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HomeMy WebLinkAbout08375 ORDINANCE NO. 8375 AN ORDINANCE RATIFYING AND APPROVING AN AMENDED AND RESTATED PHASE ONE PROJECT COOPERATION AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO AND RATIFYING THE EXECUTION OF THE AGREEMENT AND DEED DESCRIBED THEREIN BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate matter being deleted, underscoring indicates new matter being added) SECTION 1. The Amended and Restated Phase One Project Cooperation Agreement dated as of March 26, 2007 by and between the City of Pueblo and the Urban Renewal Authority of Pueblo, Colorado (the “Agreement”), a copy of which is attached hereto, having been approved as to form by the City Attorney, and having been heretofore approved by Resolution No. 10962 of the City Council, is hereby ratified and approved. SECTION 2. The execution and delivery of the Agreement and the deed conveying to the Urban Renewal Authority the land shown on Exhibit “A” to the Agreement as the “Approximate Area To Be Transferred To Urban Renewal Authority” by the President of the City Council in the name of the City of Pueblo and the affixing of the seal of the City thereto and attestation of same by the City Clerk is ratified and approved. SECTION 3. All actions heretofore taken by officers, officials and employees of the City in furtherance of Resolution 10962 and pursuant to the Agreement are hereby ratified and approved. SECTION 4. This Ordinance shall become effective nunc pro tunc March 26, 2007. INTRODUCED: July 25, 2011 BY: Leroy Garcia COUNCILPERSON PASSED AND APPROVED: August 8, 2011 Background Paper for Proposed ORDINANCE DATE: AGENDA ITEM # R-2 July 25, 2011 DEPARTMENT: Law Department Thomas J. Florczak, City Attorney TITLE AN ORDINANCE RATIFYING AND APPROVING AN AMENDED AND RESTATED PHASE ONE PROJECT COOPERATION AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO AND RATIFYING THE EXECUTION OF THE AGREEMENT AND DEED DESCRIBED THEREIN ISSUE Should City Council ratify the 2007 approval of the cooperation agreement with the Urban Renewal Authority of Pueblo, Colorado for the Amended Phase One Urban Renewal Project? RECOMMENDATION Ratify and approve the agreement. BACKGROUND The City and Urban Renewal Authority of Pueblo, Colorado (“Authority”) have entered into cooperation agreements relating to tax increment funds (both sales tax and general property tax) (TIF) generated in the Amended Phase One Urban Renewal Project for Downtown Pueblo (“Phase One”) as well as the use of a 3.3% portion of sales and use tax levied by the City throughout the City (“Vendor Fees”). The Vendor Fees have been pledged to pay debt service on the Authority’s Series 2011 A and 2011 B Revenue Bonds (“Bonds”) for refunding the outstanding bonds for the Convention Center and for funding the renovation of Memorial Hall as well as to pay the net operating expenses of the Convention Center and maintenance on Memorial Hall. To facilitate development and subdivision for Gateway Park in Phase III of HARP (“Gateway Park”), the Authority had conveyed land to the City (“Gateway Park Land”). That portion of the Gateway Park Land not included in the subdivision together with City’s other adjacent land has been or will be conveyed to the Authority for private redevelopment pursuant to the Agreement. The Agreement was previously approved by City Council on March 26, 2007 by Resolution 10962. The purpose of this Ordinance is a housekeeping measure to conform the approval to the requirements of Section 3-8 of the Pueblo Charter. FINANCIAL IMPACT See Background. AMENDED AND RESTATED PHASE ONE PROJECT COOPERATION AGREEMENT THIS AMENDED AND RESTATED COOPERATION AGREEMENT (the Cooperation Agreement), is made and entered into as of March 26, 2007, by and between the CITY OF PUEBLO, a Colorado municipal corporation (the City) and the URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, a body corporate and politic of the State of Colorado (the Authority). The City and the Authority are sometimes referred to herein collectively as the Parties and individually as a Party. RECITALS A. On March 22, 2004, pursuant to Ordinance No. 7113, as modified on August 23, 2004, by Ordinance No. 7186, the City Council of the City approved the urban renewal plan (the Urban Renewal Plan) for the Pueblo Expanded Urban Renewal Project (the Expanded UR Project), which Expanded UR Project is being carried out by the Authority in cooperation with the City and in furtherance of the objectives of the Colorado Urban Renewal Law and the Urban Renewal Plan. The Expanded UR Project is an amendment to and an expansion of the Amended Phase One Urban Renewal Project for Downtown Pueblo (the Phase One Project). The Phase One Project area is included in and a part of the Expanded UR Project. B. The Parties entered into a Cooperation Agreement dated August 25, 1986, as amended by Amendment No. 1 dated October 15, 1996, Amendment No. 2 dated January 