A bill for an ordinance approving the First Amended Service Plans for each of the West Globeville Metropolitan District Nos. 1 and 2. Approves two separate First Amended and Restated Service Plans for the Title 32 districts, West Globeville Metropolitan District No. 1 and West Globeville Metropolitan District No. 2 in Council District 9. The Committee approved filing this item at its meeting on 11-9-21.
I. Madam Secretary, close the voting and announce the results. 13 Eyes. 13 Eyes Council Bill 21 Dash 1188 has passed. Thank you to Fran and the members of the public who joined us on that hearing. Next up, Councilmember Ortega, will you please put Council Bill 1334 on the floor for final passage? I move that council bill 21 1334 be placed on final consideration and do pass. Thank you. It has been moved and seconded. The required public hearing for Council Bill 1334 is open. And just want to remind folks before we have the staff report that we do have a face covering mandate in the city and county of Denver and in our building. And so I just want to remind folks to keep your face coverings on. We're glad to welcome Michael Carrigan this evening for the staff report. Go ahead, Michael. Thank you, Councilmember. Good evening, council members. I'm Michael Carrigan with the Department of Finance counter bill 21 1334 is for an ordinance approving 2/1 amended and restated service plans for the metropolitan districts supporting redevelopment of a site known as Fox Park. The districts are called West Global Metropolitan District Number one in West Kill Bill West, Global Metropolitan District number two. The districts are already organized and existing metropolitan districts and their original service plans were approved by council in March of 2016. The first amended and restated service plans are being submitted for City Council approval on behalf of the Boards of Directors pursuant to the requirements of Special District Act Sections 32, Dash one, Dash 201 and more particularly 32. Dash one, Dash 204. Colorado Revised Statutes. The two metropolitan districts will aid in the development of Fox. News for your. It's not the the presentation is not the correct presentation for this hearing. I do not have a. Not notice that I'm sorry about that. I don't know how to like. Have a staff member come help us with that. I believe Jen can go ahead and do that. Thank you, Councilmember Black. When you say. And I guess they let us know we were aware there. We don't necessarily have a presentation so we can take the presentation off so we won't have that coming up. Gotcha. Okay. Very good. The two metropolitan districts will aid in the development of Fox parts of Fox Park, which is which is a planned as a residential hotel and commercial mixed use project adjacent to the 41st and Fox commuter rail station. At full buildout, Fox Park is anticipated to encompass 6.2 million square feet of mixed use development and accommodates a daytime population of 3300 people. The inclusion area for the two metropolitan districts remains the same as was first approved by council in 2016. The amended and Restated Service Plan contains the District's purpose, powers, requirements and Financial Plan and are based off the city's newly proposed model service plan to address a number of issues, including a more robust disclosure requirement. The district shall be responsible for compliance with the city's municipal code rules, regulations and policy and other applicable law. The District shall ensure that the District's public improvements are designed and constructed in accordance with the standards and specifications of the city and other governmental entities having jurisdiction. It is anticipated the West Global Metropolitan District number one, will ultimately include all commercial property located within the Fox Park Development and West Global Metropolitan District. Number two ultimately encompass include all of the residential property located within the project. The metropolitan districts will be responsible for coordinating the financing, acquisition, construction, completion, operation, ownership and maintenance of public infrastructure and services within and without of the service areas, including without limitation street improvements, traffic and safety signals, water improvements, sanitation improvements, storm drainage improvements, parks and rec facilities and landscaping improvements. The district will be required to recorded a disclosure notice upon all property within an inclusionary of the districts. The metropolitan districts will have the power to raise revenues pursuant to the authority's granted by the Special District Act, including the imposition of up to 50 mills for district debt, operations and maintenance. Once the district imposes a debt mill levy, its operations and maintenance mill levy cannot exceed ten mills. The districts will have a 40 year maximum imposition term for a debt in the levy. The metro districts will also be authorized to impose up to five mills for regional improvements at the direction of the city. The total estimated costs for the public improvements necessary to serve the contemplated development are approximately $350 million. The amended and restated service plans anticipate that the districts will issue approximately $150 million of debt over multiple issuances to align with the construction phasing of the development. The district's financial plans indicate that the districts are able to retire the proposed debt within the limitations established by the service plans. Staff recommends approval of the first amended and restated service plans. Thank you. All right. Thank you, Michael. And didn't mean to make that more stressful than it needed to be for you. So great job on