Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 July 22, 2017 Regular Meeting Minutes Council Chambers Call to Order: Lee Radford called the meeting to order at 12:00. Members Present: Lee Radford, Brent Thompson, Kirk Larsen, Terri Gazdik, Dave Radford. Members Absent: Thomas Halley, Chris Harvey Also Present: Brad Cramer; Ryan Armbruster, Legal Counsel (via telephone); and interested citizens. Modifications to Agenda: Cramer indicated that item #7 Request for Assistance for Riverwalk Drive, can be removed as the applicant is not prepared to present their request today. Minutes: Brent Thompson moved to approve the minutes of June 15, 2017 Kirk Larsen seconded the motion and it passed unanimously. Approval of Bills: Mark Hagedorn stated that Elam and Burke and Rebecca Thompson are the typical monthly bills with no question. Hagedorn indicated that the checks to Kent Lott of $50,000.00 each are for each agreement, and he has not requested the money yet, but there is indication that he will soon. Hagedorn stated that he is preemptively asking for the checks to be cut so he is ready when Mr. Lott does request the checks. Radford reminded the Board Members that $50,000 was the payment for the option to purchase the Bonneville Hotel, and another $50,000.00 was to extend the option for an additional two years. Radford stated that the $100,000 will be applied to the purchase price of the hotel once the property closes. Radford stated that Lott has not wanted the payment yet. Cramer stated that Lott wanted to set up an account specifically for the funds for tax reasons. Lee Radford presented the finance report dated July 22, 2017. The following bills were presented to be paid from the Snake River Allocation Fund: Elam and Burke, $2,178.18 for legal services; Rebecca Thompson, $85.00 for transcription of minutes. Kirk Larsen moved to approve the Finance Report, Brent Thompson seconded the motion and it passed unanimously. Review of Draft Budget. Mark Hagedorn presented the Draft Budget. Hagedorn indicated that for River Commons, Pancheri, and Eagle Ridge Districts he based the property tax revenue on the actual, plus forecast of what could be levied this year. Hagedorn stated that they did put the Jackson Hole Junction District as a place holder if that District goes through and gets approved. Hagedorn stated that they increased the professional fees, as things are changing this year. Hagedorn stated that the City Administration and audit fees are consistent from year to year. Hagedorn indicated that in the Snake River Commons District is in a wrap up year as the District will be closing soon. Hagedorn stated that for the construction project they put in what the available cash will be for that year. Hagedorn stated that he did an analysis on the projected property tax revenue this year, how much expenses (i.e. OPA agreements), and the projected revenue that they will get next year. Hagedorn stated that the $4.3 million will liquidate all the cash. Hagedorn indicated that is a conservative number. Hagedorn stated that if they don’t spend more this year, they can budget more next year. Hagedorn suggested jumping the number up a bit in case they don’t get all of what was anticipated being spent, spent. Hagedorn asked if they want to go more aggressive with the number and make sure they are at capacity for the budget, or stick with the conservative number. Radford stated and Hagedorn agreed that they are talking about the capital projects. Hagedorn stated that the $4.3 in capital projects is what he believes the remaining cash will be. Hagedorn 1 Idaho Falls Redevelopment Agency July 22, 2017 stated that it all depends on the spending this year. Radford stated that they have a separate analysis of cash flow on the projects and that gives a great picture of where they are going. Hagedorn asked if they agree with the $4.3 million. Radford indicated that he agrees with the $4.3 million. Hagedorn stated that his only concern is the budgetary capacity. Cramer asked if the $4.3 million will include the purchase of the Bonneville Hotel. Radford indicated that the purchase price was in last year. Hagedorn stated that they are including: $345,000 for Pioneer Road; $1.4 million in Bonneville Hotel Purchase; and $1 million for Woodbury. Cramer stated the closing on the Bonneville will not happen until Spring 2018. Hagedorn stated that they would then need to add the $1.5 million to the capital projects. Radford stated that the Eagle Ridge Revenue Allocation Fund is showing at $1.15 million for capital projects. Hagedorn stated that is just capacity and that is what has been done in the past years. Hagedorn stated that this year’s budget is the same that was budgeted last year and was just rolled forward. Gazdik stated and Hagedorn agreed that in the Snake River Revenue Allocation Fund there is a fund balance carry over of $2.6 million. Hagedorn clarified that the $2.6 million is after designations. Thompson stated and Hagedorn