Memorandum

City of Lawrence

City Manager’s Office

 

TO:

David L. Corliss, City Manager

 

FROM:

Diane Stoddard, Assistant City Manager 

Roger Zalneraitis, Economic Development Coordinator/Planner

 

CC:

Cynthia Boecker, Assistant City Manager

John Miller, Staff Attorney

 

Date:

 

October 8, 2008

RE:

Free State Transportation Development District (TDD) (Bauer Farm development, northeast corner of Wakarusa and W. 6th Streets)

 

Please place the following item on the City Commission’s agenda for October 14, 2008:

 

Public hearing on proposed Transportation Development District (TDD) for Lawrence Free State TDD (Bauer Farm development, northeast corner of Wakarusa and W. 6th Streets) and first reading of Ordinance creating the TDD and imposing the TDD sales tax.

 

On September 23, 2008, the City Commission approved Resolution No. 6804 setting a public hearing date for October 14, 2008 for the proposed Free State (Bauer Farm) Transportation Development District (TDD).  Additionally on September 23, the City Commission approved the funding agreement for legal and administrative costs associated with the proposed TDD.  The City has since received an executed funding agreement along with a deposit to cover the legal and administrative costs from the developers. 

 

Recently, the City Commission approved a resolution establishing a policy on TDD Districts.  A TDD enables a property owner to petition for the establishment of a special sales tax upon sales within a district to pay for certain transportation-related costs related to the district.  The resolution outlines considerations for the City Commission when it establishes TDD Districts.  The attached matrix outlines how the Bauer Farm TDD fits within the policy on its major points. 

 

On September 22, 2008, the City received a revised petition from FREE STATE GROUP, LLC, and FREE STATE HOLDINGS, INC representing all of the property owners of Bauer Farm.  The petition proposes the establishment of a special TDD sales tax of 1% on all sales within the district to pay for certain transportation-related costs within and in the area of the District.  The petition outlines improvements totaling $6.8 million, plus financing costs.  Upon review by Bond Counsel of the list of proposed improvements set forth in the petition, it is the opinion of Bond Counsel that only the following proposed improvements outlined in the petition would be TDD-eligible:

·        Utility relocation, storm sewer improvements, and other related improvements within the Planned Commercial Development;

·        The following offsite improvements:

o       6th and Champion Lane: construct a westbound right turn lane and associated traffic signal for the turn lane;

o       6th and West Entrance: construct westbound right turn lane;

o       Wakarusa Drive and Bauer Farm Drive: construct a northbound right turn lane;

o       Wakarusa Drive improvements to include ramps and street trees along the frontage;

o       Wakarusa Drive and Overland Drive: construct a northbound right turn lane;

o       Overland Drive and the existing Champion Lane: demolish the existing Champion Lane and rebuild curb and gutter and sidewalk;

o       Wakarusa Drive and Overland Drive:  traffic signal

o       Overland Drive from Wakarusa Drive to Planned Residential Development- curb ramps, street lights and street trees;

o       Sanitary sewer

 

The reduced project listing will take the proposed maximum costs from $6.8 million to a maximum of $5 million, plus financing costs, although TDD-eligible costs are likely to be closer to $5.8 million. TDD project costs will be paid from the TDD sales tax. 

 

Staff continues to work with the developer’s representatives and Bond Counsel to draft a Development Agreement for the TDD.  If the City Commission approves first reading of Ordinance No. 8339, establishing the district on October 14, it would be anticipated that second reading of the ordinance establishing the district would be considered at the October 21, 2008 meeting.  The Development Agreement would be considered at a later date.  The sales tax would be anticipated to commence April 1, 2009. 

 

The draft Development Agreement anticipates that the improvements will be constructed upfront by the developers with no upfront financing from the City. The draft further specifies that the TDD sales tax will be paid by the City to reimburse the developer for project costs.  Eventually, the City may issue a debt instrument to replace the developer’s financing.  However, certain conditions must be met in order for this to occur including at least 50,000 square feet of retail space must have been constructed and received a final certificate of occupancy and opened for business. 

 

Requested Action:  The City Commission should hold a public hearing on the item.  After the public hearing, the City Commission should consider first reading of an ordinance creating the Free State Transportation Development District.