HomeMy WebLinkAbout01/10/2017 13 Plaza Committee Letter to Council 10 I
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 13.
For Meeting of: January 10, 2017
ITEM TITLE: Letter from Plaza Committee to Council
SUBMITTED BY: Cliff Moore, City Manager
SUMMARY EXPLANATION:
See attached.
ITEM BUDGETED:
STRATEGIC PRIORITY:
APPROVED FOR
SUBMITTAL: City Manager
STAFF RECOMMENDATION:
BOARD/COMMITTEE RECOMMENDATION:
ATTACHMENTS:
Description Upload Date Type
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MEMORANDUM
TO: Honorable Mayor Coffey and Members of the City Council
FROM: Cliff Moore, City Manager
Sean Hawkins, Economic Development Manager
DATE: January 10, 2017
SUBJECT: Follow Up on Plaza Issues
Background
On November 8, 2016, Council received a letter from the Yakima Central Plaza Fundraising
Committee which provided an update on the first phase of fundraising activities, including
pledges, pledges under contract, and cash in hand. In addition, the letter outlined plans for phases
two and three of the fundraising effort. The letter asks Council to address two specific questions:
1. Would Council support extending a deadline to December 31, 2017 to have $9 million in
pledges secured in contracts?
2. Would Council be willing to identify one or more Council members to join the
fundraising committee for Phase 3 efforts (pursuit of corporate, foundation and federal
grants)?
The letter from the Plaza Committee was placed on the November 15, 2016 Council business
meeting agenda. At that meeting, Council voted to table the discussion until the December 6,
2016 business meeting. On December 1, 2016, by email to the Mayor and city manager, Council
Member Dulce Gutierrez requested the issue be postponed until the January 10, 2017 Council
business meeting. By email to the city manager, a majority of Council supported this request, and
the item was moved to the January 10, 2017 business meeting agenda. As a result, the two
questions noted above remain on the table for Council consideration.
Pledges/Contracts/Payments
Meanwhile, staff have continued to work on the process of converting pledges to contracts and
receiving payments as per those contracts.
The current total amount pledged by the private sector to the construction of the Yakima Central
Plaza is $5,310,908.45. The current total amount of private sector pledges for which contracts
have been signed by donors is $5,283,671.47. Of that amount, payments totaling $656,804.83
have already been received by the City, some of which include small overpayments by a few
donors of their first-year payment commitment.
Contracts have yet to be provided to the City for approximately $27,236.98 in pledges. The
majority of this amount, $23,500, has been received in pledges within the past few weeks. Each
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donor has a contract and we do expect them to be returned in the very near future. Of the
remaining amount, the City has already received payment and we are just waiting for the contract
to be signed as a formality.
Based on Council direction, all recently-agreed-to donor contracts include terms requiring full
payment of pledged funds within a period not to exceed five (5) years.
Three (3) of the previously-agreed-to donor pledges that included full payment schedules
exceeding five (5) years have been converted to full payment schedules of five (5) years or less.
Four(4) of the donors who made pledges prior to the Council's direction regarding full-payment
schedules not to exceed five (5) years have requested no change be made to their original ten-
year full-payment schedules. Those four donors are requesting 10-year full-payment schedules
because they have made similar commitments to other local projects (such as the SOZO Sports
Complex) and personal financial considerations. The total amount pledged by those four(4)
donors is $700,000 and all have made payments toward their full pledge commitments during
2016, and at the end of five years, the remaining amount to be received from these contracts will
be approximately $220,000. It should be noted, however, that even those payments would come
into the City before the debt service on a project bond would be satisfied, so they would be used
to help retire the debt.
Additional Questions
Subsequent to the receipt of the fundraising committee's November 8, 2016 letter, a number of
additional questions have been asked of the Plaza Fundraising Committee and staff. The
questions are enumerated below and, with input from the committee, staff have prepared the
preliminary responses that follow each question. Members of the Plaza Fundraising Committee
do plan to be at the January 10, 2017 Council business meeting and may have additional or
updated information to share at that time.
