Council Study Session

MINUTES OF THE GILBERT TOWN COUNCIL, IN SPECIAL MEETING FOR A STUDY SESSION, TUESDAY, JANUARY 25, 2022, AT 5:15 P.M., GILBERT PUBLIC SAFETY TRAINING FACILITY, ATLAS AUDITORIUM, 6860 SOUTH POWER ROAD, GILBERT, ARIZONA COUNCIL PRESENT: Mayor Brigette Peterson, Vice Mayor Aimee Yentes, Councilmembers Scott Anderson, Yung Koprowski, Scott September, and Kathy Tilque COUNCIL ABSENT: Councilmember Laurin Hendrix STAFF PRESENT: Town Manager Patrick Banger, Town Clerk Chaveli Herrera, Town Attorney Chris Payne, Economic Development Director Dan Henderson, and Redevelopment Program Manager Amanda Elliott CALL TO ORDER OF SPECIAL MEETING Mayor Peterson called the meeting to order at 5:21 p.m. AGENDA ITEM 1. Discussion on Redevelopment Area Statutes and Government Property Lease Excise Tax Program Town Attorney Payne presented on redevelopment areas; covering why they existed, what they were, how they were created, how they were beneficial, what they potentially meant for property owners, and Government Property Lease Excise Tax (GPLET). He explained the purpose was to provide local governments with tools to revitalize “blighted” areas within their jurisdictions and further discussed the definition of a “Blighted area” as defined in Arizona Revised Statues, A.R.S. § 36-1471. He highlighted that a redevelopment area did not mean town subsidies, acquisition of property through purchase or eminent domain, loss of personal property, nor decreased property values. He outlined the creation process through parcel surveys and data gathering, public outreach, the role of involvement for the Redevelopment and Planning Commissions, the Town Council’s involvement through adoptions of resolutions and redevelopment plans at various stages, and finally, implementation of the recommended Redevelopment Plan. He listed some of the redevelopment tools available to the Town per State statute, but noted the Town historically had not utilized those tools. He expanded on potential benefits of a redevelopment area, emphasized the community involvement of the project, and that the 10-year designation did note the General Plan Growth Area designation. He summarized that GPLETs were another tool created by the State Legislature used by some cities, Gilbert not included, and explained the change of tax rates since authorized in 1996, which reduced the potential tax benefit of a GPLET. He stated Gilbert had not utilized a GPLET and he was unaware of plans for the Town to utilize one, but they were available though not a requirement. Councilmember September asked for clarification if redevelopment areas were recorded on property titles. Attorney Payne advised redevelopment areas were not recorded on property titles. Councilmember Koprowski asked for an example of a GPLET implemented. Town Attorney Payne commented GPLETs were likely most common in Tempe and Phoenix. Economic Development Director Henderson provided GPLET examples including Tempe Town Lake and areas of the City of and Phoenix that were in a redevelopment area and in a designated central business district, thus they were able to lower or eliminate their property tax for some of the projects. He explained in similar situations there were other jurisdictions such as the county or state, or local districts such as a community college or school district, where there would be payment in lieu of tax to those taxing districts or jurisdictions for a project. He reiterated that those types of projects had never been done in Gilbert and would require certain regulations and steps that would go through Council for approval. Town Attorney Payne mentioned Tempe Marketplace as an example of a redevelopment area and explained it was a collection of approximately twenty different GPLETs. Director Henderson explained that multiple GPLETs were used for the area, as it was previously a dumping site and there were concerns about environmental concerns and toxic waste. They felt the best solution was to work with the developer and use GPLETs to position the property and remove the environmental contamination for completion of the project. Councilmember Koprowski asked for clarification that the presentation was for informational purposes only, not contemplation of implementation. Town Attorney Payne confirmed there were no intentions of implementation and the presentation was meant to provide the Council additional information on GPLETs, as they were mentioned at the Fall 2021 Council Retreat. Vice Mayor Yentes asked what the process was for the Town to get a central business district designated, and if it was similar to that of a redevelopment area, if there were safeguards for property owners in the area uninterested in being included. She asked if there had been any additional discussion regarding applying for a central business district, and if there was additional guidance within the statutes to determine appropriate use of the criteria for establishment of a redevelopment area. Town Attorney Payne responded that the Town Council would have to create and adopt a resolution to determine what and whom the area would include. He explained the standard was predominance of any or some of the criteria and confirmed the Council had complete discretion on the decision. He commented he was not aware of any conversations had regarding applying for a central business district. Vice Mayor Yentes asked if there were additional statutes detailing the process of public input. Redevelopment Program Manager Elliott discussed statutes regarding public outreach that included the requirement to notify the public of a boundary discussion and take the Findings of Necessity to the community, as well as notifying the public of the redevelopment plan and adoption. She referred to a 2018 redevelopment plan which involved approximately three years of community outreach at various locations and events for thorough outreach and emphasized the importance of public input. Town Attorney Payne stated every property owner must be