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MEETING

MAY 17, 2012

AGENDA

Date:

May 10, 2012

To:

Commissioners of the Urban Renewal Authority

From:

Susan Wood-Ellis, Chair

Subject:

Regular Meeting, May 17, 11:30 a.m.

City Hall – Academy Room

107 N. Nevada Ave., Ground Floor

Colorado Springs, Colorado 80903

Agenda:

1.

Approval of April 19th CSURA meeting minutes

2.

Approval of Financial Report as of April 30, 2012

3.

Vineyards URA Overview – Vince Colarelli and Arne Ray

4.

CSURA Impact Report – Anne Ricker

5.

North Nevada Avenue Project Update

6.

2011 CSURA Audit Report – Carrie Bartow

7.

Other Matters

8.

Adjournment

MINUTES OF THE REGULAR MEETING OF THE

URBAN RENEWAL AUTHORITY

OF THE CITY OF COLORADO SPRINGS

THURSDAY MAY 17, 2012

On the 17th day of May, 2012 at 11:30 a.m., the Commissioners of the Urban Renewal Authority of the City of Colorado Springs met in Regular Session at 107 N. Nevada Avenue, at City Hall in the Academy Conference Room, Colorado Springs, Colorado.

In attendance were:

COMMISSIONERS:

Michael Collins

Scott Hente

David Neville

Judy Noyes

Wynne Palermo

Jim Raughton

Robert Shonkwiler

Rosemarie Venezia

Susan Wood-Ellis

ABSENT:

Also in attendance:

Carrie Bartow

Clifton Larson CPA

Anne Ricker

Ricker/Cunningham

Paul Beneditti

Vineyard Legal Counsel

Arne Ray

Ray Real Estate Services, Inc.

Vince Colarelli

Vineyard Developer

Mike Trapp

Olson Plumbing

Ryan Tefertiller

City Land Use Review

David Steward

Olson Plumbing

Rich Laden

Gazette

Dan Hughes

CSURA Legal Counsel

Mary-K. Burnett

CSURA Staff

Chuck Miller

CSURA Staff

Jim Rees

CSURA Staff

Chairman Wood-Ellis called the meeting to order at 11:34 a.m.

Item #1 – Approval of Minutes

Motion was made by Commissioner Raughton, seconded by Commissioner Noyes, that the Minutes of the Regular meeting, held on April 19, 2012 be adopted as written. The motion carried.

Item #2 – Approval of Financial Report as of April 30, 2012

Ms. Carrie Bartow, CliftonLarsenAllen, CPA, reviewed the income and expenditure financial statement for April 2012. She gave a brief overview of the information contained in the financial report including the most current figures for property and sales tax increment received from the CSURA projects. Sales tax numbers are up between 17-18% from this time last year. There being no further discussion Commissioner Palermo presented the following resolution:

RESOLUTION NO. 1763

A RESOLUTION APPROVING THE INCOME AND EXPENDITURES OF THE CSURA FOR THE PERIOD ENDING APRIL 30, 2012

BE IT RESOLVED BY THE COMMISSIONERS OF THE URBAN RENEWAL AUTHORITY OF THE CITY OF COLORADO SPRINGS, COLORADO, THAT:

The income and expenditures of the Colorado Springs Urban Renewal Authority for the period ending April 30th are hereby approved.

Motion was made by Commissioner Palmero, seconded by Commissioner Hente, that Resolution #1763 be adopted.

Upon a Call for the Vote, the following Commissioners voted:

AYES:

Michael Collins

Scott Hente

David Neville

Judy Noyes

Wynne Palermo

Jim Raughton

Robert Shonkwiler

Rosemarie Venezia

Susan Wood-Ellis

The following voted:

NAYES:

None

The motion was declared carried and the Resolution adopted.

Item #3 – Vineyard Data Park URA Overview – Vince Colarelli and Arne Ray

Mr. Colarelli stated that he, his team and the CSURA staff had been diligently working on the draft Redevelopment Agreement for the Vineyard project. The draft document is currently being reviewed by the project partners. Mr. Colarelli then proceeded to review the project stating it was a 105 acre site with 64 acres developed for the data center campus with anticipated build out of 800,000 sq. ft. in 5-10 buildings depending on the user needs. The remainder of the site will be dedicated to the City as part of the Pikes Peak Greenway trail and open space. All the companies being courted for this project as customers are Fortune 500 companies in good standing.