Questions and Responses:
1. The number of corporate grants and/or donations the committee is pursuing.
Response: The Plaza Fundraising Committee is currently actively engaged in soliciting
significant donations from forty-three (43) corporations, foundations, and philanthropic
organizations and will be pursuing additional such opportunities in 2017. To date, the total
amount of funds being solicited from these entities is $3,283,000. Sectors include finance,
agriculture, insurance, health, engineering, and local and regional manufacturers.
By comparison to the first phase of the fundraising effort, which primarily focused on
individuals with the ability to make giving decisions on their own relatively quickly, securing
donations from corporate, foundation, and philanthropic sources involves multiple prescribed
steps dictated by organizational processes that can be time consuming. And as the committee
works through the process of applying for corporate and foundation grants, they will continue
working on obtaining more individual/family donors. Currently they have requests out with 68
potential individual or family donors, seeking approximately $lmillion additional in funding.
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With a fundraising deadline of December 31st, 2017, the committee is confident the necessary
steps can be completed and the needed donations from these sources will be secured and under
contract.
2. The number of programming commitments the committee has secured or is pursuing.
Response: The Yakima Central Plaza has been deliberately designed to serve as an event venue
in order to draw people to the Downtown core and stimulate economic activity. The plaza would
be home to existing successful Downtown-centered events, such as the Fresh Hop Ale Festival,
the Downtown Summer Nights concert series, and the Yakima Farmers Market. As a dedicated
event venue, the plaza would allow such events to continue to thrive and possibly expand since
street closures would likely no longer be necessary, or would be needed only on a limited basis.
As reported to Council in a March 8, 2016 memo, City Staff anticipates a minimum of 95 events
to occur in the first year of plaza operations. While final rental rates have not been determined, at
a minimum this amount of events would produce $36,500 in revenue to assist with plaza
maintenance issues.
Even before construction of the plaza has begun, organizations like the Yakima Valley
Farmworkers Clinic have expressed interest in hosting events at the plaza such as health fairs,
children's activity days, community splash and play days in the fountains. Additionally, as
demonstrated by the attached schedule from Yakima Valley Tourism, conventions and
conferences taking place in Yakima are likely to utilize the plaza as an available outdoor event
venue.
3. The number of potential state grants the committee plans to pursue.
Response: At this point in time, the Committee is looking at approximately 12 state and federal
grants totaling up to $2M. Examples include the Building for the Arts Grant through the state
department of commerce, the National Endowment for the Arts Challenge Grant, and the
ArtsPlace National Creative Placemaking Fund Project.
4. The plan for who will operate and manage the plaza long-term.
Response: A key element in the success of the plaza will be effective day-to-day operation,
maintenance, and programming oversight. Since its inception about two years ago, the non-
profit Downtown Association of Yakima ("DAY") has been strategically positioning itself to
include in its mission operation, maintenance, and programming oversight of the plaza.
Agreements to be considered by the Council at an upcoming business meeting concerning event
support and a future Downtown Yakima Business Improvement District contract would situate
DAY well to assume day-to-day plaza oversight responsibilities in the future.
Currently, agreements are in place with non-profit entities for operation, maintenance, and
programming oversight of the City-owned Capitol Theatre, Yakima Convention Center, and
Yakima Valley Trolley system. A similar agreement between the City and DAY regarding the
plaza could be considered at an appropriate future date. Under such an agreement, a revenue
sharing model could be instituted to utilize plaza rental fee revenue to support day-to-day
operations, maintenance and programming as follows:
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1) DAY Fund —Utilize to cover staffing costs incurred by DAY related to
landscaping, litter removal, power washing, and other basic maintenance needs of
the plaza
2) Capital Reserve Fund—Utilize to make future equipment and infrastructure
upgrades and repairs to the plaza
3) Plaza Maintenance Fund—Utilize to cover plaza utility costs (water, sewer,
electricity)incurred by the City and costs related to incidental services provided
by City staff
4) Debt Service Fund—Utilize to assist in retiring debt assumed by the City related
to the plaza
The specific percentage of plaza rental fee revenue allocated to each of the four
funds would be determined through an agreement negotiation process between the
City and DAY.
5. Share the bond repayment model and graph developed by a Plaza Fundraising
Committee member as well as any other materials that best visualize how the bond for
the project would be structured and paid.
