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HomeMy WebLinkAbout1999-11-03 EURA MINUTES• • • ENGLEWOOD URBAN RENEW AL AUTHORITY November 3, 1999 I. CALL TO ORDER The regular meeting of the Englewood Urban Renewal Authority was called to order in the Community Room of the Englewood City Hall, Chairman Weddle presiding. Present: Bertoluzzi, Graebner, Roth, Weddle, Garrett (Mr. Garrett entered the meeting late) Absent: Lindsay Also present: Executive Director Frank Gryglewicz City Attorney Dan Brotzman EDDA Executive Director Harold Celva EDD A Board Member Connie Sanchez II. APPROVAL OF MINUTES March 3, 1999 Chairman Weddle stated that the Minutes of March 3, 1999 were to be considered for ap- proval . Roth moved: Weddle seconded: The Minutes of March 3, 1999 be accepted as written. AYES: NAYS: Graebner, Roth, Bertoluzzi, Weddle None ABSTAIN: None ABSENT: Garrett, Lindsay The motion carried . III. 1999 BUDGET AMENDMENT Resolution #1, Series of 1999 A resolution amending the 1999 Operating Budget for the EURA was considered . Mr . Ber- toluzzi asked if, by transferring funds . to the Authority, the City becomes liable in suits against the Authority. Mr. Gryglewicz referred to an operating agreement signed in 1983 between the Authority and the City of Englewood , and stated that transference of funds from the City to the Authority is acceptable under this agreement. 1 • • • Mr . Garrett entered the meeting . Roth moved: Weddle seconded: The EURA adopt Resolution #1, Series of 1999, amending the 1999 Op- erating Budget of the Authority . AYES: NAYS : Graebner, Roth, Bertoluzzi , Garrett , Weddle None ABSTAIN: None ABSENT: Lindsay The motion carried. IV. BUDGET 2000 Operating Budget Debt Service Budget Mr. Gryglewicz presented the proposed 2000 Operating Budget and the Debt Service Budget. Ms . Weddle asked if new housing units that are proposed in the CityCenter redevelopment will be of any assistance to the EURA to reduce outstanding debt. Mr. Gryglewicz stated that there will not be much income realized from the housing units, and that the debt continues to grow because of compounding on the interest. Mr. Garrett stated that new housing construction in CityCenter will provide no assistance in repayment of the bonds. Mr. Bertoluzzi asked about the revenue and debt service projections for the year 2000 . Mr. Gryglewicz stated that he did not have that information at hand. Mr. Gryglewicz discussed the bonds , noting that they were basically "j unk bonds " when they were issued -they were high interest, unrated, unsecured , and uninsured. Investors took a risk in purchasing the bonds, and unfortunately , the Authority went into default in 1991. Mr. Bertoluzzi asked if was economic circumstances and not the Redevelopment Plan that caused the default. Mr. Gryglewicz stated that when the Plan was written and revenue fore- casts made, the economy was quite good . Unfortunately, after the bonds were issued the economy soured, revenue projections were unrealistic and the revenue stream was not suffi- cient to cover the debt service on the bonds; thus, the default. Mr. Garrett noted that he had, during that period of time, been involved in special districts and bond issues; he stated that many, many bond issues for special districts went into default all over Colorado. Mr. Gryglewicz stated that the Finance Department of the City had run projections some time ago, and it appears that all bond holders will receive at least their primary investment on the bonds , and possibly a very small interest return . They will not receive the 11 3 interest they had anticipated. 2 • • • Chairperson Weddle asked for a motion to accept the Budgets for 2000 . Roth moved: Garrett seconded: The Operating Budget and Debt Service Budgets for 2000 be accepted as proposed. AYES: NAYS: ABSTAIN: ABSENT: Roth, Bertoluzzi, Garrett, Graebner, Weddle None None Lindsay The motion carried. V. SOUTH ACOMA STREET PROPERTY 3400 Block South Ms. Weddle welcomed Harold Celva and Connie Sanchez to the meeting. Ms. Weddle noted that Mr. Celva and Ms. Sanchez are present to discuss the 3400 block of South Acoma Street. Mr. Celva stated that he is the Executive Director of the Englewood Downtown Development Authority (EDDA), and that Ms. Sanchez is an EDDA board member. Mr. Celva stated that he works with an 11 member board composed of business and property owners from the downtown district. Mr. Celva displayed a map of the EDDA District. The EDDA was cre- ated in 1978 by the City Council, and their charge is to create an environment where existing