Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 December 17, 2015 Regular Meeting Minutes Council Chambers Call to Order: Chair Radford called the meeting to order at 12:10 p.m. Members Present: Lee Radford, Terri Gazdik, Kirk Larsen, Thomas Hally, Brent Thompson and Linda Martin. Members Absent: Lee Staker. Also Present: Renee Magee, Executive Director; Thane Sparks, Agency Treasurer; Matt Parks, Legal Counsel (via telephone); Ed Marohn, City Council Member; Brad Cramer, Community Development Services Director; Kristine Staten, Idaho Falls Downtown Development; and Mayor Rebecca Casper. Modifications to Agenda: None Minutes: Brent Thompson moved to approve the minutes of November 19, 2015, Linda Martin seconded the motion and it passed unanimously, Approval of Bills: Lee Radford presented the finance report dated December 17, 2015. The following bills were presented to be paid from the Snake River Allocation fund: Rebecca Thompson, $90.00 for transcription of minutes; Kevin Machen, $35.00 for snow removal; Elam and Burke, $884.95 for legal services. Thomas Hally moved to approve the finance report, Kirk Larsen seconded the motion and it passed unanimously. Request for Assistance for Public Improvements for Springhill Suites, Simplot Circle and River Walk Drive. Renee Magee stated Woodbury Corporation has requested assistance for the subdivision and development entitled Taylor Crossing, Division No. 12, which will extend from WATCO Railroad Line south to Bridgeport Drive. Magee showed slides illustrating Woodbury’s plans. Woodbury is proposing to build a Springhill Suites hotel on Lot 14. One slide of the plat illustrated the plans in colors. The areas in yellow were proposed for Agency assistance, including River Walk Drive and the relocation of the sewer trunk line to the western portion of Lot 14. Another yellow area on the eastern portion of the Lot 14 is the location of the extension of the water main from the Marriott and the public parking area. Magee stated Public Works has requested the Agency replace the existing 18” line in the WATCO Railroad right-of-way. The parking lot on Lot 14 will have parking spots to serve the public from 8 a.m. – 8 p.m. Lot 13 will be a storm retention pond holding storm water from Simplot Circle and a portion of Utah Ave. Magee explained the committee of the Board reviewed the cost estimates from Woodbury totaling $3.5 million. After reviewing the cash available and the projected cash flow of the Agency, the committee proposed the maximum amount of assistance be $3,250,000, including the portion of the WATCO Railroad line replacement not originally in Woodbury’s cost estimate. The Agency’s proposal also includes work on the Bridgeport Circle not in Woodbury original cost estimates and compensation for the right-of-way of Riverwalk Drive south of Lot 14. Magee explained the timing of this project is an issue since the project came to the Agency after the Agency had entered into negotiations for two major Idaho Falls Redevelopment Agency December 17, 2015 1 projects downtown. The committee reviewed the uncommitted funds, the timing of the improvements, potential demands of the downtown projects, and arrived at the maximum assistance for this project. One alternative is to delay or eliminate some of the Greenbelt improvements, e.g., the South Greenbelt is south of Lot 14 and that improvement could be delayed until Lot 14 is developed. Larsen responded, if the South Greenbelt portion is developed now, it makes the likelihood of development and value of the lots greater. Although it is not critical the Greenbelt improvements be done now, there would be some efficiencies of scale to complete it now. Thompson explained, once the project is constructed and all of the improvements are completed, it will have a dramatic effect on the assessed value and tax revenues generated. He believes the Agency can handle the $3,250,000 in assistance. Radford stated the timing of the committed funds is an issue. The timing is not exact but does need to be considered. Radford stated the six month segments for the cash flow are helpful. Jeff Stokes, Woodbury, stated Woodbury now has a better understanding of the Agency’s tax revenue and cash flow needs. Stokes stated the estimated costs contained fees and general conditions on top of the unit pricing. Such fees and general conditions are not usually used in local estimates. He took those numbers out and left only the unit pricing. Woodbury’s numbers now look better. Woodbury also met with contractors and suppliers and got more unit pricing. The numbers are still looking higher than the projected numbers. Stokes believes Woodbury can reduce the scope of some of the work along the Greenbelt if necessary and focus to assure, with the money available, they get the roadway improvements and main utilities done and the services on Lot 14. The roadway will have to be paid for in 2016 and the other improvements will be able to wait until 2017. Stokes stated he wants to see things done right and finish the project. In January they will be able to get firm bids on all of the road improvements and have a better understanding of the costs. He does not want to give the Agency a cost that is under budget and have to come back with a half-finished road. If the funds are not available to finish and pay for the road in 2016, there are certain things that can be furloughed to 2017 such as developer’s fees. Stokes stated they could hold back the contingency on the construction until it is complete and possibly through the one year warranty. Radford stated there is a tight cash flow for the next few years so the funds will have to be staggered right. Stokes’ statement that he could stagger some of the costs will give the Agency some room to hit the cash flow marks. Magee explained the Agency and Woodbury need to get started on the OPA. Magee asked Stokes if the amount of $3,250,000 is acceptable. Stokes replied the $3.25 million is acceptable and Woodbury will take whatever the Agency is willing to