CRA 101 Downtown Investment Authority City of Jacksonville August 14, 2013

CRA 101 Downtown Investment Authority City of Jacksonville August 14, 2013

Agenda Why Redevelopment? What are Community Redevelopment Agencies (CRAs)? What can CRAs Do and Not Do? What are the Rules of Engagement? How to be an effective CRA Leader What are the Best Practices? 2

Ten Reasons to Re develop Remove Slum & Blight Create Clean and Safe Places Prevent Crime Encourage Economic Development Build or Enhance Affordable Housing Fund Streetscape and other Capital Improvements Preserve Historic Buildings/Resources Retain and Recruit Business Enhance Parks and Recreation Increase the Tax Base 3

What is Redevelopment? ANY activity authorized under Chapter 163, Part III, Florida Statutes. Activities authorized by your approved Redevelopment Plan and funded by the local CRA Trust fund 4

What is a CRA? Dependent Special District Board Members Law generally - only one Community Redevelopment Agency (Board) per jurisdiction Note: Except in Charter Counties over 1.6 million people One CRA may have multiple CRA districts 5

Community Redevelopment Agencies (CRAs) Redevelopment Act 1969 Amended over years, Chapter 163 Part III, F.S. Not in widespread use until 1980 State of Florida v. Miami Beach (1977) Affirmed by Strand Case (2007) 214 CRAs Florida Department of Economic Opportunity Only form of tax increment used widely in Florida State not involved in the creation or administration 6

Mission: Eradicate Slum & Blight serious and growing menace, injurious to public health, safety, welfare disease and crime economic and social liability declining tax base Impediments to sound growth decent housing accommodations traffic problems/hazards 7

How Created? All Local Charter counties delegate authority to city CRAs Non charter counties can challenge the creation of city CRA by statutory process Finding of Necessity and blight as defined by statute, not Mr. Webster CRA Board is established Trust Fund is created Redevelopment Plan is adopted No state approval required, but reporting requirements (annually by March 31 st ) 8

The CRA Board Elected officials of city or county OR board of 5 9 appointed by elected Interlocal agreement may include representatives of other taxing authorities If governing body is only 5 members then it can be governing body + 2 appointed Chair and Vice Chair of the CRA designated by governing body (not the CRA Board) 9

Redevelopment Plan = Blueprint Even if a program or project is in the Plan, does not need to be done ultimately But if a program or project is NOT contained in the Plan it CANNOT be undertaken. Put everything you might want to do in the Plan whether you think you will do it or not. Can only do projects in the plan AND in the CRA area Be ready to point to page where activity is in the plan Strategic planning each year is key to details for carrying out the plan 10

Not allowed by statute/other Any project or program a CRA wishes to undertake must be outlined in the Community Redevelopment Plan (CRP) and in the CRA district IF IT IS NOT IN THE PLAN AND DISTRICT YOU CAN T DO IT!!!!! 11

What is Increment Revenue? Tax Increment Financing or TIF Contributed by cities, counties, very few districts Not school boards, water or library districts Increases in taxes collected from property values improving over time ostensibly from CRA activities What you put in, you get out, plus much more through private partnerships Technically not ad valorem tax amount equal to This fine point reaffirmed in Strand case 2007 Increment is 95% or less of the revenues per statute (5% admin fee for processing by local govt) Fiscal Year for all CRAs is October 1 st September 30th 12

Calculating Increment All taxable properties in the CRA Difference in value between ad valorem revenues this year and year CRA was created Does not include debt service millage Collected for no longer than 40 years (60 years if created before July 1, 2002) Can differ from statute by interlocal agreement 13

Tax Increment Revenues CRA District Assessed Value 2010 Base Year $100,000 value Tax $200.00 2015 Year 5 $150,000 value Tax $300.00 City and County Receive $200.00 in tax payments City and County Receives $300.00 ($200.00 + $100.00) Remits Increase Redevelopment Trust Fund Receives $95.00 (95% of $100.00) 14

Use of Funds Ch. 163, Part III, F.S. Anything in plan and district, including but not limited to: Administrative and overhead expenses Redevelopment planning, surveys, & financial analysis Acquisition of real property in the CRA district Clearance/preparation & relocation of occupants Repayment of borrowed funds All expenses related to bonds/other indebtedness Development of affordable housing Community policing innovations 15

Administrative/Overhead Executive Director Technical experts Educational/Professional Development Other such agents & employees as required Counsel and legal staff 16

E/O/Liability Insurance? CRA is a separate legal entity Governing body s insurance may or may not cover the CRA Board and staff Check with the city/county s carrier if the CRA does not have its own insurance 17

