03/23/2021 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