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HomeMy WebLinkAboutStudy Session Agenda Packet 02-02-15STUDY SESSION AGENDA CITY COUNCIL CITY OF WHEAT RIDGE, COLORADO 7500 W . 29th Ave. Wheat Ridge CO February 2. 2015 6:00 p.m. -2015 LEGISLATIVE FORUM Study Session after Legislative Forum adjournment Individuals with disabilities are encouraged to participate in all public meetings sponsored by the City of Wheat Ridge. Call Heather Geyer, Administrative Services Director at 303-235-2826 at least one week in advance of a meeting if you are interested in participating and need inclusion assistance . .L Tax Increment Financing (TIF) Educa tion Seminar 2 . Discussion of payment to Jefferson County for Foothills Animal Shelter Bu il ding Loan Commitment ~ Staff Report(s) 4 . Elected Officials ' Report(s) ADJOURNMENT \ 4 ( .. ~ ~ .. City of • .. ~Wheat&_dge ~0FACE OF THE Cnv MANAGER Memorandum TO : Mayor and City Council FROM: Patrick Goff, City Manager DATE : January 23 , 2015 SUBJ ECT: Urban Renewal and Tax Increment Financing City Council created the Wheat Ridge Urban Renewal Authority (WRURA) in 1981 after a determination was made that blight existed in the area referred to as the Town Center. WRURA utilized Tax Lncrement Financing (TlF) to ass ist w ith the redevelopment of the Town Center into the grocery-anchored, r etail center that exists today. Since that time fo ur additional urban renewal areas were fonned after a determination of blight was made in those areas. WRURA has approved three additional TIP agreements for individual projects in Wheat Ridge including the Wheat Ridge Cyclery expansion, Perrins Row Townhomes and the Kipling Ridge Sprouts development. Staff is currently evaluating a TIF app lication for the Wheat Ridge Comers project at 38lb Avenue and Wadsworth Boulevard. Corey Hoffmann, WRURA Attorney, w ill provide a short presentation at the February 2 , 2015 study session and discuss the roles and responsibilities of the WRURA, the City Counci l and the Planning Commission in the approval of urban renewal plan s and TIF agreements. In addition , Mr. Hoffmann will brief Counci l and guests on the ro le TIF plays in urban renewal projects. Staff has invited both the Planning Commission and the WRURA to participate in the discussion. We encourage you to be prepared to engage in dialogue and ask questions to ensure you have a clear understanding of the urban renewal and TIF processes. ATTACHMENTS: 1. URA 1 0 I , Corey Hoffmann 2. Then F AQs about Urban Renewal , CML 3. Basics ofTIF, Denver Urban R enewal Authority II HAYES, PHILLIPS, HOFFMANN & CARBERRY, P.C. 1530 Sixteenth Street, Suite 200 Corey Y. Hoffmann Kendra L. Carbetry Jefferson H. Parker Of Co unsel Herbert C. Phillips J . Matthew Mire TO: FROM : DATE: RE: D enver, Colorado 80202-1468 Telephone: (303) 825-6444 Facsimile: (303) 825-1269 Fairplay Office 675 Main Street P .O. Box 1046 Fairplay, CO 80440 Telephone : {7 19) 836-9005 Facsimile: {719) 836-9010 WHEAT RIDGE URBAN RENEWAL AUTHORITY MEMORANDUM WHEAT RIDGE URBAN RENEWAL AUTHORITY COREY Y. HOFFMANN, ESQ.C(j- JULY 31, 2013 COLORADO'S URBAN RENEWAL LAW Ryan S. Malarky Kelly L. Donlon Elizabeth R Cross Chari ssa A. Johnston John E. Hayes (Retired) This Memorandum is intended to provide members with an introduction to Colorado • s Urban Renewal Law, and the r ole oftbe Wheat Ridge Urban Renewal Authority. Primary Function of Urban Renewal Authority The fundamental basis for urban renewal is the elimination of "blight!' A blighted area is an area that substantiall y impairs or arrests the sound growth of the municipality, retards the provision of housing accommodations, or constitutes an economic or social Uability, and is a menace to the publi c health, safety, morals, or welfare, by reason of at least fom of the following factors: 1. Slum, deteriorated, or deteriorating structures 2. Predominance of defective or inadequate street layout 3. Faulty lot layout in relation to size, adequacy, accessibility, or usefulness 4 . Unsanitary or unsafe conditions 5. Deterioration of site or other improveme nts Attachment 1 713111 3 Q:IUSERS\WRUIW C J'H\10/3\UR I 0/-MO/..DOC July 31, 2013 Page 2 6 . Unusual topography or inadequate public improvements o r u tiliti es 7. Defective or unusual conditions oftitle rendering the title nonmarketable 8. The existence of conditions that endanger life or property by fire or other causes 9. Buildings that are unsafe or unhealthy for persons to live or work in because of building code v io lations, dilapidation, deterioration, defective design, physical construction, or