Background on Resolution 16-50

I received a question from a citizen yesterday asking why was One University Place divided into two parcels, and two condominium regimes. The questioner wondered if it had to due with who would control a home owner's association, commercial owners or residential owners. Below is my response. Of course after sending it, I remembered the most important reason, for this occurring, which is this:

In December, 2015 the development team was informed that if the property was to be assessed on Jan. 1, 2016, then a condominium regime had to be filed with the State of Iowa by Dec. 31, 2015. The simplest way to file that was to make the south building, already under construction, a separate entity. Without a filing by 12/31 there would be no assessment of the property as commercial or residential and to be taxable until Jan. 1, 2017, meaning any taxes generated would come an entire year later. Remember than an assessment on Jan 1, 2016 will result in an initial property tax payment in Sept. 2017. Since the property had previously been assessed at $0 valuation due to it's use as a church, there would have been no taxes paid.

The issue of dividing the property into two plats really has nothing to do with commercial owners vs. residential in a condo association. Council first heard about this at the Dec. '15 council meeting. At the Jan. 2016 Council meeting there is a considerable explanation of why this was done. In the Jan 16 Legal Report the city attorney explains what the issues are at length. Look at his report, item 6, are on pages 6-8 of the linked document.

In the Feb 16 Legal Report city attorney also outlines details of what should happen to ensure that all PUD and TIF document details are carried out by two condominium regimes instead of one. Item 2, pages 8-13 outline these opinions.

The March 16 legal report states that the city attorney and developer's attorney had begun working through those details. The April 16 legal report says the process between the attorneys is still underway but not complete. The May 16 legal report says the process is close to completion and a chart showing all provisions of the PUD and TIF agreement and how they are addressed in North and South condo declarations is being created.

The June 16 Legal Report states that due to the fact that the financing proposals (GO Bond and special assessment) being considered will also include amending the PUD and TIF documents, council should wait until those actions are complete so as to consider all amendments to the PUD and TIF at the same time. Item 6 on page 65 outlines this.

That brings us to the September meeting when the GO bond work was complete, so council was to consider all the PUD and TIF amendments. What Resolution 16-50 does is finish that process and allow us to go forward with a special assessment of OUP to repay the Public Works project, which is the larger portion of the general obligation bond that was let on 8/29. It also allows us to take advantage of better pricing on the community center due to that special assessment. I've written in more detail about that on my blog: What is the Impact?

The Sept. 16 Legal report gives a summary of the process and more details. Item 2 pages 188-191 refer to this. The chart mentioned in the May legal report can be found on pages 61-64.

My Vote on One University Place

I voted in favor of the PUD and the Developer's Agreement at our June City Council meeting tonight. Neither decision was taken lightly nor without considering the many details of both documents. I also considered how those documents work in light of the request for TIF that the developer has made.

I have spoken at length lately about the merits of commercial development, how a rebate TIF is a best way to make sure this project succeeds, and why this project is good for our town. Tonight it is time for me to go back and reflect on what started me on this path 6 years ago.

When I first ran for council in November 2009 I spoke at length about our city budget and my concern over it. The fiscal year that had ended in June 2009 had a $39K annual deficit. I had spoken in favor of the proposed development as a citizen who saw walkable commercial as important to maintaining our town's quality of life. The more I studied the situation the more I realized that the economic impact was critical as well.

Even though the development has not progressed, we as a city received a reprieve in the form of the Local Option Sales Tax (LOST) that was collected in Johnson County from July 2009 through June 2013. We received roughly the equivalent of a 10% increase for those four years. We managed to bank quite a bit of those proceeds, even though our annual carryover was always smaller than the amount of LOST received.  In conversations with Finance chair Jim Lane and City accountant Steve Kuhl 100% of the City's current carryover is attributable to LOST.

It is time to move this project forward. We need this to continue as a vibrant community and we need this be economically viable in the future.

