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07-31-2017 Community Redevelopment Authority Regular Meeting Packet Community Redevelopment Authority (CRA) Monday, July 31, 2017 Regular Meeting Packet Board Members: Tom Gdowski - Chairman Glen Murray – Vice Chairman Sue Pirnie Glenn Wilson Krae Dutoit 12:00 PM Community Meeting Room-Grand Island City Hall 100 E. First Grand Island Regular Meeting - 7/31/2017 Page 1 / 18 Call to Order Roll Call A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda Items form located at the Information Booth. If the issue can be handled administratively without Council action, notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given. B - RESERVE TIME TO SPEAK ON AGENDA ITEMS This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak. Please come forward, state your name and address, and the Agenda topic on which you will be speaking. DIRECTOR COMMUNICATION This is an opportunity for the Director to comment on current events, activities, and issues of interest to the commission. Grand Island Regular Meeting - 7/31/2017 Page 2 / 18 Community Redevelopment Authority (CRA) Monday, July 31, 2017 Regular Meeting Item A1 Agenda 7-31-17 Staff Contact: Chad Nabity Grand Island Regular Meeting - 7/31/2017 Page 3 / 18 Grand Island Regular Meeting - 7/31/2017 Page 4 / 18 COMMUNITY REDEVELOPMENT AUTHORITY AGENDA MEMORANDUM 4 p.m. July 31, 2017 1.CALL TO ORDER. The meeting will be called to order by Chairman Tom Gdowski. This is a public meeting subject to the open meetings laws of the State of Nebraska. The requirements for an open meeting are posted on the wall in this room and anyone that wants to find out what those are is welcome to read through them. 2.APPROVAL OF MINUTES. The minutes of the Community Redevelopment Authority meeting and retreat on July 12, 2017, are submitted for approval. A MOTION is in order. 3.APPROVAL OF BILLS. Payment of bills in the amount of $213,740.55 is submitted for approval. A MOTION is in order. 4.REVIEW OF COMMITTED PROJECTS AND CRA PROPERTIES. 5.BUDGET. The 2017-2018 proposed budget will be discussed. A MOTION for approval is in order. 6.RESOLUTION TO PURCHASE/SELL REAL ESTATE. None. 7.DIRECTOR’S REPORT This is an opportunity for the director to communicate on going actions and activities to the board and public. 9. ADJOURNMENT. Chad Nabity Director Grand Island Regular Meeting - 7/31/2017 Page 5 / 18 Community Redevelopment Authority (CRA) Monday, July 31, 2017 Regular Meeting Item B1 Minutes 7-12-17 Staff Contact: Chad Nabity Grand Island Regular Meeting - 7/31/2017 Page 6 / 18 OFFICIAL PROCEEDINGS MINUTES OF COMMUNITY REDEVELOPMENT AUTHORITY MEETING OF June 12, 2017 Pursuant to due call and notice thereof, a Regular Meeting of the Community Redevelopment Authority of the City of Grand Island, Nebraska was conducted on July 12, 2017 at City Hall 100 E. First Street. Notice of the meeting was given in the July 5, 2017 Grand Island Independent. 1.CALL TO ORDER. Tom Gdowski called the meeting to order at 1:37 p.m. The following members were present: Gdowski, Glen Murray, Glenn Wilson and Sue Pirnie. Also present were: Director, Chad Nabity; Planning Administrative Assistant Tracy Overstreet; Billy Clingman from the Grand Island Finance Department; Grand Island City Council President Vaughn Minton; City Administrator Marlan Ferguson; Austin Koeller of the Grand Island Independent; Sonja Weinrich of Weinrich Development; and Mike Bacon of Bacon and Vinton Law Office. Gdowski stated this was a public meeting subject to the open meeting laws of the State of Nebraska. He noted that the requirements for an open meeting were on the front table easily accessible to anyone who would like to read through them. 2.APPROVAL OF MINUTES. A motion for approval of minutes for the June 7, 2017 meeting was made by Wilson and seconded by Murray. Upon roll call vote, all present voted aye. Motion carried 4-0. 3. APPROVAL OF FINANCIAL REPORTS. Clingman reviewed the financial reports for the period of June 1, 2017 through June 30, 2017. A motion was made by Pirnie and seconded by Wilson to approve the financial reports. Upon roll call vote, all present voted aye. Motion carried 4-0. 