faulty or inadequate faci lities I 0. Environmental contamination of buildings o r pro perty 11. The existence of health, s afety, or welfare fac tors reqwnng higb levels of municipal services or s ubstantial p hysical underutilization or vacancy of s ites, buildings, o r other improvements C.R.S. § 31-2 5-1 03(2). If the owner o f a particular piece of property does not object, onJy one blight factor is necessary for the property to be blighted. C.R.S . § 31-25-1 03(2)(1). An area is only eligible to be des ignated as an urban renewaJ area if it meets the legal criteria of a "blighted area." If an area d oes not meet the definition o f a bligllted area, it may not be include d within an urban renewal area Notabl y, there is no requirement that each individual lot within a given area contain at least fo ur (or five) blight factors. Rather, the area as a whole must have at least four (or five) factors of blight to qualify under the statute. Therefore, for example, one lot m ay have one blight factor, another lot may have another factor, and together with other lots with other blight factors , a "blighted area," will exist It is also important to note that the boundaries of a blighted area must be drawn as narrowly as possible to accomplish the planning and dev elopment objectives o f the proposed urban renewal area. C.RS. § 31 -25 - 107(1). Planning Procedures Once an urban renewal authority has been formed, it may not undertake any urban renewal projects or acquire property until an urban renewal plan has been adopted . See C.R.S. § 3 I -25-1 07(1 ). The general s teps taken before an urban renewal authority may undertake an urban renewal project are as follows: (a) Blight study is prepared; 7131113 Q:IUSERS\WRUIWCYHI2013 \UR 10/.MOI.DOC JuJy 31, 2013 Page 3 (b) Initial urban renewal plan or a plan amendment is prepared based on the blight study; (c) The governing body submits the plan to the planning commission for review and recommendation as to its conformance with the "general plan for the development of the municipality [the comprehensive/master plan) as a whole." C.R.S. § 31-25- 1 07(2); (d) The planning commission submits its written recommendations with respect to the amendment to the governing body within thirty (30) days of receipt of the proposed amendment /d.; (e) Upon receipt of the recommendations from the planning comrruss10n, the governing body conducts a public hearing upon no less than thirty (30) days notice. Please note there are a number of interre lated notice provisions related to the public hearing including notice to all property owners, residents, and business owners within the mban renewal area, as well as in some circumstances, notice to the county. (f) At the public hearing, evidence is presented on the blight facto rs and details regarding the pr oposed amendment, as well as several other statutory factors regarding, for example, relocation and compliance with the master plan. C.R..S . § 3 1-25-107(4); and (g) If the governing body fmds that evidence of blight exists, the governing body approves the plan or plan amendment by resolution. Please note that the finding of blight and the approval of an urban renewal plan are accomplished by the City Council. These acts may occur at a single bearing or may occur separately at different hearings. In addition to the above-referenced procedures, there are a number of additional components that are required in the event that the urban renewal plan includes the use of eminent domain and the subsequent transfer of property acquired by eminent domain to a private entity. See C .RS. § 31-25-105.5. There is an additional p ublic bearing that is required, that is only required if eminent domain is used in this manner. See C.R.S . § 31-25- 107(3)(b) and (4.5). Also, for example, more specific relocation policies are required if an authority will be transferring property acquired by eminent domain to a private entity. Ultimately, proposed urban renewal projects are intended to and in fact must eliminate blight and prevent the spread of bl ight A critical component of redevelopment projects is determining the very specific parameters of the project, and allocating risk related to those factors. An urban renewal authority is authorized to finance projects by the use of special or general obligation bonds which are secured by property, loans, grants or other assets of the 7131nJ Q:\USERS\WRURA \CYH\2013 \UR 101 -MOI.DOC July 31' 2013 Page4 authority. Moreover , if authorized by the urban renewal plan, property and/or sales tax increment financing may be