businesses can thrive and where new businesses will want to locate and grow. The EDDA is to stop blight from occurring in their district. Mr. Celva stated that EDDA has been involved in fa<;ade renovations for Broadway businesses; they have sponsored a summer concert series for several years on the Plaza at Little Dry Creek; they have developed a Downtown Plan, and they are assisting in the Broadway revitalization efforts that the City is currently doing. Mr. Celva stated that the EDDA wants to acquire the property owned by the EURA in the 3400 block of South Acoma Street (east side), and the small parcel which fronts along Englewood Parkway and South Broadway. The EURA property is presently leased to the City, and used to provide parking for merchants in the 3400 block of South Broadway. How- ever, there is no assurance that this site will be available for long-term parking; parking is vital to the downtown area and to the viability of business. The business owners are very concerned that this property could be sold for development, and the parking that has been available to them for the last several years would be gone. Mr. Celva stated that with the redevelopment of the Cinderella City Mall site, it is a prime time for other developable sites in the downtown area to be acquired and developed. Mr. Celva stated that EDDA has discussed with the City of Englewood, over the last two years, what action can be taken to ensure long term parking for the majority of this site, with some development occurring on the north portion of the site along Englewood Parkway and the Broadway frontage. Mr. Celva stated that the City of Englewood wants to keep the "arm's length" in the relationship with the Authority; therefore, EDDA has proposed to acquire the EURA property with the goal of then turning the property 3 • • • over to the City of Englewood for development of a long-term parking lot. Mr. Celva stated that the Public Works Department has estimated improvements in excess of $300,000 will have to be made to the site -these improvements include paving of the alley , resurfacing, fencing, and landscaping, among other things. Mr. Bertoluzzi asked about the size and value of the property. Mr. Celva stated that the size of the property is approximately 70 ,000 square feet. He stated that he has an appraisal which was prepared for Engineering Manager Kahm. Mr. Garrett stated that any proceeds from sale of the property would go to the bond holders. Mr. Brotzman indicated that he had been in discussions with EDDA attorney Windholz and EURA attorney Benedetti regarding this site. Mr. Celva stated that he understood that the EURA cannot landbank land; the land may be ac- quired but must be used for public purposes. The Authority does have the right to establish a value of the land they own; they can sell the land or "give " the land to the EDDA or to the City at no charge. Mr . Garrett suggested that the Authority will not be "giving " the land away ; that if bondholders did not receive the value of the land the Authority could be in court . He asked if there is some way to give comfort to the Broadway business people that the prop- erty will be used for long-term parking; is there some instrument -such as a lease , that can be drawn to provide this assurance, yet also provide protection to the EURA . Mr. Celva discussed the need to develop a special improvement district to finance improve- ments that have been identified for the site ; business and property owners would prefer a lower overall cost for acquisition and assessment for improvements . Mr . Garrett asked how long the special improvement district would be in effect , and what area would be included . Mr . Celva reviewed the development of the South Lincoln Street parking lot (3400 block south), and noted that business properties on the west side of South Broadway in the 3400 block, and the 3300 and 3500 blocks of South Broadway were assessed for that parking lot development. He suggested that the same precedent would have to be followed in developing the assessment district. Brief discussion ensued. Mr. Brotzman agreed that the EURA could give the land to the City. However, the bondhold- ers and Trustee have said that the City of Englewood and the EURA are one and the same, and the several legal counsels don 't want to compound the confusion on the EURA/City separation. The EDDA isn't within the "arm 's length " issue, and is serving as a go-between. Mr. Gryglewicz asked what duties the EURA has to the bondholders . If the EURA does give the property away, isn 't