4. APPROVAL OF BILLS. The bills were submitted for approval. A motion was made by Murray and seconded by Pirnie to approve the bills in the amount of $92.01. Upon roll call vote, all present voted aye. Motion carried 4-0. 5.REVIEW OF COMMITTED PROJECTS & CRA PROPERTY. Nabity provided a review of the committed projects. He said a building permit has been pulled for the Auto America façade on South Locust Street. The Bosselman Corporate Office on South Locust is near completion. The Elk’s Lodge façade is largely done with a new sign that is used to advertise events. The Federation Labor Temple is also nearing completion and will likely be paid out by the end of this fiscal year. Othy’s façade is on hold until the Vitrolite contractor is back in Grand Island. He has heard no update on the upgrade of South Locust landscaping by the Grand Island Regular Meeting - 7/31/2017 Page 7 / 18 Business Improvement District there. Wing Properties has submitted claims and cancelled checks for payment on the façade at 116 E. Third. That is awaiting final inspections from the Building Department. The remaining Wing Property facades will roll over to next year. The Hedde Building will not have payments this year as they are moving forward with the state historic tax credit application first. Peaceful Root is moving along with many new windows. Murray asked about a former project request from Wild Bill’s Fun Center. Nabity said that project hasn’t come back for finalization due to the developers still working on details. 6. WEINRICH DEVELOPMENT REDEVELOPMENT CONTRACT. Nabity said the Regional Planning Commission found the redevelopment plan in compliance with Grand Island’s Comprehensive Plan and recommended approval of the redevelopment plan through its approval of Resolution 2017-12, which was forwarded to the CRA. A motion was made by Murray and seconded by Wilson to forward the plan to the Grand Island City Council. Upon roll call vote, three present voted aye. Motion carried 3-0 with Chairman Gdowski abstaining. 7. APPROVE RESOLUTION TO PURCHASE/SELL REAL ESTATE (none) 8. BUDGET. Nabity presented a draft budget detailing $3.6 million in spending. New revenue is forecast at $760,000 with $198,000 of that committed to the Lincoln Pool Project and $560,000 for CRA projects. Minton suggested the $100,000 in land sale revenue be reduced to $0 to reduce questions from the city council during budget review. There was also discussion of increasing the façade improvement line item from $200,000 to $350,000 due to anticipated requests and offsetting that through a reduction in the $300,000 for other projects. Minton suggested reducing the $200,000 allocated for land purchases, however Nabity said he would like to keep a number there for unexpected events that occur such as in the past acquiring a downtown lot after a fire. The CRA may also need to budget for food and beverage receipts that may be allocated for a Husker Harvest Days show site upgrade, but that may not be needed until the next fiscal year. 9.LEGISLATIVE UPDATE. Mike Bacon with Bacon and Vinton Law Firm of Gothenburg presented an update on the 2017 Legislative session. He said there were three major bills this year, LB262 by Sen. Groene that would change the provisions for undeveloped vacant land under the Community Development Law; LB95 by Sen. Crawford to change provisions of the Community Development Law and tax increment financing; and LB496 by Sen. Stinner that defined and redefined terms in the Community Redevelopment Law. Bacon said the Groene bill would eliminate the ability to do projects such as Copper Creek, with single-family homes on previously vacant land. It didn’t get out of committee. LB95 is still being worked on and will probably get out of committee next year. Much of LB95 is in response to the State Auditor’s report on TIF projects in Nebraska. LB95 will likely seek to lengthen the Grand Island Regular Meeting - 7/31/2017 Page 8 / 18 process and time for a TIF application by adding more public hearings and time between notices and hearings. Bacon said school boards have complained that the current 17 day notice is not enough on TIF projects. Other proposed changes include a formal blight study