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HomeMy WebLinkAboutOrdinance-1988-0758INTRODUCED BY COUNCILMEMBER Worth COUNCIL BILL NO. 343 Ordinance No. 758 Series of 1988 TITLE: AN ORDINANCE AMENDING THE CODE OF LAWS OF THE CITY OF WHEAT RIDGE BY CREATING CHAPTER 24, ENHANCED SALES TAX INCENTIVE PROGRAM, AND PROVIDING CRITERIA FOR INCLUSION OF BUSINESSES WITHIN SAID PROGRAM. WHEREAS, the City of Wheat Ridge is a home rule municipal corporation possessing all powers granted to home rule cities by Article XX, Section 6 of the Constitution of the State of Colorado, included within such powers being the power to levy and collect taxes, including sales taxes; WHEREAS, the "County and Municipal Sales or Use Tax" provisions of the statutes of the State of Colorado, specifically C.R.S. 29-2-107(1), provide that nothing in state statutes "limit(s) the powers of home rule municipalities organized under Article XX of the State Constitution to impose, administer, or enforce any local sales or use tax such as the tax discussed herein; WHEREAS, Section 11.1 of the Home Rule Charter of the City of Wheat Ridge authorizes the imposition of a sales tax after the same has been approved by a "majority of the electorate voting at a regular or special municipal election" at which the question of imposition of such a sales tax is a question upon the ballot; WHEREAS, a majority of the registered electors voting at an election called for the purpose of creating a sales tax in the City of Wheat Ridge has approved a sales tax of two percent (2%) upon retail sales, one-half (one percent (1%)) of which goes to a "Capital Improvement Fund" and the other one-half (one percent (1%)) of which goes to the General Fund; WHEREAS, the City uses sales and use taxes in the operation of government for the purpose of providing municipal services to the citizens, residents and business owners of the City of Wheat Ridge; WHEREAS, there is currently an economic downturn which is negatively affecting the City of Wheat Ridge, the metropolitan Denver area, and the State of Colorado, which economic downturn is such as to justify a local program to encourage economic development; WHEREAS, the City Council of the City of Wheat Ridge deems the development of new, and the substantial expansion of existing, retail sales tax generating businesses to be a vital and important step in the economic development of the City of Wheat Ridge; WHEREAS, the City Council of the City of Wheat Ridge wishes to establish hereby a fund derived from a portion of enhanced sales taxes, which fund may be shared with owners as an incentive for establishing or expanding retail sales tax generating businesses within the City of Wheat Ridge; WHEREAS, so as to avoid an impact to the General Fund and Capital Improvement Fund of the City, the source of funding for said Program shall be limited to a portion of increased sales taxes generated solely by businesses involved in the Program; WHEREAS, the City Council wishes to establish such an Enhanced Sales Tax Incentive Program as set forth herein to serve the public purposes of providing public and public-related improvements through deferred expenditure of public funds, while promoting economic development within the City of Wheat Ridge, thereby continuing to encourage and to provide for the vitality of retail business and retail businesses within the City, as well as providing opportunities for employment for the residents of the City, and enabling the City to carry forward its functions in the preservation of the health, safety, and welfare of the citizens and residents of the City. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO: Section 1. The Code of Laws of the City of Wheat Ridge is hereby amended by the addition of the following Chapter 24 Enhanced Sales Tax Incentive Program. Section 24-1. There is hereby established within the City of Wheat Ridge an Enhanced Sales Tax Incentive Program ("ESTIP"). Section 24-2. The purpose of the Enhanced Sales Tax Incentive Program created hereby is to encourage the establishment and/or substantial expansion of retail sales tax generating businesses within the City of Wheat Ridge, thereby stimulating the economy of and within the City, thereby providing employment for residents of the City and others, thereby further expanding the goods available for purchase and consumption by residents of the City, and further increasing the sales taxes collected by the City, which increased sales tax collections will enable the City to provide expanded and improved municipal services to and for the benefit of the residents of the City, while at the same time providing public or public-related improvements at no cost, or at deferred cost, to the City and its taxpayers and residents. Section 24-3. As used in this Chapter 24, and all sections thereof, the following phrases shall have the following meanings: 2 (a) The phrase "enhanced sales tax" shall mean the amount of sales tax collected by the City over and above a base amount negotiated by, and agreed upon by, the applicant and the City, and which amount is approved by the City Council, which base amount shall never be lower than the amount of sales taxes collected by the City at the property in question in the previous twelve (12) months plus a reasonable and agreed upon percentage of anticipated increase in sales taxes, or, in the case of a newly established business, an amount which represents the good faith determination by the applicant and the City as to the amount of sales taxes which could be generated from the new business without the participation by applicant in the ESTIP created hereunder. (b) The phrase "owner or proprietor" shall mean the record owner or operator of an individual business, or, in the case of a shopping center, the owner of the real property upon which