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Agenda Item No. IV-1 City of Wichita City Council Meeting July 11, 2017

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Agenda Item No. IV-1 City of Wichita City Council Meeting July 11, 2017 Agenda Item No. IV-1 City of Wichita City Council Meeting July 11, 2017 TO: Mayor and City Council SUBJECT: Resolution Setting a Public Hearing for Consideration of a Project Plan (Tax Increment Financing) for the Naftzger Park Project (District I) INITIATED BY: Office of Urban Development AGENDA: New Business Recommendation: Adopt the resolution setting a public hearing on August 15, 2017 for consideration of a Tax Increment Financing (TIF) Project Plan for the Naftzger Park Project (Project). Background: On May 8, 2007, the City Council established the Center City South Redevelopment District in downtown Wichita, in order to permit the use of Tax Increment Financing (TIF) to pay for certain eligible costs. On December 2, 2008, the City Council adopted an ordinance expanding the Center City South Redevelopment District for the purpose of providing TIF to fund various infrastructure projects needed in the area of Downtown Wichita surrounding Intrust Bank Arena. On May 16, 2017, the City Council amended the District Plan to allow for TIF financing to be used to improve Naftzger Park. The next step in establishing the legal authority to use TIF is the adoption by the City Council of a redevelopment project plan, within the district, which provides more detailed information on the proposed project and how TIF would be used, and demonstrates how the projected increase in property tax revenue will amortize the costs financed with TIF. Similar to the process for establishing the TIF district, adoption of the TIF Project Plan also requires a public hearing to be held by the City Council, following the giving of proper notice, prior to adopting an ordinance that approves the project plan. The City Council action needed to set the public hearing is adoption of the attached resolution. Analysis: Naftzger Park was originally constructed in 1977 as a bequest of the Naftzger Family and later acquired by the City in 1980. The park was designed in the Victorian style and includes brick and iron fencing around the perimeter. The location and current use of the park has created a need to update the park and its design to a more open urban park. The park is located along Douglas Avenue and is a connection between Intrust Bank Arena, Old Town, Union Station and Douglas Avenue. The site is seen as a gathering location downtown and is a primary route to the events at Intrust Arena. Douglas Avenue and the areas near the park have seen an increase in development in recent years. Additionally, the City has an opportunity to make improvements to Naftzger Park in anticipation of the March 2018 NCAA tournament games to be held at Intrust Bank Arena. Improvements to the park will be constructed in a way to provide a venue during the tournament and future events held at the arena and in Downtown. Improvements are anticipated to be coordinated with development of the adjacent Spaghetti Works site. Improvements on the adjacent site are anticipated to generate the revenue necessary to fund the improvements to Naftzger. In accordance with state law, a TIF Project Plan has been prepared in consultation with the Wichita- Sedgwick County Metropolitan Area Planning Commission, which has made a finding that the project is consistent with the Comprehensive Plan for development of the area. In order to adopt a TIF Project 47 Naftzger Park Project July 11, 2017 Page 2 Plan, the City Council must first set a public hearing no less than 30 and no more than 70 days from adoption of the resolution setting the hearing. The date of August 15, 2017, at the regular City Council meeting is proposed for the public hearing on the Naftzger Park Project Plan. If adopted by the City Council, the attached resolution setting the August 15, 2017 public hearing will be sent to the owners and occupants of all property located within the proposed Naftzger Park Project Area, by certified mail. The resolution will also be published in the Wichita Eagle and copies will be provided to the Board of County Commissioners and Board of Education and their appropriate staff. After closing the public hearing on August 15, 2017, the City Council may adopt the TIF Project Plan by ordinance, by two-thirds majority vote. Once adopted, the City will be authorized to use TIF to finance eligible project costs. Financial Considerations: The improvements are planned to be financed by City general obligation bonds, which will be repaid from TIF revenue. The feasibility study, included in the attached project plan, indicates that TIF capacity will be sufficient to pay projected bond payments. All costs of reproducing, mailing and publishing the resolution will be paid from the City’s Economic Development Fund and reimbursed by TIF. Legal Considerations: The adoption of a TIF Project Plan requires a public hearing to be held by the City Council, following the giving of proper notice, prior to adopting an ordinance that approves the project plan. A resolution setting