reynolds ✓ ,410 -v5 Thiel Mayor Coody City Council Meeting March 1 , 2005 • • Subject: _ i P Motion To: Motion By: Seconded: Cook Marr Rhoads ✓ Ferrell Lucas Jordan ✓ f� Reynolds Thiel ✓ Mayor Coody Subject: Motion To: OW AtJ IN 3oq ✓L(.Il(i�Q Motion By: Seconded: n Cook Marr ✓ �/ Rhoads ✓ �/ r/ I 441 Ferrell r/ ✓ ✓ Lucas Jordan ,/ ✓ �i0 O Reynolds 6/ Thiel e/ Mayor Coody City Council Meeting March 1 , 2005 • • Subject: Motion To: Motion By: [� Seconded: " Cook Marr r Rhoads N ) Ferrell ✓ Lucas Jordan 404 � / Reynolds ,{ 5 Thiel �� VU Mayor Coody Subject: Motion To: tyv Motion By: h Seconded: [' Cook t/ Cc7 Marr Rhoads Ferrell ✓ Lucas Jordan ✓ P Reynolds ✓ / Thiel 7 J 65 Mayor Coody City Council Meeting March 1 , 2005 • • Subject: OAA _ _ _ d Motion To: f(, �( i ���t Y•� Motion By: � Seconded: Cook ,/ ✓ (� • Marr 2CCUAAo . JU,� _ „ ) Rhoads G��� JIAlR/`^' MAI Ferrell �/ ,/ � 1 , r Lucas Al Jordan �/ �✓ Reynolds ✓ ✓ Thiel ✓ �/ t/ 0 Mayor Coody VA 0"11- i Subject: Motion To: Motion By: Seconded: Cook ✓ k/ ( . Marr Rhoads i • Ferrell Lucas . AJordan ✓ Reynolds Thiel I /// Mayor Coody City Council Meeting March 1 , 2005 • • Subject: Motion To: Motion By: Seconded: Cook Marr PRhoads ✓ tf (L Ferrell Lucas r/J000���G°°°"'��• Jordan Reynolds 1 Thiel I � Mayor Coody Subject: Motion To: Motion By: Seconded: Cook Marr Rhoads Ferrell Lucas Jordan Reynolds Thiel Mayor Coody Aldermen Ward I Position I - Robert Reynolds Mayor Dan Coody • Ward I Position 2 - Brenda Thiel Ci Attorney Kit Williams Ward 2 Position I - Kyle B. Cook City Y Tayve Tj/�1 �//'+�'�" Ward 2 Position 2 - Don MartCit Clerk Sondra Smith P Y 1 ` Ward 3 Position I - Robert K. Rhoads Y V Ward 3 Position 2 — Bobby Ferrell ARKANSAS Ward 4 Position I - Shirley Lucas Ward 4 Position 2 - Lioneld Jordan Final Agenda City of Fayetteville Arkansas City Council Meeting March 1, 2005 A meeting of the Fayetteville City Council will be held on March 1 , 2005 at 6:00 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Call to Order Roll Call Pledge of Allegiance A. CONSENT: 1 . Approval of the Minutes: Approval of the January 25, February 7 and the February 15, 2005 City Council meeting minutes. 2. Premier Home Services Bid Award: A resolution awarding a bid in the amount of $ 14,274.00 to Premier Home Services for the rehabilitation of the residence at 443 West North Street; and approving a contingency in the amount of $ 1 ,000.00. 3. Arkansans For Drug Free Youth Grant: A resolution authorizing the Fayetteville Police Department to accept an Arkansans For Drug Free Youth Grant in the amount of $20,000 to fund training and overtime for officers performing underage drinking patrol, compliance checks of merchants selling alcohol and community presentations; and approving a Budget Adjustment recognizing the grant revenue. 4. Department of Homeland Security Fire Grant: A resolution authorizing the Fayetteville Fire Department to apply for and accept a Department of Homeland Security Fire Grant for approximately $200,000.00 to upgrade the computer aided dispatch system and procure additional training equipment. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevil le.org D. PUBLIC HEARINGS: 1 . Brinkley's Limo Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Brinkley's Limo Service for the operation of five (5) limousines within the City of Fayetteville, Arkansas. 2. Jones Transportation Service; Certificate of Public Convenience and Necessity: A resolution granting a Certificate of Public Convenience and Necessity to Jones Transportation Service for the operation of four (4) Limousines within the City of Fayetteville, Arkansas. E. INFORMATIONAL: Council Tour: NONE 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevil le.org ` -- ' • �' Special City Council Meeting Minutes January 25, 2005 Page I of 44 r Aldermen Ward 1 Position I - Robert Reynolds Mayor Dan Coody Ward 1 Position 2 - Brenda Thiel Cit Attorney Kit Williams Ward 2 Position I - Kyle B. Cook Y Y rev Ward 2 Position 2 - Don Marr Cit Clerk Sondra Smith T. ayve teWard 3 Position 1 - Robert F Rhoads Y Ward 3 Position 2 — Bobby Ferrell ARKANSAS Ward 4 Position I - Shirley Lucas Ward 4 Position 2 - Lioneld Jordan Special City Council Meeting Minutes January 25, 2005 A Special Meeting of the Fayetteville City Council was held on January 25 , 2005 at 5 :30 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Mayor Coody called the meeting to order. PRESENT: Alderman Reynolds, Thiel, Cook, Rhoads, Ferrell, Lucas, Jordan, Mayor Coody, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience. ABSENT: Alderman Marr Pledge of Allegiance Mayor Coody: The first order is New Business. Number one is the Highway 71 East Square Redevelopment District # 1 boundary modification. Public Hearing: Highway 71 East Square Redevelopment District #1 Boundary Modification Adoption : 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) declaring an emergency. Kit Williams : Let me read the ordinance Mayor. The city attorney read the ordinance for the first time. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevi I I e.org Special City Council Meeting Minutes January 25, 2005 Page 2 of 44 Mayor Coody: Alright thank you. The first order of business is to explain why we would need to increase the boundaries, modify the boundaries. Do you have any input on that for the public? Kit Williams : Mayor I think that part of this would need to go also to the developers and they could probably respond to that. But as I mentioned to the City Council in a memo that I sent out last week, there are approximately four options in order for us to do tonight. One of them would be to increase the boundaries of this district so there could be enough money generated with the three mils that are not in dispute and the seven mils that would be purchased by the developers if they so choose and were willing to do that that this project could still go forward. If in fact we do not increase the boundaries of this district to include the Downtown Master Plan area also then I don't think there would be sufficient finances to be able to finance this project plan. And I don't know if the project of removing the blighted Mountain Inn could be accomplished. Mayor: Alright. Do the developers, petitioners want to address us on this issue? John Nock: Good evening Mr. Mayor and Aldermen and thank you for the opportunity to speak again on this project. In regards to the boundaries themselves, all of you were furnished I believe with a copy of the revision feasibility study that the Walton College of Business has provided that was hired by the City of Fayetteville. In those there are a series of tables that outline the available yields that would be available to service the debt over the life of the TIF. Without breaking each one of those down they range anywhere from approximately two million to on the high side, six million depending on the projections which one you look at. Projections can always be looked at different ways and they can be shopped different ways. Certainly over the life of the 25 year period there certainly will be additional mils that could be utilized. As well as there is a possibility and some people believe the probability that there will be eventually a case to be weighed before the Arkansas Supreme Court, thereby testing the recent opinion the Attorney General has come out in regards to the 25 mils and other mils as it relates to the debt service for a Tax Increment Financing and Redevelopment District. On Table 7 if you have that available I think the numbers are fairly self-explanatory. We begin to utilize both the East Square as commonly called in the downtown. Baseline scenario for the TIF, for the millage and if we utilize the 7.66 as Kit Williams, the city attorney has utilized that is a net present value of 15 million and change or total available over the life of the project at 27 million. Alderman Cook: John. Does anybody else have an Economic Feasibility Study? Mayor Coody: Did we get that today? Kit Williams: Steve had 21 copies run off I thought they would have been given to the City Council. Do we have those? John Nock: I just received mine a few minutes ago. Mayor Coody: Steve still has them. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevi I I e.org ' ' • • Special City Council Meeting Minutes January 25, 2005 Page 3 of 44 John Nock: Ultimately. Does everyone have a copy of this Kit? Kit Williams: Yes. Yes they do. John Nock: Okay. There is also a second document that is the removal of Phase Two from the existing project plan which was for additional development projects inside of the initial project plan in the East Square Redevelopment District. Basically to put it in very quick layman terms, by reducing the amount of mils there is certainly not enough project area to cover the debt that is going to be financed for any project let alonejust the Mountain Inn project. Until that is decided and if you' ll go back in your memory to last summer when we first started talking about TIF's and their boundaries I was one the people who stood up in front of you as a developer on this project saying that is too large of a project. If you have multiple projects in a project area because of its size, then sometimes it is more difficult to manage. I think most of you all will recall me saying that. However because of the current condition, at least the current opinion of the Attorney General on the way that is being reviewed on what note it can be used in the State then currently no project could be built and if any, there would be very minor projects. And so, then it comes back down to an economic viability and what could actually be utilized. Our project, if you include the total area of the Downtown Master Plan as initially prescribed by Dover Kohl to the city in the Downtown Master Plan, it can still be accomplished. That was one of the options that works. I know this might be jumping a little bit ahead, Kit but in order to do that there is still some question about the additional mils and we'd be glad to explain what we will do and step up to make sure that this project doesn't get lost in a timing issue. Are there any questions about why we're stepping up. Mayor Coody: What's the difference between petitioner and developer? Kit Williams: Actually I have a couple of questions. I think that, when I proposed the options to the City Council, one of the options, Option 3 was were we would not be able to raise the $3 .5 million dollars without expanding the boundary but we might be able to raise as much as $2.5 million or with your purchase of part of that $2.5 million because three mils would not raise very much at all . That would require you as the developers to put another $ 1 million into the project and that are the two options that would keep the project going. Either that option or then the second option would expand the boundaries as you just stated. I think you need to explain to the City Council what your position is on Option 3 if we did not expand the boundaries. John Nock: Sure. Option 3, if you keep the boundary the same its obviously less dollars. There' s a couple of issues. One, is there enough to pay back any additional liability that we take on. Obviously this project as we' ve talked about before because of its blighted condition, because of the state it is in that' s why you've not had developer' s clammering to do this project over the last perhaps ten years. The economic sense to just put in more money on a project downtown on the square rather than just doing a project of the same magnitude on the interstate just doesn't make sense. But in order to do this, this is why we petitioned the city under the TIF legislation to be able to set up a TIF, and so to put additional dollars on the budget its just not there. So our viewpoint was until all these numbers get resolved through the courts we would resolve to take that away, that issue away from the city by buying the additional bonds. But the only way that we would want to do that is if there was some certainty that there would be additional revenues to cover it. By taking the risk we' d like to know there' s the chance over that 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org ' ' • Special City Council Meeting Minutes January 25, 2005 Page 4 of 44 25 year period that subordinated bonds that we'll be buying will help with the project. When we say we that's not just the developers that will be investors in the project that would be taking those bonds but it will be off the direct liability of the TIF District they will be subordinated bonds. Yes. Alderman Ferrell: I basically like the idea of what' s going to happen here and I have a couple of questions. I'd like to see the city and the developers working to make this a better town and look forward to working with more other developers in the future like this for the good of the City. One of things that does bother me is the how fast this thing is going to go down looking at it for tonight. So if you could explain to me how important time is on this. John Nock: Sure. We started this process a little over, I think it was the spring of last year when we first started the process of the TIF District. It has been approved in its current form which is the existing East Square Development boundaries alone and the current plan that goes with it has been approved actually twice by the City Council and as I recall both time by unanimous vote. There have been, if I recall, each time there has been three opportunities to six total opportunities for the public to weigh in and to talk about the various opportunities that this allows for the city. Each time that we've had to extent that for one reason or another once it was for publication issues, another time not all the project plan was complete but for whatever reason each extension has required us to go out and extend certain contracts. There are private people that own some of the property and there are other contracts such as construction contracts that we've had to work through as well as towards the end of the year one of our local banks here, Bank of Fayetteville, actually stood up regardless of this all being completely resolved because at that time we thought it was resolved and agreed to step up under the new market tax credit scenario. There's a lot more to this project for it to be economically feasible than just the TIF. In fact we didn't expect that this would be something that we would go through three iterations of. Although tonight is certainly a critical junction we have certain contracts that on the 28th of this month begin to expire and some of those elements are very key for the total project. We've had it approved. We've had it done. It's not anyone's fault but after awhile when you're starting to deal with private folks they start to say I 'm not sure this is ever going to get done and they start to question not only if you are saying that it's really going to get done or if you really are going to have some sanity about staying with a project after four years. Nevertheless there' s the sense of timing because we have real contracts that expire on the 28th of this month. Kit Williams: You mean the 28th of February right? John Nock: The 28th of February. The 28th of this month we have to notify them specifically that we're going to make them close or at that point in time we lose additional money. So it' s certainly a real economic issue. Mayor: Another reason that we have to make these changes in short order is because the Attorney General ' s opinion that just came out the other day kind of threw everybody up in the air all over Arkansas. Everybody is trying to resolve the issues that his opinion has rocked. John Nock: I think that around the state after having read the press that we have received, I am talking about the City of Fayetteville and this project, this project has been considered by most, 1 think they've labeled it the poster child of what TIFs were intended for both in the spirit of the legislation as well as the letter of the law. After that Attorney General' s opinion came out we 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org t . Special City Council Meeting Minutes January 25, 2005 Page 5 of 44 had to sit down and really scratch our heads and say can this project still get done and how do we do it. It was after a series of meetings that we were able to come up with multiple options to present before the City Council and for the citizens to see if this is something that really does make sense. We thought that the best thing to do is to come