The project is expected to generate $1 billion in new development in Colorado Springs as well as attract new companies to invest in our City. The project will clean up a large blighted area and implement additional parks and multi-use trails. Additional long-term revenue will be realized through the sale of large amounts of energy. The data center buildings are expected to use 22,000 watts per square foot of utilities due to the huge data banks required. This is far beyond other average commercial building energy usage.

The economic impact of this project has the potential to create 300-400 permanent jobs with the possibility of $15-20 million in annual personal income. There is an anticipated need for 700-800 construction jobs that will add as much as $40 million to the region’s economy annually. This project will attract telecom/technology jobs that are in the upper income range for our region. By developing a data center business park, Colarelli and area economic development officials have said they hope to brand the Springs as a data center magnet — attracting Fortune 500 companies and hundreds of millions of dollars worth of economic activity into the area.

Mr. Colarelli went on to state that Urban Renewal plays an important part in bringing this project to fruition. It will assist with the high cost of extraordinary infrastructure needs such as multiple power sources, updating the telecom service providers, assisting with “green” solutions within the project. The tax increment financing tool available within this urban renewal area will assist in making this project feasible and beneficial to the City of Colorado Springs and its’ citizenry.

The site was annexed into the City in 2007 and has one owner, the developer. One 75,000 sq. ft. building has been fully approved. The developer anticipates announcing his capital partner by the end of the month with construction to begin in the second quarter of 2012 for Phase 1 of the infrastructure. He is also expecting to finalize the leases of initial companies and begin structure construction this year. Occupancy of the first building is expected by the spring of 2013.

Mr. Arne Ray, financial analyst for the project on behalf of CSURA, presented the financial package for this very ambitious project. He summarized his background and experience and then explained the very complicated finance plan.

Commissioner Hente departed the meeting at 12:27 p.m.

Mr. Colarelli and his financial investor will pay for much of the $75 million in improvement costs, such as extending power lines to the site, installing telecom lines, improving roads, etc. They will be reimbursed for much of their upfront costs through tax increment financing by the Urban Renewal Authority, but will end up being responsible for about $21 million worth of the improvements.

It is expected that of the $54.2 million in remaining costs, $20.4 million will be funded by a metropolitan district (bonds) and $33.8 million will be funded by the City’s Urban Renewal Authority, which will issue bonds for its share of the improvements. There will also be a special, per-square-foot, public improvement fee (PIF) that will be assessed on property owners within the district. Revenues from the metro district property tax and public improvement fee will pay 75 percent of the $54.2 million; the increased property tax revenue generated by new development will pay the other 25 percent.

The Urban Renewal Authority won’t issue bonds until property tax revenues generated by the project have reached a point where they cover 135 percent of the Authority’s annual bond payments. This has been included in the finance plan as a safe guard for CSURA. It is anticipated that the Authority will not issue bonds until at least 2016. The Authority’s payments to cover public improvement costs incurred by the developer will end by 2036 (expiration of the URA) and perhaps before.

Commissioner Raughton asked why it was necessary to implement a PIF. It was explained that currently legislation for the metropolitan district does not provide for reimbursement for utility infrastructure and that the legislation is based on older project models. Commissioner Raughton requested that the legislation be reviewed and perhaps an initiative be made to update the legislation. CSURA staff stated that they would have the City’s legislative liaison look into the matter as well as the Colorado Municipal League, who would usually handle such a request.

Extensive discussion occurred concerning details on the sale of the project bonds. Both Arne Ray and Paul Benedetti (legal counsel for the developer) shared their insight and fielded questions by Authority members.

Item #4 - URA Impact Report - Anne Ricker

Ms. Ricker distributed copies of the final draft of the Colorado Springs Urban Renewal Authority’s Impact Report. She shared some very impressive statistics such as: over 2,000 permanent jobs have been created through the CSURA projects that generate over $90 million in annual personal income to date. There has been $60 million in public investment spent that generated $125 million in private investment; more than double the return. To date there have been 377 residential units built and over 660,000 sq. ft. of commercial space developed along with multi-use trails and parkland.

Ms. Ricker reviewed each active project sharing what the investment outcome was to date and where it will be upon build out. She also reported on the additional tax revenue generated by these projects that is received by the City at build out will be an estimated $542 million. Also, there is newly generated tax revenue for public safety, trails and open space and transportation that totals over $8 million on an annual basis right now. None of these special taxes are captured by CSURA; they go directly into supporting our City government and benefitting the citizens of Colorado Springs.