24, 2005, Amendment No. 3 dated December 27, 2005, and Amendment No. 4 dated January 23, 2006 for the purpose of financing and providing certain public improvements for the Phase One Project and the Expanded UR Project. C. The Authority has issued its $7,310,000 Revenue Refunding Bonds, Series 2005 (the Bonds) and with respect thereto entered into an Indenture of Trust dated as of February 15, 2005 (the Indenture). The Bond proceeds were used to refinance the Anthority's Series 1994 Bonds related to the Phase One Project. D. Such refinancing made approximately $972,153 in funds categorized as TIF Revenue available to the Authority, which was paid to the City in satisfaction of the Authority's obligation to reimburse the City under Paragraph 1, subparagraphs (e) and (f) of Amendment No. 1 to the Cooperation Agreement (the City Funds). Pursuant to the authorization contained in Section 31-25- 112, C.R.S., the City has contributed the City Funds to the Authority to be used for redevelopment of the hotel site described in Section 2 of this Cooperation Agreement. E. To ratify and confirm the obligations of the Parties with respect to the Bonds and the Indenture, the parties desire to amend and restate the Cooperation Agreement as set forth herein. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the Parties agree as follows: 3/1/07 increment revenue and property tax increment revenue paid to the Authority from the Phase One Project Area shall be deposited by the Authority in a separated account (the Phase One TIF Revenue Account). Pursuant to the issuance of the Bonds and the Indenture, and this Cooperation Agreement, the Authority has deposited the City Funds in the Phase One TIF Revenue Account for uses in accordance with this Cooperation Agreement. From the funds in the Phase One TIF Revenue Account an amount totaling $1,100,000 (the Hotel Funds) is earmarked for and shall be used by the Authority for the redevelopment of the hotel site located at the former Tool City and Peterson Paint Building properties. The Authority has entered into a Redevelopment and Reimbursement Agreement ~vith Ashwin A. Amin and Avik A. Amin dated as of January 7, 2007 (the Redevelop- ment Agreement) for redevelopment of the hotel site. lfthe redevelopment of the hotel site does not take place pursuant to the Redevelopment Agreement, $972,153 of the Hotel Funds shall be released from this pledge and returned to the City or used as the City and Authority shall mutually agree. Section 3. The Approved Budget. The Phase One TIF Revenue Account shall be used by the Authority as set forth in this Cooperation Agreement and for uses authorized by law and included in the annual budget of the Authority approved by the City Council by resolution each year (the Approved Budget). No further approval of the City will be required unless the Authority desires to amend the Approved Budget or expend such funds in excess of the line items in the Approved Budget or for items not included in the Approved Budget; provided, however, the Authority may increase spending by (i) the greater of 10% or $5,000 in any line item in that portion of its budget devoted to expenditure of the Phase One TIF Revenue Account without further approval of the City Manager of the City if there is no increase in the'total expenditure of such revenues in the Approved Budget and (ii) the greater of 10% or $5,000 in any line item in that portion of its budget devoted to expenditure of Vendor Fees for the Convention Center without further approval of the City Manager of the City if there is no increase in the total expenditure of Vendor Fees in the Approved Budget, Except as provided herein, any expenditure in excess of the line items in the Approved Budget or for items not included in the Approved Budget shall be subject to the prior approval by resolution of the City Council. Section 4. Notwithstanding anything contained herein to the contrary, City's records indicate funds in the amount of $91,000.00 may be payable to the Authority The Parties stipulate and agree that (a) the $91,000.00 represents sales tax increment revenue and property tax increment revenue generated from the Phase One Project Area, and (b) that the $91,000.00 shall be kept and retained by City in partial satisfaction of the Authority's obligation to reimburse the City under Paragraph 1, subparagraphs (e) and (f) of Amendment No. 1 to the Cooperation Agreement. Section 5. Release. As part of the consideration for the Authority's obligations herein, the City hereby releases the Authority from any obligation to return to the City any excess revenues under Paragraph I, subparagraphs (e) and (f) of Amendment No. 1 to the Cooperation Agreement described in Recital B. Section 6. Property Conveyance. To facilitate financing of construction of Gateway Park in Phase III of the Historic Arkansas Riverwalk of Pueblo by the City, the Authority agrees to convey to the City by special warranty deed, the