COR Public Infrastructure Improvements

The City has completed two studies within the last year focusing on public infrastructure improvements within the TIF #14 District.  These studies focused on public infrastructure improvements needed to support future economic development in the way of providing shovel ready parcels for development.  The studies further provided updated cost estimates for such improvements to allow the City to plan improvements based on available TIF funding and other sources.

The first study focused on the redevelopment area known as West Armstrong Area Reconstruction.  The project includes 146th Avenue from Ferret Street to its termini cul-de-sac, 147th Avenue from Ferret Street to 380 feet west of Armstrong Boulevard, and Ferret Street from 146th Avenue to Bunker Lake Boulevard.  Since completion of the study and up to this date, the City finalized plans to extend water, sanitary sewer, and stormwater services to the area, including a Ferret Street extension connecting to Bunker Lake Boulevard.  This project has been awarded and construction is underway.  This project consisted of approximately $1 million worth of costs that are TIF reimbursement eligible.  This project moved forward for two main reasons.  First, the conditions of the roadway necessitated a reconstruction of the pavement section, and second, proposed development along with vacant parcels in this area would greatly benefit from the extension of city services and thus promote economic development.

The second study focused on city owned parcels located in the COR.  Following study completion, staff met with the City Council on February 28, 2023 to receive final direction on what improvements should be constructed this year.  During this meeting, the financial status of the TIF #14 district was also reviewed.  Assumptions made by staff were collected by Ehlers and the analysis was completed.  This analysis is attached to the case for reference, but in summary, predicts that the district should provide $5.7 million cash balance by the end of 2040.  Meaning, if the City repaid previous obligations per the adopted reimbursement policy from 2014 there remains $5.7 million of available funds for other eligible expenses.  Also attached is the current policy for the reimbursement of city funds with land proceeds and tax increment for the district.  Consensus provided to staff was to move forward with certain improvements from the COR Analysis that were tif reimbursement eligible.  Those improvements included the waterfront excavation/grading, placing excavated material on parcels that need material to be at grade with the roadways, tree clearing of COR properties, and final plan design of Center Street, Zeolite Street and West Ramsey Parkway. 

On June 13, 2023, City Council awarded the tree clearing contract in the amount of $287,000.  This amount is eligible for TIF reimbursement.  On July 11, 2023 the City Council authorized bids for the remainder of the priority improvements to be completed in 2023.  The engineer's estimate for the remainder of the work is $7,509,215.

The plans for 2023 were predicated on legislation specific to TIF #14 where any expenses that were eligible for reimbursement were required to be made by November 2023.  The City received received and extension of this deadline by an additional three (3) years during the 2023 Legislative Session.  This extension, along with proposed developments currently be considered by the City within the COR would support consideration of completing additional improvements in the coming years.  The final plans for the above referenced roadways is the most feasible improvements to consider.  In the coming months those plans will be finalized and able to be bid over the winter months for a 2024 construction.  A 2024 construction would align with construction of the private development projects.

A second component to the COR infrastructure improvements is the Waterfront Park.  The project listed above aids in the plans for the waterfront park, however, the construction expenses related to the park specifically are not TIF eligible expenses.  The park has been a plan for a number of years and would act as a community park with amenities associated with water activities.  Concept plans include walking trails, touch points around the water features to include educational components, green space, splash pad, and a building with a food establishment and community center features. Funding for these improvements are not available in full, but based on timing priorities previously expressed by Council staff would like to continue to explore these improvements.

Throughout the improvement projects for 2023, it has been noted that the City has approximately $2 million of cash to contribute to towards eligible projects.  The 2023 projects alone surpass this total, so the planned funding source would be to issue a TIF Bond.  Early estimates would require a $7 million bond for 2023 expenses, which would hold an approximate $640,000 annual debt service obligation.  Staff is seeking information on what the total bonding capacity for the district is should Council want to maximize that in order to lump multiple year's of projects into one bond issuance.  The district does generate enough annual revenue to cover this debt service payment, as explained in the attached Ehlers analysis.  The funding question at hand for future projects in the COR will require a review of the reimbursement policy.  Depending on the incurred costs, and how successful private development/property values are in the future will dictate whether the district produces the revenue necessary to pay off past and future expenses. 

In the last paragraph of the Ehlers analysis, it is recommended that the City request legislation that makes it clear that expenditures for land acquisition, Transit Station or public improvements constructed before or after the creation of the district can be reimbursed with TIF without the requirement of an interfund loan resolution.  Staff will suggest this be recognized as part of our future legislative priorities.  This legislation would allow the city to capitalize on revenue generated towards the end of the collection period and repay those previous expenses.  In other words, if the district is more successful than current predictions, we would be able to repay expenses not originally anticipated to be repaid.

Provide direction on 2024-2026 infrastructure improvements and next steps on the Waterfront Park planning/implementation.