To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Frank Gray, CEO, Castle Rock Economic Development Council
Title
Resolution Approving the Castle Rock Collaborative Campus Development Agreement [ACC Facility]
Body
________________________________________________________________________________
Executive Summary
In January 2017, the Town Council directed staff and the EDC to negotiate an agreement with the Castle Rock Collaboration Campus which includes Arapahoe Community College (ACC), Colorado State University (CSU) and Douglas County School District (DCSD) in the Meadows development. The financial terms of the agreement included a not to exceed amount of three million dollars to be paid by the Town in specific phases of development which will include reimbursement of permits, fees, infrastructure and site development costs. ACC is the lead financial agent on project and has now completed all the state and national regulatory, budgeting and finance processes. Now that the approvals of funding are in place with the State of Colorado, ACC’s is seeking final approval of the Castle Rock Collaborative Campus Development Agreement (“Agreement”).
Overview:
As authorized by the Town Council, the major provisions of the term sheet have been detailed in the Agreement and are summarized below:
• The Campus will consist of two buildings with a minimum of 40,000 sqft. per building.
• The Campus will remain an educational facility for a minimum of 10 years*
• The Campus has agreed to Town council approvals of the enhanced architectural design
• The Campus will only receive reimbursements of applicable fees, permits and site improvements not to exceed $2M on building one and $1M on building two. 50% upon issuance of a building permit and 50% upon Certificate of Occupancy (CO) from the State of Colorado.
Discussion:
The Town Attorney advises that while there is language in the agreement requiring exclusive educational use for 10 years, it is not certain that the Town has an effective legal remedy in the event of a breach of that obligation. However, there are other significant factors that provide assurance that the Castle Rock Collaboration Campus and ACC will meet the 10-year obligation. Those factors include the following:
• Proven Trusted Partner: ACC has operated a campus in Castle Rock for the past six years and has been a great community partner and host honored it’s commitments to the Town and Community. ACC currently leases space for their campus in Castle Rock and has demonstrated its loyalty to the Castle Rock Community.
• Restricted Use Covenants: The Castle Rock Development Company (CRDC) covenants recorded against the parcel restrict use of the land to a public community college campus, and the agreement specifically contemplates the ACC Collaboration Campus partnering with Douglas County Schools, CSU and local business partners. The Restriction on use runs for a period of ten years from June 30, 2017 to June 30th 2027. During the 10 year period of restricted use, the parcel can only be used for public higher education.
• State Financial Obligation to Bond Holders: The Colorado Community College System will be issuing revenue bonds to fund the $30M+ cost of constructing the campus. The closing is scheduled for December 22, 2017. The Revenue Bond covenants will prevent the State, CCCS or ACC from selling, mortgaging or otherwise using the Campus facilities for any use other than as a public higher education campus that generates tuition revenue. ACC would have to refund the bond in full if it were to sell the Collaboration Campus for another purpose.
• Economic Viability of Single Use Building: The building will be custom designed as a public higher education facility using a design build process. It would be economically infeasible and practically impossible to renovate the building into a commercial use since most of the space will be classrooms and student common areas. Payment by the Town is triggered only upon the issuance of a building permit and Certificate of Occupancy, which requires substantial completion of the facility.
Recommendation:
The Agreement has been reviewed and is presented to Town Council with a recommendation for approval by the Town staff and Castle Rock EDC.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Agreement