Options for First State Bank of NW Arkansas Property – M ace Curve 391 STAFF PRESENTATION Special M eeting of Davis City Council J une 11, 2013
Overview Consent Calendar vs. Regular Session • Staff was aware it would be pulled by Council. • Was intended to allow flexibility to Council for when they heard item after it was pulled. • M uch of current discussion is not fully vetted and ready for Council presentation… NRCS Grant timing is driving schedule. City Goal T ensions, Policies and Realities • Council Goals - Fiscal Stability, Economic Development, Sustainability • General Plan Land Use Designations and M ap – Business Park, University-Related Research Park, Urban Agricultural Transition Area • M easures J/ R and O • Fiscal uncertainty – Structural budget deficit, deferred maintenance, rising personnel costs
Overview of M easure O • Approved November 7 th 2000 - 70.4% approval created Ordinance for the Open Space Protection Tax. • Purpose is to “collect funding for the acquisition, operation and maintenance of open space and related public facilities necessary for operation of the land as open space • Generates Approx. $600,000/ year • Approx. 80% goes towards acquisition • Open Space means: • Land in a predominantly natural state or altered for natural resource based uses (i.e. farming, parks) • M ay include, but is not limited to riparian areas, agricultural lands, watersheds, forests, floodplains, and habitat areas Revenue can be spent on: • Acquisition in fee or easement of open space lands within the Davis Planning Area • Improvement, operation, maintenance and/or monitoring of OS lands • Acquisition, improvement, and operation of only those bicycle trails designated to connect Davis to open space areas outside the city and with other regional bicycle facilities. • Construction and maintenance of facilities necessary to preserve or enhance OS properties for OS purposes (wells, irrigation, access) • Incidental expenses incurred in the administration of the tax including but not limited to the cost of elections, cost of collection, operate, maintain and monitor OS properties owned in fee or easement • Sunsets in June 30, 2031 • Approx. 1848 acres acquired with M easure O funds (whole or partial)
M ace Curve 391 Purchase How we acquired M ace Curve 391 • City presented with opportunity by local broker to purchase the property • M et City’s Sustainability goals • Used City funds to purchase � M easure O – appropriate for easements � Loan from Road Impact Fee – specified use, not available for general road maintenance
M ace Curve 391 Purchased by city in July 2011 – $3,800,000 • $1,325,000 – M easure O • $2,475,000 – Internal Loan (Roadway Impact Fee) Intent of Ag Conservation of 391 acres (estimated completion of M arch 2014) • Purchase of Conservation Easement � $1,125,000 – NRCS Grant � $1,325,000 – M easure O � Part of funds go to repayment of City Loan • Repayment of Remaining City Internal Loan � $1,350,000 – Upon sale of Fee Title to third party
Mace 391/ Arkansas (City-owned) = 391 + / - acres
Innovation Park Task Force Concurrent Policy Effort • Innovation Task Force met for 1½ years � (mid 2010 – late 2012) • Used guiding principles of City economic development goals of: � cultivate diversified economy, workforce and tax base; � capitalize on resources of university town, including human capital; and � promote appropriate partnerships with the private sector and university community • Council adopted Task Force recommendations in November 2012 � Key Recommendation: Pursue dispersed innovation center strategy, including centers at the east and west edges of the City
Capitol Corridor Ventures Concept • Enter into exclusive negotiations for acquisition of the M ace Curve 391 Property. • CCV proposes escrow deposit of $100,000 � Reimburse YL T for costs incurred in the NRCS and land acquisition process and City costs for negotiating the agreement with CCV. • Essentially swap 234 acre portion of the M ace Curve 391 Property for a conservation easement on the Shriner property (234 acres) � CCV holds an option on the Shriner’s Property. • Conservation easements proposed for the north east 157 acres of the M ace Curve 391 Property. � The M easure O funds are proposed to pay for the easements described in this proposal. • City and the Y olo Land Trust would be made “ whole” at the conclusion of the addition of the Shriner’s Property into the transaction. • Any future, voter-approved development proposed by CCV in the M ace Curve proposed to include a continuous, substantial and sustainable annual funding source for the City � In excess of traditional development fees