authorized. C.R.S . § 31-25 -1 07(9). Powers of an Authority An urban renewal authority is an entity separate and apart from the municipality in which it operates . Urban renewal authoritie s possess a number of powers, including th e following: • • • • • • • • • to sue and be sued to undertake urban renewal projects, and to make and execute contracts to arrange for the furni shing and repair of streets, publi c utili ti es, or educational or oth er faci lities, and to dedi cate property for public works, improvements facj lities and util itie s to arrange with the municipality for planning , replanning, zoning, and rezoning areas of th e municipal ity to survey and appraise properties and buildings, and to acquire property, and to use eminent domain powers to invest its funds to borrow money to make plans with the municipality to eliminate blight and to encourage redevelopment to make plans and payments to help relocate displaced individuals See C.R.S . § 3 1-25-105 . Any exercise of these powers must relate to the primary objective of an urban renewal authority, which is the elimination of slum and blighted areas. Roles of U rban Renewal Authority versus C ity Council An urban r enewal authority is one of many tools a municipality may select when addressing redevelopment issues in a community. An urban renewal authority exists as a result of action taken by the governing body of a municipality. Commissioners of an urban renewal authority are appointed by the Mayor with approval of the governing body. C.R.S. § 31-25- 1 04(2)(a). Although, an urban renewal authority is an independent entity, many of its powers are derived directly from the govern in g body of the related municipality. Moreover, an urban renewal authority may be abolished by the governing body of the municipality . C.RS. § 31-25- 115. Effective redevel opment involving an urban renewal authority requires cooperation between the commissioners of the urban renewal authority and the members of the municipality's governing body. 713 1113 Q:\USERSIWR URA\C l'H\2013 \UR 101 -MOI .DOC July 3 1,2013 Page 5 As a general rule, the governing body is responsible for e stablishing the redevelopment objectives, and the commissioners of the urban renewal authority are responsible for meeting those objectives. Thus, the governing body is responsible for: • formin g the urban renewal authority • appointing the urban renewal commissioners • establishing the urban renewal boundaries • approving the urban renewal plan • authorizing the use of eminent domain powers The urban renewal commissioners are then responsible for exercising the powers provided to an urban renewal authority to carry ou1 urban renewal projects within the authority's boundaries and in compliance with th e urban renewal plan. Urban Reoew:ll Authority -Owner versus No n-owner of Property Often urban renewal authorities acquire real property as part of their redevelopment projects. Typicall y, this property is conveyed to a third party-often a redeveloper -at some later date. When property is acquired by eminent domain or under threat of eminent domain and then transferred to a private party, a number of strict procedures must be followed . See C.R.S . § 3 1-25-105.5 . If an urban renewal authority has acquired the property via other means, it must only comply with the less stringent standards set forth in C.R..S. § 31-25-106, which require that a competitive bidding process occur and that the property not be resold for less than fair market value. When an urban ren ewal authority is attempting to redevel op an area containing property the authority does not own, the urban renewal authority may not compel private owners to perform certain acts , but it certainly may provide incenti ves. Accordingly, an urban renewal authority often uses certain financial incenti ves to encourage the redevelopment of blighted or s lum areas. Often urban renewal authorities will use a combination of tools to acquire some property, assist with the financing for the redevelopment of other properties, and assist with the construction or repair of necessary related public improvements. Conclusion U rban renewal is a valuable tool intended to eliminate blight as defined by the statute. Many of the issues related to urban renewal are necessaril y subjective and municipality-specific in terms of what types of conditions may constitute blighL However, the factors set forth above 713l!l3 Q:\USERS\WRUIU'CYHI20JJ IUR 101-MOJ.DOC July 31, 2013 Page 6 do provide a framework that requires findings of blight, and such findings are necessary for the creation of an urban renewal authority. 