agreed that if they put $1.5 million into the Bonneville, it will raise that fund carryover and the correct capital budget by the same amount. Cramer stated that in the Pancheri Revenue Allocation Fund there is no specific projects planned, but they have had conversations with some of the property owners that are interested in using the funding, and so it may make some sense to add in whatever the cash balance is for that account in case that project does come to fruition. Cramer stated that it would be approximately $550,000.00. Hagedorn indicated that currently they have $633,000 in cash and the next big tax payment should arrive any day. Hagedorn stated that it will go up another $50,000-$75,000 for Pancheri. Cramer stated that there is a $0 for capital projects. Hagedorn asked if they would like him to put $750,000 for capital projects. Radford stated that on Pancheri they are showing $633,000 available funds, but doesn’t show up as a carry over. Hagedorn indicated that the carry-over is just a way to balance the budget for the year, and they are not listing the full cash balance. Radford indicated that it doesn’t have to be exact as it is just a best estimate. Dave Radford asked Armbruster if they can open the budget during the middle of the year if something happens. Armbruster stated that you can open the budget if anything extraordinary occurs during the year, you’d just have to go through the same process to amend the budget. Hagedorn indicated that it is by entity and not by individual fund. Armbruster indicated that it is difficult on revenue allocation areas as they cannot move monies among or between individual areas. Hagedorn stated that overall as an Agency they are ok, with the changes and will not go over budget. Hagedorn asked if one fund goes over budget do they have to go back and open the budget. Gazdik clarified that Hagedorn is proposing that they will be budgeting in a deficit with the $750,000. Hagedorn stated that by the end of next year they will have the $750,000 in cash. Hagedorn stated that they will get $50,000 this year and maybe $50-75,000 for next year. Larsen stated that they would still be in the deficit. Hagedorn stated that the negative balance is misleading and when it states its negative it just means that there is more cash than expenses. Gazdik stated that if they input $750,000 in proposed capital expenditures on the budget they aren’t increasing the revenue section, so they would be budgeting for a deficit for this year in that fund. Hagedorn stated that this is a cash balance and they will increase the carry over fund balance at the same time. Gazdik asked if they would change the fund balance. Hagedorn stated that right now they have $633,000. Radford stated that one change needed is to put on the Snake River Revenue Allocation Fund add $1.4 million to the capital projects to purchase the Bonneville Hotel, so the $4.3 would change to $5.7 million, and then change Pancheri and add capital improvements of $750,000.00. Dave Radford asked if they are mixing one year’s operating statement with the prior year’s income. Hagedorn stated that the thought is they have cash in Pancheri, and they believe they will have $750,000 in cash, so they are just indicating on the budget that they would like to spend the $750,000 next year. Cramer stated that an alternative is to leave it as it is, and if they must open the budget during the year, then they can. Radford stated that Pancheri doesn’t seem concrete enough, and so the proposal 2 Idaho Falls Redevelopment Agency July 22, 2017 would be to only add $1.4 million to the capital projects on the Snake River Fund to increase that from $4.3 to $5.7 for the purchase of the Bonneville Hotel. Dave Radford moved to make a change to the draft budget to add $1.4 million to the Snake River Revenue Allocation Fund for the purchase of the Bonneville Hotel, which would change the $4.3 million listed on the draft budget to $5.7 million and tentatively approve the budget and direct staff to publish the budget, Thompson seconded the motion and it passed unanimously. Hagedorn stated that the budget will be published on August 6 and August 13. Armbruster stated that when the Agency meets in August they will have a formal Appropriation of Budget Resolution for the Agency to consider and can attach the document that is being published onto the resolution. Armbruster stated that if there are any changes at the public hearing they can be made by a revised exhibit. Armbruster stated that they can always go down on the budget from what was published, but they cannot go up. Request for Assistance. Lorin Walker. Lorin Walker. Walker stated that they are making a request for consideration of assistance on the blasting and removal of the lava on Lot 2 of Taylor Crossing. Walker stated that Lot 2 comprises the area where Culvers Restaurant is located and the area north where there has been a big hole from lava blast and removal. Walker stated that there are two