that. We have three individuals signed up to speak this evening. The first two are here in chambers. Josie Curran, Dan Clarendon. Now you can correct me on your last name. If we have Josie here. Jose down now. Yes. I'm just here to answer questions. Okay. Thank you. Thank you. All right. The next speaker we have in chambers is Mack Ryland. Good evening, counsel. Matt Ruland, general counsel for the Metropolitan Districts. And I'm here to. Answer questions if there are any. Thank you. Thank you, Matt. We're going to go ahead and move on line. We have Jesse Perez signed up. And it looks like we might have had Jesse leave the meeting. Okay. It doesn't look like we have Jesse. So. All right. That concludes our speakers for this hearing. Questions from members of Council on Council Bill 1334. Councilmember Sawyer. Thanks. On a president. Did you say one five mils or five zero mils when you were saying it? I couldn't tell if you said 15 or 50. And I just needed a clarification. Thanks. Michael Carey from Department of Finance five zero 50. Thank you. All right. Thank you, Councilmember Sawyer. Next up, we've got Councilmember Flynn. Thank you, Madam President. Michael, a couple of questions. I'm looking at the presentation that was given at committee while you were going along. And just a couple of questions says the original service plans under a previous owner was based on a public infrastructure investment of just under $12 million. And then this one is the restated. One shows an estimated cost of public improvements of 340 million. That's like. Math on the fly. It's like 30 times or something like that. Yeah, about 30 times. And what accounts for this? So it's my it's my understanding that the original service plan was entirely dependent on a development plan. It's completely different than than what was contemplated. Obviously. I understand that the first developer was never really intending to build anything. They were just trying to get as much entitlements as possible and then turn around and sell the property to another property owner. Okay. I see that that first one that was the one that included Mike Shanahan. Not aware of that. Is Mr. Ruland or someone from the could you answer the question is what accounts for this massive difference in in public investment. From the original to the current. Your other question, Mike Shanahan was not part of the original. Okay. But the biggest difference well, one of the cost of infrastructure has changed a lot. And in the. Interim. Sorry, could you slow down and speak of. Cost of. Infrastructure has. Changed significantly, has gone up quite a bit, but most of it is because of the enhanced development costs of the actual infrastructure being put in, not the dollar for dollar. And the project is much more robust and much more dense than what before. It was originally anticipated to be a single family residential development and it was much it was done prior to even really understanding what was going to be there. So we've done more of of speculation this is being done off of the intended development that's before you. Okay. And the projected debt issuance is $150 million. That is total. The capital I that's the 30 bills, correct? That would be what if there's a combined cap of 50 mills. Ten of which would go towards operations and. You're issuing debt for operations? No, I'm saying of the 50. Mills that is allowed, ten of it would go towards operations of. 40 and five, a regional. Possibly five, but that's. Above the 50. We're anticipating 34 debt, though. You are. Correct. Okay. Thank you. That was my next question, actually. So you're capped at 50 mills. Of those ten are the owned M five mills. Is the regional region. Five is above and beyond. That's if the city decides to have us impose that. The city informs us to impose the regional level, and we do so. So it's really 55, correct. Okay. So where does the rest of the money come to build the $340 million in infrastructure with a debt issuance of only 150. It'll either come from two financing through direct or through developer costs. And that's our next hearing, correct? Okay. Thank you. That's all I have, Madam President. All right. Thank you, Councilmember Flynn. Councilmember Ortega. Thank you, Madam President. I wanted to ask Chris, never Chrissy in the audience to come forward and talk about this is sort of in in response to Councilman Flynn's question about the infrastructure and how the traffic demand management for this area and specifically for this site changed those numbers from the first application that came before council to this one for this metro district. So, Chris Nevett mayor's office. Nice to see y'all. So are you referring to the the first concept plan for for this project back in whenever it was 2017, 28? I am because it's my understanding that back then the whole next step study was not done. We didn't have the traffic demand management plan in place in terms of how developers in this area were expected to use traffic demand management as a tool in terms of trying to figure out how to essentially reduce parking on the on the development sites, but also how any new roadways built, create a different standard, if you will, for what can be allowed at additional sites in this area, including this one. Thank you for the orientation, ma'am. So the original. We're going to go ahead. And former councilman, if you could put your mask on. We're we're trying to obey the mask mandates that come forward. So I wanted to just remind you about that. Thank you. I figured I was six feet from y'all and. Justin closer to the microphone. Your model, the right. Behave yourself. Okay. So the original plan, when it came forward to us, clearly imposed a challenge with respect to managing the