Potential 157 acre Ag Conservation Easement Potential 234 acre Ag/Open Space Conservation Easement Mace 391/ Arkansas (City-owned) = 391 + / - acres Shriner’s/ Mace Covell Gateway = 234 + / - acres Proposed Ag E asement = 157 + / - acres Howatt R anch (City-owned) = 776 + / - acres
Balancing City Goals and Priorities Open Space Preservation/ Economic Development City staff must balance goals… § Acquire open space and conservation easements � Council Goals - sustainability � General Plan Policy – Urban Agricultural Transition Area � City M easures J/ R & O § Support of entrepreneurship, access to business support services and local business growth � Council Goals – fiscal responsibility & economic development � General Plan Policy – Business Park, University-Related Research Park � Innovation Park Task Force – Adopted resolution � Losing businesses - revenue
Balancing Priorities NRCS Grant Acceptance Advantages Disadvantages • Y • Land use restrictions - greenhouse olo Land Trust receives NRCS grant for $1,125,000 structures or other impervious surface area � substantially offset the City’s original acquisition costs • Potentially difficult to identify � partially pay back the Road purchaser of the land with a planned Impact Feel internal loan easement • Permanently preserved for • Potential sale of easement- agricultural use encumbered land not at minimum of $1,350,000 • City would have an opportunity site � internal loan, pay broker fees, nor to establish an urban farm set up YL T endowment for on- • City likely able to repay the rest of going enforcement of the the Road Impact Fee internal loan easement, • Implement a portion of the Urban • Potential inability to utilize the property Agricultural Transition Area for leverage to acquire more complete conservation buffer on the northeast side of the City.
Balancing Priorities Decline NRCS Grant Advantages Disadvantages • Potentially acquire alternative • Real estate acquisition or development configurations for conservation concepts are always speculative • Retains maximum flexibility to • There are details that would need to be appropriately locate and scale a negotiated in the CCV proposal and potential innovation center exploration and vetting of concepts will be necessary • Close proximity to critical • The City would lose the NRCS grant infrastructure funding • Cost-sharing strategies could be explored to create a long term revenue stream for the City • Conservation easements could include commercial greenhouses, open space recreation and wildlife conservation areas
NRCS Relationship Assurance Gore, James - NRCS, Washington, DC James.Gore@wdc.usda.gov To: Rob White Cc: Boozer, Astor - NRCS, Washington, DC; Suarez, Carlos - NRCS, Davis, CA Re: DC M tg Followup - Davis, CA Wed 5/ 15/ 2013 6:06 AM I am cc ing Astor Boozer here. I spoke with Carlos after our meeting, and don't see an option to trade out the easement for another property. Y ou can follow up with Astor and Carlos. No hard feelings if you guys have to rescind your application . Best to you in all your endeavors. James Gore Assistant Chief Natural Resources Conservation Service | USDA Office: 202-720-4525 | James.Gore@wdc.usda.gov Helping People Help the Land Email – emphasis added
Staff Recommendation • Determine that exploring options for M ace Curve 391 � Policy consistent with Council stated goals of Fiscal Stability, Economic Development and Sustainability � Outweighs the current value of USDA NRCS grant • Authorize staff to notify the Y olo Land Trust (YL T) that the City will decline to proceed with USDA Natural Resource Conservation Service (NRCS) grant funding NOTE: Action by Council is required at June 11 th City Council meeting � Lack of Council action will have the default effect of staff implementing previously adopted Council actions � Accepts the NRCS grant and executes the conservation easement agreement
Conclusions • City staff are working to give the City Council maximum flexibility in balancing the communities goals, priorities and directives � NRCS Grant schedule requires June 15 th decision � Declining grant preserves options � Additional public vetting would be ideal, but cannot be done with NRCS grant acceptance • Any project proposal that converts land to urban use continues to be subject to M easure J/ R • Value relationship with Y olo Land Trust (YL T) and look forward to working with them on future options/opportunities
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