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HomeMy WebLinkAbout1996-12-11 EURA MINUTESENGLEWOOD URBAN RENEW AL AUTHORITY December 11, 1996 I. CALL TO ORDER. The meeting of the Englewood Urban Renewal Authority was called to order at 5:30 P.M. in Conference Room A of the Englewood City Hall, Vice-Chair Darrell Smith presiding. Members present : Graebner, Havens, Vormittag, Smith Gryglewicz, Executive Director/Executive Secretary Members absent: None Also present: Community Coordinator Stitt [SECRETARY'S NOTE: The Urban Renewal Authority has three vacancies.] II. APPROVAL OF MINUTES. July 11, 1996 Vice-Chair Smith called for consideration of the Minutes of July 11, 1996. Vormittag moved: Havens seconded: The Minutes of July 11, 1996 be accepted as written. AYES : NAYS: ABSTAIN: ABSENT : Graebner, Havens, Vormittag, Smith None None None The motion carried. III. TOLLING AGREEMENT. EURA/Trustee Agreement Mr. Smith asked Mr. Gryglewicz the result of the telephone poll conducted on November 27, 1996. Mr. Gryglewicz stated that he had spoken with all members of the EURA, and that all members had voted to approve signing the tolling agreement. Mr. Gryglewicz asked that the telephone poll be ratified by a formal vote at this meeting. Mr. Gryglewicz briefly discussed the purpose of the tolling agreement, and noted that the City of Englewood had signed a sepa- rate tolling agreement. \\ENG_CH\SYS\DEP1\NBD\GROUP\BOARDS\URA\MrN96\URAM1296.DOC 1 Vormittag moved: Smith seconded: The telephone poll conducted on November 27, 1996 regarding signing the Tolling Agreement between the Trustee and the EURA is hereby rati- fied. AYES : NAYS: ABSTAIN: ABSENT: Graebner, Havens, Vormittag, Smith None None None The motion carried. IV. REVENUE REPORT. A revised revenue report was distributed. It was noted that property tax revenues for 1995 amounted to $539,301.11; property tax revenues to date in 1996 are $520,645.86, with reve- nues for the month of December yet to be posted. Sales tax revenues for 1995 amounted to $1,936,867.17; 1996 sales tax revenues are $1,963,268.14 . Graebner moved: Vormittag seconded: The revenue report be accepted as presented. AYES: NAYS : ABSTAIN : ABSENT: Graebner, Havens, Vormittag, Smith None None None The motion carried. V. NEW BUSINESS. Mr. Gryglewicz discussed recent contact with the Trustee, and reported that consideration is being given to a resolution to the default problem via a change in TIF District language in the State regulations to allow URAs to take Chapter 9 Bankruptcy. If this endeavor is unsuccess- ful, other options will be considered. At the present time, Chapter 9 Bankruptcy seems to be the least costly for both the Authority and the bondholders. Discussion ensued. Mr. Grygle- wicz reported that the City Council is not disposed to extend the Tax Increment Financing pe- riod for repayment of the bonds. Mr. Gryglewicz stated that other avenues of remedy which may be explored if the Chapter 9 pursuit is fruitless may be one of the proposals discussed at the July 11th meeting, or waiting until the expiration of the TIF in 2005, at which point the Authority will, in all likelihood, be sued by bondholders. The Attorney for the Trustee stated they will take the lead in pursuing changes in State Statutes to allow urban renewal authorities protection under Chapter 9 . \\ENG_ CH\SYS\DEPT\NBD\GROUP\BOARDS\URA\MIN96\URAM1296.DOC 2 • r ·' Mr. Graebner asked how bondholders would benefit from the Authority taking Chapter 9. Mr. Gryglewicz stated that if the Authority were to be sued, funds due and payable to the bond- holders would be used to fight the suit. Mr . Gryglewicz emphasized that there are no guaran- tees on anything at this point in time -no guarantee Chapter 9 will work, no guarantee that any of the proposals considered on July 11th would work. Mr. Gryglewicz noted that the Authority is presently following the route advocated by George K. Baum, that being to pay the bond- holders all revenues that come in. Mr. Gryglewicz suggested that probably neither of the other two proposals presented on July 11th would be acceptable to City Council. Mr . Smith commented that a proposed change in language to allow bankruptcy may not get to the legislature for action this year. Mr . Gryglewicz agreed, and noted the possibility of an- other "tolling agreement" being presented next year. Mr. Gryglewicz emphasized that the in- tent is to find a solution everyone -the EURA, the