HomeMy WebLinkAbout108-06 RESOLUTION4i
RESOLUTION NO. 108-06
AN RESOLUTION TO GRANT THE APPEAL OF EAST
SQUARE DEVELOPERS TO ADD TWO FLOORS OF
HOTEL ROOMS AS A MINOR MODIFICATION OF C-
PZD 05-1610
WHEREAS, the City Council approved C-PZD 05-1610 East Square
Development on December 20, 2005 to replace the former blighted Mountain Inn and
three other vacant and deteriorating structures; and
WHEREAS, a prestigious hotel chain will establish a luxury hotel in the building
if two more floors of hotel rooms are permitted to be constructed; and
WHEREAS, East Square Developers have requested that their building be
allowed two additional stories of hotel rooms identical to the already permitted hotel
room stories as a "Minor Modification" of C-PZD 05-1610, pursuant to §166.06 (I)(1) of
the Unified Development Code; and
WHEREAS, East Square Developers have a right to appeal the Zoning and
Development Administrator's decision not to approve these two additional stories as a
"Minor Modification"; and
WHEREAS, allowing two additional floors at this site on College Avenue near
other large downtown buildings is appropriate, will further enhance surrounding
commercial and office structures, and is compatible with all the reasons that justified the
original request for a sixteen story building.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF FAYETTEVILLE, ARKANSAS•
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
grants the appeal and approves the developers' request to allow construction of two
additional floors of hotel rooms that will be identical in outward appearance to the other
floors of hotel rooms so that the total authorized height shall be eighteen stories as a
Minor Modification of C-PZD 05-1610 All other terms, conditions, requirements and
plans for C-PZD 05-1610 shall remain unaltered and in full force and effect.
_ AC-cc\iY pc •1c;p
=U• •4
APPROVED:
By:
ATTEST:
By: «iQ
S, NDRA SMITH, City Clerk
RP
:FAYETTEVILLE:
•99KANS.•\
o
yfyGTON GO
lounHhIt'
City Council
CITY COUNCIL AGENDA MEMO
To: Mayor and City Council
Thru: Gary Dumas, Director of Operations
From: Jeremy C. Pate, Director of Current Planning 4
Date: May 23, 2006
Subject: Request for approval to increase height of East Square Development PZD (C-
PZD 05-1610)
6/6/‘
Meeting of June 6, 2006 /es
Agenda Item Number
C- p&p o$-1410/
bas sg j6rJ
fr19I
RECOMMENDATION
Planning staff has recommended denial of a requested administrative approval to increase
the building height of the proposed hotel/condo/retail building known as East Square
Development Planned Zoning District. It is within the ability of the Zoning and
Development Administrator to approve a Minor Modification to an approved Planned
Zoning District maximum building height if the request falls within 20% of the originally
approved height; this request does meet the criteria of a Minor Modification. However, at
this time, staff finds the request to be substantial in nature, especially with regard to
height, and hereby recommends this item be considered by the City Council for a final
decision.
BACKGROUND
The Planned Zoning District ordinance for this project was approved by the City Council
in December of 2005. The project proposed a 16 -story mixed-use project, consisting of
147 hotel rooms, 25 condominiums, restaurant, retail and meeting space. At that time, the
applicant elected not to utilize the newly adopted PZD ordinance Master Development
Criteria, due to the fact the project had been submitted under the previous ordinance. The
previous ordinance did not allow for administrative approvals; rather, the project passed
by the City Council was the one expected to be built, with changes to zoning only
allowed by returning to the City Council for consideration. The current PZD ordinance
does allow administrative approvals of minor modifications to a PZD, subject to certain
criteria. For increases in height, the request must be within 20% of the original height
established with the associated PZD project. The applicant states a need for 53 additional
hotel rooms in order to attract a certain hotel, citing market forces. In order to
accommodate this request, instead of utilizing existing space within the hotel, the
applicant has requested an additional two (2) floors, for a total of eighteen (18). In this
case, an additional two stories in height as compared to the 16 stories approved is a 13%
increase, which does meet the threshold for administrative approval. However, because
the ordinance under which this project was approved did not allow for such
modifications, staff finds it appropriate to be reviewed by the City Council, as opposed to
administrative approval.
City Council Meeting of June 6, 2006
Agenda Item Number
DISCUSSION
The following supporting documents, among others, may be found in the attached packet:
I. Letter of Request from applicant for City Council consideration of adding two
(2) additional floors to the approved C-PZD 05-1610 for East Square
Development, for an I 8 -story height.
II. Letter and parking charts detailing the proposed parking ratios for the project
III. Letters between the applicant and staff regarding the administrative approval
IV. Copy of approved ordinance (No. 4804), with attached conditions of approval
V. Reduced copy of approved site plan
BUDGET IMPACT
None.
May 22, 2006
Jeremy Pate, Director of Current Planning
City of Fayetteville
113 West Mountain Street
Fayetteville Arkansas
RE• ADDITIONAL TWO FLOORS,
EAST SQUARE PROJECT
Dear Jeremy,
R 1 G: 1 T E RED
ROBERT SHARP. ARCHITECT, INC
525 SOUTH SCHOOL AVE i STE 220
FAYETTEVILLE I AR
PHONE:4171.112.0229
FAX: 47t.442-5711
R 5 A
The East Square redevelopment project was approved by the city Council on December 20, 2005
as a Planned Zoning District. This project was brought forward as a PZD rather than as a LSD
under the C4 zoning for two reasons: First due to the difficulty of constructing the parking
structure on a site that was limited by historic building and the programmatic requirements of a
first class commercial hotel and convention center. Second, the residential condominiums are a
conditional use under the C4 zoning. Therefore the parking structure and the residential
condominium units combined to lead us to the PZD process.
We did not utilize the PZD process as a way to gain additional height. As you know, the C4
zone has no height limit. Another factor that has contributed to the ultimate height of the
building is my client's willingness to locate the tallest part of the project as far away from the
historic square and the historic Washington County Courthouse as possible. This decision to
preserve views to these sensitive areas, as well as their decision to preserve the existing historic
buildings have resulted in the limited footprint of the hotel Market forces have dictated that
another 53 rooms be added in order for the hotel to have every chance for economic success.
We ask that you consider the following items when making your recommendation to the City
Council:
1. The additional two floors will not exceed the current height of C4 zoning.
2. The PZD was utilized to enable the residential units and the parking deck, not the
hotel tower.
3. This site has been slated for renewal and redevelopment after a long dismal
history of economic failure. Market forces are a key aspect of this project.
East Square
page 1 Project Number 00001
•
Experts in the hospitality field have told us that increased private investment in
the form of 53 additional rooms is called for. We ask for a similar commitment
from the City of Fayetteville.
4. Much of the recent controversy over height is related to preserving views of Old
Main and the historic and unique character of Dickson Street, neither of which is
at issue here.
5. One of the benefits of the PZD process is flexibility. My client should not be in
the situation of having his development rights reduced as a consequence of his
agreeing to meeting the higher standards of PZD development. In essence, he has
agreed to spend additional monies on the facade of the parking structure, and has
committed to using historically appropriate materials on the hotel tower. In
addition, he has agreed to preserve existing historic buildings that contribute to
the fabric of the neighborhood.
6. The 2020 plan and the Downtown Master Plan both urge revitalization of the
downtown area and the development of this site in particular. We feel we can
better meet these goals with the addition of 53 rooms.
1
7. This building represents a transition from the 1970s zoning that envisioned
unlimited height in the downtown area and the new lower slung city proposed by
the Downtown Master Plan. While my clients and I welcome many aspects of the
proposed Downtown Master Plan, we feel that we are not able to look to it for
definitive guidance until it is subject to final citizen input, thoroughly reviewed by
the Aldermen, and passed into law.
For the above reasons, I ask for your support in amending PZD 05-1610. I strongly feel that the
benefits that this project represents to the City of Fayetteville are enormous.
Sincerely,
12— ghat*
Robert Sharp, Arcl11'tect
cc: Richard Alexander
File
East Square
page 2 Project Number 00001
Da °1d maw o ana(I aaenbs )se,
.
.1 'A 1101
as fo �d luauido lanau algin s 1se -
oilrnai31S113 :z a mr!
OUP •••••.1. ea
..• ...m—••••• , aimmom.••
RESOLUTION NO.
AN RESOLUTION TO GRANT THE APPEAL OF EAST
SQUARE DEVELOPERS TO ADD TWO FLOORS OF
HOTEL ROOMS AS A MINOR MODIFICATION
OF C-PZD 05-1610
WHEREAS, the City Council approved C-PZD 05-1610 East Square Development on
December 20, 2005 to replace the former blighted Mountain Inn and three other vacant and
deteriorating structures; and
WHEREAS, a prestigious hotel chain will establish a luxury hotel in the building if two
more floors of hotel rooms are permitted to be constructed; and
WHEREAS, East Square Developers have requested that their building be allowed two
additional stories of hotel rooms identical to the already permitted hotel room stories as a "Minor
Modification" of C-PZD 05-1610, pursuant to §166.06 (IX 1) of the Unified Development Code;
and
WHEREAS, East Square Developers have a right to appeal the Zoning and Development
Administrator's decision not to approve these two additional stories as a "Minor Modification",
and
WHEREAS, allowing two additional floors at this site on College Avenue near other
large downtown buildings is appropriate, will further enhance surrounding commercial and
office structures, and is compatible with all the reasons that justified the original request for a
sixteen story building.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby grants the
appeal and approves the developers' request to allow construction of two additional floors of
hotel rooms that will be identical in outward appearance to the other floors of hotel rooms so that
the total authorized height shall be eighteen stories as a Minor Modification of C-PZD 05-1610.
All other terms, conditions, requirements and plans for C-PZD 05-1610 shall remain unaltered
and in full force and effect.
(1)
TITLE XV UNIFIED DEVELOPMENT CODE
Amendments to the PZD Master Development
, Plan.
The Zoning and Development Administrator shall
determine whether an amendment request shall
be considered a minor modification or a PZD City
Council rezoning based on . the criteria
established herein. The applicant may appeal the
Zoning and Development Administrator's
decision to deny an administrative modification
within 10 working days of said decision to the
City Council, in writing.
(1) Minor Modification - Criteria
An amendment request may be considered
as an administrative minor modification if it
meets the following criteria:
(a) Building Setbacks —An increase or
decrease of the required building
setback when such modification is no
more than a 20% change to the
originally approved setback.
(b) Minimum Lot Size —An increase or
decrease of the minimum lot size when
such modification is no more than a
20% change to the originally approved
minimum lot size.
(c) Building Height -An increase or
decrease of the building height when
such modification is no more than a
20% change to the originally approved
maximum building height.
(d) Increased Number of Dwelling Units -An
increase of the number of dwelling units
in a planning area of 20% or less. Such
increase shall be accompanied by a
corresponding decrease in dwelling
units in another planning area located
within the same approved PZD Master
Development Plan.
(e) Decreased Number of Dwelling Units -A
decrease of the number of dwelling units
in a planning area up to 20%. Such
decrease shall result in a net loss of
dwelling units unless these units are
concurrently approved as an increase of
units in another planning area
(f) Commercial/Non-residential
Development Intensity An increase or
decrease of the square footage of
development intensity when such
mod cation is no more than a 20%
change to the originally approved
development intensity.
(g) Text Changes Insubstantial changes to
the text, as determined by the Zoning
(J)
and Development Administrator, to add
clarity, when such changes do not
change the commitments.
(h) Street Alignment -The Zoning and
Development Administrator upon review
. by the City Engineer shall determine
whether an insignificant shift in the
alignment of a street shall be considered
as a minor modification.
(2) City Council Approval. Rezoning through the
PZD process is required to modify any
aspect of the PZD which is not allowed
under the Minor Modification process. A
planning area within a Master Development
Plan may be amended separately from the
remainder of the approved master
development plan with City Council approval.
Phasing. Phasing of arPZD master development
plan may vary from the requirements of Chapter
166 of the UDC with regard to the expiration of
permits and plans only when phasing has been
identified, described, and approved as part of the
PZD master development plan process.
(K) Development standards conditions and review
guidelines
CD166 25
(1) Generally. The Planning Commission shall
consider a proposed PZD in light of the
purpose and intent as set forth in Chapter
161 Zoning Regulations, and the
development standards and review
guidelines set forth herein. Primary
emphasis shall be placed upon achieving
compatibility between the proposed
development and surrounding areas so as to
preserve • and enhance the neighborhood.
Proper planning shall involve a consideration
of tree preservation, water conservation,
preservation of natural site amenities, and
the protection of watercourses from erosion
and siltation. -The . Planning Commission
shall determine that specific development,
features including project density, building
locations, common usable open space, the
vehicular circulation system, parking areas,
screening and landscaping, and perimeter
treatment shall be combined in such a way
as to further the health, safety, amenity and
welfare of the community. To these ends, all
applications filed pursuant to this ordinance
shall be reviewed in accordance with the
same general review guidelines as those
utilized for zoning and subdivision
applications.
(2) Screening and landscaping. In order to
enhance the integrity and attractiveness of
the development, and when deemed
May 22, 2006
Jeremy Pate, Director of Current Planning
City of Fayetteville
113 West Mountain Street
Fayetteville Arkansas
RE• PARKING REQUIREMENTS FOR
ADDITIONAL ROOMS, • EAST SQUARE PROJECT
Dear Jeremy,
Richard Alexander forwarded your letter of May 18, 2006. In that letter you addressed the
parking loads of an additional 53 rooms at the East Square/Mountam Inn project. In that letter
you requested further study of the parking loads required by ordinance. I have researched this
issue and concluded that we are required to provide 280.53 parking stalls (including the extra 53
hotel rooms) and we are providing 348 parking stalls. Please see the attached tables showing our
updated calculations. The major difference between the previous and current parking load
calculations is the addition of the Juvenile Courts Building and the Niblock Law Firm under
172.05 (A) (3) Building Footprint Waiver in C3 and C4 and the 25% reduction for accessory
uses in a hotel under 172.05 Table 3. Another difference is the revised number of residential
condominium bedrooms and the addition of the 53 hotel rooms.
These updated parking calculations demonstrate that our client is able to fulfill the parking
requirements of the additional rooms under the terms of the UDO, and therefore the parking
should not be a reason to limit the addition of the requested 53 rooms.
Please call, write, or e-mail me if you disagree with my interpretation of the parking requirements
for this project.
S ncerely,
Robert Sharp, Architect
page 1
East Square
Project Number 00001
Enclosures: East Square Development Use Type Parking Calculations, November 17, 2006
Mountain Inn (Demolished) Use Type Parking Calculations, November 17, 2006
East Square Development Use Type Parking Calculations, May 22, 2006
East Square Prior Structures (Demolished), May 22, 2006
cc:
•
Richard Alexander
John Nock
File
East Square
page 2 Pr41ect Number 00001
D o Orrn Aro t0lt A
iN pNwi O O $ N
2 M
Pt" w AT9 0 0 II 0
i N
C c v
O D A �� D Da A_ pm Nm AMA
-402 az
00O0utw 00w
c211
_entutttutt00 contort 66_
i _
8 v oA
bN
QL
A 4.0 0000 000 AA°
P
A
i
D
R. \\-S2.<
C
c ,c� ww0.0 twttuitwtt
rn A a0 0000 000 _N_
A
A_
A
A
0 t6its
0 it mmmo _m0 a 0
7�p W WM NAt_.tto Amm 0a0
rn
NI a w
-4 CD AJ 0 W 00 0-4-4 -4 a s ON N
4 aa tiut�it 61001 O1 jJ N� N O.0 a 0
M 5 wNttiS _w01 Oa0
D
A
c �t
m c 0u
rn m
rrn
r0•'
rn
1
A
D
2
A 0
• C
D
i
z
A N
i
0
O
2
O
A
D
0
0
crn
to K
la
`o cmzz §
($ -16k®
z
AVAILABLE PARKING IN DEMOLISHED GARAGE
1.3
-
ij-
00000'00
00000a00_
&% Q Q2
0� +t+Ul,a
MOUNTAIN INN (DEMOLISHED) USE TYPE PARKING CALCULATIONS
USE TYPE
CALCULATED
QUANTITY/5 F. RATIO FACTOR TOTAL PARKING
HOTEL ROOMS
RETAIL, IST FL.
ARCADE 3 FLS.
MEETING, 2ND FL.
BANQUET, 2ND FL.
RESTAURANT, 2ND
RED BUD CAFE
64 ROOMS
2,012
18,315
50k1 OGG.
2,205
FL. 1,261
1016
1:01
1:250
1:500.
1:04
1:50
1:100
1:100
REQUIRED PARKING TOTAL
AVAILABLE PARKING IN DEMOLISHED GARAGE
TOTAL SHORTAGE PER EXISTING REQUIREI"ENTS
NOTES:
1
1/250
1/300
1/4
1/50
1/100
1/100
64
8.1
61.25
12.61
44.1
12.61
I I
213.19
113
101
MEETING SPAGE5:0CGUPANGY FOR ASSMBELY BASED ON
UNCONCENTRATED' AT A I5 NET 2ND FLOOR 160 GROSS SF/I5
=50.61 OCCUPANCY
BANQUET SPACE: BASED ON 'DANCEHALL, BAR/TAVERN' CLASSIFICATION
DEMOLISHED PARKING GARAGE: 5 FLOORS PLUS BASEMENT AND
ROOFTOP; 113 PARKING STALLS ESTIMATED
•
EAST SQUARE DEVELOPMENT USE TYPE PARKING CALCULATIONS
USE TYPE
QUANTITY/S.F.
CALCULATED
RATIO FACTOR TOTAL PARKING
CONDOS, CENTER
RETAIL, CENTER ST.
HOTEL ROOMS
CONDOMINIUMS
BAR, 1$T FL.
RETAIL, IST FL'
MEETING, 2ND FL.
MEETING, 3RD, FL.
BALLROOM, 31W FL.
RESTAURANT, SW F
ST. 3
938
141 ROOMS
22 ROOMS
552
6,410
286 OGCP.
130 OCCP.
6,140
L. 6,215
SUBTOTAL
LESS PARKING SHORTAGE OF PRIOR STRUCTURE
REQUIRED PARKING SUBTOTAL
I/BR.
1:250
1:01
1/BR.
1:50
1:250
1:04
1:04
1:50
1:100
LESS 30%
TOTAL
PARKING STALLS PROVIDED
2
1/250
2
I/50
1/250
1/4
1/4
1/50
1,100
6
315
141
44
11
25.88
113
32.5
122.8
62.15
526.6
IPI
425.6
121.1
298
350
12 PARKING STALLS WILL BE DEDICATED TO SERVE TI -4E CONDOMINIUMS
IN THE BANK OF AMERICA.
NOTES:
RESTAURANT GROSS SF.
DINING
PRIVATE DINING
KITCI-IEN
SERVERY
3,108
858
1.208
441
6,215
MEETING SPACES: OCCUPANCY OR ASSEMBLY BASED UPON
UNCONCENTRATED' AT A 15 NET
2ND FLOOR 4,285 GROSS 5F,15-2855 OCCUPANCY
3RD FLOOR 1,950 GROSS SF,15-130 OCCUPANCY
BALLROOM AND LOBBY BAR: BASED ON 'DANCEHALL, BAR/TAVERN'
CLASSIFICATION; BAR 552 SF 15 COMPRISED OF OPEN SPACE
WITHIN THE HOTEL LOBBY
PROPOSED PARKING GARAGE: 1-1/2 FLOORS; 133,316 SF,
350 PARKING STALLS
¶yeteV1I1e
ARKANSAS
THE CITY OF FAYETTEVILLE, ARKANSAS
PLANNING DIVISION CORRESPONDENCE
23 May 2006
Mr. Richard Alexander
East Square Development Co., LLC
11 N. West Avenue
Fayetteville, AR 72701
Re: Renaissance Tower/Mountain Inn Project
Dear Mr. Alexander,
125 W. Mountain St.
Fayetteville, AR 72701
Telephone: (479) 575-8267
I have reviewed the letter faxed to my office and received on May 22, 2006, requesting a review of
new parking calculations and a reconsideration of my decision to not administratively approve the
two additional stories in height to the proposed building. Please allow the following to serve as
answers to your requests.
Parking: I have spoken at length with your architect's office, Rob Sharp Architects, in reviewing the
parking calculations; while some uses have changed or been reorganized since the original PZD
approval due to more refinement in floor/construction plans, the ratios provided do indicate that the
348 parking spaces that are proposed to be provided on-site will meet the ordinance requirement,
utilizing the credit for pre-existing structures' parking deficiencies as allowed in the C-4 district, the
25% less ratio for hotel accessory uses and 30% less than that, as permitted by the Unified
Development Code, Ch. 172 Parking and Loading. It is my finding that the parking as presented
does meet the requirements of the Unified Development Code.
Administrative Approval: You are correct in your assertion that nothing in our current code would
limit the Zoning and Development Administrator's ability to grant the request to add two additional
floors to the 16 -story Renaissance Tower/Mountain Inn Project, for a total of eighteen floors. While
that decision could be appealed to the Planning Commission or City Council, the ordinance as it
exists allows for administrative approval of an increase in height to a building of 20% or less.
However, as mentioned in the previous letter, I feel that while this request does meet the criteria of a
"Minor Modification," in that it falls within the 20% change, I also find that this particular request is
more appropriately reviewed by the City Council. At the time this project was processed for
approval, the applicant chose to proceed forward under the rules of the previous Planned Zoning
District Ordinance. The previous ordinance did not allow for administrative approvals, therefore
K: lteremyl2006 CorrespondencelRenaissance Tower -Mountain !nn 2.doc
under that established criteria, the City Council approved a Planned Zoning District with the
understanding that nothing in terms of zoning or development would change without their revisiting
it. It is my finding that this particular change justifies a City Council resolution, as opposed to an
administrative approval.
I have just now (4pm) received a letter from Rob Sharp's office requesting this item be placed before
the City Council for their consideration.. I will be happy to forward the submitted materials to the
City Clerk's office in order to place this request on the City Council's agenda.
Please contact me if you have any further questions.
Best Regards,
46,
(Jerem'y
Director of Current Planning
1/4
•
K:L'eremy11006 Correspondence Renaissance Tower-Mounlain /nn 2.doc
May -22-06 04:34P Alexander & Gregory
501 521 1889 P.02
Alexander Merry -Ship & Alt
• Real Estate Group, Inc.
. Real Fume Sales Development
and Property Management
Richard Alexander, Resident Sherec Alt. Sr Vire President, Pnncipal Brinker
Rnb MerryShip. Sr. Vac President Jennifer Ellison. Rircinax Manager
May 22, 2006
VIA FACSIMILE TO (479) 575-8202
Jeremy C. Pate
Director of Current Planning
City of Fayetteville
125 W. Mountain St.
Fayetteville, AR 72701
RE: Renaissance' Power/Mountain Inn Project
Dear Mr. Pate:
Please allow this letter to serve as our fc)rrnal request for you to. reconsider your letter to
me of May [8, 2006 regarding our request for administrative approval of the addition of two
floors to the Renaissance Tower/Mountain iron project.
Upon receipt of you letter i discussed our parking situation with our architect, Roh Sharp
and asked him to work through the calculations concerning our current onsite parking. Please
find attached parking calculations for the project as prepared by Mr. Sharp's office. As you can
see from Mr. Sharp's calculations, our parking requirements arc 280.53 spaces utilizing the
current code and we are providing 348 spaces ensile.
With regard to your interpretation of the unified development code. 1 would respectfully
add that i have reviewed the code and there is nothing in the current code that would limit the
zoning and development administrator from granting our request since we are asking only for
two additional floors on a sixteen -floor project. The code specifically allows for the
development administrator to grant "minor modifications" including, specifically, an increase or
decrease in the :building height, which modification is no more that a 20% change in the
originally approved maximum building height. In this case, we are asking for a 13% change. I
have reviewed .the prior ordinance in effect at the time our project was approved and could find
nothing in that ordinance that prohibits the city council from adopting subsequent ordinances to
govern changes to approved projects such as the one requested nor is there anything in the new
ordinance that would prohibit the zoning or development administrator from applying existing
ordinances to a previously approved planned zoning development.
11 N. West Ave. Fayetteville, AR 77701 Phone 479.443.1313 Fax 479.521. 12(89
May -22-06 04:35P Alexander & Gregory
501 521 1889 P.03
Also, and as you know, we specifically did not request a waiver of the ninety -day
moratorium in order to allow what public comment might have come. 1 have personally been
aware of no negative comments from the city council despite the fact that our request was public
information widely known to council members in that it was the subject of several articles in
most of the local newspapers.
As far the changes recently enacted by the city council I. do not believe they affect our
project in that those changes as l understand it with respect to height limitations were specifically
limited to areas of C-3 zoning_ Our project, aside from being a planned zoning development, is
not in a C-3 zoning arca nor has it ever been in a C-3 zoning area. Tt has been, as long as 1 can
remember, a (:-4 zoning classification. Again, the city council specifically did not impose in the
past or recently any height limitations in C-4 commercial areas.
Of course, the timing of this request is very important to us. We are putting our
negotiations with our franchisor, Marriott, on hold, pending the outcome of this request. They
have strongly urged us to seek this change and any delay is of paramount concern to us. In
conclusion therefore 1 believe that we have more than adequate parking to satisfy our needs
assuming that we are approved for the additional two floors and in light of the fact that the
present ordinances specifically allow you to grant our request; 1 respectfully request that you
reconsider and do so. Ifyou are unable to grant our request because you do not believe you have
the authority. rather than deny our request we would ask that you forward our request to the city
council for approval pursuant to subsection (i)(2) of the code. Obviously, in light of the
information supplied f would also request that you night include your recommendation for
approval of our request to the city council. If, prior to making a ruling you should need any
other information or would like to meet with us regarding our request please do not hesitate to
contact me at the above number.
ItPA/jdc
Enclosure
Sincerely_,_ `
Richard P. Alexander
Ta!tile
ARKANSAS
THE CITY OF FAYETTEVILLE, ARKANSAS
PLANNING DIVISION CORRESPONDENCE
18 May 2006
Mr. Richard Alexander
East Square Development Co., LLC
11 N. West Avenue
Fayetteville, AR 72701
Re: Renaissance Tower/Mountain Inn Project
Dear Mr. Alexander,
125 W. Mountain St.
Fayetteville, AR 72701
Telephone: (479) 575-8267
The Unified Development Code, under Section § 166.06 (I) Amendments to the PZD Master
Development Plan, gives the Zoning and Development Administrator the authority to determine
whether a requested amendment to an approved Planned Zoning District is to be considered a
minor modification or a rezoning to be considered by the City Council. There are certain criteria
identified under this section that the Zoning and Development Administrator may consider a
request to determine if an amendment can be approved administratively. If the amendment
request falls within the set criteria and the Zoning and Development Administrator approves the
request, no further action is needed. If the Zoning and Development Administrator does not
approve the request, the applicant may appeal the decision to deny an administrative modification
within ten (10) working days of the decision to the City Council, in writing.
The letter dated March 06, 2006 regarding this project requests an administrative approval of
.additional building height and square feet of nonresidential space to the East Square
Development/Mountain Inn project, above that which was approved by the City Council in C-
PZD 05-1610. The request is to increase the number of hotel rooms from 147 rooms to 200
rooms, and from a height of 16 stories to 18 stories. As noted in the letter, the increase in room
results in an increased parking need, which is not proposed to be added to this property; rather,
an informal proposal has been made to use an existing off-site 60 -space parking lot to
accommodate the additional parking demand generated by the additional hotel rooms.
At this time, I can not support your request for administrative approval. This project was
processed prior to the current Planned Zoning District ordinance being adopted. At that time, any
modification to an approved Planned Zoning District was required to return for consideration by
the City Council: Because amendments to this project were not anticipated when the City
K:VeremyI2006 Correspondence\Renais.sance Tower -Mountain Inn.doc
Council, the legislative body that adopted the ordinance rezoning on this property, allowing the
development and all of the associated waivers and variances, it is my opinion that it should be the
City Council that considers amendments to height and increase in building area for this specific
project. I do have concerns administratively increasing the building height an additional two
stories, especially in the context of recent City Council directives in both ordinance and policy
form regarding building height within the City of Fayetteville. Furthermore, the concern
regarding the parking is one that I do not feel that I have the ability to administratively approve.
The current Unified Development Code requires Conditional Use approval by the Planning
Commission when off -site parking is proposed to meet the parking demand generated by a
development that can not provide sufficient parking on -site. With an addition of 53 hotel rooms,
53 spaces are also required to be provided on -site. If the parking proposed on the site can be•
proven to meet the demand of that which is proposed, plus the additional 53 hotel rooms, this
may be a moot issue. However, at this time, these calculations have not been provided.
Additional information regarding the square feet of existing space and square feet of proposed
space would also be helpful.
As mentioned before, if you wish to appeal this decision to deny the administrative appeal
request, you must do so in writing to the City Clerk's office within ten (10) business days of this
date. Please feel free to contact me with any questions or concerns.
Best Regards,
Jerem e
Direct u ent Planning
K: Ueremy120o6 CorrespondenceRenaissance Tower -Mountain lnn.doc
East Square Devefopm.ent Co. , LLC
11 N. West Ave.
Fayetteville, AR 72701
Phone 479.521.9188 Fax 479.521.1899
March 6, 2006
Jeremy Pate
Planning Director
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72701
Re: Renaissance Tower/Mountain Inn Project
Dear Jeremy,
Pursuant to our recent conversations please allow this letter to serve as East .
Square Development Co. LLC's formal request to seek administrative approval to add.
two floors to the Renaissance Tower/Mountain Inn hotel project. As I stated to you
earlier, we have been having extensive and ongoing negotiations with our proposed hotel
franchisor. After many weeks of discussion and review of our proposed hotel project, our
franchisor has requested in the strongest possible terms, that we increase our room count
to 200 rooms in order, in their opinion; to enhance our overall economic feasibility, and
therefore final approval of our franchise application. Of course, a franchise agreement is
of paramount importance to our lenders and investors, and could determine the success of
the project.
It is my understanding of current city ordinances and regulations that the Planning
Director has the ability to administratively approve a change of not more than 20% in an
approved PZD project. Due to site and area restrictions, the additional room count can
only be achieved in this instance by the addition of the requested two floors to the already
approved 16 -floor structure, making a total of 18 floors, or a change of approximately
13%. As I also stated to you, time is of the essence, in that we have a contract with the
City, which calls for completion of the project by September 2007. The urgency of course
is that the addition of the two floors will necessitate a redesign of the foundation,
structure, mechanical, electrical, and plumbing components to name a few, which if not
started immediately will delay all other aspects of the project. Also, and as previously
stated, to thefl extent that our request results in an increased parking requirement, our
group has access to a 60 plus space parking lot at the corner of Rock and Church Streets,
which can be dedicated to this project, and we will be glad to deliver such documents, as
you require, evidencing the commitment of those spaces to the project and/or other
suitable spaces.
Richard Alexander
Managing Member
East Square Development Co., LLC
ORDINANCE NO. 4804
AN ORDINANCE ESTABLISHING A COMMERCIAL PLANNED
ZONING DISTRICT TITLED C-PZD 05-1610, EAST SQUARE
DEVELOPMENT, LOCATED AT THE NORTHWEST CORNER OF
MOUNTAIN STREET AND COLLEGE AVENUE, CONTAINING
APPROXIMATELY 1.01 ACRES; AMENDING THE OFFICIAL
ZONING MAP OF THE CITY OF FAYETTEVILLE; WAIVING
ANY POSSIBLY CONFLICTING DEVELOPMENT ORDINANCES;
AND ADOPTING THE ASSOCIATED PLANNED ZONING
DISTRICT
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1: That the zone classification of the following described property is hereby changed
as follows:
From C-4, Downtown Commercial, to C-PZD 05-1610 as
shown in Exhibit "A" attached hereto and made a part hereof.
Section 2: That the change in zoning classification is based upon the approved development
standards as shown on the Planned Zoning District's plans, all conditions of approval determined
appropriate and approved by the Planning Commission on November 14, 2005, and the City
Council.
Section 3: That the City Council hereby expressly waives any development ordinances that
might be in conflict with C-PZD 05-1610 including but not limited to § 166.12 Structures not allowed
over public utility easements and §166.18 Master Street Plan Setbacks, and approves the
development proposal as presented herein.
Section 4: That this ordinance shall take effect and be in full force at such time as all of the
requirements of the development plan have been met.
Section 5: That the official zoning map of the City of Fayetteville, Arkansas, is hereby
amended to reflect the zoning change provided in Section I above. .
PASSED and APPROVED this 20'h day of December, 2005. .
EXHIBIT "A"
C-PZD 05-1610
LEGAL DESCRIPTION - TRACT 5
ALL OF LOT ONE (1), LOT TWO (2), AND A PART OF LOT THREE (3), LOT
SIXTEEN (16), AND 11 OF LOT SEVENTEEN (17), LOT EIGHTEEN (18), LOT
NINETEEN (19), AND A PART OF THE 10 -FOOT EAST -WEST ALLEY OF BLOCK
TWENTY-EIGHT (28) ORIGINAL TOWN PLAT FAYETTEVILLE, WASHINGTON
COUNTY, ARKANSAS BEING MORE . PARTICULARLY DESCRIBED AS
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT NINETEEN (19),
THENCE N 87°22'33" W - 151.00 FEET; THENCE N 02°31'28" E - 112.14 FEET;
THENCE S 87°! 923" E - 45.20 FEET; THENCE N 02°31'28" E - 68.17 FEET; THENCE
S 87°28'32" E - 5.80 FEET; THENCE N 02°31'28" •E - 34.00 FEET TO THE
NORTHWEST CORNER OF SAID LOT TWO (2); THENCE S 87°12'53" E - 100.00
FEET TO THE NORTHEAST CORNER OF SAID LOT ONE (1); THENCE S 02°31'29"
W - 214.00 FEET TO THE POINT OF BEGINNING, CONTAINING 0.63 ACRES, MORE
OR LESS.
LEGAL DESCRIPTION - TRACT 6
ALL OF LOT FOURTEEN (14), LOT FIFTEEN (15), AND A PART OF LOT SIXTEEN
(16), AND A PART OF THE 10 -FOOT EAST -WEST ALLEY OF BLOCK TWENTY-
EIGHT (28) ORIGINAL TOWN PLAT FAYETTEVILLE, WASHINGTON COUNTY,
ARKANSAS BEING MORE PARTICULARLY DESCRIBED AS BEGINNING AT THE
SOUTHWEST CORNER OF SAID LOT FOURTEEN (14), THENCE N 02°4F18" E -
112.28 FEET; THENCE S 87°19'23" E - 150.14 FEET; THENCE S 02°31'28" W -112.14
FEET; THENCE N 87°22'33" W - 150.46 FEET TO THE POINT OF BEGINNING,
CONTAINING 0.39 ACRES, MORE OR LESS.
City Council Meetinb,of December 06, 2005
Agenda Item Number
CITY COUNCIL AGENDA MEMO
To: Mayor and City Council
Thru: Gary Dumas, Director of Operations
From: Jeremy C. Pate, Director of Current Planning
Date: November 17, 2005
Subject: Rezoning for East Square Development (C-PZD 05-1610)
RECOMMENDATION
Planning Staff recommends approval of an ordinance creating a Commercial Planned
Zoning District (C-PZD) for East Square Development, submitted by Bob Kohler in
behalf of One East Center, LLC. This action will establish a unique zoning district for a
commercial development including a hotel, commercial uses, and a parking deck on a
1.01 -acre tract located on College Avenue.
BACKGROUND
The property consists of approximately 1.01 acres located within the Original Town Plat
on the block between Center Street and Mountain Street, with additional frontage onto'
Hwy 71 B (College Avenue). The Mountain Inn, parking deck, and other deteriorated
structures on this property have been demolished and the property sits primarily vacant.
The property is currently zoned CA, Downtown.
The applicant requests approval of a C-PZD to establish specific zoning criteria and large
scale development approval. Development will consist of a 16 -story structure that will
incorporate a hotel with 147 rooms, condominiums, retailltenant space, conference
rooms, a ballroom, and a restaurant and bar and a 7 %2 story parking garage with 350
parking stalls. There are several waivers from the Unified Development Code
requirements requested for this project to be approved.
DISCUSSION
The Planning Commission voted.8-0-0 in favor of this request on November 14, 2005. A
Planned Zoning District requires City Council approval as it includes zoning (land use)
and large scale development approval. Recommended conditions were approved by the
Planning Commission and are reflected in the attached staff report.
Due to the limited area of development and the size and scope of this in -fill project, the
applicant requests City Council consideration of granting several variances. These
include a variance to allow construction of a parking deck over Mountain Street and a
pedestrian bridge over an alley. Additionally, the applicant requests approval of lesser
dedication of right-of-way for College Avenue, a Principal Arterial. The applicant has
City Council Meetii.b-of December 06, 2005
Agenda Item Number
agreed to all street improvements recommended by the Planning Commission and within
the attached staff report.
BUDGET IMPACT
None.
PC Meeting of November 14, 2005
THE CITY OF FAYETTEVILLE, ARKANSAS
PLANNING DIVISION CORRESPONDENCE
TO: Fayetteville Planning Commission
FROM: Suzanne Morgan, Current Planner
Brent O'Neal, Staff Engineer
THRU: Jeremy Pate, Director of Current Planning
DATE: November 9, 2005 Updated December 21, 2005
125 W. Mountain St.
Fayetteville, AR 72701
Telephone: (479) 575-8267
C-PZD 05-1610: Planned Zoning District (EAST SQUARE DEVELOPMENT, 523):
Submitted by BOB KOHLER for property located at NW CORNER MOUNTAIN ST. AND
COLLEGE AVE. The property is zoned C-4, DOWNTOWN COMMERCIAL and contains
approximately 1.01 acres. The request is to approve a 16 story Commercial Planned Zoning
District with a hotel, residential condominiums, meeting space, commercial space and a parking
garage.
Property Owners: ONE EAST CENTER LLC Planner: SUZANNE MORGAN
Findings:
•Property Description: The property consists of a total of approximately 1.01 acres located
within the Original Town Plat on the block between Center Street and Mountain Street, with
additional frontage onto Hwy 71 )3 (College Avenue). The Mountain Inn, parking deck, and
other deteriorated structures on this property have been demolished and the property sits
primarily vacant. The property is currently zoned C-4, Downtown.
Proposal: The applicant requests approval of a C-PZD to establish specific zoning criteria and
large scale development approval. Development of a 16 -story structure that will incorporate a
hotel with 147 rooms, condominiums, retail/tenant space, conference rooms, a ballroom, and a
restaurant and bar. A 7-1/2 story parking garage with 350 parking stalls is proposed. There are
several waivers from the Unified Development Code requirements requested for this project to
be approved.
Surrounding Land Use/Zoning:
Direction
Land Use
Zoning
North
Restaurants, Retail, Office
C-4, Downtown
South
Government/Federal Buildings
C-4, Downtown
East
Court House, Government Buildings
C-3, Central Commercial
West
Offices, Bank, Bank of Am. Condos
(proposed)
C-4, Downtown
K:IReporu120051PC Reports111-14-0SIC-PZD 05-1610 (Fast Square Development).doc
Process: The property on which this large scale development has been submitted consists of all
and parts of several tracts of property. Several of the existing structures along Center Street will
not be disturbed with the proposed development. The applicant requests approval for the
establishment of zoning regulations on the entire tract of property and the development, proposed
to be done in phases. They are as follows: -
Phase I — 16 -story Hotel Tower, 3 -story building containing the ballroom, two
structures on Center Street
Phase II — Retail/Tenant space and parking garage on Mountain Street
Permits for both Phases to be issued within one year of R-PZD approval.
The following bulk and area regulations are proposed by the applicant:
C-PZD 05-1610 East Square Development
(A)Proposed Uses.
