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Home My WebLink AboutItem 11- MOU for Urban Renewal SDCs AGENDA ITEM SUMMARY Meeting Date: 7/1/2024 Meeting Type: Regular Meeting Staff Contact/Dept.: Kristina Kraaz, CAO Staff Phone No: 541-744-4061 Estimated Time: Consent Calendar S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Community and Economic Development and Revitalization ITEM TITLE: AUTHORIZING AN MOU WITH SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY FOR PAYMENT OF SYSTEM DEVELOPMENT CHARGES FOR PROJECTS IN URBAN RENEWAL AREAS ACTION REQUESTED: Authorize the City Manager, Finance Director, and Development and Public Works Community Development Division Director to enter a Memorandum of Understanding (MOU) with the Springfield Economic Development Agency (SEDA) regarding payment of system development charges (SDCs) for projects in the Downtown and Glenwood urban renewal areas, as provided in Attachment 1. ISSUE STATEMENT: Whether the Council should approve an MOU with SEDA, for SEDA to assume payment for SDCs for projects in the Downtown and Glenwood urban renewal areas for the period from July 1, 2014, through December 31, 2023, and for projects from January 1, 2024, forward. The MOU allows SEDA to defer payment for Glenwood SDCs until they can be applied to infrastructure projects for Glenwood. ATTACHMENTS: 1. Memorandum of Understanding between the City and SEDA DISCUSSION/ FINANCIAL IMPACT: In furtherance of the Downtown and Glenwood urban renewal plans, SEDA has authorized the SEDA SDC Program to assume payment of SDCs for development and redevelopment in the urban renewal areas that is consistent with the urban renewal plans. The SEDA SDC Program is currently in effect for five years, from January 1, 2024, to December 31, 2028 (Resolution SEDA2024-03). Additionally, the SEDA Board has retroactively authorized SEDA to assume the SDCs waived during a prior lapse in the SDC Program, from July 1, 2014, to December 31, 2023 (Resolution SEDA2024-04). The total amount waived is $1,848,450.13: $570,718.03 for Downtown and $1,277,735.10 for Glenwood. The SEDA Board approved an MOU to provide the specific terms for the ongoing SDC Program and for SEDA to pay the previously waived SDCs to the City. The City Council is asked to approve the MOU on behalf of the City. Scope: SEDA will pay transportation, stormwater, and local wastewater SDCs for urban renewal projects in the Downtown and Glenwood urban renewal areas, and SEDA assumes payment for the previously waived SDCs. Downtown SDCs: SEDA will pay the previously waived SDCs to the City immediately. SEDA will assume SDCs up to $100,000 per project in the future, or more if authorized by the SEDA Board. Glenwood SDCs: SEDA will defer paying Glenwood SDCs to the City, to a later time when the funds can be applied to the cost of construction for public improvements under the Glenwood Urban Renewal Plan. There is no per-project cap, but there is an overall cap of $2,000,000 on future SDCs paid by SEDA. MEMORANDUM OF UNDERSTANDING – Page 1 {00032859:3} MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF SPRINGFIELD & SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY REGARDING SYSTEMS DEVELOPMENT CHARGES IN URBAN RENEWAL AREAS EFFECTIVE DATE: ____________, 2024 RECITALS: A. The City of Springfield (“City”) and Springfield Economic Development Agency (“SEDA”) are parties to a Cooperation and Services Agreement that declares each party’s intent to mutually cooperate in carrying out the Downtown Urban Renewal Plan and Glenwood Urban Renewal Plan and defines each party’s obligations in carrying out these plans. B. The City and SEDA are parties to an Intergovernmental Agreement to Advance and Repay Funds Needed for Urban Renewal Projects (“Advance and Repay IGA”), under which the City may advance up to $1,500,000 to SEDA at any point in time, with the balance to be repaid from SEDA’s tax increment revenues over time. C. In furtherance of the Downtown Urban Renewal Plan and Glenwood Urban Renewal Plan, the SEDA Board has adopted Resolution 2024-03: A RESOLUTION INCENTIVIZING DEVELOPMENT IN THE DOWNTOWN URBAN RENEWAL AREA AND GLENWOOD URBAN RENEWAL AREA BY ASSUMING PAYMENT OF CERTAIN SYSTEM DEVELOPMENT CHARGES AS ESTABLISHED BY SPRINGFIELD MUNICIPAL CODE SECTION 3.406 THROUGH THE PERIOD ENDING DECEMBER 31, 2028. Said resolution directs the City Manager, Finance Director, and Development and Public Works Community Development Division (“CMD”) Director to develop and execute a Memorandum of Understanding (MOU) between the City and SEDA to carry out the SEDA SDC Program. D. The SEDA Board has adopted Resolution 2024-04, which also directs the City Manager, Finance Director, and CMD Director to execute an MOU to carry out its requirements: A RESOLUTION RETROACTIVELY ASSUMING PAYMENT OF CERTAIN SYSTEM DEVELOPMENT CHARGES AS ESTABLISHED BY SPRINGFIELD MUNICIPAL CODE SECTION 3.406 FOR THE PERIOD FROM JULY 1, 2014, THROUGH DECEMBER 31, 2023. E. Per the terms of the Cooperation and Services Agreement, the City, by and through City staff, has agreed to act upon request of SEDA as SEDA’s agent for purposes of necessary activities normally performed by the City with reference to public improvements in the City, which includes but is not limited to, carrying out Springfield Municipal Code (SMC) sections 3.400 to 3.420 regarding systems development charges. Attachment 1 Page 1 of 4 MEMORANDUM OF UNDERSTANDING – Page 2 {00032859:3} F. All references herein to the City Manager, Finance Director, and CMD Director includes their authorized representatives or designees. NOW, THEREFORE, in consideration of the foregoing, City and SEDA agree to the following: Article I. SDC payments after January 1, 2024. The following terms and conditions apply only to SDCs that are assumed by SEDA under Resolution SEDA 2024-03 for the period from January 1, 2024, to December 31, 2028, unless extended by further Resolution of the SEDA Board. 