71311/3 Q:\USERS\WRUIU\ClJf\201 3\UR 101-M01.DOC 10 FREQUENTLY A KED Q UESTIONS ABOUT U RB AN RE NE WAL I . What is urban renewal? U rban renewal is primaril y the act of revitalizing a fai li ng urban area in o rder to restore economic v itality and improve the safety of the area, although the urban renewa l statute is flexib le and can be used for develop ment, as weJI as redevelopment. Understanding that redeveloping urban areas is much harder and more expen s ive than new development, Colorado has empowered local auth o rities with certain to o ls, including emi nent domain and tax increment finan c ing, to en courage urban renewal activit ies. A ll 50 s tates have some fonn of urban renewal law . 2. Why is urban renewal important? Urban renewa l is c riti ca l to the s uccess of local co mmu nities and th e long-tenn prosperity of c iti zens li v ing in urb an areas. W ithout urban renewa l, there would b e no incentive for d evelopers to tackle the ch allenges associated with redevelopment , and o u r deteriorating downtown areas would be subject to in creased crime and sa fety problems, whi le conti nued growth o n the fringes of communi ties would add to the prob lem of urban sprawl. But thanks to the urban renewal, c ities and towns across the s tate ha ve been ab le to save older parts of town and make significant improvements to their communities. 3. What is e min ent domain? Eminent doma in is a tool of urban renewal that gives local governing bodies, includ ing urban renewal authorities, the right to assemble pri vate p ro p erty fo r th e purpose of accomplishi ng a necessary publi c benefit project. Th e law of emi nent (condemn ation) m ay o nl y be used to benefit the publi c and requires that the pri vate p ro perty owner be justly compensated for th eir property, meanjng that he or she mus t be paid fair market price fo r the property. 4. When is eminent domain used ? Eminen t doma in is used in rare and exceptional cases to make difficult projects work. In most cases, the local au th ority is able to reach an out-of-court settlement w ith the private land owner. ln cases where eminent d omain is used , the local a uthority is requi red by law to pay the land owner fa ir market va lu e for the property and almost a lways a lso provides generous re locati on packages to the property owner. 5. What is "blight"? Bli gh t is the legal tenn given to a piece of property w hen four of the II criteria outlined in the statute are met. These factors range from di lapidated buildings, to land title problems, and co ll ectively mus t be considered to be a threat to the health , safety, peace or wei fare of a community, in order for a finding of "blight" to be made. 6. What is tax increment fmancing? Tax increment Financing or TlF is another too l of urban renewa l that allows a loca l au thori ty to leverage sales and property taxes to help finance projects s uch as infrastructure development or enviromnental c lean up . Attachment 2 7. How does tax increment fmancing work? When an urban renewal project is being pl anned, the local authority perfonns an economic analysis to detennine how much additional property and/or sales tax s ho uld be generated once the project is complete. The proj ected tax revenue increase, call ed a tax increment , a portion can then be used to either finance bonds o r reimburse developers for some of their project financing. 8. Unde r what conditions can a city take land for an urban renewal project? A city can o nl y take property for urban renewal once the property has been declared blighted -and property can on ly be bli ghted if it meets four o ut of II criteri a -and only fo r the purpos es of crea t ing a publi c good. Contrary to popu lar belief, a local authority cannot take property away o nl y to generate more tax revenue. 9. What happen s to the people who lose their land in urban renewal projects? Most people enter into a settl ement agreement with the local authorities in which they agree o n a package of financial benefits and, in many cases. the land owners end up better off than they were before. Even th ose peo ple who go through eminent do main come o ut with at least fair market val ue for their prope11 y and generous relocation packages. Between 2000 and 2002. th e A rvada Urban Renewa l Authority (AURA) purc hased 50 parcels of land and relocated approximate~v 75 families .from 16 apartment buildings and 15 s ingle·:family h o uses in south east Arvada. as part of the Wat er Tower Villag e redevelopment project. Jan 0 'Quinn