What CRAs Cannot Pay For (s.163.370) Construction / expansion administrative buildings for public bodies/police/fire facilities Publicly owned capital improvements if scheduled in city or county capital improvement plan until removed from schedule or plan and 3 years have elapsed. General government operating expenses unrelated to the planning & carrying out of a community redevelopment plan 18

Other Things CRAs Cannot Pay For Activities/projects not covered in plan Board Members/Commissioners payment for service as CRA Board member Project or program outside of the development area However, by interlocal agreement there may be legal uses of funds outside the CRA Area and not in plan 19

Things CRAs Can Pay For Capital expenditures Promotion, marketing & events Non Profit activities limited Incentives and grants Code enforcement Land Acquisition Cost sharing/allocation for services 20

Be Careful With.. Market/direct funding events (AG-2010-40) Funding non-profits (AG-2010-40) Substitution of CRA funding for city/county duties/projects done previously by them Maintenance and repair of CRA projects Community Policing details, details Reimbursement to city/county of expenses (Auditor General Reports 2006) Subject to all Government Accounting Standards Board (GASB) requirements 21

Powers of a CRA 163.345 Encouragement of private enterprise 163.358 Exercise of powers in carrying out redevelopment and related activities 163.360(7)(d) Community Redevelopment Plans maximum opportunity for rehabilitation and redevelopment by private enterprise 163.370 (2)(c) Powers; counties and municipalities; community redevelopment agencies 163.380 Disposal of Real Property 163.400 Cooperation by public bodies 163.410 Exercise of powers in counties with home rule charters 163.415 Exercise of powers in counties without home rule charters 22

Interlocal Agreements 163.387 (3)(b) Alternate provisions contained in an interlocal agreement between a taxing authority and the governing body. May supersede the provisions of this section with respect to that taxing authority. The Community Redevelopment Agency may be an additional party to any such agreement. 23

Five (5) Reporting Requirements 1. Proposed and Final Budgets posted on official website two days prior/30 days after (September/October) 2. Annual report to the Florida Department of Economic Opportunity (DEO), Special Districts Information Program (December) 3. Annual Report to governing body and taxing authorities (March 31) 4. Audit (separate or city/county component unit) to each taxing authority and to Auditor General (45 days after completion or June 30) 5. Inclusion in Annual Financial Report (AFR/CAFR) to the Florida Department of Financial Services by city or county (June 30) 24

Amending the Redevelopment Plan Modification of boundaries, terms, language, trust fund, board composition, etc. is an amendment A lot like the creation process Governing body amends on recommendation from the CRA The governing body holds public hearings after public notice in newspaper of general circulation and notices to all the taxing authorities that collect a millage within the CRA New Finding of Necessity must be prepared and adopted for a new area or expanded area 25

$$ End of the Fiscal Year Funds left in the Redevelopment Trust Fund on the last day of the Fiscal Year (September 30 th ) shall be: Returned to the taxing authorities Used to reduce debt Deposited in an escrow account for reducing debt later Appropriated to a specific project contained in the Redevelopment Plan that will be completed within three (3) years No carryover into the next fiscal year of an undesignated fund balance 26

Not allowed by statute/other Any project or program a CRA wishes to undertake must be outlined in the Community Redevelopment Plan (CRP) and in the CRA district IF IT IS NOT IN THE PLAN AND DISTRICT YOU CAN T DO IT!!!!! 27

The Rules Open Meetings Open Records Ethics 28

Why is the Public Sector Involved? Attract private investment (capital) into slum or blighted areas Increase the tax base Investment won t occur without public assistance 29

Why Private Sector Investment Doesn t Occur Without Public Assistance Investors perceive an inadequate Return on Investment (ROI) Understand how investors measure ROI Learn to adjust the imbalance between cost and revenues Lenders perceive an unacceptable level of risk Understand how lenders evaluate risk Learn to reduce risk of default and foreclosure 30

Redevelopment - a Contact Sport Chapter 163, Part III encourages government to invest public funds with private enterprise to ultimately bring an area back to life. Local funds, generated by cities and counties, can be a political football. Diverse groups have vastly differing ideas on how to use the money. Lack of vision, leadership, buy-in, and responsible implementation can lead to mission drift. Public does not understand the Who, What, When, Where and Why of the process. 31

Who, What, When, Where and Why CRAs use redevelopment funds, for a limited period of time, within a deteriorating area, to transform it into one that again contributes to the overall health of the community. 32

How to be a CRA Leader Do your homework (benefit from FRA experience). Seek input from citizens, businesses build consensus. Adopt the shared vision and make a personal commitment to it. Explain Who, What, When, Where & Why as many times as necessary Get out of the way steer don t row. Work for redevelopment success, not credit. 33

Homework: Things to Know About Your CRA What is the history of your CRA? What has been accomplished? What are the current projects? What programs does the CRA offer? What s in the plan? Read it in entirety. How much money is in the trust fund? How much does the county v. city contribute? How much longer has the CRA to operate? When was the last time the plan was amended? 34

