Leveraging Contextual Learning in Your Talent Development Strategy
Leveraging Development Agreements Between Municipalities...
Transcript of Leveraging Development Agreements Between Municipalities...
Leveraging Development Agreements Between Municipalities and Private Parties Attracting Private Funding for Long-Term Development Projects and Addressing Land Use and Infrastructure Issues
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
WEDNESDAY, MARCH 11, 2015
Presenting a live 90-minute webinar with interactive Q&A
Shelby D. Green, Professor, Pace Law School, White Plains, N.Y.
Gregory W. Jones, Esq., Ancel Glink Diamond Bush DiCianni & Krafthefer, Chicago
Rob Killen, Shareholder, Kaufman & Killen, San Antonio
Tips for Optimal Quality
Sound Quality
If you are listening via your computer speakers, please note that the quality
of your sound will vary depending on the speed and quality of your internet
connection.
If the sound quality is not satisfactory, you may listen via the phone: dial
1-866-871-8924 and enter your PIN when prompted. Otherwise, please
send us a chat or e-mail [email protected] immediately so we can
address the problem.
If you dialed in and have any difficulties during the call, press *0 for assistance.
Viewing Quality
To maximize your screen, press the F11 key on your keyboard. To exit full screen,
press the F11 key again.
FOR LIVE EVENT ONLY
Continuing Education Credits
For CLE purposes, please let us know how many people are listening at your
location by completing each of the following steps:
• In the chat box, type (1) your company name and (2) the number of
attendees at your location
• Click the SEND button beside the box
If you have purchased Strafford CLE processing services, you must confirm your
participation by completing and submitting an Official Record of Attendance (CLE
Form).
You may obtain your CLE form by going to the program page and selecting the
appropriate form in the PROGRAM MATERIALS box at the top right corner.
If you'd like to purchase CLE credit processing, it is available for a fee. For
additional information about CLE credit processing, go to our website or call us at
1-800-926-7926 ext. 35.
FOR LIVE EVENT ONLY
Program Materials
If you have not printed the conference materials for this program, please
complete the following steps:
• Click on the ^ symbol next to “Conference Materials” in the middle of the left-
hand column on your screen.
• Click on the tab labeled “Handouts” that appears, and there you will see a
PDF of the slides for today's program.
• Double click on the PDF and a separate page will open.
• Print the slides by clicking on the printer icon.
FOR LIVE EVENT ONLY
Leveraging Development Agreements between
Municipalities and Private Parties:
Value of Development Agreement
Presented by Rob Killen
Why Enter into a Development
Agreement?
Value for Municipality
Certainty in the development process
Generation of incremental real property tax and
sales tax
Incentivize certain types of development
Job creation
Protection of environmental features (e.g.
endangered species habitat, trees, water resources)
6
Why Enter into a Development
Agreement
Value for Developer:
Certainty in the development process
Creation of necessary public infrastructure
Offset development costs
7
Why enter into a Development
Agreement?