u ·as one of the residents relocated as part of the project. Jan remed a 111-·o bedroom . one bathroom house in the Water Tower area with her sister and brother fo r I 4 years. She 11 ·orked in Aurora and ball led th e long commwe wirh rush ho ur traffic and s un shine s lou · do·.vns fo r years. Through th e urban ren ewa l process. A URA he lp ed Jan purchase a two-bedroom condominium in Aurora , maAing her a .first-lime homeowner in a n eighborhood closer to herjob. ''Atfirsllthoughl that th e urban renewal process ll'as bad. but if fum ed out to be good, "Jan no tes. "I never would have been able to buy my own place-1 'm happy with the way it turned our .. , 10 . Why can't the private se ctor take care of the problem? Redeveloping land is consi d erably more difficu lt than developing n ew property. Previously developed si tes often lack necessary infrastru ct ure, access and improvements to make them useable. Add itio na ll y th ese si tes are often burdened with contan1ination from years of neglect or thro u gh prio r uses. W ith s uc h problems pl aguing the s ites. there is no demand for th e prope11y and the mark e t fai Is to su ppo rt it. The too ls provided to lo cal autho ri ties through urban renewal are the only way to s upport the redevelopment of s u ch si tes. Creat ed by Colorado Municipal League: February 9 . 2004 Sa m Mame t. 303.503 .2938 & Carolynne White. 303.903.6 107 I I f I I ( I I I I I I I ' I ' ' ' ' Chapter IV -Basics of Tax Increment Financing By Tracy Huggins, Executive Director, Denver Urban Renewal Authority Background From the 1950's through the 1980's, cities across the nation were able to~ neighbOrhood and downtown revitalization efforts with substantial federal assistance. 'These funds were used by urban renewal authorities to acquire property, clear existing improvements, install public improvements. and resell the property to _developers for redevelopment consistent with an adopted urban renewal plan. The Federal government significantly cut funding levels for urban renewal programs in the 1980s, thereby making revitalization efforts very difficult With inadequate amounts of federal assistance available. urban renewal authorities were forced to find alternative funding methods which would enable them to continue urban revitalization efforts. Colorado addressed thi s problem by modifying its Urban Renewal Law in 1975 to provide for the use of tax increment fmancing (TIF). and the Colorado Supreme Court upheld the constitutionality ofTW in October 1980.119 This made possible the use of this financing mechanism for all eligible Colorado urban renewal authorities. This decision opened the door for locally funded redevelopment projects, releasing communities from their reliance upon the declining federal assistance. Since the u se of TIF was authorized, it has become an important source of funding for redevelopment efforts throughout Colorado. In the City and County of Denver alone, TIP financings h ave resu lted in 24 different redeYelopment projects since 1991 and more than $1 billion in private capital investment The complexity of this financing mechanism often leads to misunderstanding of its use . Because it has become a primary method of assisting with the funding of redevelopment, tax increment financing is an important tool to comprehend. Definition of Tax Increment Financing (TIF) Upon adoption of the urban renewal plan "base" levels of property and sales ~ are established. In the case of the sales tax, the base is set at the collections over the 12 months prior to the adoption of the urban renewal plan . 120 The property·tax base is set at the last certified value and is adj usted at each year of general reassessment. Thereafter, all taxing bodies continue to receive base tax · revenues and the urban renewal authority thereafter receives all property and/or sales taxes which are generated above this "frozen base." This revenue may be used by the authority to reimburse developers for public improvement costs, and retire fmancial obligations of the authority related to the project.121 119 Denver Urban Renewal Authority v. Byrne , 618 P.2d 1374 (Colo . 1980). 