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HomeMy WebLinkAboutSpecial 2010-05-10 Item 2 - Resolution - Declare Museum of Flight Area an "Economic Target Area" / Support Space Shuttle Gallery VisionCAS NUMBER: 10-058 REVIEWED BY Fund Source: Comments: I MTG. DATE 5/3/10 MTG. DATE 05/10/10 10 0 P) CATEGORY Discussion n Motion Mtg Date Mtg Date COW Mtg. Utilities Cmte EXPENDITURE REQUIRED $0 Meeting Date 05/10/10 COUNCIL AGENDA SYNOPSIS Prepared by DS CA &P Cmte Arts Comm. Initials Ma1a review 1 Counci/ review )4R ITEM INFORMATION ORIGINAL AGENDA DATE: MAY 10, 2010 ITEM No. 5 pL AGENDA ITEM TITLE A Resolution declaring the Museum of Flight area an "Economic Target Area" and supporting the Museum's vision for a Space Shuttle Gallery Resolution Ordinance Bid Award n Public Hearing Other Mtg Date 5/10/10 Mtg Date Mtg Date Mtg Date Mtg Date SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal P6.R Police PTV SPONSOR'S SUMMARY The Museum of Flight has requested the City declare an "Economic Target Area" in the area around the Museum to improve the Museum's ability to receive financing through the Federal New Markets Tax Credit program for their proposed Space Shuttle Gallery. n F &S Cmte n Parks Comm. DATE: 5/3/10 Presentation by Dr. Bonnie Dunbar RECOMMENDATIONS: SPONSOR /ADMIN. Mayor Economic Development COMMITTEE COST:IMPACT FUND SOURCE AMOUNT BUDGETED $0 RECORD OF COUNCIL ACTION Presentation provided by Dr. Bonnie Dunbar Transportation Cmte Planning Comm. APPROPRIATION REQUIRED $0 ATTACHMENTS Informational Memorandum dated 05/06/10, with attachments Resolution Description of New Markets Tax Credit from "50 Projects 50 States" Report Example of FareStart Adult Culinary Academy List of Businesses and Real Estate Developments Approved for NMTCs through 2008 99 100 TO: Mayor Haggerton FROM: Derek Speck, Economic Development Administrator DATE: May 6, 2010 SUBJECT: Designation of Economic Target Area for the Museum of Flight ISSUE BACKGROUND DISCUSSION City of Tukwila INFORMATIONAL MEMORANDUM Jim Haggerton, Mayor The Museum of Flight has requested the City of Tukwila declare an "Economic Target Area" in the area around the Museum to improve the Museum's ability to receive financing through the federal New Markets Tax Credit program for their proposed Space Shuttle Gallery. The Museum of Flight is competing for one of the space shuttles that will be retired in 2010. In order to receive a shuttle, the Museum must have a climate controlled facility to house the building. The building cost is estimated at $11 million. The Museum has $8.9 million in cash and pledges, including a Washington State capital grant of $3.0 million. The Museum plans to apply for approximately $2 million in funding from the New Markets Tax Credit program through the National Development Council, which is a non profit community and economic development organization that has received an allocation of NMTCs. The New Markets Tax Credit program is a federal program created in 2000 and implemented by the Community Development Financial Institutions Fund (CDFI) of the United States Treasury. In short, the Federal government provides tax credits to investors in buildings or businesses located in low income communities. To date, the Fund has made 495 awards totaling $26 billion. At the City Council meeting on May 3, 2010 the Museum of Flight requested the City of Tukwila to include language in the Council's minutes declaring the area around the Museum as an "Economic Target Area This designation will increase the Museum's chance of a successful application for New Markets Tax Credits. The New Markets Tax Credit program is a widely used program across the nation and has funded many businesses and real estate projects located in low income communities. Attached is a list showing 57 businesses and real estate developments approved for NMTC funding in Washington State through 2007. One is listed in Tukwila. Also attached is an example investment in FareStart Adult Culinary Academy in Seattle. The City's declaration of an Economic Target Area will not have an effect on Tukwila other than to support the Museum's funding application. The City's designation will be referenced in a 101 INFORMATIONAL MEMO Page 2 National Development Council report from its staff to its investment committee. The designation has no other purpose. There