We also scheduled a Public Hearing for July 14th to discuss TIF district. I will have much more to say about how this TIF is structured and how it works in the coming month.

One University Place PUD My Thoughts

In the past week City Councilors received the National Development Council's report analyzing whether a TIF proposal would be warranted for the One University Place project. We also received the latest Developer's Agreement draft document.  Both of these will be helpful as Council holds it's Public Hearing and Special Meeting on Wednesday May 27. This meeting will be at the University Club at 7:00 PM. All citizens are invited to attend and comment.

Here is a link to the Agenda and Attachments for the hearing and the meeting. Also in this document are all the reports submitted to Council covering various aspects of the plan. This packet runs 138 pages, so here is a chronological listing of what's in it:

1. Agenda
2. Attorney report
3. PUD Submission 4/17/15
4. PUD Submission 5/21/15
5. MPOjc report
6. MPOjc traffic report
7. NDC gapfunding report
8. UH Building Inspector report
9. UH City Engineer report
10. Coralville Fire Department report
11. Iowa City Water Division report
12. UH Police Department report
13. University of Iowa report
14. Development team responses to city reports
15. Resolution 15-30
16. Development Agreement revised 5/21
17. Resolution 15-31
18. Resolution 15-32

While I think reading the entire packet is informative, I would especially recommend reading the two documents that I made into links above.

Here are my thoughts: I'm comfortable with the PUD plans as amended in the submission of 5/21/15. I will support Resolution 15-30 with the considerations listed (some of which have been addressed by the developer's response.)

I'm also comfortable with the Developer's Agreement as presented. I will support Resolution 15-31.

I'm also willing to support a rebate TIF as outlined in the NDC gap financing report. What that amounts to is a 10% support level, based on the final value of the project. 

Gap Financing Report

It is fair to say the most anticipated report for next week's PUD public hearing was the gap financing report from the National Development Council. Tom Jackson from NDC has worked with the City and the Development group for over a year. His report came to councilors today and can be found here:

Gap Financing Report

I've had a quick read through it and will need to look more closely again tomorrow. Jackson does recommend that the city allow a $4M rebate TIF to the developer. That represents roughly 10% of the projected tax value of the project.

The PUD Public Hearing will be Wednesday May 27th at 7:00 at the University Club.

All of the reports for this hearing as well as other project information can be found here:

http://university-heights.org/BuildZoneSanit/OUP/15/index.html

I hope to see a good turnout of city residents.

A Closer Look at TIF

Council held a work session last night on Tax Increment Financing (TIF) as we continue to consider the One University Place project. We had two speakers talk with us, and it was a very informative and illuminating meeting.

The first presenter was Dr. Peter Fisher, Research Director of the Iowa Policy Project. Peter is national expert on public finance and is a frequently cited commentator on what is viewed as the abuse of TIF projects.

I spent a good deal of time speaking with Dr. Fisher in 2010 when in my first term on city council and the idea of TIF was proposed for One University Place. I find him to be very approachable and gracious with his time and expertise. Last night he had a PowerPoint presentation that he shared with the council and public who attended the meeting.
The slideshow can be downloaded from the U-H Municipal website:  TIF Presentation

The portion I found most helpful were the last two slides he shared. The first slide was guidelines for Responsible TIF Use:

These guidelines generally correspond with what I've said I would support in a TIF: a project based, rebate TIF with a definite time/cost ending. The only area above that I haven't supported is the last one in that I have mentioned TIF as a means to pay for the Community Center which would be a tax exempt facility. I will now need to consider bonding for a center in light of Dr. Fisher's suggestions.

