urban renewal authority - lakewood · 05.08.2019 · 2011 & 2012: “transparency” bills; not...

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August 5, 2019

Presented byRobert Smith

Urban Renewal Authority –How they can be used to

improve a community

Presented by

Carolynne White

Urban Renewal

in Colorado

August 5, 2019

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URA – How they can be used to improve communities

Council has some

interest in

exploring the

formation of a

new Urban

Renewal Area

within Lakewood.

The approval of such

areas would be a

decision of the

Lakewood City Council.

Lakewood

Redevelopment

Authority (LRA)

oversees &

manages our 4

existing URAs.

The approval of an

Urban Renewal/

Redevelopment Plan for

any new area would be a

decision of the City

Council and likely the

LRA Board as well.

The LRA Board

would need to

expand, by

several seats,

before it could

consider an

Urban Renewal/

Redevelopment

Plan for a new

area.

Some Framing Comments

There are many

acronyms &

words of jargon

used in Urban

Renewal

discussions.

Don’t be shy about

asking for clarification

on terminology.

Though we’ll use

the term

“blight”… it has

specific meaning

with regard to

URA.

Blight will possibly have

a different meaning in

the context of the

Growth Ordinance.

Urban Renewal

Authorities (like

the LRA) have

different powers

than do City

Councils.

URA – How they can be used to improve communities

Some Framing Comments

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We All See Things Differently

A

Typical

Shopping

Center

A

Shopping

Center

as seen

by a

MAJOR

TENANT

A

Shopping

Center

as seen

by a

Developer

A

Shopping

Center

as seen

by the

CITY

Perspectives

Increased/more sophisticated public demand for infrastructure and services

Changes in tax policy more public improvements financed by private developers

Cities (and citizens) want development to pay its own way

Result More public/private partnerships, lines blurred

Public v. Private

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Money Doesn’t Grow On Trees

1958

1ST Enacted in Colorado

July 15, 1949

Federal Housing Act

(63 Stat. 413)

Intended primarily to

enable Colorado to

receive federal funds

designated for slum

clearance and housing

construction

1970s & early 80s

TIF provisions added

when federal funds

began to dry up

…the prevention and

elimination of slums

and blight is a

matter of public

policy and statewide

concern in order that the state and its municipalities shall

not continue to be endangered

by areas which are focal centers

of disease, promote juvenile

delinquency, and consume an

excessive proportion of its

revenues because of the extra

services required for police, fire,

accident, hospitalization, and

other forms of public

protection, services, and

facilities

1958: Urban Renewal Law enacted

1999: HB 99-1326 – 4 blight factors

2004: one bill passed, two others introduced -- HB 04-1203 (eminent domain)

2005:one bill passed, two others introduced -- HB 05-224 County impact report

2006:(three bills passed; numerous others introduced)HB 06-1375 tax increment task forceHB 06-1411 higher burden for eminent domain HB 06-154 Clarify eminent domain laws

2007:(one bill passed; one other introduced) -- SB 07-157 -- notice of commissioning of blight study

Improving Since the 1950s

History Philosophy ChangesHistory Philosophy Changes

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1958

1ST Enacted in Colorado

July 15, 1949

Federal Housing Act

(63 Stat. 413)

Intended primarily to

enable Colorado to

receive federal funds

designated for slum

clearance and housing

construction

1970s & early 80s

TIF provisions added

when federal funds

began to dry up

…the prevention and

elimination of slums

and blight is a

matter of public

policy and statewide

concern in order that the state and its municipalities shall

not continue to be endangered

by areas which are focal centers

of disease, promote juvenile

delinquency, and consume an

excessive proportion of its

revenues because of the extra

services required for police, fire,

accident, hospitalization, and

other forms of public

protection, services, and

facilities

2008:two bills -- HB 08-1349 - county treasurer offset; SB 08-154 –may include unincorporated territory with consent of county

2009:four bills introduced; none passed

2010:HB 10-1107 – “ag” land bill; “TIF Reform” bill not introduced

2011 & 2012:“transparency” bills; not passed

2014:HB 14-1375 – “seat at the table” plus formula for county revenue sharing – vetoed by Governor

2015:HB 15-1348

Improving Since the 1950s

History Philosophy Changes

Statutory Authorization

Purpose: eliminate slumand blight

C.R.S. §31-25-101 et seq.

