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Tax Increment Ordinance Greater Downtown Urban RenewalTHE CITY OF DUB E ~-~~ MEMORANDUM April 11, 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Tax Increment Ordinance for the Greater Downtown Urban Renewal District On February 2007, the City Council approved an Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District which added four properties to the Urban Renewal District, including the Locust Street Ramp, Carnegie- Stout Public Library, former U.S. Federal Building, and the former Adams Company property. Economic Development Director Dave Heiar is recommending amendment of the Tax Increment Ordinance to establish the use of tax increment financing to existing and expanding areas of the district. I concur with the recommendation and respectfully request Mayor and City Council approval. Z ~ ~ ~_ Michael C. Van IVlilligen MCVM/jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager David J. Heiar, Economic Development Director THE CITY OF DuB E MEMORANDUM ~-~-~ April 10, 2007 TO: Michael Van Milligen, City Manager FROM: David J. Heiar, Economic Development Directory ~.; SUBJECT: Tax Increment Ordinance for the Greater Downtown Urban Renewal District Introduction This memorandum transmits for City Council review and adoption an ordinance amending the tax increment financing district for the Greater Downtown Urban Renewal District. The proposed ordinance and associated certifications were prepared by the City's bond counsel and are attached to this memo. Background On February 20, 2007, the City Council approved an amended and restated Urban Renewal Plan for the Greater Downtown Urban Renewal District which added four properties to the Urban Renewal District (Locust Street Ramp, Carnegie-Stout Library, Former U.S. Federal Building, and the Former Adams Company Property). The tax increment ordinance also needs to be updated to allow for TIF collection on these properties. Discussion Adoption of the proposed tax increment ordinance is needed to establish the use of tax increment financing to existing and expanded areas of the district. The ordinance authorizes the City to establish a special fund for the collection of a portion of the property tax revenues generated by new development occurring within the five subareas of the district. All taxable property located with the tax increment district will continue to pay property taxes based upon the current tax levies and assessment valuations. Tax revenues collected in excess of the base amounts will be used to assist in financing future development projects within the district, including both public and private development. Adoption of the ordinance will continue the base valuations for the Original Project Areas (all five subareas). The new areas will be assigned a base valuation date. Recommendation I recommend that the City Council approve the tax increment ordinance for the Greater Downtown Urban Renewal District. Tax increment financing is an important tool for economic development and will be used to assist future public and private development efforts in the downtown and riverFront area. Action Step The action step is for the City Council to approve the amended tax increment ordinance attached hereto. attachment F:\USERSWdejonglUrban Renewal\2007.1 Amendment\TIF Ordinance120070406 TIF ord memo.doc ORDINANCE NO. 20-07 AN ORDINANCE AMENDING ORDINANCE NOS. 35-04, 30-82 AND 66-89, AS PREVIOUSLY AMENDED, PROVIDING THAT GENERAL PROPERTY TAXES LEVIED AND COLLECTED EACH YEAR ON ALL PROPERTY LOCATED WITHIN THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT OF THE CITY OF DUBUQUE, COUNTY OF DUBUQUE, STATE OF IOWA, BY AND FOR THE BENEFIT OF THE STATE OF IOWA, CITY OF DUBUQUE, COUNTY OF DUBUQUE, DUBUQUE COMMUNITY SCHOOL DISTRICT, .AND OTHER TAXING DISTRICTS, BE PAID TO A SPECIAL FUND FOR PAYMENT OF PRINCIPAL AND INTEREST ON LOANS, MONIES ADVANCED TO AND INDEBTEDNESS, INCLUDING BONDS ISSUED OR TO BE ISSUED, INCURRED BY SAID CITY IN CONNECTION WITH THE URBAN RENEWAL PLAN FOR THE GREATER DOWNTOWN URBAN RENEWAL DISTRICT WHEREAS, the City Council of the City of Dubuque, Iowa (the "City") has heretofore, in Ordinance No. 30-82, provided for the division of taxes within the original Downtown Dubuque Urban Renewal Project, Iowa R-15, described in Resolution No. 123-67 adopted on May 18, 1967, pursuant to Section 403.19 of the Code of Iowa; and WHEREAS, the original Downtown Dubuque Urban Renewal Project, Iowa R-15, subsequently was amended by Resolution No. 79-71 approved on March 15, 1971, by Resolution No. 73-74 approved on March 11, 1974, by Resolution No. 107-82 approved on May 3, 1982, by Resolution No. 191-84 approved on June 25, 1984, by Resolution No. 371-93 approved on December 6, 1993, by Resolution No. 145-94 approved on May 2, 1994, by Resolution No. 479-97 approved on November 17, 1997, by Resolution No. 476-98 approved on October.19, 1998 and by Resolution No. 187-02 approved on April 1, 2002, which amendments, among other things, added areas referred to as the Old Main Subarea, Town Clock Expansion Subarea and Upper Main Subarea to the area of the Downtown Dubuque Urban Renewal District; and