Value for Municipality
• Certainty in the development process
• Generation of incremental real property tax and sales tax
• Incentivize certain types of development
• Job creation
• Protection of environmental features (e.g. endangered species habitat, trees, water resources)
Value for Developer
• Certainty in the development process
• Creation of necessary public infrastructure
• Offset development costs
8
Potential Development Agreement
Incentives
Direct Municipal Assistance
Applicability of Current or Future
Ordinances
Tax Abatement or Reinvestment
Annexation
Special Districts
9
Direct Municipal Assistance
Grants
Fee Waivers
Construction of pubic improvements
Participation in costs of public
improvements
10
Applicability of Current or Future
Ordinances
Permitted land uses upon annexation
Grandfathering/Vested rights
Special zoning districts
11
Tax Abatement or Reinvestment
Tax Abatement
Tax Rebate
Tax Increment Reinvestment Zone
12
Annexation
Non-Annexation Agreement
Delayed Annexation
13
Special Districts
Districts with Land Use Controls
Districts that use existing tax revenues
Districts that can collect taxes and assessments
Examples in Texas
Municipal Utility District (MUD)
Water Control & Improvement District (WCID)
Public Improvement District (PID)
Special Improvement District
Road District
Municipal Management District (MMD)
Municipal Development District
County Development District
14
SunEdison Solar Farm
Project: Solar farm in south San Antonio
Incentive: Non-Annexation Agreement, Tax Abatement
Value to developer: No City taxes
Value to Municipality: Additional renewable energy
Example 1
15
Cibolo Canyons &
JW Marriott Resort
Project: Residential development, 1000+
room hotel and 2 TPC golf courses
Incentive: Special district, non-annexation
agreement
Value to developer: District collects
property, sales, and hotel occupancy taxes
Value to Municipality: Aquifer recharge
zone protection and destination resort
Example 2
16
PETCO Headquarters
Project: Creation of
corporate headquarters
Incentive: Tax abatement
and grant
Value to developer: Cash
and no taxes
Value to Municipality:
Over 400 high paying jobs
Example 3
17
City Base West
Shopping Center
Project: Retail shopping center
Incentive: Purchase of real
property and drainage
improvements
Value to developer: Equivalent
of grant for public improvement
Value to County: Job creation,
public infrastructure, new retail
in underserved area
Example 4
18
Broadway Apartments
Project: Apartment complex
in central San Antonio
Incentive: Tax abatements and
fee waivers
Value to developer: Reduced
city taxes and significant fee
reduction
Value to Municipality:
Creation of housing near
downtown
Example 5
19
Leveraging Development Agreements between
Municipalities and Private Parties:
Community Benefit Agreements
Presented by Rob Killen
20
What is a Community Benefit
Agreement?
“A Community Benefits Agreement … is a
contract signed by community groups and a real
estate developer that requires the developer to
provide specific amenities and/or mitigations to
the local community or neighborhood.” (Source
– Wikipedia)
21
What is a Community Benefit
Agreement?
“In exchange, the community groups agree to
publicly support the project, or at least not
oppose it. Often, negotiating a CBA relies
heavily upon the formation of a multi-issue,
broad based community coalition including
community, environmental, faith-based and
labor organizations.” (Source – Wikipedia)
22
Why Enter into a Community
Benefit Agreement
• Reduce risk by establishing community support
Value to Developer
• Enforceable agreement to provide benefit
Value to community
group
23
Difference Between CBA & Development
Agreement
Developer
City Community
Group
Development
Agreement
CBA
24
Examples of CBAs and Benefits
25
Atlanta Beltline
Benefits
Affordable Housing
Historic preservation
Art
(Light rail loop)
26
Denver Gates-Cherokee
Benefits
Affordable housing
Living wage
Ban on big box
(retail/residential)
27
Hollywood & Vine
Benefits
Living wage
20% of units are affordable
Job training grant
Arts grant
Employee healthcare
(hotel, housing, retail)
28
Staples
Benefits
Park and rec facilities
Parking permit
program, living wage
Job training
20% affordable housing
Interest free loans to
non-profits
(LA Lakers arena, housing, retail)
29
Similar Agreements
Even if your jurisdiction has not adopted a
formalized CBA process, there may be similar
types of agreements:
Example:
Deed restrictions with zoning – usually negotiated
with neighborhood association, community group,
park conservancy, etc.
30
San Antonio
San Antonio does not have a formal CBA
process. However, there is a provision in the
development code that encourages such dialogue
between developers and neighborhood groups,
called the “Citizen Participation Plan”.
31
Acknowledgments
Thank you to The Public Law Center at Tulane
University Law School for all of their material
on Community Benefit Agreements.
