Urban Renewal Authority How they can be used to improve a - PDF document

8/5/2019 Urban Renewal Authority – How they can be used to improve a community August 5, 2019 Presented by Robert Smith Urban Renewal in Colorado August 5, 2019 Presented by Carolynne White 1

8/5/2019 Some Framing Comments Council has some The LRA Board Lakewood interest in would need to Redevelopment exploring the expand, by Authority (LRA) formation of a several seats, oversees & new Urban manages our 4 before it could Renewal Area consider an existing URAs. within Lakewood. Urban Renewal/ The approval of an Redevelopment Urban Renewal/ The approval of such Redevelopment Plan for Plan for a new areas would be a any new area would be a area. decision of the decision of the City Lakewood City Council. Council and likely the LRA Board as well. URA – How they can be used to improve communities Some Framing Comments There are many Though we’ll use Urban Renewal acronyms & the term Authorities (like words of jargon “blight”… it has the LRA) have used in Urban specific meaning different powers Renewal with regard to than do City discussions. URA. Councils. Don’t be shy about Blight will possibly have asking for clarification a different meaning in on terminology. the context of the Growth Ordinance. URA – How they can be used to improve communities 2

8/5/2019 We All See Things Differently A Shopping A Center Typical as seen Shopping by a Center MAJOR TENANT A A Shopping Shopping Center Center as seen as seen by the by a CITY Developer Perspectives  Increased/more sophisticated public demand for infrastructure and services  Changes in tax policy  more public improvements financed by private developers  Cities (and citizens) want development to pay its own way  Result  More public/private partnerships, lines blurred Public v. Private 3

8/5/2019 Money Doesn’t Grow On Trees History History Philosophy Philosophy Changes Changes 1958: 1958 …the prevention and Urban Renewal Law enacted 1 ST Enacted in Colorado elimination of slums 1999: HB 99-1326 – 4 blight factors and blight is a July 15, 1949 2004: matter of public Federal Housing Act one bill passed, two others introduced -- HB 04-1203 (63 Stat. 413) policy and statewide (eminent domain) concern in order that the 2005: Intended primarily to one bill passed, two others state and its municipalities shall introduced -- HB 05-224 County enable Colorado to impact report not continue to be endangered receive federal funds by areas which are focal centers 2006: (three bills passed; numerous designated for slum of disease, promote juvenile others introduced) delinquency, and consume an clearance and housing HB 06-1375 tax increment task excessive proportion of its force construction HB 06-1411 higher burden for revenues because of the extra eminent domain services required for police, fire, HB 06-154 Clarify eminent 1970s & early 80s domain laws accident, hospitalization, and TIF provisions added other forms of public 2007: (one bill passed; one other protection, services, and when federal funds introduced) -- SB 07-157 -- notice facilities of commissioning of blight study began to dry up Improving Since the 1950s 4

8/5/2019 History Philosophy Changes 2008: 1958 …the prevention and two bills -- HB 08-1349 - county 1 ST Enacted in Colorado treasurer offset; SB 08-154 – elimination of slums may include unincorporated territory with consent of county and blight is a July 15, 1949 2009: matter of public Federal Housing Act four bills introduced; none passed (63 Stat. 413) policy and statewide 2010: concern in order that the HB 10-1107 – “ag” land bill; “TIF Intended primarily to Reform” bill not introduced state and its municipalities shall enable Colorado to 2011 & 2012: not continue to be endangered “transparency” bills; not passed receive federal funds by areas which are focal centers 2014: designated for slum of disease, promote juvenile HB 14-1375 – “seat at the table” delinquency, and consume an clearance and housing plus formula for county revenue sharing – vetoed by Governor excessive proportion of its construction revenues because of the extra 2015: services required for police, fire, HB 15-1348 1970s & early 80s accident, hospitalization, and TIF provisions added other forms of public protection, services, and when federal funds facilities began to dry up Improving Since the 1950s Statutory Authorization C.R.S. § 31-25-101 et seq. Purpose: eliminate slum and blight Not:  job creation  economic development  increase tax revenue 5