traffic. Exactly, exactly as you said. And we did not have a next step study about how we would address those challenges with traffic. We had no transportation demand management requirements. We definitely did not want to have traffic from this project in the surrounding neighborhoods and caused major issues, particularly with respect to emergency service vehicles, because there's only two point of access in and out of the Fox Island area. And so we set that project. In motion with a cap on the total amount of traffic to be generated not just from this project, but any project from the total amount of traffic to be generated from new development. And with that, we set in motion the next step study process, which concluded just a little bit earlier this year, which told us what is the new pieces of infrastructure that we need to serve this area. We also established a transportation demand management requirement. Again, not just for this project, but for all projects in this area. And that very much was the pilot program for the Transportation Demand Management Program that we have now citywide. So we we've we used the kind of experimented here in Fox Island and now have a citywide transportation demand management program. And then as this project has moved forward, what you're seeing tonight is the tax increment financing. The metropolitan district levies a whole financing structure to build the components that the next step study said that we need to build in order to serve the rest of the area. So we'll continue to have transportation demand management keeping a lid on the amount of new traffic generated from development here. But we'll also be building new not just roadway infrastructure, but multi-modal infrastructure to serve both this project and other projects in the area as well. So how much how much of that? New infrastructure that you're talking about is being imposed on this particular development project or this developer that has changed the the mill, the financing of the project, essentially. Right. This project is actually taking on an enormous amount. So the next step study identified four key projects. One was the 38th Avenue, Park Avenue, Fox Street. 25 off ramps. It's a complete mess there. And we refer to it as the, you know, boulder ized way as the cluster. That's a mess. We need another new point of access for the area. We also identified and this was a key innovation from the next step study. A new access on the south from Huron Street going over to 38th Avenue and then 44th Avenue. Is what is not a killer. Correct? I'm sorry. That one. It's not vehicular access. It's more pedestrian by. No, it's it's. It's vehicular access. It could be it could be bike ped, but it's, you know, to be maximally effective, it's it's a it's fully modal across all modes, you know, vehicle of emergency avenue. So jumping 38th Avenue and then the 44th Avenue bikeway, which is really the main multimodal connection between the sort of the the the other quadrant of Globeville on the east to connect through to Fox Station. That's a key project. So right now that 44th Avenue bridge over I-25 is kind of a miserable experience. And then traveling west to get the Fox Street and then down to the station, that's not very pleasant either. So the next up study identified those four projects. This project will completely design and reconstruct the 38th Avenue Fox. Park Avenue cluster. We need to go through a process to figure out feasibility, cost, etc. of a of a new access, an entirely new multimodal access for the island that may be up in the north by a bridge or a tunnel. It may be the the Huron Bridge. So they will construct both of those and they will render to us complete design of the other key components that they don't construct. So the 44th Avenue bikeway, we'll get a complete design of that, be able to pursue that on our on our own. And depending on what the the new complete new connection to Fox Island is, we'll be able to take the other one and have that as complete design as well and seek funding elsewhere to do that. So as we're seeing other sites developed in this area, are other developers being asked to contribute towards offsetting the cost of that infrastructure that you just talked about? That that is a great question. And the. Is the short answer? No, the simple answer is no, because there's a scale issue. So there's a project only of a certain. All of those sites were significantly observed. The ones that have been resolved by this body, that have been brought forward by the planning process. Yeah, you're you're absolutely right about that. I mean, they have we have rendered considerable with your permission, we have rendered considerable value to those sites. Some sites are quite small, so we've got a couple of townhome projects and we can hardly sort of ask a townhome project to make a major infrastructure investment. But without getting into too much detail, there are two large sites that occupy the southern part of the island, and those were big rezonings, as you say. And those occupy what used to be large format industrial parcels. So big sort of multi block parcels. Those projects are all delivering an entirely new street grade back to the city. So we don't have 40th Avenue west of Foch Street. We're getting a 40th Avenue west of Foch Street. We only have half of a 39th Avenue west of Fox Street. We're getting all of 39th Avenue, west of Fox Street. But wouldn't we be doing that anyway? No, ma'am. We have no way to do that. We would I mean, that would require acquiring the land, designing, building those roads. So what I'm asking is, wouldn't we be asking a developer to do that anyway? I know I've seen projects around the city where. There is no. Right of way