Use Unit #
Type of Use
Unit 1
City-wide uses by right
Unit 2
City-wide uses by conditional use permit
Unit 3
Public protection and utility facilities
Unit 4
Cultural and recreational facilities
Unit 5
Government facilities
Unit 12
Offices, studios and related services
Unit 13
Eating laces
Unit 14
Hotel, motel and amusement facilities
Unit 15
Neighborhood shopping
Unit 16
Shopping oods
Unit 17
Trades and services
Unit 19
Commercial recreation, small sites
Unit 24
Home occupations
Unit 25
Professional offices
Unit 26
Multi -family dwellings
Unit 29
Dance halts
(B) Density. Density = None (25 units are proposed in the development; however, the
applicant requests to reserve the right to increase the number of residential units.)
(C) Bulk and area regulations. None.
(E) Setback requirements. Front: 0'; Side: 0'; Rear: 0'
(F) Height. Hotel Tower: 16 stories maximum
(stories 11 to 16 are proposed for condominium units)
Hotel w/ Ballroom: 3 stories
Parking Garage: 7-1/2 stories
Retail/Tenant: I story
2 Bldg.s on Center St: 3 stories and a basement
K:IRepon511005V'C Reponsll1-14051C-PZD 05-1610 (Fns' Square Development) doc
(G)Building area. 100%; The entire site is covered with buildings and impervious surface.
Parking Chart:
Parking required
Parking Provided
Mountain Inn
214
113
East Square
Development
369
350
Water Sc Sewer: Water and sewer lines are being relocated and extended to serve the
development.
Utilities: Several alleys are requested to be abandoned, in which many of the existing utility
lines are located. The applicant is coordinating with the utility companies which will
serve this development.
Access: The parking deck will be accessed from Mountain Street and Center Street via an
existing alley. The Downtown Master Plan recommends a modification of Mountain
Street to allow for two-way traffic. At this time, no such proposal has been brought
before the Street Committee or City Council for consideration, though it is anticipated in
the future, likely before the subject project is constructed. Access from this parking deck
is proposed to each of the retail spaces on the ground floor of the parking deck on either
side of the entrance. Also, access from the parking deck will be available from the third
floor of the parking deck to the Hotel Tower and a pedestrian bridge is proposed. to;the
Bank of America Condominiums to the west. The applicant also proposes a drive-in on
Mountain Street for drop-off access to the Hotel Tower.
Adjacent Master Street Plan Streets:
College Avenue (Principal Arterial, currently a 50' ROW, requires 110' ROW)
Mountain Street (MS -55, Main Street; currently a 55' ROW, requires 55' ROW)
Center Street (MS -55, Main Street; currently a 55' ROW, requires 55' ROW)
Commercial Design Standards:. The applicant has submitted elevations of the proposed hotel,
parking garage, ballroom and structures on Center Street. They incorporate a variety of
exterior materials of brick, stucco, pre -cast concrete, steel, tile, slate, glass, ornamental
iron, aluminum, pre -finished metal panels and fiber cement. All proposed structures are:
very visible to the public due to the height of the building or prominence on the
surrounding streets. The parking garage, for example, will protrude further into the street
than adjacent buildings. Design and architectural style of this structure is therefore as
important in its affect of the downtown area as the hotel tower.
.Tree Preservation: A Tree Protection Waiver hasbeen submitted and signed by Landscape
Administrator after an on -site visit to verify that no trees currently exist.
Parks: Park fees shall be charged for each multi -family unit proposed. The developer shall pay
• $9,825 for 25 multi -family units prior to issuance of a building permit for the phase in
which the units shall be constructed.
K:IRepored20051PC Reporcslll-14-051C-PZD 05-1610 (Fns! Square Devdopwnl).doc
Public Comment: Staff has not received any objections to the requested C-PZD at this time.
Background: The Subdivision Committee forwarded this item to the Planning Commission on
September 01, 2005. The Planning Commission forwarded this item to the City Council at the
regular meeting on November 14, 2005.
Recommendation: Staff recommends forwarding C-PZD 05-1610 to the City Council with a
recommendation for approval with the following conditions:
Conditions of Approval:
Planning Commission determination of improvements. Staff recommends the following:
• Construction of sidewalks as indicated on the plat along College Avenue and from
• College Avenue to the alley on Mountain Street and Center Street.
• The applicant shall comply with the plantings shown on the proposed Landscape
Plan, including planters and street tree plantings in structural soil along College
Avenue, Mountain Street and Center Street west to the alley. Tree species shall be
approved by the Landscape Administrator
• New curb and gutter on Mountain Street and Center Street from the alley to College
Avenue and along College Avenue;
• Storm drainage improvements on all street frontage as shown on the site plan and
as determined necessary by the City Engineer with further investigation to be
conducted at the time of construction;
• Pavement overlay and restriping along Mountain Street and Center Street from the
alley to College Avenue and along College Avenue, as well as the alley where
determined to be needed by the City Engineer as part of the construction process;
an overlay of the entire width of Center Street, Mountain Street, and the alley is
recommended as opposed to improvement of only one-half the street width.
The Planning Commission recommended in favor of the above improvements.
2. Planning Commission recommendation of a lesser dedication of right-of-way for
College Avenue (Hwy 71B) from the.required 55' from centerline to 30' from.
centerline. Staff recommends approval of the requested lesser dedication. A Master
Street Plan Amendment to modem the designation of College Avenue for a total 60'
right-of-way (30' from centerline) from Rock St. to North St has been forwarded by the
Planning Commission to the City Council with a recommendation for approval and is
currently being reviewed by the Street Committee. This project is in compliance with
this original recommendation by the Planning Commission.
The Planning Commission recommended in favor of lesser dedication of right-of-way
for College Avenue.
3. Planning Commission recommendation of granting a waiver variance request to allow
the construction of a pedestrian bridge over an existing alley (City right-of-way) that
will connect the parking garage to Bank of America Condominiums subject to City
Council approval to allow construction over a City right-of-way. Staff recommends
KAReponst200SIPC Repon.c 1I-14-051C-PZD 05-1610 (fact Square Development).dac
approval of the requested waiver to construct a structure over public right-of-way. The
parking required for the condominium units will be provided in the parking deck as was
approved' by the Planning Commission and listed as a condition of approval for the
Conditional Use Permit for Bank ofAmerica Condominiums.
The Planning Commission recommended in favor of the requested variance to allow
construction over a City right-of-way.
4. Planning Commission determination of granting a waiver variance request to. allow the
construction of a parking deck and hotel entrance canopy over the existing right-of-way
for Mountain Street as indicated on the proposed C-PZD site plan and subject to City
Council approval allowing the narrowing of Mountain Street to allow this
construction over a City right-of-way. The construction of this structure over the right-
of-way will result in the removal of approximately 11 on -street parking spaces, and a
maximum encroachment of 17' 3" into the right-of-way. The public sidewalk will be
constructed under the proposed deck, which will essentially function as a covered, open
walkway.
The Planning Commission recommended in favor of the requested variance to allow
the construction over a City right-of-way.
5. Planning Commission determination of Commercial Design Standards and
compatibility of materials and architectural features with the surrounding structures and
historic downtown. Stafffinds that the proposed structures incorporate many elements
within the architecture of the downtown and are compatible with the desirable. features
of adjacent structures. Staff and the Subdivision Committee expressed concerns with
the design of the parking deck especially because of its high visibility as it encroaches
into the right-of-way and recommends particular elements on the southwest end cap be
incorporated to create a better transition and view from the downtown square.
The Planning Commission recommended in favor of compliance with Commercial
Design Standards.
The applicant shall dedicate the required amount of right-of-way for College Avenue
(Hwy 71B) as determined by the City Council by warranty deed prior to issuance of a
building permit.
8. All exterior lighting shall meet the requirements of the Outdoor Lighting Ordinance. A
cut sheet showing the lighting plan and details shall be submitted to the Planning
Division for review and approval prior to issuance of a building permit.
9. The applicant shall install six bike racks per ordinance requirements.
.CIRepons11005lPC Reponsll1-14-051O-PZD 05-1610 (east Square Development).doc
10.
A Certificate of Occupancy for any phase of the project may not be issued prior to
completion and issuance of a Certificate of Occupancy for the Parking Deck and all
required improvements for that phase.
11.
All development shall meet applicable building codes for separation and other
ordinances of the City of Fayetteville.
U.
Allowed uses in this C-PZD shall be restricted to Use Units 1, 2, 3, 4, 5, 12, 13, 14, 15,
16, 17, 19, 24, 25, 26, and 29.
13.
The maximum number ofdwelling that
be
units may peitted is 25. The applicant
does not propose a maximum density to reserve the right to subdivide the
condominium units in the future.
14.
Payment of Park fees in the amount of $9,825 for 25 multi -family units shall be paid
prior to issuance of a building permit for the phase in which the units will be located.
15.
Signage shall be permitted in accordance with city ordinances for a property located in
a C-4 zoning district. The parking structure shall be allowed signage in accordance
with the C-4 zoning district requirements.
16.
Planned Zoning District approval shall be valid for one calendar year, per city
ordinance. The applicant has stated that it is the intent to obtain all permits for Phase I
and Phase II within one year of City Council approval of the C-PZD.
17.
Prior to City Couneil eonsideration, the
applieant shall modify the zoning
information ..., the site 1 .7' 1. - - ti r eondonilnium
units in the hotel tower, density
proposed and setbaek regulations. The applicant
has complied with this condition.
Standard
Conditions of Approval:
18.
Plat Review and Subdivision comments (to include written staff comments provided to
the applicant or his representative, and all comments from utility representatives - AR
Western Gas, SWBT, Ozarks, SWEPCO, Cox Communications)
19. Staff approval of final detailed plans, specifications and calculations (where applicable)
for grading, drainage, water, sewer, fire protection, streets (public and private),
sidewalks, parking lot(s) and tree preservation. The information submitted for the plat
review process was reviewed for general concept only. All public improvements are
subject to additional review and approval. All improvements shall comply with City's
current requirements.
20. All overhead electric lines 12kv and under shall be relocated underground. All
proposed utilities shall be located underground.
KARepor[t120051PC Reports)U-l4-051C-PZD 05-16!0 (Fast Square Developmem).doc
21. Prior to the issuance of a building permit the following is required:
a. Grading and drainage permits
b. Separate easement plat for this project.
c. Project Disk with all final revisions
• d. Completion of all required improvements or the placement of a surety
with the.City (letter of credit, bond, escrow) as required by §158.01
• "Guarantees in Lieu of Installed Improvements" to guarantee all
incomplete improvements. Further, all improvements necessary to serve
the site and protect public safety must be completed, not just guaranteed,
prior to the issuance of a Certificate. of Occupancy. •
ADDITIONAL CONDITIONS OF APPROVAL (AS AMENDED BY THE CITY
COUNCIL ON DECEMBER 20, 2005)
22. A minimum of 16 feet clear from the alley to the bottom of the pedestrian overpass
shall be maintained to ensure adequate solid waste and emergency access-
• 23. All sidewalks located adjacent to the public right-of-way (and not within the public
right-of-way) shall be within a pedestrian/sidewalk easement, to be filed of record.
Planning Commission Action: Required YES
✓ Approved O Denied O Tabled
Motion to approve: Clark
Meeting Date: November 14, 2005 Second: Vaught
Vote: 8-0-0
City Council Action: Required YES
✓ Approved O Denied O Tabled
Vote: 8-0-0
Comments:
The "Conditions of Approval" listed in the report above are accepted in total without exception
by the entity requesting approval of this development item.
Signature
K. IReparts170051PC Reports i 1-14-051C-PZD 05-1610 (Ease Square Devetopment).doc
Findings associated with C-PZD 04-1610
Sec. 166.06. Planned Zoning Districts (PZD).
(B) Development standards, conditions and review guidelines
(1) Generally. The Planning Commission shall consider a proposed PZD in light of the
purpose and intent as set forth in Chapter 161 Zoning Regulations, and the development
standards and review guidelines set forth herein. Primary emphasis shall be placed upon
achieving compatibility between the proposed development and surrounding areas so as
to preserve and enhance the neighborhood. Proper planning shall involve a consideration
of tree preservation, water conservation, preservation of natural site amenities, and the
protection of watercourses from erosion and siltation. The Planning Commission shall
determine that specific development features, including project density, building
locations, common usable open space, the vehicular circulation system, parking areas,
screening and landscaping, and perimeter treatment shall be combined in such a way as to
further the health, safety, amenity and welfare of the community. To these ends, all
applications filed pursuant to this ordinance shall be reviewed in accordance with the
same general review guidelines as those utilized for zoning and subdivision applications.
FINDING: The proposed development of the subject downtown site into a mixed -use,
commercial/retail/hotel/condominium space achieves many of the goals identified in the
City's adopted Downtown Master Plan, as well as many goals in the General Plan 2020.
The surrounding commercial developments and residential neighborhoods will be greatly
enhanced by the unique development, which.provides revitalization of a prominent block
on the corner of Center St., College Ave.; and Mountain Street. Specific development
features of thefl project, including the structure's height and prominence, walkable
sidewalks with planters consistent with the downtown area, a parking deck and residential
dwellings on the top floors of the structure, contribute to the health, safety, amenity and
welfare of the community. The proposal creates residential units in the downtown area, a
primary goal of the Downtown Master Plan.
(2) Screening and landscaping. In order to enhance the integrity and attractiveness of the
development, and when deemed necessary to protect adjacent properties, the Planning
Commission shall require landscaping and screening as part of a PZD. The screening and
landscaping. shall be provided as set forth in §166.09 Buffer Strips and Screening. As part
of the development plan, a detailed screening and landscaping plan shall be submitted to
the Planning Commission. Landscape -plans shall show the general location, type and
quality (size and age) of plant material. Screening plans shall include typical details of
fences, berms and plant material to be used.
FINDING: Screening is not required as a part of this development, with the exception of
trash enclosures and utilities (wall and ground -mounted). All such utilities are proposed to
be located within the interior of the parking deck. Landscaping is required, and has been
presented with the Landscape Plan and includes the installation of planters and trees
within the new sidewalk to provide shade for pedestrians and a streetscape. The addition of
vegetation on this bare ground will be a benefit to the public and downtown.
KiReportsl2005U'C Repo#sU1-14-05IC-PZD 05-1610 (Fast Square DevelopmenJ.doc
(3) Traffic circulation. The following traffic circulation guidelines shall apply:
(a) The adequacy of both the internal and external street systems shall be reviewed in
light of the projected future traffic volumes.
(b) The traffic circulation system shall be comprised of a hierarchal scheme of local
collector and arterial streets, each designed to accommodate its proper function and in
appropriate relationship with one another.
(c) Design of the internal street circulation system must be sensitive to such
considerations as safety, convenience, separation of vehicular and pedestrian traffic,
general attractiveness, access to dwelling units and the proper relationship of different
land uses.
(d) Internal collector streets shall be coordinated with the existing external street system,
providing for the efficient flow of traffic into and out of the planned zoning
development.
(e) Internal local streets shall be designed to discourage through traffic within the
planned zoning development and to adjacent areas.
(f) Design provisions for ingress and egress for any site along with service drives and
interior circulation shall be that required by Chapter 166 Development of this code.
• FINDING:. No new public or private streets are proposed with this project. A single
vehicular entry point is proposed froth Mountain Street to the proposed parking deck.
There is an existing alley west of the proposed structures over which a pedestrian crossing
is proposed. The applicant also requests the vacation of an alley which bisects the property
and from which existing utilities are to be relocated. The hotel will have a drive -through
drop off area on Mountain Street. The Subdivision Committee raised concerns about the
ability for cars going south from this drop-off and potential traffic conflicts should
Mountain Street become two-way. As traffic on Mountain Street is slowed somewhat by
the presence of a traffic light, slower speed of vehicles may allow for cars to merge onto
Mountain Street. At this time, the Downtown Plan calls for Mountain Street to become
two-way; however, this has not been considered by the Street Committee or City Council,.
which must approve any such street modification.
The applicant does request dedication of lesser right-of-way than required by the Master
Street Plan on College Avenue. The Master Street Plan requires dedication of 55' right-of-
way from centerline; the applicant requests dedication of 30' right-of-way from centerline.
In addition, the applicant requests a waiver from the City Council to allow the construction
of a parking deck over existing right-of-way for Mountain Street, which is a structure
within the city right-of-way.
(4) Parking
standards. The off-street
parking and
loading standards found in Chapter 172
Parking
and Loading shall apply to
the specific
gross usable or leasable floor areas of the
KtReponsl2005U'C Reponslil-1 d-051C-PZD 05-1610 (Post Square Development) doe
respective use areas.
FINDING: The ordinance allows any redevelopment within the C-4 zoning district to
"credit," so to speak, the parking spaces and area of existing uses within the former
structure towards the development. Therefore, the number of hotel rooms and area of
retail space within the Mountain Inn may be deducted from the proposed bedrooms and
retail area. Parking spaces are only required for the rooms, retail area, and other uses
above and beyond what had existed. The parking deck provides 350 parking spaces, which
is more than required for this additional development. It replaces the 101 spaces within the
former parking deck, provides 12 spaces for the Bank of the America Condos and replaces
the 11 on -street parking spaces removed with development, with an additional 214 spaces
in excess of the previously existing parking deck.
Bike racks will be installed per ordinance requirements.
(5) Perimeter treatment. Notwithstanding any other provisions of a planned zoning district,
all uses of land or structures shall meet the open space, buffer or green strip provisions of
this chapter of this code.
FINDING: The greenspace required for a Planned Zoning District is 15% of the site.
Consistent with the former development of the property and the downtown, this proposal
has no greenspace proposed with the exception of street tree plantings and some planters
along the sidewalks, which will increase the existing greenspace of the site.
(6) Sidewalks: As required:by §166.03.
FINDING: A new public sidewalk 7 to 14 feet in width is proposed along Center Street,
Mountain Street and College Avenue.
(7) Street Lights. As required by § 166.03 & § 176.
FINDING: Street lights are installed on those streets adjacent to the subject property. All
new building lights shall be permitted in accordance with Chapter 176, the Outdoor
Lighting Ordinance.
(8) Water. As required by § 166.03.:'
FINDING: Public water is being provided to the project site, pursuant to city code.
(9) Sewer. As required by § 166.03.
FINDING: Public Sewer is being provided to the project site, pursuant to city code.
(10)Streets and Drainage. Streets within a residential PZD maybe either public or private.
(a) Public Streets. Public streets shall be constructed according to the adopted standards
K..IRepaTs110051PC Repartslll-14-051C-PZD 05-1610 (East Square Development).dx
FINDING: There is no tree canopy on the subject property.
(13)Commercial design standards. All PZD developments that contain office or commercial
structures shall comply with the commercial design standards as set forth in §166.14 Site
Development Standards and Construction and Appearance Design Standards for
Commercial Structures.
FINDING: Staff finds the architectural elevations for the Hotel Tower exceed the city's
commercial design standards. The elevations submitted for the Parking Deck are
primarily pre -finished metal panels, though the first two stories will be brick. This
structure will be prominent on Mountain Street, as the applicant has requested a waiver to
construct this building within the right-of-way. Staff finds that the proposed structures
incorporate many elements within the architecture of the downtown and are compatible
with the desirable features of adjacent structures. Staff and the Subdivision Committee
expressed concerns with the design of the parking deck, especially because of its high
visibility as it encroaches into the right-of-way and recommends particular elements on the
southwest end cap be incorporated to create a better transition and view from the
downtown square. The two retail structures proposed on Center Street shall be reviewed
for compliance with the Design Standards set forth by the applicant and approved by the
City Council. Staff shall review the elevations at the time of building permit for
compliance and compatibility with surrounding developments.
(14) View protection. The Planning Commission shall have the right to establish
special height and/or positioning restrictions where scenic views are involved and shall
have the right to insure the perpetuation of those views through protective covenant
restrictions. .:
FINDING: Staff finds no scenic views to be protected on the subject. property. This
property is located atop one of the many hills within Fayetteville, this being the most
prominent as it defines the downtown area. The addition of a 16 -story structure at this
location will alter the line -of -site for this property and the view of the city from afar. The
construction of such a tall structure is unique within the City of Fayetteville but not
unprecedented, with the Hillcrest Tower and Radisson Hotel (15 floors) located within
close proximity to the subject property.
.(E) Revocation
(1) Causes for revocation as enforcement action. The Planning Commission may
recommend to the City Council that any PZD approval be revoked and all building or
occupancy permits be voided under the following circumstances:
(a) Building permit. If no building permit has been issued within the time allowed.
(b) Phased development schedule. If the applicant does not adhere to the phased
development schedule as stated in the approved development plan.
K. IReporrsU005tPC ReportrV I-14-051C-PZD 05-1610 (East Sgrmre Developmenrt.doc
*Required Findings for Rezoning Request.
RECOMMENDATION: Staff recommends approval of the rezoning request from C-4,
Downtown Commercial, to C-PZD 05-1610, with the adoption of the associated large scale
development plan.
LAND USE PLAN: The General Plan 2020 Future Land Use Plan designates this site as
Historic Commercial. Rezoning this property to C-PZD 05-1610, with associated mixed use
plan, is consistent with the land use plan and compatible with surrounding land uses.
FINDINGS OF THE STAFF
A determination of the degree to which the proposed zoning is consistent with land use
planning objectives, principles, and policies and with land use and zoning plans.
Finding: The proposed zoning is consistent with previous use of this property and the
surrounding uses within the properties zoned for Downtown Commercial,
which this property is currently zoned. The mixed -use commercial and
multi -family residential development exhibits many of the characteristics
deemed desirable as guiding policies in the General Plan 2020, as well as the
adopted Downtown Master Plan.
A determination of whether the proposed zoning is justified and/or needed at the time the
rezoning is proposed.
Finding:. The proposed rezoning is justified, as a means of redeveloping a.parcel of
property in the downtown area in a manner that is more consistent with: • ..
surrounding land use patterns. A mixed -use land use is desirable for the
subject property, to achieve compatibility with both commercial and
residential zoning and land use in the surrounding area.
3. A determination as to whether the proposed zoning would create or appreciably increase
traffic danger and congestion.
Finding: Based on staff findings and the attached Fayetteville Police Department
report and Fire Department projections, the proposed rezoning would not
create'or appreciably increase traffic danger and congestion in the area .t
This property was formerly developed for a similar type use at a smaller
scale. At one time this property generated considerable traffic. The
redevelopment of the property will increase the amount of traffic on
surrounding streets, but most traffic will be generated from College Avenue,
a Principal Arterial Street which has been designated to serve up to 20,600
vehicle trips per day.
Fire: The request for C-PZD 05-1610, East Square Development, is within the
acceptable limits of service delivery impact for the Fire Department.
K. IReponf12005IPCRepanst11-14-051C-PZD 05-1610 (Fast Square Deve(opmenrt doe
.
4. A determination as to whether the proposed zoning would alter the population density
and thereby undesirably increase the load on public services including schools, water, and
sewer facilities.
Finding: The proposed zoning would create a total of 25 new residential units. This
increase in units would not undesirably increase the load on public services.
5. If there are reasons why the proposed zoning should not be approved in view of
considerations under b (1) through (4) above, a determination as to whether the proposed
zoning is justified and/or necessitated by peculiar circumstances such as:
a. It would be impractical to use the land for any of the uses
permitted under its existing zoning classifications;
b. There are extenuating circumstances which justify the rezoning
even though there are reasons under b (1) through (4) above why
the proposed zoning is not desirable.
Finding: N/A
K: IReponsl2005 PC Reponsl11-14-051C-P7D 05.1610 (East Square Development).doc
CPZD05-1610 EAST SQUARE DEVELOPMENT
One Mile View
P-1
m
41
P-1
P-1
ca
P-1
SUBJECT PROPERTY
P-1 q1., RM -24
WF-16
P-1
ink
c -I
41 i . --__2I t 15PJ 1 1 41 :1 42
Overview Legend Boundary
Subject Property
uPWlmirg area
CPZD05-1616 :000ay
000 ocu Overlay f)",d
i , _ Oufsbe City
---' Legend
00426.25 0.5 0.75 1.
iles
6 F 10"L mil.I yj E U V f1 F wT1Y2 tYl2 L CO
I OJiL tlV Hll1A]11HAYJ gy[{Ayjg<lIP tlY r .au3AY3 3+ CO
f� JS IOOPJ[ PLPOS[[r JLdiWiVIf1190 (1MVII0S JSY(I 1i9115PryLS:gI WY3'J3iYJJ iJ lS3ppJ ry[i Q
'JNJJJI0IJW earxs txinon 1NHWdO'HAH0 H)IVfI S .LSVH
3NN3A [303TOJ "' — — ii ..��yw , ., ,,r Is. t L. ®E I�
,. x sy 3s
v.wf+. 4l is R'Ti' n n �J rv� d1 T w
II
y i[ " xh )r 1'h_1 }� F'i I, SJyr`�'`' GF'KJy'JJ�4P ilrV4 Y� ,, 7iix A.$.'YF�irL �^'.fx QrC jKf�I. ff c
to 1.•Lf v"a'f -3 a`U �["Ji„�An�i 11 F 1F
' kyi `r www a . }} ii +yCF f' .iv ' Ly'�il ♦?'� "`J`'��(( '�5 ri'c
S �E t2-., 17, K�.V*Fx IYV1,1. v� I."nF.F 5f 5rR`i 't(c'.a-'lrtx�Jr )3 Z�
'I
"pp 1 yiitl•J`Z`''s-°,S'.izl�iyxa"Iy y i' Y L t"i'"3.-4`y' !' iv J ifs 11) m �I : �+f „ ^Sa ' bvtie}�'36 +> nrn •]
5 F •ids. ��S� .t •ti`1
if
I AY 1 3,S
fill {
hil
I_(j.n ..
i 3f
m� i 3
A B f 6
�1
LETTER OF TRANSMITTAL
East Square Development
May 24, 2006
4 I GIST C RED
ROBERT SHARP. ARCHITECT,,tc.
525 SOUTH SCHOOL AVE STE 220
FAYETTEVILLE AR
PHONE: 479.442.0229
FAX: 479-442-8711
Sondra Smith, City Clerk
City of Fayetteville I _
125 W. Mountain
Fayetteville, AR 72701 L
We are sending you: Requested Action:
. ■ Drawings O For Approval
❑ Submittals ■ For Your Use
❑ Reports O Resubmit for review
❑ Specifications O For Review and Comment
O Approved as Noted
• z
Delivery Method: ❑ Approved
❑ Mail
❑ Facsimile
❑ FedEx
■ Hand Delivery O Logged In
Remarks:
Please find 12 packets of three color renderings of the East Square Hotel.
Sent by:
1 . I I - .1)
Kristen Knight, Projeck anager
Robert Sharp, Architect, Inc.
Please contact the person listed above at 479 442-0229 if you have any questions or comments
about the transmittal.
cc: File
May 24, 2006 East Square Development Project
Job Number 00001
a
in 1N 1N - -;- -;- -;- -iiIM;1.
III- 1- 1 i- l-! iii
11._ 1_ 1_ 1_--I--u--i--1- l-eirr.-
• ' .— ■m ■ol .ew ..
■� - - - - - -�- - - -�- -I- i-.-;
r Ill
/ i11. 1N 1- - sl- -I- -I- -fl- A-.��: ) ii_
ON
I- Iwo IN I- - lilII - -11! I• I 1l
I
L
I. •.
I•. ling
iuE 1
IL Ir
•
1
• 1i
1
1
-
1
1.. In la 1.. — .■ilr =li =IIM I:-_.' a, I= 1n t�
.a I --- I •- J •-u — fin if MIlz. . a I! Ill
fil.� .a l IS in aia IS =I= a.≥ ■ AM
.v
�h! i1G- aIIaI= 11*r a
■_i1 Ian I . in =I= =I= MII?- ■ a Am I= ■
Ii; c zi in 1 a ais / i r . I . a
�� ■�I'a.. I.w I�q iJi ai.71I a.• I ■ a I= .t3 �■■
ill r 1. I_ ii: 1• �� i� ..
I• _ _ C= _
I
RESOLUTION NO. 55-05
A RESOLUTION TO APPROVE A CONTRACT WITH JOHN NOCK
AND RICHARD ALEXANDER FOR THEIR PURCHASE OF
PROPERTY TO BE OBTAINED BY TIF FUNDING FOR
$300,000.00 AND FOR OTHER MATTERS
WHEREAS, the City of Fayetteville has created the Highway 71 East Square
Redevelopment District No. I and adopted a Project Plan that requires the City to purchase
four parcels of land, demolish the vacant and blighted structures thereon, and sell the raw
land to the developers, John Nock and Richard Alexander to be used to develop a $20 million
dollar hotel, condominium, parking deck and convention facility; and
WHEREAS, the procedures mandated by Fayetteville Code §34.27 Sale of
municipally owned property were waived by Ordinance No. 4651, passed on December 7,
2004 because such procedures would cause such delays as to render this adopted Project Plan
unfeasible; and
WHEREAS the developers, John Nock and Richard Alexander, have offered to
purchase the raw land after demolition for $300,000.00 (which is more than its appraised
value); and
WHEREAS, the contract with John Nock and Richard Alexander attached as Exhibit
A should be approved.
. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby
approves the contract attached as Exhibit A to sell to John Nock and Richard Alexander the
four parcels purchased with TIF proceeds for $300,000.00 and specifying other matters.
PASSED and APPROVED this 15'h day of March, 2005.
-FAYETTEVILLE: By:
ATTEST:
By: &p t.NAt-
SONDRA SMITH, City Clerk
On this 15`x' day of March, 2005, the City of Fayetteville and
Developers, Richard Alexander and John Nock agree as follows:
WHEREAS, the City of Fayetteville desires to remove the blighted
area of the Mountain Inn and surrounding vacant structures (the County
Courts Building, the Red Bird Cafe and the old Niblock Law Office); and
WHEREAS, the City of Fayetteville will be greatly benefited if, after
the removal of this blight, a valuable new structure will be constructed on
this cleared site bringing jobs, Sales taxes, and Hotel, Motel and Restaurant
taxes, and stimulating increased economical activity and vitality and
increased property valuation throughout downtown Fayetteville; and
WHEREAS, Developers Richard Alexander and John Nock have
proposed to purchase the cleared blighted area for $300,000.00 and build
about a 22.5 Million Dollar Hotel, Condominium, Parking Deck, and
Convention facility on this site.
NOW, above
premises considered, the
City
of
Fayetteville and the
Developers, Richard
Alexander and John Nock
agree
as
follows:
1. The City of Fayetteville agrees to issue tax increment financing
bonds pursuant to its ordinances establishing the Highway 71 East Square
Redevelopment District Number 1 of Fayetteville as amended to include
most of the Downtown Master Plan area, the Amended Project Plan for this
enlarged District, the Bond Ordinance, Bond Purchase Ordinance (if
necessary), Amendment 78, and SubChapter 3 of Chapter 168 of Title 14,
Community Redevelopment Generally. These TIF bonds shall be issued
to obtain net usable proceeds of $3.5 million to the City of Fayetteville to
effectuate the Amended Project Plan as approved by ordinance by the City
Council on March 15, 2005.
2. The City of Fayetteville agrees to use the net available $3.5 million
proceeds from the TIF bonds to purchase:
(a) the blighted Mountain Inn property for $1.2 million;
(b) the County Courts Building for $413,000.00;
(c) the vacant Niblock Law Office for $500,000.00;
(d) the vacant Red Bird Cafe for , $500,000.00.
Total for land acquisition $2,613,000.00
If bond proceeds in net usable amount of $3.5 million are available by
April 19, 2005, the closing for all four properties shall be April 20, 2005.
3. The City of Fayetteville agrees to use the remainder of the $3.5
million not expended for land acquisition for demolition and site preparation
to include:
(a) demolition (including asbestos removal) of the newer part
of the Mountain Inn, the Courts Building, the Niblock Law
Office and the Red Bird Cafe;
(b) resolution of access issues and utility relocation;
(c) water and sewer upgrades (on site).
If the demolition and site preparation costs exceed $887,000.00 (the
remaining bond proceeds after land acquisition costs), the City's
responsibilities end after its full expenditure of $3.5 million on this
project. If demolition and site preparation can be accomplished for less
than $887,000.00, any remaining money shall be used to pay TIF bond
indebtedness.
4. Developers Richard Alexander and John Nock agree to purchase
the four parcels purchased and demolished by the City of Fayetteville for a
total of $300,000.00. The Developers agree to purchase these parcels at
whatever condition they are in after the City of Fayetteville has expended
$887,000.00 for Demolition and Site Preparation even if all such work
cannot be accomplished for an $887,000.00 expenditure.
If all of the estimated $887,000.00 costs for demolition and site
preparation is not needed to accomplish the demolition, resolution of access
and utility issues, on site water and sewer upgrade if needed, and asbestos
and other necessary environmental remediation, Developers Richard
Alexander and John Nock agree that any remaining money shall be used for
repayment of TIF indebtedness.
5. Developers Richard Alexander and John Nock agree to construct
or cause the construction of the Planned Development Project approximately
as described on page 7 of the Amended Project Plan:
(a) approximately 144 room, full service hotel;
(b) approximately 18 condominiums;
(c) approximately 12,000 square foot conference/meeting
space;
(d) approximately 300 space multistory parking garage;
(e) restaurants, small shops, day spa;
(f) rooftop botanical garden.
6. If economic conditions change or require an alternative
development, Developers Richard Alexander and John Nock can satisfy this
requirement by constructing or causing the construction of an approximately
Equivalent Project subject to approval by the City Council, whose approval
shall not be unreasonably withheld.
7. Developers Richard Alexander and John Nock agree that
architectural or engineering contracts for the construction of this Planned
Development Project or the Equivalent Project shall be entered into in 2005.
8. Developers Richard Alexander and John Nock agree that the
construction contract for this Planned Development Project or the Equivalent
Project shall be entered into no later than June 1, 2006.
9. Developers Richard Alexander and John Nock agree that the
Planned Development Project or the Equivalent Project shall be finished and
open for business and/or. occupation no later than September 1, 2007.
10. Force-majeure.
All requirements for completion dates are subject to force-
majeure and may also be extended by the Fayetteville City Council for good
cause as requested and shown by the Developers.
3
pl
11. Non -assignable.
This Contract may not be assigned to another party without the
previous written consent by the City of Fayetteville after an authorizing City
Council Resolution.
12. Jurisdiction and venue.
Arkansas law shall control the interpretation of this Contract and
jurisdiction and venue shall be the Washington County Circuit Court,
Fayetteville, Arkansas.
13. Waiver.
The waiver of one of the terms or completion dates in this
contract shall only apply to that term or completion date and such waiver
may be limited or conditional.
14. Freedom of Information Act.
City contracts and documents prepared while performing city
contractual work are subject to the Arkansas Freedom of Information Act. If
a Freedom of Information Act request is presented to the City of
Fayetteville, Developers Richard Alexander and John Nock will do
everything possible to provide the documents in a prompt and timely manner
as prescribed in the Arkansas Freedom of Information Act (A.C.A. §25-19-
101 et. seq.) Only legally authorized photocopying costs pursuant to the
FOIA may be assessed for this compliance.
15. Liquidated Damages.
The City of Fayetteville is incurring substantial TIF debt in order
to accomplish its Project Plan so that the Planned Development Project can
be constructed promptly enough to ensure the federal tax credits obtained by
the Developers can be utilized. Without this need to obtain immediate clear
title and ownership of all four parcels, the City of Fayetteville would likely
seek to condemn such blighted structures at a potentially lower cost.
Therefore, if Developers Richard Alexander and John Nock fail to
meet any of the requirements of the project dates for engineering, architect
or construction contracts, the City of Fayetteville may opt to receive the
conveyance of the four parcels of property back from the Developers for the
payment by the City of Fayetteville to the Developers of $10,000.00.
4
If the construction of the Planned Development Project or the
Equivalent Project is not completed and open for business or occupation by
September 1, 2007, the City of Fayetteville shall receive $25,042.00 per
month ($834.73 per day) until the Planned Development Project or
Equivalent Project is completed and open for business or occupation (but not
to exceed twelve months for a total of $300,504.00 in liquidated damages).
This amount represents the estimated loss of monthly sales tax and FIMR tax
to the City of Fayetteville that the Planned Development Project should
generate according to the Developers' estimates provided to the Fayetteville
City Council in February, 2005.
In agreement to all terms, conditions and promises made above,
the City of Fayetteville by Mayor Dan Coody and the Developers Richard
Alexander and John Nock have signed below.
By:
CITY OF FAYETTEVILLE
DAN COODY
Mayor
Attest: SC]l71. 4i By:
Sondra Smith. City Clerk
; •c\SY o,e.'1
S.
:FAYETTEVILLE:
Special City Council Meeting minutes
July 29, 2004
Page I of 22
Minutes for
Special City Council Meeting
July 29, 2004
A Special meeting of the Fayetteville City Council was held on July 29, 2004 at 6:00 p.m. in
Room 219 of the City Administration Building located at 113 West Mountain Street,
Fayetteville, Arkansas.
Mayor Coody: I'm going to go ahead and call this special City Council meeting to order.
Would you please call the roll?
City Clerk, Sondra Smith called the roll.
PRESENT: Alderman Lucas, Jordan, Reynolds, Thiel, Cook, Marr, and Mayor Coody,
City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience.
ABSENT: Alderman Rhoads was absent.
Mayor Coody: Will you please join me in reciting the Pledge of Allegiance
The Pledge of Allegiance was recited.
Mayor Coody: Thank you very much. We have one item on the agenda this evening and that is
the approval of an ordinance. Kit do you want to go ahead and read the read the ordinance.
Kit. Williams: Yes, your honor. (The city attorney read the ordinance for the first time.)
Highway 71 East Square Redevelopment District #1: An ordinance forming the Highway 71
East Square Redevelopment District Number One pursuant to Amendment 78 of the Arkansas
Constitution and authorizing the preparation of a project plan. This ordinance was tabled at the
July 20, 2004 City Council meeting to the July 29, 2004 City Council meeting.
Mayor Coody: Alright thank you very much. Any of the City Council people have questions or
comments on the ordinance before us tonight?
Alderman Thiel: I still have some questions. I had several calls today on things that weren't
entirely answered at the public hearing. What happens if the Alexander/Knock Corporation fails
if they get half way through rebuilding this and they somehow lose their funding? Where does
this building go to? Who is still obligated for the bonds, etc?
Kit Williams: They are building this also upon investments from a private investor who will
certainly have a mortgage right on the property. The property will be owned by initially the
developers and then by their investor not by the city. The city would not actually even have a
financial duty to pay the taxes of financing bonds but they will continue to be paid with the taxes
from the financing from the county collector on the excess of funding beyond what it is right
now for the millage. So those bonds would still be paid. The increase expected might not be as
much as one would have hoped so it might take longer for those bonds to be paid. They would
be a obligation of the city unless the City Council chose to make them an obligation of the city.
Special City Council Meeting minutes
July 29, 2004
Page 2 of 22
Mayor Coody: Does that answer your question?
Alderman Thiel: Kind of. You had also said some things last night that weren't fully answered
to my satisfaction and that is what is the process of us; you've indicated that the city would have
to own that building initially or that property they would have to buy it. Explain that again to the
public.
Kit Williams: Well that would all be part of the project plan which is what we're not actually
adopting tonight. I don't think the final decisions have been made on that. My tentative position
would be that I would prefer us to actually own the building, the part of it that's going to be
demolished, then have the building demolished and pay for that with increment financing. Pay
for the development of the site to be prepared for actual construction. In other words we'd clear
the site and have it ready for development prior to then selling it to the developers so they could
begin construction. The demolishment and preparing the site is clearly spelled out and given you
all the power to do that under the redevelopment statute. Therefore, that's why I prefer that sort
of undertaking as opposed to other possible scenarios that have been presented by other
developers and their attorneys.
Alderman Thiel: So in other words the three million dollars, they would use that basically to
buy the property from city and Pay or reimburse the city.
Kit Williams: No, the city would use the tax. The developers can't use the tax incremental
financing that's what the city uses, that's city money, its money that you will get when the tax
incremental bonds, if you decide to do that, are sold. That money would go to the special fund
that you all would be creating and that you have control over, that fund must be spent on the
project. If the project plan says that the city will use those funds to try to correct this blight by
buying it, demolishing it and preparing the site for construction then that's what you would do.
That would be part of what we do as a city, at that point then when the property is ready to be
built upon that's when it would be sold to the developers so they could go ahead and do their part
which is building the building.