Not: job creation economic development increase tax revenue

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Statutory Authorization

ButThe eliminationof slumand blight

C.R.S. §31-25-101 et seq.

almost alwaysresults in job creation economic development increase tax revenue

JobsEcon

Dev

TaxRevenue

URA Success Stories

Colfax Corridor & Alameda Corridor

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The Conditions Survey

Sometimes Called the “Blight Study”

Statutory Blighting Conditions

Deteriorated or deteriorating structures

Defective or inadequate street layout

Faulty lot layout in relation to size, adequacy, accessibility, or usefulness

Unsanitary or unsafe conditions

Deterioration of site or other improvements

Unusual topography or inadequate public improvements or utilities

Defective or unusual conditions of title rendering the title non-marketable

Conditions that endanger life or property by fire or other causes

Buildings that are unsafe or unhealthy for people to live or work

Environmental contamination of buildings or property

Existence of health, safety, or welfare factors requiring high levels of municipal

services or substantial underutilization or vacancy of buildings, sites, or

improvements

Not All Conditions Need Be Present

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Study Area Scope | Properties Included | Fictional Example

Boundaries of Urban Renewal Area must be drawn “as narrowly as

possible” to achieve the goals of the Colorado Urban Renewal Law

Property Values

What happens to the value of a

property if it is designated

within an Urban Renewal Area?

No studies have

shown reduction

Some studies have

shown increase

Designation of

blight indicates

intention of

governing body

to target

investment to

that area;

increases market

perception of

value

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Congratulations, You Have Blight

Photo Credit: Mark Heller

Adoption of Urban Renewal Plan

Blight Study/Conditions Survey

11 categories of blight

Appointment of new Board Members

Negotiation with Taxing Entities

Public Hearing – Planning Commission

Public Hearing – City Council

Adoption of Urban Renewal Plan

Defined plan area boundaries

Sets goals

Authorizes TIF and/or eminent domain

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Timelines

Public Hearing

+ 30 days –County impact report & copy of plan under

prior law (original statute)

+ 90 days –deadline for

mediator “findingsof fact”

(HB 15-1348)

+ 120 days –maximum

negotiation period

(HB 15-1348)

+ 90 days –minimum notice to counties

(HB 15-1348)

1 Million2 Million

4 Million

6 Million

8 Million

10 Million

12 Million

14 Million

16 Million

18 Million

0 1 2 3 4 5 6 7 8 9 10 1112 13 14 15 16 17181920 21 22 2324 25 26

TIF =

Tax Increment Financing

Base & Increment

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Tax Increment Financing

URA receives a share of District

property & sales tax revenues

URA makes the catalyst

investment in a building or

project

That project results in an increment in

property and/or sales

taxes

How TIF Works

Blighted Property

After Redevelopment

TIF District is created

Tax base is established

Increased taxable value

Captured taxable valueRegular tax levies

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Why Use Increment & TIF

NEW

TAX

Increment is NOT a new tax

$ Extraordinary public improvement

requirements may be needed

Increment does NOT increase tax

rates on existing property owners RATEINCREASE

Increment does NOT require that

property owners outside of urban

renewal area contribute to project

TAXOUTSIDE

URA Increment captures the additional

value created by private investment

to put back into the project

$$$$$

$$$

Growth pays its own way

Absent the investment by the Urban Renewal Authority, development may not happen.

Without

development,

tax revenues

stagnate or

decline.

With URA

investment,

development occurs,

and sales and

property tax

revenues increase

Incremental increase

available for URA to

reinvest in the district to

remedy blight.