www.law.tulane.edu/tlscenters/PublicLawCenter
32
Rob Killen
100 West Houston Street, Suite 1250
San Antonio, Texas 78205
(210) 227-2000
www.kk-lawfirm.com
33
Development Agreements: Validity and Enforceability
Shelby D. Green
Pace Law School
March 2015
Shelby D. Green Development
Agreements March 2015 34
Land use regulation as a backdrop
• Pursuant to police powers • Regulations to serve the public health, safety, morals and
general welfare
• What land use regulation entails • Adoption of comprehensive plan
• Enactment of ordinances pursuant to the plan
• Ordinances • Use districts or zones
• Lot sizes
• Height
• Activities
• Historical Model for zoning • Euclidean
• Legislative acts
• Rigid segregation of uses
Shelby D. Green Development Agreements
March 2015 35
Current Land Use Model • Bargaining
• Early Forms
• 1. Variances
• authority to use property in a manner prohibited by the zoning ordinance
• Requiring some showing of undue hardship or practical difficulties
• But, must be consistent with the public interest
• 2. Special exceptions or conditional use permits
• allows a different use than is expressly permitted as of right by the ordinance
• allows additional uses, which are conditionally compatible within each zone, but which should not be allowed unless specific statutory standards assuring compatibility are met by the landowner
• More recently
• 3. Development Agreements
Shelby D. Green Development Agreements
March 2015 36
Why Bargaining
• Land use is multifaceted
• Dynamism inheres in a growing economy • Local governments have become more entrepreneurial
• New land use philosophies
Preservation
Sustainability
Shelby D. Green Development Agreements
March 2015 37
What Are Development Agreements
Agreements between Developer and Municipality
• Allowing development
• With the assurance that the zoning in place at time of agreement will govern the project
• Benefits
• To developer
• Certainty of governing rules
• Ability to coordinate approvals
• Ease of obtaining financing
• To municipality
• Fulfillment of comprehensive plan
• Opportunity for exactions
• Avoidance of litigation
Shelby D. Green Development Agreements
March 2015 38
Early Legal Challenges to Development Agreements
A form of contract zoning
• Illegal because it portends: • Bargaining away police powers
By
• Bilateral agreement
That
• Binds municipality
• Without public hearing
• Without regard for the public interest
• Prohibited by Reserve Powers Doctrine
Shelby D. Green Development Agreements
March 2015 39
How Courts Responded to the challenges
Four Camps:
1. Per se illegal as contract zoning
2. Case by case approach; invalid if:
public interest not served extraneous consideration is involved
unreasonable
process lacks transparency destructive of zoning uniformity
3. Finding conditional zoning • Unilateral promise from developer
• No promises made by municipality
• Rezoning with conditions
• Promotes general welfare, not merely private interests
• Not spot zoning
>>> Are contract zoning and conditional zoning distinguishable?
4. Upholding the Agreements
Shelby D. Green Development Agreements
March 2015 40
Development Agreements as Sui Generis
• Negotiated Deals
• Creating rights different from vested rights
• Public welfare is furthered
• Subject to public review process
• Subject to abrogation if the public interest demands
Shelby D. Green Development Agreements
March 2015 41
Legislative Responses to Challenges
•Development Agreement Acts
•By state enabling acts Arizona, California, Colorado, Florida, Hawaii, Idaho, Louisiana, Maryland, Maine, Nevada, New Jersey, New Mexico, North Carolina, Oregon, South Carolina, Virginia, Washington, Utah, and Texas
• Common Provisions
• 1. goals, details of project
• 2. minimum terms specified
• 3. conformance with comprehensive plans
• 4. limits on duration
• 5. mechanisms for review, amendments, cancellations, exceptions
• 6. approval and adoption
• Resolution
• Referendum
• Administrative
• General Effect
• Rules, regulations, official policies governing are those in force at the time of the agreement
Shelby D. Green Development Agreements
March 2015 42
Some Recent Cases
• Sierra-Nevada, SW Enter. v. Douglas County (D. Nev. 2011) (because authority retains the ability to rezone as the public interest requires in the future, the contract “entails neither a formal, nor a practical surrender of the police power.“)
• Toll Brothers, Inc. v. Board Of Chosen Freeholders of Burlington (N.J. 2008)(recognizing the value and limits of “developers agreements”)
• 2800 La Frontera No. 1A, Ltd. v. City Of Round Rock (Texas Ct. App. 2010)(reaffirming the validity of development agreements)
• Neighbors For Responsible Development v. City Of Yakima (Wash. Ct. App. 2006)(rejecting contract zoning challenge)
Shelby D. Green Development Agreements
March 2015 43
Strengthening the Foundation: Getting the Most out of Development
Agreement Statutes Strafford Webinar:
“Leveraging Development Agreements between Municipalities and Private Parties”
March 11, 2015
Presented By:
Gregory W. Jones Attorney
Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer P.C.
www.ancelglink.com
44
Overview
Basic components
Common limits on development
agreements
Key provisions to enable public-private
agreements
45
Why is Statutory Authority Necessary?