Alderman Thiel: Where does this figure this three million dollar figure come in then?
Kit William: You'll have to ask the developers that. I haven't priced out what this would be
and like I said that's part of the project plan and I have not done any of that part at all. The only
thing that we are considering now is creating this particular district which has to come first
before the project plan can be created according to the statute.
Alderman Thiel: Okay. Another question someone had was have we looked at the traffic
projections from this hotel with the size and everything being what it is?
Mayor Coody: As to its impact on College Avenue or ....
Alderman Thiel: Yes, the impact on just the traffic, just traffic coming in out of that corridor. I
mean that's adding a lot of traffic to the downtown area.
Hugh Earnest: The short
answer is no. One of the montra
that I guess all of us have to
keep
saying and something I've
said repeatedly to
the developer,
in the project plan approval
there
were what I call 19 shalls
in there, they shall
do these things.
One of the issues in there
is the
Special City Council Meeting minutes
July 29, 2004
Page 3 of 22
economic feasibility study which of course addresses a lot of things I know Mrs. Thiel that you
and other people are concerned about. I would presume that that economic feasibility study will
have to address some of the traffic issues, because obviously there is going to be some change in
how traffic is going to flow in that area. That will be a part of what we will have to do either as
part of the project plan or certainly as part of the development process that we will control as the
building moves through our approval process.
Alderman Thiel: Just because we adopt this outline, that's all we're doing right now basically
is establishing the TIF. If we don't come up with a plan that is satisfactory to everybody then
what happens?
Kit Williams: Well then you would not go forward with your project. We are creating a
redevelopment district. It's not a TIF district yet unless we decide to go through that kind of
financing. One of the items that must be done in this project plan is a detailed list of estimated
project costs. That's where we'd look to see what can the city do to assist in removing this
blight. What will it cost to do those things to remove the blight? The final thing must be done in
this project plan is for you all to find that it is economically feasible.
Alderman Thiel: Okay.
Kit Williams: Of course there has to be a hearing, a public hearing before this plan is adopted,
just like this ordinance and that's probably one of the most important decisions that City Council
will have to make.
Alderman Thiel: Okay. Thank you.
Mayor Coody: Is that it?
Alderman Thiel: Yes.
Mayor Coody: Who's next?
Alderman Lucas: So then the other night when the three million dollar bond issue was batted
around, it might not be a three million dollar bond issue then, you don't know.
Kit Williams: I don't know.
Alderman Lucas: It might be six million dollars or five million dollars.
Kit Williams: No I don't think it could be
Alderman Lucas: Two million dollars.
Kit Williams: I think it could not be greater than three million dollars because I don't think that
the very conservative figures that they must use to market these bonds will support a higher
amount than that. I don't know that for sure because they're talking about money left over in the
future if it grows maybe faster than their conservative figures. I would think that would be the
top end and it might be what the city can do would not be that much. I don't know we'd just
Special City Council Meeting minutes
July 29, 2004
Page 4 of 22
have to look at it and you all would have to make the decision of what you are willing to do to
remove this blight.
Alderman Lucas: Okay. One more question. They talked about bond service the other night.
What if the monies that are raised from the tax increment does not meet that bond service? Who
is responsible for it?
Kit Williams: Well if we have not committed other revenues which you can according to the
statute but 1 don't recommend that we go down that road, but it is something that the City
Council can do. As long as you have not done that those bonds can only be paid by the
incremental tax payments and if they're not paid, if it somehow shortfalls it doesn't come back
against the city if we have not pledged anything voluntarily. The statutes kind of opens that
door, if want to walk through it but we don't have to walk through it.
Alderman Lucas: Does that affect the city in anyway? Their ability to float other bonds later
on or something?
Kit Williams: Probably not because
in fact it is not a city
debt, it's a
debt only of this
district
and therefore should not reflect on us.
We heard that from one of their
speakers the other night.
I'm not a specialist in bonds and what
they're going to look
at in order
to give us higher
ratings
or not. It will not be a debt of the city
though and therefore
one would
hope it would not
reflect
badly against us.
-
Hugh Earnest: If I may Mrs. Lucas one of the things that will happen as part of the project plan
and this is another shall, if tax increment financing is to used then the method for calculating the
tax increment which shall be in compliance of the provisions of the subchapter together with any
provisions for adjustment of the means of calculation. In layman's terms the developer will
propose how they plan to pay for this. You may rest assured that on our side of equation, our
investment people, and we have someone hired as part of our service will look at that so that you
have an excellent assurance that what they are proposing can be met under very conservative
projections of the increment.
Mayor Coody: Does that answer your question Ms. Lucas.
Alderman Lucas: Yes.
Mayor Coody: Anyone else have any questions right now?
Alderman Reynolds: I don't understand, are we going to sell the three million dollars in bonds
to the city or is that going to be a responsibility of the TIF district.
Kit Williams: You control the TIF district. These will be, should be just TIF district bonds, but
the City Council controls the TIF district and improving any plan or amending the plan,
amending borders. Doing whatever you wish to with this district as long as it doesn't violate the
terms of a bond you might get into. The City Council will be ones making the decision but the
bonds will have on their face that these are special bonds that are only going to be paid by tax
incremental financing not by city general revenue unless you choose to change that. Therefore
they should not be an obligation of the city but only of that district.
Special City Council Meeting minutes
July 29, 2004
Page 5 of 22
Alderman Reynolds: You said should but, if I support this I surely want your word that this
thing is going to be written up to the fact that we're not going to be responsible as a city.
Kit Williams: Well my word will be I will do whatever the City Council instructs me to do.
Alderman Reynolds: Thank you.
Kit Williams: The City Council can, if you'll look at the back of my fact sheet that I gave you
where it talks about TIF bonds there is a provision in there, § 14-168-318 that gives the City
Council powers to do other things to make the bonds more marketable. My recommendation is
that you don't do that but I don't control the City Council so I can't give you my word. I will not
write that up because if the City Council instructs me to do that, then I am bound to do it.
Mayor Coody: I would recommend that we follow the attorney's recommendation on that.
Alderman Thiel: I'm not an attorney; I would be concerned if we didn't have leans or
something on this building. I realize that this can be a discussion at a later date whenever we
actually get into the plan, but I'm still concerned about if the building is not completed and is left
it could be worse than what we have there now.
Mayor Coody: Can we get some performance bonds on this?
Kit Williams: I don't know what we can do but we wouldn't have a right to have a lean on the
building because we would sell the property and the property would no longer be ours, it would
be owned by somebody else. We have no interest in that property and therefore we could not
have a lean or a mortgage. The first mortgage is going to be the person who has not invested a
few million dollars but the person who has invested 20 million dollars to do the project, the
private entity is going to need that mortgage. We don't have any right to a mortgage on that
because we won't own the property. We'll be basically out of the game once we've gotten rid of
that blight and prepared the property for this project to be built.
Alderman Thiel: Okay. I understand.
Mayor Coody: Anyone else? Anyone from the public want to address us on this issue? How
are you tonight Sharon?
Sharon Davison: Good evening. My name is Sharon Davison and hopefully I'll present some
thoughts for you to consider. I'm sorry I'm tired and ill prepared but here goes. I am here to
speak about TIF and Mr. Knock tonight and it is a real serious matter. I will just pass on first
just my husband's comment as a taxpayer he says please don't hurry, City Council members,
please take your time working through the information you're been given. He said that private
business is suppose to support themselves in their projects and the reward is that they have
invested or risked whatever. I think there are a lot of taxpayers that are concerned when we
don't have money to save our own library because of the funds. When we have issues of
management and plans for half a million here and a million there, all of the sudden three million
is now ready to help a person renovate. Okay for a private enterprise. That is his questions and
his thoughts as a conservative business person and a taxpayer as to the time, energy, over
accommodation of what we're all doing and why we're rushing. Now it seems to be at this point
of urgency the marketing campaign for this project of TIF has been very pervasive.
Special City Council Meeting minutes
July 29, 2004
Page 6 of 22
I was channel flipping and noticed Mr. Knock's walk through of the dilapidated unsafe structure.
Yes it did look horrible and we all know its been allowed to get that way and funny how it all
became front page news when I believe we did have to pay for the plywood to cover up some of
that building, when all the sudden we had extra windows broken out. I think that gets to TIP and
blight and the basis of square one, the Mountain Inn, the block of the Mountain Inn. Guess what
folks that's the only real blight area in our town right now, our town is looking great. Thank
you, good night.
Mayor Coody:
Thank
you for your
comments. Quick question, Kit is the city going to have
any general fund
money
in this project
at all?
Kit
Williams: I
would think not.
The City Council
could do certain things like but I don't think
the
City Council
is going to want
to put general fund
money in it.
Mayor Coody: I don't think we'll have any city money in it either.
Alderman Marr: Mayor.
Mayor Coody: Yes sir.
Alderman Marr: I just want to make sure we are clear, our meeting tonight is to talk about a
boundary of the Tax Incremental Financing District, whether that boundary is appropriate, and
whether the conceptual plans, that maybe coming as the second phase of this, warrants the
boundary that we're speaking to. So I hope that all of our future people that come to the podium
will direct their comments to the issue we are talking tonight.
Mayor Coody: Thank you. Anyone else like to address us tonight. How are you Don?
Don Loftis: I am a property owner on Center Street. My property along with my partners
adjoins the Mountain Inn and we would very much like to see this project go through.
As far as the property lines, I don't have a problem with that. It would appear that the
developers have drawn lines where there is a very minimal of residential areas in this project
which is what they have tried to accomplish I think. I would urge the Council to approve this. If
they feel like they need to move some lines I don't really have a problem with that but I feel like
you should pretty much stay with what the developers are doing here. Again, we're not talking
city money, this is not costing the city anything. All they're asking for is your approval for them
to build this, so it's like me going out and building a house all I have to do is get a permit from
the city and go build a new home. That's what they're trying to do here only it's a 22 million
dollar project. So I would urge the Council to approve these boundary lines as they've got them
drawn or very close to it, so that these people can proceed with this project.
Mayor Coody: Thank you sir. Would anyone else like address us.
Rob Merry -Ship: 1 am a
developer here in town. This
is a new one;
talking about a project I'm
not involved in with my
partner Richard Alexander. I
have known
John Knock for about two
years now and I'd like to
speak on his behalf shortly if I
may.
Special City Council Meeting minutes
July 29, 2004
Page 7 of 22
John was brought in when we worked with Stella Moga. We facilitated the purchase of this
property two and a half years ago for Stella. We had managed the property adjacent to it. I've
been privy to a numerous amount of meetings to develop business plans, the first bringing John
Knock to the table to help us set some plans that fell short with Ms. Moga on this property. It's
been an ongoing project. I also hope that you will consider these boundaries and hopefully we
will create a TIF. I hope to see maybe numerous more TIFs that might facilitate parking,
infrastructure, street scape, and affordable housing. We haven't done this yet, we need to be
very concise on how we do it. We need the public input but I can assure you I know that
Mountain Inn project. I know that it keeps going back to the Mountain Inn. It is not going to
happen without this TIF. That's not a threat, it's just a fact of life because its just one piece of a
puzzle of numerous pieces of a business plan to bring in private money and some assistance.
Like the gentleman just mentioned, it's not going to be a burden on the city if it's done the way it
is suppose to be. Its a tax deferring mechanism that will have an impact immediately on the
Mountain Inn and then as it widens over time it will have an impact on the whole area, the whole
district. The area that you decide on as far as streets, lighting, it will be a good thing for not just
the Mountain Inn. Although the first and I think the most important impact of this one piece of
the puzzle, this is talking about the Mountain Inn now is this. I encourage you and wish you
good luck. I'm not involved in it by the way.
Mayor Coody: Thank you very much. Anyone else want to comment on this tonight.
Jim Boyd: Most of you all know me; I've been practicing law here for about 30 years. I live in
the historic district, the Washington Willow Historic District, for 29 years in the same house. I
have clients that have property in this proposed district and have owned property here myself. I
just wanted to speak up and tell you that I think this TIF is a good idea, its something new, it
takes courage to do new things. Obviously the Mountain Inn is an eye sore and getting worse
not better, downtown Fayetteville is barely hanging on, the construction and activity and money
is going north of here, so whatever you can do to save downtown you should do that and
seriously consider that. If you can turn that sow's ear into anything close to a silk purse with
private enterprise footing the bill you should seriously consider that and it's just like a raise in
tide lifts all boats. If you can fix that problem and make that something very valuable it will
affect all of the rest of downtown. I know I'm telling you things you already know, but I think
you should seriously consider this. It's not like we're dealing with people we don't know.
Alexander has a reputation of having practically worked miracles in redoing old buildings, if he
says he can do it I have a tendency to believe he can. So to that extent that he needs a leg up I
don't see how this hurts the city all. I can see how it can help the city a great deal but I ask you
to give serious consideration to this and to the extend that you can fix that problem and start
downtown Fayetteville growing back up instead of continuing to deteriorate, you should
seriously consider that.
Mayor Coody: Thank you sir. Go ahead. How are you tonight?
Professor of Economics: There is no question in my mind this is great idea for the city. First of
all I think that it's going to improve, significantly improve the infrastructure of the downtown
area of Fayetteville. I think as much as I've heard from, I know about this project, the
developers have put a really good project together and they're taking time putting everything
nicely together. So to be short, please I think I support this project and that it's going to be very
good for the downtown area.
Special City Council Meeting minutes
July 29, 2004
Page 8 of 22
Mayor Coody: Thank you sir. It's good to see you again
David McGeady: Good evening ladies and gentlemen. I'm the general manager of the Radisson
Hotel. First off I'd like to say God bless America for free speech. I've been in Fayetteville for
five years in that time frame I've initially fell in love with the Mountain Inn and was hoping to
see something to transpire with the Mountain Inn. I am on the A & P Commission and I'm on
the Board of Directors for Arkansas Hospitality Association so I have a great interest in further
development for Fayetteville. I would like to see Fayetteville become a destination point for
citywide conventions. To have citywide conventions you need to have enough hotel rooms to
sustain that and to draw people into Fayetteville.
From my prospective as on the convention side we would need to have a property, that being the
Mountain Inn, that would partake in that for trying to attract conventions citywide which would
have a great impact which would obviously expand the tax base and obviously the A & P tax
money. Based on that if we were looking in that futuristically for drawing in convention
business I think it would be a very prudent thing to do.
As the market currently stands with transient business being some what down in Fayetteville, I
don't know if it could sustain business. The time frame were looking at is maybe two years
outward for construction and opening up the property, if it would be able to sustain just on
transient business. I think the focus needs to be and needs to be incorporated into this that part of
this really needs to focus on the overall citywide convention business which would put
Fayetteville on the map and drawback some of. the business that is going up north.
I thank you for your time.
Mayor Coody: Thank you sir. How are you Linda?
Linda Ralston: Good evening. Bouncing from Alderman Man from Tuesday evening's hearing
that it has been hard for me to separate boundaries, use, plan and everything. It seems like it all
flows together. I won't be long but I do have a couple comments that I've just been doing little
further research that I wanted to bring before you. I doubt that probably that all interested
parties have had a chance to reach ya'll. I'm concerned I'm a new resident of Ward 3. This
seems to be kind of a rush, we're meeting tonight and you will probably complete a first reading.
You will meet again next Tuesday where you can complete a second reading and this probably
will go pretty quickly in that regards. I hope that people do continue out there to contact you
throughout the city as to their comments. I still feel like a lot of us still have questions. I know
ya'll do and I'm sure the citizens even though they received a letter, because they're in the
proposed district, may still be internalizing a good question that they may have so I hope that we
don't rush through the readings.
I'm from Fayetteville and was reminded of something that happened when I didn't live here and
that was the incinerator project. Several of ya'll are probably aware of that and after doing a
little checking on that project it appeared that those bonds actually had stamps on the front cover,
each one of them in red letters, "This bond will never be an obligation on the City of
Fayetteville". This was just brought to my attention later this afternoon.
Apparently the City of Fayetteville actually did spend millions of dollars to get out from
underneath these bonds, they were actually issued by another group outside of the city. I know
Special City Council Meeting minutes
July 29, 2004
Page 9 of 22
this is probably different from what we're looking for now and everything but that is something
as we talk about financing and bonds. I'm not still sure who will issue the bonds maybe I need
to hear that one more time where all that comes together. There is concern even based on things
that we believe to be true that the city would not be indebted and yet why in the incinerator
project did that not happen that way? So I just wanted to present that as a historic prospective of
sorts. I'm not sure if anybody could even address that tonight or not.
I asked Richard Alexander the other night about part of the district that obviously does involve
a second key element of the Dover Kohl Downtown Master Plan and that is the Archibald Yell/
College Avenue redevelopment. I'm wondering, and Richard did say that yes we would
certainly have to have highway department approval. We probably just can't go and say hey
we're going to do a boulevard and whatever. It's a lot more intricate than we've got some
money and let's do a boulevard and traffic calming and sidewalks and stuff. I guess that is
possible it's just a matter of how does it all blend together that is another question I have.
Also a thought is that if the city does appear, as Council you are the governing body potentially
of this TIF, you know and the bonds are secured by tax dollars. You know it ties back into my
earlier comment, how can the city not be held liable for the bonds. I am not sure is it connected
all the funding and everything.
My thoughts also took me back to something that Kit mentioned but I think we all kind of
internalized and this is a paraphrase, Kit can say it better than I will be able to this point. As we
look at the boundaries and try to decide what is really, what our first try at a redevelopment
district and a TIF District is, apparently the entire district has to benefit from the improvements.
Again, probably a heavy paraphrase on that Kit but I know it was mentioned to try taking the
boundaries all the way leaving residential out which I am certainly more in favor of. Maybe
taking it all the way down I can see that the highway maybe more connected to the improvement
its almost an entrance into Fayetteville. Ultimately I'm not sure how you can prove or how
much you have to substantiate that something that happened at Cato Springs and School actually
was benefited because of all that was put together. So maybe I'm kind of unclear as to some of
that.
If a property owner, for example like Richard Alexander, who I believe will become the new
owner of our current Roberta Fulbright Library property. I know the first year we established a
base value as far as where things get calculated from there. The Roberta Fulbright Library I
understand will be actually private, owned by him and I was just wondering if an exempt
property owner somehow in the process of this 20 or 25 year project if it becomes a private
property, how does that merge in. How do the revenues get treated? Does it get adopted in
automatically or does it get to stay exempt.
Mayor Coody: Oh no. Once it becomes private and starts paying taxes it's a tax paying private
entity.
Linda Ralston: And if it's in the district and the boundaries then Mayor Coody it would,
supposedly be included in the....
Mayor Coody: Yes, it would participate with every other property within the district
Special City Council Meeting minutes
July 29, 2004
Page 10 of 22
Little Ralston: In the calculations. Okay, those are just some thoughts that I've had since a
couple days ago. This is really very fascinating and yet I do have some concerns of hoops and
maybe some hidden items and information that we still may not totally have. You have got an
incredible decision before you and I hope again that this is not rushed that we certainly
encourage people to come and understand. It takes a little bit of reading and internalization and I
don't feel like the average citizen probably maybe has that. So I hope that ya'll continue the
dialogue. I don't think this is a timely project, apparently there are monies on the line as far as at
the end of the year, these new market tax credits and grants and everything, but I think that we
still have plenty of time. I would love Ward 3 representation of someone to talk with. I hope
that ya'll do go ahead and do this in normal timing and not rush these reading. Thank you.
Mayor Coody: Thank you Linda. Anyone else want to address us tonight?
Morgan Hooker: I in the past have developed property down in this area and currently have
several projects that I think would impact this area. I also know John and Richard, the guys
doing this and can speak very highly about them and the effort that they have poured into this
project and many other projects. I've had the unfortunate pleasure of being in the Mountain Inn
the last few years and with the kind of background in construction I think everyone needs to
think real careful about what could potentially ever go there if this project didn't somehow work
out. The people that I'm working with and projects that we have in this area, we would be in
support of the TIF district and the boundaries. Thank you.
Mayor Coody: Thank you sir. Anyone else like to address us on this item tonight?
Bill Stafford: I am president of the University of Arkansas Technology Development
Foundation. I hope that you will consider this TIF District. The boundaries seemed entirely
appropriate to me, primarily because of the extent of the improvements that can be made. As
you consider this I hope you will not only consider the direct benefits that will occur downtown
and throughout the limits of the district boundaries but the indirect impact that it could have as
well.
As you know I'm working hard to develop the Research and Technology Park in south
Fayetteville. We have a goal of being able to attract Fortune 500 companies to the park and our
ability to bring those kinds of companies to this community even though it's the greatest
community in the United States, would be greatly enhanced by doing this. Using the TIF
mechanism seems to be an appropriate mechanism as a catalyst to begin to implement some of
the recommendations that Dover Kohl did. I hope you will consider it and do think about the
secondary impact of doing this on the rest of the city. Thanks.
Mayor Coody: I think you might be the first person that mentioned the word boundaries in
these speeches today. Thank you.
John Knock: I am one of the proposed developers. I've lived in Arkansas since 1977 and I've
lived in Fayetteville since 1991, this is our home. This is where we're raising our family and
regardless of whether this project happens or not I will continue to live here because it is a great
place to live. I appreciate the dialogue both those that are pro and those that con to the project.
The only reason that I'm,standing up tonight is to share with you something that we omitted in
the schedule last night and that was information about what comprises in boundaries since
Special City Council Meeting minutes
July 29, 2004
Page I I of22
tonight the discussion is about the boundaries, I've handed out for your view and it's available
for anyone else who would like to see it. This information that is provided by the Washington
County Assessor's office and is the makeup of the 405 parcels. I will just read them rather
quickly so the audience at home can follow along.
They identify a commercial building only as one parcel, commercial improved, 141 parcels.
Commercial miscellaneous, I'm not sure what that identification is but that's the county, 14.
Commercial residential, 4; Commercial vacation, 26; Exempt properties, those are not paying
taxes, 92; Industrial improve, 1; Industrial vacation, 2; Public services, 5, Residential Improved,
86; Residential miscellaneous, 5; and Residential vacation, 28. 1 think that will give us a fairly
good makeup of what is in the boundary. 1 appreciate the opportunity. Thank you.
Mayor Coody: Thank you very much. Anyone else want to address us on this item tonight?
Bill Ramsey: I'm the president of the Chamber of Commerce but I do not have my Chamber of
Commerce hat on tonight. I don't have an official position. I think in a way we're getting the
cart before the horse. We're talking about boundaries tonight. We're talking about establishing
some boundaries and these are days when we have to look at creative ways of making things
happen. I mean these are different times and this is a new vehicle and I need to think about if we
don't establish some boundaries and at least open up the opportunity of whether we want to do
these projects, correct me if I'm wrong but I don't think we're talking about a project tonight. I
think there are going to be feasibility studies and if the feasibility study shows that something
isn't feasible, it's not going to be done, but folks we need to look at the options. As a citizen and
I'm speaking only as a citizen, I live on Forest Heights in Fayetteville, I'd hate for us to look
back down the road and say we closed the door on an option that we could have looked at to
make something good happen in Fayetteville, Arkansas. In a way I'd hate to say it but I think
some other people in some other areas may be already a little ahead of us. We're not voting on a
project, we're deciding and taking the first step on whether we can even consider using the TIF
District to make things happen in Fayetteville. Mr. Attorney am I right on that or am I wrong?
I'm still here to learn, this is brand new and since it is new I think we owe it to ourselves and we
owe it to the citizens of the City of Fayetteville to at least open that door so that we can at least
explore our options.
Kit Williams: It certainly is a two step process. We have to decide what the boundaries are and
create the district before you then attempt to create a project plan and go through all the other
feasibility studies. So it is a two step process, we are on the first step tonight.
Bill Ramsey: If we don't take the first step we can't take the second step. I would urge you to
take that first step and let's look at whether you want to go to step two. We've got to take it one
step at a time but you've got to take that first step before you can proceed. I would urge you to.
Mayor Coody: Thank you sir.
Ron Thornton: I've been a resident of Fayetteville many hours now. I am a Fayetteville
graduate, I'm rooted here. I'm not sure how appropriate it is that I speak but I'd like to speak
because I have worked personally with John and have been a friend of John's for at least ten
years. I feel like his integrity has been called into question quite often tonight. I know in the
process of creating these boundaries this process was done strictly and very closely with the city
in a very open manner, there were no closed doors or anything. I think the district as it is drawn
Special City Council Meeting minutes
July 29, 2004
Page 12 of 22
is very effective. I know before the school board really gave us their approval or were on broad
every one wanted the district to be smaller, but now the school board actually themselves release
a CFO suggesting that we expand the boundaries. I think that as it is the boundaries are certainly
not too long, especially if we compare them to the boundaries of the TIF District in Rogers
which is three or four times larger than this one. I hope that you will approve these boundaries,
but more especially I hope that that these forums and discussions will be centered on the
business of the deal instead of the personal attacks on the character of many of the people
involved. I would like to say that I would stand up and put my name on the line for the integrity
of John Knock. He is a resident of Fayetteville and his desires are to do what's best for this
community. Thank you for your time.
Mayor Coody: Anyone else that would like to address us on this item?
Phil Ralston: I'm a Fayetteville resident and I just basically have some questions and concerns.
You're considering creating a district tonight without a plan, but the district size is based on
servicing a three million dollar bond issue. Somebody's done some planning but we're not privy
to what's on the plan. Why three million dollars? What's that going to be spent for? Is that
money that you know is going to be gone? Kit tonight said that the city won't own the building
but in the plan they may own the building long enough to tear it down and get it ready for
someone to build on, if that happens, how do we sell it? Do we have to sell it to these
developers? What if someone comes up with more money and has a different plan. Who's
going to decide that? Has it been already decided that we're going to spend a million, the
thought was buy it for a million, tear it down for a half a million, and then sell it to them for
something but we don't know what. Who's going to decide what's a fair value at that point and
do they have first bid on the first value or can somebody offer more.
Part of the district says we have to have a benefit to everybody, if we widen College that's going
help the businesses on College a lot more than those folks on the far side of the square. Who
determines what benefit each person gets or each landowner or person in this district gets? Do
we have equal benefit, probably not but how do you decide that? Who's going to run it? Is there
going to be a TIF board when we decide we're going to spend some money? Does that all come
before you every time we decide to spend part of this ten million dollars that we're expecting to
get, or conservatively guessing. It's not going to cost the city any money but it's going to cost
the taxpayers money. The money that these increments are, would be going to the school board,
the school district. The school district is getting their money from the state now. Well I'm a
state taxpayer too so they're getting their money but I'm paying for it and with Roger's bigger
TIF I'm paying for more of theirs too. I'm not sure that TIF is a way of putting the money to
somebody else farther removed from the taxpayer so he doesn't know what he's doing. You're
taking my money to go to the school board but instead of it coming through my property taxes
here, if I'm an owner in this area it goes through the state somewhere else. If I'm not in that
district I'm going to pay for because I pay state taxes. My biggest question is how can you even
consider approving a district if you don't know what the plan is and haven't given enough
thought to know how much money we're going to get, where's it going to be spent, how's it
going to be spent. What are we doing? I just don't know how you can approve a district without
all the other answers. Thanks you.
Mayor Coody:
Thank you. Do you
want to
address
some of these questions?
Kit Williams:
Whatever you want.
Do you
want me
to address them now I could
Special City Council Meeting minutes
July 29, 2004
Page 13 of 22
Don Marr: Let's get all the comments out of the way.
Mayor Coody: Then address them all at once. Did anyone else want to address us tonight? So
everyone has spoken their fair share this evening and no one wants to ask anything else. Alright.
Kit Williams: In fact there are a number of questions you might have to help me
remember all of them. I think you're looking at the TIF Board right now. There's not
going to be a separate TIF Board. The City Council is the one that makes the decision, if
they make the decision on the finding that they must make to pass this ordinance. Let me
read the statute, it says what this ordinance must have as a finding. One of the things, "It
must contain findings that the real property within the redevelopment district will be
benefited by eliminating or preventing the development or spread of shims or blighted
deteriorated or deteriorating areas or discouraging the loss of commerce, industry or
employment or increasing employment or any combination thereof"
That is a finding that the City Council has to make, that by creating this district the property
within it will be enhanced or benefited by the removal of blight and also possibly encouraging
employment and other things like that. That's a finding they need to make in order to pass this
particular ordinance to create the district. Obviously there's been talk about the project and I
think that even though the project is not detailed yet there must be some other understanding of
why this district is or should be considered. That there is blight within this district and the
project is designed to get rid of the worst spot of blight as well as probably a few other things
that would be detailed in the project plan. That's the finding they have to make and think the
way this statute is set up. They have to do this part first before they can go forward and do the
much more detailed project plan where you'll see all the estimated costs, all the projects that are
recommend to be done and any possible financing for doing that. That's why this is a two part
process I think, because creating that project plan would be very complicated and expensive to
do, so I think that's way it's a two step process. Do this part first, will this district be benefited
by removing the blight and then get into your project plan.
The incinerator case was talked about and I'm very familiar with that because I was on the City
Council when we had to spend millions of dollars because the Supreme Court ordered us to do it
to pay attorney's fees, not to pay bonds. In fact the supreme court told the City of Fayetteville
you cannot pay those bonds because the bonds were stamped on their face, it's not an obligation
of the city. What happened in the previous form of government, the city Board of Directors,
even though that's what the bonds said they committed themselves by contract to pay the
Resource Recovery Authority who had issued those bonds and whose indebtedness those bonds
where not the city's. They had committed themselves by contract to pay the Resource Recovery
enough money so it could pay the bonds even if the incinerator was never built and even if they
never received any trash from the City of Fayetteville, that's what happened. The city decided
not to build the incinerator or the Resource Recovery Authority did, so there was no money to
pay the bonds. So what happened, an ordinance was passed that all of the rate payers had to pay
an extra $2.02 a month to pay these and that was unconstitutional. Therefore that's what the
supreme court found and we not only ended up paying our own attorneys but outside attorneys
about three million dollars and about the same amount to the ratepayers' attorneys. That's a very
hard lesson, I think, the city government learned. I know I learned that lesson very hard when I
was on the City Council and since I've been city attorney I've been very careful that we do not
fall into that kind of trap again because we don't have the extra millions now to pay that kind of
Special City Council Meeting minutes
July 29.2004
Page 14 of 22
money. I will be watching this very' carefully and advising the City Council when they get into
a dangerous area and hopefully they will not get into a dangerous area. They will leave the
bonds just as they are and not try to commit city resources to secure these bonds and pay them if
the tax incremental financing fails.
Mayor Coody: We didn't have the extra millions then either.
Kit Williams: What happened is that we didn't do capital improvements projects for several
years and we're still trying to catch up because we had to spend all that money on both our own
outside counsel and also the rate payers' counsel. That was a hard lesson learned but I think
we've learned that. What other questions were there. .
Mayor Coody: I've been going to back to the original question of the three million dollars
owed to satisfy that portion of the bond, the building, the reconstruction of Mountain Inn would
be paid for out of proceeds from bonds issued by the TIF district that would be repaid by the
increment that we're talking about. So this wouldn't be city bonds. This wouldn't be the city
issuing bonds and paid for out of city tax offers. These would be bonds that we paid for and
obligated to be paid for only by that increment of property tax that we've already been talking
about all this time. So this wouldn't be a city obligation with city money involved and I think
that keeps getting lost in the conversation.
Kit Williams: The other thing is that we don't know how much its going to be. None of us up
here have seen the project plan, the estimated cost and there are certain things that you can use
TIF money for. There are other things that I have questions about whether you can use the TIF
for.
I am going to take the more conservative view when it comes to what we can spend it on because
I don't want to have another incinerator case, or another case where people think that we are
using tax dollars inappropriately.
You can certainly use TIF money for public improvements to streets, sidewalks, lighting, things
like that and public improvements. We can also use it, according to the statute, to buy blighted
property, demolish it and get it prepared for construction. There is arguments that I've heard that
well you can even use it in helping to build the structure that you would then lease or convey to a
private enterprise. That gives me a little heartburn when I hear that and I'm going to have to be
pretty strongly convinced that that's absolutely rock solid that we can do that. I don't think I can
be convinced and the reason because this is a brand new law. The courts have never interpreted
this law.
Mayor Coody: Right here in Arkansas anyway.
Kit Williams: Yes. well in each state you've got to look at it for each state because each state is
unique and I don't what to be pushing the envelope. I would rather do what we can statutorily
and constitutionally do that I'm sure of and do what we can to help this project but I don't want
to step over the line either and that's going to be my advice to City Council that we stay within
the bright line that I know that we can actually do. There's a lot of help we can give this project.
Being able to acquire the property and fix it up and get it ready to move utility lines. There's lots
that we can do that's clearly within the statute and constitutional that should be a great help to
this project that's desperately needed to be done for Fayetteville. I think we can do that. I don't
Special City Council Meeting minutes
July 29, 2004
Page 15 of22
know exactly how much that's going to cost. We've got to wait for the project details to come
out and that will be a whole another discussion up here.
Mayor Coody: And nothing gets approved until the plan is fully bedded by everyone.
Kit Williams: And approved as economically feasible by the City Council.
Alderman Thiel: Mayor.
Mayor Coody: Yes ma'am.
Alderman Thiel: I have one more thing to say but I want to make sure the public did get a
chance to comment. We are just talking about this area and several times tonight people have
mentioned the Rogers' project and while I think there might be something questionable as to
whether or not that really regards blight. There's no doubt that speculators that have bought land
there want their property values to increase.
What I've heard from residential people is that there are still concerns about and I know some
people would question the logic behind this but these people they've bought their homes, they
can't afford the property tax. They don't want the area around them to increase, they don't want
their property to increase in value, they have no intention of selling their property, it's all they
can afford to live in and own. They can barely manage the increase in property taxes that just
occurred naturally. I'm certainly not ready tonight to adopt this. I hope we leave this on this
reading and then Tuesday night we go to the second reading.
Most of the people I've talked to though have pointed out all the positives about this project and
how they will benefit from it. I just want to make sure before we adopt these boundaries,
particularly the residential boundaries. That's really the only thing that I've got any concerns
about that are in Ward 1.
There's a lot of questions I have and I think the public does too but I think it does all boil back
down to the project plan which I think its finally been drove in our heads that that's not what
we're looking at tonight.
Mayor Coody: Thank you. Anyone else want to make a comment? Yes sir.
Alderman Marr: Thank you mayor. I struggle with the fact that how do you define what a
boundary should be without having some idea of what concepts you were talking about and I
think I've voiced that. I decided to go back and kind of read the law again and get hopefully a
better feel for what was the purpose of the two phases, why are they separated, if in fact they are.
I think what happens is we get an idea of a project first and then are asked at establishing the TIF
as a boundary to help not only that project but other things that may happened like our
Downtown Master Study. What I tried to say is forget that I know about the project and if I look
at what we should be establishing in terms of a boundary our ordinance that we're passing was
pretty clear about what that was. Do we believe that whatever area we're talking about needs to
eliminate and prevent a development? I'm going to take out the word blighted for a minute and
start from a lesser word of deteriorated or deteriorating areas that we would also be looking at in
that area as to discourage the loss of commerce and the loss of employment and have the
opportunity for increased employment or a combination of those thereof.
9
Special City Council Meeting minutes
July 29, 2004
Page 16 of 22
Since we started the prior City Council meeting with a discussion about a lease in the center of
our square, we had an alderman go through all the vacate spaces that are beginning to develop.
We heard also Tuesday night about the number of properties that are becoming open and so I
would say that while we started with one deteriorated property that that is spreading. In my mind
I would also go back too and say we've had other potential decreases in economic issues. We
have a grocery store that use to be open 24 hours and now they're open less than 24 hours on the
northern end of the boundary that we are talking about. On the south end of the boundary we
have ever since I've been on this Council, talked about redevelopment of south Fayetteville.
That's a long stretch and certainly the point of where you start entering our downtown core, what
I would call the south end of the boundary.
I think that we have an opportunity for increasing employment, discouraging deterioration,
reducing loss of commerce by the boundary we're talking about, I do think it's appropriate. I
would agree that there may be some tweaking related to residential areas but when I look at this
boundary from the very northern part to the very southern part of it I think there's opportunity to
do the things that are listed in this particular ordinance.
I would agree with the gentleman who stood up spoke and said you know "if you don't have a
plan how did you get three million dollars?" because I think he's right. How can you talk about
a number when you haven't even talked about a plan? We have what is probably a pretty
appealing plan to us because most people want the Mountain Inn fixed or that comer fixed
there's a lot of discussion about that property. Even the design they talked about, while I looked
at it and thought this is great I got calls today about is it too tall. Is it this, is it that, you're going
to have a process about the development process.
On the boundary piece of it that we're talking about tonight versus the plan, what makes me
interested in it is are there other areas of Fayetteville that I think would meet all these areas
better. Would I have a different TIF location. We talked about down to Cato Springs, twenty
years ago it might have been Dixon Street. What if we would have had an opportunity to have a
TIF on that and what the increment would have been with what has happened privately there. I
think this very much warrants us looking at establishing the district.
I'm not interested in financial risk. Thank god I wasn't on this Council when the incinerator
happened. I want us to do what is right but I truly think it's a good plan. I think it meets these
requirements that we're asked to look at and if I were going to use a project plan in my mind to
determine the boundary, the only project plan I have to look at right now, even though I've heard
the Mountain Inn, is really our Downtown Master Plan. I went back and I read that and it had six
basic principles: superbly walkable environment, downtown living, smart parking, special places,
experience based economy. This district could address all six of those in some way. It certainly
would make College, which what we're talking about in terms infrastructure, more walkable.
That it accesses the eastside of College to the Westside of College then I think we've got to
pause a bit.
A project that we've heard in this boundary talks about parking decks which gives parking in this
area. We heard that this not only a hotel but office space and condos and other things so we have
a liveable piece to it. Special places, if the Mountain Inn which was a place keeper, it has an
opportunity to do that. Experienced based economy, well certainly you will come downtown if
you have something to experience and if you don't then you won't be down there.
Special City Council Meeting minutes
July 29, 2004
Page 17 of 22
I'm certainly interested in anything that we can do to continue to revitalize and pull back into the
core of our town things, particularly in a ward that I represent which is where a big part of this is.
I would even encourage not only naming, I know we've used kind of a East 71 and the East
Square but I really think of this as a College tax incremental finance area because we are really
talking about College Avenue. Infrastructure for the majority of the money and the building
we've talking about putting in as our place keeper is really on the comer of College and
Mountain.
Those are my comments; I think it's a good idea. I haven't heard a reason why we shouldn't be
at least investigating it and moving forward to hearing more about what the plan would be and
looking at the financial feasibility of it. 1 believe that this district meets these requirements. I
don't believe that the blue area we represented on Tuesday does that. I truly do not which is why
I said then and still believe today I would not support adding that to this boundary. Thank you.
Mayor Coody: I don't think anyone would support adding that. Anyone else have any
comments or questions for the Council. John I've got a couple of questions for you if you don't
mind. I know that you were involved with the city about the boundary here.
John Knock: Yes.
Mayor Coody: According to the boundary, what is the relationship between the boundary and
the three million dollars can you in quick terms explain that.
John Knock: The boundary itself produces a certain amount of revenue, the schedules that we
referred to on Tuesday night are certainly available to look at. For the maximum amount of
incremental allowed under state law, the maximum growth allowed in collections is 10%.
Considering all of these properties that we talked about earlier tonight they still only generate a
certain amount of dollars, approximately $40,000 to $42,000 right in that range, I don't have my
notes in front of me, that's without the improvement of the Mountain Inn that includes no future
development. _
Obviously you do a catalyst and you do a tax increment financing district with the hope that it
will generate additional monies. Because the growth is in a triangular fashion starting out with
low dollars first and larger dollars in later years, any financing you do is bound by the amount of
collections and the amount of debt service you can do. Secondly, even if you said okay we need
more money so let's make it a bigger district, too large is unmanageable, so you also have to go
back to the core. What we we're looking at was marrying the catalyst project with the Dover
Kohl study of the Downtown Master Plan.
