2020-03-11 CC Minutes - Approved

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City of Centerville Council Meeting Minutes March 11, 2020 Goiffon Road, Sorel Street and Centerville Road. This property was the former home of the County Public Works garage, then City Public Works garage and skating rink. At one time the parcels contained 4 single-family homes. In 2001, the City vacated its facility. In 2005, the City used CDBG funds to purchase one home and demolish it. In 2007, the City used CDBG funds to purchase and demolish the second home on the same block. The property has been vacant since 2007 with no serious development proposals. Administrator Statz stated that in 2019 the City was approached by two developers, Trident Development and Apollo Development. Trident Development was chosen after each developer presented their proposal to a joint committee of the City Council and Planning and Zoning Commission. They proposed a three story, 53-unit apartment building with 80% of the units at market rate rent and 20% at affordable rent (50% of AMI) with a small retail space available on the ground floor. This project also proposed to have underground parking which was subsequently determined to be infeasible due to the water table. Administrator Statz stated that the total cost of this project would be $10 million, with a financial gap of $1.35 million which Trident Development requested TIF (tax increment financing) to fill the gap for 16 years. He explained tax increment financing would allow the developer (owner) to pay their property taxes (city, county, school) and the City refunds 97.5% of the taxes back to the developer. He stated that this continues until the 16 year period is reached or the $1.35 million has been reached. Whichever comes first. Administrator Statz stated there are two basic questions: 1. Should the city use tax increment financing as a tool to incentivize the development of a 53 unit apartment building? 2. Should an apartment building be constructed on Block 7? He stated that there are other correlating questions also. If an apartment is the desired development for Block 7, are there other incentives that should be considered? If no incentives are used, how long should the City wait for development? If not an apartment building, what is an appropriate development and the relationship of the Comprehensive Plan and the Downtown Master Plan to it? Administrator Statz stated that there are other things to consider other than TIF or not to TIF: Northland Securities was hired by the EDA to evaluate the developer’s proposal, on the City’s behalf. They have found the developer’s financial summary to be valid which shows a gap in the project funding for which without TIF assistance, it would not be viable. He noted, again, that Northland is working for the City, not the developer and if the City wishes to have an apartment built on the site, this TIF proposal is the best way to do. This advice comes after evaluating other ways to make-up the financial gap, including non-TIF scenarios. If the City moves forward with the development, on day one, the city will receive $350,000 for the land which would go to the general fund, with $162,000 going into the park dedication fund which would pay down debt to the sewer fund. He also stated that $124,200 would be paid in water connection fees, $3,623 would be paid in storm water fees and $54,500 would be paid in building permits. This amounts to roughly $794,000. This money is only refunded to the developer through taxes that we are not currently collecting. Also, there would be an additional $4,500 per year of non- TIF reimbursable taxes, estimated $7,000 per year in water fund revenue, estimated 10,000 per year in sewer fund revenue, estimated $10,000 per year in storm sewer fund revenue, and estimated $2,500 per year in franchise fee revenue – a $34,000 total estimated annual revenue from day one of the project. Administrator Statz stated that the additional burden on general government needs, without taxes to offset such costs for the first 16 years could affect the fire/police, elections/ IT services and other population based contracts. Things that would not be affected would be building Page 3 of 18