City Council

Special Session 10/30/18 CITY OF FREDERICKSBURG, VIRGINIA HON. MARY KATHERINE GREENLAW, MAYOR CITY COUNCIL HON. WILLIAM C. WITHERS, JR., VICE -MAYOR, WARD TWO HON. KERRY P. DEVINE, AT-LARGE HON. MATTHEW J. KELLY, AT-LARGE HON. JASON N. GRAHAM, WARD ONE HON. DR. TIMOTHY P. DUFFY, WARD THREE Council Chambers, 715 Princess Anne Street HON. CHARLIE L. FRYE, JR., WARD FOUR Fredericksburg, Virginia 22401 October 30, 2018 The Council of the City of Fredericksburg, Virginia, held a special session on Tuesday, October 30, 2018, beginning at 7:30 p.m. in the Council Chambers of City Hall. City Council Present. Mayor Mary Katherine Greenlaw, William C. Withers, Jr., Council members Kerry P. Devine, Dr. Timothy P. Duffy, Charlie L. Frye, Jr, Jason N. Graham and Matthew J. Kelly. Also Present. City Manager Timothy J. Baroody, Assistant City Manager Mark Whitley, Assistant City Manager Doug Fawcett, City Attorney Kathleen Dooley, Director of Community Planning & Building Services Charles Johnston, Senior Planner Michael Craig, Director of Economic Development Bill Freehling, and Clerk of Council Tonya B. Lacey. Opening Prayer and Pledge of Allegiance. Council was led in prayer by Councilor Matthew J. Kelly followed by the Pledge of Allegiance led by Mayor Mary Katherine Greenlaw. Officer Recognized. Mayor Greenlaw recognized the presence of Deputy Thomas Worthy at this evening’s meeting. Citizen Comment. The following speakers participated in the citizen comment portion of this evening’s meeting. Jon Gerlach, 809 Charlotte Street, Chair of the Architectural Review Board, spoke in support of the C-PACE ordinance. He said the C-PACE ordinance was a promising tool for 20095 Special Session 10/30/18 preserving historic buildings. He said it was important to save the older buildings and preservation was expensive. Mr. Gerlach spoke about the work the Historic Preservation Group was working on and ways they could incentivize preservation and he said the C-PACE ordinance would be a great asset. Dr. Roy Gratz, 1007 Albert Reynolds Drive, said the last time he spoke to the Council about baseball he was strongly opposed because it was bad for Fredericksburg. He said he was not opposed to the current deal but he thought the City could bet a better deal than the $1.05 million payment over 30 years. Dr. Gratz stated that the team would be coming back to the City for an increase because of inflation. He questioned if the interest of baseball would hold up in the future and whether the City was capable of holding events in such a venue. Scott Dicke, Arlington County resident, works for Sustainable Real Estate Solutions, a National C-Pace Program Administrator and he is the Director of Virginia’s C-PACE programs for the firm. He also wears two hats for the State, by administering the C-Pace program for Arlington County and he engages local jurisdictions around the state to facilitate the reference to new C-PACE programs and expanding the market in Virginia. He encourage the Council to support the C-PACE program in the City. Arlington was the first County in the State and the City of Fredericksburg would be the first City to enact if the Council approved the ordinance. Mr. Dicke explained that this would be an opportunity to provide building owners and developers with a new project financing option to improve their buildings and water systems. Gina Schiller, 1706 Washington Avenue, said Fredericksburg was already a City that attract people and baseball would expound on that. She said the Baseball league would be a part of the community because they were already in the community. 20096 Special Session 10/30/18 City Manager Baroody (D18-411), commended staff for hundreds of hours of work on this project, he thanked the Silber family for their cooperation as well. He handed out a new timeline for the project to the Council. The following items were transmittal items and no action was taken. Mayor Greenlaw requested Clerk Lacey read the items into record so the public would have knowledge of the items. • Transmittal of Resolution Amending the Comprehensive Plan to Provide for a Public/Private Use Stadium, with Related Transportation Planning, in Land Use Planning Area 1 (Celebrate Virginia South) (D18-412). • Transmittal of Resolution Granting a Special Use Permit to Celebrate Virginia South, LLC; CVAS Parkway, LLC; and CVAS Expo Center, LLC; for a Stadium Use at GPINs 7860-70-3653, 7769- 57-9159, 7860-80-0703, 7769-79-5783, and 7860-60-7626 in Celebrate Virginia South (D18-413). • Transmittal of Resolution Adopting Fees for the C-PACE Program (D18-414). Ordinance 18-18, First Read Approved, Approval of the Proposed Vacation of an Unimproved Portion of the Carl D. Silver Parkway Right- of-Way (D18-415 thru D18-416). Senior Planner Craig presented a PowerPoint and in 20097 Special Session 10/30/18 his presentation he discussed the existing conditions-site character, Carl D. Silver Parkway extended, Planning Commissioners comments, and recommendation. Councilor Kelly moved to approve Ordinance 18-18, on first read, approving the proposed vacation of an unimproved portion of the Carl D. Silver Parkway Right-of-Way; motion was seconded by Councilor Devine and passed by the following recorded votes. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Ordinance 18-19, First Read Approved, Creation of a Program for Financing Clean Energy Improvements, Known as “C-PACE” (D18-417 thru D18-417.1). Economic Development Director Freehling explained that the Commercial Property Assessed Clean Energy “C-PACE” Program would help establish Fredericksburg as a progressive leader in environmentally friendly policies and innovative financing. C-PACE is an innovative way to finance clean energy and water-efficiency projects on new and existing commercial and multifamily buildings. Mr. Freehling stated that if the ordinance was enacted the program could be used to help finance the multi-purpose stadium as well as future construction and rehabilitation projects in the City. The program could be used to incentivize rehabilitation of historic buildings, enhance the real property tax base and promote employment and economic growth in the City. Mr. Freehling explained that setting up the program would enable private sector loans for 100 percent of the total cost by placing a special assessment lien on the property and the property owner would pay over time. The energy-efficiency upgrades would offset the special assessment by saving the borrower money through their utility bills. Mr. Freehling said the C-PACE program has been used throughout the United States but Fredericksburg would be the second locality in Virginia to adopt it if Council approved. 20098 Special Session 10/30/18 City Attorney Dooley spoke on the voluntary special assessment lien that sets the C- PACE program apart from private loan programs. Under the voluntary special assessment lien the C-PACE loan is secured by a lien against the real estate and it has equal priority as a real estate tax lien does. The special assessment is billed and collected by the Treasurer on the same schedule that the City bills for real estate taxes. In order for the lien to have special priority it would out rank any other lien on the property except real estate taxes. If there was already a mortgage on the property then that lender must sign an agreement saying this special assessment would take priority over their loan. Ms. Dooley said many times they will agree to this because they will see the added value to the property and C-PACE loans do not have an acceleration clause and would run with the land and they also realize the added value to the marketability of the property. She said another statutory provision the City would be taking advantage of is the early collections options under VA Code, if a C-PACE loan becomes delinquent it can be foreclosed upon by the Treasurer within one year of the delinquency. She noted that for real estate taxes the City would have to wait for two years before filing foreclosure. Citizen Schiller asked whether the City would be protected so that what happened with the Slavery Museum would not happen again. Ms. Dooley explained that there were protections built in to protect the City but she also said this was different from the CDA loan. She said the CDA loan was taken out before the land was developed and the C-PACE loan comes after all of the infrastructure is in place and the builder or developer would get the C- PACE loan at the same time they get the building permit. Councilor Graham questioned the minimum number of units for multi-family was five and he wanted to know how that would affect mixed use development that had less than 20099 Special Session 10/30/18 five multi-family units. Ms. Dooley explained that all properties were eligible except for residential property of four units or fewer so mixed use development should be eligible. Councilor Devine asked for clarification of the age of buildings that were eligible and Ms. Dooley explained that C-PACE was available for any existing building no matter the age as well as new construction. Councilor Devine made a motion to approve Ordinance 18-19, on first read, creating a program for financing clean energy improvements, known as “C-PACE”; motion was seconded by Councilor Kelly and passed by the following recorded votes. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Development and Shared Use Agreement with Potomac Baseball, LLC (D18-418 thru D18-419). Mr. Freehling reviewed the process it took to get to this point starting from the talks with the Hagerstown Suns, which fell through because of various reasons. He said it was from the conversations with the Suns that his relationship developed with Mr. Art Silber, owner of the Potomac Nationals, at which time Mr. Freehling was working for the Free Lance-Star. Mr. Freehling said he later learned that the negotiations fell through with Prince William County and he and City Manager Baroody decided to contact Mr. Silber about moving the team to Fredericksburg. Mr. Freehling said over the past year they had developed a strong relationship with the Silber family and Mr. Silber’s good friend Peter Kirk. Mr. Kirk has built more than a dozen professional stadiums, owned Minor League teams and he has been a key consultant during the process. Mr. Freehling presented a PowerPoint which showed the renderings of the proposed stadium. He said there was an unlimited number of events that could be held at the stadium. He said this stadium would bring new life to Celebrate Virginia South and it would help to 20100 Special Session 10/30/18 fulfill