back to the city with something that can in some ways really reduce your liability until all of these things are resolved. Now lets talk a little bit about when you expand the district what that might do. Does that mean that Phases II, Phases III, Phases IV can not be done? No, it will still be just the same as it was before. If ultimately a ruling comes down from the Supreme Court or the law is changed and there' s been some conformity out there then at that point in time you may have multiple projects in the same district. It' s not like you are losing opportunities once that ruling would occur. Secondly, until that time would occur you wouldn't be able to do other projects anyway of substance. You always want to do a project that has the largest economic impact because this is all based upon tax increment growth. If you're doing a very small project you would get very small increment versus a larger project that does the opposite. Mayor Coody: Any other questions for Mr. Nock? Yes, sir. Alderman Rhoads: Mr. Mayor I would like to make a suggestion I guess on our procedure tonight. As the champion of this, when we had our retreat I think we appointed champions for various things and this was one that fell in my lap. Of late I have been talking to a lot of people on all sides of the issues and I have a pretty good feel of what a lot of people think and overall I think it' s perhaps the only way in the next three or four years that we' re going to see something done with that site. With all that said though what I'd really like to do if it's alright with the rest of the Council and with you Mayor, is that I'd really like to hear, there's a whole lot of folks here for a special meeting and I'd really like to hear what's on their mind because I know after we hear them then there' s probably going to a pretty lively conversation amongst us Council members. I think that might get us a better feel for some of the issues that are about to come up. If that's alright with you Mr. Mayor. Mayor Coody: Oh sure that's fine. Mr. McGrady I think called earlier today would like to speak first. He has another engagement this evening. I might ask everyone that speaks tonight to please sign in so we can have that for the record. David McGrady: Yes. Mayor Coody: I might ask everyone to number one turn off cell phones and pagers. Number two keep your comments just distinct and brief as possible because I know that there will be a lot of people that would like to speak tonight and we would like to hear everyone. Kit Williams: Mr. Mayor. I would also recommend that this also be considered the public hearing for the project plan at the same time. I think that you could probably have both of these. So if you'd open it up with the project plan also. Mayor Coody: We will be opening up for both the district boundary modifications and the project plan and the public hearing for both of these concurrently. Thank you. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevillc.org ' ' • • Special City Council Meeting Minutes January 25, 2005 Page 6 of 44 Public Hearing Mayor Coody Opened the Public Hearing Highway 71 East Square Redevelopment District #1 Project Plan Amendment: A Public Hearing to allow all members of the public and representatives of taxing entities to present their views on the Proposed Project Plan Amendment for the Highway 71 East Square Redevelopment District Number One. David McGrady: Good evening ladies and gentlemen, Mr. Mayor and the city attorney. Thank you very much for giving me the opportunity to come to speak to you this evening. This evening I'm speaking to you as wearing one of my hats that of the general manager of the Radisson and a citizen of Fayetteville. I have been in Fayetteville for five years and I' ve had the unpleasant site everyday of looking at the dilapidated Mountain Inn. Although there isn' t probably anybody in this room that would disagree that it needs to go away. As I was sitting here earlier looking at the goals for 2008 in the guiding principles of Fayetteville we have planned and managed growth. We also have the natural beautiful city. That whole section of town takes away from it dramatically from anybody coming into town. I just drove back from Little Rock this afternoon and looking at it is unbearable to see from that direction. I don't see it from that direction that often. I get to see it from the hotel. It's my firm belief if we were to incorporate another hotel of this magnitude in downtown Fayetteville with those additional hotel rooms in conjunction with the other hotels that we currently have in Fayetteville, one being the Radisson as well as the other surrounding hotel rooms. The Town Center, the CEC, the meeting space that is planned for the Mountain Inn, and the meeting space that is currently available at the Radisson, we will be able to attract on a regular basis large citywide convention business. Currently we have challenges in being able to facilitate those needs because we don't have the hotel rooms available to house all the people that would like to come into Fayetteville. We have unfortunately lost some large groups that if we had the space we could bring in. Obviously to the north we have the Convention Center in Springdale with another one being planned up in Rogers. To our benefit at this point in time we have the Randall Track Center which has given us the opportunity to really capture a lot of convention business for Fayetteville. The end result of being able to bring that business in, I don't have the numbers in front me, but I can tell you that it will be substantial as to the impact that it will have citywide not only on hotels, restaurants and retail and not just for the heart of downtown it will be covered throughout all of the City of Fayetteville. I think that it is a prudent decision at this point. I know it' s a difficult decision for you all to make this evening. I encourage you to muster up the best that you possibility can. All I can offer in closing is to say let it begin with you. Bring Fayetteville back. Let it be in competition to the rest of the different parts of the state and allow this project to go through with the expansion of the TIF district. Thank you very much. Mayor Coody: Thank you Mr. McGrady. Who else would like to address us tonight on this issue? How are you tonight Ron? 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org ' • Special City Council Meeting Minutes January 25, 2005 Page 7 of 44 Ron Bumpass : Good evening Mayor. Ron Bumpass, citizen of Fayetteville. You know I am not sure exactly where all this fits in. I've just been looking at the paper but as you're looking for additional funding to expand this district doesn't seem to be a particular problem. It' s probably prudent. But I'm wondering if, now I'm talking to the Council now if I can get you to step out of the box in thinking about some additional revenue. It seems that one possibility would be to create an enterprise fund from the parking revenues, from parking meters and from parking tickets all the way through the court system and perhaps the parking deck next to the Radisson. Perhaps if you could calculate what that revenue is on an annual basis and then make that part of the TIF financing that might give some additional revenue to this TIF district. Secondly, and I don't know if this is a possibility or if legislation could be passed for this but if you could likewise take the current sales tax collections from within the same district and establish a similar cap on those taxes collected within the district and then get the increased sales tax collected within the district as a funding component for the TIF. Possibility, I don't know if it's legal or not. Talk to your attorney. And thirdly, you know we've mentioned this as blight and I have been involved in the redevelopment of the square for over 32 years. I was there as an attorney clerk for the law firm that had all the condemnation authority for urban renewal projects. I went through these buildings that we tore down, measured them and compared them to the appraisals and that's how I got interested in the Old Post Office building and saving that as a landmark. But I' ve known all along that the HUD money that we receive and that ya' ll have authority over can be