Response: The Committee's bond repayment model and graphic is attached to this document. In
short, this model projects a 15-year debt repayment of the bond with $9 million in private funds
and $1.8 million in City funds for construction. With this model, the total interest cost would be
$841,728, which would be the City's responsibility. The graphic depicts a bond repayment plan
which, for the first five years, would totally be funded by private donations at just over $8.4
million dollars. The bulk of the remaining private donations, coming in from those contracts with
payment schedules beyond five years, would be included with debt payments in years six
through ten.
City Finance staff have also developed a model and graphic (attached)that demonstrates a
slightly-less-costly bond repayment strategy. This model takes advantage of the ability to borrow
construction costs internally (from the water/wastewater reserve), and repay that debt at an
allowable, but more favorable, interest rate. In this model, the total interest cost would be
$574,166.
It should be noted that each of these models would be subject to change if interest rates climb. In
addition, each of these models is using the figure of$10.8 million as the projected construction
cost. While this is the estimate that was developed as the design was being modified, the actual
cost will not be finalized until the project is put out to bid.
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Yakima Valley Tourism
/tf 10 North 8th Street
Yakima,WA 98901
T: 509-575-3010
F: 509-575-6252
800-221-0751
www.yakimavalleytourism.com
Current convention clients that could book the Plaza for an outdoor event(23 events, up to
7,370 people. Most of these folks would walk from hotels or be bused in by event organizers)*
Association of WA Cities- 400/600 people
American Legion, Department of Washington- 200
National T Bucket Alliance- 120
WA State Farmers Market Association- 200
WA State Veterinary Medical Association- 500
Lutheran Women's Missionary League,WA/AK District- 300
WA Assn. of Prosecuting Attorneys- 100/200
WA State Bar Assn- 250/350
WA State Council of Fire Fighters- 400
WA State Fire Commissioners- 350
WA Fire Chiefs- 150/300
WA State Democrats- 200
WA Health Care Assn.- 175
WA Assn. of Realtors- 240
WA Assn. of Healthcare Engineers- 300
American Public Works-WA Chapter- 500
WA Assn of Sewer and Water Districts- 180
Office of Superintendent of Public Instruction- 100-600
WA Assn for Career and Technical Education (WA-ACTE)- 600
UW- 125/375
WSU- 50-200
WA Assn of School Business Officials- 450
Building Industry Assn of WA- 175/350
Potential clients to pitch the Plaza as a venue (19 events,up to 6,760 people)*
Cascade Chainsaw Sculptors Guild- 200
WA State Chili Cook Off- 500
WA Assn. of County Assessors- 150
WA State Assn. of Municipal Attorneys- 180
Assn. of WA Business- 80-300
WA State Independent Insurance Agents-Young Agents Conference- 100
WA State Assn. of Counties- 400
WA Hospital Assn.- 200
PNW District Kiwanis- 400
WA Council of Police and Sheriffs- 100
WA Assn of Sheriffs and Police Chiefs- 350
Assn. of WA School Principals- 275/900
WA State Restaurant Assn- 80
WA State Retail Assn- 150
NW Human Resource Management Assn- 600
Master Brewers Assn- 400
Public School Employees- 800
PNW Vegetable Assn.- 500
WA Wine Grape Growers- 100/450
*A split number like 400/600 it means Yakima has hosted or wants to host two different conferences
with those numbers. 50-200 means they have many events in size ranging within those numbers.