Successful CRAs Vision Leadership Plan the work, then work the plan A passion for partnerships Community support and trust Patience and the guts to stick with it Wisdom to evolve and embrace the next opportunity 35

Building the Consensus To Vision or Not to Vision... No one right way to build consensus You can over think it ask yourself: Is it time to get the community involved? Is it time to move forward regardless? Identify easy-to-understand measurement for progress and success Continuously build support for the program 36

Good Ideas Be realistic about what can be accomplished, but... be bold in setting goals Vision, Mission, Goals, Objectives keep them up front Understand the private sector/profit motive Annual strategic planning workshop (two hours) Let the annual budget tell the story Communicate, Communicate, Communicate 37

Best Practices Understand the Market Review Land Use & Zoning Create Successful Partnerships Track Your Progress Promote Projects and Success Stories Create Themes, Campaigns, Events, and Buzz in the district 38

More Best Practices Always separate CRA vs. Commission meetings Consider joint procedures for CRA and city, e.g. Personnel Policies Maintain separate insurance (errors/omissions, liability) Monitor CRA contracts Complete all appropriate reports Use your legal counsel - pay now or pay more later 39

Not allowed by statute/other Any project or program a CRA wishes to undertake must be outlined in the Community Redevelopment Plan (CRP) and in the CRA district IF IT IS NOT IN THE PLAN AND DISTRICT YOU CAN T DO IT!!!!! 40

The Future... Inter local agreements will be used more to outline who pays for what, when, how and why Cooperative instead of competitive approach to governing Dialogue, not monologue Strong legislative advocacy - any changes to the redevelopment act should empower, not limit. 41

FRA Can Help Advocacy including Legislative Education Speakers Bureau News Clips Web, facebook, Twitter Technical Assistance Professional Development and Training Academy Program 42

2013 FRA Annual Conference Redevelopment Defined October 30 November 01 Tampa Waterside Marriott 43

Resources Florida Chapter of the American Planning Association www.floridaplanning.org Florida Planning and Zoning Association www.fpza.org Florida League of Cities www.flcities.com Florida Association of Counties www.flcounties.com International Council of Shopping Centers www.icsc.org Urban Land Institute www.uli.org Florida Brownfields Association www.fba.org 44

Florida Redevelopment Association Carol Westmoreland, Executive Director Florida Redevelopment Association cwestmoreland@flcities.com 850.701.3608 www.redevelopment.net Jan Piland, Executive Assistant jpiland@flcities.com Lara Diettrich, NE FL Regional Rep. Diettrich Planning, LLC Office: 904-551-6969 laradiettrich@gmail.com 45

COMMUNITY REDEVELOPMENT AREA: SUMMARY OF WHAT, HOW AND WHY August 2013 Community Redevelopment Agencies: What, When, and How CRAs, as they are known, are quite common, but often there are many questions in the minds of those who don t work with them every day. How are they authorized? Who oversees them? What is involved in their operation? How are they funded? This article is intended to simply answer those questions. It also summarizes the legislation passed in session 2002 relating to CRAs. For further information, please contact Carol Westmoreland of the Florida Redevelopment Association at cwestmoreland@flcities.com or call (850) 222-9684 ext. 115. What is a Community Redevelopment Area or District? Under Florida law (Chapter 163, Part III), local governments are able to designate areas as Community Redevelopment Areas when certain conditions exist. Since all the monies used in financing CRA activities are locally generated, CRAs are not overseen by the state, but redevelopment plans must be consistent with local government comprehensive plans. Examples of conditions that can support the creation of a Community Redevelopment Area include, but are not limited to: the presence of substandard or inadequate structures, a shortage of affordable housing, inadequate infrastructure, insufficient roadways, and inadequate parking. To document that the required conditions exist, the local government must survey the proposed redevelopment area and prepare a Finding of Necessity. If the Finding of Necessity determines that the required conditions exist, the local government may create a Community Redevelopment Area to provide the tools needed to foster and support redevelopment of the targeted area. There are currently over 200 Community Redevelopment Areas in the State of Florida. The designation is used by Florida cities of all sizes, from Jacksonville and Tampa to Madison and Apalachicola. Many familiar locations, such as Church Street in Orlando, Ybor City in Tampa and the beachfront in Ft. Lauderdale are successful examples of Community Redevelopment Areas. What is a Community Redevelopment Agency? 1