give. However, his estimates, even after they have been modified, are still higher than the $3.25 million. He is hoping the bids will come in more competitive than his estimates, although he has seen an increase in construction costs lately, not a decrease. He wishes to take the $3.25 million and go as far as they can on the project with the intent that, if they cannot complete it right, they can re-approach the Agency and adjust the improvements and timing. Magee explained, to keep the project moving, a draft OPA with numbers and time frames is needed. She asked and Stokes agreed the amounts of $2.4 million in the summer of 2016 and $850,000 in February 2017, can go into a draft OPA at this point. Stokes stated Woodbury has made some assumptions and gone down the road with this project. They are taking the risk of extending the scope and completing River Walk Drive with the hope the Agency will help with the cost; otherwise the scope would have been only Lot 14. Magee recognized Woodbury’s original scope would have ended at Lot 14 and completion of adjacent road only. Idaho Falls Redevelopment Agency December 17, 2015 2 Radford stated the discussion includes $3.25 million in the OPA with some language stating there is discretion, if the cash flow is sufficient, for the Agency to fund additional segments that are being xcluded. Magee suggested the OPA note the Greenbelt projects will be completed if funds are available. Stokes stated, if they have to push the project out to another year, they wish to do the project right and get all the projects done and not omit any. Thompson replied the Agency has a finite amount of money and the costs may be higher than the Agency’s contribution. There are four categories of expenses, and he does not want to starve out the Greenbelt components for the sake of River Walk Drive or Lot 14 costs. If the costs for River Walk Drive and Lot 14 go higher and are expended sooner, are the Greenbelt funds for the expenses on Lot 14 and River Walk Drive starved out. Thompson asked if the OPA will be for one lump sum of $3.25 or will it be broken down into projects to protect some of the funding for the Greenbelt. Magee replied there is flexibility in the OPA. Matt Parks explained there is a lot of flexibility in the OPA on where the expenses will be allocated. Considering there is long construction schedule, there will be at least two lump sum payments time to project completion. One can build in some flexibility on amending the amounts. There needs to be a lot of negotiation before they can bring a complete and final OPA to the Board for approval. Radford wants everyone to have a good understanding of the numbers and the project. Hally stated the asset value of the hotel increases if the road goes through. The longer the project is delayed, the more the costs go up. The sale of the lots and the completion of the hotel are leveraged by the improvements. Hally stated cash flow should not be king and asset creation should be considered. Stokes agreed with Hally and stated the Redevelopment Agency is doing their job very well in improving the blighted areas. Stokes stated he would like to not worry about the cash flow and get things done right. He does not want to compromise or shorten esthetics. Stokes stated the Agency is not the only partner that should be considering the improvements. He is willing to look for other options to make sure things get done. He is concerned about the items outside of the original scope of the project that need to be paid in 2016 when the work is done. Radford stated the Board needs to remember they asked Woodbury to do River Walk Drive and connect it to Bridgeport Circle. Radford asked what portion of the $2.4 million dollars includes items in Woodbury’s original scope. Stokes replied he does not have a number for that question. The proforma numbers for the hotel include a section of River Walk Drive adjacent to Lot 14. Stokes stated maybe $250,000 relates to financing for the improvements for the hotel. The bank does not want to pay for the relocation of a major sewer trunk sewer line and water line so that has to be taken out of the numbers. Radford asked Stokes again what portion of the $2.4 million is below the original scope of Lot 14. Stokes again replied he does not have a number but will get a number for him. Radford explained he wants to make sure Woodbury is whole on the section the Agency requested. The part related only to Woodbury can be encouraged but maybe not whole in funding. Radford asked if there is public access to the Greenbelt between Lots 11 and 10 and between Lots 11 and 12. There is access between Lots 12 and 13. Stokes replied there is public access from Woodbury’s parking lot to the trail on Lot 14. Where the storm drain comes down there will be another access along the southern line of Lot 14 and another one where utilities will go through to the River. Stokes added it is hard to put in the language when you do not know how the area will develop. Kirk Larsen stated language could be put in the OPA. Stokes agreed they could have an agreement requiring all the lots on the east side of the development have public access. Magee stated such language should be in the City’s development agreement because the Agency has no way to control future access. Stokes stated any access will marry River Walk Drive and the Greenbelt together. Woodbury plans to have the access and have it in the development agreement. The improvement to the Greenbelt will be done from the hotel parking lot to the Greenbelt path. Radford asked Matt Parks to make sure the language on access will be in the proposed OPA. If the Agency is going to spend money on the Greenbelt, there needs to be access on the Idaho Falls Redevelopment Agency December 17, 2015 3 north, south and between Lots 10 and 11. Radford wants the language in the OPA to state the access requirements must be in the development agreement. Stokes replied Woodbury only owns Lot 14; however, the improvements will improve the value of Division No. 12. Gazdik