2) Pass a motion to adopt the Resolution with revisions 3) Do not pass a motion to adopt the Resolution

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1 DATE: September 20, 2011 ITEM#: RE: 8.B. RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY AUTHORIZING THE PREPARATION OF A DRAFT COMMUNITY DEVELOPMENT PROJECT AREA PLAN FOR THE BLOCK 70 PROJECT AREA PREPARED BY: Edward Butterfield EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City has been asked by the City Administration to create a Community Development Project Area (CDA) for the limited purpose of funding a percentage of the costs of constructing the Utah Performing Arts Center (UPAC), thereby stimulating economic development in the CDA. The CDA is one of several anticipated funding sources to construct the UPAC. The UPAC project will be designed in conjunction with an adjacent office tower and mixed-use retail development that will be constructed in a phased approach. The first step in the creation of a CDA requires the Board to adopt a resolution directing staff to draft a Community Development Project Area Plan with respect to the construction of the UPAC. FUNDING: The cost of drafting a plan and creating a CDA will be covered from funds allocated in recent years for Arts District Planning and Implementation. ALTERNATIVES: 1) Pass a motion to adopt the Resolution 2) Pass a motion to adopt the Resolution with revisions 3) Do not pass a motion to adopt the Resolution ANALYSIS AND ISSUES: The creation of a CDA will generate funds to contribute to the cost of the construction of the UPAC. The CDA would include all of Block 70 in Downtown Salt Lake City with boundaries from Main Street to State Street and from 200 South to 100 South. Currently, Block 70 is in the Central Business District (CBD) Urban Renewal Project Area but tax increment is not collected on this Block based on the original terms of the CBD Project Area, which limited the area of collection to 100 acres. Establishing the CDA will allow the RDA to collect tax increment generated from properties on Block 70 including the office tower and mixed-use developments that will be constructed as part of the UPAC project. Because the construction of the UPAC will benefit property values and create significant potential for development in the area, it makes sense to capture incremental values from selected taxing entities to assist in funding the project.

2 Limited Purpose Community Development Area (CDA) The CDA option would enable the city to capture incremental increase in property values that increase due to appreciation, as well as increases from new investments within the area. The actual net present value of the increment generated depends on a variety of factors, including how quickly or slowly properties values increase over time, and how the Salt Lake County Assessor values other new developments on the block when they are added to the tax rolls. The Redevelopment Agency of Salt Lake City is proposing creation of a CDA for the limited purpose of contributing to funding the UPAC, with the understanding that all collected tax increment will be used to repay the debt service on bonds issued by the city to pay for the costs associated with development of the UPAC. Community Development Area Process Community Development Areas are the least complex project areas permitted under Utah state statute. The CDA creation process does not require the participation of the Taxing Entity Committee. Any taxing entity participation is voluntary through independent interlocal agreements. The first step in the CDA creation process is the RDA Board authorizing the Agency staff to prepare a draft community development project area plan. The second step is drafting the plan, which will describe the existing conditions of the project area and standards that will guide community development. Also, the plan will be consistent with the City s Master Plan for the area and reference any specific projects proposed in the project area. The third step is making the draft project area plan available for public review at the Agency s office during normal business hours. A plan hearing is also organized with notification sent to property owners, State Tax Commission, TEC, and the County Assessor and Auditor. All written and oral comments collected from participants during the plan hearing are considered by the Agency in connection with the preparation of a revised project area plan. As the next step, the Board approves a resolution adopting the draft community development project area plan as the CDA s project area plan. After adoption by the Board, the City Council must adopt an ordinance that designates the approved project area plan as the official community development plan of the project area. Once approved by the Council, a notice will be placed in the paper providing a 30-day protest period. The RDA will then enter into Interlocal Agreements with any of the taxing entities. The Agency is negotiating with Salt Lake County and the Salt Lake City School District the terms of the Interlocal Agreement. Notices of the finalized interlocal agreements with each entity are published in the newspaper with a 30-day protest period. BACKGROUND: Mayor Becker has made the construction of a downtown Broadway-style theater one of his highest priorities. He has asked the RDA to assist with the acquisition of property and selection of a developer for the project, which will include a 2500-seat theater, as well as rehearsal spaces and other ancillary facilities that will support the operation of the theater and various performing arts functions.

