RESOLUTION NO. ____
A RESOLUTION ESTABLISHING A POLICY OF THE CITY OF LAWRENCE, KANSAS RELATING TO TAX INCREMENT FINANCING DISTRICTS.
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,
redevelopment activities, due to
complexities of existing infrastructure and development, often
require larger
financial investments
and meet a larger public goal; 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, redevelopment activities, due to complexities of existing infrastructure and development, often require larger financial investments and meet a larger public goal; 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 developersapplicants
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 proposed development.
NOW, THEREFORE, THE TAX INCREMENT FINANCING POLICY FOR THE CITY OF LAWRENCE, KANSAS, WILL BE AS FOLLOWS:
SECTION ONE: 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 t by constructing
public improvements in support of developments. For the purposes of this
policy “a substantial and significant public benefit” may include
one or more of the following benefits: that
will, by creating new jobs and/or
retaining existing employment, ;
eliminateing
blight, strengthening the employment
and economic base of the City, increaseing
property values and tax revenues, reduceing
poverty, creating e economic
stability, upgradeing
older neighborhoods, facilitateing
economic self sufficiency, promoteing
projects that are of community wide importance, or and implementing
the Comprehensive Plan and economic development goals of the City.
Projects which encourage redevelopment congruent with City goals, plans and/or
policies will be considered more favorably. The City
Commission also encourages projects that will be sensitive to the environment
and contain elements which promote energy efficiency.
SECTION ONETWO:
PROCESS:
1. Any personAn
applicant wishing to request the City to create a redevelopment
district within the City of Lawrence shall first submit a detailed written proposal
to the City Manager. The proposal shall include, but is not limited to: (a) a
proposed comprehensive plan that identifies all the proposed redevelopment
project areas and that identifies in a general manner all of the buildings and
facilities that are proposed to be constructed or improved in each redevelopment
project area; (b) description and map of the proposed redevelopment district;
(c) description of the proposed boundaries of the redevelopment district; (d)
information regarding expected capital expenditure by the applicant; and (e) a
proposal for development assistance.
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. City staff shall make
available to the public in a timely manner information summaryingsummarizing the TIF
Act and the process for evaluating a request to create a redevelopment district.
The City’s process for considering the request to create a redevelopment
district within the City will emphasize transparency,
while balancing the ptotentialpotential need for
some applicant information to remain confidential. Further, the City’s process
for considering a request to create a redevelopment district shall encourage
public participation and comment. At such
time, the procedural steps outlined
in state statute to create
a redevelopment district will be set forth clearly so that the public and
applicant understand the process. The
process for establishing a redevelopment district will emphasize transparency, while
balancing the
potential need for some applicant information to remain confidential, and
encourage public participation and comment.
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 . Such evaluation
may include a review of
appropriate market returns for a project that takes into consideration the
type of the project, the site and other relevant factors. This
evaluation will take place in conjunction with the feasibility study as
required by statute.
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
applicant 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 in a form acceptable to the City that the applicant has the financial ability to complete and operate the proposed project.
5. Projects that have at
least 50% of the total project costs (all
development costs, including public and private costsredevelopment
project costs as defined by the TIF Act and
costs reasonably related to the project that are not included
in the TIF Act’s definition of redevelopment 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 more favorably. Projects to stabilize
current residential neighborhoods, commercial, and industrial areas that have
or will likely experience deterioration will also be
viewed more favorably.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 andfor
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 applicant on
any bonds will be viewed favorably. Private
financing of improvements will be encouraged by the City and viewed more
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. The City may
make incremental City Sales
Taxes associated with
the redevelopment districtand/or Transient
Guest Taxes associated with the redevelopment district available
as TIF incentives. Generally, the City will make no more than 50% of the
incremental sales and transient guest taxes available for a
redevelopment project. 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.
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ATTEST:
___________________________
Frank S. Reeb, City Clerk