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HomeMy WebLinkAbout03/23/2021 05 Mill Site Planning and FinancingB US INE S S O F T HE C I T Y C O UNC IL YAK I M A, WAS HI NG T O N AG E ND A S TAT E M E NT I tem No. 5. F or Meeting of: March 23, 2021 I T E M T IT L E :Mill Site P lanning and F inancing S UB M IT T E D B Y:B ob Harrison, C ity Manager J oan Davenport, Director of C ommunity D evelopment S teve Groom, Director of F inance and B udget B ill Preston, C ity Engineer S ara Watkins, C ity A ttorney S UM M ARY E X P L ANAT IO N: This is to provide an update to the project planning and f inancial planning to the D evelopment of the Mill S ite. S ince the 2021 budget study sessions, revenues have been secured and new potential revenues identified. A n update to the phasing of the project and coordination with other agencies will be provided. I T E M B UD G E T E D:No S T RAT E G I C P RIO RIT Y:Economic Development AP P RO V E D F O R S UB M I T TAL B Y T HE C IT Y M ANAG E R RE C O M M E ND AT IO N: AT TAC HM E NT S: D escr iption Upload D ate Type mill site 3/15/2021 Cover Memo Project Update 3/17/2021 Presentation 1 Office of the City Attorney City of Yakima 200 South Third Street, 2nd Fl. | Yakima, WA 98901 P: 509.575.6030 | F: 509.575.6160 MEMORANDUM March 15, 2021 TO: Honorable Mayor and City Councilmembers Bob Harrison, City Manager FROM: Sara Watkins, City Attorney SUBJECT: Local Improvement District Procedure Mill Site Improvements This memo is intended to supplement the presentation provided at the March 23, 2021, Study Session regarding the Mill Site development and financing of the improvements thereon. In addition to the methods of financing discussed in the presentation, consisting mostly of grants and City funding sources, a Local Improvement District and its assessments is an additional funding mechanism that could be available to help with the costs of the street, sidewalk and lighting improvements associated with the Mill Site. Local Improvement Districts (LIDs) are authorized by state statutes, RCW 35.43—35.56, and the City has adopted additional procedures into its municipal code at YMC 8.12. LIDs are a method to finance a public improvement, such as streets, sidewalks and lighting. As part of the LID process, a local improvement district is created which allows the costs of improvements to be paid by the properties benefiting from the improvements over a period of time through a special assessment. Oftentimes an LID is created at the request of property owners. It can also be created by City Council in cooperation with property owners. An LID provides the City additional options to finance improvements, such as bonds and provides the property owners the ability to pay off improvements over time. The first step is to determine what improvements will be made and what properties stand to benefit from those improvements. Here, that has been done—the Mill Site roadway, sidewalk and lighting improvements are already planned and the City has been working with the property owners regarding the Mill Site development. 2 Bob Harrison, City Manager March 15, 2021 Page 2 Prior to formation, city staff would explain the process to the property owners and see if the property owners wished to bring forth the petition to form the LID. Because the city has been working closely with the property owners group throughout the Mill Site project, it will be important to involve them in the discussions revolving around forming an LID. If the property owners do not bring their own petition, the City Council will first need to adopt a Resolution of Intent that declares that the LID will be formed. The resolution would outline the land that is benefited by the improvement, as well as the improvement project itself. The resolution will set a public hearing. At a subsequent council meeting a public hearing will be held, and the council can then determine if it wishes to move forward and create an LID. If it does, then council will adopt an ordinance creating the LID. At that point, the City will need to hire an appraiser to evaluate the benefits to each property within the boundaries of the LID, and determine the assessment each property will be required to pay. Due to the size and complexity of this project, the City would likely use a special benefit analysis. This analysis is done by a certified appraiser who will calculate the value of each parcel with and without the infrastructure improvement. The difference between the two (value of the property with the improvements and the value of the