pieces to the request. Walker stated that in 2010 they had an approved blasting and removal under the IFRA Plan on Lot 2 and they did the blasting, but the potential tenants all disappeared, so it just left a hole. Walker stated that the first tenant on Lot 2 was Culvers. Walker stated that Culvers is now opened. Walker stated that they are asking for consideration to participate in a reimbursement for the lava. Walker stated that half of the $350,000.00 was for the first round at the onset of the recession (2010) and the second half of the cost was recently incurred for Culvers. Radford stated that for the portion for culvers the request is $171,000.00. Walker stated that Culvers is part of a 500+ national chain restaurant. Walker stated that Culvers is operated by an experienced franchisee that has stores in Twin Falls and opening in Meridian soon. Walker stated that the store in Twin Falls has done well. Walker stated that they have a long-term lease. Walker stated that they are leasing the building with the intent of purchasing the building in 5-10 years. Walker stated that they should be a strong player in the market. Cramer stated that the valuation on the building and how the County has valued the lot, the rough estimate for tax revenue was $28,000. Cramer stated that traditionally the Agency will look for a 5-year return on the investment and that would put them at about $140,000.00. Cramer indicated that the numbers are rough. Dave Radford stated that sometimes the building permits don’t always indicate what the actual value is placed on the building. Radford asked if they would have to enter into a new OPA to consider this request. Armbruster stated that they would have to have another agreement, and given the limitation of the term of the revenue allocation they would have to pay for this up front, and Armbruster indicated that he would probably prepare something like a grant agreement that is straight forward and not nearly as complex as the OPA with Taylor Crossing. Thompson asked if there are similar agreements with Deseret Book and Indian Motorcycle. Cramer indicated that it is a similar agreement. Radford stated Deseret Book came to the Agency before starting the project and the Agency was able to control some costs. Radford stated that Indian Motorcycle came to the Agency late and had already started turning dirt and because of that it diminished what they could help with because they weren’t able to participate in governing. Radford stated that Deseret book was able to shift the footprint so they could avoid a lot of 3 Idaho Falls Redevelopment Agency July 22, 2017 basalt and lower the cost. Radford asked Lorin Walker why he didn’t come and talk to the Agency before they started turning dirt on the project. Lorin Walker stated that they had the termination agreement and they questioned whether there was any potential for participation. Lorin Walker stated that at the time they didn’t feel it was something they could approach the Agency on. Lorin Walker stated that in retrospect they should have come to the Agency first. Walker stated that they spent a lot of time trying to minimize the cost. Walker stated that they ended up raising the building 1 foot to avoid some rock. Walker stated that on Lot 2 there is 2 ½ - 3 acres and so they were constrained between Pancheri setbacks and Utah and the curb cuts that were pre-designed by the State off Pancheri, so they had a tight corner to work with. Walker stated that they believe they ended up in the most affordable spot. Radford stated that the Agency wants new projects to develop, and if there is a proposal the Agency does want to encourage the development. Thomson asked if Lot 2 is where Culvers is located. Cramer indicated that he created the photo that shows Lot 2 and 3 and stated that there is a typo on Lot 3 and he was trying to differentiate where Culver’s sits vs. what is still undeveloped. Thompson clarified that Lot 2is the yellow (Culvers) and the blue as shown on the Photo is undeveloped. Thompson clarified and Walker agreed that Culvers isn’t occupying the entire blue and yellow area. Thompson asked and Walker Confirmed that some of the blasting that has occurred for future development. Walker stated that the blue is future development and the yellow is developed. Thompson asked if the blue and yellow shows the demarcation between the $170,000 and the $175,000. Larsen asked and Walker confirmed that the blue was done years ago and has sat. Radford stated that the blue area is on the market and hopefully can develop soon. Gazdik asked if there is more blasting that needs to be done on Lot 3. Walker stated that there is minimal blasting that would be needed in the future. Walker indicated that a lot of the rocks on Lot 3 are loose and just need excavated, not blasted. Thompson stated that the incremental tax that is generated is going to relate to what has been done for the Culver’s part ($171,000). Cramer stated that between the land and the