is no cost to the City to approve the designation of an Economic Target Area nor are there any costs to the City for the Museum's application for New Markets Tax Credits. The New Market Tax Credit program is a very positive program and one that may be useful for other projects to encourage revitalization in the Tukwila International Boulevard Corridor. RECOMMENDATION Staff recommends the City Council approve the attached resolution declaring the area around the Museum of Flight as an "Economic Target Area ATTACHMENTS Draft resolution Description of New Markets Tax Credit from "50 Projects 50 States" Report Example of FareStart Adult Culinary Academy List of Businesses and Real Estate Developments Approved for NMTCs Through 2008 1 0 2 C :ltemp\XPGrpWise\NMTC AGENDA MEMO.doc City of Tukwila Washington Resolution No. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DECLARING THE MUSEUM OF FLIGHT AREA AN "ECONOMIC TARGET AREA AND SUPPORTING THE MUSEUM'S VISION FOR A SPACE SHUTTLE GALLERY. WHEREAS, the City of Tukwila has worked for many years to revitalize the commercial corridor along Tukwila International Boulevard; and WHEREAS, some of the census tracts along the Tukwila International Boulevard Corridor contain high rates of poverty; and WHEREAS, the Museum of Flight is located at one of the gateways into the Tukwila International Boulevard Corridor; and WHEREAS, the Museum of Flight plans to construct a new gallery to house a Space Shuttle, which will attract more visitors and investment to Tukwila and further the City's goal of revitalizing the Tukwila International Boulevard Corridor; and WHEREAS, the Museum of Flight has a better opportunity to seek funding from the federal New Markets Tax Credits Program if the museum is located in an area designated as an "Economic Target Area NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The Museum of Flight exists within an area of Tukwila that has been declared an "Economic Target Area" with the intention of lifting this part of the community to the level of neighboring areas. This will be done in partnership with the business community located within the area, including the Museum of Flight. Section 2. The City congratulates the Museum of Flight on its vision for the Space Shuttle Gallery and expresses its enthusiastic support. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Council Meeting thereof this day of 2010. ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney W' \Word Processing Resolutions Museum of Flighf.docx 5/5/20W Dennis Robertson, Council President Filed with the City Clerk: Passed by the City Council: Resolution Number: Page 1 of 1 103 104 About the New Markets Tax Credit Description of New Markets Tax Credits Excerpt From "50 Projects 50 States" New Markets Tax Credit Coalition, December 2008 The New Markets Tax Credit program was enacted in 2000 in order to bring private capital to our country's traditionally underserved, low income communities. The New Markets Tax Credit provides an incentive to taxpayers to invest in businesses and projects in economically distressed communities. Taxpayers invest in Community Development Entities (CDEs). An example of a CDE is a community development loan fund, a community development corporation or a private financial institution. CDEs compete for Credits allocated by the Community Development Financial Institutions (CDFI) Fund of the Treasury Department. CDEs use the proceeds from NMTC investments to provide financing to businesses operating in low- income communities. The idea behind the New Markets Tax Credit is that there are good business opportunities in low- income communities and that a modest federal incentive could spur the flow of private sector capital in urban and rural communities that sorely lack access to capital. Since its inception the NMTC program has directed billions of dollars into low income communities and boosted investor confidence by filling the gap in business and real estate transactions. There is substantial evidence that the NMTC is an effective incentive to encourage private sector investment in low- income areas. A recent GAO report indicated that 88 percent of investors surveyed would not have made the investment in the low- income community without the Credit. A total of 69 percent of the investors indicated that they had not made an investment in a low- income community project prior to working with NMTC. According to a recent statement by U.S. Treasury Deputy Secretary Robert Kimmit, thanks to New Markets, some $12 billion of private- sector capital has been invested in distressed urban and rural communities throughout the country. Through 2007, $9 billion of capital derived through NMTC has been invested into approximately 2,000 businesses and real estate developments helping to develop or rehabilitate over 68 million square feet of real estate, create 210,000 construction jobs, and create or maintain 45,000 full time equivalent jobs at businesses in low- income communities. 