To: Honorable Mayor and Members of Town Council
From: Robert J. Slentz, Town Attorney
Title
Ordinance: Approving the First Amendment to Amended and Restated Public Finance Agreement with Promenade Castle Rock, LLC, the Promenade at Castle Rock Metropolitan District Nos. 1-3, and the Town of Castle Rock Which Agreement Concerns the Proposed Promenade at Castle Rock Retail Center; and Providing for its Emergency Adoption on First and Final Reading (First and Final Reading)
Body
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Executive Summary
This First Amendment to the Amended and Restated Public Finance Agreement (Attachment A) exempts a 15.8 acre parcel proposed from the Add-On Public Improvement Fee (PIF) otherwise required to be imposed on all retail development in the Promenade. The proposed amendment also reduces the square footage of retail that must be constructed by year-end.
Discussion
Please see the attached letter from general counsel for Alberta requesting the amendment (Attachment B). We have confirmed directly with King Soopers that it will not develop a new store in the Promenade if it is required to pay the .25% Add-On PIF. Apparently this is firm corporate policy and resolution of this issue is the last significant impediment to King Soopers locating on a 15.8-acre parcel in the Promenade. Add-On PIF revenue will be a primary source of repayment of the taxable $3,475,000 Series B Bonds. Although it is important that the taxable bonds are retired at the earliest possible time due to the interest rate on the Bonds, this exemption of the 15.8-acre parcel will not have a material impact on the overall timeframe for retirement of the Series A and B bonds, based on financial projections we have reviewed.
This amendment unconditionally exempts the parcel from the Add-On PIF. If for some unforeseen reason King Soopers does not locate on this parcel, any other retailer on the parcel will similarly not be subject to the Add-On PIF. The provision in the Public Finance Agreement that no Credit PIF will be imposed on a King Soopers is unchanged. Consequently, the Town will receive all municipal sales tax.
Currently the PFA requires that the first 60,000 square feet of retail space be constructed by December 31, 2015. The amendment pushes 5000 square feet of that requirement to July 31, 2016. We are comfortable that the developer is making concerted efforts to secure tenants and complete retail space irrespective of any contractual requirements.
Resolution of this issue is the last condition to the Districts’ issuance of the Series A and B bonds.
Staff Recommendation
Staff recommends approval of the First Amendment to the Amended and Restated Public Finance Agreement, as presented. Because the bond closing is scheduled to take place shortly after this First Amendment is approved, it is requested that the Ordinance be approved on an emergency basis.
Proposed Motion
“I move to approve Ordinance No. 2015-28, an Ordinance approving the First Amendment to Amended and Restated Public Finance Agreement with Promenade Castle Rock, LLC, the Promenade Metropolitan District Nos. 1-3, and the Town of Castle Rock, which concerns the proposed Promenade at Castle Rock Retail Center as an emergency ordinance on first and final reading.”
Attachments
Attachment A: First Amendment to PFA
Attachment B: Letter