Derby North Gateway TIF District Feasibility Study

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Transcript of Derby North Gateway TIF District Feasibility Study

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    MEMORANDUM

    TO: Sedgwick County Finance Division Staff

    FROM: Tom Kaleko, Senior Vice President/Client Representative

    Tom Denaway, Analyst

    DATE: March 29, 2013

    SUBJECT: Sedgwick County tax increment finance policy minimum data requirements

    The purpose of this memorandum is to outline the location of the minimum data requirements, as specified by the

    Sedgwick County Tax Increment Finance Policy, within the Derby North Gateway TIF District Financial Feasibility

    Study.

    Minimum Data Requirements Location

    Legal description and district mapThe legal description is in Exhibit V

    Map of TIF district is in Exhibit I.

    Existing assessed valuation and list of owners Parcel listing in Exhibit VI

    Existing zoning classifications and proposed land

    uses

    Zoning map in Exhibit IX

    No proposed changes in land use

    Description of proposed projectSection 3 describes projects

    Section 5 outlines public improvements to be funded

    Market feasibilityExhibit VII indicates how district will be timed to coincide with

    market support

    Private pro forma Not applicable

    Public sources and usesSection 4 outlines the analysis of public fundingExhibits II and II illustrate assumptions and annual projections

    Section 5 outlines proposed public uses

    Exhibit IV illustrates annual debt-service

    Evidences of private fundingExhibit VII indicates how district will be timed to coincide with

    market support

    Description of expanding municipal services Exhibit VII

    Springsted Incorporated

    9229 Ward Parkway, Suite 104N

    Kansas City, MO 64114-3311

    Tel: 816-333-7200

    Fax: 816-333-6899

    www.springsted.com

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    Redevelopment Project Financial Feasibility Study

    Derby North Gateway TIF District

    City of Derby, Kansas

    March 29, 2013

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    1 OVERVIEW ...................................................................................... 1

    2 GENERAL DESCRIPTION OF TAX INCREMENT...................................... 3

    3

    PROJECT DESCRIPTION ................................................................... 4

    4 PROJECTED REVENUES (BENEFITS) .................................................. 6

    5 PROJECTED EXPENDITURES (COSTS) ................................................ 8

    6 CONCLUSIONS ................................................................................ 9

    MAP OF PROPOSED REDEVELOPMENT DISTRICT & PROJECT ............EXHIBIT I

    TIF DISTRICT AND REDEVELOPMENT

    PROJECT AREA ASSUMPTIONS........................................................... EXHIBIT II

    PROJECTED PROPERTY TAX INCREMENT ......................................... EXHIBIT III

    BOND PROJECTIONS ......................................................................... EXHIBIT IV

    LEGAL DESCRIPTION.......................................................................... EXHIBIT V

    PARCEL LISTING................................................................................ EXHIBIT VI

    MARKET FEASIBILITY STATEMENT .................................................. EXHIBIT VII

    DESCRIPTION OF EXPANDED MUNICIPAL SERVICES .......................EXHIBIT VIII

    ZONING MAP ...................................................................................... EXHIBIT IX

    BLIGHT STUDY .................................................................................... EXHIBIT X

    Mission Statement

    Springsted provides high quality, independent financialand management advisory services to public

    and non-profit organizations, and works with them

    in the long-term process of building their communities

    on a fiscally sound and well-managed basis.

    Table of Contents

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    Introduction

    City of Derby, Kansas. Redevelopment Project Financial Feasibility Stud

    1. Introduction

    The City of Derby, Kansas is proposing creation of a tax increment financing

    (TIF) district as a means to fund public road improvements. Specifically,

    realignment of Nelson Drive to the east, allowing it to intersect East Patriot

    Avenue aligned with the private roadway serving the existing Lowes/Kohls

    development. This Redevelopment Project Financial Feasibility Study has beeprepared to meet the requirements of state statutewhich are described below

    and to assist the impacted taxing districts in consideration of this proposed

    financing district.

    Statutory Basis and Process

    Sections 12-1770 through 12-1780 of the Kansas Statutes ("the Act") provide a

    means for cities to finance public development and redevelopment costs

    through tax increment financing. The purpose of the Act is to "promote,

    stimulate and develop the general and economic welfare of the State of Kansas

    and its communities and to assist in the development and redevelopment of

    eligible areas within and without a city thereby promoting the general welfare

    of the citizens ofthis state

    A city may exercise the powers conferred under the Act by approval of an

    ordinance adopting a plan (the District Plan) which describes the boundaries

    of the specific area to be developed or redeveloped and the types of

    improvements to occur. Prior to adoption of the District Plan, the city must

    pass a resolution setting a public hearing and finding that the specific area

    sought to be developed or redeveloped (the Redevelopment District or

    District) is an eligible area under the Act.

    One or more redevelopment projects (the Redevelopment Project or

    Project) may be undertaken within each District. For each Redevelopment

    Project undertaken within the District, a project plan ("the Project Plan") must

    be prepared in consultation with the controlling planning commission. The

    Project Plan must include the following:

    1. A summary or copy of the Financial Feasibility Study (this document).2. A reference to the District Plan for the District.3. A description and map of the area to be redeveloped.4. A Relocation Assistance Plan.5. A detailed description of all buildings and facilities proposed to be

    constructed or improved.

    6. Any other information the city deems necessary to advise the generalpublic of the intent of the Project Plan.

    The Act requires all Projects to be completed within 20 years from the date of

    the approval of a Project Plan, with the exception of environmental

    investigation and remediation projects which must be completed within 20

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    Introduction

    City of Derby, Kansas. Redevelopment Project Financial Feasibility Stud

    years from the date the city enters into a consent decree with the Kansas

    Department of Health and Environment or the U.S. Environmental Protection

    Agency.

    The Financial Feasibility Study must show that: a) the Projects benefits, tax

    increment revenue, and other available revenues under K.S.A. 12-1774(a)(1)

    are expected to exceed or be sufficient to pay for all Project costs as defined byK.S.A. 12-1773, including the payment of principal and interest of debt used to

    finance the redevelopment project; and b) the effect, if any, the redevelopment

    project costs will have on any outstanding special obligation bonds payable

    from the revenues described in K.S.A. 12-1774(a)(1)(D).

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    General Description of Tax Increment

    City of Derby, Kansas. Redevelopment Project Financial Feasibility Stud

    2. General Description of Tax Increment

    Tax increment generated within the proposed Project Area will consist only of

    ad valorem property tax revenues. The Project will not redirect any portion of

    the sales tax increment. Therefore, this summary description of how tax

    increment is calculated and captured to fund redevelopment project costs

    addresses only the property tax increment.

    Upon establishment of a Redevelopment District, the total assessed valuation o

    all taxable real estate within the District is determined. This valuation is

    referred to as the District's "Base Year Assessed Valuation." Property taxes

    attributable to the District's Base Year Assessed Valuation are annually

    collected and distributed by the county treasurer to the appropriate city, county

    school district and all other applicable taxing jurisdictions in the same manner

    as other property taxes.

    As new development occurs within the Redevelopment District, the total

    assessed valuation of the District in any given year will presumably exceed its

    Base Year Assessed Valuation. The real property taxes attributable to this

    increase in valuation above the Base Year Valuation represents the tax

    increment that will be utilized by the District to pay eligible project costs. All

    tax increment collected by the county and distributed to the city is deposited

    into a segregated fund established solely for that purpose.

    Tax increment funds may only be used to pay for specified eligible project

    costs, including principal and interest on debt used, in whole or in part, to

    finance projects within a Redevelopment Project. Such debt includes notes,

    special obligation bonds, full faith an