120 C .R.S. § 31 -25-107(9} 121/d. 29 Attachment 3 I I I I I l l I . I f I I I I I I I I I I I I I I I I I I I Tax increment financing is a tool used to ftll the gap between the total cost of a redevelopment project and the level of private financing it can support. Under this financing mecha.nis:m, the level of property and/or municipal sales tax collections in a project area before redevelopment i s used as a base and the new tax reven ues expected to be generated are estimated. The difference between the base and the increased taxes collected as a resul t of the redevelopment project, or "tax increment," then can be used either to pay off bonds issued to hel p pay for the project or to reimburse developers for a portion of their costs. The base, as adjusted every two years in connection with the reassessment process, continues to be paid to the norm~ taxing ~ntities . TIF is used only when an area or property cannot attract sufficient private capital fo r redevelopment and when the redevelopment meets a public objective. TIF revenues are generally used for infrastructure improvements associated with the redevelopment that benefit the public, including site acquisition and clearance; construction and/or reconstruction of streets, utilities, parks or other public infrastructure; and the removal of hazardous materials or conditions. Bow TIF Works in Colorado In Colorado , onJy urban renewal authorities (URAs) and downtown development authorities (DDAs) are able to use TIF.122 But URAs and DDAs, although defined as corporate bodies under state law, do not have the power to levy taxes . Rather, u nder the Urban Renewal Law, the municipality collects the incremental sales and property taxes and allocates them to the URA or DDA for use in carrying out an urban renewal plan . In the case of sales tax increment, only the municipality's portion of the sales tax may be used . Before a URA or DDA can use TIF, the City Council or Town Board must determine that an area or property is blighted , using a set of criteria spelled out in state law. (See Chapter I. Urban Renewal 101 .) The URA prepares an urban renewal plan to defme how the area or property will be redeveloped . The plan must be approved by governing body of the municipality. The geographic boundaries of the urban renewal area generally serve as the boundaries of the tax increment area. Once the URA has fulfilled its specific monetary obligations related to a project, the tax increment created by the redeveloped project reverts to the normal taxing entities. TIF may be allocated to the URA for a maximum of 25 years . 123 Tax Increment Bonds URAs may use tax increment revenue to pay the principal, interest and any premiums of tax increment reve nue bonds is sued to help finance a redevelopment project. Bonds supported by TIF are not guaranteed by the city or the authority. (See Chapter V, Bond Issuance and Marketing). 122 C.R.S. § 3 1-25-101 et seq. (URAs) and 31-25-801 et seq. (DDAs) 123 C.R.S. § 3 1-25-107(9Xa) 30 I · I I I I I I I I I I I I I I I I I I Tax Increment Reimbursement Tax increment revenue may also be u sed to reimburse a developer for costs incurred related to eligible improvements in support of a development (i.e., life safety systems, environmental remediation). In a reimbursement scenario, the risk falls upon the developer due to the fact th at any incremental increase in tax .revenues is not guaranteed and is totally dependent upon the success of the project. Tax increment re venu es can only be assigned to an urban renewal authority until the terms of developer reimbursement have been met as set forth in the redevelopment agreement executed between the developer and the urban .reilewal authority. In either case, the incremental revenue can only be assigned to the urb an renewal authority up to a maximum of twenty-five years unless the governing body of the municipality extends this time period.l 24 Tax Increment Financing: Property Taxes TIF is not an additional sales tax or property tax levy on property ow ners , but rather a portion of the established taxes which are collected by the City on behalf of the urban renewal authority.125 The Supreme Court decision which authorized tax in crement financing concluded that the tax increment revenues did not, in fact, belong to th~ City, but were the property of the authority.126 An example will help demonstrate bow this fmancing tool operates. For illustrative pwposes, assume the fo llowing conditions immediately prior to the adoption of an urban renewal plan in theoretical Blue Sky in the City and County of Denver: 1) the total assessed value of the proposed urban renewal area is $10,000,000; 2) the Denver County total mill levy is 80.000 mills; and 3) the boundaries of the urban renewal area are identical to the tax increment district boundaries. For simplicity, we will also assume that the Denver County total mill levy of 80.000 is divided into these taxing bodies: City and County of Denver General Fund: DenverSchool~nict: Urban Drainage and Flood Control District: Total 124 C .R.S. § 3l-25-l -7(9)(a). 