used completely for blight. I think that's what seven or eight hundred thousands a year. Now I realize that would take change in current policy and perhaps a long standing policy as I know that money is typically used in refurbishing 10 or 15 homes. But you could just as well, if you really want this thing to work, you could just as well say look this is so important we're going to change that horse and we're going to use that money to fund this blighted area for years into the future. All of which if you would explore those, I would certainly prefer to raising any property tax millage. It seems like this thing had a real good feel about it when we were talking existing taxes, capping them and taking the increase in taxes from the redevelopment for the revenue strength. So for my two cents that's it. Mayor Coody: I have a couple of quick questions. You're still in the parking district. Downtown Parking District Board. Are you still on that? Ron Bumpass: No. Mayor Coody: I think that' s a good suggestion. As a matter of fact that's something, we' re looking at all options and that' s one of the things we've been kind of looking at. Ron Bumpass : I just wanted to throw that on the table. Mayor Coody: I think it' s a good suggestion. As for the sales tax that would take State legislation to change. I think there are some legislatures looking to make some amendments. I' m not sure what's involved with that to see if that' s feasible. Ron Bumpass: If it can be computed I don't see any difference using the increase from sales tax as there is in using the increase of property tax values from the redevelopment of that particular 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org iSpecial City Council Meeting Minutes January 25, 2005 Page 8 of 44 spot. If this doesn't work out I think that building should be razed in any event. I think it's not only blight, it' s dangerous. Even if we had to put a park there for awhile until we figured something out it would be better than what we have. Mayor Coody: Thank you very much Mr. Bumpass. Alderman Ferrell: Mr. Mayor. One of things that Mr. Bumpass mentioned was the parking revenue and the fines and associated fees does that go into the General Fund? Mayor Coody: Yes it does and we are looking at some options to see if that might be something we might want to consider as a matter of fact. Hello, good evening. Jim Boyd: Hello. I'm Jim Boyd, a resident of Fayetteville for thirty years and have clients that have property in this TIF District. I spoke on behalf of this earlier and I know I'm telling you things that you already know but since it' s a public hearing maybe it needs to be repeated. That is in free enterprise which fickle and has many opportunities to invest its money in lots of different places but if they are willing to spend and invest on the Mountain Inn millions of dollars then the City of Fayetteville to the extent it can needs to assist them. As the first speaker alluded we might spend a million or so seed money to get this project going but the rewards that we will reap as a result of a big fine facility down there for the City of Fayetteville and the increased revenue from taxes and all the merchants, etc that will reap the benefits will far out weigh the little bit of money we put in here at the beginning. So I encourage you to use your imaginations and do whatever you have to do to let this project proceed and not let this free enterprise money go somewhere else. There are lots of other places that are willing to accept their proposals. Another thing that I mentioned earlier and you should remember is it's not like we're dealing with strangers here. We know John Nock and Richard Alexander and know what they can do and have done and they're citizens right here along with us. So we have a comfort level of dealing with those guys. That' s all I had to say. Thank you. Mayor Coody: Thank Mr. Boyd. Who else would like to address us tonight. The next person that would like to speak I might get them to kind of cue up behind the current speaker so that we can kind of move things along more quickly please. Mr. Rust: Members of the City Council. On behalf of FEDC in the letter that we sent you we support all the TIFs that have been talked about and tonight we specifically support this one. I was at a breakfast meeting this morning with Dr. Jeff Collins and one of the thing you need to be concerned about is one of the things I was concerned about in terms of supporting this is what are the numbers behind it. How do they work and I think you need to be comfortable with it. We talked about expanding the TIF district to include the downtown area. That appears to be a very good idea and I think rather than me trying to explain that and so forth I 'd like to ask Dr. Jeff Collins to come up and just run through those numbers. Because I think it' s important that the public understands that this is doable. Mayor Coody: Alright, thank you Mr. Rust. Dr. Jeff Collins : More than anything I wanted to be able to answer whatever questions you had about our numbers. I think given the fact that you have a document that you just got and there 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org ' • * Special City Council Meeting Minutes January 25, 2005 Page 9 of 44 are a lot of different scenarios that are in the document it would probably be helpful if I just open it up and anything you want to ask me I' d be happy to answer. Mayor Coody: First I'd like to recognize Dr. Jeff Collins here. I might get you to sign in too please so we can have that as a public record. Thank you. What questions do we have for Dr. Collins? Yes, ma'am. Alderman Thiel: Since we are discussing the plan at this point I mean this has just been thrown on us. We are up here trying to read this and can't even listen to the speakers because we've not seen any of this. I would like to know what the project plan is. I'm not familiar with it anywhere because in your feasibility study it mentions the Mountain Inn, Terminella Project and the library renovation which are all far removed from the west side of this district that we are talking about. All of the sudden we've sifted completely over on the eastside of the original boundary and we're talking about adding this to the west to make this work. I think we all want to make this work but I want to know what the plan is. Dr. Collins : That is difficult for me to speak to. However what I can speak to is the implement and the difficulty in getting sufficient revenues out of the east TIF if that' s all you're looking at to support the investment, infrastructure investment. Given the AG' s opinion which of course who knows what' s actually going to happen which is also one of the reasons there are so many permutations of the scenarios within that document that was handed you. Simply because there are different millages that may or may not be available. We were asked to consider multiple scenarios about which projects would be included and which projects wouldn't be included. We wanted to really give you a range to make a decision from a very conservative low end range into what we consider to be, I wouldn't say this is overly optimistic, I think that when you're talking 7.66 mils that may be optimistic, I don't know. Whether or not these projects are simply going to occur may be optimistic but I think those are relatively reasonable. One of the interesting things about the numbers and I think it's important to keep mind that the best data that we have available to us to predict the future is what's happened in the recent past. In fact the further back you go the less reliable that information is to predicting the near future. Certainly there are lots and lots of "what ifs" scenarios. There are lots of things that may or may not happen. Really the data from 2001 to 2004 is the best data we have to go on in terms of establishing growth rates for certain property types. Those growth rates of course have been impacted by recurring development within those districts and within the city. Obviously when we go out and re-estimate those growth rates there are a function of things that have been taking place over that three year period of time and Fayetteville is a growing place. Obviously there has been a lot of property value appreciation over that period of time. Alderman Thiel: Actually, I guess my question is we are discussing the Mountain Inn that's blighted. We've all determined that, I think everyone here agrees, that needs to be fixed. But all of the sudden this plan now has gone from that to add two more projects. Kit Williams: I think you're not understanding this. When we talk about projects the only project that the TIF would be doing is the Mountain Inn. What he's talking about when he says projects is should he include the value of other things that are being built. And I wish he wouldn't use projects. Dr. Collins: I apologize I didn't know my vocabulary was confusing. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayetteville.org • • Special City Council Meeting Minutes January 25, 2005 Page 10 of 44 Kit Williams: He' s talking about other buildings that will be built and if you include the value of these other buildings in the millage, what will that make the millage? The only project we're looking at, the only project that we can possibly afford is the Mountain Inn project as was originally approved by the City Council. If you look at the project plan amendment that I gave up, the first thing that we did is remove all of Phase II because there' s simply not enough money for Phase II. The only project that is economically feasible at this point in time, if you make that finding, is the rehabilitation of the Mountain hm. The purchase of that and the destruction of that. Alderman Thiel: Thank you. Dr. Collins: My apologies for my vocabulary. I should talk about projects versus developments. When we were going through the various scenarios there were certain developments which we knew were going to take place or were already in the process of taking place. But with that issue of how conservative to be, whether or not to include those which I think is a no brainer. It' s only obvious that they should be. You just have to drive by and see dirt being turned or not to include them. I think that in order to provide you with as broad a spectrum as possible to be as reasonable as possible they were either not included or included incrementally into the overall estimation of what increment would be available to pay off the debts. Alderman Thiel: Okay. Dr. Collins : Does that make sense? Mayor Coody: Yes. Any other questions for Dr. Collins? Alderman Reynolds : At what point are we going to talk about the expansion this district? Mayor Coody: We're discussing the boundaries and the plan at the same time concurrently right now. You can discuss that right now if you'd like to. Alderman Reynolds: Okay. Archibald Yell Boulevard, when we talked about this before, I told the people that are east of Archibald Yell that they wouldn't be included in this. Fifth Street, Fourth Street and that district. I think I already told them that we got them back in there and we took them out the last time. Dr. Collins : I would have to defer. We take our cues in terms of which parcels are to be included from the City. So I would have to defer that question to someone else. Kit Williams: The only change in the boundaries was towards the west to include the Downtown Master Plan boundaries. That was the intent. The intent was not to move it toward the east whatsoever but only move it toward the west to include what had been presented as the Downtown Master Plan Redevelopment District. Mayor Coody: Tim do you know if we accidentally used an old map that had excluded properties put them back in? Do you have a copy of the map in front you? 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevil le.org • Special City Council Meeting Minutes January 25, 2005 Page 11 of 44 Tim Conklin : The original project plan that was approved is the same boundaries as what we're discussing this evening. It has not changed. Alderman Thiel: Mayor, I think the problem is that this amendment is including the downtown plan as part of the amendment? Mayor Coody: Yes. The Downtown Master Plan TIF. Alderman Thiel: Yeah, the area on the west? Mayor Coody: Yes. Alderman Thiel: A lot of those people had contacted Alderman Reynolds and me that lived in Ward One, the Ward One portion map. I don't think they were aware that we were going to be discussing their property, their boundaries again because we had tabled indefinitely that project because of the announcement from the Attorney General' s office. Mayor Coody: Yes. Alderman Thiel : I think the concern is this is moving so fast without them even being aware that this is being included now in this amendment. Mayor Coody: I understand now. Alderman Thiel: I don't think anything has changed it is just. . . . Mayor Coody: It' s the west side not the east side. Alderman Thiel: Right. Mayor Coody: Right. Any other questions for Dr. Collins? Any more questions on the economic feasibility? Thank you very much. Stick around we might have more questions for you. Who else would like to address us on this? Hello John. John Newman : I' m John Newman, citizen of Fayetteville. Maybe the answer to this is obvious but I have one question. It would seem like the Mountain Inn property is if there ever was a property that was appropriate for condemnation that would seem to be it. My question would be why don't we just condemn it, take it, knock it down and sell it whether that gets us a hotel or an office building? Mayor Coody: I can answer that. I wish it were that simple but we can force condemnation on a building and have it torn down and we can put a lean on that property for the current property owner that owns it. With a lean on it we wouldn't own it. The current property owner would continue to own it even after we had poured money into tearing the building down and cleaning the site up. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevi I Ie.org ' • •Special City Council Meeting Minutes January 25, 2005 Page 12 of 44 Let' s just use some random numbers. Let' s say that we had $880,000.00 in the demolition removal of the building. We would condemn the building, demolish it. We'd have $880,000.00 or a million dollars in the removal of the building and then we'd put a million dollar lean on that piece of property. Then if someone wanted to buy it they would have to satisfy the million dollars lean and then it would still be owned by the current property owner. So we wouldn't have any control over what might go there. She could sell it to whoever she wanted to sell it too. So we wouldn't have any control over the future of the downtown area there if we just condemned it and destroyed it. Kit Williams : Mr. Mayor that really is Option One that I presented to the City Council that they can in fact use General Fund money to attempt to raze and remove this building. I' m sure there would be litigation involved. I think the owner would say no it' s not blight enough but I think we could prove our case. It would result in the kind of problems that the Mayorjust spoke. There is another option. The City Council under Option Two could issue enough bonds that they could possibly condemn the property through the TIF District. Then it would be disputed about how much we would have to buy the property for. I personally don't think it is worth much more than what it would cost to tear it down but that would decided by a jury not by us. If the jury decided on too high a figure then we couldn't afford to buy it and tear it down. So we might have to buy a property that would be our problem from then on. The City Council is not required to either enlarge the district or to do anything else. They can if they want to determine that, because of the Attorney General's opinion, there' s not enough funds to do the project as conceived and they just will not want to go forward. Those are certainly options that the City Council will weigh. However both of those options have costs because if there is a blighted building there, I think there is some responsibility on the City to try to protect the buildings around it by condemning that property and that would be an expensive proposition. John Newman : And so the issue is control over what happens. Mayor Coody: That's one. We'd have a million dollars in piece of ground out there that we might not see again. We might never see anything become of it. It might become just a cleared site with nothing on it for years to come and we would have a million dollars in it. John Newman : Versus what three and half million. Mayor Coody: That would be coming out of the General Fund and it would go toward a twenty three million dollar hotel project and convention area in the downtown, right here in the downtown versus just a brown field site. That would be paid back as well you're right. Thank you. Mr. Andrews how are you tonight. Michael Andrews: Good sir. My name is Michael Andrews, lifelong resident of Fayetteville. Although neither of my businesses that I own here in Fayetteville are in the current TIF District or the expansion that's proposed I can't see anything but good that would come to my businesses if this project were done. I 've seen the plans. I've heard everything and read everything about it and think it would be a good project for not only the businesses here in Fayetteville but every citizen here in Fayetteville. So whatever we can do to make this project move forward, whatever it takes for the City of Fayetteville to get this project on the ground and running I think that's what we need to do. Thank you. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) access fayettevil le.org ' • especial City Council Meeting Minutes January 25, 2005 Page 13 of 44 Mayor Coody: Thank you sir. Hi Mr. Butt. Jack Butt: Good evening Mayor and Councilmen. My name is Jack Butt. I am, along with others, the owner of several properties literally across the street from the Mountain Inn. We are obviously here to see this blight resolved by the creative and diligence of Richard Alexander and John Nock and that group. Forgive me for being ignorant on this but I have been vaguely interested in other projects like the city incinerator, using sales tax to build schools, how rollback taxes apply to the county, and each case the county, the city, the schools trying forward thinking ideas, original creative ideas perhaps something like Mr. Bumpass suggested. I 'm not suggesting his ideas are wrong but they try to find a creative way to go around a road block and every time we got our socks sued off. We lost four or five years, million of dollars in attorney's fees alone and tens of million of dollars in tax refunds. I don't mean to say there' s any danger with this and I trust that Kit Williams is an excellent attorney, but if there' s a safe way to do this, do it the safe way, do it the conservative way. Attorney General opinions aren't worth warm spit. In every one of those cases I told you about there were Attorney General opinion's that supported doing what was done and the Supreme Court overruled them. If there 's any doubt about at all then forgive me. I don't know if there is any doubt if there' s not that's great. If there' s any doubt at all resolve it to a friendly suit. Don't get tangled up in five years of class litigation. Mayor Coody: Thank you. I want to comment on your comments. We are all of the opinion that we want to avoid any kind of illegal tax, tax exaction, illegal exaction, and any kind of lawsuits. That's why we're being very cautious. Of course we're moving at light speed it seems but we are very concerned about doing things well . As matter of fact we're reacting very conservatively to the Attorney General 's opinion. His opinion went against what we thought was approved by legal and we're taking that opinion very seriously instead of just relying on it and doing something. We're taking the other approach. We're relying on a very conservative opinion but our attorney, Kit Williams is very concerned. We're all very concerned about making sure we do things legally and well because none of us want to get sued. None of us want to lose money in a lawsuit. One of the things in our plan which is, and I was going to bring this up in a little bit, is if we approve this tonight then we would be basically approving authorization of an injunctive or declaratory judgment suit versus Washington County Assessor. That is not the final word on what the Supreme Court is going to say even though the County Assessor is exceptionally good and we owe her a debt of gratitude for working so well with us and she' s very good at what she does. We figure that we might have to force some kind of injunction just to have the judge or some jury tell her and us what we can do, what' s legal because none of us really have the answers right now. Kit Williams : I do want to say, you may call that to the Council' s attention that you would be authorizing me to have a declaratory judgment or injunctive suit basically to protect the County Assessor about the proper disbursement of that. I think in that way hopefully we could avoid any possible illegal exaction suit because the tax will never be given improperly. Without such a suit, she would have to make an educated guess and as you know in the past sometimes those educated guesses have not come out right and that can result in substantial taxpayer losses. So I agree with you Jack, I think this is something we need to be very careful with. 113 West Mountain 72701 (479) 52 1 -7700 (479) 575-8257 (Fax) access fayettevil le.org ' •special City Council Meeting Minutes January 25, 2005 Page 14 of 44 Jack Butt: I perceive you're talking about a friendly suit and those were discussed and passed over on these prior tax disasters. The second matter I 'd like to follow up on John Newman' s idea, and I don't dispute you Mayor Coody but I think if you take it to its logical conclusion, if the City were to spend more than a million dollars to cure this blight and even Mr. Alexander and Nock weren't out there, I think that's a great idea. I mean you've got a danger, an eye sore and impairment to the economy and something has to be done about that. Now if we've got some white knights on the horizon that can build us a five star hotel we're incredibly lucky but even if he doesn't I think the city needs to do something. So if we raze the building for a million dollars, I don't know if we can find that in the budget and we get a lean against the owner. Now the owner, if I understand it, and I guess I'm posing this as a hypothetical for Mr. Williams to comment on, if the owner doesn't pay the City the million dollars then we foreclose. We put that property, cleaned up slick as a hound's tooth ready to sell to a developer and put it on the market at the courthouse steps. That' s what you do when you foreclose a lean. Then we're going to have people bidding on it and I suggest Mr. Alexander, Mr. Nock, Jim Lindsey, any number of investment groups from all over the state, the region and the United States, are going to be pretty interested in a slick acre or two in downtown Fayetteville that' s clean and ready to go. Now if they only bring $200,000, the City is out net $800,000 because if $200,000 bided in, you're out $800,000 but you cleaned the site up. I don't think you're going to have chancey, iffy, patchy, uncertain buyers bidding on a site like that. I think you're going to get blue chip bidders. Whoever buys it, maybe they will put a hotel there, maybe they will put a huge suite of offices for rent or maybe they will put a high rise apartment building. That' s free enterprise at work, the most the City can lose is $ 1 million and that's if nobody in the world steps up and buys it. I'll write you check tonight for $300,000 to buy that site and get it cleaned up, I' ll do it. Now I imagine that there' s plenty of people that can write a check for two or three million dollars to have that site cleaned up. I think the real risk to the City on razing that site is zero, the worst case, a million dollars. Somebody could step up and pay for a clean site in downtown Fayetteville across the street from two courthouses, down the street from the convention center, and we're the only convention center site in northwest Arkansas that has walk ability. I put people up in the Embassy Suites and you can't walk anywhere from the Embassy Suites. You put them up at the Springdale Convention Center. They can't walk anywhere. If you put them up down there then they can walk to gardens and retail shops. We've got the pieces to go with it. Now I' m not arguing against the TIF but if that's a bridge too far I think the City ought to condemn the thing and raze it in a second and I bet you' ll have your money back in a year. If you make any money over what it cost to raze then the owner would get the money and we're all happy. But I think, unless I'm wrong, the owner doesn't still control it. You can foreclose against her, sell it at auction and people will step up and bid on it. Mayor Coody: That' s one our options. If the TIF is a bridge too far then I think that will be our next logical option because we all want to see this situation resolved. Jack Butt: I don't envy the hard decisions you have to make. Thank you for taking the time to do it. Mayor Coody: Thanks for the suggestions. They're all good. Thanks Jack. Hey Rob. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayettevil le.org ' • Special City Council Meeting Minutes January 25, 2005 Page 15 of 44 Rob Sharp : My name is Rob Sharp. I' m the architect for the East Square Redevelopment Project and I'd just like to very quickly make two points. First of all I want to personally assure the Mayor and the City Council that everyone on the development and construction team is going to make every effort to design and construct a building that' s going to be a credit to Fayetteville in every possible way. I know we just heard from the previous speaker about possible future projects that might happen in the next few years with possible future developers. I think we really ought to be careful that we don't lose what' s taken years to put together on another second guessing of what' s going on here. I think that the team you've got is a good team. I think you know we've got people that have been willing to renovate the Campbell-Bell building. Imagine the Fayetteville square without the Campbell-Bell building being renovated with the TV studio in the ground floor or imagine the University of Arkansas without Carnal Hall. I mean this is a team that can do it, put out projects that you can be proud of. The second point is that this is a tough project. Before this current group I 've worked with other developers and they couldn't make it work. I tried to get other out-of-state investors interested in it and they were of the opinion that you could give them that property and they could still lose money because of the condition of the building and difficulty of trying to make that work on that tight site. I just want to make those two points that if this TIF can be approved in the amended format we' ve got an excellent chance of having a great building. Secondly no matter what happens this is a tough project and that's why it has taken as long as it has. Consider carefully before we close the door on this one. Mayor Coody: Thank you very much Rob. I want to ask our attorney, Kit Williams a question referring back to Jack Butt's comments. Let's just say the TIF doesn't work for some reason. What if we were to go to the raze and remove route, how long do you think it would take for us to have control of that piece of property if ever? What' s your assessment? Kit Williams: We could certainly have it eventually. One of the problems would be of course if you look at this particular project as being proposed and approved by the City Council in the past, it wasn't just the Mountain Inn. There were four different properties there including the Courts Building and two other buildings in order for not only the hotel to be built but a parking deck to serve the hotel and the condominiums also. We can't condemn the rest of that property. We can only condemn the one piece coming out of the middle. That would make the demolition more difficult and expensive I think because you would have buildings on both sides of the Mountain Inn. There would be some question about whether you could save the arcade section which I think they are planning on doing. The historic part by Center Street I think the current developers are intending to attempt to save that. If we condemn it I think we'd have to tear everything down. I don't think we can pick and choose and say well we' ll tear everything down but the fagade. Either the building needs to be razed and removed or doesn't. I don't think we really have the legal option of not doing it. I think eventually we would be able to gain control of the property through a tax lean or foreclosure as Mr. Butt explained and at that point in time if we didn't bid on the building or the land which I don't think we would have, we actually wouldn't control it. It would be whoever showed up on the courthouse steps and bid the most money. They would be the ones that would own that property. We would get some of our lean 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayetteville.org ' • • Special City Council Meeting Minutes January 25, 2005 Page 16 of 44 paid off but probably the rest of it would be discharged and so we would only get a portion of whatever money we have invested back. That is certainly an option the City Council has. If you think that this TIF District is not feasible or if this is not the kind of project you feel like is still what you want to do then you certainly have the right not to go forward and not to enlarge the boundaries and to basically repeal the former project plan and at that point the City would have to look toward doing a condemnation action which I think would be successful. They could challenge it. They could say the parking deck is still fine, I mean people can still use the parking deck. They could say this shouldn't be razed and removed. I might disagree with them but they would probably have enough of an argument to go up to court. So whatever we're going to do in this case I think one way or another unfortunately there' s going to be more work for my office. I think we're going to end up in court regardless of any decisions you make tonight one way or the other. Mayor Coody: Thank you. Hello Ms. Hoover. Sharon Hoover: Hello. Sharon Hoover with Fayetteville Downtown Partners. I would just like to point out that our board met last week and we have a letter from the board in support of the Mountain Inn Redevelopment Project. I just wanted to make sure that you got that. Thank you. I want to I guess address the two issues tonight one is the boundary. The boundary that is suggested now is exactly what's listed in our Downtown Master Plan that the community came up with. I guess I' m confused why anyone would have a problem with these boundaries. Is there something in Ward One that I'm not understanding. Alderman Thiel: Uh huh. Sharon Hoover: What is it? Alderman Thiel: The people that live down there. Sharon Hoover: Did they go to the master plan community sessions? Alderman Thiel: Yeah they did. Actually some of the people did participate and they were going to be at the last meeting when we were going to discuss this area but they knew that it was tabled because of the Attorney General ' s opinion. They were not aware that tonight we were going to be discussing this expanded boundary. So it' s their interest I am concerned about. I have no way of contacting them. If we're going to be try to make a decision tonight I think we owe that to them to let them have their say about this. Sharon Hoover: Were there particular issues? I'm just not aware. I' m trying to learn here. Alderman Thiel: I think they have issues with being within the TIF. 113 West Mountain 72701 (479) 521 -7700 (479) 575.8257 (Fax) accessfayetteville.org ' • • Special City Council Meeting Minutes January 25, 2005 Page 17 of 44 Sharon Hoover: In general. Alderman Thiel: In general. Sharon Hoover: Okay. Alderman Thiel: I think they at least want to have their say about it. I may try to amend this to exclude a portion of this. It' s a very small portion but it would include the area of the people that are concerned. I 'm not sure that they are here. They've contacted both of us and so that may be how we handle that part. Sharon Hoover: Okay. Thank you. I will try to figure that one out. The other question I have on the project plan, is it possible to amend it at a later date? Mayor Coody: Yes. Sharon Hoover: To keep things moving? Mayor Coody: Yes. Sharon Hoover: Is it very easy to do? That could keep the developers on track and keep this going. I'm concerned also, we've got some great developers in line to do this project and I certainly wouldn't want to lose them even though Mr. Butt suggested some other good solutions. They certainly have a good track record for us in town and we certainly like to do everything we can for them. Mayor Coody: Yes. Sharon Hoover: So if that' s a possibility I guess I'm not seeing any problem with the project plan at the moment. Thank you. Mayor Coody: Alright, thank you Sharon. Who else would like to address us tonight. How are you Cyrus. Cyrus Young: Just fine. I would like to talk about the millage again. That's what I talked about the last time. There' s two scenarios there one with 3 . 