Revitalization Commission Agenda and Packet 2019 11 18

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Revitalization Commission Minutes October 14, 2019 Page 3 of 5 Typically we use TIF for infrastructure. Is this common to provide this type of assistance? EPS responded that they recommend using TIF for this project. This tool is used throughout the Front Range, most recently Wheat Ridge and Erie. It is relatively common for Urban Renewal authorities to use TIF in this manner. Will we get the first floor retail? The economics are that retail will pay higher rents than office. In a robust economy, retail will be preferred and can be achieved. Retail space is at a premium. 9% discount rate seems generous. Where did this come from? 9% is in a range of 8% - 12%. See project performance slide, page 47 of packet. This amounts seems reasonable based on EPS analysis. Is the city taking on developer risk? 9% seems generous to be taking on someone else's risk. Developer is still taking on significant risk. TIF revenues are only generated if project goes vertical and investments are made. Could every project need assistance? What corrects the need for assistance is a robust market that drives up rents and covers costs. Historic Main St situations are challenged by what can be supported in the way of rent. If you make investments in new property, won't property taxes be driven up for others? You are trying to improve overall attractiveness of area. New investment is a good thing. Property is developed for its highest and best use. Why not include the sales tax/retail requirement for the first floor? Rick Woodruff of Boulder Creek Neighborhoods (BCN) said that in this type of project, typically 70% -75% is financed. Lenders do not like restrictions that limit their ability to lease space. The intent is to rent as retail. As far as risk, this is not a lot of risk to the City. The City gets no funds if we do not do it. He struggles with what the risk to the City is financially. If we don't do the project, it stays status quo. If the project happens the City gets the full tax revenue increase in 10 years when the TIF rebate ends. It will revitalize the community. That is what this tool is for. If the City insists the first floor is retail, the project will most likely not go forward. Business Retention and Development (BRaD) Chair Mark Oberholzer said BRaD views TIF in general as a good thing. BRaD supports TIF as a good tool. Is there any thought given to the impact of trickle down for employees downtown? Any employees downtown will have positive economic impact. Maintaining an employer downtown and improving the downtown environment justifies extraordinary community benefit.