There are four or five factors, one is the size of the district and what it would generate, then once
you look at the impact area, because the statute is very clear, there must be a benefit for all
property owners. Although we heard it said from the aldermen, I appreciate it, that needs to be
primarily College Avenue, you have to be careful because all of the property owners inside of
that area need to have an impact in a positive way. It may be simply be sidewalks or landscaping
or lighting but there should be some continuity of those benefits, so that has to be considered.
Special City Council Meeting minutes
July 29, 2004
Page 18 of 22
The second thing that has to
be considered is because
we're downtown,
unlike Rogers which is
along a corridor of Interstate
540 and as I pointed out
earlier some 80 or
90 units inside this area
are already exempt, so those
units don't pay any taxes.
All those things had
to be considered.
The other thing that the City Attorney said earlier that there are only certain qualified dollars,
qualified expenditures that can meet the TIF line items. The statutes are very clear, you can't go
and build a hotel per say with TIF money, but there are certain things that can be done to get it
ready for that. There are certain "public" uses that can be done from cityscape, streetscape,
excavation, renovation, excuse me, demolition and acquisition, if you add all those things up our
preliminary value shows that those numbers could be in excess of five million dollars. All the
acquisition, renovation, additional parking structures and all those things that are necessary.
Even at five million dollars though this will not support that and so going back with prudent
financial models you would never have tried to propose something that the district itself would
not support on a conservative basis. The three million was a number derived after what was,
what could be qualified expenditures, and also what the project would cover less the exemptions
on a fairly reasonable dollar as given to us by the county on what those dollars might be. You
don't just pick a number and say that's the number, it has to be based on many factors and those
are about five or six of those factors.
Mayor Coody: Alright so I want to make this clear. If the TIF would have been in place last
year and we saw exactly the same property tax increases that we've seen this year, the difference
or the increment would be how much?
John Knock: It was approximately $42,000.00. I actually have a note here and that was the
number that was provided to me by Steve Davis who did the calculation.
Mayor Coody: Alright. I was surprised to find out that it was that little
John Knock: I think there is an assumption that somehow this is millions of dollars on an
annual basis. Please don't let this be forever spoken again, our taxes are fairly level in this area.
They're not too high and they produce only a certain amount of dollars. If you're going to just
look at the increments, not the tax dollars collected simply that increment, it is not a large
amount of money. If we're talking about only five percent growth, its half of the $40,000.00.
Now those numbers obviously grow over time so it becomes an accumulative effect.
As I explained on Tuesday night, you didn't ask this question but I should throw it out there, the
three million dollars or the debt service required to service that three million dollars never
increases. Once the debt service coverage ratio is met for the project which is standard financial
numbers of 125, then all excess dollars, 100% of those go to the infrastructure improvements.
The beneficiary is directly to those improvements as outlined in the Downtown Master Plan,
streetscapes, lighting, new sidewalks, walkability and other things.
The question came up that we can do other projects, well this will spur additional projects like
the redevelopment on Dickson Street has now created a different sense of place than it was
several years ago.
Mayor Coody: Any questions for Mr. Knock?
Special City Council Meeting minutes
July 29, 2004
Page 19 of 22
Alderman Jordan: I've got one. John I noticed in here it says you're going to create 125 new
jobs. Is that correct?
John Knock: Yes, that's what was given to us by our feasibility expert.
Alderman Jordan: That's good. Jobs are very important to me, also important to me is what
do you think these jobs are going to pay? What do you think the average salary is going to be?
John Knock: Well it certainly depends, we had an speaker earlier tonight who manages a good
hotel here in town, I'm sure he could address those numbers better. I don't have a breakdown in
front of me that I could give you but I'd be more than happy to get that information for you.
Alderman Jordan: I wish you would. I would appreciate that.
John Knock: I bet you that could be given. I would hate to guess on things I don't know.
Alderman Jordan: Okay.
Mayor Coody: Any other questions.
Alderman Thiel: We just keep going beyond just the district here but I wanted you to clarify
something you mentioned last night. You talked about the new market tax credit allocation and
that's one of the reasons you want this project because that will assist this whole project. It will
add what five million dollars to the project?
John Knock: Approximately right.
Alderman Thiel:
Is that based on this project, the
Mountain
Inn being in a TIF, or is it based on
a specific amount
of funding being made available
or both.
John Knock: That's a good question. The calculation of new market tax credits and that is a
fairly new tax credit, it has only been around a couple of years, in fact there has only been one
full year of allocations, this is the second year of that. It is basically a 39% tax credit which is
much different than any other tax incentive. It also has qualified expenditures that are looked at,
in this case we're talking about a 22.5 million dollar project, not all of that qualifies under the
federal guidelines for new market tax credit. What is looked at is what they call soft money or
public money expenditures to help those areas. New market tax credits are not reserved for
affluent areas, they're reserved for very much the same thing, projects that would otherwise not
occur or projects that need to occur for incentives such as that. In our discussion with Ella
Cortez on new market tax credits TIF's are extremely important. Specifically in responding to
your question on this project the Mountain Inn has been tried many times and failed. Even
recently I was working as a financial advisor two years ago for Ms. Moga who tried to do this
project, I finally said there is no way I can get it done. Ultimately the TIF and the amount it
provides if it is not there it certainly does not provide in the calculations necessary for the new
market tax credits for those to be there.
In other words, they only apply in projects where the economic viability makes sense. They're
review is somewhat similar to what your review will be when you do the project plan. It will be
do all of these pieces that will be included in this both civically and economically, do they make
Special City Council Meeting minutes
July 29, 2004
Page 20 of 22
sense. If you
take the new market tax credits away from the project would we
do it, the answer
is no, if we
take away the TIF project from it would
we still do it, no,
because they're
incrementally
related to one another. Just like all types
of revenue in our
households or in
businesses are
important, if you take them away the project
is just not doable in
its current state.
Now could something else be done on that property at some point in time,
perhaps, but not
certainly what
we're proposing.
Alderman Thiel: Okay.
Mayor Coody: Any questions or comments?
Mayor Coody: Go ahead Don.
Alderman Marr: John, while I was reading through this Downtown Master Plan it talked about
tax incremental financing districts and business improvement districts.
John Knock: Yes.
Alderman Marr: I guess one question that goes through my mind is why is this a better option
than the business improvement district?
John Knock: That's a good question. Business improvement districts are special tax districts
•where you have an additional tax, a new tax. You can create a business improvement district and
impose a self -tax upon the members or owners of that district, just like another improvement
districts, a business improvement district must be supported, it requires a majority vote of all
those property owners. They self -tax based upon some sort of formula, some times it is based
upon the values incurred and so it is truly a new tax.
Alderman Marr: It's like the old Dickson Street Improvement District.
John Knock: It is very similar to an improvement district except it has some special
circumstances because it is a BID versus a standard property owners improvement district. An
improvement district is certainly a new tax although it is a self -tax, a TIF as we talked about
before is not a new tax it is a reallocation of certain tax dollars for specific projects.
Mayor Coody: Yes sir.
Alderman Jordan: I noticed that it says on here, John, that you have a residential vacantness.
Is that abandon homes or what does that mean?
John Knock: Mr. Jordan I'm really not sure. That what was given to me by the county.
Alderman Jordan: Does anybody know?
Hugh Earnest: No we don't.
What we did is we got from that from
Washington
County.
That's the tax assessor records.
We wondered the same thing ourselves.
I will check
with the
assessor to see if there could be a
further explanation.
Mayor Coody: There might have been just lots.
special City Council Meeting minutes
July 29, 2004
Page 21 of 22
Alderman Jordan: Well that's what I'm asking.
Hugh Earnest: It maybe something as simple as a lot.
John
Knock: Another thing
that we do have available, we have a stack
of papers about this
thick
of every property owner
and every lot parcel that could
be provided as
well.
Alderman Thiel: It's probably just a vacate lot. Remember these, if they wrote these down by
lots, are very small lots.
Hugh Earnest: Yes.
Alderman Jordan: Yes. I'm sorry I'm just trying to figure what all this means.
Alderman Thiel: Some of these are not even buildable they're so small.
Kit Williams: I know one thing, there is no home on it.
Alderman Thiel: Right.
John Knock:
It was provided to us by the county
and further identified through the
city. Every
property owner
of course in order to receive the
publication of this potential TIF
district and
those could be
made available I'm certain, to the Council to review.
Alderman Thiel: The names of every one.
John Knock: Names and parcels and I believe also the assessed values are listed as well.
Alderman Jordan: Let's assume that some of these are older abandoned homes shall we say or
vacant homes, what can we do with those is there anything or do we just take them down or what
do we do in that kind of situation?
Mayor Coody: That would be entirely up to the Council wouldn't it?
Alderman Jordan: Well that's what I'm asking.
Mayor Coody: No one has the power of condemnation except for us. We have that power now
and that doesn't change.
John Knock: If I could just mention one thing. The "plan" as we keep referring to which there
is a draft of that plan could be made available fairly quickly once this is adopted.
Alderman Jordan: Okay.
John
Knock: Even
before that
if you have ideas
or questions, because you can't create the plan
until
you know you
are going to
have district.
Alderman Jordan: I understand.
special City Council Meeting minutes
July 29, 2004
Page 22 of 22
John Knock: The plan is very specific. It says you can't do anything unless you authorize it.
Mayor Coody: Alright anything else?
Alderman Reynolds: As long as we're talking about the boundary lines tonight I have no
questions.
Mayor Coody: Alright, thank you very much. I appreciate everyone coming out tonight. We
will have the second reading of this I'm assuming at the next City Council meeting is that right.
Kit Williams: Tuesday.
Mayor Coody: Tuesday night. So will this be under New Business or Old Business?
Kit Williams: Its Old Business.
Mayor Coody: This will be at the next meeting. If anyone is interested at home that wants to
come up and speak their peace on this it will be at the next City Council meeting. So we invite
everyone to come please make their opinions known. Thank you and good night. Meeting is
adjourned.
Meeting adjourned at 7:30 p.m.
Sondra Smith
City Clerk
Special City Council Meeting
November 30, 2004
Page I of 17
Aldermen
Ward I
Position I - Robert Reynolds
Ward I
Position 2 - Brenda Thiel
Mayor Dan Coody
Ward 2
Position I - Kyle B. Cook
Ward 2
Position 2- Don Marr
City Attorney Kit Williams
VI
`Ay
Ward 3
Position I - Robert K.O Rhoads
Ward 3
Position 2 - Conrad Odom
City Clerk Sondra Smith
Ward 4
Position I - Shirley Lucas
KANSAS Ward 4
Position 2- Lioneld Jordan
Special City Council
Meeting Minutes
November 30, 2004
A Special Meeting of the Fayetteville City Council was held on November 30, 2004 at 6:30 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, Cook, Marr, Rhoads, Odom, Lucas, Jordan, Mayor
Coody, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience.
ABSENT: Alderman Thiel
Pledge of Allegiance
Mayor:
I want to add something to the agenda tonight so we'll
need to suspend the rules and
add this
ordinance to the agenda for
tonight's meeting. I entertain
a motion to suspend the rules.
Alderman Lucas moved to add the Highway 71 East Square Redevelopment District
Project Plan Adoption Ordinance to the Agenda. Alderman Reynolds seconded the
motion.
Mayor: And we have a motion and second to suspend the rules and add the ordinance for the
TIF to the agenda. Shall the motion pass?
Upon roll call the motion passed 7-0. Alderman Thiel was absent.
Special City Council Meeting
November 30, 2004
Page 2 of 17
Highway 71 East Square Redevelopment District Project Plan Adoption: An ordinance
adopting the Project Plan for the Highway 71 East Square Redevelopment District, finding the
Plan is economically feasible and authorizing the issuance of Tax Increment Financing Bonds to
fund the improvements outlined in the plan.
Mr. Williams read the ordinance
A Public Hearing on the Proposed Project Plan for the Highway 71 East Square
Redevelopment District Number One: A Public Hearing to allow all members of the public
and representatives of taxing entities to present their views on the proposed project plan for the
Highway 71 East Square Redevelopment District Number One.
Mayor Coody: Thank you very much. Do we have any comments on the ordinance that was
just read?
We have a public hearing tonight and as people come up to speak about this I am going to ask
everyone to please sign in since this is a formal public hearing process.
Now then we want to hear a presentation from Mr. Earnest to open up the conversation
Hugh Earnest: Thank you Mr. Mayor and members of the Council. As you know city staff has
been working since last summer with a very committed team of developers on a project that all
parties have recognized as difficult and time consuming. This project which you will be
accepting public comment on tonight has had as its primary focus the removal of an
acknowledged blight namely the long abandoned Mountain Inn.
In addition, as funding is available the project plan recommends a series of streetscape
improvements within the district itself. The staff is recommending the adoption of the project
plan copies of which has been available for two weeks for public consumption and has been
furnished to all members of the Council.
The plan itself consists of two phases listed on page 14 of the plan. Phase I is the Process of
Removing Blight in the former Mountain Inn area and it's something that we call the catalyst
project in this $3,500,000.00 based on 2004 dollars.
Phase II, Cityscape Improvements will be a ten year project for $7,116,000.00. The project plan
anticipates, at lease before amendments that the Council can make at anytime during the process,
$10,616,000.00.
As we stated in the transmittal letter to you we've asked Mr. Bob Wright from Crews &
Associates to attend tonight's meeting. He has a brief statement for the record that he read and is
prepared to answer any and all questions relative to where we stand relative to financing.
However before he talks I've asked Mr. John Nock to briefly cover Phase I of the project plan.
Special City Council Meeting
November 30, 2004
Page 3 of 17
Phase I is what we call in the catalyst project which is the activities associated with the removal
of the Mountain Inn. Tim Conklin will briefly summarize Phase II and then we'll ask Mr.
Wright to be available to answer any and all questions and obviously I hope there are some
comments from the public.
John Nock: Thank you. The project plan coincides with the public discussions that happened
several months ago. As you have had an opportunity to read the items listed in here this outlines
both Phase I and Phase II. I've been asked to talk to you little bit about the removal of blight.
What we have looked at is only those issues that will be of public nature for the proposed
project. Although we are referring to the new project of 22.5 million dollars as being the catalyst
project, 3.5 million dollars will be to remove the blight, acquisition costs and other necessary
sight expenditures. You can look in the project plan on page 5 through page 10 to see how that is
set up. I won't go through all those details. It certainly is available for the public to read as well.
I wanted to point out just a couple of points starting on page 8. I'd like to read from a statute that
says: redevelopment project needs undertaking for eliminating or preventing the development or
spread of slums or deteriorating or blighted areas, for discouraging the loss of commerce,
industry or employment or the increasing or any combination thereof.
What we are referring to as the catalyst project or removal of the blight in the redevelopment of
the Mountain Inn site included some of the things that you've read in the press before. Let me
just address them again.
We are anticipating a 144 room hotel with 12,500 square feet of meeting space. We're talking
about three floors of condominiums for private residential use. We also have the plans to build a
parking structure on the site of the existing parking structure from adjoining areas so that it will
be functional. Currently it is designed as a motor lodge and you have to drive into the existing
structure to get into the existing parking deck. Obviously that will change when we bring down
the existing addition to the Mountain Inn that currently exists on the corner of College and
Mountain. The new parking deck is anticipated to have approximately 350 spaces.
We are also talking about the removal of certain environmental concerns that are in the air.
We've had several professional outfits come in to look at what needs to be done for remediation
of asbestos and other environmental hazards that exist in the building as well as other materials
that are classified to go into a Class Four landfill. We've had to certainly make sure of that.
You can see on page 9 the expenditures how they're listed in the property assembly cost. You
can also see the demolishing of site preparation that is being used here as well.
On page 10 you can see an aerial photograph of how this works with the meeting facilities on the
comer of Center and College and then you can see the existing hotel will be torn down on the
corner and the new main building will be built on that comer site.
The direct economic impacts are also outlined on page 10 which are important to point out. Its
determined that approximately 125 permanent new jobs will be created in connection with the
catalyst project and construction jobs are estimated at 55 in the local market alone. There would
also be an increase in demand of consumer goods during the construction period. This will
Special City Council Meeting
November 30, 2004
Page 4 or 17
improve property values upon.removal of the blight. This will be a tourist attraction and will
draw tourist dollars to Fayetteville, the convention meeting spaces will attract additional
conventions, increase the catalyst for additional redevelopment along College/Archibald Yell
Streets. It will promote additional downtown living thereby adding vitality to Fayetteville's
downtown economy and then of course two specific numbers, new tax revenues estimated on
this project alone of $153,000.00 in sales tax a year and under HMR an approximate $60,000.00
estimated annually as well.
In our portion of the project plan we have had quite a bit of impact from not only professionals
but city staff as well as the city attorney to make sure that we were in compliance with the
statute, not only the letter of law as outlined in the Tax Increment Financing but also what has
been referred to in the media as the spirit of the law. That was in fact the removal of blight and
being able to promote again a quality of life that Fayetteville has gained the reputation to have.
We appreciate the opportunity to be involved with the plan and are certainly available for any
comments or questions.
Mayor Coody: Thank you
Tim Conklin: Mayor, members of the Council. I'll briefly go over the public improvement or
the Phase II portion of this project plan. City staff looked at Dickson Street as a guide or a
model to look at where we would enhance our streetscape within our downtown TIF area.
If you'll look at page 13 we have a couple of maps there showing which streets would be
enhanced. Looking at the table, College Avenue, Mountain to Maple, Center Street, College to
East Mountain Street, College to East, the downtown square which is in need of repair of the
deteriorating sidewalks, Block Avenue, Center to Spring and Block Avenue does end at Spring
Street because that is where the project boundary ends as part of this 71 East Square TIF.
Staff is working on an additional TIF district for the remainder of the Downtown Master Plan
area that portion of Block Street would be picked up within that potential TIF if City Council
approves that plan, also School Avenue and Prairie to our TIF boundary. So we have
improvements once again based on using Dickson Street as a model looking at street trees, street
lighting, replacement of curb and gutter, replacement of sidewalks, overlay of the streets where
necessary up around where the Mountain Inn project will be constructed, around the square,
down Block Street and up College Avenue to Maple.
In the south part of the TIF district we are looking at how to enhance that entry way into our
downtown and that is on School Avenue south of Sixth Street and up north to where we recently
did the major intersection realignment and enhancement project on School and Archibald Yell.
Estimated project cost is $6,696,000.00. Those are the public improvements that would be Phase
II as part of this project plan. Thank you.
Bob Wright: Good evening. I'm Bob Wright with Crews & Associates of Little Rock. As
you're probably aware we've been retained as financial advisor on this TIF project for the City
of Fayetteville.
Special City Council Meeting
November 30, 2004
Page5 of 17
This is the first opportunity I've had to come before you as a full Council to give you an update
as to what we've been doing. Rest assured that we have been working numerous untold hours
and dozens of meetings with the Mayor, staff, the developers and your bond counsel in Little
Rock in getting to this point to present this project plan.
I've handed out a memo basically for the record giving you an update where we stand. Part of
the project plan and part of the difficulty in presenting the plan is coming up with the financial
section, the financing that we were looking at. We're currently working the City of Rogers on
their big TIF plan and are going to be presenting that project plan in a couple of weeks. We've
already done that for the City of Jonesboro. We're acting in the same capacity. We're also
working with North Little Rock. So I'm very involved with the process of getting to this point of
presenting the plan. It's difficult to get an accurate gauge of what the financial package is going
to look like because we're looking at a number of months into the future.
We are very comfortable in the fact that we think we can get the Phase I as has been talked about
tonight, the catalyst, get that financed. We don't see that that's going to be a problem in the very
near future. We're continuing to analysis numerous other financial scenarios, revenue
projections and such to look and see about Phase II when that might come about with the
available revenues and such. We think that at your meeting on the 21S1 of December, we should
be able to come back with what we think is a pretty detailed projected plan of what Phase I
financing will look like and possible Phase II series of financings in the future.
I certainly would like to answer any questions tonight from you or the public, and then certainly
plan to be back in two or three weeks at your regular Council meeting to give a further update.
That's what we're looking at.
Mayor Coody: I want to ask a couple of quick questions or two. To outline the perimeters
which you used to come up with these figures, how would you describe your perspective when
you put together this, especially the Phase I part, the $3.5 million dollars? How conservative
were you when you came up with these figures.
Mr. Wright: This is the process we're in. We've got to be extremely conservative in making
our projections. I know that what is in the project plan one scenario we've studied in depth
might provide upwards of six, six and half million dollars in available proceeds to date, but there
are numerous other factors that come into that. We take the conservative, the ultra conservative
approach in coming to you tonight to say we think we're comfortable with the 3.5 million dollars
to get the catalyst done but we think we need to be cautious in moving forward on Phase II to
make sure we get the most efficient structure in place, not only for today but long term. For this
we're looking for the life of the TIF and we need to maximize what's available out there. To get
all the bonds paid off as soon as possible we have to mix all that in the best possible way for the
City of Fayetteville. So to answer your question, we've been very cautious. That's why we're
saying right now, Phase I is probably what we need to be focusing on and come back at a later
date and start looking at the Phase II opportunities.
Special City Council Meeting
November 30, 2004
Page 6 of 17
Mayor Coody: So as I understand from earlier conversations I want the Council, the public and
everyone at home that is interested in this to be aware of how conservative this budgeting
process was, or this projection was. These were based on, and I want you to explain, you'll
explain better than I, the fact, the projections were based on the assumptions that this project
didn't spur development and that we basically just capitalized on the same rate of growth we've
experienced with no real spurt of growth involved with this. Isn't that right?
Mr. Wright: Exactly. Part of the project plan you'll see is an analysis from the Sam Walton
School of Business. They've done the revenue projections and the projected growth of the
property value within the TIF district. What is not included in those projections are namely the
Phase I, the catalyst Mountain Inn project, approximately a $22 million dollar project that will
almost immediately when built generate tax revenues to go towards paying back future debt, not
included is the new building going in on College Avenue. Everything else that is in the district
that is planned or currently in the process which is upwards in 60 million dollars, all the revenues
that are going to be generated from that are not being used in our calculations toward begin able
to fund Phase I and Phase II. You never know what the future holds so you're not really sure if
the Mountain Inn project gets delayed six months or a year and you've based your calculations
on that being in place on a specific date that's where you run into some difficulties so we take
the cautious approach. We don't include any of these projects at this point. We will certainly
add them in to do some revenue calculations, some possibilities to come back to you and to say if
this holds true this is what we're looking at. That's the same thing we did at Rogers. If a billion
dollars worth of projects over the next four years come into play we're going to do 60 million
dollars worth of debt. So you really have to plan, what do we have in place, let's use the growth
that's existing now and take that conservative approach then if these projects come in line which
we expect, here's what will possibly happen, here's how the debt will pay off, here's the other
phases that we can bring on line at some point in the future.
Mayor Coody: Okay. Do we have any questions from the Council?
Alderman Marr: I have some questions. I want to make sure I understood your comments. So
you're using exactly the same methodology for this that you used in Rogers. This ultra
conservatisms that you're talking about in terms of these projections because the article in the
paper and the information that's out today on the Rogers' TIF certainly doesn't say that it would
be an ultra -conservative approach. They're using the development community feedback in
anticipated growth of those projects but I'm hearing from you we are not doing that. Why is it?
It appears to be different.
Mr. Wright: It is. Rogers and Fayetteville as far as looking at the financing opportunities is
totally night and day.
Fayetteville, the revenue projections that we've got right now are based on the current value of
the TIF district which is 16.6 million dollars as the base value and then the growth that has
occurred in the TIF district over time will generate these excess revenues that will be applied to
debt. One of the problems that we face on these projects, unlike Rogers, we've got one, two
maybe three major projects coming into the TIF district that we know will generate revenues.
The timing of those is a little bit questionable. When is the old library going to be done? When
Special City Council Meeting
November 30, 2004
Page 7 of 17
is the Mountain Inn project going to be done? So when are those revenues coming in? We can
make projections but again if we miss that by 6 to 9 to 12 months, the area projections are off as
far as the financing.
Regarding Rogers it didn't get into the paper, as far as what I talked with the reporter for over an
hour yesterday, we took an extremely conservative approach there as well. But it is different in
that we are not looking at the growth of Rogers; we're looking at these developers say that a
billion dollars worth of projects are coming in over a four year period. We're not doing all that
financing from day one. We're doing financing in 2005 based on what is already being built and
will be completed in 2005. So we know that we've got a captured value that will generate
revenue by October 15th of 2007. There's my revenue stream and off I go. That's already being
built.
Here is the Fayetteville TIF area we're using the growth of the district itself but again since we
don't have a date certain on the Mountain Inn as far as when it's going to be built. I don't have a
date certain on the library, I don't have a date certain on the project on College and those are the
three to my knowledge, the three big projects coming in at this point. That's why we have not
used those calculations as far as a revenue generating source. Unlike Rogers where we know
something is going to be built in 2005, in 2006, etc.
Alderman Marr: If you did have a date certain, if they were on the same 2007 plan that if we
were in Rogers, let's say that we had that information. Would you're expectation be the same
that we'd only feel secure about the first 3.5 million and not the total.
Mr. Wright: If.we knew the Mountain Inn was coming and would be completed in 2005 for
instance, so we'd have revenues in 2007, then sure we could look at a much more secure
financing for the 3.5 million dollars potentially adding in a smaller increment above that to start
in some streetscape and landscaping and such. But also our calculations would say, we could
come back in three or four years and do an additional series of bonds to start in on Phases II
streetscape and such like that.
So as we stand here tonight as we don't know that date certain. John and Rich can address that
they are a lot more certain as when they expect that to come in. But that process is still ongoing
that's why we've not included that in the revenue projects to give you a false hope that we going
to come in with 6 or 7 million dollars worth of debt right now and you can do all the streetscape
today. Whereas we truly feel the conservative approach, we're probably looking at Phase II a
couple of years down the road.
Alderman Marr: May I ask one more question. The six million dollar portion of this is in
today's dollars.
Mr. Wright: That's correct. The six million in streetscape in Phase II is in today's dollars,
you're correct.
Alderman Rhoads: For some reason the Mountain Inn project does not get built as currently
planned and the City razes that property, then do you believe that that property has a certain
Special City Council Meeting
November 30, 2004
Page 8 of l7
value to it that can be built within the life of this, within the next 25 years and take care of the
needs to service the bond.
Mr. Wright: Do I think that the property as what's being proposed, the hotel condominium?
Alderman Rhoads: Does not get built for some reason.
Mr. Wright: Does the TIF itself have the economic ability to handle the debt? Yes, without the
Mountain Inn project, yes.
Alderman Rhoads: If the current project doesn't get built but some other project of a similar
nature then that's just gravy?
Mr. Wright: Then that's just gravy and that's why we're presenting tonight, it is uncertain. I'm
not on the hotel financing side even though we've done some hotel financing. We've done the
Hilton which was a shutdown hotel in Little Rock, we've done the financing. I know what is
involved in getting those done, it's a difficult process. They've put their time in. They've been
working on that but since that is uncertain I want to make sure that getting that blighted area out
of there in that catalyst to get that property cleared can still maintain and amortize itself without
this 20 million dollars, 22 million dollars project sitting on top. So it's not contingent upon that
project. It's not contingent upon the library or the other project on College. It's contingent on
what's there now. The historical growth that's there based on what the school is telling us that's
presented. I've already gotten that schedule into our computer and been running some stress
tests on that as far as property growth to see what happens to the debt if it goes at eight percent
or six percent annual growth for twenty something years instead of the projected nine something
percent growth as has been historical. We'd be doing all those stress tests to make sure that no
matter how we look into that crystal ball, no matter what happens without these other projects,
this 3.5 million dollars to secure that site and demolish it, get it out of here is going to be a very
secure financing for the City of Fayetteville. That's what we're here for and as you said those
projects that come on and generate additional revenues a lot quicker than what we're projecting
then that's gravy. We're doing Phase II a lot quicker if it generates even more than we're
anticipating we can do further projects over and above what we're looking at. But at that point it
will be up to the Council's desire, do you want to get the debt out of the way or close the TIF
down or do you what to do additional projects. That's a question to be answered in 20 years.
Mayor Coody: I don't think there will be any of us of up here answering that question 20 years
from now. Any other questions for Mr. Wright. Thank you very much.
Mr. Wright: I appreciate ya'll.
Mayor Coody: Anyone from the public want to comment on this? I might ask you to sign in
please. How are you tonight Linda.
Linda Ralston: Good
evening. Thinking topical
tonight.
Staying warm. Linda Ralston. I've
been following the TIF process I guess since we've
kind
of started
all this. I guess I'm still
feeling a little uneasy
about how things kind of
work and I know
this is new for all of us.
Special City Council Meeting
November 30, 2004
Page 9 of 17
Needless to say I'm a little concerned just jumping ahead. I know you all are going to be talking
about the second TIF district in a couple of weeks and I'd like to see if this one works first.
I know things will be changing at the legislature potentially so there seems to be a big rush and
again I'm feeling a certain amount of discomfort. I wrote down a couple of thoughts that maybe
someone can answer.
I came in a couple of minutes late so I may have missed this. If it could be clarified as to how
the razing of the building actually happens. I was still unclear as to where that money, I guess it
is all a matter of timing. I'm concerned if the City will be out any money, do we own it? I think
we've had this dialogue before, Kit. Do we have to buy the property and then we raze it as a
City and then the developers buy it back and there's some puzzle pieces in here I know that are
quite intricate. I was just wondering if there is any potential for the City to fall into a gap of
timing, of financing as things move forward. So if there is anyone that can comment to that.
Mayor Coody: I think Kit would probably be the one to comment on that.
Kit Williams: My understanding would be that none of the purchases or demolishing or
anything like that would be done until the City has received the money from Tax Incremental
Financing Bonds that 3.5 million dollars that was just spoken about. There is a bucket in the
plan to purchase the property and to demolish the property within this 3.5 million dollars.
At that point, as you say, I think you encapsulated it pretty well, the City would then sell the
property at an appraised price to the developer so that they could then build their project.
Ms. Ralston: I know before it was mentioned that maybe it could be a Holiday Inn Crown Plaza
and in talking to one of the developers that would probably not be the case. The Crown Plaza
and Holiday Inn has certain guidelines that would not allow for condominiums up on top or other
special things that will make this property more unique and special then maybe the next Crown
Plaza might be.
Also in reading tonight's paper it talks about allocating money that involves 71 Business and
maybe I need to learn more about the highway department and how that money gets allocated. I
know we can include it in the plan but does the diversion of the tax money actually go to pay part
of or all of?
Mayor Coody: As we've been talking
about Phase I and Phase 11. Phase
I is basically just the
structural building part
of the Mountain
Inn and the surrounding building to
take those down.
Phase II would we the public domain improvements, that would be streetscape, sidewalks, street
planning, landscaping, water/sewer lines. All the public domain will be Phase I1.
Phase I is something that we can do right away. As you heard the ultra conservative approach
that our bond counsel took to make sure that Phase I would pay for itself even the worse case
scenario it would cover its notes adequately. Then we would see if things improve or if things
Special City Council Meeting
November 30, 2004
Page 10 of 17
go as well as we expect then we would have money to do Phase II which would be the public
domain improvements.
To do improvements to College Avenue for example, we work well with the highway
department. We would be able to use some of this Tax Increment Financing money to improve
parts of College Avenue, along the sidewalks, in the surrounding environs of the project, trees,
sidewalks, all that.
So it would be Phase I now and Phase II in the near future or some time in the near future.
Ms. Ralston:
Which can be confusing as
you all know because we went through out
first public
hearing and in
my mind I labeled that kind
of Phase 1. Now we're talking Phase I and
Phase II as
far as Phase II
is concerned maybe.
This is actually Phase II that we're in right now, right?
Mayor Coody: No. Phase I would be the first thing we would do that would be just the
Mountain Inn building project and the buildings adjacent to it, adjoining it.
Ms. Ralston: Okay.
Alderman Marr: Mayor I think what she is referring to is that the first step was to establish the
boundary which we did.
Ms. Ralston: Right.
Alderman Marr: The second step is to approve the plan which is where we are and the plan has
two phases.
Mayor Coody: Is that right. Oh, excuse me.
Ms. Ralston: So anyway I noticed again the eminent domain, I know that's not part of what
we're talking about tonight. One more questions though and I'll take my seat on this one.
I've left a message before in regards, actually I called John Nock's office, I've had a financial
background and I was just curious as to how monies get paid commission wise on the financial
package? As we put all these in the new market tax credits how do the monies actually get paid
commission wise for any of our advisors, even Mr. Nock. I was curious on that, maybe they can
address that. Thank you.
Mayor Coody: Mr. Wright, where are you. Why don't you address the last question please.
Mr. Wright: From my perspective acting as financial advisor for the City of Fayetteville you're
getting a pretty good deal. It's actually not charging them anything with all the hours we've put
into it, there has been no costs. The city staff asked me to put together an engagement letter for
what I thought the time cost would be. I offered up our services just knowing the importance of
Special City Council Meeting
November 30, 2004
Page 11 of 17
this and
all the
time
and effort
needed
for this, we don't need to get sticklers for a couple
thousand
dollars
here
and there.
I
If there are TIF bonds issued at
that point, an underwriter fee would
be paid to the underwriter
which the City would engage us
or whomever to
act as underwriter for the bond issue. The fees
would be built into the bond issue itself. As far as
the new market tax
credits I would have to ask
Mr. Nock to answer that, but all
of the services
up to this point and
going forward even if this
project doesn't work is not going
to cost the City
anything.
Mayor Coody: Does that answer your questions Linda?
Ms. Ralston: I would love to hear Mr. Nock's comments.
Mr. Nock: It maybe difficult to understand it, even though I am an investment banker by
professional I'm acting as a developer of this project and so any advice that I give to my partners
or things that I say to the City that maybe related to public finance those are all free dollars.
Sometimes you might get what you pay for. Whatever I might do working with Crews &
Associates, helping them and making suggestions that is simply my role as a developer.
New market tax credits. We are the recipients of new market tax credits therefore those go into
the project and there are no fees that are paid by either principle or agent. Those are given to
CDE's, in our case it's the Heartland Renaissance Fund in Little Rock.
Mayor Coody: Define CDE's please
Mr. Nock: Community Development Enterprise which is a federally recognized organization
that distributes new market tax credits from the Treasure Department. We have no direct
connection with those except hopefully getting the benefit of having the project built and making
a long term success out of it and making money. As far as fees, we act as principle as developers
thereby taking a risk on the project but it should not be misconstrued with my other activities as
an investment banker. To other cities and other activities I am not an investment banker,
financial advisor or underwriter for the City of Fayetteville. None of those things do I act in. Its
simply that I do that in my profession and certainly comes into play on occasion to be able to talk
the same language that those that are called to be professionals and hired to be professionals by
the City that they know those things and that I would talk about as well. Any other questions?
Mayor Coody: Does that answer your question Linda? Does anyone else have any questions for
anyone that we've heard from so far. Anyone else in the public want to address us on this? How
are you Alan?
Alan Ostner: Hi, Pm Alan Ostner, 312 S. Block, I'm here as a resident, I'm within the TIF
boundary. Some of the things I've heard tonight really put me at ease as Ms. Ralston mentioned
the ability of the governing body, probably not you all, but the ability of this body to declare
eminent domain with a development scares me and it scares most of the people that I live near in
the neighborhood. As Mr. Williams was reading at the beginning of the meeting the actual
ordinance we're considering, said that no persons are intended to be displaced. That sets me at
special City Council Meeting
November 30, 2004
Page 12 of 17
ease, that
it is
being put down as a rule that is not what you are here to do.
That's the first thing I
wanted to
talk
about.
The other items are very rudimentary. They have nothing to do with financing. As a neighbor of
the TIF district, the parking structure that will be in the hotel I'm wondering who can park there?
Is it only the hotel occupants, is it only the downtown consumers or visitors or is it somewhat a
public facility open to the neighborhood or the downtown area to use? I know it's a private
parking deck but I was just wondering what the plans were for that. I know a lot of people who
live down here that are interested too and a lot of people who work down here.
The other question I had was on Phase II any kind of projected time line or at the very least a
prioritized list of the street improvements, trees, lights, all the things on that list. When the debt
service gets satisfied on Phase I and it comes around for Phase II, what's first? Which areas are
going to get worked on first? That was my question on that item.
I'm sorry I had another question. I was very pleased to hear that the numbers from Crews &
Associates were so conservative and please correct me if I'm wrong, they are so conservative
that are basically based on the Mountain Inn not getting built. The replaced Mountain Inn? Was
I clear on that?
Mayor Coody: Yes.
Mr. Ostner: I think that was good prudent financial planning. It must be awkward for Mr.
Nock to deal with this situation and plan on his project failing and I applaud you for that. It's
almost like buying insurance.
Mayor Coody: I don't think he's planning to fail.
Mr. Ostner: Of course not but that's what that conversation had to be about. I wanted to ask,
the numbers again, Phase I is listed at 3.5 million dollars and if I understand that, basically the
City would purchase the Mountain Inn building, destroy it, and sell a vacate lot to the developer
for the appraised value at that time.
Mayor Coody: Yes.
Mr. Ostner: Is that the way it's going to work?
Kit Williams: Oh no, actually we're going to be buying four buildings, the Courts Building, the
Mountain Inn, the Redbird and the former Niblock Law Office. So there would be four
properties that would be purchased not just one.
Mr. Ostner: The building that they mentioned was going to be the Community Room or the
Community Facility was going to be located on the corner of Center and College?
Mr. Wright: Meeting.
special City Council Meeting
November 30, 2004
Page 13 of 17
Mr. Ostner: Meeting Room, is that the entire building that looks a little bit different from the
other buildings? I didn't know that the Mountain Inn went all the way to Center Street. I didn't
know this project that the City was looking to demolish went all the way from Mountain to
Center. So I was glad to hear that. I think that whole property could use redevelopment.
Thank you for hearing me and I appreciate you efforts.
Mayor Coody:
Thank
you very much.
Mr. Nock I might ask you to respond about the
availability
of the
parking
deck to different
folks.
John Nock: The parking deck will be built by private funds. We anticipate it being used for
multi -purposes including the obvious hotel guests but also we're looking at this facility being
adjunct to the Town Center so there would be shared parking between convention facilities to be
done here at the City of Fayetteville. Those events will be coordinated with both A&P and the
existing Radisson operation as well as residential folks that are going to live in the condominium
areas and not in just the new development but also the surrounding areas. Keep in mind the
dollars from the Tax Increment Financing is going to build the parking deck that is being built
from private sources. However it is important to note that we will have retail shops as part of
the project. Those that coming to other spots along that retail corridor, there are some great
shops in that area that currently exist right now and I've personally had conversations with those
store keepers and they are quite anxious for opportunities where they can get additional parking.
Certainly our idea is to do an economic model that also facilitates what's going on in the
downtown area.
I think specifically the question was asked can anyone use the parking deck and I think we
certainly want as much activity in that area so it's economically viable. You want people to
come there, you want people to shop there, you want people that stay at the hotel to utilize it and
you want people that are going to live there to have places to park. So it's going to be all of the
above. Will it be free parking for anyone to do what ever they want to on or will it be all paid
parking? We have completely not determined whether that it is going to be but certainly we
have an economic model built upon it. Does that answer that question?
Alderman Rhoads: How many condos in total.
Mr. Nock: We have three floors of condos. Each floor is approximately 9,600 square feet some
of the condos maybe larger. There may be some that 1,500 and there are others that may be as
much as 4,500 square feet of space.
We originally had talked about between 15 to 18 condos as it turns out there may be less or more
than that based upon the pre -sales.
Mayor Coody: Anything else? Thank you, John. Tim or Hugh do you have an answer for the
second question which was the time frame and the plan for Phase II.
Tim Conklin: I think that's going to dependent on what happens with our current transportation
bill. One of the questions talked about was highway funding and everybody probably read in the
Special City Council Meeting
Noveinbcr 30, 2004
Page 14 of 17
newspaper about the earmarks. Just as we experienced on Dickson Street even with that funding,
that 1.5 million dollars, we still put in approximately 3 million dollars into that project. So
depending on phasing and what funding comes in from the federal level I think it is going to
depend on how fast we pursue these projects. With regard to prioritizing individual projects
we've put a list of projects in here. As we talked earlier today with our financial consultant, it's
going to depend on how fast the bonds, the debt gets retired and how much increment yield is
available for additional bond financing. Based on what happens in our downtown will allow us
to do more or less of these projects. So that's really not a clear answer of this street is going to
be first or this but I think when we see what happens in our downtown area and the Mountain Inn
gets replaced and other building occurs it's going to allow us to do more projects quicker.