notified and mailed a public notice with the public meeting information. Mayor Peterson asked if the boundaries would have needed to be predetermined in order to accurately send the mailed public notice. Manager Elliott clarified the ability to mail a notice to include the larger boundary that encompassed both boundaries, which would allow both areas to be presented the Findings of Necessity for wider community input and property owners. Councilmember September described a case in which a jurisdiction incentivized financial benefit to induce businesses to move to that city, then asked how a GPLET was different from that scenario. Town Attorney Payne explained there had been many similar cases; however, the case referenced involved a development agreement and was tied to concerns of constitutional gift clause violations, and GPLETs were not involved; those were separate issues. He added GPLETs had been successfully challenged in the past, but to his knowledge the statue was not challenged, rather the criteria or rates were challenged. Vice Mayor Yentes asked if a property value analysis could be included by staff for the mapped areas to evaluate if there were depressed property values to help determine if a redevelopment designation would make sense in relation to the greater area. Director Henderson discussed the nine components of the Findings of Necessity and agreed to incorporate the requested data collection in the analysis if the Council found it agreeable. Councilmember Tilque stated the property tax evaluation would be enlightening and asked to have the data encompass the past 20 years, as the data may not be reflective of the current market. She also asked to review crime statistics in comparison to the larger community. She emphasized that there was an ageing area in the community that was left behind due to the Town’s growth and she understood there may be a different process, but there was opportunity for some outlying areas that could use improvement. She provided examples of Chandler and Mesa investing in older areas to revitalize them and noted some of the statistics of those areas were rising in certain areas of Gilbert. She stated it was important to provide the same level of safety and quality of life to those aged areas as the rest of the community and noted a redevelopment area provided tools for improvements rather than burden. She listed the Gilbert Crossroads Business Park as an area that no longer supported enough parking and was an example of an area that should be further discussed as a redevelopment area or to explore other options for improvement. Councilmember Anderson agreed with Councilmember Tilque and mentioned the corridor she referred to was what sparked the City of the Future Initiative. He stated that redevelopment areas were reevaluated every 10 years and asked if there were instances where areas were not designated as redevelopment areas, but rather character, or other areas after substantial investment in the area. Director Henderson confirmed there were nationwide examples of areas initially designated as redevelopment areas that grew over time and became market-driven opportunity areas, thus they dropped the redevelopment designation and became character areas. He offered for staff to research and provide Council with examples of communities that had transitioned redevelopment areas otherwise positioned for decline into areas with vibrant futures. Councilmember Anderson confirmed he would like examples as he had not heard of communities dropping the redevelopment designation, and though there was no impact of the designation to property owners, he noted the perception that they were somehow being affected and asked if there was a way to drop the designation after some time to lessen the concern. Director Henderson shared an example of eight redevelopment areas in Phoenix that consolidated into one and noted it was an example of how redevelopment area designations changed or could eventually become character areas. Mayor Peterson asked if it was known if those eight areas had their own redevelopment commissions or boards. Director Henderson responded he was unsure of whether each had a dedicated group but noted separate boards, missions, and objectives in Tempe that eventually came together for a common purpose. He noted the Tempe example did not include an entertainment district, like the Gilbert Heritage District, but recognized the possibility of dropping a redevelopment designation as the area were to stand on its own. Mayor Peterson asked for a list of the pros and cons for the business and residents within the redevelopment area if designated. Director Henderson responded that the General Plan was the overarching guide every 20 years for the community and had proven successful time and time again. He added a benefit was the ability to treat the designated areas differently and provided examples including the ability to embrace a shared parking model seen in the district and the use of neon signs. He continued to discuss the opportunity to pilot changes in those areas which allowed for discovery of intended and unintended consequences of the changes, and policy modifications from what was learned. Manager Elliott emphasized community involvement in the process and the continuity of vision; she expanded as the Mayor and the Council had changed through four past redevelopment areas and the Heritage District benefitted from their input and the continued vision throughout that time. She described the biggest challenge as the time taken for completion of such an undertaking, the need for a strategic vision and plan over time, and the demands on staff. Mayor Peterson asked if there had been discussion at the Fall Council Retreat regarding the role of the Redevelopment Commission over the full redevelopment area if expanded. Director Henderson commented there had not been direction from Council on the matter at the Retreat, but public outreach would be a means of learning from the community what