If Not “But for” the URA

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Bonding

• Public or Private Placement

• Interest and issuance costs

Reimbursement Agreement

• Easiest to administer

• Requires well-capitalized developer partner

Other Methods

Cash fund, land value discounts, loan guarantees,

community land trusts, etc.

TIF =

TAX INCREMENT FINANCING

Using Tax Increment Financing

The But For Analysis

How do you know a project is appropriate

for support through tax increment?

Urban Renewal Plan

already adopted/in place

Proposed project consistent

with plan goals

Project would not occur absent

tax increment support (“but for”)

Note: Urban Renewal statute does not

require that improvements be public in

order to receive tax increment,

only that they remedy blight

TIF =


Tools for Applying TIF

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TIF =


Tools for Applying TIF

The Gap Analysis

What are the total project costs and the

developer’s anticipated returns?

If anticipated returns are significantly

lower than market expectations, project

will likely not occur.

Can/should public participation be used

to close the gap for the project?

Does the project include extraordinary

costs acting as a barrier to market

participation?• Demolition of existing structures

(eg: CU Health Center – 9th & Colo Blvd.)

• Landfill/contamination

(eg: Castle Rock, Gates)

• Oversized or regional infrastructure

Policy & Governance Considerations

100%? 50%? Some other number? How to decide?

No statutory requirement.

Some authorities adopt across-the-board policies;

others address case-by-case

Is the answer different in an area-wide plan than in a

project-specific plan?

What is the minimum amount of incremental tax

revenues necessary to insure that the project will

occur?

Unlike a private investment, the goal of urban renewal

is not to generate increased tax revenue or returns for

the public “investors;” rather the goal is to eliminate

blight. Governmental entities can choose to invest at a

“loss” or break even, to achieve important policy goals.

?

How much tax increment should be contributed to a project?

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URA Policies Intergovernmental Agreements (IGAs)

Tax Increment Reimbursement Agreements/Public

Finance Agreements w/ Property Owner/Developer

• list of approved “Eligible Improvements”

• process for URA verification

Adoption of bylaws not expressly required, but

worth considering

Adoption of other policies or form documents

• Grant Guidelines

• Public Art

• Grant Agreement Template

• TIF Agreement Template

• Relocation Policies

Policy & Governance Considerations

What is “Public”?

STATUTORY

AUTHORITY

IRS

REGULATIONSPOLITICAL

WILL

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Some Phases Moving Forward

Phase

1

Outline a

potential

new urban

renewal

area

Informal

outreach to a

large number

of property

owners,

including

those with

key interests

in the area

Outreach to other

taxing entities

Potentially identify

some terms for

future

Intergovernmental

Agreements (IGAs)

Outreach to internal

departments including

Legal and Finance

Determine what impacts,

in addition to expanding

the number of Board

Members, will be part of

adding a new URA

Phase

1A

Continued Compliance with Colorado H.B. 15-1348 Urban Redevelopment Act

with the seating of at least 3 New LRA Board Members

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Phase

2

Authorize the engagement of an independent

consultant to conduct a formal Conditions Survey

of the potential new urban renewal area

Phase

3

Issue written notification of the impending

Conditions Survey to all property owners within the

Study Area

Phase

4

Engagement of a consultant to conduct a formal

Conditions Survey & develop a draft plan and impact

report of the area


Phase 5 Consultant works on Conditions SurveyContinue to communicate with property

owners

Continue to communicate with other taxing

entities

Phase 6 Consultants complete and then present Conditions Survey

Phase 7 If the formation of a URA is warranted, then hold a Public Hearing at which Council will consider

forming a new URA

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Phase 8 Analysis and preparation of Urban Renewal Planning Documents – TIF & Impacts

Phase 9 Plan presentation, consideration & possible adoption at Public Hearing

Lakewood City Council

Lakewood Reinvestment Authority (LRA)

Discussion&

Questions