property without the improvements) equals the special benefit for the property. The appraiser then determines the percentage of the total value of improvements each property owner is required to pay. The project can be under construction during and after the appraiser is determining the assessments. Unless the LID is formed with the intent to start assessments in phases that correspond with construction phases (which is a possibility in this project), no assessments are collected until the infrastructure construction is completed. After construction is completed and total costs can be accurately estimated, the City will determine the final costs of the project. Those costs, along with other allowed costs, are then used to determine the assessments for each property owner. Once the final assessments are determined, there is a hearing where the City Council acts as a Board of Equalization and determines whether the assessment for each parcel is correct. Upon approval the assessment roll an ordinance is adopted and one year later the property owners are required to start making payments (unless phased under the original ordinance). Property owners then make yearly assessment payments. The payments are structured out over many years, making it beneficial to both the City and the property owners to enter into this arrangement. If necessary, property owners have opportunities to object to or protest the decisions of the council regarding the formation of the LID and the assessments. There is also an appeal period where property owners can appeal the final assessment roll to the Yakima County Superior Court. Under the Yakima Municipal Code, property developers are required to make infrastructure improvements as part of the development process as necessary (See YMC title 12 and YMC Title 15). By enacting an LID, the City allows a developer to pay for infrastructure improvements over time rather than up front. As indicated above, the city has been working with the property owners throughout this process, and would continue to engage with the property owners regarding the LID option. 3 Clear – Reliable – TrustworthyBudget Considerations Cascade Mill Site Development Financing4 Goals of City Investments at Cascade Mill Project•Provide traffic congestion relief for Terrace Heights Dr, Yakima Ave and I-82 Interchange•Judicious investment of all funds•Leverage and encourage private investment•CREATE JOBS!!•Improve neighborhood transportation and access to Greenway, parks, jobs•Minimize displacement and disruption to the adjoining neighborhood (EJ)5 GGeneral Phasing Plan6 Projects to Finance2021: Removal of MSW (current) $14,500,000*2021 - 2022PE for Bravo Co Blvd Rd $ 500,000RI for Landfill $ 300,000Sewer Extension and MSW project $ 3,000,000Construct Bravo Co Blvd: $6 - 12,000,000 2023 - 2025H St Improvement $8,000,000Landfill Remediation $6 - 18,000,000 River Walk to Greenway??? Or other undetermined LIFT projects7 Secured ResourcesCurrent MSW Removal project ($14.5 M) – Complete in 2021•State Ecology Grant $8.7M•County SIED $1.5•Utility Match for LIFT funds up to $2 M•LIFT – up to $3.5M2021-2022 Bravo Co Blvd Streets ($12 M)•LIFT Matching $1M/yr to 2036Landfill Remediation ($8 M to $18 M)•Inside of LIFT Area•DOE Grant of $3 M in State Budget for future8 Still seeking resources•Request to Sen Murray $19.8 M•EDA Public Works Grant $4.5 M•INFRA Grant - amount unknown at this time•Transportation Improvement Board•RID or LID for street costs•Recovery Act for water and sewer costs•2023 H Street ($8.5 M)Outside of LIFT Area9 Project Timelines•City street construction contract need to be awarded as soon as NEPA is complete ( Estimated March of 2022)•County begins construction on the Corridor in 2022 (also after NEPA)•WSDOT must obligate for off-ramps construction after they complete a NEPA, expected in 2024•Landfill clean-up obligation must occur prior to redevelopment of this area where streets will be complete by end of 202210 2022 Finance Decision DeadlinesFinancial Obligation•City needs approximately $2 million annually for Debt service for 20 years$1 million through LIFT (expires in 2036)$1 million through match (can be Federal, private or local)•Offsets of this obligation can occur as success in alternate funding scenarios are determined•Potential to leverage private funds in a late-comers agreement/ LID/RID format (see memo from Legal)•Return on Investments (ROI) anticipated to be positive and yield economic growth, property tax, sales tax as well as new jobs•Grants are different than General Fund expenditures11