16 mils and one with 7.66 mils. We're talking about the base here. What millage are those in the two scenarios. Kit Williams: The smaller millage, the three point something millage is basically, I think, undisputed that could go into the TIF District according to everybody's best understanding. Cyrus Young: What does it include in other words? Kit Williams: That would include all the millage for the city library one mil, the police and fire pension plans both have a total of point four mils, and five mils from the county and then one point something mils on the county road tax. Cyrus Young: That' s the 7.66. 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) accessfayetteville.org ' • • Special City Council Meeting Minutes January 25, 2005 Page 18 of 44 Kit Williams: That' s the 7.66. To get down to the three mils the school district's interpretation of the debt service ad valorem rate is that whatever their debt service was in 2001 , even if that's no longer millage supported by debt service, that they' re still entitled to the tax increment for the amount that they had in 2001 . I don't think that's proper. I think that would violate the constitutional provision that says a tax levied for one purpose cannot be used for another purpose. I don't think you can take the millage increment that was supposed to be for the library and transfer it to the schools. I think Amendment 78 said that in the one circumstance when you create a TIF District you can divert millage that had been passed for one purpose and use it for the tax increment financing district but I don't see Amendment 78 as changing the constitution saying that a tax for the police and fire pension can be transferred to the school. So they are actually getting more millage then currently have been passed by the voters for them. That is the issue that would have to be decided by the courts and that's why I would attempt to get the case to the courts so that the judge could decide that issue. Cyrus Young: So are you saying in the 7.66 mils there is some school millage? Kit Williams: No, 7.66 mils is everything but the school millage. Cyrus Young: So the 3 . 16 definitely doesn' t have any. Kit Williams: Right. The 3 . 16 would be if you use some of the tax increment increase and give to the schools even though they don't have a mil at this point voted in by the voters to entitle them to that. Cyrus Young: Okay, now the other thing is the developers are talking about secondary bonds. What would pay those off, the 3 . 16, the 7.66, or either one depending on how the courts rule? Kit Williams: The 3. 16 would not support them. The 3 . 16 would only support the primary marketable bonds that we call in. Actually the marketable bonds would have all the tax increment financing pledged to them initially. The other bonds would be sub servant subordinate to those bonds without recourse against the City or the TIF District if they weren't paid off in the 25 years. They would be paid basically after the other bonds were paid. Cyrus Young; Or if the courts ruled that the 7.66 is allowed. Kit Williams: Yes. We could have a provision in there that if the courts do rule that the 7.66 is in there and there' s sufficient debt service to support the original marketable bonds that the other bonds could begin to start being paid. Cyrus Young: Thank you. Mayor Coody: Anyone else who would like to address tonight please. How are you tonight? Daniel Hintz: Doing well thank you. Thank you for allowing me to speak this evening. My name is Daniel Hintz. I'm a resident on the south side of Fayetteville. I think one of the important things about the Mountain Inn TIF we shared a lot being said that it is a gateway to the 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fac) access fayettevi l Ic.org • . Special City Council Meeting Minutes January 25, 2005 Page 19 of" downtown district. I'd like to flip that around and say that it' s also a gateway to the south side of Fayetteville. People coming in from the north to the south they see this blighted building, they come down to the south side and they also see some of the issues that we're dealing with on a daily basis on the south side. As a symbol for what is possible I think that the Mountain Inn project takes on a larger meaning than just economic development. We're talking about showing those of us on the south side that Fayetteville is committed to changing some of these blighted issues. Those of us who do live on the south side have talked about this. I was at a neighborhood meeting last night and this issue was talked about as an important potential development. I really see this even if we flip this around as a gateway to the south side that philosophically I think this is a very important project. This may open up a lot of different doors for those of us that live on the south side to implement projects. It' s almost a domino effect is the way I see this Mountain Inn project. I really hope that as you go over the options that you actually are able to make a decision in a timely manner that will allow all of us who are working on both the grass roots level as well as those working on a larger level to be able to work together to not only help the downtown area but also the south side. So thank you very much. Mayor Coody: Thank you for that prospective. Who else would like to address us tonight? How are you Mr. Ramsey? Bill Ramsey: I'm good. How are you Mr. Mayor. Members of Council. I don't think probably any of us necessarily wanted to be here tonight. We thought when you passed this Mountain Inn TIF unanimously you had done your job. I think the only reason you're here tonight is because of the Attorney General's opinion. The only reason for enlarging the district is to make it feasible so that you can utilize this tool that we so badly need. I think you've got an opportunity and this may be an opportunity lost if it' s not done. I think you heard Rob Sharp just say that if that's a bare piece of ground out there you're probably not going to be able to attract a developer that's going to put a hotel there. I can tell you that we started working with these developers at the Chamber of Commerce way back. We're getting state people together, federal tax credits and they just told you tonight that there' s some very time sensitive things that you' re dealing with. Those opportunities are going to go away. Kit you know I don't understand the legal part of every thing. I probably should know about TIF but as far as impact to individual property owners I don't think there is any. You just freeze the rates at what they are and the increment is what helps pay off those bonds. That's the reason why you' re talking about enlarging this district so that you can increase the increment and make it feasible. You wouldn't have to do that if we hadn't had the Attorney General's opinion. You know the track record of the developers they have worked hard and secured some tax credits. They have said publicly, they have said privately without that help they can't do this project. If we don't do this part and establish this TIF or at least come up with some way to assist them and if that help goes away the project is going to go away and we're all going to sit back one day and say hey we let an opportunity slip away from us. Let' s not let that happen. Okay? Thank you. Mayor Coody: Thank you sir. Richard Alexander: Mayor. I 'm one of the developers, Richard Alexander. I would like to address just a couple of the concerns that I heard tonight in addition to the comment. This is a very time sensitive project as Bill said there are federal tax credits involved if Bank of 113 West Mountain 72701 (479) 521 -7700 (479) 575-8257 (Fax) access fayettevi Ile.org