The CSURA Impact Report will be presented to City Council and the City Administration as soon as the report is in final format and ready for public distribution.

Item #5 – North Nevada Avenue Project Update

Mr. Jim Rees reported that the University Village of Colorado developers, UCCS and CSURA have all agreed to partner in paying for the contract to update the North Nevada Corridor Master Plan in the amount of $33,500. The Master Plan will outline and implement specifics concerning the development of the corridor. CSURA’s share will be $11,500.

There being no further discussion Commissioner Palermo presented:

RESOLUTION NO. 1764

A RESOLUTION APPROVING THE $33,500 CONTRACT AND SCOPE OF SERVICES BETWEEN UNIVERSITY VILLAGE OF COLORADO DEVELOPERS, UCCS AND CSURA WITH AECOM TO UPDATE THE NORTH NEVADA CORRIDOR MASTER PLAN

BE IT RESOLVED BY THE COMMISSIONERS OF THE URBAN RENEWAL AUTHORITY OF THE CITY OF COLORADO SPRINGS, COLORADO, THAT:

The contract to update the North Nevada Corridor Plan between UCCS, University Village Developers and CSURA with AECOM in the amount of $33,500 is hereby approved.

Motion was made by Commissioner Venezia, seconded by Commissioner Collins, that Resolution #1764 be adopted.

Upon a Call for the Vote, the following Commissioners voted:

AYES:

Michael Collins

Scott Hente

David Neville

Judy Noyes

Wynne Palermo

Jim Raughton

Robert Shonkwiler

Rosemarie Venezia

Susan Wood-Ellis

NAYES:

None

The motion was declared carried and the Resolution adopted.

Ms. Carrie Bartow reported that information concerning projections for the University Village of Colorado project has been shared with Sam Sharp from DA Davidson. Mr. Sharp will now be able to run various models concerning options for renegotiating the North Nevada Bonds. It is expected that Mr. Sharp will be attending either the June or July CSURA meeting to present his findings.

Ms. Bartow also shared that there were several new tenants expected to open in the University Village project; among them being Pets Mart, Il Vicino and Hacienda Colorado.

Commissioner Shonkwiler asked if there were criteria for enforcement of entitlements concerning landscaping and access into the North Nevada Avenue URA for future development. Chairman Wood-Ellis explained that Jim Rees had discovered North Nevada Avenue Corridor Improvement plan approved by City Planning Commission and City Council in 2009, referencing North Nevada specifically and setting criteria for curb cuts and other right-of-way development standards, which CSURA was held to when developing University Village. Mr. Rees has shared the approved plan with the City’s Land Development Review staff and Traffic Engineering. the City Traffic Engineer felt that the plan was only a guideline for enforcement subject to her discretion even though it is only three years old.

Commissioner Shonkwiler excused himself from the meeting at 1:40 p.m.

Item #6 – 2011 CSURA Audit Report – Carrie Bartow

Ms. Bartow presented the 2011 CSURA annual audit report completed by BiggsKofford. She reviewed the major points of the audit and stated there were no issues found in the way that CSURA does their finance accounting or in any of the 2011 transactions reviewed by the independent auditing firm.

Chairman Wood-Ellis then presented the management letter written by BiggsKofford explaining the process they used in examining the CSURA financial records and their findings. The letter did make mention of the possibility that the Authority may want to check into the latest IRS rulings concerning consultants versus employees for CSURA staff members It was decided to have CSURA legal counsel look into the matter and to put this topic on the June agenda when more information was available.

Commissioner Collins excused himself from the meeting at 1:55 p.m.

CSURA staff was asked to make available to Authority members their most current employment consultant contracts.

Item #7 – Other Matters

Commissioner Raughton requested on his behalf and that of Commissioner Shonkwiler the possibility of moving the monthly CSURA meeting to the third or fourth Wednesday of each month. CSURA staff will check into the availability of the Pikes Peak Conference Room and email out the findings and ask for preferences from Authority members. The June meeting will still be held on the third Thursday of the month.

Item 8 - Adjournment

There being no further business to come before the Commissioners, motion was made by Commissioner Raughton, seconded by Commissioner Palermo to adjourn the meeting. Upon unanimous vote, the meeting was declared adjourned at 2:10 p.m.

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