more than one business is operated, provided that said owner (whether an individual, corporation, partnership or other entity) is the owner or lessor of the individual businesses operated thereon. Section 24-4. Participation in ESTIP shall be based upon approval by the City Council of the City of Wheat Ridge, exercising its legislative discretion in good faith. Any owner or proprietor of a newly established or proposed retail sales tax generating business or location, or the owner or proprietor of an existing retail sales tax generating business or location which wishes to expand substantially, may apply to the City for inclusion within the ESTIP provided that the new or expanded business is reasonably likely to generate enhanced sales taxes of at least twenty thousand dollars ($20,000.00) in the first year of operation. Section 24-5. Approval by the City Council of an agreement implementing this ESTIP shall entitle the successful applicant to share in enhanced sales taxes derived from applicant's property or business in an amount which shall not in any event exceed fifty percent (50%) of the enhanced sales taxes; provided, however, that applicant may use said amounts only for public and/or public-related purposes such as those specified herein and which are expressly approved by the City Council at the time of consideration of the application. The time period in which said enhanced sales taxes may be shared shall not commence until all public or public-related improvements are completed, and shall be limited by the City Council, in its discretion, to a specified time, or until a specified amount is reached. 3 Section 24-6. The uses to which said shared enhanced sales taxes may be put by an applicant shall be strictly limited to those which are public or public-related in nature. For the purposes of this Chapter 24, public or public related purposes shall mean public improvements, including but not limited to streets, sidewalks, curbs, gutters, pedestrian malls, street lights, drainage facilities, landscaping, decorative structures, statuaries, fountains, identification signs, traffic safety devices, bicycle paths, off-street parking facilities, benches, restrooms, information booths, public meeting facilities, and all necessary, incidental, and appurtenant structures and improvements, together with the relocation and improvement of existing utility lines, and any other improvements of a similar nature which are specifically approved by the City Council upon the City Council's finding that said improvement are pubic or public-related improvements, and that such improvements shall enhance the competitive position of the applicant within the Denver Metropolitan area marketplace. Section 24-7. The base figure for sales taxes shall be divided into twelve (12) monthly increments, which increments are subject to agreement between the parties, and approval by the City Council, and which increments shall be reasonably related to the average monthly performance of the business or property in question, or similar businesses in the area (i.e. adjust for seasonal variations). If in any month the agreed upon figure is not met by applicant so as to create enhanced sales tax for that month, no funds shall be shared with applicant for said month, and no increment shall be shared until that deficit, and any other cumulative deficit, has been met, so that at the end of any twelve (12) month cycle, funds in excess of those "enhanced sales taxes" agreed to be shared shall not have been shared with any applicant. Section 24-8. It is an overriding consideration and determination of the City Council that existing sources of City sales tax revenues shall not be used, impaired, or otherwise affected by this Enhanced Sales Tax Incentive Program. Therefore, it is hereby conclusively determined that only enhanced sales taxes generated by the properties described in an application shall be subject to division under this ESTIP. It shall be the affirmative duty of the Treasurer of the City of Wheat Ridge to collect and hold all such "enhanced sales taxes" in a separate account apart from the sales taxes generated by and collected from the other sales tax generating uses and businesses within the City and to provide an accounting system which accomplishes the overriding purpose of this Section 24-8. It is conclusively stated by the City Council of the City of Wheat Ridge that this Chapter 24 would not be adopted or implemented but for the provisions of this Section 24-8. 4 Section 24-9. The one percent (1%) of sales and use taxes earmarked for the Capital Improvement Fund may be utilized in this ESTIP for public improvements as herein defined so long as the same are within the meaning of the phrase "capital improvements" as defined in the voter approved sales tax referendum previously held within the City of Wheat Ridge, and provided that the same are found and determined by the City Council to be capital improvements which could be provided by the City from the Capital Improvement Fund but for the provision of said improvements by the applicant; provided, however, that such use of capital improvement funds as part of this ESTIP shall be limited to the amount agreed pursuant to Section 24-11 hereof; provided further, however, that nothing contained herein shall limit the City Council in the determination to appropriate additional capital improvement funds for capital improvements affecting the property in question as a part of the City's regular appropriation and budget process. Section 24-10. Approval of an application for inclusion in this ESTIP shall be given by the City Council, at a public hearing held as a portion of a regularly scheduled City Council meeting, based upon the following criteria: a. The amount of enhanced sales taxes which are reasonably to be anticipated