notification, requiring that redevelopment plans be posted on city web sites and annually do a cost-benefit analysis on old projects. The cost-benefit analysis request may be quite involved and costly ($15,000 to $20,000 per project) which Bacon said could be detrimental to smaller scale TIF projects. It may require a review on job creation, wage analysis over time, cost to schools and other governmental entities, and the impact on streets, sewer and water. Bacon helped draft LB496 to allow tax increment financing to be used to build workforce housing, instead of just the infrastructure to housing lots as is allowed now. It passed two rounds and was filibustered. Three of Grand Island’s four senators voted against the bill. Bacon said more anti-TIF bills will be coming. In response to questions, Bacon said Nebraska’s TIF laws are the most restrictive compared to other states. Nebraska allows TIF for up to 15 years. Rhode Island allows 40 years and many states have no time line. There will be a study session on TIF this summer and Bacon encouraged Grand Island representatives to attend and tell the good stories of its use in Grand Island. He praised Grand Island for its housing work and downtown revitalization and positive, responsible use of TIF. Nabity said the use of TIF at the Grand Island Mall, which Ray O’Connor purchased for $2 million, has led to an overall $40 million investment in the community. Gdowksi, who sits on the Grand Island Area Economic Development Corp. board, said TIF is a valuable tool for economic development, as competing for businesses is difficult. The group discussed how some developers already do a cost-benefit analysis, including some of the projects for apartments and the second hospital project. Minton said it’s important to have the analysis up front on big projects and to involve the community. Bacon said it may be helpful to sit down and talk with stakeholders before projects come in to find out what the parameters are, ie. how many school-age children may live at a development that may then require transportation or additional staff at a nearby school. He also urged the CRA to remain true to its mission and not operate in a silo or become overly distracted by the concerns of a special interest group. 10. DIRECTORS REPORT/INTRODUCTION TO RETREAT. Nabity discussed what is the mission of the CRA. Nabity read the mission on the web site that “The CRA is charged with taking action in specified areas of the community to remove, prevent or inhibit physical deterioration (blighted and substandard conditions) that will result in lower property values and create disincentives to private investment.” Grand Island Regular Meeting - 7/31/2017 Page 9 / 18 That mission was altered slightly to read, “The CRA is charged with taking action in specified areas of the community to assist in the prevention and to inhibit physical deterioration (blighted and substandard conditions) thereby enhancing property values and creating incentives for private investment.” Nabity reported that the department has started a residential project notification to Grand Island Public Schools to give the district as much notice as possible for residential projects. Bacon suggested asking residential developers to identify the target population and estimated age range of children and families in their projects so that information could be shared with the school district. Nabity said the developer of the Talon apartment project actually met with the school district before pursuing project financing. The 288-unit project has seen half a dozen kids in the 5 and under range in the first 36-unit building that is occupied, according to the developer. The authority discussed community concerns about new apartments getting a subsidy through TIF and competing against the market. Bacon said that’s a universal concern, but the CRA’s job isn’t to influence the market, it’s to get rid of blight and substandard conditions. Invite the other developer to build in the blight area, he said. Gdowski said he still sees a need for affordable housing in Grand Island, which has a low vacancy rate for apartments. Nabity said it’s never been above a 3 percent vacancy