Economic Development Council

BLUE SPRINGS ECONOMIC DEVELOPMENT COUNCIL MEETING August 16, 2017 – 8:00 A.M. Journagan Family Community Room Howard L. Brown Public Safety Building 1100 SW Smith Blue Springs, Missouri 1. Call Meeting to Order 2. Approval of Minutes a. June 21, 2017 3. 2017-18 Budget Overview 4. Program of Work Update – Human Resources Consortium 5. MCRC Incentive Policy and Program Update 6. Activity Update 7. Other Business 8. Comments 9. Adjourn NEXT MEETING: Wednesday, October 18 – 8:00 A.M. Journagan Family Community Room Howard L. Brown Public Safety Building 1100 SW Smith Blue Springs, Missouri If special accommodations are required for citizen participation at this meeting please call (816)228-0111 1  CITY OF BLUE SPRINGS, MISSOURI MINUTES OF ECONOMIC DEVELOPMENT COUNCIL MEETING June 21, 2017 A meeting of the Blue Springs Economic Development Council, was held on Wednesday, June 21, 2017, in the Journagan Family Community Room, Howard L. Brown Public Safety Building, 1100 SW Smith, Blue Springs, Missouri, with Mike Lally presiding. COUNCILMEMBE Ron Baker Kathy Hunter RS PRESENT Justin Beal Mike Lally Erin Curry Dave Meyer Kim Deveney Cindy Miller - Absent Bill Essmann Deb Ohnoutka Trevor Goodwin – Arrived 8:30 a.m. Kirk Sampson Jeff Grote Councilman Susan Culpepper Yvonne Hall Also present were CJCFPD Chief – Steve Westermann, Deputy City Administrator - Adam Norris, Director of Community Development - Scott Allen, Economic Development Manager – Mark Stombaugh, and Economic Development Coordinator - Teresa Evans. CALL MEETING Mike Lally called the Economic Development Council meeting to order at 8:05 TO ORDER a.m. APPROVAL OF Councilmember Hunter moved to approve the minutes of the April 19, 2017 MINUTES Economic Development Council meeting. Motion seconded by Councilmember Essmann and carried with the following votes: Councilmember Baker – Aye Councilmember Hall– Aye Councilmember Beal - Aye Councilmember Hunter – Aye Councilmember Curry– Aye Councilmember Lally– Aye Councilmember Deveney – Aye Councilmember Meyer – Aye Councilmember Essmann– Aye Councilmember Miller - Absent Councilmember Goodwin – Absent Councilmember Ohnoutka - Aye Councilmember Grote - Aye Councilmember Sampson – Aye PRESENTATION – Mark Stombaugh presented a summary report of the Economic Development VISIONING Council’s Visioning Session held on April 19, 2017. The summary as provided SESSION by Sheila Shockey, Shockey Consulting Services, LLC is attached. Councilmember Essmann moved to approve the visioning and plan of action highlight summary. Motion seconded by Councilmember Ohnoutka and carried unanimously. ACTIVITY UPDATE Economic Development Manager Mark Stombaugh on project and activity updates. Councilmembers posed some clarifying questions related to the projects which were addressed by city staff present. OTHER BUSINESS No additional business was presented. 2 June 21, 2017 Economic Development Council Page 2 ADJOURNMENT At 9:05 a.m. there was no further business to come before the Economic Development Council; Councilmember Hunter moved the meeting be adjourned. Motion seconded by Councilmember Ohnoutka and carried unanimously. ___________________________________ Chairman ATTEST: ______________________________ Teresa Evans, Economic Development Coordinator 2 3 2017-2018 BUDGET REQUEST ECONOMIC DEVELOPMENT Budget Request Primary Goals & Objectives 5% 3% • Develop ED Policy 6% 1% • Attract and retain employment, and encourage 6% and support capital 1% investment 2% • Promote Blue Springs for future investment opportunities 74% • Provide valuable and Personal Services - $175,495 vehicle allowance - $5,800 actionable technical assistance to current and Professional Services - $3,500 Dues & Memberships - $14,500 potential businesses Training & Education - $3,500 Travel & Marketing - $14,500 Promotions & Special Events - $12,000 Office Ops & Misc. - $7,150 4 5 6 July 6, 2017 Development Advisory Commission: RE: Development Fee Reduction, Main Center Redevelopment Corporation The attached Main Center Redevelopment Corporation (MCRC) Incentive Policy, has been modified from the adopted MCRC Tax Abatement Policy to include an additional program reducing the permit, review, and system development fees charged on construction projects within the boundaries of the MCRC District. It is being presented for your consideration coupled with the periodic review of development fees. A summary and rationale of the referenced additions is included below; Program: Staff has been made aware of hurdles to potential development opportunities within the redevelopment areas where project costs are rising and the impact of the collective fees is greater, as a percentage of the overall project costs, when compared to those same opportunities, namely residential, in other areas throughout the City. The Program as drafted would reduce by ½, or 50%, the following; • Building Permit • Plan Review • Sign Permit • Water System Development Fees • Sewer System Development Fees Supporting Rationale and Impact: Staff’s review centered around support for the case presented that fees, as a portion of project costs were higher, approx. 5% in the Main Center District, compared to 2.5% in other areas. Representative Ave Fees; June 2016 through May 2017 Residential Commercial Permit Ave. Residential System Ave. Commercial System Permit Ave Ave Development Development (water/Sewer) (water/sewer) $1,414.73 $3,847.63 $7,800 $12,800 Additionally, it was understood that the creation of additional housing options and reinvestment in our downtown corridor are identified as primary components of the Strategic Vision adopted in 2015 by the City Council, and is further encouraged by one of the key elements from the 2007 Downtown Master Plan, to target economic incentives to help jump-start redevelopment efforts. 