Staff looked what
were the principle projects within this
area that we would
recommend to the
Council, of course
the Council will have to approve these
projects as
they come
forth.
Mayor Coody: Alan does that answer your questions? Anyone else have anything for us
tonight? We'll close the public hearing then.
We have, what's the order of business here? What do we need to do next?
Alderman Rhoads: Discuss it among ourselves.
Kit Williams: I think that will probably conclude our business. We should remind everyone
though that this ordinance will be on its second reading at our next City Council meeting which
is next Tuesday, our first regular meeting in December.
Mayor Coody: Since this is a public hearing would we not go to an internal discussion with the
City Council?
Kit Williams: We certainly can.
Mayor Coody: Anyone have anything to add or subtract from the conversations.
Alderman Rhoads:
Real quick
on
parking. Does
anyone know what the capacity of the
parking deck is at the
Town Center
and
at the Radisson?
Just rough numbers.
Hugh Earnest: We'll get that information for you. I want to say 300 and something but that's a
guess.
Alderman Rhoads: In total or each.
Hugh Earnest: I don't know.
Alderman Rhoads: How much retail space will be in yours?
Richard Alexander: We haven't decided on that. It depends on how much ground floor the
hotel needs to take. We want to build enough parking to satisfy the requirements of whoever our
Special City Council Meeting
November 30, 2004
Page 15 of 17
hotelier is. They will have a requirement and of course we want to have enough for our tenants.
We anticipate from our economic model to have parking available for the businesses, law firms,
etc.
Kit Williams: Rick you probably need to come up to the mike so that we can hear you.
Richard Alexander: We anticipate about 350 spaces. The hotel will have a requirement, we're
talking to different hoteliers, they'll have requirements and that will take up so much of parking.
We hope to have additional parking, after we take care of tenants, to also be available to the
public for rent or lease.
Alderman Rhoads: I was doing rough numbers. Parking is a big issue around this town. The
way I calculated it once you take out the no vacancies at the hotel plus what the condo folks
would use and then some retail I think you're still going have 150 spaces for law firms or other
people in the community to use..
Richard Alexander: Exactly.
Alderman Rhoads: If I'm wrong, I hope I'm not wrong but if I'm wrong,] hope you'll let me
know.
Richard Alexander: Yes, I think that's accurate. I don't know whether it will be exactly 150
spaces but it might be anywhere between 100 and 150. Our plan has always been to build more
than we must need for the hotel and condominiums. Basically a public parking deck.
Alderman Rhoads: I hope that's further comfort to Mr. Ostner. Okay. Thank you.
Mayor Coody: Anyone else? Yes, sir.
Alderman Jordan: The 125 jobs, John maybe you can answer this. We're talking about 125
new jobs.
Mr. Nock: Yes.
Alderman Jordan: Can you tell me what type of jobs those will be.
Mr. Nock: Yeah, let me give you a little background on that. Part of this process was dealing
with hoteliers, those that are actually in business to run hotels and those numbers came from one
of the consultants that we've been using for the last three years.
It was actually almost exactly to the money
that another consultant have
given to
Mrs. Moga
who had worked on this project before us.
The makeup is about half
of that are fullltime
employees, that means that they are receiving 40 hours of work as either a paid
or salaried
employee. You will have about 10% of them
that will be management and
then you
will have a
fair amount of them that will be in the service sector as well. So from that
125 you're
going to
special City Council Meeting
November 30, 2004
Page 16 of17
have any where, that doesn't just include the hotel, and the service sector that goes with that but
it also includes the restaurants as well other secondary pieces that are connected to the facility.
Alderman Jordan: I guess my next question would be then, what do you think would be the
average pay. Have there been any studies done on that about the types of jobs and what they will
pay. I certainly don't want people working for low wages.
Mr. Nock: I don't know the average on that but I can tell you we investigated multiple facilities
around the country from other hoteliers because that was one of the first things that we wanted to
look at, what kind of operation. Some of the facilities in the northeast certainly have a different
pay scale then those that we looked at in the Texas market for instance.
However there are some pretty strong industry standards, from what I understand that if you're
going to be moving to management you get that regardless of whether you're in Arkansas or
whether you're in Florida, those are going to be comparable to industry standards. I would only
be guessing to tell you what those are but we could certainly find that out.
Alderman Jordan: I wish you would find that out for me. I would appreciate that
Mr. Nock: It's readily available information.
Alderman Jordan: Richard do you have an answer for me
Richard Alexander: I think I can answer that because I have a hotel. You're talking about jobs
ranging from $18,000 to $100,000, from entry level, waiters, waitress, housekeepers, caterers,
banquet managers, banquet facility people, restaurant managers, hotel managers, assistance
managers, parking lot attendants, all those kind of jobs. At Carrell Hall we're running a pay
scale from about $18,000 to $60,000 but we're a 50 room hotel. We have about 50 people on
staff, some of them are part-time a lot of them are wait staff and students. They're not all full-
time but then we have our housekeepers, managers, chefs, and kitchen help that are all full-time.
Alderman Jordan: So we can assume that a worker can start at say $18,000 or there about?
Richard Alexander: There again it depends on if they are half-time. I think that's probably
about the range you're talking about. Because of the tipping nature of the restaurant business I
don't how you know what a waiter, waitress' wage is, it's probably minimum wage by
definition but they make tips so I don't know how you figure that out.
Alderman Jordan: Also my next question is that I believe that I saw that we have several
vacate lots or vacate property?
Richard Alexander: I did a rough estimate, I think there is roughly probably 200,000 square
feet of vacate space on that side right now.
Alderman Jordan: What do you think could be done with that? I know that we're projecting
down the road.
Special City Council Meeting
November 30, 2004
Page 17 of 17
Richard Alexander: We're talking about developing most of it in this project.
Alderman Jordan: In the businesses?
Richard Alexander: Yeah, in the businesses. I think that the buildings adjacent to this project
will come back to life because there will be life in the area and then across the street both ways
once you bring life back there I think those buildings will fill back up. We don't intend to
develop all of them but I've heard people making plans on the basis of this project coming in that
those buildings will take on new life. Currently they're either vacant, we probably have 200,000
square feet of vacate and you probably have 100,000 square feet of under utilized. In other
words, very, very low rents that really aren't a good economic model right now but they'll come
back to life when you put life in that area again I believe.
Alderman Jordan: Okay. That's all I have.
Mayor Coody: Anything else. Alright, if there's no other further public comment or other City
Council comment we will adjourn tonight's meeting and we'll see you at the next City Council
meeting. Thank you very much.
Meeting Adjourned at 7:30 PM
Sondra Smith, City Clerk/Treasurer
Dan Coody, Mayor
City Council Meeting Minutes
December 7, 2004
Page I of 54
Aldermen
Mayor Dan Coody
City Attorney Kit Williams
City Clerk Sondra Smith
City Council
Meeting Minutes
December 7, 2004
Ward I Position I
Ward I Position 2
Ward 2 Position I
Ward 2 Position 2
Ward 3 Position I
Ward 3 Position 2
Ward 4 Position
Ward 4 Position 2
Robert Reynolds
Brenda Thiel
Kyle B. Cook
Don Marr
Robert K. Rhoads
Conrad Odom
Shirley Lucas
Lioncld Jordan
A meeting of the Fayetteville City Council was held on December 7, 2004 at 6:00 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, Marr, Rhoads, Odom, Lucas, Jordan, Mayor
Coody, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience.
Pledge of Allegiance
Mayor Coody presented a plaque to Dawn Warrick, Planning Department for her nine years of
service to the City.
Tim Conklin, Planning thanked Dawn for her hard work in the Planning Department.
Airport Board Annual Report: Doc Wallace of the Airport Board gave the 2004 annual report
on the airport. He introduced the current Airport Board members to the City Council. He also
thanked the staff for their efforts.
Mayor Coody
thanked Doc Wallace for his
leadership
and participation on the Airport Board.
He stated he is
very pleased with the direction
that Drake
Field is headed.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
acccssfaycttevillc.org
City Council Meeting Minutes
December 7, 2004
Page 9 of 54
Alderman Jordan: I asked for this and was told how to calculate this. I would like to know
how much these individuals pay versus how much it cost to serve them.
Mayor Coody: We collect the lowest sales tax of any city in Northwest Arkansas, 1.75 cents
instead of the 2 cents that Rogers, Springdale and Bentonville charges. We also do not collect
any millage for property tax for operations. Springdale charges 5.7, Bentonville 5.5, Rogers 3.9.
and Fayetteville charges zero. We can't continue to expand services Mayor Coody explained
the increase in cost that the city has had this past year in products and services.
Geary Lowery stated he could show the City Council a way to get all the roads in the city
repaired.
Mayor Coody asked him to send him a letter.
Alderman Reynolds moved to table the resolution until the December 21, 2004 City Council
meeting. Alderman Odom seconded the motion. Upon roll call the motion to table passed
unanimously.
The Resolution was tabled until the December 21, 2004 City Council meeting.
Highway 71 East Square Redevelopment District Project Plan Adoption: An ordinance
adopting the Project plan for the Highway 71 East Square Redevelopment District, finding the
Plan is economically feasible and authorizing the issuance of Tax Increment Financing Bonds to
fund the improvements outlined in the plan. This ordinance was left on the First Reading at the
November 30, 2004 City Council meeting.
Alderman Lucas moved to suspend the rules and go to the second reading. Alderman
Reynolds seconded the motion. Upon roll call the motion passed unanimously.
Mr. Williams read the ordinance.
Sharon Davidson a resident voiced her concerns on this TIF consuming the time of city
employees. She is also voiced her. concern about TIF's taking money and resources from
various public tax paying entities such as schools and city services. She continued to speak on
TIF's in other cities.
Mayor Coody: I might just get you to focus on the Highway 71 East Square TIF.
Sharon Davidson: Excuse me sir this is all relative. I have not been here for a long time and I
see no time limit.
Mayor Coody asked if Chief Johnson was at the meeting.
Sharon Davidson left the podium.
Cyrus Young: What you are doing tonight is forming a TIF District is that correct?
Kit Williams: The TIF District has already been formed. Tonight we are approving the Project
Plan for the TIF District that was formed previously.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
acces sfayettevi I I e.org
City Council Meeting Minutes
December 7, 2004
Page 10o154
Cyrus Young: The District is formed and that means the base is set for the property taxes right?
Yes that is part of the Project Plan. The County Assessor fixes the base.
Cyrus Young: Any natural increase in the property taxes over a period of time that goes toward
the project is that correct?
If the project is approved that is correct.
Cyrus Young: You talked
about
the
city buying the property and tearing part of it down so the
TIF District would pay the
city to
do
all of this.
Kit Williams: Actually the City would not be doing that the City would be using the TIF bond
proceeds to do that. The District is really not separate from the City Council. The City Council
controls the TIF District, its funds and the Project Plan, so they make that determination.
Kit Williams: That is my understanding, they will control it, I don't know if they are officially a
board but they will be controlling the TIF District. The City Council remains in control it is not
under control of any other entity.
Cyrus Young:
Kit Williams: The TIF District will. The bonds are specifically designed by statue as only to be
supported by the obligation of the tax increment difference not by the general revenues of the
city. The bonds must state on them that they are not a bond that is a debt of the City but is only
supported by the tax incremental financing not by the general revenues of the City.
They control the TIF.
Cyrus Young: They are either
the
TIF or
they aren't.
In other words if they are not going to be
the TIF than who is going to be
the
Board
of the TIF?
Kit Williams: The statue does not set forth a Board for the TIF District. It does say that the TIF
District is controlled by the City Council, they have to do it by ordinance, and they can modify
the TIF District borders or the Plan in the future after having public hearings so the City Council
remains control over the project but they are not a special TIF District Board.
Cyrus Young: That's the same set up as the incinerator. What happens if no one buys the
Then there would be no money in order to do the project.
Then would you dissolve the TIF?
≥701(479)521-7700
accessfayettevi I I e. org
City Council Meeting Minutes
December 7, 2004
Page II of 54
Kit Williams: It would be up to the City Council to decide what to do. The legislation indicates
that selling bonds is only one of the options, there can be a pay as you go using the tax increment
even without bonds.
Alderman Thiel: The city is not going to purchase this property until the bonds are issued, we
are not going to purchase this prior to those bonds being issued are we?
Kit Williams: That's correct, in fact I think not only would the bonds have to be issued so that
we would have sufficient funds on hand to be able to purchase these buildings and do the
demolition. I would also recommend that that we have a very strong contract with the proposed
developers to buy the property back from us at fair market value. They would also have to agree
to build the project. The primary reason behind this TIF District is to not only to clear this blight
but to have something good to replace it with. I don't know if the City would want to buy all
these properties if in fact the project was not going to go forward. I would expect to be able to
present to you the contract with the developers where they would be contracting and agreeing to
buy the property back and to have the project built as part of the whole process.
Alderman Thiel: There is concern about the appraised value of this property after the buildings
have been razed and removed. The value is considerably less than the purchase price of the
buildings. Would the Council look at a fair market value not necessarily the appraisal the
developers obtained for this project.
Kit Williams: I think that's correct. The Project itself does talk about the real property
assessment cost and it has those all laid out. It also states upon completion of removal of the
blight the developer will purchase the raw land of the project site at the established appraised
fair market value. We have been offered the appraised fair market value by the appraiser who
has been working for the developers. I don't think the City Council is necessarily bound to take
that. Keep in mind the reason this project is being proposed is that without some financial help
from the tax payers this project would probably not go forward. This building has been sitting
there for a long time deteriorating. When we got into this project, it was always assumed that we
would lose money on this project by paying more for the cost to acquire and demolish the
buildings than we would ever get back from selling the property. However we still want to make
sure that you are happy with the appraisals and that you feel like that is in fact a fair market
value.
Alderman Thiel: I think the public would need to be assured that ultimately we are getting a
value back in the entire area as far as property values going up, enhancing this area and bringing
in more tax dollars, all the things this TIF is supposed to do. To assure the public we would be
recovering our cost over time. I think the public needs to be reminded again that only the area
that's in this TIF is the only area that will be affected as far as taxes.
Kit Williams: The taxes won't be any different for the people that are actually paying them it
will just simply be that the TIF District will be allowed to take the amount in excess of the taxes
paid each year and use that money for this project. The people paying the taxes won't have to
pay anymore with the exception that when property gets more valuable all over the city then the
tax payers will be paying a little bit more because their property has gone up in value.
There will be another time that I would want to present a contract to the Council with the
developers. I have not begun any type of contractual negotiations with them at this point in time.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi I le. org
City Council Meeting Minutes
December 7, 2004
Page 12 of 54
At that point in
time you will need to weigh
in on what you
believe is the fair market value and
whether or not
you approve the contract the
city might have
with the developers.
John Nock: The statue does allow for the opportunity to purchase and sell back land at a deficit
for economic returns. Based upon our calculations the sales tax of approximately $153,000
annually will be collected just from the project alone of the hotel, not the surrounding
developments that are being improved as well. HMR taxes the first year is expected to be
$60,000 with inflation over the next 25 years you are looking at over $5 million coming in from
sales tax and over $2 million coming in from HMR taxes. The property values currently are
approximately $6,000 in property taxes. Just that project being revitalized will begin to throw
off an increase of property taxes to a tune of over $8 million. On a conservative basis there will
be just from the property alone $15.4 million in tax collections. In addition to that the jobs
created from the project and the economic incentive should also be a concern for the city. The
mid range job will pay $30,000 to $35,000.
Alderman Cook: Where did the demolition and abatement numbers that where included in our
plan, where did those numbers come from?
John Nock: We got three separate bids from three separate contractors.
Alderman Marr: What was the spread between the three?
John Nock: Almost a half million dollars. A lot of that was because of the land fill
requirements. One of the bidders could satisfy that with a Class IV landfill themselves, the other
bidders where assuming they would use the same that the city is using right now which is the
only landfill in the area.
Alderman Cook: Are the offer and acceptances on the other pieces of property, are those prices
set?
John Nock: TIF's in other parts of the country have utilized condemnation, we went with the
notion that condemnation was not going to be something that the City of Fayetteville wanted to
utilize so we negotiated what we thought was the appropriate price.
Alderman Cook: What happens if the $3.5 million is not enough for the initial Phase I,
demolition, abatement and assembling the property?
John Nock: As you know the total project is in excess of $22.5 million'. All of the private
purposes of the project are being funded by private dollars. The statue is very clear that if you
utilize those dollars that are collected through Tax Increment Financing for private purposes the
bonds themselves could no longer be tax exempt so we have been very careful of that to market
the bonds. We could ask for more money but this is what it would take to get economically the
response that we need to get the project done. If there is more that is required then we would pay
for it from the private side.
Alderman Cook: Where does the initial investment come from? Is it taxpayers putting the
money up or is it the bond proceeds. I think Kit answered that it is the bond proceeds initially.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayetteville.org
City Council Meeting Minutes
December 7, 2004
Page 13 of 54
John Nock: The dollars that we are talking about spending are all coming from bond proceeds
that are coming from taxes from property; they are not coming out of the city's General Fund. In
fact none of it is coming directly per say from the City of Fayetteville but instead the statue is set
up from the state side to reallocate tax dollars as they are already sitting there. They are dollars
that are sent back to the City as the governing body for those dollars. They are dollars that
otherwise the City would have no control over and would not receive any of those dollars under
the current system of collection of taxes.
Kit Williams: As long as the city doesn't have any millage that would be correct.
Alderman Cook: What happens to those bond proceeds if the project goes in the can?
John Nock: Bonds always carry risks that is why they get a favorable or higher interest rate
depending on what the project is. In this particular case the bond holder takes the risk, this is not
a good faith in credit of the city it is strictly based upon the revenues, therefore the risk goes to
the bond holder. There is no consideration, lending or any other good faith from the City of
Fayetteville to the bonds.
Alderman Cook: The plan speaks of estimated project and non -project cost, Phase I is the
project cost where there any non -project cost that weren't included in this plan.
John Nock: The cost that could occur in projects that are considered no -project cost would be
the financing cost and project cost in excess of the $3.5 million. Those paid professionals the
city engages to satisfy that their risk is truly assessed, such as investment bankers, bond counsels
and other professionals that need to give you the appropriate comfort level to go forward with the
project. The other thing is the feasibility study that was done by the University of Arkansas that
is a non -project cost but required by the statue. Cost that are required because this is a TIF
project.
Alderman Cook: Are the non -project cost rolled into the TIF bonds?
John Nock: Yes, all project and non -project cost would be rolled into the bond and would not
be a secondary cost to the City.
Alderman Cook: Do we have an agreement with the developers that basically says if we buy
these properties and prepare them for construction, do we have a contract that states that they
will build what they state they will build. I don't want to do all this and then they decide they
can't finance this and they want to do something else with it.
Kit Williams: We don't have that in hand yet. That is what I want to protect the city.
John Nock: It has always been our assumption that would be appropriate and we are certainly
willing on our side. ✓
Alderman Thiel: Have the bonds been secured, have you found someone that will fund the
bonding for this project? Who is required to get the bonding for this the city or the developer?
John Nock: This is not a city backed debt but it is in fact going to be a tax exempt municipal
bond. Bonds can not be issued or marketed until they are approved by the Council. I think your
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi Ile.org
City Council Meeting Minutes
December 7, 2004
Page 14 of 54
advisor
said he was 100% confident that the $3.5
million Was doable. The rest of it
they still
needed
to study and .look at those improvements
and over time how quickly dollars
generated
from revenues
collected would be satisfactory to cover additional improvements.
Kit Williams: I think that is correct, he wanted this to be in two phases to do the streetscape and
Phase II a couple of years down the line after he has seen these projects actually get built and get
on line which will make a significant different in the tax increment. At that point he could come
back before the City Council and recommend further bond issuance. This was our financial
advisor, Kruse and Associates that spoke to the City Council.
Alderman Reynolds: This map indicates this has a lot of City, County, State and Federal
property involved in this District, how is that going to affect the income in this District?
John Nock: Because those properties are tax exempt by nature they don't pay any property tax
currently. However some of those properties may sale and become private properties and then
they would increase from a zero tax base to a current tax base.
Richard Alexander: This is a four piece puzzle it is not doable without any one of the pieces.
The pieces are the TIF District, new market tax credits, sales tax rebates from the State level and
private financing. We have to have some idea what the purchase price back to the project is so
we can put the funding in place, that's why we got the appraisal. We instructed the appraiser to
look at the property as raw dirt in a blighted area, not raw dirt with a $22 million hotel on it.
That came out to about $6.00 per foot. We purchased recently from the City the old library, that
property was appraised pursuant to the city's appraiser at $6.00 per foot and that is not in a
blighted area and had a perfectly nice building on it.
Mr. Alexander spoke of other properties in the area and their value. He stated they are ready,
willing and able to do the project.
Alderman Cook: Regarding Phase II our Bond Counsel basically said that the public
improvements was up in the air, it depends on how well the TIF goes whether that will be funded
and at what level it will be funded. Is that piece of the plan still up for debate? If we vote on this
plan as it is what's mentioned in that $6.5 million is that what's going to be done. If we vote on
this plan in front of us is that Phase II spelled out?
Mayor Coody: No, that wouldn't be Phase II spelled out at all.
Kit Williams: Well it is spelled out but the City Council has the right to amend a Project Plan in
the future.
Alderman Cook: We have talked about changes to Highway 71 but we have to get approval
from AHTD first and they might not agree with that, so we might not be able to do that part of
the project. For some people that might not even be their priority, to me this is the carrot for the
taxpayers, the public improvements that we can get out of this project. There is no guarantee it
will happen.
Mayor Coody: There are a couple of carrots one is the public improvements the other is the
removal of the Mountain Inn and the building of a new facility there. We do want to do some
public improvements down there but with the ultra conservative approach of the Bond Counsel.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettcvi I I e. org
City Council Meeting Minutes
December 7, 2004
Page 15 of 54
Alderman Thiel: One thing that has concerned me about Phase II of the project is that we have
already made a request for funds from the federal government for basically the same project that
we are talking about in this. I would be concerned that by doing that through the TIF we would
jeopardize getting the federal grant for improvements on College.
Mayor Coody: The appropriations bill will be reviewed by the new congress. There is no
guarantee that we will see a penny of that although they are going to be working very hard to
keep that appropriation in the bill. The $4 million that is ear marked currently wouldn't cover
the entire project. I don't see these conflicting as much as complementing each other. If there
were the funds raised for the public improvement of the TIF, that wouldn't be just for College
Avenue that would be for all the areas within the TIF. It would take supplemental funds that the
TIF would provide to really finish the job.
Alderman Jordan: The thing I look at when I see this TIF District is we are talking about
cleaning blight in an area. We are looking to make things better. If I live near North College
and my property taxes are going to be increased, what's in it for me? What can this TIF money
be used for.
Alderman Odom: You are only going to be paying higher property taxes because the value of
your home is going to be greater.
Alderman Rhoads: If it's your nest egg then you will have a bigger nest egg and better
retirement probabilities.
Alderman Marr: To me the other event for the home owner is their ability to go out and do an
appraisal at a higher value and borrow money and do more to their home if they want to because
they now have a higher basis.
Mayor Coody: Increases for property taxes are capped anyway.
Alderman Jordan: The perception is they are raising my property taxes and building a new
hotel and what am I getting out of it.
Alderman Odom: This doesn't actually raise the property taxes. The increase in the value
increases your taxes and that's what is going to pay off the TIF bonds.
Kit Williams: The millage rate doesn't change.
Mayor Coody: Property taxes on that same house have been increasing over the years without
any improvements. Probably just a quickly as they would with improvements.
Alderman Jordan: I do want us to remember that hopefully some of these funds can be used to
improve the District.
Mayor Coody: Yes. Anything in the public domain directly affects that homeowner.
Alderman Jordan: Can any of the funds be used for affordable housing.
Kit Williams: I don't see that as part of the powers in here.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi Ile.org
City Council Meeting Minutes
December 7, 2004
Page 16 of 54
John Nock: The Project Plan states the purposes that you can do. You could do public housing
however keep in mind in order to do public housing you must be able to generate an economic
model to do so.
Alderman Marr: I whole heartily supported the District when we established it and the Project
Plan. When we were setting this District our finding was the blighted area that needed to be
done and generation of jobs that was the purpose of why we wanted to do this. I don't think it
can be argued at all that we currently have a piece of property that is in need of renovation and
redevelopment. It is the closest thing to blight in NW Arkansas that I think we probably have in
terms of property value that once was an economic item and today we don't collect any
significant value from it. I have had citizens say to me that you are going to buy this and then
sell it for fair market value which is something less than that. That is the intent of this
legislation.
Alderman Man read part of the Plan that stated, which is less than its cost to the local
government, he stated that says to him that in the creation of this the government is going to take
care of this item, otherwise you don't need it. If you can get the financing yourself why would
you come and ask us. The reason we would want to remove this is for safer conditions. The two
issues that citizens have talked about when they came to the podium was we don't want such
regeneration that we can't continue to live in Fayetteville and don't condemn my property. I
don't think we want to condemn the property. I think in our prior discussions the District
decided we didn't want to condemn the property, which meant you need to negotiate in good
faith, set contract values and that is what it is going to be to tear it down and redo it. The other
finding in the Plan says we are suppose to do is contain a finding that the plan is economically
feasible.
I heard men stand in front of us at the last meeting and tell us that $3.5 million could be financed
if this project didn't even exist. The model that this financial economic thing is built on is the
most conservative. In the worst case scenario if it didn't get built, then the issue is that you are
limited to collect that amount money in 25 years. The termination clause of this says the District
can't be existence for a period of longer than 25 years unless the bonds that have been issued
would not be fully paid until which the date 25 years from the date of creation. Worst case
scenario would be if you didn't have enough increment and you got to the 25`s year then you
would keep going because you still have outstanding debt until that debt is retired. I don't see
the risk, we are not raising taxes, we are only using the proceeds from the increment to finance it,
we are getting rid of blight, we are creating jobs, and we are prospering downtown. When
people look at new areas they look at vibrant areas downtown and the re -development of
downtown. That is why we invest in downtown and Dickson Street because businesses look at
what your downtown area is to decide whether or not they are going to relocate there. Because if
downtown is crap then the rest of your town is, that is the assumption. I think it is important to
keep your core solid. I think this is a major step to do that. 1 haven't heard any thing tonight that
says this plan isn't economically feasible and that there is risk being taken on by the City to a
degree that we can't handle it in 25 years. This is the only finding that I have found in this
section other than the detail that Kit has talked about that we as a Council are suppose to do in
the Project Plan. If we didn't think that we needed to redevelop this then we should have never
set a boundary which is the first action we took. I think got great answers on the questions that
citizens have asked. I think the bottom line is, is it economically feasible. I think we have heard
it is and it is without the project ever being built. I think someone in the future is going to be
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi Ile. org
City Council Meeting Minutes
December 7, 2004
Page 17 of 54
sifting here trying to figure out how to spend the money that I believe this project is going to
generate.
Mayor Coody: One of the things the TIF regulation was put together for was to introduce a tool
to redevelop blighted areas where private money won't go because there is no private incentive
and no private motive. Private people are going to stay away from something like this because
there is no way to make any money at it so it continues to stay blighted. This tool was set up to
allow governments and private businesses to be able to take care of blighted areas. This helps
provide an incentive for private folks to come in and invest their money, whereas there would be
no incentive otherwise. That is the entire intent of the legislation. As far as condemnation goes
we did talk about not wanting to condemn. My impression was the Council did not want to
remove people from their homes. I think the conversation for the next TIF District, if we want to
do one, shouldn't be that we have a history of not condemning property but if there is someone
that has a derelict commercial property then the city can come in and condemn that property, not
removing someone from their home but making a TIF project work. That's why condemnation
in some cases might be appropriate.
Alderman Marr: Luckily we don't have that in this scenario.
Kit Williams: When I drafted this ordinance I said under Subsection K that no non project
costs are anticipated to be paid out of the TIF proceeds. There is a resolution that will be
coming before you stating your intent to pay the city back for the cost that is incurred for
economic forecasting and the bond proceeds. We probably need to amend Subsection K to say
that non -project cost include financial advise, bond cost, economic forecasting, etc. rather than
non are anticipated. If that is what the Council would like to do.
Alderman Reynolds: In the TIF District at what point are we going to put the utility lines under
ground? .
Mayor Coody: I don't know.
Alderman Reynolds: To me that is part of the blight of the old hotel.
Mayor Coody: You are right. If we redevelop College Avenue one of the things that we will
want to do is move the utility lines off the main thoroughfare. That will take a lot of planning
with the utility companies to get that done. That is a goal that we would have but we do not have
a timeline or direct cost for that.
Alderman Rhoads: This Council or future Council's will have their hands on the controls.
Alderman Lucas: I am very much in support of this. Even without the hotel being built the
revenue is there to pay off the bonds for Phase I the demolition of the Mountain Inn. This is
getting rid of a terrible blight that we have in the city.
Alderman Marr moved to amend Section K of the ordinance to include non -project cost.
Alderman Lucas seconded the motion. Upon roll call the motion to amend the ordinance
passed unanimously.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi I]e.org
City Council Meeting Minutes
December 7, 2004
Page 18 of 54
Alderman Lucas moved to suspend the rules and go to the third and final reading.
Alderman Reynolds seconded the motion. Upon roll call the motion passed unanimously.
Mr. Williams read the ordinance.
Alderman Cook: You are still going to negotiate with them as far as the final price? Us voting
on this doesn't change that?
Kit Williams: It does not change the fact that I will be coming back to you with a proposed
contract for the sell of what we will acquire back to them and them building the project if we go
forward and buy it and demolish it. The contract will come back before you.
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
'Ordinance 4646 as Recorded in the Office of the City Clerk
NEW BUSINESS:
R-PZD 04-1154 (Cliffside): An ordinance establishing a residential planned zoning district
titles R-PZD 04-1154, Cliffside located east of Happy Hollow Road, South of the Cliffs
Apartments, planned unit development, containing approximately 26.114 acres, more or less;
amending the Official Zoning Map of the City of Fayetteville; and adopting the associated
residential development plan as approved by the Planning Commission.
Mr. Williams read the ordinance.
Dawn Warrick gave a brief description of the project.
Alderman Lucas: I noticed this is going to be reduced, is it still going to be four lanes?
Dawn Warrick: A collector street is typically a three lane street which provides for two travel
lanes and a turning lane.
Alderman Lucas: So we are going to reduce the width of the street then.
Dawn Warrick: Happy Hollow is over built at the further north end, there is not an opportunity
for it to go further north because of slope and development that is existing. It will transition to
some degree at the northwest corner of this property.
Alderman Lucas: I noticed that part of that says no dead end. When you have a turn around or
circle is that a dead end?
Dawn Warrick: My understanding of that is the cul-de-sac's in this case are not considered
dead ends. The stub out to the east is not a street that someone would have to drive on in order
to get to any of the lots within this development therefore it does not prove as a stopping point
for traffic flow within the development. Traffic can flow on all the streets without coming to a
point that it is a traditional type dead end with no outlet.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettcvi IIc.org
Special City Council Meeting
December 28, 2004
Page I of 27
Aldermen
Mayor Dan Coody
City Attorney Kit Williams o� � Ale
City Clerk Sondra Smith
ARKANSAS
Special City Council
Meeting Minutes
December 28, 2004
Ward I Position I
Ward I Position 2
Ward 2 Position I
Ward 2 Position 2
Ward 3 Position I
Ward 3 Position 2
Ward 4 Position I
Ward 4 Position 2
Robert Reynolds
Brenda Thiel
Kyle B. Cook
Don Marr
Robert K. Rhoads
Conrad Odom
Shirley Lucas
Lioneld Jordan
A Special Meeting of the Fayetteville City Council was held on December 28, 2004 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, Marr, Rhoads, Odom, Lucas, Jordan, Mayor
Coody, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience.
Pledge of Allegiance
Mayor Coody Opened the Public Hearing
Highway 71 East Square Redevelopment District #1 Creation: A Public Hearing to allow all
members of the public and representatives of taxing entities to present their views on forming the
Highway 71 East Square Redevelopment District Number One.
Mayor Coody: Kit do we need to do anything from your perspective?
Kit Williams: Basically this has already been discussed a few times before the City Council, it
was a proposal that was approved earlier with minor notification problems. We decided to run
through the process again but nothing has changed within the district. The borders are still the
same and so is the project plan.
Alderman Thiel: I realize this has already been discussed thoroughly but I have had some
recent concerns on this and have been requested that I ask some questions. We have had the
discussion about reimbursement to the city for cost related to the TIF. Does that deal with
adding additional staff to the City? At some point I would think there would have to be staff
Special City Council Meeting
December 28, 2004
Page 2 or27
hired to facilitate and coordinate. Would that be reimbursed from the proceeds of the TIF? If so
how would that be divided among the various TIF's?
Kit Williams: I don't. I don't think there has been any discussion about adding new staff. The
kind of cost I think the resolution was talking about is for the bond counsel, financial advisor,
underwriter and the economic forecast that the University did for us. I think those are the costs
that were anticipated to be paid for with the TIF proceeds if the bonds are in fact passed.
Alderman Thiel: No one thinks there needs to be any type of management of these TIF's
except for the City Council?
Kit Williams: That would be up to the Mayor and the Administration I don't decide on
personnel.
Alderman Thiel: My question again is if at some point we see the need to hire someone rather
than contract our services would that be reimbursed?
Mayor Coody: I would think that it would be a reimbursable expense would it not?
Kit Williams: I don't know if it would be or not.
Mayor Coody: We have not had discussions about hiring any more staff for this.
Alderman Thiel: I think a lot of people are concerned about that. There are a lot of things that
haven't been discussed and that is one of them.
Mayor Coody: It is an intense short spurt of activity and then by the time it is all approved
everyone goes back to their normal routine. So it is not an ongoing day to day operation.
Steve Davis: The ongoing day to day monitoring and management of the TIF data actually falls
to the County Assessors office. The County Assessor has the ability to charge each TIF for their
potential share of increased operational cost.
Alderman Thiel: Can charge each TIF. Okay, very good.
Steve Davis: The City doesn't necessarily have any management oversight.
Alderman Thiel:
There seems to be
concern about the appraised cost of the purchase of the
Mountain Inn and
why the City or the
people that have
been working on this
project didn't look
closer at the idea
of just condemning
that property.
Maybe Mr. Nock or
whoever has been
working on this project could explain
why it was just
set up with an offer
of $2.5 million to
purchase this.
John Nock: I will try to answer that the best I can. The process to acquire the land was a multi
month even year process to get the necessary property to do the project. One of the resounding
comments that we heard both from public input as well as from the Council was that the interest
in using condemnation was just not there. We certainly did what a private side would do and
negotiate the very best possible prices for those parcels. In addition the statue clearly states that
one of the specific items allowed and I will quote from that, this is the Arkansas Statues for
TIF's refers to real property assembly cost meaning any deficit incurred resulting from the sale
Special City Council Meeting
December 28, 2004
Page3 of 27
or lease as lessor by the local government of real or personal property within a re -development
district for consideration which is less than it's cost to local government. It was certainly, in the
intention of doing a TIF, the ability to remove the blight and also to assembly the necessary
property. We could certainly just remove one building and remove the blight but then you could
not carry forth the necessary items to do the whole project. Could it have been condemned,
certainly. You can condemn anything the City Council has that power. It is also specifically
granted under the TIF legislation it is my understanding. We did not approach that and we said
early on that it was not our idea or scenario to be involved in a condemnation procedure. Having
worked with the Dover Kohl Downtown Master Plan it was very auditable during that process
that condemnation rather that re -development was not what was wanted it was the other way
around and we certainly tried to stick with the spirit of that.
Alderman Thiel: I think there is a difference between eminent domain and condemnation.
Whenever a property is to the point of being condemned, I see a difference there. I think what I
heard in the early conversations of this TIF was using eminent domain and there is a difference.
I guess I am alright with that and that is what I have explained to people that have asked me. I
said I think that was the original intent and it was explained back to me they are two different
things and they are.
John Nock: That is a good point. Let me go on if I may and go to another scenario. The idea
behind a tax increment financing or a re -development district is a short term investment in under
utilized blighted or under developed areas depending upon how you define the legislation
whereby money is spent so additional dollars come back. This project doesn't make sense on its
own privately and the only way it makes sense to have any public dollars come in and help with
remediation of the building, removal of the blight and assembly of the project is if it is going to
return economic dollars back to the project area in the re -development district. So, one has to
say what is the cost for assembly, demolition and then what does this return. In your boxes this
week there was a number that was supplied from HMR taxes, property taxes as well as other
sales taxes just from this project alone. If my calculations were right it was in excess of $40
million dollars over the same 25 year period. So the real test of a TIF is money spent short term
what does it give us as a long term result. You are exactly right you could go in and do the same
process by condemnation but what you end up with is a much different process.
Mayor Coody: Does that answer your question at all?
Alderman Thiel: Not entirely. Not as far as the difference between buying it and condemning
it and that really is for the Mountain Inn property and I understand the whole project
encompasses more than just that.
John Nock: We as developers had no interest in petitioning you as the City Council to do
condemnation. That has not been Richard Alexander's history of doing projects in downtown; I
think he's been quite successful with that. It's also been an adopted measure on my part that
instead of going in and utilizing, where there's condemnation or eminent domain, that was not a
part of our program. Maybe another developer would submit that, but that was not a part of our
program and it was clearly allowed under the statute for TIF's. We complied with what was out
there and also tried to follow that spirit of the law.
Alderman Thiel: Okay.
Special City Council Meeting
December 28, 2004
Page 4 of 27
Mayor Coody: All right. Anyone else? Yes, Ma'am.
Alderman Lucas: Maybe a better question would be, why did the City not, before even the
TIF's were, you know, available, why did the City — there must have been reasons why the City
did not condemn the hotel, because it was a blighted building and everything and dangerous. I
was just curious what the thinking was that the City did not approach it that way. Maybe we
didn't have the laws — maybe we have better code enforcement now that we can do it or
something like that...
Mayor Coody: No. The reason we didn't condemn it, we thought about condemnation but the
developers asked us to please stay away from that because that probably would have screwed the
deal up that they were trying to accommodate with Stella Mogel, is that right? So we discussed
this...
John Nock: Well, there's more than one owner certainly involved, but it was never our plan to
go through condemnation. We certainly — you certainly could do that.
Alderman Thiel: Yeah. I think what I — I think you've made a good point. I mean, why didn't
we deal with this before the TIF discussion? I mean, in fact I think there had been some
discussion of it a couple of years ago, before you even came forward with this idea of, you know,
in other words I guess we all kind of feel like why are we compensating Stella for not .doing
something with that property.
Mayor Coody: Yes, sir.
Alderman Odom: My only comment about that is that condemnation isn't as simple as it
sounds. I mean, it's a — it can be a very long, protracted legal battle when you've been in
condemnation proceedings and you can't just go in and condemn property without good reason
or you end up in a very long, protracted legal battle. An area can be blighted without the
necessity of condemning it. And if — and I think it kind of goes to what is the City going to take
as a policy stance. Is it gonna — just going to go in and start condemning property because it
doesn't like what it sees? And I understood that the Council was sort of against that sort of
philosophy. And so 1 think that's the reason it wasn't looked at sooner. I mean, yeah, it was a
potentially harmful to, you know, vagrants and so forth to go into that area but those, you know,
it was boarded up at certain points in time, the roof was maybe fixed at certain points in time, so
— yeah — I think it's a dangerous thing for a City to just — at first — to go in and say, "we need to
look at condemnation". I think that's a theory or a way of last resort. Much as a tourniquet is —
if someone is bleeding, the first thing that you want to do is apply pressure. The last thing in the
world you want to do is come in and put a tourniquet on. So 1 don't — while I think that the area
was blighted, I don't know that it was to the point of where the City needed to come in and
actually condemn the property. That'd be my thought on it.