rate. Bacon said a community really needs a vacancy rate of 5 or above to be healthy. The authority talked about Grand Island’s aging housing. Grand Island was incorporated in 1875. Many of the homes may be uninhabitable based on Housing and Urban Development standards. Bacon said the CRA might want to consider a method of fixing up older neighborhoods. HGTV impacts it because there’s a growing population of Do-It-Yourselfers. LB496 would also help with that. The group discussed the Problem Resolution Team. There are pockets of older homes that could be cleared, however the council may be more favorable to commercial uses of TIF versus residential uses. Minton said there’s a group that doesn’t want TIF for any individual housing, only for commercial projects. He said some developers aren’t being honest with the “but for” clause. Some of the development could be done with private funds. There are objections to declaring some vacant land as blighted and substandard, he said. Bacon said Omaha requires a rate of return report on projects with and without TIF. Having the return report can take pressure off the city council Grand Island Regular Meeting - 7/31/2017 Page 10 / 18 and CRA. It’s almost never cost effective to knock something down to develop versus building on open ground, Bacon said. Gdowski said the fair rate of return is subjective. Bacon said ask Realtors and they will give you the current rate of returns. Bacon said some people have a misconception about TIF that it is a hand-out of free money. It’s not. It’s a cost share. Plus not all projects advance to the council level. Bacon suggested keeping a list of projects that are not advanced. Break from 3:15 to 3:30 p.m. Nabity held a map session to show the 23 areas have been declared blighted and substandard. There are two more pending - the Veterans Home Area 16 that had a study done two years ago. It can come forward at any time. Nabity recommended the city annex the land with the study and declare it blighted and substandard. The other area is the Cornhusker Army Ammunition Plant, which will be considered by the council on July 25. The CAAP land makes up 65 percent of the municipal limits, but is not counted into Grand Island’s allowed 35 percent of city limits that can be declared blighted and substandard because CAAP is a former defense site. Council has declared two other blighted and substandard areas in the last month - Area 23 for Tim Plate on Memorial Drive for a four-plex and an area across from the hospital for a residential project. Other areas must remain in existence, as long as there is a TIF project that is active. The CAAP area, if declared blighted and substandard, may be able to accommodate a redevelopment plan for Husker Harvest Days, which would not be a TIF project – it will be a project with CRA dollars funded through food and beverage tax dollars. The CRA will have to borrow or bond to do that and pay off over 20 years with food and beverage tax. Nabity said it will be a little bit complex. Ferguson said the Husker Harvest Days owners will want to start this fall on what will probably be a two-year project with electrical improvements first and then streets and water. There’s also a proposal for a TIF application from O’Neill Wood Resources that will come forward if its siting application is approved. Tax increment financing would be use for the recycling and scale house, Nabity said. Microblight projects have been a popular use of tax increment financing. Nabity asked if the CRA wanted to look at any new areas for redevelopment or wanted to change the boundaries of existing areas (existing areas can be narrowed as long as all active projects are still included in the redevelopment area.) Murray said the Fifth Street area has lots of old houses that may benefit from redevelopment. Nabity said that could be done on a case-by-case basis through microblight projects as opposed to declaring an entire area that will use some of the allowed 35 percent of city limits that statutorily may be declared blighted and substandard. Grand Island Regular Meeting - 7/31/2017 Page 11 / 18 Nabity said Grand Island is currently 19.99 percent blighted and substandard and would increase