WHEREAS, consistent with the foregoing amendments, Ordinance No. 30-82 subsequently was amended by Ordinance Nos. 23-94, 36-94, 67-97, and 26-02 to provide for the division of taxes within the several subareas of the amended Downtown Dubuque Urban Renewal District; and -1- WHEREAS, the City Council of the City has heretofore, in Ordinance No. 66-89, provided for the division of taxes within the original Ice Harbor Urban Renewal District, described in Resolution No. 403-89 adopted on December 18, 1989, pursuant to Section 403.19 of the Code of Iowa; and WHEREAS, the original Ice Harbor Urban Renewal District subsequently was amended by Resolution No. 241-00 approved on June 5, 2000 and by Resolution 114- 02 approved on March 4, 2002, which amendments, among other things, added an additional area referred to as Subarea B to the area of the Ice Harbor Urban Renewal District; and WHEREAS, consistent with the foregoing amendment, Ordinance No. 66-89 subsequently was amended by Ordinance No. 97-00 to provide for the division of taxes within the two subareas of the amended Ice Harbor Urban Renewal District; and WHEREAS, the original Downtown original Ice Harbor Urban Renewal District combined into a single urban renewal area, for the Greater Downtown Urban Renewal adopted on April 19, 2004; and Dubuque Urban Renewal District and the and their respective Subareas have been under the terms of an Urban Renewal Plan District, pursuant to Resolution No. 170-04 WHEREAS, consistent with foregoing amendment, Ordinance Nos. 30-82 and 66-89 were amended by Ordinance No. 35-04 to provide for the division of taxes within the various sub-areas of the Greater Downtown Urban Renewal District; and WHEREAS, the Urban Renewal Plan for the Greater Downtown Urban Renewal District was amended and restated as an Amended and Restated Urban Renewal Plan, pursuant to Resolution No. 108-07 approved on February 20th, 2007, to provide for the further expansion of the Greater Downtown Urban Renewal District; and WHEREAS, indebtedness has been incurred by the City, and additional indebtedness is anticipated to be incurred in the future, to finance urban renewal project activities within the combined area known as the Greater Downtown Urban Renewal District (the "Greater Downtown Urban Renewal District"), and the continuing needs of redevelopment within the Greater Downtown Urban Renewal District are such as to require the continued application of the incremental tax resources of the Greater Downtown Urban Renewal District; and WHEREAS, the following enactment is necessary to accomplish the objectives described in the premises. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA, THAT: -2- Ordinance No. 35-04 (Ordinance No. 94, 36-94, 67-97, and 26-02, and Ordinance 97-00) is hereby amended to read as follows: 30-82, as amended by Ordinance Nos. 23- No. 66-89, as amended by Ordinance No. Section 1: For purposes of this Ordinance, the following terms shall have the following meanings: (a) Original Town Clock Subarea shall mean that portion of the Amended Project Area initially described in the Urban Renewal Plan for the Downtown Dubuque Urban Renewal Project, Iowa R-15, approved by Resolution No. 123-67 on May 18, 1967, as amended by the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District approved by Resolution No. 108-07 on February 20th, 2007, which Original Town Clock Subarea includes the lots and parcels located within the area now legally described as follows: Beginning at the intersection of the north right-of-way line of Ninth Street with the east right-of-way line of Central Avenue; thence south along the east right-of-way line of Central Avenue to its intersection with the south right-of-way line of Fourth Street; thence west along the south right-of-way line of Fourth Street to its intersection with the west right-of-way line of Locust Street; thence north along the west right-of-way line of Locust Street to its intersection with the north right- of-way line of Ninth Street, but also including the adjacent City Lots 623 and 624 (Dubuque Museum of Art), the Locust Street Parking Ramp between 8th and 9th Streets and the former U.S. Federal Building located on City Lots 101, 102, 139, 140, and the N 54.5' of City Lots 103 & 138, and the vacated alley between said lots; thence east along the north right-of-way line of Ninth Street to its intersection with the east right-of-way line of Central Avenue, but also including the adjacent Iowa Inn property and the public parking lot known as Parking Lot Number 1 located between 9th and 10th Streets east of Iowa Street, to the point of beginning (b) Old Main Subarea shall mean that portion of the Amended Project Area initially described in the Amended and Restated Urban Renewal Plan for the Downtown Dubuque Urban Renewal District approved by Resolution No. 145-94 on May 2, 1994, which Old Main Subarea includes the lots and parcels located within the area legally described as follows: Beginning at the intersection of the south right-of-way line of Fourth Street with the east right-of-way line of Central Avenue; thence west along the south right-of- way line of Fourth Street to the west