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HomeMy WebLinkAbout1998-07-15 EURA MINUTES• ENGLEWOOD URBAN RENEWAL AUTHORITY July 15, 1998 I. CALL TO ORDER The Englewood Urban Renewal meeting was called to order at 5:35 P.M. in the Community Room of Englewood City Hall, Chairman Havens presiding . Members present : Members absent: Also present: Belt, Havens, Roth, Weddle Gryglewicz, Executive Director/Executive Secretary Garrett, Knuppertz, Graebner Lindsey, Liaison member Harold Stitt, Planning Coordinator, Neighborhood & Business Develop- ment Mark Graham, Neighborhood Coordinator, Neighborhood & Business Development II. APPROVAL OF MINUTES February 4, 1998 • Mr. Havens stated that the Minutes of February 4, 1998 were to be considered for approval. Roth moved: Weddle seconded: The Minutes of February 4 , 1998 be approved as written. AYES: NAYS: ABSTAIN: ABSENT: Roth, Weddle, Havens None Belt Garrett, Graebner, Knuppertz The motion carried. III. LAND TRANSACTION Eura/3705 South Clarkson Street Mr. Gryglewicz stated that he had spoken with EURA legal counsel Paul Benedetti earlier on this date; Mr. Benedetti stated that he has reviewed the information regarding the land transac- tion and finds it to be in order. Mr. Benedetti also advised Mr. Gryglewicz that his attendance at this meeting was not required, and the Authority could approve the Resolution on the Land Transaction. Mr. Havens asked if everyone had read the background report prepared by Mr. Stitt. He asked • the pleasure of the Authority. • • Roth moved: Weddle seconded: The Englewood Urban Renewal Authority approve Resolution #1, Series of 1998, A RESOLUTION OF THE ENGLEWOOD URBAN RE- NEWAL AUTHORITY APPROVING THE CONVEYANCE OF LAND FROM THE AUTHORITY TO AL R. AND WANDA CASTELO IN FURTHERANCE OF THE DOWNTOWN REDEVELOPMENT PLAN. AYES: NAYS: ABSTAIN: ABSENT: Roth, Weddle, Belt, Havens None None Knuppertz, Garrett, Graebner The motion carried. Mr. Graebner and Mr. Lindsey entered the meeting. IV. REVENUE REPORT Mr. Stitt briefly discussed the Revenue Report, noting that sales tax revenues are up in compari- son to this same period in 1997, and property tax revenues are down. Property tax revenues year-to-date are $311,208.99; sales tax revenues year-to-date are $855,984.92. The revenue report was accepted as presented . V. COMMISSIONER'S CHOICE Mr. Havens stated that he has just taken a new job, and after an orientation period he will be traveling about 75% of his time, probably being at home only on weekends. He stated that this job will impact time available to serve on boards and commissions, and he may have to resign from the EURA. He noted that this is advisory information only at this time . Ms. Belt asked if everyone could introduce themselves, and bring her up-to-date on activities of the Authority. She noted that she had applied for four boards, none of which was the EURA, and was not familiar with the activities of the Authority. Mr. Lindsey stated that he also is a newly appointed member, and the introductions and back- ground information would be helpful to him. Members all introduced themselves. Mr. Stitt was asked to give an historical overview of the Authority. Mr. Stitt stated that the Authority was formed in the early 1970's, but did not become active until approximately 10 years later. Studies had shown that Englewood was losing market share, and something had to be done to revitalize the business activity. In fact, something had to be done to even "maintain" market share, let alone expand it. New shopping malls were being built, and shoppers were • gravitating to those outlying areas. Also, a large portion of downtown Englewood was in the 2 • • 100-year flood plain . This inhibited new construction and rehab activity in the downtown area because of the necessity to comply with the Flood Plain standards . Compliance could be very costly . The City of Englewood had an interest in removing the flood plain designation for the core area of the City , but could not finance this project and get it accomplished in a short period of time . The Authority was activated , tax increment districts were formed , and the Authority sold some $30 ,000 ,000 worth of TIF bonds used to finance public improvements such as street realignment , acquire land which was then sold to developers , and the Little Dry Creek flood improvements were accomplished . Mr. Stitt noted that several developers were involved in the EURA activi- ties , developing Trolley Square, Englewood Marketplace , Pharmor Plaza, and Englewood Ex- change. Mr. Stitt explained