John Nock: If I could add one more thing...
Alderman Thiel: We have a Raze and Removal on the end of our agenda of this next - on
Tuesday's Council meeting. So...
Alderman Odom: I'm not saying — I'm not saying that there aren't certain times where things
shouldn't be condemned...
Special City Council Meeting
December 25, 2004
Page 5 of 27
Alderman Thiel: Yeah.
Alderman
Odom: ...there
certainly are.
I'm just saying I'm not sure that this project was
actually to
that point.
It sure
was close.
Alderman Thiel: Yeah.
John Nock: There's an economic story behind that, too. We have three different bids coming
in on the demolition of the project. And those range, at the minimum of half a million dollars
and at the high side, close to nine hundred thousand dollars. So, again, I don't know the
complete process but I do know if you condemn and if you do tear it down, the City, the
taxpayers would then absorb that cost, and then if I understand the process after that, you would
then attempt to try to sell the land. Uh, having been recently involved in the purchase of the
library, where we paid full market value, in fact'a little bit more than that, than what your
appraisal came up with — an independent appraisal analysis on the old library building, that was
actually $6 a foot - with a nice building in a nice historical area. Whereas the Mountain Inn, the
appraisal on it came in, believe it or not, at the same area — right at $6 a foot. But it's also
blighted and is not in the historical area, but it has potential to turn around. So, uh, the valuation
of how we'd be purchasing it, versus where it is, it's worth much more with the buildings gone,
believe it or not. Because of the liability of — let's call it a half a million to three-quarters of a
million dollars is a number that the taxpayers would then immediately absorb. If you can sell it
for that, great, otherwise it would be a deficit thereafter. Whereas, a redevelopment project such
as this — and as you've seen on the spread sheet that's been prepared, $3.5 million comes back in
many different ways — through HMR, other sales tax as well, that otherwise would not come,
even if it was just a razed building with an empty parking lot.
Mayor Coody: All right.
Alderman Jordan: You know, it seems to me that we did have some discussion of
condemnation on this property because I remember Alderman Man saying something like that
nobody on this Council wants to condemn property. Is this the same — was this the same issue?
Do you remember, Don?
Alderman Marr: Yeah. Actually it was a gentleman who lived down off of Rock Street I think
it was who was talking about a home. It wasn't this particular building. But there — the people
who actually commented were concerned about eminent domain and...
Alderman Jordan: Okay.
Alderman Marr: ...condemning their property for economic growth, if you will and I — I made
a joke that night that, you know, the best way to do that is to reelect the people up here who
didn't want to do that. And, so — I also think that — I mean I wasn't aware the history of why we
didn't proceed with, you know, code enforcement on the property but I think at this point, since
it wasn't and there's been negotiations, I think you open — a point to consider is we open
ourselves up now for commitments that have probably verbally been made or contractually made
about purchasing it versus changing in mid stream. So that would - now my concern would be
that you'd have higher litigation on the end of going that route.
Special City Council Meeting
December 28.2004
Page 6 of 27
Mayor Coody: Well, if I remember right, we certainly sent letters to ask to please secure the
place. Kit, I think, did you have a hand in that? I believe we sent letters to Moga saying that
they needed to secure the place, clean it up ...
Kit
Williams: I
didn't
have a hand in that but 1 was aware, I know we had our fire marshal go
into
the building
and he
was very concerned.
Alderman Thiel: And again, I wasn't to emphasize the difference between eminent domain and
condemnation. There is — I mean, there is a difference as far as, I mean because the
condemnation that we're doing — the raze and removal we're doing — we're ;going to be
discussing at the next meeting, is for a different reason. I mean, eminent domain is taking
property for streets or whatever. And I do think this Council was very committed to not using
eminent domain. As far as — I mean I'm sure we'll — we'll have properties pop up down South
College again that need to be razed and removed. I mean, so we're not opposed necessarily to
razing and removing and condemning property whenever it's necessary. And — and I really don't
— the reason I'm bringing this up is just these are questions that people wanted me to try to get
fleshed out so that they have a better understanding of this TIF. I think there's more concern
about this one now in a way because we're looking at other ones. And, so anyway that's really
the reason I'm — I agree with you, there's already been a lot of commitments made and I'm not,
you know, going to back pedal on my support of this particular one. I just want to make sure
plenty of questions are asked and so...
Mayor Coody: All right.. .yes, sir.
Kit Williams: Mayor, we probably should restrict most of the discussion actually to the
boundaries of the TIF and the creation of this TIF rather than talking about the project plan at
this point in time. And we need to make sure that we let the public comment since this is the
public hearing portion.
Mayor Coody: Oh, yeah. That was the next thing is public comment. Where it says here,
present views on forming the 71 East Square Redevelopment District #I, I was thinking that
that's what Brenda was doing, was presenting her views on that. All right, anyone from the
public want to comment on this? Yes sir, please step forward. Please introduce yourself for the
record.
Don Bright: Yeah, my name's Don Bright. I've got three questions that I'll try to get over with
real quick and then let whomever up there wants to discuss them. Number 1 — and we've been
talking about this — do you plan to use to condemn property and use eminent domain on the non -
blighted areas. I think we all know that the vast majority of this district is not blight so would
you ever use eminent domain to remove a person from a non -blighted building. Two ....
Mayor Coody: Let me answer these one at a time. Then I think the first answer we can pretty
much certainly say no.
Don Bright: Okay. Do you have a definition of blight that you can include in this or would you
consider that?
Mayor Coody: With TIF legislation I believe that if. .is there no....?
Special City Council Meeting
December 28, 2004
Page 7 of 27
Don Bright: I've read the Act and it — well it covers it but it doesn't specifically — when you
say "underused" as part of blight, you know, a person that travels a lot is not using their house a
lot so its — it leaves a lot of open gaps, I think.
Mayor Coody: Well, I think that when we've used the word "blighted areas", when we look at
the Mountain Inn, pretty much everyone agrees that qualifies.
Don Bright:
Definitely I
agree
there.
But if someone's living in a — in a private home for
instance that's
not very well
kept,
you can't
call that blighted....
Mayor Coody: True.
Don Bright: ...is my point. And the other one — and this is, you may not have to discuss this, it
may sound silly. Is there — or have you considered taking bids on the development of these TIF
areas and seeing if another developer might come and do it without the City having to put out as
much money. Thank you.
Mayor Coody: Thank you very much. As far as taking bids go, no, we haven't because, Steve,
where — is Steve Davis back there? Our finance guy? These -folks came up with a plan to put a
14 -story hotel here and do a lot of things we needed to have done in the downtown area. If we
were to just put it out to bid, there's no telling exactly what we would get, I believe. Do you
have an answer for Mr. Bright's question about going out to bid with random access folks to see
if they — what they would do with the building?
Steve Davis: I'm not sure it would be in the City's — the City would be in a position to put
anything out for bid. Until the property is acquired and demolished, there's nothing there to —
for us to bid out. It's been a vacant building for many, many years and it's been — there's been a
number of items in the press about who the owners were, so any — any developer that wanted to
try to put together a viable development plan had the opportunity to do that. These developers
did take that opportunity and did show the initiative.
Mayor Coody: All right. Thank you. How are you tonight, Jeff?
Jeff Erf: Okay, thanks. My name's Jeff Erf, a Fayetteville resident. I live outside the proposed
TIF district. Uh, the Northwest Arkansas Times has this special section on their website devoted
to explaining this specific TIF district and some of the other proposed ones and I just wanted to
read a couple of statements here and find out whether or not they are true. And this is in regards
to the Mountain Inn TIF district, is what they are calling it, that's what is before you tonight. "A
redevelopment district will not raise tax rates for anyone." Then there's another statement,
"anyone with property outside the district is unaffected". Would that be a true — are those true
statements?
Mayor Coody: I certainly believe so, yes.
Jeff Erf: Because about three weeks ago, there was a discussion about raising millage rates for
fire and police protection. I believe you had thrown out maybe 2.5 mils additional tax. And
there was a comment and some discussion made about that since the millage rates would be
frozen to be a base rate in the TIF districts, that that increase in millage for fire and police
protection that would cover the rest of the city and would go into the general fund for fire and
Special City Council Meeting
December 28, 2004
Page 8 of 27
police protection, that additional collected tax would actually have to stay in the TIF district and
be used for that TIF development plan
Mayor Coody: I'm not sure that — does that apply to new millages, Kit? Or is that just existing
millages?
Kit Williams: I think there is a base value established and that will cover it even if there's going
to be a new millage. But it doesn't raise anybody's tax rate. Now, it might affect where that tax
is going — inside the TIF district it would go to the County Assessor and she would send the
increment back to the TIF district itself to pay the bonds or whatever. And the money from
outside the TIF district would all go into the City for general purposes. So it wouldn't raise
anybody's taxes but not all the taxes collected would go to the City. Some would go to the TIF
district.
Jeff Erf: Well, there was an article in the paper, I think a week ago, that -the library had
requested the attorney general for an opinion. Their concern is that if they were to raise library
millage, the way I understand it anyway, that that millage — the tax increases that would be
collected inside of a TIF would stay in the TIF and could not be used for — their concern is that it
wouldn't be available for the library's use. And, reading between the lines, if they can't collect
that additional money from the TIF district, then they have to raise millage in the areas of the
City that aren't included in a TIF.
Kit Williams: I think the only thing a TIF does is put a base of property value — not a base of
taxes — a base of property value that can be raised — that you can apply millage to in a TIF
district. So it's not that the new millage might not — the new millage would be applied uniformly
1 think, throughout the entire city, but the base value of the property in the TIF district will not be
raised because - the increase in property value will go to the TIF district but the base value will
stay with the other taxes entities, whether they're the schools, the library, the County or the City.
Jeff Erf: Okay. Let me re — I thought you discussed this already, so let me try again. If you
would, for example, raise the millage for fire and police 2% and it - and for the entire City
including the TIF district. And you're collecting that additional two mils from every property in
the City. Does all the property in the City — does all that money go to the City's general fund or
does the property that's inside the TIF district — that money has to be directed and allocated —
redispersed — to the plan — to the projects only inside that area — that TIF district?
Kit Williams: My understanding is it's a mixture in the TIF district. The base value goes to the
City for the general purposes. The increment — the amount above the base value, the amount the
property has increased in value in the TIF district, that would be separated by the County
Assessor and that would go back to the TIF district. But the millage would be applied uniformly,
there would be no difference in tax rates, whether you're in the TIF district or out of the TIF
district.
Jeff Erf: I'm not concerned about the difference in the tax rate, I'm concerned about the money
— where the money comes that's collected in the TIF district, if it — if there's an additional two
mils property tax increase in the district, does it increase the base rate by two mils or does that —
oris it considered part of the increment, which goes into the...
Kit Williams: My understanding is — it's not part of the increment.
Special City Council Meeting
December 28, 2004
Page 9 of 27
Jeff Erf: It's not? Okay. That's what you're saying.
Kit Williams: That's my understanding. No, only the increase in value of the property — that is
the increment. Not a change in the millage rate itself. Only the property's value. The property
goes from $100,000 to $120,000. So that $20,000 — the millage on that $20,000 goes to the tax
increment financing district. The $100,000 still goes to the taxing entity.
Alderman Rhoads: So, so to answer Jeff's question, if you — if you raise — if you put a new
millage in, then the — the benefactor — I'm sorry, the beneficiary of that new millage wouldn't get
that additional millage on the $20,000. Is that right?
Kit Williams: I'm not — I'm not sure if there's a new millage — I think the new millage would
be applied at the base value, that is established right now....
Alderman Rhoads: So with your example, you'd get the millage on that $100,000 and then that
additional twenty would go ...
Kit Williams: ...would go to the tax increment financing district, I think.
Jeff Erf: But, okay, but then over twenty five years that could be a significant amount.
Kit Williams: That's correct.
Jeff Erf: So, okay. Thank you very much.
Mayor Coody: Thanks, Jeff. Anyone else want to address us on this? Yes, sir. John, how are
you tonight.
John Newman: I'm good. I'm John Newman, Fayetteville resident. I guess I'm coming into
this late, but I just wanted to state my opposition to this TIF and certainly to the others that I've
heard just a little bit about. And I'm opposed for two reasons. Opposed to this TIF. One, I think
my reading of the law it talks about blighted areas. When I think of a blighted areas I think of
something where, you know, there's no private investment going in, that sort of things. And I'd
certainly agree that the Mountain Inn is a blighted property. But the Mountain Inn lot of course
is a very small part of this district. And then when I look around at what's in the district, I see
the Town Center, I don't think that's a blighted property. I see the whole square and I see new
development, I think on Spring and College there's something going up and we've got the Mill
District, a new Walgreens. So, it doesn't seem to me like a blighted area I guess. Maybe I'm
reading the law wrong.
Mayor Coody: I don't — now just - all the land inside the boundary doesn't have to be blighted.
This intent of this legislation is to able to put private investment where it won't go without some
kind of a mechanism or a tool like this to make it happen. So, we wouldn't be considering the
Town Center, for example; a blighted area. Well, that's a bad example since it's off the tax roles
anyway. Let's just use new development over at Spring and College. That — that's going to be a
brand new building - it certainly won't be blighted, but the increase in the property value there,
that increase will go toward the removal of blight within the district, which means the Mountain
Inn and its environs. It doesn't mean that the entire district is blighted. But it means there —
that's the reason the boundary is drawn the way it is, is to capture enough of an increase — and
Special City Council Meeting
December 28, 2004
Page 10 of 27
believe me even as big of an area as that is it doesn't generate as much money as one might
think. So the reason the map was drawn like that is to be able to capture enough of an increase to
make — an increment to make the redevelopment of the Mountain Inn viable and without
something of that size, it wasn't — it's not viable. Does that make sense at all?
John Newman: Yeah. I mean, it makes sense. And I guess that's a good reason why you
would want to draw the district large. But 1 don't think the district at large in general is blighted.
There's maybe, you'd call a low rent district, or even parts of it are not that, the square certainly
isn't...
Mayor Coody: No. We — I think we would all agree with that assessment. The whole district is
not blighted.
John Newman: Okay. Well, my reading of the law, it seems like an abuse of — if not the letter
of the law, the spirit of it. I guess the — the number one reason I'm opposed to it — opposed to
TIFs in general, is they sort of sound too good to be true. And in a way it goes back for me to
twenty-five years ago when I was getting my accounting degree up on the hill and I had a
teacher, maybe some of you know Leonard White, best college teacher I ever had for economics.
And he was so good because he distilled economics down to a few basic concepts and one of his
basic rules of economics was that there is no free lunch. No free lunch for society. He said now,
he said, "Dan, you may buy me lunch and I get a free lunch, but that's only because you're
paying. And that somebody's always paying for everything. And — and yet I'm hearing this
being promoted - the TIF concept, like a free lunch. And that's really what got me interested in
it in the first place. I'm reading these articles and initially not understanding them and finally
really dug into it a lot wanting to — wanting to answer this question. Well, who's paying for this?
And, the only answer that I could come up with is that it's — it's our school districts, school
district, and anybody else that gets these taxes. And I understand that this is just — it's just on the
increase in value but when you're talking twenty five years, especially in an area like
Fayetteville where real estate is appreciating fairly rapidly, you know, you get out there twenty,
twenty-five years and the increment in value is likely much, much larger than the base value that
you started with at the beginning of the period. I studied the, you know, the plan that's on the
website and read through it to further, to answer this question and I poured over the numbers and
the projections that Jeff Collins at the U of A did, which by the way there's a few significant
mistakes in there, but be that as it may, those projections don't speak to my question at all. All
they do is project how much money will be generated by this and is it enough to do whatever we
want to do. Kind of what you were talking about earlier, Dan. So I guess my question is, do we
have projections that say, "here's what the schools and others would get if we didn't do a TIF,
and here's what they'll get with the TIF in place." Because without that, we're just shooting in
the dark.
Mayor Coody: While we do have some projects, I'm not sure — at the level of detail you're
asking, I'm sure we do have several projections out there that you're welcome to. But one of the
things is, that without some kind of tool for redevelopment, the Mountain Inn is going to stay
just like it is for the next twenty years. And we won't see those property values increased. I
mean, it's been like this for, I don't know, twenty years already. We don't see much hope for a
really good redevelopment, especially the kind that we really need downtown without a tool like
this to make it happen. If there were an easier way to do it, we would have done it years ago.
John Newman:
And let me just say,
I think the
idea
of, you know, helping to put a hotel on
that
property, doing
something with it is a
wonderful
idea.
I just think, I'm really uncomfortable
with
Special City Council Meeting
December 28, 2004
Page 1 ] of 27
TIFs because of this idea that we go into it without any clear understanding of who's paying.
And yeah, if I can get a copy of those projections, I'd like that. Thank you
Mayor Coody: All right. Thank you. Anyone else want to make a comment on this tonight?
Phil Ralston: Good evening. I'm Phil Ralston. I'm from Fayetteville. Are we talking about the
plan or the district at this point?
Kit Williams: We're supposed to be talking about the — about the borders and creating the
district.
Mayor Coody: Yes.
Phil Ralston: So, when are we going to talk about the plan again?
Mayor Coody: That's going to be...
Kit Williams: Later on tonight.
Mayor Coody: Yes.
Phil Ralston: Later tonight. I'll wait then.
Mayor Coody: All right. Thank you. Anyone else want to talk - address us on this topic. See
none...oh...go ahead.
Carol Tarving: Good evening. I'm with the Green Party of Washington County and the Green
Party of Arkansas. And when I was visiting Little Rock recently to visit the Clinton Library, I
picked up the Arkansas Times that had an article called, "More TIF Madness" by Max Brantley.
And I'd like to offer you some copies of that article. The first thing I'd like to know is if you
find anything inaccurate in this. Kit, I know you were quoted quite a bit in this article and I'd
like to know, you know, if there's anything that was a misquote in that article.
Kit Williams: Well, actually I won't argue on the quotations but often he started off with a
comment that I would make at the start of a paragraph and then he would fill in his thoughts the
rest of the paragraph, making it sound like those are what I said, when in fact, that is what he
said.
Carol Tarving: Well, this is what, I would like to use this opportunity to clarify what those
comments are. They were different than anything I've heard — heard or read in our local media
concerning this. But it does raise the issue of the legalities — and you've mentioned that if you, it
quotes you as saying, if you were in private practice you would question some of the legalities of
this TIF plan.
Kit Williams: No. He didn't go — actually go that far. He said if Williams were a lawyer in
private practice, he said he'd be inclined to look at the legality of some TIF's being completed in
a rush. And that's not the Mountain Inn TIF, which is not being completed in a rush and in fact,
fully complies with the law in my opinion. There have been some others that I've read about in
the paper that have caused me to wonder about them, but I don't want to comment on any of the
other TIF's.
Special City Council Meeting
December 28, 2004
Page 12 of 27
Carol Tarvin: 1 agree. And, and you know that's, part of our concern is that this is a template.
This is a precedent setting TIF in Northwest Arkansas. And so, how we conduct this one, it
seems to me, is going to make a difference in how other — I've noticed that Lowell has
designated 47% of its whole town now as a TIF district, you know. That's a — that's a concern.
That the Community College in Rogers is concerned about the losses that it's going to incur due
to lost property taxes that go to the school programs. This quotes you as saying that the schools
say it's great, their bond millage is protected, the State Treasury is going to make up the loss, is
that correct?
Kit Williams: Well, that's actually not correct. Their bond millage is absolutely protected
because the TIF increment financing specifically excludes millage that's required to make their
bond payments. However, even their operational payments, I think are protected because of the
Act that the legislature did in the last session saying basically that they would hold school
districts harmless from the affects of a TIF. We had the Finance Director for the Fayetteville
Public Schools come and address us this summer when we were considering this TIF district and
she said this is fine, this is no problem for the schools, they're financially held harmless and so
I'm inclined to believe the school people know more than I do about the school finances.
Carol Tarvin: And I'd like to ask, are there any people from the school board here tonight to
speak to that.
Mayor Coody: I'm sorry. Can you, you need to address us, please.
Carol Tarvin: Okay. Well, 1 thought it was a public hearing, but anyway ...
Mayor Coody: It is.
Carol Tarvin: ...uh, so I am concerned about what, you know, the effects on the State Treasury
that you raised. Or are credited with having raised in this article. It's saying that the schools like
this because we've got a new State law and program and funding that will pay per pupil if — in
case — they're kind of the insurers if this thing goes belly up, the schools will not lose their
funding because the State Treasury, a bottom line, will make sure that all of the school funding is
provided through the State, is that correct?
Kit Williams: Well, I think the Act is not concerned about whether a TIF district goes belly up.
But, just the fact that the schools would be losing a portion of the increased taxes and I think that
the new Act that the legislature passed last session makes this difference up. That's what I
understand from the presentation of Dr. Lisa Morstad from the school district when she came to
us and said this is fine with the Fayetteville Public Schools and she supported the creation of this
district.
Carol Tarving: Based on that....
Kit Williams: Based on that State law.
Carol Tarving: ...using those State funds.
Kit Williams: Yes.
Special City Council Meeting
December 28, 2004
Page 13 of 27
Carol Tarving: Right. Well, their comment here is that the — the TIF's are possible only in the
most prosperous areas, making the subsidy doubly cruel for the people in the Delta and
elsewhere paying the cost of a better Fayetteville. Our concern is that State monies will, when
you - when this gentleman asked about who is going to ultimately pay, I thought that was a great
question. And that there's a risk that if schools — and what's difficult and I know it's a complex
issue here, we've got school boards and property taxes, we've got State fundings, we've got
City, you know, trying to, you know, just find the one right body to talk to about the multiple
concerns — I'm a citizen of each one of those entities. As a State citizen, I'm concerned about
the State Treasury being used to underwrite a plan that is going to help develop Fayetteville.
And there was — there was, is it — is this an accurate quote here that says, "Williams wondered if
any State legislature realized how much money this is going to cost the State Treasury. In the
beginning years, the amount will be relatively small, but as the new projects come on line in the
big TIF districts in booming Northwest Arkansas, the local property tax loss to the schools will
increase dramatically, all to made up by the State in future years" and the quote attributed to you
was that it's going to be phenomenal.
Kit Williams: That could very well be. I could have said it's phenomenal because it will be if
the law remains unchanged, obviously, and if there are a lot of TIF districts established,
especially large ones like in Rogers, there will be a tremendous amount of money from the State
Treasury to make up to the school districts the amount of TIF district money coming from that
district.
Carol Tarving: Okay. And so, our concern isn't just with this particular project, it's...
Mayor Coody: Carol, Carol, I'm getting a lot of heat up there — the discussion is supposed to be
limited to the boundaries of the district itself. I know that ...
Carol Tarving: Well, we — our request would be that you take time, possibly postpone any vote
on this, it seems tome that there's a lot of different questions being asked and that we get more
answers before we make any decisions or sign our names to anything that the legislature could be
changing as it meets this spring.
Mayor
Coody:
Thank you
very
much.
Anyone else want to address us on the boundaries? All
right, I'm
going
to close this
part
of the
public hearing.
New Business:
1. Highway 71 East Square Redevelopment District #1 Adoption: An ordinance
forming the Highway 71 East Square Redevelopment District Number One pursuant to
Amendment 78 of the Arkansas Constitution, authorizing the preparation of a Project Plan,
repealing Ordinance No. 4608 and declaring an emergency.
Mr. Williams read the ordinance.
Kit Williams: And I should note that actually we already have an ordinance in effect right now,
that's Ordinance 46-08, which was passed, I guess almost this summer, it's been a long time ago.
That ordinance is in effect. This ordinance would in fact just repeal that and replace it with one
that is identical. The only reason for this was a very minor technical notification problem that
probably wouldn't have affected that ordinance. It's probably 99.5% safe as it is. But since
there was a very minor notification problem, I thought it was wise for us to have another special
Special City Council Meeting
December 28, 2004
Page 14 of 27
meeting in order to re -pass these ordinances and — which would repeal the initial ordinance
which is currently in effect.
Mayor Coody: All right. Thank you. Any questions or comments on the ordinance?
Alderman Marr: Just got a — since this re -notification, has there been anyone, school
superintendent, school board member, or Lisa Morstad, the CFO of the school district, or Judge
Hunton who have expressed concerns about the development of this TIP since that last notice?
Mayor Coody: I haven't heard a word.
Kit Williams: I've heard nothing.
Alderman Marr: So no change in position from their original?
Mayor Coody: None.
Alderman Marr: Thank you.
Mayor Coody: All right. Is there any comment on the ordinance that we've read? I would
entertain a motion to suspend the rules and go to the second reading.
Alderman Rhoads moved to suspend the rules and go to the second reading. Alderman
Reynolds seconded the motion. Upon roll call, the motion passed unanimously.
Mr. Williams read the ordinance.
Alderman Rhoads moved to suspend the rules and go to the third and final reading.
Alderman Marr seconded the motion. Upon roll call, the motion passed unanimously.
Mr. Williams read the ordinance.
Mayor Coody: All right. Any further questions or comments from the Council? And once
again, to restate this, this ordinance or one extremely similar to this was passed several — or a few
months ago anyway, only except for notification of some particular school board members that
we thought were notified but weren't. We're just redoing this to make sure that we get all of our
T's crossed and our I's dotted.
Kit Williams: And in fact, the school board members did receive notice from Superintendent
New, I think, Mr. Conklin talked to Superintendent New — so they actually received notice. The
statute said we're supposed to send them letters and so we did not send letters out. It's a very
technical problem. I don't think it would have been a real problem but if we can make it 100%
right, I'd rather do it 100% right.
Mayor Coody: That's why we're going through the public hearing process again. All right.
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
Kit Williams: We need a separate vote on the emergency clause.
special City Council Meeting
December 28, 2004
Page 15 of 27
Mayor Coody: We do have an emergency clause, which does require a separate vote. Is there a
motion to accept the emergency clause? We have a move and a second to approve the
emergency clause. Shall the motion pass?
Alderman Marr moved to approve the emergency clause. Alderman Reynolds seconded
the motion. Upon roll call the motion passed unanimously. ,
Mayor Coody:
Thank you.
Now, we'll
move along to project plan part of the public hearing.
Most of which
we've already
heard about
this evening.
B. Public Hearing:
1. Highway 71 East Square Redevelopment District Proposed Project Plan:' A
Public Hearing to allow all members of the public and representatives of taxing entities to
present their views on the Proposed Project Plan for the Highway 71 East Square Redevelopment
District Number One.
Mayor Coody: Is there anyone who hasn't spoken tonight that would like to?
Phil Ralston: Good evening. My name is Phil Ralston. I'm from Fayetteville. And I'm glad
that you guys had to go through this again because I wasn't able to make the first meeting and
you went through three readings of this plan in one meeting. And I wasn't able to attend that.
Alderman Thiel: No, we didn't.
Mayor Coody: I
think
we
did
it over a couple of — two or three-week periods — I forget exactly
the length but we
didn't
do
it in
one meeting.
Kit Williams: I think there was two meetings.
Mayor Coody: Two meetings over a two-week period.
Phil Ralston:
Is this
the project
plan that we're talking about — dated 11/10/2004
Kit Williams:
Yes, I
think that's
correct.
Phil Ralston: ...that I picked up down at the City? Okay. 1 wanted to make sure that was right
before — before I go further because there are things in this plan that I think don't meet the law
requirements, specifically in five different ways. First, in the law, which is included in the plan,
it says that the — each project plan shall include — and I know, Kit, that `shall' means different
than 'may' include, which means it has to be there — it shall include ... am I right?
Kit Williams: Shall is mandatory.
Phil Ralston: Shall is mandatory. It shall include a detailed list of estimated project costs. A
detailed list I don't see in here. I see an overall big picture, but I don't see any details. And it's
kind of hard to see the detailed costs are going to come out to $3.5 million. I — it could happen
but probably not. And on page 10 under other costs, it includes providing replacement parking
and it doesn't say what that's going to cost. That would be a detail that's not there. The question
I have is — are we responsible for — for parking for whoever this parking is for. If we buy the
Special City Council Meeting
December 28, 2004
Page 16 or27
building and we say you don't have parking here, are we responsible for re — for providing them
parking. I don't think we would be but that's for you to decide. The second thing in the `shalls'
is number 4, which — which at the end says that the description of the methods of financing and
the time and the costs or monetary obligations related thereto are to be incurred. You know, I
see up here we're going to have a three and half million dollar bond and then we've got other
costs on the phase two but it doesn't say anything about when or what it's going to cost us to do
that, so I don't think that meets the — meets the requirement of having that in there. The next
thing is item 6 on the `shalls' — the type and amount of any other revenues. One thing that we've
talked about for — any other revenues that are going into this TIF fund should include what are
we getting when we sell the property. That's not in the plan. I don't think that at the meeting
I've watched on television, it was discussed but it was going to be determined at some point in
the future. You can't pass a plan with details that aren't in there and then expect it to be a valid
plan, I don't think. And also it says it shall have a list of estimated non -project costs and I don't
see any non -project costs. Are there not going to be any non -project costs that are paid for out of
this fund?
Mayor Coody: The non — I don't know of any non -project costs - the costs that we would have
in here would be associated with the project itself. The project or the public infrastructure
investment within the district. Is that what, non -project costs, would there be anything outside
that, Kit?
Kit Williams: I don't think so. I think that, I believe the plan does comply with the statute, but
go ahead.
Phil Ralston: Okay. In addition to these reasons, you know, that I don't think it follows the law
because it doesn't have all the details in it, I don't understand why we're paying the full -market
price on this property and I'm wondering who negotiated for the Mountain Inn? Was it the
developer who negotiated with the seller and we're taking their price? Could we not have
negotiated a better price by threatening, whether we used it or not, condemnation and reduced
our costs? Even with the same district that would have made more money available for other
plans — other project items that — I don't think we addressed that.
Mayor Coody: The Mountain Inn, I think we're having to use appraised values.
Phil Ralston: We have to use appraised values?
Mayor Coody: We are. I think that the County has an assessment on there and appraised values
and values that we're using are on a funding formula.
Phil Ralston: Okay. The other three buildings that we're buying aren't blighted, you know.
Why are we buying them at full market price and selling them for — for blank space price? If the
developer wants that as part of their project, you would think that they would be able to pay for
at least the amount that they're — the cost of the buildings. I mean, we're building — we're
buying them at fair market value and we're tearing them down and we're giving them to them
for dirt price. I just don't think that — that that's a reasonable way to do things. On page 18 of
the plan, under the economic feasibility study, it mentions that the TIF's in Tulsa, most of those
had difficulty meeting their projected increases. So what are the chances we're going to meet
our projected increases? I mean, we're projected 10% - 9.9% growth for 25 years. You know, if
we — if you have that kind of growth, that means every 8 years your property is going to double
in value. So if you have a $100,000 house now, in 8 years or less it'll be $200,000. In 16 years
Special City Council Meeting
December 28, 2004
Page 17 of 27
it'll be $400,000. And in 24 years, by the time this plan is done, it'll be $800,000. And I don't —
I don't know that property is going up that fast around here
Mayor Coody: With the Crews & Associates assessment of the situation, they made the
statement that even if we didn't building the hotel there with the expected increase in the values,
even if the hotel weren't built, even if we just had bare dirt there, that we would still be able to
meet our obligations. That was very conservative...
Phil Ralston: You mean, which obligations, for the $3.5 million?
Mayor Coody: Yes.
Phil Ralston: But not for anything beyond that.
Mayor Coody: That's all we're worried about right now.
Phil Ralston: Well why is there phase two in here for this other....
Mayor Coody: We can always amend the plan later on. Once we see how this phase one goes,
we can always amend the plan and have more public hearings and see if we want to do a phase
two, and if so, what it would include.
Phil Ralston:
But phase two is
in the plan.
I mean, it's not
— it's not
something you would
amend to put in
there because it's
already here.
Although there's
no detail
in it.
Mayor Coody: The detail's what I'm talking about.
Kit Williams: Well, what you — what you would do is actually — phase two as you say is in the
plan right now. However there is not a request at this point, or anticipation to try to use TIF
bonding to do phase two at this point in time. Our financial advisor recommended we wait
several years and make sure that the increments are as predicted by the economic expert before
we look at doing phase two. And so phase two is here — we wouldn't necessarily have to amend
the plan but there would have to be another ordinance for a bond ordinance if we wanted to go
forward - or when we want to go forward with phase two.
Phil Ralston: So phase two is here with no detail but that — that qualifies for what the law says
to have the detailed costs? On page 7 it indicates that a national flagship hotel is being planned.
And originally they had talked about a Holiday Inn Crown Plaza and I understand that that's not
the case. Do we have any idea what kind of hotel we're going to have at this point? I know I've
heard it.will be a good one. But I don't know what that means. It's in the plan, I'm just trying to
figure out what the plan says.
Mayor Coody: Yeah. I don't know exactly who the hotelier would be right at this point. We'll
ask that of the developer.
Phil Ralston: The cost for creating the plan. Who's paying for that? And for the feasibility
study? Is that coming out of the TIF?
Mayor Coody: Yes, TIF proceeds.
Special City Council Meeting
December 28, 2004
Page 18 of 27
Phil Ralston: Do we have any idea what it costs? And why aren't those details in there? 1
mean, that's a — that's another plan cost that should be known at this point and should be
included.
Alderman Thiel: Didn't we pass a resolution last week that dealt with some of that?
Kit Williams: Yes, it did express the City Council's determination that they would apply the
costs of preparing the plans and the TIF district and recover that money back from the TIF
district itself, or all TIF districts that we might adopt.
Phil Ralston: But it's not in the plan what that costs or anything like that. So those are my
concerns that it really doesn't meet the law because it doesn't have the detail and it looks like a
good starting point for a plan but it doesn't look like a plan for a redevelopment. It looks like a
plan for $3.5 million to the developers to me. Thank you.
Mayor Coody: Thank you very much for your comments.
John Nock: I'll address a couple of those items I think you directed toward the developers.
First of all, about the flagship, it does state in the project plan that we are using a national
flagship — a couple of things that we have probably failed to mention in these meetings — let .me
go ahead and point that out. When Stella Moga originally tried to do this project in 2000 — 1999
and 2000 — and on before 9/11 occurred she had gone through negotiations both — she had
architectural plans, engineering plan, as well as a franchise agreement secured through Crown
Plaza. Part of our negotiations for that project and part of the value that the TIF actually will
receive because it's going to be a flagship hotel, is we have inherited that franchise agreement.
We certainly have to pay for it but it — it saves about a year's worth of process to be able to do
that. What we have elected to do, however, is allow the hotelier who will be running this — this
is a real estate project based primarily with the hotel in it that will be run by a hotelier. We are
certainly leaving that option to the hotelier who currently has two different types of flagships —
one of which has been previously in Fayetteville. It did not have a good life to it and it's now
gone from Fayetteville. And so we're leaving some of those details about what the hotel chain
will be up to the hotelier and what best fits. And also, keep in mind, we don't do this just on
`hey, we want this type of hotel or that one', it's based upon demographics, feasibility studies
and other scenarios that we have to look at. And so we inherit a Crown Plaza franchise
agreement, which we certainly have to keep alive and renew that fee, but that is one of the
intrinsic values that comes with the project. Whether it ends up being a Crown Plaza or whether
it becomes another flagship, that has been our commitment that it will be a nationally recognized
flagship. It was not our intent — and the reason why that's in there that way, it's not our intent to
do another home-grown, boutique hotel. It did not work there before and there are many reasons
why those don't work for most cases in these type of metropolitan areas. Primarily because the
traveler today — they're hooked in with national chains or hooked in with national reservation
systems and so we've allowed that to be a decision that the hotelier — the management arm who
comes in and runs the hotel business — to make that decision. All franchise agreements charge
anywhere between 9 and 15% of revenues and so you certainly look at that as a better name
should bring in better revenues, but also you want — you need a name that's going to be
complimentary to the Fayetteville market. There's certain names you're not going to put here.
You don't need a Ritz. Fayetteville market wouldn't cater to that. But you need something
that's going to fit the demographic of the traveler and the overnight businessperson as well.
That's one of the questions. I think one of the other questions was about —I I believe it's spoken
of as non -project costs. The way I understand those defined, Mr. Williams, is those pertinent and
Special City Council Meeting
December 28, 2004
Page 19o127
27
necessary to the issuance of the bonds and those would come directly from bond proceeds. And
that relates back to your earlier question about can the City be reimbursed for those non -project
expenditures and I think the statute says you may pay them yourself or you may elect to allow
the TIF district to pay for it through bond proceeds. So, those kind of— two questions with one
answer. Were there any other questions that you wanted me to answer?
Mayor Coody: Any other questions for the petitioner?
Alderman Thiel: I wonder if he answered everything...
Kit Williams: Well, let me respond to one. They talked about a detailed list of estimated
project costs. And I guess the devil's in the details, when you say `detailed', how detailed do
you want to be. If I look on page 9, 1 see the real property assembly costs, I see our demolition
and site preparation costs to total up the initial $3.5 million that is supposed to be invested. If
you look on page 13, you see six streets listed that are supposed to be improved - each one of
those has an estimated cost figure for the improvement. Obviously, before you do engineering
work, it is impossible to get perfectly detailed plans. I think that the — this statute needs to be
read with some degree of reasonableness. How far are — would a City be required to go to make
their project plan before they even know whether or not the City Council's going to approve it
and there's going to be any tax increment financing to finance everything. I think what the State
legislature wanted to do is say don't just say you want money. You've got to tell the citizens
what are they going to do. What are you going to use this money for. Well, according to this
plan, we're going to use the money to buy four buildings, they have them all listed out, how
much it's going to be and then the rest can be fof demolition and site preparation, which includes
resolution of access issues, resolution of utilities as needed, water/sewer system upgrades as
required, layout and engineering, asbestos and other environmental remediation. So I think that,
depending on how this would be interpreted, I think that is a fairly detailed list and I think we've
met the statutory requirements. This is a new law, it's never been interpreted by the Supreme
Court, so how they will interpret detail if it's ever challenged - I wonder, but I also wonder if any
other cities have gone into any more detail than what we have.
John Nock: If I might add one thing, because that was a question that I guess was addressed
partly to us having been involved in this phase one of the project plan — and as you notice, it does
come into a tidy number of $3.5 million. We started this process looking at all of the public
aspects of the project for the TIF. None of the dollars that are used here will be spent on private
— on building of the private hotel, building of condominiums or even the parking deck. All of the
expenditures that will come through the TIF bond proceeds will go directly, as the statute
outlines, for public purpose. There is expenditure numbers that are — expenditures number
greater than $3.5 million that are for public purpose. But you can only service so much debt
based upon the size of the district and based upon the increment as found through the feasibility
study. So, could it have been larger? Certainly. But the reason why it's dropped to $3.5 million
is that is the most that it can.service in its early years, certainly in later years it will be much
more but that's being utilized for phase two of the project. Secondly, the other thing is that I
think the engineering issue is — is a good one. We already know from our preliminary estimates
that we're going to be in excess of $4.5 million from public purpose items. We also know that
we couldn't pay for it through the TIF and so we're paying that through the private development.
Kit Williams: The only other issue I think was brought up was parking. And, part of this
project is to build a large parking deck. That's not being done by the City buy by the private
developers, but there is a — how many car parking deck are you planning?
Special City Council Meeting
December 28, 2004
Page 20 of 27
John Nock: We are anticipating 350 parking spaces on the deck. And those will certainly be
available not only to the hotel user, but also to adjoining businesses and even those who will be
coming in for conventions and that type of things. Were there any other questions on that?
Mayor Coody: I think not. Thank you very much.
Phil Ralston: There were just a couple that he didn't answer yet. The project plan provides for
temporary replacement of twenty-five parking spaces. Whose parking spaces are we replacing?
And how are we doing that?
Mayor Coody: Do you have an answer for that, please.