right-of--way line of Locust Street; thence south along the west right-of-way line of Locust Street to the north right-of-way line of the Locust Street Connector; thence east along the north right-of--way line of the Locust Street Connector to the west right-of-way line of Highways 151/61; thence north along the west right-of--line of Highways 151/61 to the point of beginning. -3- (c) Town Clock Expansion Subarea shall mean that portion of the Amended Project Area initially described in the Amended and Restated Urban Renewal Plan for the Downtown Dubuque Urban Renewal District approved by Resolution No. 479-97 on November 17, 1997, which Town Clock Expansion Subarea includes the lots and parcels located within the area legally described as follows: South 1/2 of City Lot 167, City Lot 168 and City Lot 168A; Lots 1 & 2 of City Lots 204, 205, 206, 207 and 208, N. 23' of City Lot 263, S. 28.5' of City Lot 263, N. 1/2 of City Lot 262, S. 1/2 of City Lot 262, N. 1/2 of City Lot 261, all in Section 24, Township 89 North, Range 2 East, 5th P.M., Dubuque County, Iowa and any adjoining public right-of--way. (d) Upper Main Subarea shall mean that portion of the Amended Project Area initially described in the Amended and Restated Urban Renewal Plan for the Downtown Dubuque Urban Renewal District approved by Resolution No. 187-02 on April 1, 2002, as amended by the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District approved by Resolution No. 108-07 on February 20th, 2007, which Upper Main Subarea includes the lots and parcels located within the area legally described as follows: On the North by Fourteenth Street, on the West by Locust Street but also including adjacent City Lots 660, 659, 658A and 658 except the south 1' of City Lot 658 (Carnegie-Stout Public Library), on the South by the Town Clock Expansion Subarea and on the East by Central Avenue, including all public rights-of-way. (e) Ice Harbor Subarea A shall mean that portion of the Amended Project Area initially described in the Urban Renewal Plan for the Ice Harbor Urban Renewal District approved by Resolution No. 403-89 on December 18, 1989, which Ice Harbor Subarea A includes the lots and parcels located within the area legally described as follows: that area generally bounded on the north by the public alley located between the vacated Fourth Street and Third Street, on the west by the Chicago, Central and Pacific Railroad right-of-way, on the south by East First Street and on the east by the municipal limits of the City of Dubuque, Iowa and including any adjoining public right-of-way. (f) Ice Harbor Subarea B shall mean that portion of the Amended Project Area initially described in the Amended and Restated Urban Renewal Plan for the Ice Harbor Urban Renewal District approved by Resolution No. 241-00 on June 5, 2000, which Ice Harbor Subarea B includes the lots and parcels located within the area legally described as follows: -4- that area generally bounded on the north and west by the Chicago, Central and Pacific Railroad right-of-way, on the south by the northerly boundary of the Ice Harbor Subarea A and on the east by the municipal limits of the City of Dubuque, Iowa (excluding Lot 1 Adams Co.'s 2nd Addition) and including any adjoining public right-of-way (g) Ice Harbor Subarea C shall mean a portion of the Amended Project Area added by the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District approved by Resolution No. 108-07 on February 20th, 2007, consisting of Lot 1 Adams Co.'s 2nd Addition and any adjoining public right-of-way. (h) Amended Proiect Area shall mean the areas of the City of Dubuque, Iowa included within the Original Town Clock Subarea, the Old Main Subarea, the Town Clock Expansion Subarea, the Ice Harbor Subarea A, the Ice Harbor Subarea B, and the Ice Harbor Subarea C, each as described in this Section. (i) Urban Renewal Plan shall mean the Amended and Restated Urban Renewal Plan for the Greater Downtown Urban Renewal District, approved by Resolution No. 108-07 on February 20th, 2007, as the same may be amended from time to time. Section 2: The taxes levied on the taxable property in the Amended Project Area, legally described in Section 1 hereof, by and for the benefit of the State of Iowa, City of Dubuque, County of Dubuque, Dubuque Community School District, and all other taxing districts from and after the effective date of this Ordinance shall be divided as hereinafter in this Ordinance provided. Section 3: As to the Original Town Clock Subarea, that portion of the taxes which would be produced by the rate at which the tax is levied each year by or for each of the taxing districts taxing property in the Original Town Clock Subarea upon the total sum of the assessed value of the taxable property in the Original Town Clock Subarea as shown on the assessment roll as of January 1, 1966, being the assessment roll last equalized prior to the date of the initial adoption of the Urban Renewal Plan for the Downtown Dubuque Urban Renewal Project, Iowa R-15, shall be allocated to and when collected be paid into the fund for the respective taxing district as taxes by or for said taxing district into which all other property taxes