bondholders, Trustee, and City, can live with. Mr . Smith noted that the debt increases approximately $1.3 million per year; if Chapter 9 doesn 't work, more debt has been added and we still will not have a solution. Mr. Gryglewicz agreed, noting that in 2005 the district expires. The City would like to use the Authority on other projects, but nothing can be done while the Authority is in default on its current debt. Discussion ensued. Mr . Graebner questioned whether the City is doing the right thing in trying to assist the Authority find a solution to the default. He suggested that the more involved the City be- comes, the more responsible the City may be in the eyes of bondholders. Mr. Gryglewicz re- iterated that the City signed a separate Tolling Agreement. He further emphasized that when one reads the documents (Offering Statement, Indenture, etc.) it is very clearly set forth that debts of the Englewood Urban Renewal Authority are NOT debts of the City of Englewood. Mr. Smith asked what the cost would be to Englewood taxpayers if they ultimately have to as- sume responsibility for repayment of the debt. Mr. Gryglewicz pointed out that under the TABOR restrictions, the City cannot assume debt without voter approval, and it is very un- likely that the Englewood residents would vote to repay the bondholders. Mr. Smith asked who will ultimately be responsible if the URA cannot take bankruptcy, and should lose a law- suit if sued. Mr . Gryglewicz stated that at the expiration of the TIF District, the Authority will exist but there will be no funds and the bondholders will have a "paper". Mr . Gryglewicz re- viewed the history of the Authority activities, noting the impacts of "bad timing'', vacancy rates, economic depression -all combined impacts led to the ultimate default. Further discus- sion ensued. Mr. Gryglewicz stated that some of the bondholders have been "active", and that there is lan- guage currently in place which says that a TIF district "may" be extended; efforts have been made to change the wording to state that TIF districts "shall" be extended. Mr. Havens asked what impact the default of the EURA has on efforts to redevelop the Mall. Mr. Gryglewicz stated that the City Manager would like the EURA to be active, but the default \\ENG_ CH\SYS\DEPT\NBD\GROUP \BOARDS \U RA \MIN96 \URAM I 296.DOC 3 is a problem. Mr. Graebner asked if the Authority is legally prevented from doing anything else while we are in default. Mr. Gryglewicz stated that common sense would dictate that nothing further could be accomplished by the Authority while in default. Mr. Vormittag excused himself from the meeting at 6:00 P.M. Mr. Graebner asked what the advantages were to Swedish Medical Center to go to the "not- for-profit" status, and why they chose to go to that status. Mr. Stitt and Mr. Gryglewicz both suggested it was a matter of "survival". Mr. Gryglewicz pointed out that by becoming a member of the large Columbia Health Services group, there is an opportunity to share services and equipment; there have been some personnel lay-offs in all of the hospitals that have be- come part of the conglomerate. It is to the benefit of the City that Swedish is now not-for- profit, and pays property taxes on their real estate holdings. Mr. Graebner asked about progress on redevelopment of the Mall. Mr. Gryglewicz stated that there is a meeting this evening at 7:00 P.M. at Bishop Elementary School; the developer , Miller Development, will discuss redevelopment plans. Mr. Graebner asked if ownership of the Mall has been resolved. Mr. Stitt suggested there will be no transfer of Mall ownership until a plan has been presented by the developer. Mr. Stitt clarified the process the developer must follow to rezone the site from B-1, Business , to PUD, Planned Unit Development. Staff anticipates submittal of a District Plan within the next couple of weeks, and a Site Plan sub- mittal later in the Spring. Mr. Havens asked if community meetings held earlier this year were well attended. Mr . Stitt stated that there were approximately 200 people attending the four meetings. Several people attended all four meetings. V. COMMISSIONER'S CHOICE. Nothing was brought up for discussion. VI. DIRECTOR'S CHOICE. Mr. Gryglewicz stated he had nothing further for discussion. VII. ADJOURN. The meeting was declared adjourned at 6 :05 P.M. _...Gertrude G. Welty, Recording \\ENG_ CH\SYS\DEPT\NBD\GROUP\BOARDS\URA \MIN96\U RAM 1296.DOC 4 ' .