8/5/2019 Statutory Authorization C.R.S. § 31-25-101 et seq. Econ Tax Jobs But Dev Revenue The elimination of slum and blight almost always results in  job creation  economic development  increase tax revenue URA Success Stories Colfax Corridor & Alameda Corridor 6

8/5/2019 The Conditions Survey Sometimes Called the “Blight Study” Statutory Blighting Conditions  Deteriorated or deteriorating structures  Defective or inadequate street layout  Faulty lot layout in relation to size, adequacy, accessibility, or usefulness  Unsanitary or unsafe conditions  Deterioration of site or other improvements  Unusual topography or inadequate public improvements or utilities  Defective or unusual conditions of title rendering the title non-marketable  Conditions that endanger life or property by fire or other causes  Buildings that are unsafe or unhealthy for people to live or work  Environmental contamination of buildings or property  Existence of health, safety, or welfare factors requiring high levels of municipal services or substantial underutilization or vacancy of buildings, sites, or improvements Not All Conditions Need Be Present 7

8/5/2019 Study Area Scope | Properties Included | Fictional Example Boundaries of Urban Renewal Area must be drawn “as narrowly as possible” to achieve the goals of the Colorado Urban Renewal Law Property Values  No studies have What happens to the value of a shown reduction property if it is designated  Some studies have within an Urban Renewal Area? shown increase Designation of blight indicates intention of governing body to target investment to that area; increases market perception of value 8

8/5/2019 Congratulations, You Have Blight Photo Credit: Mark Heller Adoption of Urban Renewal Plan  Blight Study/Conditions Survey  11 categories of blight  Appointment of new Board Members  Negotiation with Taxing Entities  Public Hearing – Planning Commission  Public Hearing – City Council  Adoption of Urban Renewal Plan  Defined plan area boundaries  Sets goals  Authorizes TIF and/or eminent domain 9

8/5/2019 Timelines + 30 days – + 90 days – + 90 days – + 120 days – County impact deadline for Public minimum maximum report & copy mediator notice to negotiation of plan under “findings Hearing counties period prior law of fact” (HB 15-1348) (HB 15-1348) (original (HB 15-1348) statute) Base & Increment TIF = 18 Million Tax Increment Financing 16 Million 14 Million 12 Million 10 Million 8 Million 6 Million 4 Million 2 Million 1 Million 0 1 2 3 4 5 6 7 8 9 101112 13 141516 1718192021 22 2324 2526 10

8/5/2019 Tax Increment Financing URA receives a share of District property & sales tax revenues That project URA makes the results in an catalyst increment in investment in property a building or and/or sales project taxes How TIF Works Blighted Property After Redevelopment TIF District is created Tax base is established Increased taxable value Regular tax levies Captured taxable value 11

8/5/2019 Why Use Increment & TIF  Increment is NOT a new tax  Extraordinary public improvement requirements may be needed $$$ TAX  Increment does NOT increase tax NEW $$ $ RATE rates on existing property owners OUTSIDE  Increment does NOT require that TAX $$$ INCREASE property owners outside of urban URA renewal area contribute to project  Increment captures the additional value created by private investment to put back into the project  Growth pays its own way If Not “But for” the URA With URA Without investment, development, Absent the development occurs, and sales and tax revenues investment property tax stagnate or revenues increase by the Urban Incremental increase decline. Renewal available for URA to reinvest in the district to Authority, remedy blight. development may not happen. 12

8/5/2019 Using Tax Increment Financing  Bonding TIF = TAX INCREMENT FINANCING • Public or Private Placement • Interest and issuance costs  Reimbursement Agreement • Easiest to administer • Requires well-capitalized developer partner  Other Methods  Cash fund, land value discounts, loan guarantees, community land trusts, etc. Tools for Applying TIF The But For Analysis TIF = TAX INCREMENT FINANCING How do you know a project is appropriate for support through tax increment?  Urban Renewal Plan already adopted/in place  Proposed project consistent with plan goals  Project would not occur absent tax increment support (“but for”) Note: Urban Renewal statute does not require that improvements be public in order to receive tax increment, only that they remedy blight 13