Yakima Central Plaza
15-Year Bond Debt Service
Matched to Private Donations
Annual Cash Flows
Net CoY Cash Year-End CoY
Year Assumed Bond Yield Annual Interest Principal Debt Service _Construction Costs Bond Proceeds Debt Service Private Donations Income/(Outlay) Cash Carryover
2017 0.00% $ $ _ _ $ (5,408,500) $ 8,000,000 $ - $ 2,107,657 $ 4,699,157 $ 4,699457_
2018 1.00% $ 133,055 $ 1,075,000 $ 1,208,055 $ (5,408,500) $ (1,208,055) $ 1,918,357 $ (4,698,198) $ 959_
2019 1.20% $ 122,305 $ 1,795,000 $ 1,917,305 _ _ $ (1,917,305) $ 1,918,357 $ 1,052 $ 2,011
2020 1.40% $ 100,765 $ 1,480,000 $ 1,580.765 $ (1,580,765) $ 1,580,023 $ (7411 $ 1,270
2021 1.60% $ 80,045 $ 1,000,000 $ 1,080,045 _ _ $ (1,080,045) $ 1,079,773 $ (271) $ 999
2022 1.81% $ _ 64,045 $ 255,000 $ 319,045 _ _ $ (319,045) $ 75,833 $ (243,211) $ -
2023 1.90% $ 59,429 $ 260,000 $ 319,429 $ (319,429) $ 75,833 $ (243,596) $ -
2024 2.00% 3 54,489 $ 260,000 $ 314,489 $ (314,489) $ 75,833 $ (238,656). $ -
2025 2.20% $ 49,289 $ 270,000 $ 319,289 $ (319,289) $ 75,833 $ (243,456) $ -
2026 2.40% $ 43,349 $ 275,000 $ 318,349 $ (318,349) $ 75,833 $ (242,516) $
2027 2.50% $ 36,749 $ 210,000 $ 246,749 T _ $ (246,749) $ 8,333 $ (238,416) $ -
2028 2.60% :$ 31,499 $ 220,000 $ 251,499 _ $ (251,499) $ 8,333 $ (243,166) $ -
2029 2.70% $ 25,779 $ 215,000 $ 240,779 $ (240.779) $ - $ (240,779) $ -
2030 2.80% $ 19,974 $ 220,000 $ 239,974 $ (239,974) $ - S (236,9741 S -
2031 2.90% $ 13,814 $ 230,000 $ 243,814 $ (243,814) $ _ - $ (243,814) $ -
2032 3.04% $ 7,144 $ 235,000 $ 242,144 $ (242,144) $ - $ (242,144) $
Totals 111MINF 841,728 $ 8,000,000 $ 8,841,728 $ (10,817,000) $ 8,000,000 $(8,841,728) $ 9,000,000 $ (2,658,728) iania
Total Sources and Uses of Funds
Sources of Funds
Private Donations $ 9,000,000 77%
Net City Funds $ 2,658,728 23%
Total Sources of Funds $ 11,658,728
Uses of Funds
Plaza Construction $ 10,817,000
Interest on Bonds $ 841,728
Total Uses of Funds $ 11,658,728
SOURCES OF FUNDS FOR PLAZA CONSTRUCTION AND DEBT SERVICE
$2,500,000
$2,000,000
•
$1,500,000
$1,000,000
$500,000
$- ititt
—
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Private Donations 'Net City Funds
City of Yakima
Plaza Construction Funding
Sources of Cash Uses of Cash
Interfund Loan LOCAL Bond Construction Debt Principal Debt Interest Net City Cash Year End Cash
Year Donations 0.75% 2.0% Costs Paid Paid In/(Out)flow Carryover
2016 690,983 690,983 690,983
2017 1,110,783 - - - - 1,110,783 1,801,766
2018 2,330,145 - 6,000,000 (6,000,000) (807,072) (120,000) 1,403,073 3,204,839
2019 1,704,439 835,000 - (4,817,000) (823,213) (103,859) (3,204,633) 206
2020 1,543,895 - - (839,677) (93,657) 610,560 610,766
2021 930,295 - - (856,471) (76,863) (3,040) 607,727
2022 425,295 - - (873,600) (59,734) (508,040) 99,687
2023 77,833 500,000 - (891,072) (42,262) (355,501) -
2024 77,833 600,000 - (908,894) (28,190) (259,251) -
2025 77,833 - - (377,833) (14,513) (314,513) -
2026 15,333 - - (315,333) (11,679) (311,679) -
2027 15,333 - - (315,333) (9,314) (309,314) -
2028 - - (300,000) (6,949) (306,949) -
2029 - - (300,000) (4,699) (304,699) -
2030 - - - (326,500) (2,449) (328,949) -
Totals 9,000,000 1,935,000 6,000,000 (10,817,000) (7,935,000) (574,166) (2,391,166)
Total Sources and Uses of Funds LOCAL interest is estimated based on recent issues by the state
Sources of Funds for similar terms ranging from 1.61%to 2.11%.