7 The impact of the Program was measured against the properties available and the allowable density, given the existing zoning. To back into reasonable expectations the annual average of fees collected for the last 3 years within the District is summarized below. The amount of fees foregone would have equaled $4,235. Residential Annual Ave. Commercial Annual Ave. System Development Annual Ave. $834 $2,437 $5,200 Process/Administration: The Program was developed with a desire for consistent and streamlined administration and access. Fee waiver calculations will be handled within the Community Development department at the time of permit requests. This process will happen independently of any MCRC review and recommendations related to future tax abatement requests. Approval and adoption of the program as contemplated would proceed under the following schedule; • MCRC Board of Directors – Recommended adoption June 29th • Consideration and recommendation of Development Advisory Commission – July 13th • Consideration and approval by City Council August 7th The program is targeted within the District with the impact and effectiveness of the program being reported annually through the MCRC Annual Report. The program was crafted to align with the periodic review of the MCRC Tax Abatement Policy and does not alter that established schedule, nor does it impact the future review and recommendations of the Development Advisory Commission with regard to proposed code or fee revisions. The next comprehensive review and any reauthorization of the MCRC Incentive Policy will be performed June 2018. Mark Stombaugh Economic Development Manager List of Attachments Attachment A—Main Center Redevelopment Corporation Incentive Policy Page 2 8  City of Blue Springs, Missouri Main Center Redevelopment Corporation Incentive Tax Abatement Policy I. Program Statement The intent of the Main Center Redevelopment Corporation (MCRC) is to strengthen the economic viability of the Main Center area by providing financial incentives for improving the appearance and structural conditions of its buildings and increasing the infill development of vacant parcels and population density to further support commercial properties. Main Center has been at the heart of Blue Springs development since early 1880’s. Twelve of the 126 buildings in the redevelopment area were constructed prior to 1900, while buildings in the entire area average over 50 years old. The maturity of the area brings with it both charm as well as challenges in that many of the buildings and land parcels do not conform to current standards and practices. The Main Center Redevelopment Corporation was incorporated to allow the City of Blue Springs to assist business and property owners in meeting these challenges. The ultimate success of the Main Center is dependent on private sector commitment. It is up to the merchants, building owners, residents, professionals and investors to improve the value of their businesses and the condition of their buildings. These incentive programs are intended to stimulate improvements to the Main Center Corridor by providing innovative financing mechanisms. It presents an opportunity to preserve our community’s heritage, and to enhance and promote the unique atmosphere which Main Center can provide. Successful implementation will result in a stronger Main Center and a stronger Blue Springs community. II. Downtown Master Plan A number of downtown buildings have been altered in a manner that does not contribute to the appearance or the image of Main Center. In some cases, alteration is not consistent with the overall design of the structure itself. Such building treatments are in direct conflict with the need for a comprehensive, coordinated approach to improvements. Several guiding documents have been developed with public input for the downtown area. In January 2007, the City adopted the Downtown Master Plan and in 2017 Downtown Design Guidelines were established. It is important that structures, both in their design and use, conform to the Downtown Master Plan and Design Guidelines. Accordingly, no incentive program tax abatement shall be granted unless, at a minimum, the proposed Redevelopment Project conforms to these standards as determined by the Downtown Review Board. This Policy provides for two types of incentives: (1) real property tax abatement and (2) a reduction in permit fees which would be applicable to 1 9 new development and redevelopment under the city code. It is contemplated that development may request and receive one, or both incentive programs. The two are not considered mutually exclusive. III. Description of Tax Abatement Program Pursuant to Chapter 353, RSMo, the Main Center Redevelopment Corporation has the ability to abate real property taxes for redevelopment projects. The amount and length of the tax abatement is dependent on which “Level” applies to the project: A, B or C. The incentive amount varies with each Level depending upon the investment amount. Level A The purpose of Level A is to attract sizable (market shifting) investments. There are two classes within Level A: Investment Threshold: Minimum $750,000 Incentive Amount 10 years 100% abatement + 15 years at 75% abatement Investment Threshold Minimum $1,000,000 – Requires “But for” economic analysis, paid for by the applicant Incentive Amount 10 years 100% abatement + 15 years at 100% abatement Level B The purpose of Level B is to attract mid-market investments (market stimulating): Investment Threshold $100,000 - $749,000 Investment Amount 10 years 100% abatement + 15 years at 50% abatement Level C The purpose of Level C is to attract market stabilizing investments (market stabilization): Investment Threshold $5,000 - $99,000 Incentive Amount: Equal to cost of improvements or 100% abatement for 10 years, whichever occurs first 2 10 Determination of qualified investment threshold. If the project involves new construction, or rehabilitation of an existing structure, interior and exterior