To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
C: Kevin Tilson, Director, Castle Rock Downtown Alliance
Bob Slentz, Town Attorney
Title
Non-binding Memorandum of Understanding for Festival Park Commons Parking Garage
Body
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Executive Summary
At the May 1, 2018 meeting Council will be briefed on the proposed non-binding Memorandum of Understanding (MOU) for the Festival Park Commons Parking Garage. The purpose of the MOU is to generally frame the negotiations to eventually produce a Redevelopment and Public Finance Agreement between the Town, Developer (Castle Brae Development LLC) and the Downtown Development Authority. The negotiation of a redevelopment agreement was authorized by Council at the April 3, 2018 meeting. The MOU does not commit the Town to final agreement details, instead it serves as the general outline of an agreement which would still require a public hearing and Town Council approval.
Highlights of the proposed Memorandum of Understanding:
• The Developer would construct 93 for-sale residential units, 22,000 square feet of retail and 17,500 square feet of office - additional residential units may be considered by the Developer
• The project would construct a total of approximately 496 parking spaces. 471 covered parking spaces, and 25 off-street surface parking spaces.
• The Town would acquire 300 parking spaces (275 covered and 25 surface) for exclusive public use. Developer would own and control the other spaces, with the Developer making some designated spaces available to the public. The parking space plan meets the Town’s new off-street parking requirements. Town will participate in a condo association to maintain, insure, etc. the Town’s parking spaces.
• Developer will build the parking facility, pursuant to Town-approved design. The Town parking spaces will not be competitively bid, but part of an overall private contract with the Developer. The Town will pay $9,756,000 - which is the estimated price for the Town spaces - a cost which may go down based on final costs, but will not increase.
• The Town will issue Certificates of Participation (COPs) for the Town share of the project cost. The Town will service the cost of the COPs (principal and interest) from the following sources: 1) All Town sales taxes from the site, 2) a 1% add on Public Improvement Fee (PIF) from sales on site. 3) A General Improvement District (GID) property tax solely on the new project development (Condos, retail, office); and 4) a share of the incremental property taxes. The Town’s current analysis from Economic and Planning Systems (EPS) indicates that the expected generation of revenue from these sources will be available to pay the Town COP costs.
• The Town will contribute the Town-owned parking lot property (.964 acres) and Town alley (.15 acres), at no cost, to the project. The Developer will acquire 3 adjacent private properties along Wilcox for the project.
• The Town will waive, and have an agreement with the DDA for reimbursement, the Town’s impact and development fees, Town use tax and Town permit fees for the non-residential and 93 residential units.
• The Developer will pay up to $900,000 in actual costs for the establishment of the downtown railroad quiet zone.
Additional next steps
Additional next steps include land use and site development review, including site design, layout and necessary off-site improvements. This will proceed as similar to other projects. With the MOU in place staff will concurrently work on land use review, COP and GID formation requirements, and negotiation of a final agreement and related documents. Additionally, review and necessary approvals from the Downtown Development Authority will be sought.
Merits of the Project
As previously discussed by Council, there are substantial merits to the proposed project which merit further refinement as outlined in the MOU.
The location for additional public parking will well serve the core of downtown and the substantial public and private activity currently existing and envisioned in the future. There are few other available sites of this size and location which are evident in the downtown area.
The project generates revenues to pay for the debt service of additional public parking. The nearly $10 million cost of the public parking would be a substantial challenge for existing Town resources. The Town’s budget does not have the ability to solely finance such a large capital requirement. Town impact fees for transportation and parks must be devoted to financing capital costs associated with Town growth - which has substantial demands. Reducing our strong commitment to pavement maintenance to finance the building of a parking facility would reduce the level of service to our road network. As proposed, this project will generate sufficient revenues to pay for the borrowing to finance the Town parking spaces.
The project has strong mixed use components - retail, office and for-sale residential - strongly complementing our plan for downtown. Existing and future downtown businesses will benefit from a strong residential and day-time (office) presence, thereby sustaining those businesses and our downtown character into the future.
The Developer proposes to pay-because the residential units will benefit-up to $900,000 for the cost of the downtown railroad quiet zone. There is no current budget capacity - without altering our capital improvement plan - for this project.
Staff Recommendation
Approve the Memorandum of Understanding as presented.
Proposed Motion
“I move to approve the Memorandum of Understanding as introduced by title.
Attachments
Attachment A: FPC Parking Garage Proposed Development MOU
Attachment B: FPC Renderings
Attachment C: FPC Parking and Unit Drawings