are paid. The taxes so determined shall be referred herein as the "base period taxes" for such subarea. As to the Old Main Subarea, base period taxes shall be computed in the same manner using the total assessed value shown on the assessment roll as of January 1, 1993, being the assessment roll as of January 1 of the calendar year preceding the effective date of Ordinance No. 23-94. As to the Town Clock Expansion Subarea, base period taxes shall be computed in the same manner using the total assessed value shown on the assessment roll as of -5- January 1, 1996, being the assessment roll as of January 1 of the calendar year preceding the effective date of Ordinance No. 67-97. As to the Upper Main Subarea, base period taxes shall be computed in the same manner using the total assessed value shown on the assessment roll as of January 1, 2001, being the assessment roll as of January 1 of the calendar year preceding the effective date of Ordinance No. 26-02. As to the Ice Harbor Subarea A, base period taxes shall be computed in the same manner using .the total assessed value shown on the assessment roll as of January 1, 1988, being the assessment roll as of January 1 of the calendar year preceding the effective date of Ordinance No. 66-89. As to the Ice Harbor Subarea B, base period taxes shall be computed in the same manner using the total assessed value shown on the assessment roll as of January 1, 1999, being the assessment roll as of January 1 of the calendar year preceding the effective date of Ordinance No. 97-00. As to the Ice Harbor Subarea C, base period taxes shall be computed on the same manner using the total assessed value shown on the assessment roll as of January 1, 2006, being the first day of the calendar year preceding the effective date of this Ordinance. Section 4: That portion of the taxes each year in excess of the base period taxes for the Amended Project Area, determined for each subarea thereof as provided in Section 3 of this Ordinance, shall be allocated to and when collected be paid into the special tax increment fund previously established by the City of Dubuque to pay the principal of and interest on loans, monies advanced to, or indebtedness, whether funded, refunded, assumed or otherwise, including bonds issued under authority of Section 403.9 or Section 403.12 of the Code of Iowa, incurred by the City of Dubuque, Iowa to finance or refinance, in whole or in part, urban renewal projects undertaken within the Amended Project Area pursuant to the Urban Renewal Plan, except that taxes for the regular and voter-approved physical plant and equipment levy of a school district imposed pursuant to Section 298.2 of the Code of Iowa (but only to the extent required under Section 403.19(2)) and taxes for the payment of bonds and interest of each taxing district shall be collected against all taxable property within the Amended Project Area without any limitation as hereinabove provided. Section 5: Unless or until the total assessed valuation of the taxable property in the subareas of the Amended Project Area exceeds the total assessed value of the taxable property in said subareas shown by the assessment rolls referred to in Section 3 of this Ordinance, all of the taxes levied and collected upon the taxable property in the Amended Project Area shall be paid into the funds for the respective taxing districts as taxes by or for the taxing districts in the same manner as all other property taxes. -6- Section 6: At such time as the loans, monies advanced, bonds and interest thereon and indebtedness of the City of Dubuque referred to in Section 4 hereof have been paid, all monies thereafter received from taxes upon the taxable property in the Amended Project Area shall be paid into the funds for the respective taxing districts in the same manner as taxes on all other property. Section 7: All ordinances or parts of ordinances in conflict with the provisions of this Ordinance are hereby repealed. The provisions of this Ordinance are intended and shall be construed so as to continue the division of taxes from property within the Amended Project Area under the provisions of Section 403.19 of the Code of Iowa, as authorized in Ordinance Nos. 35-04, 30-82 and 66-89, as amended by Ordinance Nos. 23-94, 36-94, 67-97, 26-02 and 97-00, and to fully implement the division of taxes in Ice Harbor Subarea C. In the event that any .provision of this Ordinance shall be determined to be contrary to law it shall not affect other provisions or application of this Ordinance which shall at all times be construed to fully invoke the provisions of Section 403.19 of the Code of Iowa with reference to the Amended Project Area and the territory contained therein. Section 8: This Ordinance shall be in effect after its final passage, approval and publication as provided by law. PASSED AND APPROVED this 16th day of April,2007. Roy D. Buol, Mayor ATTEST: Jeanne Schneider City Clerk Read first time: April 16, 2007 Read second time: April 16, 2007 Read third time: April 15, 2007 PASSED AND APPROVED: April 16, 2007 PUBLISHED: April 20, 2007 F:\USERS\Adejong\Urban Renewal\2007.1 Amendment\TIF Ordinance120070410TlF Ordinance.doc -7-