costs may count towards the investment range. The total project budget for the investment should look to allocate 50% to exterior costs and 50% to interior costs, subject to the MCRC Board of Directors review. Interior costs shall not include furniture, appliances, inventory, trade or display fixtures. The MCRC Board of Directors shall review the project budget and make a recommendation to the City Council for approval. Project density. A project shall generally relate to an individual land parcel, but treating multiple properties as if assembled may be appropriate depending upon the circumstances. This policy shall not generally apply to individual single family residential structures, unless it is appropriate to treat a project involving multiple structures as a whole. Commercial projects may have one or more units per structure. Impact on School District Because new residential projects which qualify for Levels A or B have the potential to significantly generate students into the school district, affected parties shall confer with the District to identify mitigating factors, such as entering into a PILOT Agreement, as may be appropriate given such a project's financial viability. For example, one new residential single family dwelling would not generally be expected to qualify at Levels A or B, and requiring a PILOT on this lower investment amount may render this Policy's abatement inconsequential as a means to incenting development which conforms to the Downtown Master Plan. However, a multiple family residential structure (e.g., attached housing, four-plex, etc.) may well qualify at Levels A or B and, given this higher investment amount, a PILOT Agreement would be appropriate. “PILOT” refers to payments in lieu of taxes to be made to all taxing authorities whose property tax revenues are affected by the abatement on the same pro rata basis and in the same manner as the ad valorem property tax revenues received by each taxing authority from such property in the year such payments are due. But-for economic analysis means that, with respect to a particular Redevelopment Project, the applicant would not reasonably be anticipated to undertake the Redevelopment Project without the tax abatement incentive, which may be evidenced by an applicant’s affidavit attesting to this fact. The cost of the but-for economic analysis will be paid for by the applicant. IV. Description of Permit Fee Program City Code Section 805.030 provides the public purpose and framework for a partial waiver of building, plan review, and sign permit fees inclusive of water and sewer system development fees (Fees) to encourage in-fill development and redevelopment in the Main Center area. In each situation, upon request, the Fees within the district will be reduced by one-half (½), or 50%. 3 11 V. Eligible Property Redevelopment projects may be located on any parcel within the MCRC Redevelopment Area. See attached Exhibit B for the redevelopment area boundaries. VI. Tax Abatement Application Process: Applications for the program will be accepted by the City Staff on behalf of Main Center Redevelopment Corporation. A $250.00 filing fee to MCRC is required with the application for investment Level “C” or a filing fee of $750.00 for investment Level “A” and “B”. The Application will first be reviewed by the Downtown Review Board for a determination of whether the proposed Redevelopment Project conforms to the Downtown Master Plan. If the Downtown Review Board determines that the proposed Redevelopment Project conforms to the Downtown Master Plan, then the application will be considered by the MCRC Board of Directors for recommendation to the City Council, including a recommendation as to the appropriate incentive Level. The City Council shall then consider the MCRC recommendation. If the City Council favorably considers the application, it will adopt an ordinance approving the redevelopment project and authorizing the tax abatement. The property owner and MCRC will then enter into a Memorandum of Understanding setting forth program responsibilities and expectations and execute deeds conveying the property – albeit briefly – to MCRC and then back to the property owner, which then serves as the statutory trigger for the tax abatement. The tax incentive is available for only those projects that have been approved by the City Council before the project is started. The project is considered started when the applicant has received one or more building permits for the project VII. Permit Fee Reduction Process Requests for reduction in Fees can be made to the Community Development Department along with the submission of applicable Permit Application materials. VI. Expiration This Tax Abatement Policy expires five (5) years from the date of City Council approval. No applications will be accepted after this five-year period, but applications submitted before the end of the five-year period will be processed in accordance with this Policy. The next date this policy is to be reviewed by the City Council is June, 2018. VII. Performance Audit To assist in measuring the effectiveness of this Policy, City Staff shall collect the following benchmark data: baseline annual assessed valuation of the Redevelopment Area; number of building permits issued with and without abatements within the Redevelopment Area identifying the number of projects (and units) completed per parcel; capital investment amount; amount of square feet built or rehabilitated. This data shall be documented annually. 4 12 City Staff shall present to the MCRC Board of Directors and the City Council a Performance Audit that quantifies and analyzes the program results. City Staff shall also make a recommendation whether the program should be continued or modified. All affected taxing jurisdictions shall be provided with a copy of the Performance Audit and notified of the date that it will be presented to the City Council. 5 13