would be desired for the area and direction would come from the Council as to whether a new or the existing board would be involved. Manager Elliott added that a requirement of a redevelopment plan was to identify if there were a Redevelopment Commission and what its role was. Vice Mayor Yentes asked for clarification on a portion of the Arizona Revised Statues, A.R.S. § 36-1472 (Legislative Findings of Necessity) and if the statute broadened the authority of government to exercise the use of eminent domain. Town Attorney Payne responded Arizona Revised Statues, A.R.S. § 36-1478, specifically referenced eminent domain and a municipality’s authority in regard to a redevelopment area, which did allow additional authority to the City that would not be had outside of the redevelopment area. He added that he was not aware of instances in which Gilbert had utilized eminent domain in the Heritage District but noted Supreme Court cases under other states and statutes where property was taken for economic or redevelopment purposes. Vice Mayor Yentes advocated for public education on the topic, adding it would come up during the public process and said there may be a way to confine the Council’s authority and intention, perhaps in the Resolution; she spoke of defining polices and establishing tools for people to refer back to. Town Attorney Payne stated in that same section there were a couple of checks built into statute regarding the ability of the Council to exercise condemnation authority for economic development purposes and elaborated on such conditions. He noted the current Council could not tie the hand of a future Council, but could include policies and intent in the Whereas provisions. Mayor Peterson noted the need to write up those intentions and provisions officially, rather than only in the meeting minutes, adding Town Attorney Payne covered many pros and cons and how it could be used as a tool for the community. She noted the ten-year provision created consistency and then could be reevaluated by the Council at the end of that period. Vice Mayor Yentes spoke of the Town’s vision for what it wanted the area to develop into and its potential and benefits, but said the downside was the ability to trample on people’s property rights. She said there were future economic benefits, but those who had property taken did not see that benefit. She also spoke of possible gentrification results and voiced support of creative and flexible policies, noting there may be other cities with policies Gilbert could reference. Mayor Peterson noted that Councilmember Tilque had asked if there were other options besides a redevelopment area, but she did not know if any existed. Manager Elliott confirmed she was not aware of other options. Mayor Peterson stated she would be open to taking the next step of public outreach to see what responses were received and that more information was needed. Councilmember Tilque agreed that she wanted to hear from the people, allowing the opportunity to hear concerns and if there was clear direction from those who would be impacted. She said it would also allow the Town to learn the priorities of the public; therefore, she supported moving to the public outreach stage. Councilmember September spoke in support of hearing from the public to discover more. Councilmember Anderson said that he was open to looking into other alternatives, but said his bottom line was to prevent that area from deteriorating. He spoke of the normal lifecycle of deuteriation and he supported tools to prevent that. Mayor Peterson noted restrictions with incentives and the need to be creative, but spoke of the importance of hearing what people need and want. Councilmember Koprowski stated she supported a redevelopment area and the public engagement associated with that, specifically in the northwest area. She voiced agreement with the comments regarding the prevention of deterioration and spoke of the need to provide investments that would keep that area as desirable as other areas of Gilbert. Town Attorney Payne stated regarding the previous discussion about Government Property Lease Excise Tax (GPLET) was informational only; there was no recommendation made that the Town had considered, was considering, or ever would. Mayor Peterson noted she had not heard of GPLET either prior to the Town’s last Council Retreat. Town Manager Banger stated regarding eminent domain for economic development purposes, it was not a conversation the Town ever had or would have, adding it was not a path appropriate for use for what Gilbert was trying to accomplish. Director Henderson summarized that the staff direction from the Council was to begin the public engagement portion and then to provide the Council with the information for them to choose a direction. He spoke of providing resources to develop a communication plan going forward. Mayor Peterson stated part of that discussion should involve the Redevelopment Commission and the possibility of expanding the number of members and the type of members chosen. She said from staff’s perspective, managing one Redevelopment Commission may be easier than managing two. Vice Mayor Yentes requested some clarity in the future on A.R.S. § 36-1488 as well, and read part of the statute regarding the use of funds for redevelopment projects, levying taxes, incurring indebtedness, and issuing bonds. . Mayor Peterson thanked all those who participated in the presentation. ADJOURN Mayor Peterson adjourned the meeting at 6:23 p.m. ATTEST: ___________________________ ___________________________________ Brigette Peterson, Mayor Chaveli Herrera, MMC, Town Clerk CERTIFICATION I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the Study Session of the Town Council of the Town of Gilbert held on the 25th day of January, 2022. I further certify that the meeting was duly called and held and that a quorum was present. Dated this __________ day of ______________, 2022. ___________________________________ Chaveli Herrera, MMC, Town Clerk