infrastructure, curb, gutter sidewalks, etc., where the city demands that the developer do that. So you're saying that that's part of what we're asking them to do here. But we're also not asking them to contribute to the the other infrastructure that provides greater access in and out of this location. That is correct. So so we're requiring them to give us gallop, go back to create a new here on street, to create a new 40th Avenue, create a new 39th Avenue. And they will also be creating a right in right out on 30 Ave with Gallop go. But we are we are not there. They are currently not part of the the deal, if you will, to reconstruct those two big projects that this project will be constructed. So all of that is to say that the increase in the infrastructure costs is part of why we're looking at 350 mills instead of 150 million, essentially. And over the course of time in doing this project. Keep the debt. 150 million. Sorry, not mills, but million. Yeah, that's what I meant to say. So the 150 million of the debt is anticipated to be used for parking garage, public infrastructure for the project. The other infrastructure components this Christmas talking about. That's part of the development agreement. That's a separate ordinance before us tonight. And that is being financed through TIFF proceeds and then through the developer developer dollars. But just for the metro district, under $50 million of. Debt is for. Parking garage. Public parking garage. Okay. Thank you. I think the explanation of the additional costs that this particular site in the developer is incurring is an important part of the bigger conversation, because we've got other bills on the same site coming up tonight. But I think that helps clarify what some of the additional costs are to this particular development site. Yes, ma'am. They're they're shouldering a very substantial burden. Okay. I have no further questions. Thank you. All right. Thank you, Councilmember Ortega. Next up, we've got Councilman Cashman. Yeah, thank you, Madam President. If I could get the representative back up. I just want to clarify. If I heard you correct. What I thought I heard you say was that the previous plan was single family homes. Assisted single families going to be commercial if they were going to be residential. But it was substantially less dense and less robust. Yeah. I'm looking at an article from Denver right from 2000th June 2018 that we had resounded for 8 to 12 stories, 660,000 square feet of office retail, 85,000 pure retail, and about 3000 residential units. Can you give me a comparable estimate of square foot of development we might expect for for now from that would justify the figures we're talking. Well, I think once again, I think. What justifies the figures is the increased infrastructure. More so than. Anything, the as Christmas and the access points in the road infrastructure is significantly different than what was anticipated in. 2016 when these were approved. But you have no numbers at this point of development on site. The developer reports here. It had 6000. 62 million square feet. Of office space. What if you wouldn't mind reintroducing yourself for the record, please? Jose Caetano developer sold the previous site plan even though it was his own and entitled to that maximum. The owner was only contemplating 2 million square feet and total of that development. When we acquired the property. We understood the full potential of the of the entitlement and zoning and took it up to 6.2 million square feet, 6.2 million square feet. So that and that exponentially increased the and this is the the necessary infrastructure and street grid, water, drainage and parking, parks and connectivity around the property, just like Chris said. Great. Thank you for that explanation. Thank you, Madam President. All right. Thank you. And thank you, Councilman Cashman. The public hearing has closed comments by members of Council on Council Bill 1334. Councilmember CdeBaca. Thank you. This is a really complicated one for me, because these developers have gone above and beyond what typical developers across the city have done with community members, and they've worked diligently to craft agreements with the neighborhood that no other developers have tried to do. However, on principle, I cannot support this mechanism for paying for private development, metro districts, special districts, and the two financing which will come next, are problematic for so many reasons. What we create when we create these special districts is a city within a city, and then we give or allow this city within a city to control itself and use city debt while pulling that through the financing away from the rest of the neighborhoods needs. And I think that that is not the best way to go about private development. That's what we should do when we're, you know, being responsible cities. We should do the infrastructure. We should pay for the things that we need to keep the areas safe, to make it accessible, to make the recapture those roads. And so I understand that we don't have the desire nor the funding to be able to do this. And so we lean on developers to do it. But in the long run, we don't address our goals as a city. For example, 1% of this project's budget is going toward affordable housing, and 27% is going to private parking or parking in general, which doesn't help us meet our climate goals. This is a TOD ish area where we have rail very close, and so those $2 or those dollars that end up getting taken away from the rest of the surrounding neighborhood, those tax dollars that the people within the project end up having to pay later on down the road. That is not going toward our broader goals as a city. Additionally, I think that we use this complicated structure