The activities and programs offered within a Community Redevelopment Area are administered by the Community Redevelopment Agency. A five- to seven-member CRA Board created by the local government (city or county) directs the agency. The Board can be comprised of local government officials and or other individuals appointed by the local government. Although one local government may establish multiple CRA districts, there generally may be only one CRA Board. Each district must maintain separate trust funds, and expend those funds only in that district. What is a Community Redevelopment Plan? The Community Redevelopment Agency is responsible for developing and implementing the Community Redevelopment Plan that addresses the unique needs of the targeted area. The plan includes the overall goals for redevelopment in the area, as well as identifying the types of projects planned for the area. Examples of traditional projects include: streetscapes and roadway improvements, building renovations, new building construction, flood control initiatives, water and sewer improvements, parking lots and garages, neighborhood parks, sidewalks and street tree plantings. The plan can also include redevelopment incentives such as grants and loans for such things as façade improvements, sprinkler system upgrades, signs, and structural improvements. The redevelopment plan is a living document that can be updated to meet the changing needs within the Community Redevelopment Area; however, the boundaries of the area cannot be changed without starting the process from the beginning. What is Tax Increment Financing? Tax increment financing is a unique tool available to cities and counties for redevelopment activities. It is used to leverage public funds to promote private sector activity in the targeted area. The dollar value of all real property in the Community Redevelopment Area is determined as of a fixed date, also known as the frozen value. Taxing authorities, which contribute to the tax increment, continue to receive property tax revenues based on the frozen value. These frozen value revenues are available for general government purposes. However, any tax revenues from increases in real property value, referred to as increment, are deposited into the Community Redevelopment Agency Trust Fund and dedicated to the redevelopment area. It is important to note that property tax revenue collected by the School Board and any special district are not affected under the tax increment financing process. Further, unlike in some states, Florida taxing entities write a check to the CRA trust fund, after monies are received from 2

the tax collector. In California, the increment is sent to the CRAs directly out of collected county tax revenues, before they are distributed to each taxing entity. The tax increment revenues can be used immediately, saved for a particular project, or can be bonded to maximize the funds available. Any funds received from a tax increment financing area must be used for specific redevelopment purposes within the targeted area, and not for general government purposes. How does the CRA Process Work? A public meeting begins the designation process. Several steps will have to be accomplished before the Community Redevelopment Area becomes are reality. These steps are briefly outlined below. I. Adopt the Finding of Necessity. This will formally identify the blight conditions within the targeted area and establish the area boundary. II. Develop and adopt the Community Redevelopment Plan. The plan addresses the unique needs of the targeted area and includes the overall goals for redevelopment in the area, as well as identifying specific projects. III. Create a Redevelopment Trust Fund. Establishment of the Trust Fund enables the Community Redevelopment Agency to direct the increase in real property tax revenues back into the targeted area. The Florida Legislature addressed CRAs in 2002 from an intergovernmental point of view, to strengthen the ability of cities and counties to manage CRA creation, notices and term issues. Disputes between cities and counties involving CRAs can be resolved locally by interlocal agreements, and should be, since they usually involve growth management issues other than just funding. Summary CRAs are a specifically focused financing tool for redevelopment. CRA Boards do not establish policy for the city or county they develop and administer a plan to implement that policy. The CRA acts officially as a body distinct and separate from the governing body, even when it is the same group of people. The CRA has certain powers that the city or county by itself may not do, 3

such as establish tax increment financing, and leverage local public funds with private dollars to make redevelopment happen. The definition and timeframe of a CRA is as follows: 163.387(1)(a)2., F.S. states: each such taxing authority shall make the annual appropriate for a period not to exceed 30 years after the date the governing body amends the plan but no later than 60 years after the fiscal year in which the plan was initially approved or adopted. However, for any agency created on or after July 1, 2002, each taxing authority shall make the annual appropriation for a period not to exceed 40 years after the fiscal year in which the initial community redevelopment plan is approved or adopted.0-year term. After that time, all revenues (presumably much increased from the start of the CRA) are retained by each taxing entity that contributed to the CRA trust fund. Florida Redevelopment Association Legislative Position The FRA supports the ability of local governments to create and effectively use community redevelopment agencies to redevelop and revitalize their urban areas. This includes the use of tax increment financing. We further support local control and disposition of any disputes between local governments over the use of such agencies and financing. The Florida Redevelopment Association is available for technical assistance, legislative advocacy and redevelopment educational resources. For copies of current or past bills, statutes or further legislative information, you may visit www.leg.state.fl.us or call the FRA. at (800) 616-1513 ext. 115. About the FRA The Florida Redevelopment Association (FRA) is dedicated to the revitalization and preservation of Florida s communities. Operated under a contract with the Florida League of Cities in Tallahassee, it s purpose is to promote the improvement of downtowns and other urban areas through redevelopment and development activities under the Florida Statutes; encourage Florida s communities to create a healthy mix of affordable workforce and market rate housing; and provide a forum for networking, training and technical assistance; be an advocate for its membership; and monitor legal and legislative issues. The FRA currently has more than 300 public and business agency members. 4