the basis for Tax Increment Financing; when the TIF districts were formed, sales and property tax revenues realized by the City were "frozen " at 1982 levels. Any revenues over and above these frozen levels are used to repay the outstanding bonded indebtedness . Tax increment levels did not reach the projected levels , and revenues were insufficient to meet the debt payments ; the Authority went into default on repayment of the bonds in June , 1991. As a result of this default status , the EURA cannot issue additional bonds , and is not a participant in redevelopment activities on the Cinderella City Mall. Mr. Gryglewicz stated that passage of TABOR also impacts the Authority. Even ifthe default were to be cured , any new bond issue could not be done without an approving vote of all affected by the bond issue. A TIF can impact revenues going to the City , to the County , to special dis- tricts , and to the School District. Mr. Gryglewicz stated that when the Authority defaulted on the bonds , the Trustee accelerated the debt. The unpaid principal interest keeps compounding , and even though the Authority pays out all revenues that come in, we make no progress in reducing the debt. Mr. Gryglewicz stated that in 1996, the Trustee approached the City and the Authority with a "Tolling Agreement" which would extend the rights of the bondholders; the City and the Authority signed that Agree- ment. In 1997 , the Trustee asked that another Tolling Agreement be signed ; neither the City nor the Authority signed the 1997 Agreement. The Trustee then filed suit against the City in an at- tempt to force extension of the TIF District for another 25 years. The Trustee and the City's le- gal representatives are now going through the "discovery process"; Mr. Benedetti is representing the Authority, but the Authority does not have funds to pay him. Mr. Gryglewicz stated that Mr. Benedetti asked the Trustee to pay his fees from the revenues paid into the Trustee from the TIF District, and the Trustee denied that request. Mr. Gryglewicz stated that , in his opinion, Mr. Benedetti wants to be more aggressive in resolu- tion of the lawsuit. Mr. Benedetti does not feel it is fair to bondholders ; that the funds the Trus- tee is using to pay for the lawsuit could and should be returned to the bondholders in payment of the outstanding debt. Mr. Gryglewicz stated that some calculations have been done , and it ap- pears that investors will be repaid their principal investment and a slight percentage -maybe three to four percent -interest. They will not be paid the nine to 11 .5% interest at which the • bonds were marketed. Brief discussion ensued . Mr. Gryglewicz stated that the bonds were mar- 3 • • • ket at a high premium, unrated, and uninsured. It was a risky investment, but buyers chose to take the gamble. Mr. Gryglewicz pointed out that there were unforeseen circumstances which affected the bond issuance -the recession which hit the Colorado/Denver area during the mid to late '80's, the Silverado Bank fiasco, and the revenue shortfall. Mr. Gryglewicz noted that even though the Authority is in default, approximately $2,500,000 is paid each year toward the out- standing debt. VI. DIRECTOR'S CHOICE Mr. Gryglewicz presented a memorandum from Chief Accountant Dazzio regarding audit fees for 1998 and 1999. Negotiations with the auditing firm have resulted in a reduction of fees to be charged for 1998 and 1999 to $2,500 each year. Mr. Gryglewicz stated that a motion is needed to accept and approve this fee charge for the 1998 and 1999 audits. Discussion on funds used to pay for this expenditure ensued. Mr. Gryglewicz discussed the fi- nancial status of the Authority, and possible pursuit of additional funding to pay these charges and outstanding legal counsel bills. Mr. Graebner asked if the audit fees might be paid by the Trustee. Mr. Gryglewicz stated in light of the denial of legal counsel payment, he doubted that audit fees would be approved by the Trustee. Weddle moved: Roth seconded: The Englewood Urban Renewal Authority approve the contractual agree- ment with Van Schooneveld and Company to do the 1998 and 1999 audits; audit fees per each year not to exceed $2,500. AYES: NAYS: Roth, Weddle, Belt, Graebner, Havens None ABSTAIN: None ABSENT: Garrett, Knuppertz The motion carried. Mr. Havens asked if there was any further business to come before the Authority. No further issues were brought up for discussion . The meeting adjourned at 6: 15 p.m. Gertrude G. Welty, Recording Secretary h :\group\boards\ura\min98\euram 07-98.doc 4