105 106 50 Proects 50 States. Washington FareStart Adult ,Culinary Academy Seattle, Washington FareStart is asocial enterprise in Seattle dedicated to transforming the lives of homeless men and women through job training and placement in the food service industry: Students receive job training in the food service area that generates revenue through the daily preparation and distribution of over 2,000 meals. By 2004,'FareStart had outgrown the space it rented and needed a Larger facility; The organization purchased a 33,000 square foot building in a severely distressed New Markets Tax Credit (NMTC)- qualified low income community in Seattle:to expand their training; social services, and business capacity. However, they did not have the funding necessary to renovate and upgrade the facility to make it fully operational. Community Development Funding, LLC made a $17 million NMTC loan and equity investment in FareStart to renovate and upgrade their facility, transforming it into a culinary vocational training academy and restaurant. In the new facility, kitchen and classroom space will be doubled, providing for quality and safe training areas and increase in'business capacity. A family "resource area will provide a safe, "child friendly" space for use by students who are parents of young children. The organization's management and administrative staff will be located in the same building. The new facility provides FareStart the capacity to increase to 575 the number of people served each year and increase by 80 percent the revenue generated through the organization's food service businesses. Self generated revenues will support the majority of FareStart's business operations growth, and hungry children and families will consume 21 million nutritious meals, prepared and delivered by FareStart. New Markets and "Historic Tax Credits were combined to provide below market financing with equity -like terms to make this project feasible. Conventional lenders had declined to make an investment, but with the addition of NMTCs the project was able to move "forward and is now complete. The project team included Community Development Funding, LLC, US. Bank Corporation, FareStart, the architectural firm of Stickney, Murphy Romine and construction management by Sellen Construction NMTC Allocatee Community Development Funding LLC Clarksville, MD Craig Stanley: 410.730.0490 A Subsidiary of CBO Financial Community Profile Severely distressed NMTC- qualified low- income community census tract 40.3% poverty rate Median income 55.3% of area median income Project Highlights Real Estate: culinary school for homeless Total Project Cost: $17.2 million NMTC: $17.2 million Investor: US Bank Corporation Jobs: 93 construction and 24 permanent DC. 20005. New Markets Tax Credit Coalition 1250 Eye St., NW, Ste. 902• Washington• 202.204 4500 or;ww%v newmarketstaxcrediteoali €ion. rg 108 ProiectCity' (Auburn 'Bremerton 1 Bremerton BREMERTON `Bremerton 1BREMERTON 'Bremerton !Bremerton 1 Centralia Centralia 'Clallam County Clallam County IEllensburg I Everett 'Everette Ilwaco 'Kent Langley None Not Applicable 'Othello Pacific Beach SEATAC Seattle !Seattle 'Seattle 'Seattle Seattle Seattle (Seattle (SEATTLE Seattle Seattle Seattle I Seattle !Seattle 'Seattle 'SEATTLE SEATTLE 1 Seattle 'Seattle Seattle Seattle Shelton Spokane SPOKANE Spokane Spokane Spokane 'Tacoma 'Tacoma 1TOKELAND !Tukwila (Union Gap 'Vancouver 'Yakima 1 Yakima List of Businesses and Real Estate Developments Approved for NMTCs Through 2007 Community Development Financial Institutions Fund of the U.S. Treasury 12/2/2008 Excerpt Showing State of Washington BusinessUescriptIon Retail /office building Office building real