the original vision of that tourism-oriented development. Mr. Freehling said this venue would be a great for telling the City’s story to thousands of residents and visitors. Mr. Freehling also discussed the financing stating that the Silber’s wanted a privately owned stadium but the City would be backers as the anchor tenant to help get the stadium financed. The City would contribute $1.05 million a year for thirty years in order to do so the City would use the following revenue sources, taxes generated from the stadium, revenues earned from events held by the City, and $100,000 payments from the Celebrate Virginia South Owners Association, which were being negotiated. Mr. Freehling said this did not include possible additional revenue that could be generated from hotel stays and more. Ms. Dooley presented the remainder of the PowerPoint and she discussed the following: proposal and letter of intent, development and shared use agreement, relationship with the City and the Club, Baseball Rules and comparable facilities, financial terms, stadium construction, stadium operations, stadium maintenance, team commitment, community and marketing and the City’s use of stadium. See D18-419 for more information. Mayor Greenlaw said the City has had very good discussions and the team offered the City what the City was looking for. She said the discussions with the team were very productive and an all-around great experience. Councilor Devine thanked all of staff for their work and for making it all work. She also thanked the Silber family for making it work and for being willing to communicate. She also thanked them for already being a part of the community. Councilor Devine had a question regarding the opening date. She asked what would happen if they did not open by 2021 and City Attorney Dooley explained that the City would have the right to terminate the contract or extend the contract. Councilor Devine asked if 20101 Special Session 10/30/18 there was a commencement build date and Ms. Dooley explained that would not be a part of this document but that would be a part of the loan documents. Councilor Frye echoed Ms. Devine’s comments and he said for the future he would like to make sure the events were diverse because in the past events had not been diverse. Vice-Mayor Withers said he was happy about the deal and he said there would always be some risks but they were minimal and he said this would be a huge help for the City. Mayor Greenlaw said this had been a prime project that has had the City’s attention for some time. Ms. Lani Silber-Weiss, representative for the Silber family, said the relationship and cooperation with the City had been cooperative and problem solving. She said it had been a wonderful experience from the beginning. She said they were enamored with the City and with the businesses. She said the City was the best place for the team. Ms. Silber-Weiss said with the surrounding counties it was the perfect place for the team to succeed. Resolution 18-91, Extending the Term of the Letter of Intent with Potomac Baseball, LLC, for the Approval of Definitive Agreements Related to the Multi-Use Outdoor Recreational Venue (D18-420). After staff presentation Councilor Kelly made a motion to approve Resolution 18-91, extending the term of the Letter of Intent with Potomac Baseball, LLC, for the approval of Definitive Agreements related to the multi-use outdoor recreational venue; seconded by Vice-Mayor Withers and and passed by the following recorded votes. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Closed Meeting Approved (D18-421). Upon a motion Councilor Duffy, moved approval of a closed session under Virginia Freedom of Information Act Section 2.2- 20102 Special Session 10/30/18 3711 (A)(39) for discussion of proprietary information, voluntarily provided by Potomac Baseball, LLC pursuant to a promise of confidentiality; and memoranda prepared by the City of Fredericksburg relating to Potomac Baseball, LLC, where competition or bargaining is involved and where disclosure of such information would adversely affect the financial interest of the City; Code of Virginia 2.2-3711(A)(8) for consultation with the City Attorney related to the Development and Shared Use Agreement with Potomac Baseball, LLC, and related legal instruments; motion was seconded by Councilor Devine and passed by the following recorded votes. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Return to Open Meeting Approved. Upon the motion of Councilor Kelly seconded by Councilor Devine and passed by the following recorded votes, Council approved a return to an open meeting. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Resolution 18-92, Approved, Certifying Closed Meeting. Upon the motion Councilor Kelly approved Resolution 18-92 certifying the closed meeting; seconded by Councilor Devine and passed by the following recorded votes. Ayes (7) Councilors Greenlaw, Withers, Devine, Duffy, Frye, Graham and Kelly. Nays (0). Adjournment. There being no further business to come before the Council at this time, Mayor Greenlaw declared the meeting officially adjourned at 8:59 p.m. Mary Katherine Greenlaw Mary Katherine Greenlaw, Mayor Tonya B. Lacey Tonya B. Lacey, Clerk of Council, CMC 20103 Special Session 10/30/18 [This page intentionally left blank.] 20104