To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Ordinance Approving The View at Castle Rock Redevelopment and Financing Agreement Between the Town of Castle Rock, the Castle Rock Downtown Development Authority, and Castle Rock Development, LLC (Second Reading - Approved on First Reading on April 6, 2021 by a vote of 4-3) [located at 610 Jerry Street]
Body
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Executive Summary
At the September 1, 2020 Town Council meeting, Council directed staff to prepare a redevelopment agreement for the View project, including the initial terms as presented. The September package of materials is part of the agenda packet.
On March 10, 2021, the Design Review Board approved the site development plan (SDP) for the project. An overview of the project is provided in other documents in the agenda materials.
The proposed Redevelopment Agreement (RDA) with Castle Rock Development (CRD) LLC is part of the agenda packet. It includes the following financial incentives for the project:
• Property Tax Increment
- Share back 55% of the Property Tax Increment with CRD through 2038, with a cap of $3,250,000.
- Current estimates indicate that the property tax valuation will increase 10 times the current amount, resulting in a net property tax increment gain as early as 2024. This reflects all property tax collecting jurisdictions for the property.
• Sales Tax Increment
- Share back 55% of the Sales Tax Increment with CRD through 2038, with a cap of $1,000,000. This is only the Town sales tax, as neither the County nor State sales tax are impacted.
- The current use of this site generates nominal sales tax revenue, so the addition of retail options to the downtown area will result in net sales tax increment as early as 2023 with occupancies on the site.
• Fee Waiver and purchase of Parking Spaces
- The Town will purchase 100 public parking spaces through the waiver of $3,000,000 in fees and use tax ($30,000/space).
- Town funds will be repaid in future years by the DDA Special Fund to be made whole. The project will generate a Town fee and tax requirement of approximately $5 million. These are impact fees, system development charges from Castle Rock Water, building permit fees, use taxes, etc. The redevelopment agreement will provide that $3 million of those fees will be waived, and the development will not be required to pay. The developer will be required to pay everything above the $3 million at the time the building permit is pulled for the project. In exchange for the fee waiver that the developer receives, the Town will receive title to 100 parking spaces to be built, per standards, and conveyed to the Town upon completion of the project. The Town’s DDA Special Fund receives the increment of property taxes and Town sales tax in the downtown overlay district. The Special Fund will repay to the Town funds the $3 million over time; we estimate that the fee waiver will be completely repaid by 2025. One way to view this transaction is that the taxes that Downtown generates are being used to purchase the 100 parking spaces, with the Town serving as the temporary ‘bank’ - waiving $3 million in fees and then getting the special fund taxes to repay the Town over time for that waiver.
• IREA Credit
- The Town will allow use of up to $100,000 of existing credits specifically for burying off-site utilities.
• PIF (Public Improvement Fee)
- Town will approve a 1% PIF that will be captured by the development.
Jerry Street Public Parking
At this time, the current public parking along the east side of Jerry Street adjacent to the project provides 16 parking spaces owned by the Town. Under the proposed agreement, upon completion of the project, public parking along the east side of Jerry Street adjacent to the project will provide 28 Town-owned, angled public parking spaces. In recognition of the increase in Town-owned parking spaces along Jerry Street, the Town shall install and maintain signage for a minimum of four (4) spaces along the east side of Jerry Street immediately north of 6th Street, to be designated as either temporary loading zone or two-hour public parking spaces.
Staff Recommendation
Staff favorably recommends approval on first reading of the ordinance adopting the Redevelopment Agreement.
Proposed Motion
“I move to approve the Ordinance as introduced by title, on second reading.”
Attachments
Attachment A: Ordinance
Exhibit 1: Agreement
Attachment B: DRP Report
Attachment C: DDA Memo
Attachment D: The View FAQ Fact Sheet
Attachment E: Sept. 1, 2020 Town Council Discussion/Direction Item - The View Project Overview