1. Scope of SEDA SDC Program. a. SEDA will only assume financial responsibility for payment of transportation, stormwater, and local wastewater SDCs imposed for new construction, redevelopment, or rehabilitation projects within the Downtown Urban Renewal Area and Glenwood Urban Renewal Area. b. If an applicant is eligible for a City-sponsored SDC waiver (such as SDC waivers for income-qualified housing or for certain accessory dwelling units), then the City- sponsored SDC waiver will be applied first. c. SEDA will not assume financial responsibility for SDCs related to (i) owner-occupied residential structures, unless the applicant meets the definition of low- or moderate- income household and the SDCs are directly related to correcting health and safety problems in substandard housing, nor (ii) public facilities or other tax-exempt public property except when explicitly authorized by the SEDA Board. d. Within the Downtown Urban Renewal Area, SEDA will assume financial responsibility for up to $100,000 in eligible SDCs per project. If a project exceeds $100,000 in eligible SDCs, then either (i) the applicant may choose to pay the balance of SDCs owed (the total amount of SDCs less $100,000 in SEDA SDC Program funding), or (ii) the SEDA Board may authorize additional SEDA SDC Program funds for that project. e. Within the Glenwood Urban Renewal Area, SEDA will assume financial responsibility for up to $2,000,000 in eligible SDCs in total. There is no per-project limit to eligible SDCs in the Glenwood Urban Renewal Area. 2. Applications. The City Manager will develop a SEDA SDC Program application form. The CMD Director will ensure that the form is provided to all applicants proposing development that is within the scope of the SEDA SDC Program, and that applications are approved by the City Manager before entering a SEDA credit for payment of SDCs into CMD’s permit records. 3. Downtown Urban Renewal Area. SEDA will pay the amount of eligible SDCs for a project (up to $100,000) within 30 days of CMO receiving a funds transfer request from CMD. Alternatively, SEDA may request the City advance funds under the Advance and Repay IGA for eligible SDCs under this section. SEDA will not be required to pay SDCs Attachment 1 Page 2 of 4 MEMORANDUM OF UNDERSTANDING – Page 3 {00032859:3} under this section until the applicable project receives its certificate of occupancy or other final approval. If the SEDA Board approves a project to receive more than $100,000 in SEDA SDC Program funding, the City and SEDA may mutually agree upon other means for payment. 4. Glenwood Urban Renewal Area. SEDA may defer payment to the City of eligible SDCs until such time as the SDCs can be applied to the cost of construction of an SDC-eligible public improvement as provided in SMC 3.410. CMO will keep an accurate log of deferred SDCs under this section. Deferred SDCs under this section will not be considered an advance of funds per the Advance and Repay IGA. CMO and CMD will mutually cooperate to ensure that SDC-eligible public improvements are planned for inclusion in the applicable public improvement plan, and that SEDA’s deferred SDCs are applied to public improvements that contribute to urban renewal. Article II. SDC payments for July 1, 2014, to December 31, 2023. The following terms and conditions apply only to SDCs that are assumed by SEDA under Resolution SEDA 2024-04 for the period from July 1, 2014, to December 31, 2023. 1. Downtown Urban Renewal Area. During fiscal year 2025, SEDA will make a one-time payment to the City of $570,718.03 for SDCs for new construction, redevelopment, and rehabilitation in the Downtown Urban Renewal Area. Alternatively, SEDA may request the City advance funds under the Advance and Repay IGA for the one-time payment under this section. 2. Glenwood Urban Renewal Area. SEDA will defer payment up to $ $1,277,735.10 for SDCs for new construction, redevelopment, and rehabilitation in the Glenwood Urban Renewal Area, until such time as the SDCs can be applied to the cost of construction of an SDC-eligible public improvement as provided in SMC 3.410, and subject to the provisions of Article I, section 4 of this MOU. Article III. General Terms and Conditions. 1. This MOU will terminate on December 31, 2028, or the last date that all deferred SDCs have been paid to the City under Article I section 4 and Article II section 2, whichever occurs last, unless further extended by mutual agreement of the parties. 2. The City and SEDA agree to mutually cooperate with each other in good faith to implement the matters described in this MOU. The matters described in this MOU will be carried out consistent with, and subject to, the terms and conditions of the Cooperation and Services Agreement. 3. Nothing in this agreement modifies the existing terms and conditions of the Cooperation and Services Agreement, nor the Advance and Repay IGA. 4. All SDCs that SEDA defers for future payment under this MOU are subordinate to all other indebtedness owed by SEDA under the Advance and Repay IGA and to all other borrowings approved by SEDA that are secured by tax increment revenue. Attachment 1 Page 3 of 4 MEMORANDUM OF UNDERSTANDING – Page 4 {00032859:3} 5. This MOU may only be amended or terminated by the agreement of both parties in writing. SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY: _____________________________ Nancy Newton City Manager Date: ________________________ CITY OF SPRINGFIELD: ______________________________ ______________________________ Nathan Bell Jeff Paschall Finance Director Development & Public Works Date: _________________________ Community Development Division Director Date: _________________________ Attachment 1 Page 4 of 4