Redevelopment Minutes 2-16-16 2016-11-01T09:54:47+00:00

TREMONTON CITY CORPORATION
REDEVELOPMENT AGENCY
February 16, 2016

Board Members Present:
Roger Fridal, Chairman
Diana Doutre, Board Member
Lyle Holmgren, Board Member – excused
Jeff Reese, Board Member – excused
Bret Rohde, Board Member
Lyle Vance, Board Member
Shawn Warnke, Executive Director
Darlene Hess, Executive Secretary

Chairman Fridal called the Tremonton Redevelopment Agency Meeting to order at 8:29 p.m. The meeting was held in the City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Chairman Fridal, Board Members Doutre, Rohde, and Vance, Executive Director Warnke, and Executive Secretary Hess. Board Members Holmgren and Reese were excused. Also in attendance was Public Works Director Paul Fulgham.

1. Approval of agenda:

Motion by Board Member Rohde to approve the February 16, 2016 agenda. Motion seconded by Board Member Doutre. Vote: Board Member Doutre – aye, Board Member Rohde – aye, and Board Member Vance – aye. Motion approved.

2. Approval of minutes – October 6, 2015

Motion by Board Member Doutre to approve the minutes of October 6, 2015. Motion seconded by Board Member Rohde. Vote: Board Member Doutre – aye, Board Member Rohde – aye, and Board Member Vance – aye. Motion approved.

3. New Business:

Discussion and consideration of getting a pre-authorization from the RDA regarding improvement expenses for developer improvements for Tremont Center from tax increment generated from the Tremont Center Community Development Project Area –Micah Capener, Developer

Executive Director Shawn Warnke reminded the RDA Board that the RDA has entered into a reimbursement agreement that states that the developer is entitled to reimbursement of expenses for up to 1.9 million dollars. The reimbursement to the developer is the priority obligation for the use of Tax Increment from the Tremont Center Community Development Area. The reimbursement of up to 1.9 million is for improvement such as burying the canal, right-of-way improvements, landscaping pedestrian walkways, burying overhead power lines, water lines and the project creation costs. The RDA has made the commitment to the $1.9 million or up to the actual cost. If the actual costs borne are less than the 1.9 million, then that is what the reimbursement will be to the developer.

The reimbursement agreement also identifies secondary improvements that total approximately $230,000and the reimbursement of those expenses to the developer are prioritized equally with the RDA’s desired improvements on the rest of Main Street. The RDA would share the Tax Increment once the developer reaches that 1.9 million or the actual costs of improvements equally at 50% for the tax increments after that until the developer is reimbursed for the $230,000 for the secondary improvements.

Micah Capener, the developer wants to make sure that what is designed and where they are planning to spend the money fits in line with what the RDA Board agreed to before the project is started. He also stated that they are ready to start tomorrow.

Board Member Bret Rohde asked for a clarification as to if the Tax Increment was coming from sales tax. Mr. Capener clarified that the Tax Increment is solely from property tax from the properties within the boundaries of the Tremont Center Community Development Area.

Mr. Capener stated they were given the green light on the plans to bury and landscape the canal today other than a minor change.

He stated that the original budget was $50,000 for burying the power lines, and the power company is stating it will closer to $300,000 to bury the power lines across the he Tremont Center’s frontage on Main Street. The cost to move the power lines exceeds what they had planned to bury them and the cost to bury them is 5 times what was originally budgeted for. They are willing to bury the power lines, but that will exceed the numbers estimated already without the burial of the canal.

The plans for this phase are to only bury about 1/3 of the canal. The difference between the $800,000 and the $2.2 million are to bury the remaining canal, plus demolishing the homes and moving the water line, and all the other things to complete the other half of the project. The reason it can’t all be completed now is because UDOT will not allow putting in the accesses unless the pavement is improved. You can’t improve the pavement unless the canal is buried. You can’t bury the canal unless the homes are dozed. That is why it has been broken into smaller phases so the project can be developed out and then the next phase can be finished in a year or two.

Mr. Capener stated they were planning on just moving the power lines because the cost to move them is $69,000 and the difference between burying them and moving them is $96,000. This would be done under Phase 1. The total package will be $250,000-300,000 additional over the budget we had originally anticipated because the power company is requiring the 3 power switches. They are prepared to lay the conduit, but because of the additional costs they are now planning on moving forward with just moving the lines.

Mr. Capener said that there are 2 power poles wherein the lines cannot be buried or moved because they are main lines.

Board Member Brett Rohde stated that for aesthetics, the power lines really need to be buried and we need to do whatever we can to get them buried. Although this would take away money allocated for other upgrades for downtown.

Board Member Vance asked how much taxes are estimated to be coming in from the existing buildings. Chairman Fridal said that the amount will not be determined until the County does their assessment in April.

Mr. Capener said that it is estimated between $50,000 and $60,000 a year just from Shopko. Calculated at 75% it would be $40,000 per year. The agreed amount to give back to the taxing entity is 25% for the next 15 years.

Board Member Vance commented that with what is already committed on for this project, what is the projection on how long will it take to pay the first $824,000 at 75% with the RDA money coming in.

Mr. Capener stated that it will depend on what the County assesses each property at, but if they assessed Shopko out at $60,000 at 15 years that will be $675,000. After they build the other 5 buildings and the payback amount will be reached within the 15 years.

Mr. Capener stated that the other issue that needs to be discussed in the future is, as an RDA Board, how much we have to commit to make this a bonding experience. We have the commitment to hit the payback amount, then we can bond out for the $4.3 in the next year or two, fix downtown and pay back all of it, and use the CDA to pay back the bond.

Mr. Capener stated that with this design we can fix downtown simultaneously with this project, by fixing the parking, the visibility, and the walk-ability all within the 15 year time frame.

The City Council has already agreed to start on the project. The only issue would be the additional fees to bury the power lines.

Executive Director Shawn Warnke stated that part of the reason for this meeting was to get the plans approved by the RDA for Mr. Capener to proceed.

Board Member Vance stated that allocating an additional $250,000 of Tax Increment to bury the power lines will be called Option B.

Mr. Capener stated that the agreement will be amended from the $2.218 million to $2.467 million (which includes both the primary improvements and secondary improvements contained in the reimbursement agreement with the developer) at a later date with documentation.

Motion by Board Member Vance to approve Option B. Motion seconded by Board Member Rohde. Vote: Board Member Doutre – aye, Board Member Rohde – aye, and Board Member Vance – aye. Motion approved.

4. Adjournment

Motion by Board Member Doutre to adjourn the meeting. Motion seconded by Board Member Rohde. Vote: Board Member Doutre – aye, Board Member Rohde – aye, and Board Member Vance – aye. Motion approved.

The meeting adjourned at 9:05 p.m.

The undersigned duly acting and appointed Executive Secretary for Tremonton City Corporation Redevelopment Agency hereby certifies that the foregoing is a true and correct copy of the minutes for the RDA Meeting held on the above referenced date. Minutes were prepared by Wendi Stickney.

Dated this __________ day of __________________, 2016.
____________________________
Darlene Hess, Executive Secretary