estate lessor Real Estate Lessor Real Estate Owner Real Estate Lessor Real Estate Owner Real Estate Owner Child services office facility processor of frozen fruits and vegetables Sustainable Forestry Ecological Forestry Operations Recreational Vehicle Sales Retail Mall TREATMENT CENTER Medical Hospital 'Lessor of Commercial Warehouse Space Investor in shopping center Timberlands Operation Timberlands Hotels Motels Develop PUD COMMERCIAL OFFICE BUILDING Pharm- Cancer Research Office Building and Museum 10,858 SF Community Facility for Head Start Retail shopping center with second story office Owner Occupied office building for Economic Development Agency Retail building lessors of Real Property (nonproft CBO) (COMMUNITY CENTER Homeless Shelter Owner occupied office building community center Lessor of Community Center and Retail Space Lessor of Nonresidential Buildings !Educational Facility Real Estate MIXED USE OFFICE RETAIL AND RENTAL HOUSING SHELTER/TRANSITIONAL HOUSING FOR HOMELESS AND OR ABUSED WOMEN AND THEIR CHILDREN 'Lessor of residential and commercial space I Provide social services. Develop and operate neighborhood center providing social services Social service provider. Fish Farming Retail Office HISTORIC THEATER COMMUNITY FACILITY Lessor of Community Facility Community Center Lessor of Retail, Office and Residential Space Office building Medical Clinic Retail Shopping Center Recreational Vehicle Sales gas station Hotels Motels Hotel .OrganIzattonNanie Key Community Development New Markets LLC Key Community Development New Markets LLC Kitsap County NMTC Facilitators I, LLC Kitsap County NMTC Facilitators I, LLC Kitsap County NMTC Facilitators I, LLC Kitsap County NMTC Facilitators I, LLC Kitsap County NMTC Facilitators I, LLC Kitsap County NMTC Facilitators I, LLC Charter Facilities Funding, LLC National New Markets Tax Credit Fund, Inc Ecotrust CDE LLC Ecotrust CDE LLC Community Development Funding, LLC Paramount Community Development Fund, LLC HEDC New Markets, Inc ShoreBank Enterprise Group Pacific Local Initiatives Support Corporation Rural Community Assistance Corporation Rural Development Partners LLC Boston Community Capital Inc. Charter Facilities Funding, LLC ShoreBank Enterprise Group Pacific HEDC New Markets, Inc HEDC New Markets, Inc Key Community Development New Markets LLC 'Key Community Development New Markets LLC 'Key Community Development New Markets LLC 'Key Community Development New Markets LLC 'Key Community Development New Markets LLC ,Community Development Funding, LLC IESIC New Markets Partners LP IHEDC New Markets, Inc (Key Community Development New Markets LLC 'Local Initiatives Support Corporation 1 Banc of America CDE, LLC 'Community Development Funding, LLC 'Consortium America, LLC 1 ESIC New Markets Partners LP ESIC New Markets Partners LP (Local Initiatives Support Corporation 'Seattle Community Investments 'Seattle Community Investments ISeattle Community Investments ShoreBank Enterprise Group Pacific 'Paramount Community Development Fund, LLC I ESIC New Markets Partners LP 1HEDC New Markets, Inc ]Local Initiatives Support Corporation Iusbcde, Ilc 'Local Initiatives Support Corporation 'National New Markets Tax Credit Fund, Inc IShoreBank Enterprise Group Pacific 'National New Markets Tax Credit Fund, Inc 'Community Development Funding, LLC National New Markets Tax Credit Fund, Inc 'Charter Facilities Funding, LLC IHEDC New Markets, Inc ReportYear 2004 2005 2005 2006 2007 2007 2007 2007 2006 Amount_QLICI I 1,700,000] 3,120,0001 1,547,340 5,250,000 3,311,730 5,645,162 5,580,0001 7,440,0001 3,000,0001 2006 2,500,0001 2006 3,880,000 2006 6,155,000 2005 1,110,000 2004 30,500,000 2007 3,694,9851 2007 1,020,1001 2006 13,632,5001 2006 8,000,000 2005 8,370,000 2005 19,130,000 2007 1,044,690 2005 3,166,750 2006 5,720,000 2004 14,550,0001 2004 6,000,7631 20041 1,250,0001 2004 1,400,0001 20041 1,640,0001 20041 2,860,0001 20061 15,660,1901 20061 10,925,0001 20061 4,075,000 20061 9,070,000 20061 3,893,9221 20071 9,274,8841 20071 16,000,0001 20071 13,475,4831 20071 15,546,1391 2007 10,000,000 2007 7,309,4971 20071 5,629,9741 2007 9,700,000 2007 4,070,026 2007 1,213,000 2005 5,850,000 2006 15,200,000 2007 8,685,000 2007 11,875,000 2007 4,950,000 20041 10,247,850 2007 7,000,000 2005 1,600,0001 2006 6,000,0001 2005 876,0001 2007 694,0001 2006 3,960,0001 2006 6,709,977