The last slide was Questions to Ask:

These are the questions we should apply to One University Place, some I can answer now, others not yet:

Question One: YES ( we are only considering a rebate TIF, for the project site only)
Question Two: YES (I view the commercial space as a public benefit. The developer has said they could build a residential only project without TIF. I believe the public benefit of commercial space justifies a TIF)
Question Three: Not Yet (I'll talk about this down below)
Question Four: To ensure public benefit (This can be explained in my answer to question 2 as well as my firm belief that this property, which currently generates zero taxes, should be on the city rolls. If this development does not take place there is a high probability that it could be purchased by the University of Iowa, which would effectively remove any possibility of it generating taxes)

The second speaker was Tom Jackson of the National Development Council. City Council has hired Tom evaluate the One University Place project and recommend whether or not a TIF would be necessary. Tom has also performed this duty for the City of Iowa City as they consider re-development projects. Tom's work will heavily influence how I judge the answer to question 3 above.

Tom said he will have a full written report delivered to the City prior to our May 27th Public Hearing on the One University Place Planned Unit Development (PUD). He did have some preliminary remarks last night. Here are what I considered major points of what he said last night:

• While Tom didn't say outright that the project deserves a TIF, he did talk in general terms about amounts and time limits, so I am assuming he has deemed the project as viable and worthy of TIF
• Financing model is predicting an 8% return on the project 
• Local bank financing would be approximately 5% which would be paid first
• Private equity firms are not interested in projects generating under 15% return
• A TIF time limit of 12 years is the rough projection
• The payment would be a flat amount per year, so that after the first several years of payment, any excess amount generated from site would flow through normal channels to all other entities: county, city, school district
• A gap amount of $4 million is the rough projection

As I said at the beginning of this post, I found last night to be extremely helpful and what I learned will certainly influence and clarify my judgement regarding this project.

September Council Meeting Summary

I'm doing a little clean up here, I neglected to post this to the blog earlier:

City Council held their monthly September meeting tonight below are some highlights. See more at September Agenda and attachments Police Chief Hired Kenneth Stanley, currently chief of the Village of Centuria, Wisconsin, has been selected by the University Heights City Council as Police Chief of University Heights, to replace the retiring Chief, Ron Fort.   Prior to his position in Wisconsin, Chief Stanley had a 30 year career with the California Highway Patrol. From 2003 to 2013 he served as a Sergeant and supervised in offices containing over 100 uniformed officers, as well as in an administrative capacity supervising a team of uniformed and non-uniformed personnel. Before that he worked in regional offices, public affairs, and the research and planning section of the patrol. ln the spring of 2013,he graduated from the School of Police Staff and Command at Northwestern University in Evanston, Illinois, where he was elected class president. He holds a Bachelor’s of Arts degree from San Francisco University in Public Administration and Public Policy. Stanley is expected to begin his term on November 1. 2014.. Development Proposal Presented Thomas Galuski of GG Land Group presented an initial concept for an apartment development at 901 Melrose Ave. extrememe eastern edge of town) this would be a residential complex with 158 units housing 500 residents. Council directed him to hold open community meetings to present information to all interested citizens. Go here to see the proposal Building Moratorium Proposed Council will hold a special meeting on September 24th to continue discussing the possibility of a 90 day building permit moratorium to allow the zoning commission to discuss amending ordinance 79. Go here to read more about this.

Follow University Heights on Twitter Consider contributing to the University Heights Community Fund I also write a blog covering U-H and other timely topics, with my opinions expressed UHForward.blogspot.com As always it is a pleasure to serve as your city councilor. -Mike

August Council Meeting Summary

I'm doing a little clean up here, I neglected to post this to the blog earlier:

City Council held their monthly August meeting tonight below are some highlights. See more at August Agenda and attachments National Development Council Presentation Tom Jackson who is working for City of U-Heights shared information about the National Developoment Council, and his role as an outside third party evaluator of the One University Place project. He shared that has has worked with the City team as well as the developer's to assess the viabilty of the project and whether or not City financial participation is necessary. See his Powerpoint presentation here. New PUD Submitted That presentation was followed by a summary of a new Planned Unit Development (PUD) proposal submitted last  week. Major changes include a rear building only four stories tall with 44 residential units, and an increase of about 15 surface parking spots. See the new proposal here. Local Option Sales Tax Council approved LOST language for the November ballot . We will contribute 10% of revenue to retiring the courthouse annex bond, if passed. The other 90% would be earmarked for acquiring community center space, street repairs or any othter lawful purpose. Other Good Things Happening: Fourth Room Theatre presents William Shakespeare’s romantic comedy, Much Ado About Nothing, at 901 Melrose Avenue, a beautiful, secluded outdoor space near Kinnick Stadium, on August 15-17 (Fri-Sun) & 21-23 (Thu-Sat) at 7:00 p.m. Tickets are FREE. Fourth Room Theatre requests you make a reservation by calling or texting 319-214-3375 or emailing info@fourthroomtheatre.com with your name, preferred date, the number in your group, and number of vehicles in your party. August 23rd meet at Tower Court Park (adjacent to U-Hieghts) to discuss possible improvements. City of Iowa City has money to renovate but won't do so until community members come and take the lead. That day we will gather ideas and form committees for specific parts of the update plan, such as landscaping, play structures, etc. Please attend if you are interested in providing ideas or serving on a committee, or feel free to submit ideas and feedback to Silvia or I in advance of the meeting. Our main goal for this update is to expand the appeal of this park to a wider range of ages of children and adults. Contact Virginia Miller or Silvia Quezada.

Follow University Heights on Twitter Consider contributing to the University Heights Community Fund I also write a blog covering U-H and other timely topics, with my opinions expressed UHForward.blogspot.com As always it is a pleasure to serve as your city councilor. -Mike

A TWO-FER Council Update

I tend to slow down in the summer just a little, so I didn't get this week's July Council meeting update posted, before I needed to make another post revising what I'd already said!

Here is the latest Info sent on Saturday July 12th:

I know I've already sent an update this week but two items have happened since then that I thought it was important to communicate to as many people as possible.

Vehicle Safety

Police Chief Ron Fort requests that everyone in town makes sure their vehicles are locked. U-H had 5 unlocked vehicles entered this week. Some money and minor items taken. Contact UHPD if you see anything suspicious.

Updates Regarding Election and LOST

The Iowa Attorney General reverses opinion regarding special elections. In a change from what I reported in my council meeting update, U-Heights will NOT be required to hold a special election for the city council seat that Carla Aldrich was appointed to on Tuesday. If citizens' wish to petition for a special election challenging city council's appointment this week, they must file a petition for election by July 22, 2014.

Johnson County Supervisors ask for 10% of Local Option Sales Tax (LOST) money Council will have to decide what the language will be included on our November ballot.

For More information about both of these issues:REVISED City Attorney Report 7/12/14

Mark Your Calendars!

Several major events are quickly approaching.

• City Council Special Meeting is THURSDAY July 24th 6 PM City Office 1004 Melrose. Council will meet to consider bids for the Koser/Oakcrest corner curb replacement. This project will bring the curb ramps into compliance with the ADA (Americans with Disabilities Act)
• Farmer's Market is TUESDAY Aug. 5th 5-7 PM St. Andrew Parking Lot
• August regular City Council Meeting is TUESDAY Aug. 12th 7 PM Site TBD

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 Here is what I sent out on Wednesday, July 9th:

City Council held their July meeting last night here are some highlights:

Zoning Changes Discussed

Council held a public hearing to begin discussing ordinance 187 which would amend the zoning ordinance to account for One University Place’s residential building’s elevator tops, trellises, and storage space. Council will consider more language in August to accommodate those items without raising the building’s main roof height above the current code’s 76 feet. Council will also continue discussing whether a community center space should be not be counted against the amount of retail space allowed in the front commercial building.

Councilor Appointed

Carla Aldrich, 11 Leamer Court, was appointed to serve on council, replacing Zadok Nampala. Due to a change by the Iowa legislature this last session, there will be a required special election for this seat on Nov. 4, 2014. Carla has said she plans to run for the this seat. The winner of this election will serve until the end of the current term, December 31, 2015.