3 ATTACHMENTS: 1. Exhibit A Resolution 2. Exhibit B Map

4 Exhibit A Resolution RESOLUTION NO September 20, 2011 RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY AUTHORIZING THE PREPARATION OF A DRAFT COMMUNITY DEVELOPMENT PROJECT AREA PLAN FOR THE PROPOSED BLOCK 70 PROJECT AREA WHEREAS, Salt Lake City Corporation (the City ) is proposing the construction of a regional performing arts theater and ancillary facilities (the Theater ) on Block 70; and WHEREAS, the Redevelopment Agency of Salt Lake City (the RDA ) proposes to create a Community Development Project Area (CDA) to capture tax increment from Block 70 to support the development of the Theater; and WHEREAS, the CDA boundaries would include the area described on Exhibit A attached hereto (the Proposed Project Area ), that is generally all of Block 70 in Downtown Salt Lake City from Main Street to State Street and from 200 South to 100 South; and WHEREAS, the Central Business District Project Area Plan adopted by the RDA does not allow for the collection of tax increment from the properties in Block 70; and WHEREAS, construction of the Theater will facilitate private development on Block 70 through the construction of an office tower and other mixed-use projects; and WHEREAS, in 2005, a feasibility study commissioned by the RDA, the Downtown Alliance, and Salt Lake County identified the need and potential for a touring Broadway theater; and WHEREAS, in 2011, the development team of GTS/Hamilton Partners issued a feasibility report demonstrating the economic development benefits and financial viability of a touring Broadway Theater on Block 70; and WHEREAS, the creation of the CDA will capture increased property taxes from the proposed private development and assist with the repayment of bonds issued to construct the Theater; and WHEREAS, the Theater and private development will activate and revitalize Main Street between First South and Second South and leverage the economic impact of City Creek Center, the Gateway, 222 South Main and other recent developments; and

5 WHEREAS, the Theater will create educational opportunities and cultural enrichment statewide, and introduce and attract new and broader audiences to the downtown cultural core; and WHEREAS, the Salt Lake City Downtown Master Plan calls for the expansion of Downtown arts, cultural and entertainment activities, and the creation of a theater district; and WHEREAS, the anticipated cost of constructing the Theater, based on the preliminary program and cost estimates, is approximately $100 million to $120 million depending on options; and WHEREAS, the City is considering issuing sales tax revenue bonds (the City s Bond ), the proceeds of which would be used to finance a portion of the costs associated with the Theater; and WHEREAS, pursuant to Chapter 4, Community Development, of Title 17C of the Utah Code (the Act ), the RDA may approve a community development project area plan for the purpose of supporting community development within a designated project area; and WHEREAS, the Proposed Project Area is generally ready for redevelopment and, if the Theater is constructed, it is likely that commercial and other development will occur, which will benefit the community by creating additional opportunities and by increasing the tax base; and WHEREAS, adopting a community development project area plan for the Proposed Project Area for the purpose of stimulating commercial development within the Proposed Project Area, including without limitation by use of tax increment created within such area as a result of the economic development stimulated by the construction of the Theater, and for the other enumerated purposes, may satisfy a public purpose, provide public benefits, be economically sound and feasible, conform to the City s General Plan, and promote the public health, safety and welfare of the City; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY, that, in accordance with Section 17C-4-101(1) of the Act, the Board hereby authorizes the preparation of a draft community development project area plan for the Proposed Project Area and to support the Theater; and BE IT FURTHER RESOLVED, that the Board hereby authorizes and directs the Chief Administrative Officer and the Executive Director of the Agency to take all such further action as is necessary or appropriate in accordance with Section 17C-4 of the Act in connection with the evaluation and analysis of the possible costs and benefits of the adoption of such a project area plan.

6 Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this 20 th day of September, ATTEST: Luke Garrott, Chair RDA Board of Directors D.J. Baxter, Executive Director Transmitted to the Chief Administrative Officer on Administrative Officer.. The Chief does not request reconsideration requests reconsideration at the next regular Agency meeting. ATTEST: Ralph Becker, Chief Administrative Officer D.J. Baxter, Executive Director Approved as to form: Jones, Waldo, Holbrook and McDonough, P.C. By:

7 Exhibit B Map

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