John Nock: One of the aspects in the TIF legislation certainly allows for displacement of people
or businesses or I guess it could even go as far as parking. It certainly is in the statute and the
idea there is that during the construction phase, there may be in .fact people that are dislocated
that — keep in mind there are people that park in the parking deck of the current Mountain Inn
and the only way into that parking deck is underneath the existing Mountain Inn. Even before
we contemplated and finally decided on tearing down the existing parking structure, you would
have had no access point into the parking deck because the existing hotel would have been torn
down, there would have been no access into the parking deck. At that point we looked at it and
we said, okay what about the people that are running businesses — Taste of Thai, now the
Hoffbrau has opened back up, and other people that are barely hanging on at Center Street, how
do you allow them a place to park to where they're not run out of business during a twelve-
month construction period. And so our — the option there is to look at either fair market value of
parking, which is certainly in the area, City parking but those dollars will be generated out of the
TIF bond proceeds and could be — certainly if the City supplied the parking, it would be
reimbursable items. And if it came from private individuals, which the City could negotiate
under the project plan, then it also could be reimbursed through TIF proceeds as well.
Mayor Coody: Thank you.
Phil Ralston: The one last
item that wasn't
addressed, I guess, since it says
the project plan
shall include the type and amount of any other
revenues — are we to assume that
we're not going
to get any other revenues put
into this fund since it's not in the plan?
Mayor Coody: There will be a...
Kit Williams: It's actually in the ordinance. I guess they didn't put it in the plan because there
wasn't any other revenues they were anticipating putting in there. But one of the subsections of
the ordinance says, "no other funds are expected to be deposited into the special funds". So yes,
the City will not use other revenues to go into the project plan.
Phil Ralston: So when they buy this property from us, where does that money go? Or are they
not going to buy this property from us?
Kit Williams: No, they're going to agree to purchase this property from us for $300,000 and the
proceeds of that should be used within the TIF district, probably for sidewalk enhancement and
streetscape.
Special City Council Meeting
December 28, 2004
Page 21 of 27
Phil Ralston: But won't that have to go into the fund? That's what I'm saying. That's part of
the plan is to get money for selling this property to them and it needs to show that it's going in
there somewhere. And we need to know the amount. You've said $300,000, which is quite a
deal for them, I think, but it's not in the plan.
Mayor Coody: Thank you very much.
Jill Nock: Do I need to state my name?
Mayor Coody: Yes, please.
Jill Nock: My name's Jill Nock. I'm married to the gel -haired city slicker that everybody talks
so much about. My only intention tonight is to try to talk on some of the fears that people have
and I would just like them to know about my husband. I challenge you to find a man with more
integrity and a better father and a better husband. We chose to live in Fayetteville. We would
never do anything that would other than benefit the City of Fayetteville. We care about the
environment. We care about our friends. We care about our child's school. We chose to send
him to public school and I just — I think that — I understand the fear that people have with
builders and developers and people in the financial world, because we've seen both sides of it.
And I just would like for you to know, from my perspective and my point of view that I
challenge you to find a man like my husband. He is — he is a man of integrity. That's all I have
to say.
Mayor Coody: Thanks, Jill. Congratulations on the new addition to your family. Anyone else
have anything to add?
Kit Williams: Mr. Mayor, I didn't author this plan. This plan was created primarily by Hugh
Earnest and the two developers. But I will note on page 10, it says upon the completion ....fair
market value of about $219,000. Since then the developers and I have agreed that they would
increase that amount to $300,000. There will be a contract before the City Council for that
amount.
Mayor Coody: Thanks, Kit, for that clarification. Anyone else have any questions or
comments for us tonight? All right, we'll move along to the D in New Business, which is the
Highway 71 East Square Redevelopment Project Plan adoption.
C. <New Business:
1. Highway 71 East Square Redevelopment District Project Plan Adoption: An
ordinance adopting the Project Plan for the Highway 71 East Square Redevelopment District,
finding the Plan is economically feasible, repealing Ordinance 4646 and declaring an emergency.
Kit Williams read the ordinance.
Mayor Coody: All right, I'll entertain a motion and second to suspend the rules and go to the
second reading.
Alderman Rhoads moved to suspend the rules and go to the second reading. Alderman
Odom seconded the motion. Upon roll call the motion passed unanimously.
Special City Council Meeting
December 28, 2004
Page 22 of 27
Kit Williams read the ordinance.
Alderman Cook: Mayor, can I ask a couple of questions, please?
Mayor Coody: Sure
Alderman Cook: That I didn't get a chance to ask earlier because I was thinking about
something else. John, could I ask you a question about your numbers, please? A lot of the
assumptions in here are on an occupancy rate of let's just say above 60%. And the going rates —
and I know this data is dated, but most of the going rates are in — around 51%. And I'm curious
what made that leap from 51 to in the 60's.
John Nock: I don't know where you reference 51 — it may be from the dated feasibility study...
Alderman Cook: In the two different studies that were in here for the...
John Nock: Yeah. I know that there was an updated study that was done and it was here
recently — I want to say it was early spring of this year when the newspapers came out and did a
survey of all the hotels. And this was after the new hotel, the Embassy Suites, was built — John
Q. Hammons' hotel had been opened up. And the interesting part of that story is that they were
at 75% occupancy because of the type of establishment that it was. Even the Clarion, if I recall
correctly, there was some discussions about how he had had his best years back, I want to say in
either '98 or '99, when it was still hovering in that 65 to 70% camp. This study, I can't speak for
the professionals on why they came back with those numbers, but my memory was or is that it
was based upon the type of product that is not being served currently in the Fayetteville market.
I think — I think all of you for a minute, if something happened at your home and you had to go
and stay at a hotel for your family, where would you go? And that recently happened to us.
About two weeks ago we were doing some construction at our house and decided it was best to
be outside of the house and we started looking at what Fayetteville had to offer. And it is really
interesting. It was an eye-opener for me. Here I am working on a project and I started thinking
about it because I never had to hotel need here before. So those numbers were based upon
someone from the outside looking in. IHA is one of the leading international hospitality
advisers. I'm sorry, they're one of the leading feasibility experts and their numbers were — as I
recall right after 9/11 or within six months thereafter, when there was a tremendous drop in
hospitality revenues and occupancy rates across the country, in fact some areas of the country in
the coastal region were in the 30 to 40% at that point in time. And so I believe they looked at it,
first of all — twelve to fifteen month construction period, and they also looked at the type of
market this was going to be serving and based it also upon what was currently existing in the
downtown area and what choice that would give.
Alderman Cook: Okay. So this — this list right here — the analysis, did you guys come up with
this one or is this - the analysis of potential taxes generated...
John Nock: Yes.
Alderman Cook: You guys did this one.
John Nock: That's
correct. And
we passed a copy on to Steve
Davis. And I think there's
a
disclaimer on there
that certainly should be reviewed and
looked
at — I don't know if during
the
holidays if Steve was
able to look
at it or not, but this is
simply
based upon our projections
on
Special City Council Meeting
December 28, 2004
Page 23 of 27
the pro forma and then just taking the straight, across the board sales taxes and HMR taxes that
would be generated under any other scenario. So we took our same numbers and applied it to
this.
Alderman Cook: So that's - like the room taxes, that's based on the occupancy rate of — from
of those other studies? Or you used...
John Nock: Yes. It's based upon — basically we too our pro forma, which came to us through
the feasibility study and then just applied to it straight across the board the tax rates that we have
here in the City of Fayetteville for both food and beverage, room tax and additional to that, the
HMR tax.
Alderman Cook: Okay. Do you have all the necessary funding in place right now to do this
project?
John Nock: Yes. We have recently just supplied to the City an update on that — I ....that was
dated December 21. The actual hotel portion — and I can't hardly express enough how difficult
the hotel portion is compared to basically everything else. There's such a demand for parking
and the condominium — I wish Richard was here to talk about their success stories, he and his
partners on condominium projects in the hotel market. And so those were never really the
concerns. The concern was a hotel first and foremost in the downtown area. It's much easier to
get financing for something along Interstate 540. Trust me on that because of just the traffic
flows. And so we were working about a — for a two year process securing through the new
market tax program, which is a Federal tax program whereby both banks or private investors
invest in a project such as this — the hotel portion of it. And for so doing, there are Federal tax
credits for this type of project, that has nothing to do with it being a blighted project, it has
nothing to do with anything other than it's a new market, it fits a demographic and this project
was deemed through these third party reviews that it would not only be successful but it would
be a prime candidate for this. And so we received for that enough sufficiently to build the hotel
portion of it, which we have addressed a letter from Heartland Renaissance Fund with their
commitment for that and also the Bank of Fayetteville's involvement in that, which we greatly
appreciate their involvement on the local level. In addition to that, we have all the remaining
financing, some of that is obviously subject to what is approved here tonight, because certainly
they are anxious and were very anxious the day that it came out in the newspaper that what we
thought was an ordinance ended up being in question. And uh, but regardless of that, assuming
that gets done, all the financing is there, including additional equity for any cost overruns that
may occur. So we have three different components — we have the tax credits which come in -
this is irrespective of the TIF proceeds - we have the tax credits which come in for the hotel
portion of the project, and secondly we have the private equity and we have a secondary loan
which goes on just the condo portion of that. Let me explain why that is. I've put that in the
letter but since a lot of people from the public are not aware of that, this Federal new market tax
program does not allow for the prepayment of principle during a seven year period because they
want it to be an economic success that we just don't build it and walk away from it. So we're tied
to it. We can't transfer it, we can't do lots of things for that seven year period. So obviously the
nature of doing condominiums does not work that way. If you sell condos to people, they
immediately want collateral for what they pay for it. And so we have a secondary source of debt
financing for that project. But that one, as I mentioned before, was the easiest portion of them
all.
Special City Council Meeting
December 28.2004
Page 24 of 27
Alderman Cook: And — I don't know if you can answer this — Kit, somebody, I'm — and I
believe when you say you have the financing together, but just worst case scenario — the
financing fell through. What would happen if we approve this plan, worst case scenario their
financing fell through.
Kit Williams: According to Crews and Associates, when they did their evaluation of it as they
reported to you the night that we approved the project plan, their evaluation included not the
improved valuation of this project, nor the improved valuation of the Terminella project which is
currently under construction on Spring Street, nor the old library becoming private and
generating tax revenue. So even without this project being built, without the Terminella project,
which is currently being built, and without the library, we are still supposed to easily finance the
bonds, the $3.5 million bonds that we're talking about issuing. So if this, we will have an
agreement with these developers a concerning if — to require them ,to build the project :and — and
with conditions of what will happen if the project is not built within a certain period of time or
some major project, so that I think that we can be assured that if we go forward with this $3.5
million bond issue that there's going to be something besides a hole in the ground there.
Alderman Cook: Well, I mean, I guess my comment is if it did fall through and they can't build
it — they can't build it no matter what our agreement says. So, I mean what happens to that
property then, is my question. Because, technically we're assembling the property and then
we're selling it to them. So does that mean it's the City's property? Does that mean it's the
district's property?
Kit Williams: It will be — it will be the City's property even if it's bought with TIF district
funds. And so we are going to own it and then we will sell it to them. But we'll sell it to them
on the condition that they do this and if they fail to do the project, then the property would have
to return to us and of course we would then look for some other developer, I think. But it's much
better to have one that already has a project plan in hand and substantial financing.
John Nock: And, Kyle, if I could add just a couple of points. The feasibility study done by the
University Economic Research Department outlined in there a $35 million available yield. That
is not in the present value because you would not net present value on a bond issue because
certainly a bond issue is already assuming the annual cash flows. So, that's a $35 million but it's
important to point out, and I'm sure the feasibility expert would — would also talk about what is
in the study — that it does not include, as you said, these three properties. I know that Mr.
Terminella is already in the midst of doing his construction. I can tell you that the financing not
only is in place but we have also begun the gutting, the demolition of the interior of the library
building and we anticipate a ten to twelve month construction period on the inside of that project.
I can also tell you that based upon preliminary appraisals, that building, once it's all complete —
we're putting in a substantial amount of reinvestment dollars and that should be appraising
somewhere around $4.5 million for the library building once it's completely redeveloped. I
don't know the exact number for Mr. Terminella's project but I've been told it's somewhere in
the $4 million camp. So assuming that, that's another $9 million and change, we also know that
this hotel itself, just alone, is $22 million. It actually has gone up because keep in mind we have
increased the parking deck from its current capacity of about 85 spaces to now 350. That means
that we have incurred more project costs, which are also in that financing package; as well as we
have increased the value of the total project. So, what we did is we took some very simple
numbers. We used the same growth factors that the feasibility study said and we also put those
other three projects in there. And it's interesting to note, and I'll be glad to provide you with this
information, simply a calculation in an Excel spreadsheet, it increases the available yield over the
Special City Council Meeting
December 28, 2004
Page 25 of 27
twenty-five year period from $35,466,000 to $52,849,000. And so those three projects have a
tremendous impact upon the numbers. They certainly do. Now one could certainly make the
case that the millage that's collected could drop - not the mils but the actual collection from the
mils - could drop. You have not seen that happen in the last several years. In fact, if I
understand correctly, Amendment 79 puts us actually at a cap and because of that we have a
residual every year because they only look back every three years. Not to get a long complicated
story out of that. We currently have a surplus in this project and in the TIF district for three
years because we're — by statute cannot do more than 5% on residential and 10% on commercial.
So therefore that 9.9, although it might seem large, every time you have a major impact like a
$22 million project, it caps you out and that means you have a surplus for several years to come
unless they change the Arkansas Constitution, which I haven't heard any rumblings of that yet.
So, it may seem like it would be a hard number to reach, but we never really catch up in the State
of Arkansas because of the way our tax model is.
Alderman Cook: One more question and I'll quit. And I've had citizens ask me this also. If
we're going to put up $3.5 million initially, bond issue, at what year would that bond issue be
paid off, based on your projections?
John Nock: Let me just — I think this might help. The State statute says that it may not go
beyond 25 years for a TIF, therefore you don't structure the debt longer than the life of the
district. The only reason that debt would ever go beyond that is if there was a problem and you
had to extend out the life. How quickly you pay it off is less of a factor of retiring the existing
debt that would be on the Mountain Inn, the $3.5 million, as much as it a factor of debt service
coverage. Typically in economic circles, financial circles, they use a 125. So that means for
every dollar that you would be paying for this bond you usually have to have a test of $1.25.
Once that's met additional bonds can be issued. Now your financial advisor would be best to
advise you but that's usually what they look at. And so once you've met an additional bonds
capacity test, then you don't have to wait for the whole issue to be retired, but you are able to
issue parity bonds for additional projects based upon additional revenues being generated. So
it's not an all or nothing scenario. You don't have to wait ten years, twelve years, four years,
whatever the time would be, you have to simply wait until there's enough coverage to justify —
and at a conservative ratio because you wouldn't want to just do it the first year, you want to
make sure that you have — in fact most bond parity tests usually call for two year consecutive or
three year consecutive reviews. And so it gives you enough time to make sure that it is not just a
blip and then it falls back down and then you end up having a problem doing a phase two or
phase three or phase four, whatever the time would allow.
F
Alderman Cook: I'm following you. So basically, you're
saying, you're
going to
finance that
$3.5 million for 25 years and then as your revenue or your
increments
start getting
bigger then
you can think about financing other projects within that time
frame.
John Nock: That's correct. And it also depends very greatly on how you finance the project. If
you use typical financing plans, you're going to have principle and interest every year. You can
set it up under different programs or do different things but I think the way your advisor
mentioned the other night, they'are most comfortable in saying — and correct me if I'm wrong,
Kit — that the project for the 3.5 was, they were certain, quite certain they wanted to see — some
time to see these expenditures come on and for them to generate additional taxes. Remember the
whole nature of a TIF is that it is supposed to generate your money. Otherwise you should not
do it. That article that was talked about earlier, the author of that article in the Little Rock paper
said it would take eons for the Mountain Inn to pay for itself. Actually, eons is only three years
Special City Council Meeting
December 28, 2004
Page 26 of 27
in this case because that's the time that you look back, remember the City — we have to build it,
then the County, not the City, the County has to then reassess the property from its blighted
condition to its now built condition and that takes three years. At that point in time the project
will be valued at least the $22 million that we've talked about, which should generate somewhere
around $200,000 in new taxes. It currently is paying $5,000 in taxes in its current state, so it's a
$195,000 increase. That services a great deal of bonds.
Kit Williams: But how long it would last is also up to future councils. They can choose to,
once the bonds are paid off, not issue any more bonds and end the TIF district if that is their
choice or they can choose to issue new bonds if the debt service will allow .it. It is capped at
twenty-five years, but it is not required to be open for twenty-five years. It's really — the ball's in
the City Council's chamber. It's you all's decision and your successors, a decision on how long
you want to go forward with the TIF district.
Mayor Coody: Does that answer all your questions, Kyle?
Alderman Cook: Yep. Thank you.
Mayor Coody: Brenda.
Alderman
Thiel:
Well,
you've brought
up a
good point.
So, in other words, the twenty-five
years is not
necess...I
mean that does not
have
to be the life
of this.
Kit Williams: That's the maximum life.
Alderman Thiel: That's the maximum life of it. That's a — that's a good point. Okay.
Mayor Coody: We could — from what I understand we could pay off the $3.5 million as soon as
possible and dissolve the district at that point essentially or we could borrow other low interest
money to do the other infrastructure work we talked about, streetscapes, lighting, tree planting,
sidewalks...
Alderman Jordan: In other words we would go to phase two then — or not.
Mayor Coody: Phase two. Yeah.
John Nock: And the interesting thing is that, obviously because of the nature of incremental
growth, all of your dollars generated are in the later years. So, you're going to get much larger
benefits in years twenty than you are in years five.
Mayor Coody: Any other questions? Any other comments on this particular item? I would
entertain a motion to suspend the rules and go to the third and final reading.
Alderman Rhoads moved to suspend the rules and go to the third and final reading.
Alderman Marr seconded the motion. Upon role call the motion passed unanimously.
Kit Williams read the ordinance.
Mayor Coody: All right any other questions or comments? Yes, sir.
Special City Council Meeting
December 28, 2004
Page 27 of 27
Alderman Marr:
I just have one question. Do
we have
everything at this point that we're
suppose to have in
order to move forward with this
project?
Proper notice, all the items from the
developer from the
City staffs perspective, is there
anything
else that we're waiting on?
Kit Williams: Not that I know of.
Alderman Marr: Steve, is there anything else that we're waiting on?
Steve Davis: I believe we have everything we need at this point.
Alderman Marr: Thank you.
Mayor Coody asked shall the ordinance pass. Upon roll call, the ordinance passed
unanimously.
Mayor Coody: I would entertain a motion to approve the emergency clause.
Alderman Jordan moved to approve the emergency clause. Alderman Reynolds seconded
the motion. Upon roll call the motion passed unanimously.
Mayor Coody: All right. Thank you all very much. We will conclude the public hearing and
thank you, Conrad, for your service.
Meeting Adjourned at 7:15 PM.
Sondra Smith, City Clerk
Dan Coody, Mayor
Special City Council Meeting Minutes
January 25, 2005
Page I of 45
Aldermen
Mayor Dan Coody
City Attorney Kit Williams
City Clerk Sondra Smith
Special City Council
Meeting Minutes
January 25, 2005
Ward I Position I - Robert Reynolds
Ward I Position 2 - Brenda Thiel
Ward 2 Position I - Kyle B. Cook
Ward 2 Position 2- Don Marr
Ward 3 Position I - Robert K. Rhoads
Ward 3 Position 2 —Bobby Ferrell
Ward 4 Position I - Shirley Lucas
Ward 4 Position 2 - Lioneld Jordan
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)
accessfayettevil le. org
Special City Council Meeting Minutes
January 25, 2005
Page 2 of 45
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 t] e.org
Special City Council Meeting Minutes
January 25, 2005
Page 3 of 45
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 alone just 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. 1 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 45
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, I
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 Wesl Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayetteviIle_org
Special City Council Meeting Minutes
January 25, 2005
Page 5 of 45
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 I1, 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)
accessfayettcvi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 6 of 45
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 1 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 45
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'11 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)
accessfayettev i l l e.org
Special City Council Meeting Minutes
January 25, 2005
Page 8 or45
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)
accessfayettevi Ile.org
Special City Council Meeting Minutes
January 25, 2005
Page 90145
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, 1 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.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevillc.org
Special City Council Meeting Minutes
January 25, 2005
Pagc 10 of 45
Dr. Collins: I apologize I didn't know my vocabulary was confusing.
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 Inn. 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.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayette\ilie, org
Special City Council Meeting Minutes
January 25, 2005
Page II of 45
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?
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 tom 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 I1e.org
Special City Council Meeting Minutes
January 25, 2005
Page 12 of45
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 Mayor just 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)
accessfayettcvi I I c. org
Special City Council Meeting Minutes
January 25, 2005
Page 13 of 45
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) 521-7700 (479) 575-8257 (Fax)
accessfayettevi Ile.org
Special City Council Meeting Minutes
January 25, 2005
Page 14 of45
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] 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 .1 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) 52]-7700 (479) 575-8257 (Fax)
accessfayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page IS or45
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 facade. 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)
accessfayettevi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 16 of 45
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.
1 want to I guess address the two issues tonight one is the boundary.
suggested now is exactly what's listed in our Downtown Master Plan that
up with. I guess I'm confused why anyone would have a problem with
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?
The boundary that is
the community came
these boundaries. Is
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. Fm 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)
accessfayettevi I I e.org
Special City Council Meeting Minutes
January 25, 2005
Page 17 of 45
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)
accessfayettcvi I Ic.org
Special City Council MeetingMinutes
inutes
January 25, 2005
Page ]S 01 45
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. 1 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 (Fax)
accessfayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 19 of 45
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: 0 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)
accessfavetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 20 of 45
Fayetteville was still here they would step forward and they would agree to fund those. That
funding has to take place within twelve months. So we have to develop the plans, commit the
money, get the firm commitments on the rest of the stuff, we started this three, four, five months
ago. I thought the last time we passed it the second time 8 to nothing we were done and we were
firming up our commitments and of course the Attorney General's opinion threw that on hold.
The plan is the same; it's the Mountain Inn plan. The only thing we're asking you to do here is
to expand the district to make the reduced millage that we're left with sufficient to fund at least
some of that original plan with the developers going out and finding additional investors to take
up the slack. We're only talking about funding that part of the plan that is with that millage that
is largely not in dispute as I understand it.
The consequence of not doing it tonight means that our contracts expire. We will be having a
conversation with the Bank of Fayetteville first thing in the morning. So far they've been very
gracious in staying in place and not panicking about their rather precarious position at this point.
Because there's a significant fee that the bank will incur by way of funding the new market tax
credits. That's a real issue for them and from our prospective it's absolutely imperative that we
get an answer tonight. If we don't its going to be difficult to hold all of the pieces in place that's
taken three years to put in place.
The real question here is with respect to the expansion of the district boundaries, I've been
studying TIF now for probably longer than I wanted to. There is no down side to being in a TIF
district. There's no down side whatsoever. There is a down side in being outside the TIF district
in that should money become available to spend on subsequent projects that money may not be
spent on property outside the district. Only property in the district can have money spent on it.
So for instance, if a project is lighting trails, sidewalks or parking decks, you may not spend
those monies on properties outside the district. You can spend right up to the district boundary.
From my prospective I don't see the down side to being in a district, there's no additional tax but
there is a down side to not being in the district. Again it is difficult for me to articulate why
somebody wouldn't want to be in the district there is no tax and no down side to it. This is a
twenty-two million, twenty-four million dollar project. I think we've shown the Council and
shared with the Council estimates of revenues to be generated by this project are anywhere from
thirty-five to forty million dollars. Whatever the investment is in the tax, by way of the tax
increment financing, whether that's two million or three million or three and half million the
return on that investment is ten plus fold in terms of revenues generated and that's in tax
revenues generated. That's in addition to the revenues, the jobs and the increased property
values for the properties adjacent to this.
The alternative to losing this project is the various scenarios, condemnation, whatever. Those
are all alternatives, Kit has outlined them. The down side to that is that it will take years. The
drag on those properties adjacent to this project will continue. If you'd look at this project, the
Mountain Inn itself, I think I've seen estimates of approximately 100,000 square feet of hotel and
commercial space that's been abandoned and blighted for years. In addition to that there is at
least another one hundred to hundred and fifty thousand abandoned or under -rented, under-
utilized space adjacent to the project. All you have to do is walk around down there and you can
see the store fronts that are closed. The properties that are vacant are generating no revenue,
they're generating no tax revenue, they're generating nothing.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayet t evi lie. org
special City Council Meeting Minutes
January 25, 2005
Page21 of45
If the concern is the schools, the schools aren't making any money off this project. The schools
will make more money when this project is complete by virtue of the increase in that portion that
they'll get to keep. I think its two hundred thousand a year, nine hundred thousand before the
Attorney General's opinion. How much a year, one hundred thousand before the Attorney
General's opinion, two hundred thousand now. The schools or the State of Arkansas wherever
that money ends up, there will be an increase in that revenue between one hundred thousand and
two hundred just on the project, and that's not counting the increase on the revenues that will be
generated for property taxes and sales taxes on the properties around it.
Again, this is very time sensitive and I know it's not your fault. We appreciate your support
before. You passed it 8 to 0 twice and we're very grateful. We were thrown a curve ball.
We've worked for the last while with city staff and Kit to try to find a way that's legal,
conservative and doesn't try to plow any new ground but really tries to accomplish what we
thought we were doing before. Again with respect to the project it's the same project, it's just
less millage. The expansion of the district makes up some of that not all of it.
Personally after spending three years on it we just weren't ready to throw the towel in but there
comes a point that we can't just keep holding everybody off indefinitely. We'd sure like to try to
make it work out and we're trying to figure out ways to take on the difference between what the
expanded district can generate and what will be available. So thank you very much.
Mayor Coody:
Please don't forget to sign
in Richard. Do we
have any questions for Mr.
Alexander? Who
else would like to address us
on this issue? Hello
Jeff.
Jeff Erf: Quick question which came to mind when Kit Williams was responding to Cyrus
Young. I thought I would try to ask the question and maybe you can clarify something for me.
Let's say hypothetically the citizens of Fayetteville voted to increase the library millage a couple
of percent, a couple mils. Would all of that tax revenue that was collected based on that millage
go to the library or would any of that be redistributed or directed to the TIF District?
Kit Williams: My understanding is that the base value of the property would still apply and so
the new millage would be applied to the based value within the TIF District. The increment
would then go to the TIF District with the based value continuing to go to the library and then
everywhere outside the TIF District would get the full amount of the millage including the
increment.
Jeff Erf: Alright so the properties that were on the inside of the TIF District the tax revenue
there that was collected from the increment would not be going to the library.
Kit Williams: The increment of all the millage of local taxing entities except the indebtedness
to the schools, would in fact go to the TIF District. The increment, not the actual millage itself,
the base value millage would still go to the taxing entities.
Jeff Erf: Thank you very much.
Mayor Coody: Mr. Wright
was that a
fair assessment?
Okay. Thank you. Are there questions
or comments from anyone?
I'm going
to close the public
hearing on this session.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accesstayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 22 of45
Mayor Coody closed the Public Hearing
New Business:
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:
Although I do think
it might not or
might be appropriate to have either now or
later, when we
are talking about the
project plan, to
have Mr. Wright and Mr. Wilbourn address
us.
Mayor Coody: Alright, what question do we have for anyone? This is for the City Council
now.
Kit Williams: This is back really to the ordinance for the boundaries.
Mayor Coody: Yes, ma'am.
Alderman Thiel: I understand that there is an urgency to pass this and I certainly support the
project plan. As I said I am concerned about a very small portion of the extended boundary and
only because those people have contacted us. They weren't notified of this. They did have
concerns and I would not be supportive of passing the portion that includes their property. Is
there anyway I can amend this to exclude a very small portion and I will try to define it.
Mayor Coody: Certainly.
Alderman Thiel: Although it actually does not follow streets.
Kit Williams: It is your determination as a City Council to determine the appropriate
boundaries.
Alderman Thiel: Okay. Everyone follow with me here. Locate Putman Street down in the left
comer there, actually it's Rock Street. It's Putman on the left-hand side and Rock on the
eastside. Okay if you'll follow Putman and take it across Gregg Avenue.
Alderman Lucas: Which map are you looking at?
Alderman Thiel: I'm booking at the TIF District map. Putman is lined up with Rock Street
okay. Okay follow Rock Street over.
Alderman Thiel: If we take Putman from the west boundary of the district over and extend an
imaginary line crossing Gregg Avenue to approximately where our new trail is or let's just say
the creek, follow the creek down which is kind of along Gregg Avenue south of Prairie.
Kit Williams: All the way down to Prairie.
113 \Vest Mountain 72701 (479) 521-7700 (479) 575-8257 (FaN)
access favettevil le.org
special City Council Meeting Minutes
January 25, 2005
Page 23 of 45
Alderman Thiel: That it all way down to Prairie where it would run into Gregg Avenue that
runs into Prairie. Those will be straight lines that would be a straight rectangle and exclude that
area.
Mayor Coody: How many is that?
Alderman Lucas: From Prairie you're going all the way down to Gregg Avenue.
Alderman Thiel: Go west on Prairie, back up Gregg, follow the boundary of the current TIF.
So all you're excluding is Putman over from the west TIF line then follow Putman over to Lee
Creek, go straight south to Prairie, follow Prairie back over to Gregg and then back up and just
follow the TIF line.
Kit Williams: I don't think that would probably change any of the economic liability.
Alderman Thiel: I don't think so.
Kit Williams: Because there's probably a fairly small amount of property value in there.
Alderman Thiel: But there is a group of people there that have formed and are very concerned
about this. They might not be opposed to it but if we pass this tonight which I am not opposed to
doing I would feel .1 could not support passing this tonight without excluding this because they're
not aware of it.
Alderman Rhoads; Brenda, I don't mean to meddle in your ward but I'm wondering might
there also be people in that little area that you carved out or proposing to potentially carve out
that might feel total the contrary and want to be in it.
Alderman Thiel: There might be but they're not here and they don't know about this. The
people we've heard from are concerned. I'm not saying that they might not support it. They
haven't had the opportunity, if we're going to pass this tonight, which I'm not opposed to doing
because I understand the urgency. Now if we want to table this and discuss this a little later, we
can forget this.
Alderman Rhoads: I'm trying to understand why people would have contacted you, this group
of people that have contacted you, why did they not want to be in the TIF District?
Alderman Reynolds: Well it's a very low income area they don't want to be included in this
Alderman Rhoads: Why? Did they say.
Alderman Thiel: Let me also add that I don't know if they wanted to be part of this meeting.
They were not notified of this meeting.
Alderman Jordan: I think that's the point.
Alderman Thiel: That's the point Robert.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayetteville. org
Special City Council Meeting Minutes
January 25, 2005
Page 24 of45
Alderman Rhoads: I thought the meeting had a 10 to 12 to 14 days notification.
Alderman Thiel: Of this new boundary?
Kit Williams: The notification was for the amendment to the project plan. There has been
extensive media coverage talking about what the various options were. There was not .a specific
notification about the change in the boundary because one is not required in the ordinance or in
the statute.
Alderman Thiel: Right.
Mayor Coody: How many people total have contacted you about this?
Alderman Thiel: Probably about five or six.
Mayor Coody: Okay.
Alderman Thiel: There's only about five or six houses in this area.
Kit Williams: I think this would be an insufficient change on the boundary and would not make
any difference at all in the economic viability of the plan. I'd like to ask Jeff Collins if he wants
to comment on that. I have my map drawn out; it's this one little section down here along Gregg
Street.
Dr. Jeff Collins: Go to page 18. I want you to look at the difference between where it says the
East Square, plus you can actually take any of these that you want the difference between the
base line scenario and the bottom line scenario is three major projects it's million's of dollars.
You've already heard how many millions of dollars. Look at the difference in the yield under
those scenarios. We're talking about huge millions of dollars worth of projects. Under the most
aggressive scenario which is the east square, if you combine the two TIF Districts and use the
7.66 mils you're only talking about a 3 million dollar difference on a base of twenty-seven
million five hundred thousand. We're talking about the Terminella Project which is 2.5 or
something like that and the Mountain Inn which is twenty-two million, to give you an idea of
relative scales; this little piece that you're talking about is inconsequential.
Alderman Thiel: Okay.
Mayor Coody: Any other questions for Dr. Collins? Alright.
Kit Williams: Is that a motion?
Mayor Coody: Is that a motion to amend?
Alderman Thiel: Yeah, I'm making that motion to amend and there may be some people here
that live within that district, I don't know, or in that area. But yes I'm making a motion to amend
to remove that area.
113 West Mountain 7270] (479) 521-7700 (479) 575-8257 (Fax)
accessfayctteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 25 of 45
Mayor Coody: Okay let me ask you this. In this part you carved out here, I'm sure it's very
convenient drawn the way that it is, are these four or five people are they clustered together or
are they spread throughout that district that you carved out?
Alderman Thiel:
I think they are kind
of spread out
actually. I think some of them are to the
north of that. One
was very vocal at the
last meeting.
Mayor Coody: Okay. Alright so you're making that motion to amend.
Alderman Thiel: Yes.
Mayor Coody: Is there a second?
Alderman Reynolds: Yes.
Alderman Thiel moved to amend the Project Plan Boundary. Alderman Reynolds
seconded the motion.
Mayor Coody: We have a motion and a second to amend the master plan area to exclude the
boundary previously described.
Kit Williams: This is amending the Exhibit A to that ordinance.
Mayor Coody: Is there any other further discussion on this amendment.
Alderman Rhoads: Yeah, I've got discussion. I'm desirous if this will help move the process
along then I'm very much desirous to seeing that happen. However I'm trying to walk in the
shoes of the twenty-five other houses that are in this other little carve out. Kit I don't want to be
inventing something that may never happen but have those twenty-five other folks lost any sort
of right by being carved out when at one time they were in.
Kit Williams: Actually I don't think so. One of the projects that is proposed in the amended
plan and was also proposed in the downtown plan was the extension of the trail which runs very
close to these houses but is on the other side of the creek. I don't think that they would actually
lose anything and in fact the statute does allow work even outside the district. We're not
proposing any of that but the statute does allow that under one of the provisions. No, I don't
think they're losing any rights.
Alderman Rhoads: Thank you.
Mayor Coody: Alright, anyone from the public want to comment on this amendment? I'm
going to close it to public comment and bring it back to the City Council. Oh there is somebody.
How are you Jill?
Jill Anthes: Jill Anthes, 610 North Olive Avenue. I just wanted to comment that the part of the
plan we're talking about excluding seems to be one of the most underserved parts in the district
and in that area if there's money left over after the increment it might best be served by
improvements. Also it is part of the Downtown Master Plan area that might be the most
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessf ayettevi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 26 of 45
available to artist and for the culture arts district initiative. I'd urge you to think about leaving it
within the boundary. Thanks.
Mayor Coody: Thank you. One of the things about this, for anybody that is viewing at home
that might be confused about how this TIF District works. If somebody in a particular area is in
the TIF District they see no additional expenses. They will see no extra money going out of their
billfold or purse. They will see no additional expenses. What they would see is a portion of
what they already paid being plowed back into their neighborhood and into the district that is not
currently plowed into that district.
Jill I think your comments were right. I think that it would be an area that might benefit actually
from being in the TIF area. But there are folks who don't have that same perception.
Alderman Cook: Mayor.
Mayor Coody: Yes sir.
Alderman Cook: Can I comment on that. I think those neighbors their problem is they don't
feel like they are going to see any benefit from that. 1 think Mr. Robson made his point clear
saying that I'm not going to see a new sidewalk, I'm not going to see street improvements in
front of me, all I'm going to see is this Mountain Inn that's going to get fixed and what's that
going to do for me directly. I think that's what their problem is with it. The ones that I've talked
to there besides him. I think they have a valid point in some ways but does that mean that we
should scuttle this. I don't know. I would not say that necessarily but I think a lot of people feel
that way though.
Mayor Coody: Well my thinking is that and I want to rebut that, is that it's no cost to them.
Not an extra additional cost or a penny to them. I think that all they see is to rebuilt Mountain
Inn is plenty worth it right there to see the whole downtown of Fayetteville. I don't feel like I
should just focus my prospective on just my number of square of feet that I live on, we all are a
community and we do have to look out for what's best for Fayetteville. Although I know the
amendment is going to pass, I do feel like that we do have to look at the city as a whole and look
at the opportunity to rebuild the Mountain Inn, an eye sore and a liability into something that's
really attractive and worthwhile is something worthy for all of us to get behind.
Alderman Cook: I don't think there's any argument against that. I mean what they are worried
about is in some way if their tax money is going to be going towards this Mountain Inn and that
they're not going to see the benefit, where otherwise if it did go to other tax entities they might
see that benefit at some point in the future. But they think that they're not going to see the
benefit that's all.
Alderman Thiel: Whenever we discussed the original TIF area, I said that if after I talked to
constituents that were concerned about the area south of Archibald Yell, after I explained the
things that you just said and the things that Robert has said, I think we all agree that being in a
TIF is a good thing, if they still wanted out of it then we would amend that. We didn't do that.
What I'm saying tonight is that the idea is to go ahead and pass this new additional area that's
not really been publicly discussed other then right now, and there's an urgency to do that I'm
supportive of that, if we were to leave this area in so that we do have a chance and opportunity to
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 27 of 45
discuss it with the people that live in that area further. I would be supportive of just holding this
off until we have that opportunity. I'm not saying that I disagree with what you're saying. I
think you're right. I don't think that we've had the opportunity to get that point across. Let me
put it that way, very bluntly.
Mayor Coody: You're exactly right.
Alderman Thiel: Because we are trying to pass this that's the only reason I'm trying to exclude
this. I'm not saying that they will not benefit from it.
Mayor Coody: I understand. I understand that entirely.
Alderman Thiel: Okay.
Mayor Coody: Alright, any other questions or comments? Yes, sir.
Alderman Rhoads: One last comment. I'm really struggling with this issue because I'm very
desirous of hopefully we'll be able to vote and get this whole TIF project moved forward.
However, Ms. Anthes' comment is kind of weighing on me because I'm definitely in favor of
having a very large culture district and having places for starving artists to be able to live and
what have you. But what I think I also heard is that there's even the ability to do, let me take it
one step further, I'm hoping that the Supreme Court will rule against what the Attorney General
has proclaimed and therefore there'll be Phase II and Phase. III in this TIF and there'll be money
for something besides the Mountain Inn. I'm hopeful that will happen, if that does happen then
people may see sidewalks, they may see lighting, they may see trails in all parts of this area. So
that's why I don't want to really exclude anything. Hearing that there's a possibility that other
things or benefits from the TIF money can go to things right outside of the district then I think
I'm for it. If that's a true statement.
Kit Williams: Well the statute says, "each project plan shall include: 1) a statement listing the
kind, number of locations of all proposed public works or improvements within the district, or to
the extent provided outside the district." So I think we have authority.
Mayor Coody: Alright. So we have a motion and a second to amendment this map to exclude
the area.
Alderman
Thiel:
Mayor. Can
I ask just one quick
question.
Haven't
you told us
all along Kit
that we can
amend
the areas at a
future date,
not the areas only
the plan.
The project
plan.
Kit Williams: No, you can amend both. It says in the statute that the boundaries of the
redevelopment district maybe modified from time to time by ordinance of the local government.
That doesn't even require a special notice. Now if you're doing what you're proposing tonight
and modifying a project plan that requires a 15 day notice, two publications in the newspaper,
even more notice then to establish it. So both of those can be amended from time to time if
that's the City Council's desire.
Alderman Thiel: So this amendment could be, we could add this back later.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 28 of 45
Mayor Coody: That's an option. I don't think it would ever happen but it is an option.
Alderman Rhoads: Good questions Brenda. Thank you.
Mayor Coody: Alright, we have a motion and a second is there any other discussion on this
item on the amendment? Hearing none shall the amendment pass?
Upon roll call the amendment
to
the Highway
71 East Square Redevelopment District No. 1
Project Plan Boundary passed
7-0.
Alderman
Marr was absent.
Mayor Coody: Thank you very much the amendment passes. Now then we will go to the
ordinance itself.
Kit Williams: It's on the first reading.
Mayor Coody: You've already read it once Kit. We'll entertain a motion to suspend the rules
and go to the second reading.