there cause for a suit from the bondholders. Mr. Brotzman suggested a need to discuss this issue with Mr. Windholz and Mr. Benedetti. Mr. Graebner asked what Mr. Celva wanted from the Authority . Mr. Celva stated that they are looking for a place to begin the process to acquire the property . To create a special im- provement district, they need to have some lead time , and they also need to know acquisition 4 • • • and improvement costs. Ms . Sanchez stated that the merchants in the 3400 block of South Broadway are very nervous about the CityCenter development, and the impact it may have on vacant sites that could be developed. They don't want to lose the parking lot , because if the parking is lost, their businesses could be lost. Mr. Celva stated that EDDA would be working with the City to market the corner property fronting on South Broadway and along Englewood Parkway for development. Discussion en- sued. Mr. Gryglewicz suggested a long-term lease with the EURA/City for use of the land as park- ing. Mr. Brotzman brought up TABOR law , and reservation of funds for future obligations. Mr . Gryglewicz pointed out that the present lease is way below market level. Mr. Brotzman stated that the EURA has an asset that may be sold for money; it may be difficult to convince bondholders and others that we want to keep this property for parking . Mr . Celva again raised the issue of urban renewal legislation speaking to the issue of banking property ; the Authority ma y hold property on a "temporary " basis. Ms. Sanchez asked where the obligations of the Authority lie -with the bondholders , or with the district to prevent blight. The mechanics of title change on the property were further discussed. Problems that could be created by "giving " title to the City versus "giving " or selling the title to the EDDA were also discussed . Mr. Celva spoke to the recent appraisal Mr. Kahm , Engineering Manager , had received; he also addressed the estimated cost of improvements to the site . He suggested the estimated cost of the improvements should be subtracted from the appraised value of the property to reach the true "value " of the site. Mr. Celva reiterated the need to keep the acquisition and improve- ment costs low to enable the EDDA to "sell " the idea of special improvement district to the business /property owners affected. Mr. Celva also addressed the need to work with the City to reduce the required landscaping for the parking lot once it is improved . Mr . Bertoluzzi asked if there have been inquires regarding acquisition of the property for de - velopment. Mr. Brotzman stated that he is aware of a number of inquires regarding the City - owned property fronting on South Broadway . Mr . Graebner asked if the property owned by the EURA was cited as an asset in the recent lawsuit filed by the Trustee . Mr. Brotzman stated it was not. Mr . Celva asked if it is correct that the only funds pledged to repay the bonds is the TIP pro- ceeds . Mr. Brotzman stated that this is correct. Mr. Garrett stated that the manner in which the property owned by the EURA is transferred may be litigated. Mr. Graebner asked what the appraised value of the property is. Mr. Celva stated that the large portion of the parking lot is valued at $400 ,000 ; the smaller portion , with the frontage on 5 • • • Broadway and along the Parkway , is valued at $20 ,000 . Mr. Celva stated that if a price on the property can be established , EDDA would ask for an option on the property . Between now and June , EDDA would contact business/property owners within the EDDA District and pro- pose a special improvement district to acquire /improve the lot. The District business/property owners would have to agree to form the special improvement district. Mr. Brotzman stated that EDDA could retain ownership of the site and maintain the property . He suggested that the EURA needs to get an opinion on where the funds from property transfer go . Mr. Bertoluzzi asked if there is a line item in the EURA Budget for maintenance of the site. Mr . Gryglewicz stated there is no funding for maintenance of the site . Mr . Garrett stated that the City maintains the site now under the provisions of the lease between the EURA and the City . Mr. Garrett stated that the transfer of the property makes sense , but expressed concerns re - garding possible problems regarding the proceeds and the bondholders . Mr. Garrett reiterated that he does not want the Authority and/or C ity involved in more litigation . Mr . Garrett spoke to the need for the EURA to receive an "unqualified