asked if the Snake River district can borrow funds from the other districts if there is a timing issue. Matt Parks replied, as the law stands, Agencies are permitted to borrow funds from one revenue allocation area for another allocation area. However, it is typically done in the beginning of an area as start-up funds. Parks stated it has been done in the past near the end of a plan when they want to finish a project. There would be a loan agreement between one revenue allocation area to another. Magee stated a loan from another revenue allocation fund may endanger the Agency’s ability to do a project in 2018. Gazdik asked and Magee agreed the inability to complete a project is because the revenue allocation area will terminate in 2018. Martin asked, if before the final OPA is done, is there a way to incorporate the necessities of the utilities and extensions in River Walk Drive to service the asset itself. Martin asked if there could be an addendum made so the members could have a final approval. Magee explained, as the cash flow is projected, $2.4 million is spent on River Walk Drive in July, 2016, and $845,000 or $850,000 is spent in February, 2017, for reimbursement for improvements on Lot 14, the North Greenbelt, and the South Greenbelt. Martin stated, with these ambitious plans and timing deadlines, the Agency wants to be good stewards of tax money. If the cash flow is clearer, it would be helpful. Radford asked Parks include that in the OPA. Brent Thompson moved to approve the preparation of an Owner Participation Agreement (OPA) at the level of $3.25 million, according to the committee’s recommendation, Thomas Hally seconded the motion. Terri Gazdik abstained from the vote. Radford called for vote by roll call: Terri Gazdik, abstain; Thomas Hally, yes; Linda Martin, yes; Kirk Larsen, yes; Brent Thompson, yes; Lee Radford, yes. The motion passed 5-0. Update on Kelsch Property at Broadway and Memorial: Magee stated, on December 8, 2015, soil samples were taken with a backhoe and the results should be to the Agency by mid-January. Thompson asked if they determined what the valve box on the Kelsch property is. Magee replied she will ask. Bonneville Hotel: Magee explained the asbestos and lead paint study will be done by mid-January. Report from Agnew Beck on Focus Groups: Magee stated the report from Agnew Beck on the focus groups is included in the meeting packets. She reviewed the groups’ wishes for the Kelsch property: mixed use development with grocery store, offices, apartments and retail activities; an entrance way into downtown; a rooftop restaurant with a green terrace; a small plaza or parklet built into the development. For the Bonneville Hotel, the wishes were: ground floor restaurant; mixed use development with offices, retail and housing; restoration to a historic hotel as an alternative; diverse urban housing offering affordable, mid and high range units. Comments on Draft RFPs for Kelsch and Bonneville Properties: Magee explained the criteria in the draft RFP on the Kelsch property are: establishment of market rate housing; a range of mixed uses including grocery store, offices, retail, restaurant; an anchor business complementing downtown; use of the sidewalk and landscape strip for outdoor space; orientation towards Broadway and Memorial; use of historic building materials; minimum of three stories in height; and contribution to employment and economy. The criteria in the draft RFP for the Bonneville Hotel includes: a combination of market rate credit housing above the first floor; ground floor as commercial, office use, or restaurant; use of Federal Historic Tax Incentive Program; loading zones off the alley; contribution to employment and economy; Idaho Falls Redevelopment Agency December 17, 2015 4 and use of the second floor outdoor area between the wings of the building. Magee asked the Board members to email her comments. Kirk Larsen asked if three levels of housing would work in the Bonneville, considering its size. Magee replied one developer thought he could do the upper two levels as market rate housing and the middle two levels as subsidized housing. Radford stated comments are needed on the draft RFP’s. Webpage Changes: Magee explained Patty Reines has updated the webpage for the Agency and it contains links to the Agency’s documents. Radford suggested using some of the aerial photos Cramer had taken. Magee agreed. ICRMP: Magee explained ICRMP notified the Agency they are offering terrorism insurance. If the Agency wishes to decline the terrorism insurance it has to be declined in writing. The cost is $5,000 annually. Thane Sparks explained ICRMP has a $50 million dollar insurance policy to cover members of the ICRMP covered agencies for terrorist activities that may happen. The current insurance policy is $2,300 annually and covers mainly just error and omissions. To add the terrorism insurance, the premium will double. Radford clarified, when the Agency acquires properties, they will get insurance on those. Larsen added there is nothing on the Kelsch property to insure. Radford replied it will be for liability. Radford confirmed the Board is in agreement with the staff and will decline the terrorism insurance. RAI Activities and Legislative Interim Committee: Matt Parks deferred this item to the next meeting. Radford recognized Linda Martin since this is her last meeting. Linda Martin said it has been a privilege to serve on the Board and be able to participate in a positive outcome on the projects, including the increasing of the downtown parking, reconstruction of Memorial Drive, Curtis Wright Flow expansion, feasibility of the Bonneville Hotel, and the redevelopment of the Savings Center parcel. She enjoyed working with the staff and Board members along the way. Radford thanked Linda Martin for her service on the Board. Thomas Hally moved to adjourn the meeting, Brent Thompson seconded the motion and it passed unanimously. Respectfully Submitted: Beckie Thompson Idaho Falls Redevelopment Agency December 17, 2015 5