Alderman Rhoads
moved to suspend
the rules and go to the second
reading. Alderman
Reynolds seconded
the motion. Upon
roll call the motion passed 7-0.
Alderman Marr was
absent.
The ordinance was read by the city attorney for the second time.
Mayor Coody: Alright do you want to entertain a motion to suspend the rules and go to the
third and final reading?
Alderman Lucas: Can I ask one question?
Mayor Coody: Yes, ma'am.
Alderman Lucas: I wanted to ask Kit, do you have any doubts at all with what we're doing
tonight.
Kit Williams: I would say absolutely.
Alderman Cook: He's a lawyer Shirley.
Kit Williams: I think when this was first brought to the City back in May, I pointed out that this
was a brand new amendment. Brand new law. Never tested before in the courts and as you see
even as we're considering this there's a, I'm requesting the right to file a friendly lawsuit against
the assessor. Actually to really protect her, to try to resolve some of the questions I have. So yes
probably not in the boundaries. I don't have too much trouble with the boundaries. We get to
the project plan and the financing certainly there are questions out there that I think only the
Supreme Court can answer.
Alderman Lucas: Thank you.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayette%ille. org
Special City Council Meeting Minutes
January 25, 2005
Page 29 of 45
Mayor Coody: In other words, we don't want to do anything without being certain after the
court rules for us. '
Alderman Rhoads moved to suspend the rules and go to the third and final reading.
Alderman Ferrell seconded the motion. Upon roll call the motion passed 7-0. Alderman
Marr was absent.
The ordinance was read by the city attorney for the third and final time.
Mayor Coody: Alright, any other questions or comments.
Alderman Cook: I'd like to comment real quick. One thing I want to say is that I hate making
this decision tonight even though I know we need to but we literally just got this information so
that's frustrating, but after talking to people in general about the Mountain Inn TIF since the last
few weeks. It's been all across the board and there are people that are strongly against it for the
reasons. There are people that are strongly in favor of it and there's some that just don't care to
be honest.
Mayor Coody: That's probably a majority of them.
Alderman Cook: Some of them yeah. ' I've waffled back and forth because we have voted on
this twice and I still waffle back and forth on it. There's no doubt we all support the downtown.
I mean we've shown that with past actions and there's no doubt that we all want to get rid of the
Mountain Inn. The question is, is this the right way to do it, is it perfect, no it's not perfect. I
still have questions about the economic viability of this hotel to be honest. I really don't know if
it will even fly or not. That's all opinion. I mean the numbers are all conjecture too. So we just
have to make the best decision we can. All in all I think most people will agree that they just
want to get rid of the Mountain Inn and I think what we've come up with is one way to do that. I
hope that that's the right decision to make but I want to support this.
Mayor Coody: Thank
you.
You've expressed all of our sentiments. Alright, any other
questions or comments?
We're
on the third and final reading.
Shall the ordinance pass?
Mayor Coody asked
shall the ordinance pass.
Upon
roll call the ordinance passed 7-0.
Alderman Marr was
absent.
Ordinance 4673 as Recorded in the Office of the City Clerk.
Kit Williams: Your honor, because of the fact that this is a dangerous fire trap and the time
sensitive nature there is an emergency clause to vote on also.
Mayor Coody: Alright, I entertain a motion and second approving the emergency clause.
Alderman Reynolds moved to approve the emergency clause. Alderman Ferrell seconded
the motion. Upon roll call the motion passed 7-0. Alderman Marr was absent.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi l le.org
Special City Council Meeting Minutes
January 25.2005
Page 30 of 45
Highway 71 East Square Redevelopment District #1 Project Plan Amendment: 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.
Mayor Coody: Alright, thank you very much. Now we'll move along to, we've already done
the public hearing on both phases of this. So the new business of the project plan has been
spoken to. So we would now bring this to the Council for discussion.
Kit Williams: I can read the ordinance here your honor.
The ordinance was read by the city attorney for the first time.
Kit Williams: As you are aware I've been attempting to work on this amendment for this
project plan and its been a little of a moving target because we weren't sure for a long time
exactly if there was any kind of financing that would work. It wasn't until the developers .finally
agreed to be able to step forward and to purchase the amount of bonds which would not be
marketable that I was able to fully complete the project plan which I presented to you at 4:30
p.m. I'm sorry I gave it to you as quickly as I could get it which is not quickly enough and I
apologize for that. Let me go over very briefly what the project plan says.
First it has to remove the Phase II of the current project. There is certainly not enough money to
do Phase II which was the streetscape throughout the original district. We had very, fewer
millage available at this point in time unless the court tells us differently and therefore the only
thing we will be able to do initially is the project as you approve before. The project Phase I
which is the purchase of the Mountain Inn and the three other structures and their demolition and
then their sale to the developers for $300,000.00.
The Economic Feasibility Study was given to you also earlier tonight. You all have amended the
boundaries of the district to make it financially feasible. The certification by the County
Assessor was given for both the Downtown Master Plan TIF and the original plan that we have.
She has not provided us a subsequent certification. That would be part of what I would do my
suit is to require that certification by her about the debt service ad valorem rate and applicable ad
valorem rate be determined by the court so that she would be protected and we would be
protected. So that there would be no chance that the money, the tax money would go to a non -
constitutional, non -statutory purpose. That is also in there so if you approve this project plan you
are authorizing me to file suit on behalf of the City to get that kind of determination from the
court.
The financing methods basically would have to be two types of bonds. The first one I will call
the marketable bonds. They would be supported by the, pretty much everybody agreed to okay
3.16 mils. Those bonds even with this larger district won't be enough to finance this project. So
that the developers have agreed to purchase or find an investor to purchase a note or bond that
we're calling the subordinate bonds or notes. These would be paid only after the marketable
bonds were paid. Because in order to make sure that the marketable bonds got paid. That would
be what I think our bond counsel and our underwriter says we can market that much bonds. We
can't market the bonds above for the 7.66 millage. So there would be two kinds of bonds. I
want to call your attention to the bottom of page 4. Assuming we pass a bond ordinance for the
3.16 mils and something else for their bonds which should be followed with that recourse against
113 West Mountain 72701 (479) 521-7700 (479) 575-3257 (Fax)
accessfayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 31 of 45
the City of Fayetteville or the TIF District. So that means if they're not paid within the 25 year
life span on this district it would be, they would simply not be paid and we would not owe any
money on them.
At the bottom of page 4, 1 have stated that the subordinate bonds or notes must be sold with
revenues received by the City prior to the city sales of its marketable bonds. The reason that I
have that in there is that obviously we only want to market our bonds if we know the project is
going to go forward. So we have to be assured by the developers that they have in fact raised the
money to purchase the subordinate bonds and then we will go forward at that point with selling
the marketable bonds and this project would go forward.
There were some project costs clarifications including specifying that the $300,000.00 that we
will sell the property to the developers will be used to pay interest and principle on the
marketable bonds. That should reduce our costs dramatically and make it more possible to
obtain more money from the marketable bonds because we won't have to make such a large
amount of capitalized interest into the entire debt.
The rest of the amendment just talks about what the total indebtedness would be. I'm using
figures from Cruz & Associates who I would hope would come up and be able to explain their
positions.
In the future options set forth are if in fact there are more mils available and both of the bonds
can be paid. Both the marketable and subordinate bonds can be paid then we can look toward
other projects for example the extension possibly of the Francisco Trail to the Skull Creek Trail,
a parking deck, or some other sorts of improvements within this area or immediately next to the
area if that's the choice of the City Council.
Beyond that I think that that pretty much covers what this amended project plan entails and I
would try to answer any questions about it.
Mayor Coody: Any questions for our attorney on this?
Alderman Ferrell: I've got a question for Kit, not pertaining to this but its pertaining to the
overall TIF development. Would you go through one more time with me, once again I'm all in
favor of this. I remember the old Mountain Inn before we built this one. The eminent domain in
a district like this, if anything is eminent domain it would come before the City Council?
Kit Williams: Yes. The project plan does not include us taking any property by eminent
domain. The reason for that is that you can get virtually immediate possession with eminent
domain. We've done that in having to expand roads or waterlines or something like that, but you
don't get ownership until after the trial where the jurydetermines how much you should pay.
Because of the time sensitive nature with this particular project we must go the purchase route so
we can obtain clear title and convey clear title so that they can mortgage the property. Otherwise
we would probably think about it.
Alderman Ferrell: I'm not talking about, what I'm really talking about is the TIF authority
after this passed.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfavettevi II e.org
Special City Council Meeting Minutes
January 25, 2005
Page 32 of 45
Kit Williams: There is TIF authority for eminent domain but if the City Council; just like in any
eminent domain situation the City Council makes that decision.
Alderman Ferrell: It would be for common betterment.
Kit Williams: It would have to be to further project plan. So you would have to actually amend
this particular plan in order to go forward with eminent domain.
Alderman Ferrell: Okay.
Mayor Coody: Any other questions. Yes, ma'am.
Alderman Thiel: On page 5, again stating and just for clarification, the City shall not pay more
than. I'm trying to find out what the City is actually going to be paying that's not going to be
reimbursed by the TIF District.
Kit Williams: Okay.
When I'm saying the City, the funds come in and
they are TIF funds the
City is using them.
The City in this
particular project, just like it was
before, is not actually
going to be spending
any of its general
revenue. It will be spending TIF bond proceeds.
Alderman Thiel: Okay. Thank you.
Mayor Coody: Any other questions. Alright. I entertain a motion to suspend the rules and go
the second reading.
Alderman Jordan: Aren't we going to go to public comment?
Mayor Coody: Oh, I thought we did the public hearing.
Kit Williams: Well they probably need to comment after.
Mayor Coody: Alright. Anyone want to make any public comments on the plan? It was a good
try wasn't it? Going once. Going twice.
Kit Williams: Before we get to our second one let me ask maybe Mr. Wright or Mr. Wilbourn
to make some comments about feasibility or legality or whatever they want to talk about.
Mr. Wright: Things have certainly changed since the last time we were before you since Beebe
came out a couple of weeks ago. As you are going through all this and you've all stressed and
understand that we need to move forward quickly on this. We've got some dates we've got to hit
for the developers and make sure this project works.
Kit was just talking about the economic feasibility of the project. I think I told you early on
we've got a history of underwriting numerous projects. I've got a history of doing hotel projects
and have financed recently the Hilton Inn which was a shutdown hotel in Little Rock on 630
University with razor wire all over the place. It had been out of business and no developer is
going to come in there refurbish the Hilton Inn in Little Rock until a tool became available that
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (,Fax)
accessfayetteville.org
special City Council Meeting Minutes
January 25, 2005
Page 33 of45
made it economically
feasible for
them
to do so. In Little Rock an empowerment zone became
available that allowed
that project
to go
forward.
We were brought in and Rich can tell probably six, seven, maybe eight years ago when the
current owner of the property was looking to do a project. We looked extensively at how can we
get this same hotel, how can we get this thing refurbished, built, get this out of the blighted area,
and there was no way, no economic feasible way to get that project done. We had to turn her
down at that time and obviously it's been sitting here since then.
The tool which has presented itself, the TIF financing option, the developers are using that to
make this economically feasible. We have looked at all the numbers. We have looked Dr.
Collins' projections. I too just got his updated number version this afternoon so I have not had a
chance to study that because I promised the Council
Mayor Coody: I think the reason that we all just got that is because they just got it finished up
today and delivered at 4:30 this afternoon. So it's not like we were withholding anything. It's
just that we all saw it at the same time when they brought it up.
Mr. Wright: As 1 was sitting next to him just a little bit ago I actually pinned him down and
asked if I couldn't ask him a couple of questions after this to make sure. Because I've been
taking his numbers and structuring in my own computer stress test models to be able to see what
happens if the growth patterns aren't there. If the Terminella project or all these different
projects come in or if they do not come in if the Mountain Inn works, etc. So I still have some
studying to do. But as I promised the Council early on we're taking a very conservative
approach towards making this project work and that's the only fair thing to do for the City of
Fayetteville and for the citizens.
As the Mayor mentioned a little bit ago, you've got a history of some problems. It's been quite a
while since you've had some defaulted issues. It's been awhile since you've had any of those
issues pop up. You certainly don't want such a visible project as this TIF, this Mountain Inn for
it to be any potential for it to have any failures in the future look bad on Fayetteville. That's
what we're here for, to make sure that we're covering the City of Fayetteville for now and in the
future. So everything that we're looking at, all the options that we're working with the staff of
the City in presenting to them and presenting to the developers we're taking the cautious
approach.
There are some other options out there that we've been working on. It's not pertinent tonight.
Tonight we're talking about amending the project plan, making sure that it's economically
feasible. We will be coming back when we put this all together. When we actually put the
financing package together. The final package, we'll come back one more time and amend the
project plan to put in here as the final structure because we're all looking at a crystal ball right
now. This is what we think is going to happen. We think with 3.16 mils over 25 years we can
generate approximately two million dollars in net available proceeds towards the project. One of
the reasons we look to expand tonight into the Downtown Master Plan area is without that
expansion we were only talking about a million dollars and that makes it back toward the
nonfeasible economy of this project. So expanding into the Downtown Master Plan makes this a
lot more of a workable plan. The developers are step up to agreeing to potentially purchase some
subordinate debt. We're going to look at. We've got issues to look through and structure there.
113 West Mountain 72701 -(479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi lie. org
Special City Council Meeting,Minutes
January 25, 2005
Page 34 of 45
Gordon Wilbourn, your
bond counsel,
we've got a
lot of documentation and a lot of issue to
work with Kit to make sure this all goes
through and
goes through quickly.
There is a lot of going on behind the scene. I've said it before, a lot going on behind the scenes.
Many meetings and a lot of discussions that we're trying to flush out before we come in front of
the Council. We even met 30 minutes this evening and 30 minutes on a conference call this
morning on various options. So we're making sure that the City is covered from an economic
feasibility standpoint. I think what we're looking at now, the cautious approach, we know the
undisputed millage is 3.16. We'd go forward with that but we'd certainly put in provisions. The
whole key to this program and any other options or programs we bring in front of you in the
future is whether or not you agree or disagree with Attorney General Beebe's opinion a couple of
weeks ago. I've certainly heard both sides of agree and disagree. We will leave in provisions
and options that if the 7.6 mils is available we'd be able to do X with that.
As you were starting to talk about the amendment of the project plan and taking out Phase II, 1
jumped up and ran back and talked with Gordon Wilbourn to make sure we don't want to sell
ourselves short either on that. Can we add that back in, the Phase II, the streets, all the other
projects in the future in case the seven mils, in case the 25 mils comes back? I wanted to make
sure that we didn't take to big of a step but as he has mentioned not a problem there.
So if Beebe's opinion or the Supreme Court rules that we can use the 25 mils we're back to what
we originally were talking about and a much bigger project funding all these street improvements
in a much bigger quicker pace. We can move forward cautious right now with what we know is
available, the 3 mils and then put provisions ready in case anything changes.
A couple of the comments that were brought up regarding what the legislature is doing, what
they're talking about and since I'm involved in just about every TIF in the state and I've talked
to numerous attorneys, numerous legislators as far as what they can do.
The sales tax issue that keeps coming up makes a lot of sense. I think it's going to be looked at
very long and hard. The one issue that just to keep in mind, the one issue that's going to be
brought up is if they do allow us to use sales tax proceeds generated within the district, the City
still needs to determine is that in their best interest but secondly, in the big issue with this, it still
has to go to a vote of the citizens for Fayetteville to be able to use that. It's not a tax increase
probably but it's the existing tax and the pledged of the debt. So even though it's a small TIF
district, a small portion, and the legislature allows it my understanding in talking with counsel as
well and Gordon might can expand on that. You still have to have the whole citizen, all the
group to allow you to do that. So that is, those are still some of the issues that we still have to
work through with getting back to where we were before hand.
But in summary, we're making sure that these plans brought to you are a conservative feasible
plan. One that in every worst case scenario we look at there is nothing we see that could
potentially hinder the City of Fayetteville in the future with this project. I'm glad that the
Council has adopted these ordinances and passed this tonight. This is the tool and only tool
that's become available to allow this project to move forward. Your developers are smart
enough to jump on that and I applaud them for that. This is something we've got to move
forward expeditiously to get the thing done for them; otherwise it's going to sit there like it has
for years.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayetteville.org
Special City Council Meeting Minutes
January 25, 2005
Page 35 of 45
Mayor Coody: Let me ask you a quick question. If the legislature does approve the sales tax
funded TIF, we would be able to come back and amend this plan to disassemble what we've
done to confirm to a new funding mechanism wouldn't we?
Kit Williams: Well I don't know. We'd have to study the statute that they would pass and
everything else. As Mr. Wright said there would have to be a vote of the people because when a
sales tax was passed it was passed for specific purposes and one of the purposes was not to fund
TIF district. So that would have to be back to the vote of people if they wanted to allow that as
new purpose for the sales tax.
Mr. Wright: They talked about using income taxes toward a TIF. More power to them I can't
imagine how they are going to get that done.
Mayor Coody: Some states use that method. I don't understand how they calculate that.
Mr. Wright: I don't either. I've only heard that they are talking about it. I know that myself
and few of the attorneys and legislators are going to be sitting down soon to look at all the
options and what is feasible. What are the other states doing. I've not seen any of the particulars
on the income tax but I question how that's going to happen.
Mayor Coody: Any other questions for Mr. Wright? Thank you for your comments. Do we
have questions?
Alderman Lucas: Do you need more time? You said something about you needed to look over
these figures for what we're doing tonight do you need more time.
Mr. Wright: For what you're doing tonight no I don't because all along we have planned that it
is a moving target even before Beebe's opinion came out. It was still a moving target as far as
how we were going to structure the financing. What was the best and most efficient and feasible
way. We're still looking at that and we look at it on a daily basis up until the point we structure
and finalize the package. So the information I've got there is not need for any delays tonight.
We're going to continue to move forward. It we run into any time constraints or if there are any
issues that do arise that might slow this down I certainly hope that and I know the developers
have some time frames, some very astringent time frames to get this thing done. May be the fact
that if we are in the market and selling bonds in the third week of February but we can't close
until March. Maybe that will allow them to overcome some of their hurdles once some of their
other issues, they see the money is in place but it's just going to take an ordinance period,
referendum period. But other than that like I said there's a lot to do and there's a lot for the bond
counsel and Kit have to do in a short amount of time but that's what we're faced with.
Kit Williams: Let me ask you a question. You said you're going to want to have a second
amendment to the project plan after you've gone over and looked at the economic feasibility
report and done the entire bond sort of financing work? So that the City Council will actually
then be able to look at the project plan again as its further refined in your amendment in order to
see exactly what the financing is going to be. How it's going to be set up. So that's one final
assurance for them that everything is financially feasible and ready to go forward at that point in
time.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettcvi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 36 of 45
Mr. Wright: I think the Council would prefer that to have the final project plan. The final
financial structure.
Kit Williams: Yes 1 would prefer to have that.
Mr. Wright: So I think that's a prudent step to take. I think knowing that in this next 30 to 40
day period as much as what's going to have to happen, we're probably going to call another
special meeting to come back and say these are our findings. This is what we're thinking we're
going to do as far as the financial package, the numbers, etc to give you one last review. We've
been talking all in generalities all the way up until now because it has been a moving target but
when we get real close to the point that we think this is the best way to do it we'll probably come
back to the Council and say here it is let's answer your questions, your concerns at that point and
then move forward with your approval.
Kit Williams: I know I would certainly appreciate that. I've been working hard to try to get a
plan as complete and full and detailed as possible. I .know it can be refined further and be much
clearer on economic viability of this when they have the financing actually set forward. So I
think that's a very good move. Keep in mind we have to give two weeks notice every time we
amend it. So let us know so we can get all the letters out and publish it in the paper in plenty of
time. That is the one problem with amending these plans that you have to have such a big lead
time, but I certainly would think that would be a good thing. I did my best on this but I don't
think this is good enough for the final one. So I'm glad to see that they are going to seek to have
another one. I think that we do need to try past this tonight though in order to show that this is in
fact the intent of what the City Council wants to do and then let them have a final look at it in
future when you come back with a final plan.
Mayor Coody: Alright, thank you. Any questions for Mr. Wright. I want to thank you for all
your hard work. It's been a long hard road and we appreciate it. Everybody on the staff has
really worked hard to put together this TIP district and all the others. This has been quite an
exercise. Everybody is ready to put this to bed so we can put a lot of other things on the front
burner that need to be there.
Mr. Wright: Sure.
Mayor Coody: This has put a lot of other things on hold. Anyone from the public have any
questions or comments on Mr. Wright's comments? Hearing none.
Kit Williams: Do you want to see if Gordon Wilbourn wants to have anything to add.
Mayor Coody: Gordon. You just want to hear people talk tonight don't you?
Kit Williams: They drove all the way from Little Rock and I relied upon Gordon many times
for bond advice. I found him to be very knowledgeable
Mayor Coody: Yes, Kit, yes.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi lie. org
Special City Council Meeting Minutes
January 25, 2005
Page 37 of 45
Kit Williams: And conservative, sometimes even more conservative then me which is
shocking.
Mr. Wilbourn: Kit and I are the fellow legal sticks in the mud on this deal. And I just wanted
to assure you that we're being, as Bob said that his financial model is been the conservation and
we're being legally extremely conservative. I personally respectfully disagree with Attorney
General Beebe's opinion but that doesn't really matter. We can't market bonds based on the 25
mils with that out there. So that's not what we're doing. Like Bob said you're going to get
another shot at this if we amend the project plan and there will be bond ordinances that will have
the exact precise terms of the deal and it is just a function of the statute. It's not set up very well.
Its, I don't know how you could ever have a project plan that approves the feasibility of a deal
before you have the terms of the bonds in front of you. That's just necessarily the way this is
going to have to work. I'd be happy to answer any questions.
Mayor Coody: Any questions for Mr. Wilbourn? Alright and thank you for all your help too.
You've done a very, very good job. I ask City Council to suspend the rules to go to the second
reading.
Alderman Reynolds moved to go to the second reading. The motion failed for lack of a
second.
Alderman Jordan: I want to make a comment.
Mayor Coody: I'm sorry.
Alderman Jordan: I want to make a comment.
Mayor Coody: Oh okay go ahead.
Alderman Jordan: First of all I want to say I do support the Downtown District. I do. I
support the TIF. I think that the Mountain Inn is blight. What I do not like is being handed
studies and handed documents before I've had time to absorb them. I do not feel comfortable
passing stuff that I do not fully understand and for these reasons I cannot support passing the
plan tonight. Maybe we can suspend the rules and go to some different readings even the third
reading. But I need some time to absorb this or otherwise I cannot support this.
Mayor Coody: I understand.
Alderman Lucas: I feel somewhat the same way. It's always been my policy that I read
everything before I vote on it. I support this too and I really think it's important. Is there anyway
that we could have a very little, short agenda next Tuesday can we at least have a week to look at
this and do it next Tuesday. Would that put things in jeopardy?
Mayor Coody: Let me ask a question.
Alderman Jordan: Can I say one more thing?
Mayor Coody: Okay, go ahead. Bob would you step forward again please.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi ll e.org
Special City Council Meeting Minutes
January 25, 2005
Page 38 or45
Mr. Wright: I was just asking Gordon. It is truly the need to adoption the amendment to the
project plan crucial tonight to continue moving forward. I certainly don't want to stop the
process that's already started. Since we are planning on or at least that's the thinking is come
back with a final adoption of the project plan with final numbers. Is it crucial that this passes
tonight versus what you've already as far as creating the expanded district? I'll defer to the
attorneys as far as their thoughts.
Mr. Wilbourn: Well I think what we were looking for was the will of the Council. How to
proceed? What option that Kit presented that we were going to base our deal on and that's what
we need to know. It's, we can't move forward without having at least some sense of what plan
we're going with.
Mayor Coody: I'm sorry go ahead.
Alderman Rhoads: I would recommend that we maybe rename what we're about to vote on or
perhaps not vote on and call it a proposed plan. What I mean is we're going to come back and
amend it no matter what shortly and I'm of the same concern I'd kind of like to read things first
and if we call it a proposed plan we will still achieve everything that we need to get done tonight
and then we can come back and amend, adopt a final plan at a later date.
Kit Williams: I don't really think there, there is nothing in the statutes that say proposed plan.
You either have a project plan or not. I guess you could pass the resolution you are in agreement
with the project plan even if you are not going to pass it to let them know what you are thinking
about. We either pass or do not pass the project plan. I don't think that you're not aware of, I
don't think we can rename it and solve this particular situation. Keep in mind also that we had a
public hearing and the public hearing was on the plan. Now if you don't want to pass it tonight,
if that's going to be, 1'd really have to defer to the developers and also to our underwriter and
bond counsel about whether or not this is going to mean that the project will be able to still be
done. The reason this meeting was scheduled for tonight was we backed up from the time we
had to have the money and it takes time to do the bond ordinance and have the bond ordinance in
effect. The bond ordinance has to be in effect before they can issue bonds and so we backed it
up and this was basically the last possible night to get that done I thought but 1 could be wrong.
I'll leave it up to you all and the developers to tell me is this the last night we can do this or do
we have more time?
Mr. Wilbourn: No. Again I'll just reiterate what I said earlier. If, the understanding of the
direction is a senior bond issue, a subordinate bond issue based on the 3.16 mils and that's the
direction that we need to go and we can move forward. Kit I don't know what this does to you
on the other authority for the declaratory or injunctive action. That will delay you from being
able to do anything there. I don't know if that's important right now.
Kit Williams: I wasn't planning on filing anything before Tuesday anyway.
Mr. Wright: The only issue in the original plan as Kit was saying is we backed up from
February 28"i date. Tonight was going to be an adoption of a perimeter bond ordinance to get
that 30 day referendum moving and that obviously that whole thought process died when
Beebe's opinion came out. We've been back to how we can get this thing done. Gordon and I
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi I le. org
Special City Council Meeting Minutes
January 25, 2005
Page 39 of 45
are going to talk with Kit as far as timing and if we have to hit a February 281h closing or if we
have to hit a, and this part of the discussion with the developers a February 28th lock down of the
financing. Even though we have a referendum period after that. Does it affect them. That's
some of the issues we have to work through.
Kit Williams: Well I think that we need to have the developers up here. They're the ones that
have told us that is the, that February 28th is the date that everything starts expiring.
John Nock: Well I think, we just heard a couple of things. We certainly have to have the bond
ordinance before we can close on contracts on February 28th. So that certainly seems to be a
requirement that no one in here can make happen. We're not prepared to have an ordinance for
that any way this evening.
On the other hand I certainly understand the question proposed by Mr. Jordan and secondly by
Mr. Rhoads. That if there are questions or comments that you would like to ask and comment on
if I was in your shoes I would want to ask them as well. I would want to understand them as
well. Also, this project has come so far with so many interations and we've worked through
some many things. The last thing that we want to do as developers is to try to create such a sense
of urgency, that is very real but that there would be a perception issue that we are trying to create
it in a way that it would cause you the Aldermen discomfort.
On the other hand, we can't get beyond the fact that we have some real contracts. We run the
risk, and this is a risk that we all would run based upon the decision that we make together. The
contracts that we have under the project plan, I'm talking about real estate contracts will be
actually passed through, under the project plan and would be purchased through TIF monies.
And so therefore you would be recipients of those same contracts. So we keep saying that
they're our contracts but in effect of the project plan those contracts become part involved oT
directly involved with the city's decisions. I see two things and I'm just thinking out loud here,
if you don't have an ordinance already to allow the bonds to go forward you're already going to
have to wait until at least the next meeting to have that. Then there again I don't know how you
get around that quite frankly. I think that's the big issue. What we were looking for was and I
think Mr. Wilboum pointed out is the will of the Council. We can't do anything at all without
the second piece of the puzzle which is in fact the bond ordinance passed, if I understand
correctly from the underwriter that's been selected for the project that there's going to be a final
project plan. So it seems like from our perspective nothing can occur until we know that we can
go to the holders of Offer & Acceptance on the real estate, which we can't go to them and say a
date certain away after tonight until that bond ordinance is passed. So in some ways, even
validating the project plan tonight certainly would show one thing. It would show that will of
the Council. In your preliminary direction of where to go and then it would give the ability of
the next meeting I presume if the documents could be drafted in that amount of time that's
sometimes a quick turn around to be able to give the bond documents. Even with that we would
have to get some extensions on contracts. Those aren't our numbers. We've extended them, I
don't know if the sellers will extend them again. I just don't know. '
Kit Williams: I would ask that you do that and it might actually make the procedure easier if we
did leave on the first reading and that way we could still modify this plan that's before the City
Council. The public hearing has already been held and proper notification has been made. Until
we adopt this plan you don't have to go through another former procedure to amend it because
113- West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi lie. org
Special City Council Meeting Minutes
'% January 25, 2005
Page 40 of 45
it's still before the City Council. Therefore we could read for the second time at the Tuesday
meeting and it doesn't really make too much difference when we finally act on this until we have
the bond ordinance ready to be read from my understanding. That's the key one that needs to be
done in order to get the money.
John Nock: That's correct.
Kit Williams: So I guess indifference to the Aldermen's concerns which are quite' real and my
own in fact, I would not mind seeing this left on the first or second reading tonight so that our,
maybe some motion from the City Council after you suspend the rules and allow it to become on
the agenda, a resolution of support for the basic idea of the project plan as presented. The
amended project plan as presented so that they would know in fact what the intent of the City
Council was.
John Nock: Kit, that would help us in negotiating with contracts to be able to do that, look
we're dealing with a timing issue not on a question as to whether its going to actually happen or
not. We've gone to them before and extended contracts and we just want to make sure we have
the will of the Council supporting that if we do that again.
Mayor Coody: The adoption of the boundaries and leaving it on the first reading with the intent
to move forward with the final plan that wouldn't suffice as much as a document saying, stating
intent?
John Nock:
I think it would. I think
it would.
I don't know
that anything beyond that would
actually help
us without the authorizing
resolution
for the bonds
anyway.
Richard Alexander: Can I ask Kit a question?
Mayor Coody: Sure. Come on up.
Richard Alexander: As I understand it what were doing tonight is finding That the project plan
is feasible but it's all subject to the passage of a bond ordinance. I mean if the bond ordinance
that's where these guys are. You'll say yes its feasible and these guys will come back here and
go okay yes it is and here's the money for it or no its not. So whatever you do tonight is subject
to another hearing on the bond ordinance and at that point in time all of the questions should be
answered. All of the numbers explained and the financing set out to the satisfaction of Council,
bond underwriters, and city attorney. So it's a quirk in the statutes as I understand that you have
to find that the plan is feasible in order to take the next steps which is go get the money. And
you still have an opportunity to turn it all down if they come back and go it doesn't work, we
can't raise the money.
Alderman Rhoads: Okay Richard what you're saying is that we then could still come back later
and completely amend what we've passed tonight.
Richard Alexander: Or frankly you could say look it doesn't work, we won't do it. I mean you
passed one before. You passed one before 8-0 and turned out we couldn't raise the money.
That's why we're standing back here. It didn't cost us anything but it's a legal requirement to
move the process forward. I think that you have to find that to take the next step. We are at
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi Ile. org
Special City Council Meeting Minutes
January 25, 2005
Page41 of45
exactly that position with no down side to the City. We passed it 8-0. These guys were about to
come to you with the bond ordinance when the Attorney General wrote the opinion. So they said
hey you know all bets are off and now we're back here again. So until you pass the bond
ordinance it's really just an exercise in following the correct procedure as I understand it.
Kit Williams: Therefore I don't think we really lose anything if you don't actually pass the
project plan ordinance tonight. I think you can leave it on the first reading but I do think it
would be appropriate for the City Council to express itself about whether or not this is the
direction that you are willing to go. What has been outlined in the project plan where the City
would market as much bonds as it could on the three mils and the developers would buy enough
of the remaining bonds so that we would have three and a half million dollars net be open to the
project. I think that they need to know if that is in fact the will of the City Council. I think our
bond counsel and our underwriter needs to know that also and then leave it on the first reading.
Let's refine this plan some with the information that we're going to get from our bond counsel
before you make a final decision on the ordinance.
Alderman Thiel: Mayor.
Mayor Coody: Yes ma'am.
Alderman Thiel: I personally think that we have voted on the district, the area, that is our
comment and intent. I don't know why we need to verbalize, what good a verbalization of intent
is other than that. I think we've all supported this district, the area and the boundary. We'll just
wait until we get an actual ..........
Richard Alexander: Here's a question for Kit. Right now, before tonight there was already a
redevelopment plan and boundary. Tonight you have expanded the boundary of the existing TIF.
So you actually already have a TIF plan that has been adopted and only tonight was amending
that. So actually we already have a valid plan that has not yet been amended. We have already
adopted a change in the boundary so actually we already have a TIF plan.
Mayor Coody: The planthat we have adopted won't work with ..........
Kit Williams: We have an adopted but not valid plan.
Richard Alexander: That's right. It has not yet been amended but we do have a TIF plan.
Alderman Thiel: But that again shows the Council's commitment.
Richard Alexander: Oh yeah but we're just trying, well the main thing, I know the first thing
we're going to have to do is go over to Bank of Fayetteville and meet with their guys and say hey
we're going in the right direction. Don't panic just yet we're still on track and they'll want that
comfort
level
to know that they
can go forward and
that they're
doing
the right
thing in going
forward.
So I
don't care how we
accomplish that.
Mayor Coody: Lioneld.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayet tevi l l e.org
Special Cily Council Meeting Minutes
January 25, 2005
Page 42 of 45
Alderman Jordan: I don't intend to cause anybody any undue hardship here but my job as an
alderman is to properly absorb the information that I've been given and make the best decision I
know how to make. These documents I don't fully understand them until I have read them. So I
cannot for good conscience sake make a decision on passing this without reading the information
I've been given. Now I'm not trying to cause any problems here but that's just the way I do
things. I do a lot of research and I do a lot of study and every time I seem to make a hurried
decision on anything I seem to make mistakes. I just need the time. If we want to do this
Tuesday that's fine. I think probably Alderman Marr would probably like to be hereto comment
on the plan as well.
Alderman Ferrell: is there a motion on the floor?
Mayor Coody: No there's not.
Alderman Ferell: Well obviously we're headed that way but I mean I think it's appropriate for
us to make some kind of resolution saying this is the way we're headed. I would make a motion
that Kit gives me another word to submit there, that we just ..........
Mayor Coody: First we'd have to suspend the rules to put this item on the agenda because it is
not on the agenda tonight.
Alderman Ferrell: We actually wouldn't be voting though Lioneld.
Alderman Jordan: What I'm saying is haven't we already established that by creating the
boundaries of the district.
Alderman Ferrell: I
think
so but
I think what the
fellows are talking about is moving forward
with the marketability
of the
bonds.
Trying to work
them.
Mr. Wright: Just to clarify it I'm at a point now that I know what the intent of the Council is
which is to get this project done. I'm comfortable with that. I also know that the Council is
going to look to us and look to bond counsel to make sure that the final financing package is a
secure and economic package. Whether or not it's even going to turn with senior and sub debt. I
don't even know that yet until we get to the final marketing and present it to the Council, here's
what it is. I know the intent is to move forward. I know the intent right now is, this is the
structure. We think it's going to be senior and subordinate and we're going to move forward on
that. I wasn't going to call the developers up here but the issue they've got to work through with
their contracts and their February 28t date is would the adoption of the bond ordinance before
February 28th allow them and allow them with whoever they have the contracts, does that get
them over their hurdle? When the bond ordinance is adopted you know the money is coming in
after a referendum period. It's a March closing, or do they have to have money in their hands. by
February 28". That's their issue but ..........
John Nock: I speak as from the developers. If] understand it correctly what Bob is saying at
that point in time the developers are given assurance through BPA, a Bond Purchase Agreement.
And at that point it's very much a liquid instrument that if we had to close prior to the maturity I
guess is 30 days that's required then we could actually prefund that if need be. So I am not
concerned about that that still meets our deadlines yes.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayettevi II e.org
Special City Council Meeting Minutes
January 25, 2005
Page 43 of45
Kit Williams: Bob that makes a lot more sense than to leave this on this reading and have it
again next Tuesday and then we need to schedule whenever you think you can get your bond
ordinance done so we can have it on the City Council meeting whenever that's going to be.
Mr. Wilbourn: I think when we meet next Tuesday we could get the final bond ordinance and
terms we'll have to offer the bonds. I mean that's going to be part of the process. So I think
what we'll need next Tuesday also is an ordinance authorizing us to go forward doing these
things and putting out a Preliminary Official Statement. A perimeters ordinance but I don't think
we can do one that approves the documents in substantially the final form because there's no
way of knowing that that's going to be what they look like. We'll have to have some authority to
go out and offer bonds.
Kit Williams: Okay, we'll talk tomorrow about that.
Mayor Coody: Alright so the intent now. Do you have anything to add?
Alderman Thiel: Well I thought that there was concern that you hadn't studied the material
given from Mr. Collins but you wanted to firm up the plan basically to make sure everything
worked. Then we go on with that. I think that's what I'm concerned with is to make sure we are
looking at a plan that you find is feasible and not necessarily issuing the bonds.
Mr. Wright: That's why I wasn't concerned with the adoption of the amendment of the plan
tonight because the plan would come back one more time with the final financing package
amending it one more time. If you can leave it open to where we don't have to have another l 5
day notice if you can do that so that we can put the final numbers in. Then we don't have that
issue and come back here are the numbers. Here's what we present to you. Adopt the Bond
Ordinance. Adopt the Bond Purchase Agreement. Adopt the amendment to the plan and we're
off and running. Hopefully it meets all their deadlines or pretty close to it.
Alderman Thiel: Right. Thank you.
John
Nock: Let
me just say one more time.
That, I just went through it in my mind. That time
frame
will work.
Okay.
Mayor Coody: So we're going to leave this on the first reading and we will put this on the
agenda for next City Council meeting.
Kit Williams: Next Tuesday.
Mayor Coody: Next Tuesday night and we need to, we are going to make that a motion to
suspend rules?
Kit Williams: I don't think that that's needed. They said they know were the City Council's
going.
Mayor Coody: Mr. Shifty are you comfortable with this.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accesstayettevi l l c.org
Special City Council- Meeting Minutes
January 25, 2005
Page 44 of 45
Mr. Shifty: I don't know how to answer that Mr. Mayor. I'm very concerned about the timing.
The bank has made a loan and investment commitment to the new market tax credit program in a
low income community. We have not made a commitment, legal commitment to this project but
we feel very committed to it. This is where we want to make our investment but we have a
severe time problem under the new market tax credit program that the money has to be out
within twelve months. And if we think that that can't happen we're going to have to look
somewhere else because we cannot have, there will not be a recapture under this program. So I
have a big concern. I'm willing to take John's word that we can get this done and get it funded
by the 28th and get underway but if there is going to be further delays we would probably be
forced to look elsewhere. Thank you.
Mayor
Coody:
Alright, thank you
very much. So I would just as soon go ahead and approve it
tonight
because
you have to come
back. This whole thing has to come back. I know it's not
going to happen
but I just think ..........
Kit Williams: Since they want to amend the plan away it probably makes more sense to leave it
where it is. So that because then you don't have that two week delay to approve the plan.
Mayor Coody: Right. Alright so there's going to be another delay here and that's going to
work out just fine. So we have a motion, at least we're going to leave this on the first reading
and you don't need any further motions or certificates of approval. Alright so are we finished
with this business tonight then?
Alderman Rhoads: Let's adjourn.
Mayor Cook: There's a movement to adjourn and I agree so let's do just that. Let's adjourn the
meeting. Thank you.
Dan Coody, Mayor
Sondra Smith, City Clerk/Treasurer
Meeting adjourned at 8:00 p.m.
113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax)
accessfayeitevi lie, org
Il14li.fl{*e(IJfI•
t -
From: Clarice Pearman
To: Pate, Jeremy
Date: 6.15.06 6:18PM
Subject: Res. 108-06
Jeremy,
Attached is a copy of the appeal of C-PZD 06-1610. Have a good day.
Thanks.
Clarice