Private Donations 9,000,000 79%
Net City Funds 2,391,166 21% Interfund loan interest is based on expected earnings rates in
Total Sources of Funds 11,391,166 the Local Government Investment Pool. Recently rates have
risen from 0.14%to 0.45%.
Uses of Funds
Plaza Construction 10,817,000 The data in this chart represent estimates based on current
Interest Costs 574,166 conditions and expectations of uncertain future events.
Total Uses of Funds 11,391,166
Funding Sources for Plaza Construction and Debt Service
$2,500,000 - -
$2,000,000 - - -
$1,500,000 - - - - - -
$1,000,000 -
$500,000 -
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2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
November 8, 2016
Yakima City Council
Yakima City Hall
129 N. 2nd St.
Yakima, Washington 98901
Re: Plaza Fundraising Update
Dear Members of the Yakima City Council:.
The Yakima Central Plaza Fundraising Committee would like to thank you once again
for the time, attention and leadership that you've devoted to this venture. This is going
to be a transformational project, and we are grateful to have the opportunity to work
collaboratively with our City's leaders on something that will benefit such a broad cross-
section of our community for generations to come.
Our team has been busy with our fundraising efforts and we wanted to take this
opportunity to share our accomplishments, our vision, and to propose a set of
benchmarks for the path ahead.
PHASE ONE
Fundraising Phase One started after the Council vote on July 5, 2016. During this
phase, we focused on raising funds through personal asks among our direct network of
individual and business associations.
• We connected with our current donor base with a group meeting in August.
Current donors are an essential part of our ongoing effort, as they can connect
the committee with potential new donors, and keep their networks informed of
project progress. We will continue to keep in close communication with each of
them.
November 8, 2016
Page 2
• Harvest has delayed some meetings within the Agriculture community, and now
that the growing season is coming to a close, we will resume asks with local,
family-owned agricultural companies.
• To date, we have 52 signed pledge sheets totaling $5,270,295. On October 13,
the city requested that individuals and companies who had pledged funding to
the plaza enter into a contractual agreement and provided draft agreements for
the donor's review. To date, the city has received 14 of the signed contracts
totaling $3,486,500. To date, cash in hand from pledges equals
$29,244. However, donors that have signed their contracts have until
December 31, 2016 to make their first payment.
PHASE TWO
We recently progressed to what we have characterized as our Phase Two. Phase Two
includes a strategic plan of identifying larger regional companies which have
established philanthropic activities in Eastern Washington and devising a personalized
approach for each of them. These efforts will naturally take some time to evolve, as
each potential donor has its own culture and level of management and process.
PHASE THREE
Phase Three is the final phase, and the one to which we're very much looking forward.
Phase Three involves close collaboration with the City on the pursuit of corporate
foundation and federal grants (such as large regional or national companies with
interests in the Yakima Valley). These types of grants addressed in the Council
resolution from July 5, 2016. Deadlines vary for this type of funding, and most have
annual timelines. We request that a "Council Plaza Committee," composed of members
of the fundraising committee and council, be formed to begin work on this immediately.
In our weekly meeting on November 7, 2016 we determined that December 31, 2017 is
a reasonable deadline to accomplish this scope of work to secure the total pledges of
$9 million.
We would like to update the Council on our progress through ongoing presentations.
We would like to propose the following Council Plaza Committee presentation schedule:
• December 2016: Update on contracts and other fundraising activity; grant
prospect list presented
O March 2017: Fundraising Update
November 8, 2016
Page 3
• June 2017: Fundraising Update
• September 2017: Fundraising Update
• December 31, 2017: $9 million in pledges secured
We look forward to deepening our collaboration on this important project that is
becoming — and will continue to be — a transformative economic driver for our whole
community.
Sincerely,
Yakima Central Plaza Fundraising Committee
Brendan Monahan
John Baule
Kellie Connaughton
John Cooper
Casey Corr
Dana Dwinell
Jessica Moskwa Hawkins
Liz McGree
Bridget Russel
Laura Schlect
Patrick Smith
Roger Wilson