A bill for an ordinance approving the First Amendment to the Amended and Restated Service Plan for Denver International Business Center Metropolitan District No. 1. Approves the First Amendment to the Amended and Restated Service Plan for Denver International Business Center Metropolitan District No. 1, located near Tower Road between 64th and 72nd Avenues in Council District 11. The Committee approved filing this item at its meeting on 3-19-19.
If you are here to answer questions only when your name is called, please come to the podium, state your name and note that you are available for questions of council speakers about 3 minutes and there is no yielding of time on the presentation monitor. On the wall you'll see your time county down. Speakers must stay on the topic of the hearing and must direct their comments to the council members. Please refrain from profane or obscene speech. Direct your comments to council as a whole and please refrain from individual or personal attacks. Councilwoman Gilmore, will you please put Council Bill 246 on the floor? Yes, President Clark, I move that council bill 19 dash 0 to 4 six be placed upon final consideration and do pass. It has been moved. Can I get a second? Thank you. It's been moved and seconded. The public hearing for Council Bill 19 0246 is open. May we have the staff report? Good evening. My name is Andrew Johnston with the Department of Finance here to talk to you about a amendment to an amended service plan for Denver International Business District number one. The district was organized in 1994 after city approval of a service plan and August 29th of 1994. The service plan was subsequently amended by the city on December 16, 2022, and most recently just last October. In October 2018, we amended and restated the whole service plan. Which brings us to why we're here tonight. The Denver International Business Center Metropolitan District is located west of Tower Road, between 64th and 72nd Avenues. The district is mostly is most easily recognizable for the various office and hotels on the west side of Tower Road. The district district contains only commercial property, and as the new airport noise contour prohibits residential development, the metropolitan district currently has about 11.3 million in bonds outstanding and an assessed value of 11.30 $1.7 million. The purpose of the recent amended and restated service plan in October 2018 was to update update the service plan language and certainly the new language in section SB four of the service plan was too restrictive and did not meet the circumstances of a growing metropolitan district. The district current bonds were issued with an unlimited meal levy pledge as allowed because the debt was 50% of the assessed value. This is not uncommon in districts where infrastructure is complete. However, Denver International Business Center is still constructing public infrastructure and for the next phases of development, the ratio of debt to assessed value will exceed 50%. The existing language actually in the service plan actually prohibits the issuance of any debt where the debt is to where the debt to assessed value is greater than 50%. The correction before you tonight is to allow the debt to be issued when the assessed value is greater than 50%. So long as the mill levy pledge for repayment is less than the maximum aggregate mill levy of 50 of 60 mills. Approval of the amendment clarifies the service plan and will permit the district to enter into financing arrangements allowing construction of future phases. This amendment only modifies Section XP for the district. Activities shall continue to be subject to review by the city as provided in the current and amended and stated service plan, state or local law, intergovernmental agreements , or where the district activities deviate in a material manner from the amended and restated service plan. The primary purpose of this district will be to financing strike public improvements and to operate and maintain the public improvements that are not accepted for ownership or maintenance by the city or any other public entity. The district's public improvements will be for the use and profit of anticipated taxpayers in the district and staff recommends approval of the amended Section XP four of the service plan. The applicant and their representatives are here to answer any questions. Thank you very much. We do have two individuals signed up to speak this evening, so I'll ask if you signed up to speak on this, please come up to the front bench. And first up is Marianne Mcgeady. Hi. My name is Maryanne Mcgeady. Address four or five 454 50/17 Avenue, Suite 400 and Denver. I here on behalf of the applicant to address any questions you may have. Thank you very much. Next up, Jesse Paris. It's just the. Represent for Denver homeless sell low black star some woman for self defense and positive as a commitment for social change. And I'm an at large candidate for the May 2019 election. I'm on top of the ballot. I was neither for or against this amendment. I wanted to know more details on what this all encompassed, how it was going to affect the workers at the CIA since we just passed a $15 minimum