The City of Fort Collins will consider a $45 million base financial assistance package that will revitalize the Foothills Mall and restore essential sales tax revenue, as well as an $8 million investment in City infrastructure, including a new Youth Activity Center and a underpass that connects to the Mason Street Corridor. Total project investment in the community is expected to be $312 million.
City Council will review the financial package in a Work Session on Tuesday, April 23. The package had been scheduled for a City Council vote on Monday, April 29, but will now be discussed and voted on May 7 to give the public more time to review the proposed deal. Materials associated with the package are available with the Council agendas at fcgov.com/cityclerk
. The April 23 Work Session will be replayed on Cable 14 on the following times:
Wednesday, April 24, 10 a.m. and 7 p.m.
Thursday, April 25, 7 p.m.
Friday, April 26, 8 a.m. and 6 p.m.
Saturday, April 27, noon
Sunday, April 28, 8 a.m. and 5 p.m.
Monday, April 29, 9 a.m.
The Work Session can also be viewed at fcgov.com/cable14
via video on demand.
Pending city approval, construction could start as early as June so the mall could open in time for the November 2014 holiday season.
City leaders have spent the past year negotiating with affiliates of Walton Street Capital, a private equity real estate investment firm, and Alberta Development Partners, a Denver-based real estate acquisition, development and investment firm.
“Over the last 10 years, city residents have consistently requested revitalization of the mall and we are very pleased that we are moving one step closer,” said City Manager Darin Atteberry. “The mall redevelopment, coupled with the progression of the Mason Corridor, is critical to inspiring investment and future revitalization in Midtown Fort Collins. In order to meet the 2014 timeline, which residents have really supported, work needs to begin in June.”
Mall sales tax revenues totaled $3.1 million in 2012 – a figure that has been declining annually since 2000. Once the mall is fully redeveloped, that figure is expected to grow to a total of $8.4 million annually. Under the proposed shared financing plan, sales tax receipts will be greater in the first year of mall operations – in 2015 - than they are today.
The City plans to use a combination of financing options including tax increment financing – sharing anticipated tax revenue from the project above a base - to assist with rebuilding the 735,000-square-foot enclosed super regional mall and the surrounding area. The proposed package is expected to minimize risk to the City’s balance sheet, credit rating and revenue.
Under the agreement being recommended by the City Manager:
The developer would build a new $3 million underpass to connect the mall area to the Mason Street Corridor and the Bus Rapid Transit project known as MAX, which will help create a sense of place and destination for the community. This will be a key transportation connection for pedestrians and cyclists.
At a cost of $4.8 million, the developer would build a new Youth Activity Center; the facility will sit on mall property but be owned and operated by the City of Fort Collins.
A new bonding authority called a Metro District would be created to manage the initial redevelopment with a board of directors consisting of five property owners in the surrounding area. The board would be governed by a service plan, approved by the City Council.
Financial assistance would be provided through anticipated new revenues to the City through Metro District Property Tax mills paid by property owners within the District, a Public Improvement Fee paid by consumers at the mall, Urban Renewal Authority property tax increment paid by property owners within the District and a sales tax pledge, which would share sales tax revenue above a defined base on the City’s core 2.25 percent tax rate as necessary to support specific bond payments. By 2018, the first three revenue sources will generate sufficient revenue to support the bond debt and the City will retain all sales tax generated from the project.
Starting in 2018, the City anticipates $4 million of new sales tax revenue each year that will grow at 2 percent a year thereafter.