north one-half of Lot 9 and all of Lots 10 through 14, inclusive, Block 3, Central Pueblo, according to the recorded plat thereof, City of Pueblo, County -3- Section 1. Vendor Fees. As authorized by the electorate of the City on November 2, 1993, and Ordinance No. 5853, passed and adopted on second reading by the City Council of the City on January 10, 1994, the proceeds of the 3.3% portion of the sales and use tax levied by the City pursuant to Section 14-4-17 of the Code of Ordinances of the City (the Vendor Fees) have been pledged by the City lbr the following purposes (the Vendor Fee Uses): (a) paying the principal of, premium, if any, and interest on the Bonds and any revenue bonds issued to refund the Bonds, and (b) paying the operation and maintenance expenses of a civic center and hotel complex within the boundaries of the Authority. For the purposes hereof, the phrase "operation and maintenance expenses ora civic center and hotel complex within the boundaries of the Authority" means paying the Authority's annual operation and maintenance expenses of the Convention Center after deducting therefrom the annual gross operating revenues produced by the Convention Center. Unless the qualified electors of the City authorize the City Council to use the Vendor Fees for other, additional purposes (without impairing payment of the Bonds or otherwise violating the Indenture), this pledge shall be irrevocable so long as the Bonds (and any refunding bonds) are outstanding, but Excess Vendor Fees, as defined in subsection (a) immediately below, not required for such purposes shall be subject to the provisions of this Section 1. (a) The Authority has previously constructed a convention center containing approximately 47,000 square feet and related parking facilities (the Convention Center) in the Phase One Project area. In accordance with the indenture (the Indenture) governing the Bonds and Ordinance No. 5853, the Vendor Fees are being applied to the Vendor Fee Uses. In connection with the refinancing and issuance of the Bonds and pursuant to the Indenture, the Authority has received and is holding approximately $1,212,652 in Vendor Fees not required by the Indenture to be applied to Vendor Fee Uses. Such excess Vendor Fees and all Vendor Fees returned to the Authority and the City in future years by the trustee described in the Indenture (the Trustee) pursuant to the Indenture are referred to herein as the Excess Vendor Fees. (b) Unless the qualified electors of the City authorize the City Council to use the Vendor Fees for other purposes, all Excess Vendor Fees now held by and returned to the Authority and the City in future pursuant to the Indenture shall be deposited and retained by the Authority, in trust nevertheless, in an interest bearing account (Excess Vendor Fee Account) for the following purposes: extraordinary maintenance and replacement expenses of the Convention Center and retirement of the Bonds. Prior to December 31,2006 and prior to each December 31 thereafter, the City Council, after consultation with the Authority, shall by resolution determine the amount of funds on deposit in the Excess Vendor Fee Account that shall be reasonable and prudent to retain in the Excess Vendor Fee Account for extraordinary maintenance and replacement expenses of the Convention Center, and the excess thereof shall be held for or applied to retirement of the Bonds and, after retirement of the Bonds, returned to the City for any lawful use (c) Unless the qualified electors of the City authorize the City Council to use the Vendor Fees for other purposes, the Parties agree that all revenues derived or to be derived from Vendor Fees shall be applied exclusively to the Vendor Fee Uses. Section 2. The TIF Revenue Account. To the extent that such deposit does not conflict with any prior pledge of such revenues (as determined by the Authority's bond counsel), all sales tax -2- of Pueblo, State of Colorado (the HARP Phase III Property). The City will include the HARP Phase III Property in a new property subdivision as required by City' codes and ordinances. At the time of such subdivision, that portion of the HARP Phase III Property in excess of the amount required to construct the Gateway Park will be combined with other property owned by City so that a parcel of property generally shown on the attached Exhibit A will be conveyed to the Authority for the purpose of forming a parcel of real property to be disposed of for private redevelopment in accordance with applicable City codes and ordinances and the Urban Renewal Plan. 1N WITNESS WHEREOF, the City and Authority have caused this Cooperation Agreement to be executed as of the date first above written. THE URBAN RENEWAL AUTHORITY PUEBLO, COL.~DO ~ he Cor}fmissioners/BS;: ~ ,ff/Mir}I(an of t x,PJdg43LO, A MUNICIPAL CORPORATION By: OF President of-tl~ Ci{y Council -4- LEGEND EXISTING URBAN RENEWAL AUTHORITY PROPERTY APPROXIMATE AREA TO BE EXHIBIT "A" )M B.O,W.