wage increase for the CIA workers. And there's this whole section of tower roll. Going to be an industrial district. Thank you. Thank you. That concludes our speakers. Are there any questions from members of Council Councilwoman Ortega? Thank you, Mr. President. And I apologize. I did not get a chance to check in with you guys on a couple of these questions. So the fact that it is unlimited but capped at 60 miles with the amendment. So first of all, what changed from the original creation that is warranting the amendment? And then when the improvements that are done that are turned over to the city and typically that's what roads and parks, what else would that include? So and when that's done, does the mill that's being charged or the amount of mills to the the property owners that come in, does any of that go down when those assets, if you will, are turned over to the city? So can one of you address those questions? This is Marianne Magee. I'll try to address the questions as I understand them. The first question had to do with the total overall mill levy and how does that mill levy adjust as improvements are constructed, completed, and then to the extent conveyed to the city and county for assumption for operation maintenance. What we understand at the district level is we forecast over 30, 40, 50 years what the improvements will be, what the maintenance burden will be with the eye towards trying to keep the mill levy as level as possible. And so we anticipate that there will be transition in the ownership and operation. And maintenance to the city. And so the mill should stay pretty constant. It shouldn't drop. So even though. The. Where the mills are set and the calculation factors in all of the maintenance, those assets that get transferred over to the city, the maintenance of the the mill, the the amount of money that's being charged to to the property owners still remains constant. Well, it's there is a growth projection. And so what's happening is the mill levy staying the same, the amount of dollars being used to pay debt versus operating is changing year to year. But we do build into that forecast the assumption that there's transition once we get to the end of the warranty period on certain of those operating items for the items that the district continues to be responsible for, we have to continue to have a reserve. Depreciation. Budget repair, replacement budgets. And so that's why we try to keep it constant over time, even though what we're spending the money on varies. I think your other question had to do with the mill levies and under the. So what what changed that warranted this amendment? Okay. Under the model plan that's being proposed and under discussion, which we used as the template to start preparing the amended and restated plan that was most recently approved by Council. There was a section there that refers to unlimited mill levy, which occurs once you have exceeded 50% debt to assessed valuation. So at that point you're financially stable. You can get a better interest rate if you can remove that mill levy cap. However, the way the wording is in that template plan is that once you have done that, you you can't issue any cap mill levy debt because it's assuming that all the debt you're going to issue is going to be beyond that 2 to 1 debt to assessed ratio calculation. If you have a single phase of financing that works, if you're doing future phases of financing, you can't get that next phase done. And because the ABC since 1994 is one large district and doesn't have multiple districts within its service area, it needs to be able to issue those next phases of debt to complete the project. So in discussion with the Finance Department, we brought forward the concept that you'd keep the unlimited mill levy pledge on the debt that mathematically is below the 2 to 1 debt to assess calculation for any debt issued. Beyond that, you would have the mill levy cap in place, that mill levy that's needed to serve the unlimited debt. If it takes up all of the cap, then there would be no money to pay on this on those cap debt. So mathematically, you're not pushing the mill levy cap beyond what was in the original plan. And under what circumstances might we see an additional, excuse me, metro district being created under this district? I know with I think it was the football stadium district, it had more than one metro district created. Well, for DBC, the way it has set its boundaries and it has an inclusion area and it brings in property as it's developing it, there shouldn't be a need to organize any future districts. Thank you. I have no further questions. Thank you, Mr. Chair. Thank you, Councilwoman Ortega. Seeing no other questions, the public hearing for Constable 246 is closed. Are there any comments by members of council? All right. No seeing, no comments. Madam Secretary, roll call on Gainesville, 246. Black eye. Brooks Espinosa. Hi, Flynn. Hi, Gilmore. I can. I can use Lopez. All right. New Ortega, I. Assessment, Mr. President. All right. Madam Secretary. Because the voting in the results. 12 hours, 12 hours council bill 19 0246 has passed. Councilman Gilmore, will you please put Council Bill 127 on the floor?