Local Option Sales Tax (LOST)

Also on the Nov. 4th ballot will be a Local Option Sales Tax (LOST) vote. University Heights will need to come up with language for the citizens to consider. Discussion centered on using LOST funds to pay for a community center. Council will consider the ballot language in August.

June Council Meeting Summary

I always send a summary of City Council meetings to anyone who would like to receive it. I have found it easiest to do this via MailChimp. If you would like to receive these, just send me an email: mikehaverkamp1960@gmail.com and I will add you to the list.

Here is the June summary:

City Council held their June meeting last night here are some highlights: Citizens encouraged to apply for open seats Open Seat on City Council  Due to the resignation of councilor Zadok Nampala, any eligible citizen may apply for appointment to the remaining term on city council. Interested residents should contact the City Clerk: email city-clerk@university-heights.org, or phone 319-337-6900.  Applications due June 30, 2014. Letter to U-Heights Citizens from Zadok Nampala Open Seat on Board of Adjustment Due to the resignation of member Margaret Donnelly, any eligible citizen may apply for appointment to the remaining term on Board of Adjustment. Interested residents should contact Mayor Louise From: email louise@university-heights.org, or phone 319-354-1433.  Applications due July 3, 2014. Council to hold work session 6/30 City Council will hold a work session on Monday June 30, at 7:00 PM Location TBD. The topic will be discussion of the One University Place PUD. Check the City's website later this week for the location. Six people spoke during last night's public hearing on the One University Place Planned Unit Development (PUD). The National Development Council report analyzing financial aspects of the project is not yet completed. Once it is it will be posted to the City's website and discussed at a future council meeting. Police Chief Ron Fort announces retirement Chief Ron Fort, having now served U-Heights for 10 years, intends to retire in September. A search to find his replacement will be undertaken immediately. I am grateful for Chief Fort's excellent leadership and know he will be missed. Please wish him well when you see him around town in the next several months!

Follow University Heights on Twitter Consider contributing to the University Heights Community Fund I also write a blog covering U-H and other timely topics, with my opinions expressed UHForward.blogspot.com As always it is a pleasure to serve as your city councilor. -Mike

U-Heights in the News

Josh O'Leary from the Press Citizen was at the Public Hearing and June City Council meeting last night. It was the first time in quite a while that a member of the media covered a meeting live. Here is the link to his story:

University Heights warming up to One University Place?

 Josh has a long history covering our city, something unusual here in the Iowa City area, where reporters typically don't stay long. His experience covering U-Heights is apparent in what he wrote. Here is the lead from the story:

A controversial mixed-use development along Melrose Avenue has been the center of heated City Council meetings, online debates and hotly contested elections in University Heights for much of the past five years.

While One University Place still has its critics, and still has yet to be given the green light by the City Council all these years later, the dissension appears to have died down, at least based on Tuesday's low-key council meeting.

The city is weighing the latest proposal from developer Jeff Maxwell, who put forth a new commercial-and-condominium plan this spring with a more sympathetic City Council on his side.

While meetings in past years with One University Place on the agenda drew big crowds with lines dozens deep at the podium, just 10 or so residents turned out Tuesday, and only four spoke during a relatively brief public hearing about the development.

Where meetings had once pitted council members on opposite sides of the issue, the only debate at Tuesday's meeting was when to schedule their next work session. Last year's election had swept out the three council members who had been generally opposed to Maxwell's plans.

The developer's new plans call for a 19,702-square-foot, single-story commercial building along Melrose Avenue, with an optional space for a 2,163-square foot community space for a city hall. Behind it, set back to the rear of the property, would rise a seven-story residential building that would house 78 condominiums and underground parking. 

 As Josh says, council is a long way from approving anything, and there are major items yet to be addressed (financing being chief among them) I appreciate the deliberate pace my fellow councilors are employing, and would encourage all interested citizens to contact us with your thoughts and comments as we work through this proposal.