to be derived by the City through the expanded or new retail sales tax generating business; b. The public benefits which are provided by the applicant through public works, public improvements, additional employment for City residents, etc.; C. The amount of expenditures which may be deferred by the City based upon public improvements to be completed by the applicant; d. The conformance of the applicant's property or project with the comprehensive plan and zoning ordinances of the City; e. The agreement required by Section 24-11 having been reached, which agreement shall contain and conform to all requirements of said Section 24-11. Approval shall be by motion adopted by a majority of the entire City Council. Section 24-11. Each application for approval submitted to the City Council shall be subject to approval by the Council solely on its own merits. Approval of an application shall require that an agreement be executed by 5 the owner and the City, which agreement shall, at a minimum, contain: a. A list of those public or public-related improvements which justify applicant's approval, and the amount which shall be spent on said improvements; b. The maximum amount of enhanced sales taxes to be shared, and the maximum time during which said agreement shall continue, it being expressly understood that any such agreement shall expire and be of no further force and effect upon the occurrence of the earlier to be reached of the maximum time of the agreement (whether or not the maximum amount to be shared has been reached) or the maximum amount to be shared (whether or not the maximum time set forth has expired); C. A statement that this is a personal agreement which is not transferable and which does not run with the land; d. That this agreement shall never constitute a debt or obligation of the City within any constitutional or statutory provision; e. The base amount which is agreed upon by month, and the fact that if, in any month as specified, sales taxes received from the property do not at least equal said amount, that there shall be no sharing of funds for said month; f. The base amount shall be agreed upon which shall consider the historic level of sales at the property in question, or a similar property within the area in the event of a new business, and a reasonable allowance for increased sales due to the improvements and upgrades completed as a result of inclusion within this Program; g. A provision that any enhanced sales taxes subject to sharing shall be escrowed in the event there is a legal challenge to this Enhanced Sales Tax Incentive Program or the approval of any application therefore; h. An affirmative statement that the obligations, benefits, and/or provisions of this agreement may not be assigned in whole or in any part without the expressed authorization of the Wheat Ridge City Council, and further that no third party shall be entitled to rely upon or enforce any provision hereof; i. Any other provisions agreed upon by the parties and approved by the City Council. 6 Section 24-12. The City Council has enacted this ESTIP as a joint benefit to the public at large and to private owners for the purposes of: providing the City with increased sales tax revenues generated upon and by properties improved as a result of this Program; public improvements being completed by private owners through no debt obligation being incurred on the part of the City, and allowing applicants an opportunity to improve properties which generate sales activities, which improvements make those properties more competitive in the marketplace and further provide to the applicant additional contingent sources of revenues for upgrading said properties. The City Council specifically finds and determines that creation of this ESTIP is consistent with the City's powers as a home rule municipal corporation, and that exercise of said powers in the manner set forth herein is in furtherance of the public health, safety and welfare. Notwithstanding any provision hereof, the City shall never be a joint venturer in any private entity or activity which participates in this ESTIP, and the City shall never be liable or responsible for any debt or obligation of any participant in ESTIP. Section 2. Severability. If any clause, sentence, paragraph, or part of this ordinance or the application thereof to any person or circumstances shall for any reason be adjudged by a court of competent jurisdiction invalid, such judgment shall not affect application to other persons or circumstances. Section 3. Safety Clause. The City Council hereby finds, determines, and declares that this ordinance is promulgated under the general police power of the City of Wheat Ridge, that it is promulgated for the health, safety, and welfare of the public, and that this ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The City Council further determines that the ordinance bears a rational relation to the proper legislative object sought to be attained. Section 4. This ordinance shall become effective forty-five (45) days from the date of final passage. INTRODUCED, READ, AND ADOPTED on first reading by a vote of 7 to 0 on this 2nd day of May , 1988, ordered published in full in a newspaper of general circulation in the City of Wheat Ridge and Public Hearing and consideration on final passage set for Mondav May 23 , 1988, at 7:30 o'clock p.m., in the Council Chambers, 7500 West 29th Avenue, Wheat Ridge, Colorado. READ, ADOPTED, AND ORDERED PUBLISHED on second and final reading by a vote of 8 to 0 this 23rd day of May 1988. 7 SIGNED by the Mayor on this 1988. 24th day of May Dan Wilde, Mayor ATTEST: Wanda Sang, City Cler APPROVED AS TO FORM BY OFFICE OF/-CITY.,ATTORN$Y John Fy( Hayes, lst Publication: May 5, 1988 2nd Publication: June 2, 1988 Wheat Ridge Sentinel: Effective Date: July 7, 1988 orney 8