building he figured $2.2 million. Larsen asked if there is anyone looking to develop the first area that was blasted. Walker stated that people are looking, but they have no commitments. Larsen asked if this project moves forward and another building is built does the Agency get the incremental tax on the new building. Radford stated that the tax is now as the District expires and nothing will be able to be built in time to receive taxes on it. Armbruster stated that the District expires in 2018 and you get revenues in 2019 based on the 2018 taxes. Larsen indicated that he may have a potential conflict of interest and will not be voting. Radford indicated that they do want projects to come to the Agency before they are built, but Culvers is a good project, so they can discuss it. Radford stated that the hole (blue area) is a lot that someone could develop on. Radford indicated that the Agency doesn’t help with plots unless there is something definite. Radford stated that if someone came and made a proposal on the lot the Agency could be able to help with some of the lot. Radford stated that the Culvers lot is a good development and is contributing taxes even though the Agency will only get 1.5 – 2 years of tax revenue. Dave Radford stated that without a building or an improvement on the Lot 3 (blue lot) he has a hard time supporting that. Dave Radford stated that the Culvers lot if they pulled back on it they could work with the tax increment, although he believes it is valued high. Dave Radford stated he would agree that 1 year at $28,000. Thompson indicated that they should consider coming up with a standardized reimbursement cost for lava. Thompson stated that the whole idea is to increase tax revenue, so maybe it has to be based on tax revenue. Thompson stated that he would be in favor of reimbursement of Culvers and can see where the 4 Idaho Falls Redevelopment Agency July 22, 2017 blue area is a timing issue. Thompson stated that if they delay on the blue area, it might incentivize developers to get someone going on that lot. Gazdik stated that she is in favor of reimbursement for the lava removal, as it is a risky endeavor for the developer as they do not know how much lava they will encounter and that is part of the Agency’s purpose is to encourage that development. Gazdik indicated that she is in favor of assisting with the Culver’s lot, but not excited about the blue lot as there is no way to know how long it will sit there. Radford stated that they only have the general ledger of what they charged and we don’t know what was removed and they haven’t done an engineering analysis on it. Lorin Walker stated that it was pretty much all lava, and it became a time and material issue. Walker stated that the test faults that they did tricked them, and there was a lot more lava than what was expected. Walker stated that they ended up with Jerome Bolen on a time and material basis. Walker stated that originally the job was bid to haul the rock away, and they changed it to put the lava on Lot 3 to minimize the cost. Walker stated that the building foundation and utilities had to be blasted as well as the parking lot. Radford stated that the you had to blast the foundation, the storm water retention pond, the sewer and water lines, and the parking lot. Walker stated that some of the things that they incurred the cost on, will be a benefit down the road to other developments in the area. Walker stated that the sewer and storm drain will receive more than what has been developed. Walker stated that there is only one curb cut off Pancheri into Lot 2, and to develop to the west along Pancheri, they will need to come through and have a traffic access. Walker stated that the blasting of the driveway and entrance will benefit other developers. Thompson asked if they have the cubic yardage. Walker stated that because they could give an estimate of the yardage. Walker stated that they have the engineered profile, that shows how far they went down, so they could estimate the yardage. Dave Radford stated that he felt that Walker didn’t work with staff well even though he has a good relationship with Brad Cramer. Lorin Walker stated that he does have a good communication channel with IFRA. Lorin Walker stated that the timing of information on Culvers is the problem, as they are not done with Culvers. Walker stated that they could have spoon fed their invoices from Bolen to staff as they occurred. Walker stated that they aren’t done, but he has no intention of approaching the Agency with more costs. Walker stated that there is a request by Culvers to widen the curb cut onto Utah. Walker stated that he just got the bid to remove the curb and possibly some lava to put the larger curb in. Walker stated that due to the nature of the lava, it has been hard to know when the project is going to end. Radford stated that all the Agency has is a general ledger showing invoices. Radford stated that he could have staff look at it and get with