Development agreements include limits on future
zoning power; courts question the authority
Municipal police powers are delegated by the
state and can be limited by the state
Therefore, a state statute supporting development
agreements removes a major legal concern
46
Elements of a Typical Enabling Statute
Protection of general welfare
Permitted scope of an agreement
Enabling ordinance
Requirements for approval and adoption
Conformance to plans and other reviews
Binding state and federal agencies
Amendment or cancellation of the agreement
47
Protection of General Welfare
Outline the connection: development
agreements promote public welfare
Focus advocates and critics on the benefits
e.g., Big-box development agreements
48
Setting the Limits:
Required and Permitted Scope
Required Scope: Statues should outline provisions and information that must be addressed in each agreement
Permitted Scope: Statues should identify any and all limits on scope to prevent unconstitutional conduct
• e.g., California Statue
49
Requirements for Approval
Require an enabling statute to tie
agreement to local authority
Agreement must be approved by
ordinance or resolution
e.g., Hawaii, California, Washington
50
Conformance to
Plans and Other Reviews
Statutes often require compliance with Comprehensive Plans
Comprehensive Plans seen as a symbol of future zoning decisions
Useful to convince courts that such future powers have not been sacrificed
e.g., Hawaii and California
51
Binding on
State and Federal Agencies
Allowing state agencies to join development agreements expands options
Large developments require agency approvals that often limit certainty
e.g., Hawaii, California
52
Public Participation
Identify proven strategies for incorporating
public feedback before the hysteria
Avoid the “backroom deal” label
e.g., Water Street District, Naperville,
Illinois
53
Armoring the Agreement: Tips for Strong, Successful
Agreements
Strafford Webinar: “Leveraging Development Agreements between Municipalities and
Private Parties”
March 11, 2015
Presented By: Gregory W. Jones
Attorney Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer P.C.
www.ancelglink.com
54
Overview
Use Nollan and Dolan as a framework
Eliminate potential duress
Avoid long-term, on-going obligations
Define terms and benefits to avoid future conflicts
Retain police powers
55
Nollan and Dolan:
A Blueprint for Safe Negotiation
Refresh legal background
– Nollan v. California Coastal Comm’n, 483 U.S.
826, 833 (1987)
– Dolan v. City of Tigard, 114 S. Ct. 2309 (1994)
Voluntary agreements should not be
subject to Nollan and Dolan limits
BUT….why enter the fray?
56
Eliminate Perceived Duress
As with any contract, economic duress is a
potential pitfall
Development agreements have potential for
abuse of bargaining position
Frame agreement to reflect voluntary nature
57
Avoid Long-Term, Ongoing Obligations
Future conflicts doom development
agreements
Long-term obligations lose favor when
leadership changes on both sides
Keep it limited; modify if necessary
58
Retain Police Powers
Development agreement should expressly address key legal pitfalls (i.e., Reserved Powers Doctrine)
In recitals and substantive provisions, limit time period of vested rights
Retain future rights to promote public health
59
Focus on Speed, Not Detour
Should target developments that are allowed under zoning code
Best used to provide certainty, not avoid zoning laws
Problem development = problem agreement
60
Define Terms to
Avoid Future Conflicts
Limit long-term commitments
Define and limit trouble terms
e.g., Will relief from “impact fees” pose
problems for a future stormwater utility?
61
Contact Us
Gregory W. Jones [email protected]
Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer, P.C. www.ancelglink.com
Chicago: (312) 782-7606 Vernon Hills: (847) 247-7400 Naperville: (630) 596-4610 Crystal Lake: (815) 477-8980 Bloomington: (309) 828-1990
62