and pass down the burden to the to unknowing people. I know we're trying to disclose when we sell property, disclose better that this is a special district and the taxing is out of our control after they purchase their properties. But we know that across the state buyers and harmed in the long run when the taxes go up and they have no control over it and they have no ability or recourse to go to the city and control that, the developer gets to control all of that. And so for those reasons on this one and the tariff, I will be a no tonight. But I do want to thank the developers for doing what they've done to engage with the community around the community benefit agreements. I do challenge my colleagues to think about how we fund our city's needs differently and how it's not sustainable to continue to rely on private development to do these things that we need for our city. And perhaps we should be doing the things as far as infrastructure is concerned that we need and then allowing developers to do what they have to do. So we don't have to create these types of metro districts to authorize the debt to be able to get it done. Thank you. That's it for my comments. Thank you. Council members say to Barker Councilmember Ortega. Thank you, Madam President. So metropolitan districts are a creation of state legislation that gives local governments an additional financing tool to determine how development within their jurisdictions can be created. And it's the dollars from the development that are actually retained within the development that allow those mills to be captured, that pay that debt. So it's not like the rest of Denver taxpayers are paying any costs towards this project. It's all dollars that come from the development site itself. I think we would all like to see reduction in parking, but. There is private financing that is part of this development. And banks will not loan money to a project that is without parking. They don't want to be stuck with a project that can't park itself. And it's part of the reason why the city has gone through this extra work in creating the next step study and looking at how developments not only in this area, but we will be seeing huge developments along the I-25 corridor where this particular process of doing the next step study is going to be vital to ensuring that we're not continuing to see gentrification and displacement, but really impact on existing infrastructure, roads, water, sewer, etc., etc.. So in this case, the developer is bearing those costs. Yes, it does get passed on to the end user, but this is how projects are getting financed across the state of Colorado. So I just want to express my support for this project for the extra miles that this developer has gone in working with the global community and creating the opportunity for offsite affordable housing that will be part of this, as well as many of the amenities that will be on this site that will be accessible to residents of the global community as well. So with that, I just want to express my support. Thank you. Thank you. Council member State Abarca or Councilmember Ortega and Councilmember CdeBaca, we have you back in the queue. Yeah, thank you. I just wanted to also point out that we have multiple special districts and tive financing across our city to look to to determine if those mechanisms for creating development and needed infrastructure have achieved development without displacement. And what I have found in my research is that we have not used this in a way that has prevented displacement in any of the places where it's been done. And so and we need to also be cognizant of the fact that it will, in most cases, catalyze further development and increase displacement because it changes the whole ecosystem. It is on an island, but not on an island. It will affect everything outside of its space. It will affect the values of everything around it. And that will catalyze more displacement in our communities. And we have to be also cognizant of the fact that we're locking in the current linkage fee with this project, 125% of it. We are increasing the linkage fee on large developments because we know we haven't captured what we should be capturing to pay for affordable housing. And this feels like it's premature. We should have waited until we locked in a new linkage fee so that they would be accountable to that linkage fee, because we don't know if the new linkage fee is going to be 125% of the current linkage fee. And so I wish we would have waited on this part of the deal, because I do think that this development, the size of it, they should they should be accountable to the the the linkage fee that we're working on to truly mitigate and create affordable housing. That's it. Thank you. Thank you, Councilmember CdeBaca. And I'll go ahead and weigh in on this. Green Valley Ranch in the far northeast would have never been built if it wasn't for metro districts. The city would not have had the capital to invest in that infrastructure. And we've got another example in the far northeast, the Gateway Improvement District that is right in the middle of the Belo community where I've lived for 25 years. And we did not see displacement with that Gateway Improvement district either. And so I think we've got to go in to these sort of projects with our eyes wide open as to what the city can accomplish as far as infrastructure and work. We're going to have to partner with developers or metro districts to quite honestly do that work. Madam Secretary, Roll Call on Council Bill 1334, please. CDEBACA No. Clark. I. FLYNN Hi. Hamden Hi. Catherine. I can eat I. Ortega Sandoval I saw you, I. Torres Hi. Black Eye. Madam President. I. Madam Secretary, please close the voting and announce the results.