the engineers. Radford stated that normally there would be a plan as to what would be done and the engineers could look at that and once the job was completed the Agency would pay after the CO and the engineers verified that the project was all done. Radford stated that the steps have been missed, so try to make them up and work with staff to get the invoices and have the engineer review it and then come up with a recommendation for next month. Radford stated that there will be a discount for lateness, but the Agency does want to help. Walker indicated that he is confident that he can get all the records necessary. Dave Radford moved to authorize staff to work with Lorin Walker to review invoices and go over the project with the engineers, and authorize Ryan Armbruster to begin working on a grant 5 Idaho Falls Redevelopment Agency July 22, 2017 agreement, Brent Thompson seconded the motion. Radford called for roll call vote: Gazdik, yes; Lee Radford, yes; Thompson, yes; Dave Radford, yes. Jackson Hole Junction Update. Cramer stated that the proposal went to City Council and the Eligibility Report was approved and accepted and authorization was given to create a plan for the area. Cramer stated that Meghan Conrad and Ryan Armbruster will work hard to meet the deadlines that have been set. Armbruster stated that they will be working on a plan with Phil Kushlan and the Developer and they will try to stay on schedule and have something for discussion soon. Radford clarified that the Plan will contain the limitations that have been discussed. Armbruster stated that they will put something in there on types of activities as well as consider a duration for the Plan or cost/eligibility limit. The Broadway Project (Kelsch Property) Update. Cramer stated that the project is moving forward and there is a tentative ground breaking scheduled for August 7 at 11:00 a.m.Cramer stated that they are working on getting drawings submitted to the City. Cramer stated that they will do a phase approach. Cramer stated that the design of the plaza and what features it needs to include is the current question. Cramer stated that they have put together a group of City staff and stake holders to review. Cramer stated that there wasn’t a lot of budget put into the numbers to do much of the plaza and so the City has committed to try to find some partners to fill in the gap so it looks nicer. Cramer stated that they are finalizing the numbers on the garage to make sure that those will stay under the budget. Cramer stated that assuming all the things fall into place the project should continue on schedule. Radford stated that he attended the meeting on the plaza. Radford stated that the Agency doesn’t build amenities only infrastructure. Radford stated that hopefully someone will step up, possibly some interest groups (i.e. INL, Ag). Dave Radford stated that he is happy to help in any way he can with his contacts. Lee Radford stated that Greg Weitzel from Parks and Recreation and Dana Briggs is going to reach out to the private organizations to see if there is any interest. Lee Radford stated that as of June 1, 2017 he has changed law firms and is now with Parsons, Behle, Latimer, which is a larger firm out of Salt Lake City. Radford stated that prior to him switching firms there was no possibility that the firm he was with would be interested in the Oppenheimer site. Radford stated that since joining the new firm, several of the memmbers have started to look at the site, as their lease ends in 18 months. Radford stated that due to that he needs to recuse himself from any further involvement in the Oppenheimer project. Radford stated that Brent Thompson will take charge of conducting the meetings and taking the lead on that project. The Bonneville Hotel Update. Cramer stated that The Housing Company did apply for their funding source with the Affordable Housing Program in June. Cramer stated that they have met with people that deal with the awards and believe they scored high enough that they should be funded, and the awards will be announced in December. Cramer stated that they are currently getting the tax credit applications prepared that are due in August. Cramer stated that they have been good about contacting staff in advance of needing documents. Cramer stated that they are very positive about receiving the tax credit award. Cramer stated that they have gone around the country to various trainings, and one concern they had when they revised the financial package is that there was a devaluation of the tax credits, however, the tax credits have not decreased as far as originally thought. RAI & Legislative Activities. Armbruster stated that there is nothing to report. Next Regular Meeting: August 17, 2017. 6 Idaho Falls Redevelopment Agency July 22, 2017 Dave Radford moved to adjourn the meeting, Kirk Larsen seconded the motion and it passed unanimously. Respectfully Submitted: Beckie Thompson 7 Idaho Falls Redevelopment Agency July 22, 2017