to 22.75 percent with the Veterans Home. Kearney is at 26.3 percent; Hastings at 25.84 percent, which will rise to 26.84 percent based on a pending proposal; Norfolk is at 22.91 percent; Lincoln is 11.35 percent. Bacon said sometimes redevelopment areas are driven by hoping to get a project in an area. Kearney, Hastings, and Grand Island all have tax levies to support the CRA. North Platte, Norfolk and Lincoln don’t have a levy. GI and Hastings are at 2.6 cents. North Platte has a unique set up of a 25 percent capture on TIF projects that is then put into a small project fund and used for other improvement projects in the redevelopment area. Bacon doesn’t recommend using that capture program, which has been questioned by the State Auditor. Gdowksi asked about adding or changing any redevelopment areas. The CRA members seemed satisfied with the existing areas and boundaries. Gdowski said part of the challenge with economic development and redevelopment is how to provide information to developers. He talked about more extensive use of the website to share information on incentive options and redevelopment tools. Suggestion was made by Gdowski for requiring an ROI report. Minton doesn’t think it should be for all projects. Bacon said every TIF project has a “but for” test, which can be handled through a ROI report or a bank letter. Types of projects – Minton said from council perspective it helps to tie into Grow Grand Island. Gdowski asked about the façade program and if CRA members were satisfied with the results. Ferguson likes what the CRA is doing and how it’s being done. The CRA has façade grants available in Area 1, 2, 6, and 4. Nabity said façade grants cannot be offered in other areas, such as at Grand Island Mall, unless the redevelopment plan is amended to those areas. Criteria for choosing areas to fund – a developer that previously received a façade grant wondered if they could submit a second façade request. The CRA is open to that. Grand Island Regular Meeting - 7/31/2017 Page 12 / 18 What about the same developer getting approved time after time? Murray wonders how the public perceives that. Wilson said when developers do a good job and are known for that, they are more likely to be approved again. Timeline for submission – Nabity asked if the CRA should continue its first-come, first-served practice or if it wanted to do a due date (such as quarterly) and review the applications. Pirnie said to wait and accept applications quarterly would be difficult. Gdowski likes first-come, first- served because there’s limited dollars. If you don’t do it that way you may have five apps and not enough money. Life Safety grant procedures – Gdowksi said in three years, 27 apartments are being developed out of that program that sought to gain 50 downtown apartments within five years. The program appears to be on track. Nabity reviewed the CRA owned property. The CRA discussed TIF catalyst projects – like the second hospital or a distribution center or downtown hotels. Nabity asked if the CRA wanted to hold back and wait for those bigger projects, wanted to try to entice larger projects or wait for bigger projects to find the CRA. Grand Island Mall and Hendrix Hatchery are catalyst projects. The CRA said it doesn’t want to wait, it wants to fund what it can as projects come forward. The CRA discussed five year goals - to continue what it’s doing. Murray wonders about our blight and substandard projects – do they create new jobs? Minton said Grand Island Mall does. And it brings in new residents. Clingman said it has increased property values. 