the public hearing has been prepared by Bond Counsel and reviewed by the Law Department and approved as to form. Recommendation/Action: It is recommended that the City Council adopt the resolution setting a public hearing on August 15, 2017 for consideration of the Naftzger Park Project Plan and authorize the necessary signatures. Attachments: Resolution Considering the Adoption of the Naftzger Park Project Plan 48 City of Wichita Center City South Redevelopment District Project Area 11 - Naftzger Park Project Plan June 22, 2017 Prepared by City of Wichita Office of Urban Development 49 City of Wichita Center City South Redevelopment District Naftzger Park Project Plan July 6, 2017 Prepared by City of Wichita Office of Urban Development 50 I N D E X 1. Comprehensive Financial Feasibility Study 2. Redevelopment District Plan 3. Map and Legal Description of Property to be Redeveloped 4. Relocation Assistance Plan 5. Description of Proposed Redevelopment Project 6. City Council Ordinances and Resolutions 7. Metropolitan Area Planning Commission Resolution 51 Comprehensive Financial Feasibility Study 52 Comprehensive Financing Feasibility Study for the Naftzger Park Project within the Center City South Redevelopment District City of Wichita, Kansas 53 Table of Contents Page (s) OVERVIEW….……………………………………………………………… 1-2 GENERAL DESCRIPTION OF TAX INCREMENT ……………………… 3 PROJECT DESCRIPTION …………………………………………………. 3 PROJECTED REVENUE (BENEFITS) ……………………………………. 4-5 PROJECTED EXPENDITURES (COSTS) ………………………………… 5 CONCLUSIONS ……………………………………………………………. 5 Map of the Redevelopment District and Project Area……………EXHIBIT I Assumptions Report ……………………………………………...EXHIBIT II Projected Tax Increment Report …………………………………EXHIBIT III Projected Bond Cash Flow Report ……………………………….EXHIBIT IV 54 Naftzger Park TIF Project Overview K.S.A. 12-1770 et seq. (“the Act”) provide a means for cities to finance all or a portion of public infrastructure and redevelopment costs with incremental real estate and sales taxes. The purpose of the Act is to “promote, stimulate and develop the general and economic welfare of the State of Kansas (the “State”) and its communities, and to assist in the development and redevelopment of blighted areas and deteriorating areas which are not yet blighted, but may be so in the future, located within cities…”. A city may exercise the powers conferred under the Act provided that the governing body of the city has adopted a resolution making certain findings that the specific area sought to be developed or redeveloped is an eligible area pursuant to the Act, including a blighted area, a conservation area or was designated an enterprise zone prior to July 1, 1992. In addition, the city must find that the conservation, development or redevelopment of such an area is necessary to promote the general and economic welfare of the city. One or more redevelopment projects may be undertaken within a redevelopment district created pursuant to the Act. The Act generally requires projects to be completed within 20 years from of the date of approval of the redevelopment project plan. For each redevelopment project undertaken within a district, a redevelopment project plan must be prepared in consultation with the city’s Planning Commission. The project plan must include the following: 1. A summary or copy of the Comprehensive Financial Feasibility Study. 2. A reference to the statutorily required district plan for the district. 3. A description and map of the area to be redeveloped. 4. The Relocation Assistance Plan (if applicable). 5. A detailed description of all buildings and facilities proposed to be constructed or improved. 6. Any other information the City deems necessary to advise the general public of the intent of the Project Plan. The Comprehensive Financial Feasibility Study (this document) must show that the benefits derived from the specified redevelopment project will exceed the costs, and that the income therefrom will be sufficient to pay for the applicable project costs. Benefits are determined to be the aggregate revenues of the redevelopment project including increment income, assessment income, interest income, private party contributions and any other available funding sources. Costs are determined to be the total of eligible project expenditures, including the payment of principal and interest of debt used to finance the redevelopment project. Page 1 55 Naftzger Park TIF Project Pursuant to all the provisions of the Act, the City has, by Ordinance No. 47-475 dated May 8, 2007, found a portion of the City was designated as an enterprise zone prior to July 1, 1992 and that redevelopment of the area is necessary to promote the general and economic welfare of the City. With adoption of Ordinance No. 47-475, the City established and designated such area as the Center City South Redevelopment District (“the District”). On December 9, 2008, by Ordinance No. 48-124, the City expanded the District. The District boundaries are shown in Exhibit I. Ordinance No. 48-124 also amended the statutorily required district plan for the redevelopment of the District, originally approved with Ordinance No.
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