7/30/2019 Derby North Gateway TIF District Feasibility Study

1/120

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

7/30/2019 Derby North Gateway TIF District Feasibility Study

2/120

Redevelopment Project Financial Feasibility Study

Derby North Gateway TIF District

City of Derby, Kansas

March 29, 2013

7/30/2019 Derby North Gateway TIF District Feasibility Study

3/120

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

7/30/2019 Derby North Gateway TIF District Feasibility Study

4/120

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

7/30/2019 Derby North Gateway TIF District Feasibility Study

5/120

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).

7/30/2019 Derby North Gateway TIF District Feasibility Study

6/120

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