12. ADJOURNMENT. Gdowski adjourned the meeting at 4:22 p.m. The next regular meeting is scheduled for August 9, 2017. A special meeting is expected the last week of July or first week of August. Respectfully submitted Chad Nabity Director Grand Island Regular Meeting - 7/31/2017 Page 13 / 18 Community Redevelopment Authority (CRA) Monday, July 31, 2017 Regular Meeting Item D1 Bills Staff Contact: Chad Nabity Grand Island Regular Meeting - 7/31/2017 Page 14 / 18 31-Jul-17 TO: Community Redevelopment Authority Board Members FROM: Chad Nabity, Planning Department Director RE: Bills Submitted for Payment The following bills have been submitted to the Community Redevelopment Authority Treasurer for preparation of payment. City of Grand Island Administration Fees City Finance $ 3,242.32 Accounting fees $ 450.00 Façade grant payout Elk's Lodge No. 604 $53,400 TIF Pass Throughs Girard $ 5,072.76 Geddes Street $ 13,369.13 Popular Street Water Line $ 1,374.72 Casey's $ 6,736.00 Darr Street $ 3,216.82 Lincoln Street-Plate $ 3,530.02 Token 213-215 N. Ruby $ 1,531.48 Gordman $ 25,520.61 Baker Development $ 1,804.09 Copper Creek $ 10,200.62 Chief -Aurora Coop $ 17,352.38 Enck-Kimball Street $ 1,357.57 Auto One $ 5,933.23 Enck-Carey Street $ 4,166.53 Copper Creek Phase 2 $ 19,361.34 Mainstay Suites $ 30,624.05 Copper Creek Phase 3 $ 5,496.88 Total:$ 213,740.55 Grand Island Regular Meeting - 7/31/2017 Page 15 / 18 Community Redevelopment Authority (CRA) Monday, July 31, 2017 Regular Meeting Item K1 Budget 2017-18 Staff Contact: Chad Nabity Grand Island Regular Meeting - 7/31/2017 Page 16 / 18 July 25, 2017 From: Chad Nabity, AICP Director To:CRA Board Re: 2017-2018 Budget Enclosed you will find a draft of the 2017-2018 CRA Budget. The 2017-2018 CRA Budget is presented with projected revenue from taxes of $757,664. The levy from last year is being retained and includes about $560,000 for CRA purposes including grants, façade improvements, committed projects and staffing as well as $198,000 for Lincoln Park Pool. The budget includes $350,000 for façade improvement. There are façade applications carrying over from the current fiscal year and new sizable applications expected. I am suggesting we budget $200,000 for property acquisitions to assist with substandard property abatement. This budget also includes $200,000 for downtown life safety improvements. This program was intended to run for 5 years with $100,000 contributed annually from both the CRA and the City. I am suggesting that we put $150,000 in the other projects line. This money could be shifted to property purchase, grants or façade improvements depending on the need. Budgeting money in other projects makes it possible for the CRA to consider assistance such as upgrades to the Husker Harvest Days site or the Nebraska State Fair/Fonner Park site or Veterans property. The CRA made substantial commitments to façade and life safety projects at the end of the 2016-17 fiscal year and the budget for this fiscal year reflects those commitments and fully funds the payout of those obligations. Please let me know if you have any additional feedback on the budget as presented. Grand Island Regular Meeting - 7/31/2017 Page 17 / 18 2017 2016-2017 2018 BUDGET YE Projected BUDGET CONSOLIDATED Beginning Cash 1,249,922 1,092,980 REVENUE: Property Taxes - CRA 566,972 548,641 559,614 Property Taxes - Lincoln Pool 198,050 198,050 198,050 Property Taxes -TIF's 1,809,856 937,181 1,827,558 Loan Income (Poplar Street Water Line)8,000 10,500 10,500 Interest Income - CRA 300 21 300 Interest Income - TIF'S 23,720 23,316 23,316 Land Sales 250,000 - Other Revenue - CRA 130,000 5,286 130,000 Other Revenue - TIF's - 10,082 - TOTAL REVENUE 2,986,898 1,733,077 2,749,338 TOTAL RESOURCES 2,986,898 2,982,999 3,842,318 EXPENSES Auditing & Accounting 5,000 4,475 5,000 Legal Services 3,000 613 3,000 Consulting Services 5,000 5,000 5,000 Contract Services 75,000 51,208 75,000 Printing & Binding 1,000 - 1,000 Other Professional Services 16,000 7,953 16,000 General Liability Insurance 250 - 250 Postage 200 59 200 Life Safety 265,000 - 200,000 Legal Notices 500 16 500 Travel & Training 1,000 200 1,000 Other Expenditures - - - Office Supplies 1,000 172 1,000 Supplies 300 - 300 Land 50,000 - 200,000 Bond Principal - Lincoln Pool 175,000 175,000 175,000 Bond Interest 20,863 21,338 20,863 Façade Improvement 200,000 350,000 Building Improvement 835,148 667,748 554,732 Other Projects 50,000 - 150,000 Bond Principal-TIF's 1,815,774 938,774 1,859,558 Bond Interest-TIF's 17,463 17,463 23,316 Interest Expense - - - TOTAL EXPENSES 3,537,498 1,890,019 3,641,719 INCREASE(DECREASE) IN CASH (550,600) (156,942) (892,381) ENDING CASH (550,600) 1,092,980 200,599 COMMUNITY REDEVELOPMENT AUTHORITY 2018 BUDGET Grand Island Regular Meeting - 7/31/2017 Page 18 / 18