125 Denver Urban Renewal Authority v. Byme, 618 P.2d 1374 (Colo. 1980). 126 /d. 3 1 30.000 mills 40.000 mills ) 0.000 mills 80.000 mills I I I I Given these conditions, the City and County of Denver receives from the Blue Sky urban renewal area a total of $800,000 in property taxes, being distributed as follows : City and County of Denver General Fund: Denver School District: Urban Drainage and Rood Control District: Total $300,000 $400,000 $100,000 $800,000 . Given that the above amounts were current at the lime the Blue Sky urban renewal plan was adopted, these "frozen" amounts would continue to be paid from the Blue Sky urban renewal area to each entity after the adoption of the plan. Any increase in the assessed value of the Blue Sky urban renewal area would yield higher property tax revenues. If commercial construction occurred totaling $20,000,000 in the wban renewal area, it would increase the assessed value of the area from $10,000,000 to $15,800 ,000 -29% of construction costs .127 Multiplying the post-development assessed value of the urban renewal area by the county mill levy produces a total post-development property tax of $1,264,000. The difference between this· amount and the "frozen" tax amount of $800,000 is $464,000 and represents the property tax increment. This property tax increment amount is fully apportioned to the urban renewal authority and is used to service the debt on tax increment bonds or reimburse the developer for public improvement costs. The original base of $800,000 is re-evaluated when the county undertakes a general assessment of property. Tax Increment Financing: Sales Tax Sales tax may also be used for tax increment financing and may be collected alone or in conjunction with property tax increments.128 The collection and use of sales tax increments follows the same process as property tax increments. nie urban renewal authority receives only the city or town's share of the sales tax which is collected from the urban renewal area in excess of the "frozen" base level. The city may also elect to commit all or a portion of this amount to the URA. · Benefits of TIF Supported Redevelop ment Tax increment financing is an important economic development tool used throughout the state to heJp finance revitalization of blighted properties and areas . Following are some of the benefits of redevelopment supported by TJF: • Stimulate private investment by using new public revenues created by the redevelopment; 177 29% is the commercial assessment rate for 1996. The residential assessment rate is 10.36%. In order to determine the assessed value of property, these rates are multiplied by the actual value of the property . 128 C.R.S . § 31 -25 -107(9Xa)(I) . 32 ~ I I I I I I I I I I I I I I I I I I I • Attract news jobs and businesses~ • Create more housing, muc h of it affordable; • Reduce crime; • Build or improve roads, u tilities and public facilities; • Revitaliz.e obsolete or vacated large facilities sucb as hospitals, military bases and airports; • Preserve and c reate open s pace; • Transform h azardou s waste site s (called brownfie lds) into productive uses ~ • Build schools; • Preserve historic buildin gs~ • Boost property values ; • Reduce air pollution and traffic; and • Provide needed retail in underserved areas. 33 ~ ' . ... Ci t y of !P('Whe at&_dge ~DMINISTRAT J V[ $[RVICES TO: THROUGH: FROM : DAT E: SU BJECT : Memorandum City Council Patri ck Goff, City Manger ~\ -f'o \A '? G Heather Geyer, Administrativ~erv i ces Director January 28 , 2015 (for Study Session of2/02/15) Additional Di scussion of Foothi ll s Animal Sh elter Payment Foothills Anima l Shelter (F AS) is the regi o nal animal s helter providing animal welfare services to Jefferso n County. This capital reimburs ement payment is per a 2012 IGA between Arvada, Golden Lakewood , Wes tmins ter and Wheat Ridge . The total amount due to Jefferson County is $895,858.89. Tru s amount is equa ll y divided by all five entities. The C ity's payment is $179,172. Approval of th is payment will fulfi ll th e City's ob ligation per the IGA . Fundi n g for the capital reimbursement was included in the 2015 budget adopted by C ity Cou11cil on December 8, 20 14 . This item was presented at the January 26 , 2015 meeting. Council members took no action at that time and requested further discussion be scheduled for the February 2, 20 15 Study Session. The IGA and back up d ocumentatjon is available in the electronic packet from the January 26, 2015 Council meeti ng