opinion " from legal counsel. Mr. Brotz- man suggested that EURA attorney Benedetti will probably give the unqualified opinion that Mr . Garrett desires . Mr. Graebner asked about paying the bondholders whatever proceeds the EURA receives . Mr. Brotzman stated that he is of the opinion that the EURA will be paying the bondholders; first , the value of the land has to be determined , and the mechanics of the transfer worked out. Mr . Graebner stated that it makes no sense for the EURA to continue to hold the land and lease it for a minimal amount. Mr. Brotzman stated that the City and EURA are paying the legal costs accrued for the recent lawsuit so that the Trustee will not appeal the recent decision . Mr. Graebner asked if the Trustee does not appeal decision , is the court case over and does the debt disappear. Mr. Gry- glewicz stated that the debt will not disappear ; however , the Authority will not be expected to remit revenues after 2007 when the TIF expires. Mr. Graebner asked how we should proceed on the transfer of the property . Mr . Brotzman suggested that the staff of the City , EDDA , and Authority be directed to pursue the sale and /or gift of the EURA property . He advi sed that the Authority will want to get an opinion from Mr. Benedetti on the transfer of the property and whether revenues have to go to the bond- holders. Graebner moved: Garrett seconded: The staff of the Authority , the City , and EDDA pursue investigation of property transfer ; the Authority must receive information on fair market value of the property, and an opinion from our legal counsel on how the proceeds must be used . 6 • • • AYES : NAYS : Roth, Bertoluzzi, Garrett, Graebner , Weddle None ABSTAIN: None ABSENT : Lindsay The motion carried. VII. OLD BUSINESS Executive Director Gryglewicz distributed copies of the Court decision in the suit filed by the Trustee against the Authority and City . The decision is in favor of the Authority and City , and the payment of the TIF will be 25 years from the date the district was formed . This means that in 2007, payments to bondholders will cease , and all revenues will come to the City . Discus- sion ensued. Mr. Roth asked if bankruptcy had been explored by the Authority . Mr. Brotzman stated that Title 9 Bankruptcy was explored. There are disputes among attorneys whether Title 9 can ap- ply to special districts. Tax issues were discussed. Mr. Brotzman stated that once the Authority went into default , all bonds were called and the debt was accelerated , there were numerous calls from bondholders wanting to know if the payments they were receiving was principal , interest , or a combination thereof. Mr. Gryglewicz stated that he still receives calls from bondholders inquiring on the status of the default, the taxation issue, etc . Ms. Weddle asked if someone is still buying up bonds. Mr. Gryglewicz stated that Mr. Ful- ton , of Cohig & Associates , had been purchasing bonds at the depressed value. Whether this is still occurring is not known. There was no further business brought before the Authority . The meeting was declared ad- journed. /Gertrude G. Welty, Recordings aetary \\en g_c h\sys \de pt\n bd \group\bo ard s\ura\min 99\e ura 11-99 .doc 7 • • • RESOLUTION NO. 1 SERIES OF 1999 CITY OF ENGLEWOOD, COLORADO URBAN RENEW AL AUTHORITY A RESOLUTION OF THE ENGLEWOOD URBAN RENEW AL AUTHORITY AMENDING THE 1999 OPERA TING BUDGET. WHEREAS, the Englewood Urban Renewal Authority adopted the 1999 Operating Budget in the amount of $12 ,465 , on March 3 , 1999 ; and WHEREAS, the Englewood Urban Renewal Authority has accrued legal service expenses in excess of the 1999 budgeted amount ; and WHEREAS, the Englewood Urban Renewal Authority , having no other source of revenue available , must rely on contributions from the City of Englewood to finance operating expenses. NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Englewood Urban Renewal Authority, as follows : Section 1: General Fund Sources of Funds: Contribution from City of Englewood Interest Income Total Sources of Funds Section 2: General Fund Uses of Funds : Legal Services Unreserved/Undesignated Fund Balance Total Uses of Funds $25 ,000 400 $25,400 $14 ,000 9,000 $25 ,400 APPROVED AND ADOPTED this 3 rd day of November, 1999. Robin Weddle , Chairman ATTEST: • icz ive Director/Executive Secretary Motion by: Don Roth Second by: Robin Weddle In Favor: Graebner, Roth, Bertoluzzi, Garrett, Weddle In Opposition: None Abstaining: None Absent: Lindsay f:\dept\nbdlgroupl boardsl ural budgets\re so # l -99 budget amendment.doc • •