Hello,
I received the following email from Jesse Hill, the District 1 URA Representative, regarding the proposed TIF and development located at 38th & Wadsworth Blvd.
To Whom it may Concern,
Last night I voted against the TIF agreement for 38th & Wordsworth and have been asked for my reasoning. I believe this corner has great potential, and it might need support of the URA & TIF, but I what was presented was the wrong project at the wrong time. It had much opportunity to be improved and below are a few items that I discussed at the June 16th URA meeting that directed my decision.
-The Gruen Gruen + Associates 3rd party financial analysis report concludes the need for the TIF or gap comes from the over-payment for land (Page 2- bottom) in relation to the limited value this development can support for it. It warns if we approve this TIF for the amount requested it will incentive landowners to overcharge knowing that the URA (and taxpayers who shop there) will bear the costs (Page 3 -Top). An alternative view of this recommendation is that the market/property owners expect a high value development for this corner and the TIF subsidizes low value development with this project.
– No attempt has been offered or presented to the board to lower the funding gap. No lease rate increases for high quality amenities, No value engineering, No reduced rates of return. No design alternatives. The TIF-to-PIF just shifted funds around.
– Wal-Mart and only Wal-mart is exempt from the PIF (Redevelopment Agreement Page 6). Beside the unfair bias to this tenant, the claim that they are paying more in a lease and financially it is a wash is false and unsupported. The developer testified that they are taking a financial hit and not being made whole, and in turn the city is taking a hit because it is less than the equivalent PIF. The PIF can be set up as a direct 1% sales revenue payment to the project and not show up on receipts if Wal-mart desires. This is a fair win-win-win that will get the project paid off faster.
I asked for this to be researched and added, unfortunately I did not receive any feedback from the developer or staff.
-The housing is exempt from the PIF – a 1% PIF can be applied to the sale of the units for the project public improvements that the housing developing will be using. This will get the project paid off faster and a new source for income for the project. I asked for this to be researched and added, unfortunately I did not receive any feedback from the developer or staff.
– The Developer commented that they are taking a loss on the residential portion and selling the lots below their costs due to demands of city staff, this loss of internal rate of return for the developer, like the other costs added on, lead to the extraordinary TIF request. It is difficult, due to limited information on this portion of the project to determine the exact loss, but I estimate it to be $500k from the Gruen report and developer cost sheets.
-Claims by the developer that Staff has heavily directed the design of this project and that this has lead to extraordinary costs. The developer claims that staff has received these requests from public input and from council direction. I have only gotten heard from the public to the direct contrary – That there has been no opportunity or input by the pubic for the public improvements on this project.
-The construction cost estimates updates were not included in the support documentation and generally very difficult to follow. I expected and requested this information to be made public for a greater length of time than the legally required 2 business days before the meeting.
Regards,
Jesse Hill
303-725-9530
