RESOLUTION NO. ____
A RESOLUTION ESTABLISHING A POLICY
OF THE CITY OF
WHEREAS, the City of Lawrence, Kansas (the “City”) is committed to
the high quality and balanced growth and development of the community while
preserving the City’s unique character and while revitalizing and redeveloping
areas of the City; and
WHEREAS, economic development is a joint responsibility of the
private and public sectors, working closely together creating a positive
business environment and to encourage commercial development and expansion in
the City; and
WHEREAS, the economic
development goals of the City include the expansion of existing businesses,
development of new businesses, economic development activities which are
environmentally sound, diversification
of the economy, and the creation of quality jobs; and
WHEREAS, to meet these
economic development goals, the City recognizes the need to assist in the
redevelopment of property located within the City by the creation of
redevelopment districts; an economic development tool established by K.S.A.
12-1770 et seq. (the “TIF Act’) for the financing of qualified redevelopment
projects; and
WHEREAS, the City finds it in the best interest of the public to
establish certain policies and guidelines for the consideration of proposals
that may be presented to the City by private developers requesting Tax
Increment Financing ("TIF") assistance; and
WHEREAS, all projects must demonstrate financial and economic
reasons such that they would not otherwise go forward and be viable, but for
conditions of blight, extenuating circumstances which exist in the site,
location, or other factors related to the development.
NOW, THEREFORE, THE TAX INCREMENT FINANCING POLICY FOR THE
CITY OF
SECTION ONE: PROCESS:
1. Any person wishing
to request the City to create a redevelopment district within the City of
2. The applicant
shall furnish such additional information as requested by the City Manager in
order to clarify and evaluate the submittal.
3. The Governing Body
shall then determine whether it desires to commence the statutory process to
create a redevelopment district as set forth in the TIF Act.
4.. The applicant and
City will enter into a redevelopment agreement upon satisfactory approval of
the redevelopment project plan.
SECTION
TWO: POLICY STATEMENT:
It
is the policy of the City to consider the judicious use of TIF for those
projects which demonstrate a substantial and significant public benefit by
constructing public improvements in support of developments that will, by creating
new jobs and retaining existing employment; eliminate blight, strengthen the
employment and economic base of the City, increase property values and tax
revenues, reduce poverty, create economic stability, upgrade older
neighborhoods, facilitate economic self sufficiency, promote projects that are
of community wide importance, and implement the Comprehensive Plan and economic
development goals of the City.
SECTION THREE: POLICY GUIDELINES. The following
criteria are to be used by the Governing Body and staff to evaluate TIF Proposals:
1. Each TIF proposal
must demonstrate that "but for" the use of TIF, the project would not
be completed .
2. All TIF proposals
requesting the issuance of bonds or notes will be required to demonstrate that
the incremental taxes and/or the economic activity taxes expected to be
generated will be sufficient to provide a debt coverage factor of at least 1.25
times the projected debt service on the tax increment bonds or notes. Debt service coverage greater than 1.25 times
may be necessary to market any notes or bonds that are limited to public
offerings. At the discretion of the
City, Developer or bank purchased bonds may be less than 1.25 times debt
service coverage. Alternatively, applicants may provide a guarantee or other
credit enhancement to cover any shortfalls in revenue in a manner that is
satisfactory to the City.
3. The total
amount of TIF assistance provided for projects will be based on the economic
payoff expectations of the project and its significance to the community.
4. Each TIF
proposal must include evidence that the applicant has the financial ability to
complete and operate the project.
5. Projects
that have at least 50% of the total project costs paid by the applicant will be
viewed more favorably.
6. The City will require satisfactory
assurance that the project will be completed in a timely manner in accordance
with the redevelopment project plan and redevelopment agreement.
7. TIF proposals
for residential redevelopment projects may be considered for removal of blight
and revitalization of older developed neighborhoods, and/or to provide for
public improvements to benefit economic development and employment.
8. TIF proposals
for the redevelopment of existing residential neighborhoods, commercial and
industrial areas will be viewed favorably.
Projects to stabilize current residential neighborhoods, commercial, and
industrial areas that have or will likely experience deterioration will be
favored.
SECTION FOUR: PAYMENT OF CERTAIN COSTS. Upon submission of the proposal to the City Manager,
the applicant shall enter into a funding agreement with the City to pay
out-of-pocket costs of the City in connection with the evaluation of the
applicant’s proposal and the creation of the redevelopment district, the
redevelopment project plan and the redevelopment agreement, including outside
consultant, financial advisor and attorney fees. Consultant and attorney fees may be
reimbursed to the applicant from bond proceeds or TIF revenues if a redevelopment
district is established and redevelopment project plan approved, to the extent
such costs are “redevelopment project costs” as defined by the TIF Act.
SECTION FIVE: REQUEST FOR PROPOSAL. The City may initiate a Request for Proposal
for a redevelopment project.
SECTION SIX: METHOD OF FINANCING. TIF proposals may request that TIF assistance be provided in
one of the following forms:
1. Special
Obligation Bond Financing;
2. Direct
Reimbursement to the applicant when improvements are privately financed; or
3. Any
combination of the foregoing methods.
In deciding which method of financing to use, the prevailing
factor in making the determination will be total costs and the security for the
bonds. The City will not provide credit
enhancements for the special obligation bonds; however, credit enhancement
provided by the developer on any bonds will be viewed favorably. Generally, the City will not issue General
Obligation Bonds for TIF eligible costs.
The proposed method of financing will be clearly shown in the
application and the redevelopment project plan.
The City has sole determination of the method of financing.
SECTION SEVEN: CERTAIN ECONOMIC ACTIVITY TAXES. Sales
taxes, property taxes, or other applicable taxes may be considered for purposes
of the tax increment derived from TIF economic activity taxes. Generally, the City will only make available
50% of the general City sales tax for TIF projects. Transient Guest taxes may at the discretion
of the City be used as part of the tax increment, but generally the City will
only make 50% of the transient guest tax available. For STAR Bond projects that meet state
required criteria additional revenues may be required.
SECTION EIGHT: OTHER
CONDITIONS. The
City reserves the right to modify or waive any or all of these policies in
accordance with the approved redevelopment project plan and/or redevelopment
agreement.
SECTION
NINE: AUTHORITY OF GOVERNING BODY. The
Governing Body reserves the right to deviate from any policy, but not any procedure
set forth in this Resolution or any other procedural requirements of state law,
when it considers such action to be of exceptional benefit to the City or
extraordinary circumstances prevail that are in the best interests of the city.
SECTION TEN:
EFFECTIVE DATE. This Resolution
shall take effect immediately.
ADOPTED by
the Governing Body this ______ day of ________________, 2008.
________________________________
ATTEST:
___________________________
Frank S.
Reeb, City Clerk