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Department Approval � .,-,g ��i � REQUEST FOR COUNCIL ACTION Date: 02/22/2010 Item No.: $� j City Manager Approval Item Description: Approve DEED Redevelopment Grant Contract for Phase 2 of the Twin Lakes Infrastructure Project. BACKGROUND In August 2009, the City applied for $1 million in funding from the Department of Employment and Economic Development to assist with the construction of the second phase of infrastructure within the Twin Lakes Redevelopment Area. On November 6, 2009, DEED awarded the City a$1 million grant, which will be used to purchase a small piece of road right of way, to undertake street and sidewalk construction, and to install water, sewer, and storm water utilities and streetlights. Attachment A is the agency's standard grant agreement, which must be signed by the City in order to accept the grant award. The City's attorney has reviewed this contract. The City entered into the same agreement when it accepted the Redevelopment Grant awarded in 2008 for the Phase 1 project. If the grant is accepted by the Council, the grant will expire on December 31, 2010. POLICY �BJECTIVE By accepting the DEED Redevelopment Grant Funds, the City is taking a proactive step to leverage external funds to assist with the acquisition of right-of-way and construction of the public roadways and utilities as advocated for in the 2030 Comprehensive Plan. FINANCIAL IMPACTS If the City accepts this grant, it is obligating itself to provide matching funds. As identified in the contract (Attachment A), the estimated eligible project costs are approximately $2.176 million of which the DEED grant will pay for up to $1 million in costs and the City is responsible for the $1.176 in costs. The bulk of the City's portion of these costs—land acquisition—was already incurred in June 2009. (Please note that total project costs are estimated at approximately $3 million; environmental remediation, power line burial, and streetscaping are not considered grant eligible costs.) These are TIF-eligible expenses and there are sufficient balances within existing districts to offset these costs. Ultimately, the City will recuperate these upfronted costs from developers upon the redevelopment of the private property through the adopted cost allocation process. STAFF RECOMMENDATION Staff recommends that the City Council accept the $1 million DEED Redevelopment Grant award. These funds will help defray the costs of the second phase of infrastructure improvements within the Page 1 of 2