HomeMy WebLinkAboutCOW 2014-05-27 Item 4 - Powerpoint Presentation Shown at Meeting - Tukwila South Agreements with Segale PropertiesTukwila Valley South
Agreements
May 27, 2014
David Cline, City Administrator
Rachel Turpin, Assistant City Attorney
Tukwila Valley South Agreements
1) Ordinance - Amendment #3
Targeted, narrow change to Original Development Agreement
originally signed in June 2009
Replaces Accounting Protocols and Bridge Down Payment with
Fire Services Agreement
2) Fire Services Agreement
Secures minimum payments over 15 years regardless of level of
development.
Additional fees will be collected if more development.
$3 million in credits for Fire Impact Fees
$1.75 million in non - refundable payments
Accounting Protocols
Created in 2009 due to uncertainty about future development.
An "Insurance Policy" if Development Revenues (Sales Tax, RGRL,
Utility, other) did not cover additional expenses (mainly staffing
for fire and police)
Section 4.8 of Original Agreement set up mutually agreed upon
process to create protocols and track on annual basis
If no agreement, then whole development agreement will
terminate
Revisited in 2013 -14
No development in first 5 years of 15 year agreement
Fill will take 1 -3 more years before ready for development
New City Revenues added since 2009 — RGRL
New City Expenditure assumptions — gradual increase in staffing
Options
Agree on Accounting Protocols
Difficult to track revenues and expenses
Need to have mutual agreement
Terminate
Full agreement had many negotiated points for both
City and Segale
Amend Accounting Protocols
Narrowly amend a few sections of the agreement
Provide certainty for both City & Segale
Provide City with secure payments for bonding for a
new fire station
Amendment #3
Repeals four specific sections of Original Development
Agreement
4.8.1: Operations and Maintenance Services
4.8.3: Project Revenue /City Expenditures - Protocols
4.8.4.1: O &M Collateral
4.5.2: Green River Pedestrian Bridge
Releases Lines of Credit and Deed of Trust
Replaces with Fire Services Agreement
Amends Section 8 - amendments must be provided to
the City Council one week prior to execution by Mayor
Fire Services Agreement
Fire Impact Fees will be collected per TMC 16.26
Payment Schedule — Exhibit B
Guaranteed payments
Start Dec 2017
$3 million in refundable Fire Impact Fees
$1.75 million, non - refundable
Payments Secured by deed of trust
Payment Schedule - Exhibit B
A B
Payment Date Segale Payment Total Payments
Dec. 1, 2017 $ 500,000 $500,000
Dec. 12018 $ 300,000 $800,000
Dec. 1, 2019 $ 300,000 $1,100,000
Dec. 1, 2020 $ 300,000 $1,400,000
Dec. 1, 2021 $ 300,000 $1,700,000
Dec. 1, 2022 $ 300,000 $2,000,000
Dec. 1, 2023 $ 300,000 $2,300,000
Dec. 1, 2024 $ 300,000 $2,600,000
Dec. 1, 2025 $ 300,000 $2,900,000
Dec. 1, 2026 $ 300,000 $3,200,000
Dec. 1, 2027 $ 300,000 $3,500,000
Dec. 1, 2028 $ 300,000 $3,800,000
Dec. 1, 2029 $ 300,000 $4,100,000
Dec. 1, 2030 $ 300,000 $4,400,000
Dec. 1, 2031 $ 350,000 $4,750,000
Total Payments $ 4,750,000 $4,750,000
• Secures Minimum
Guaranteed Payments
• Allows bonding of up to
$4.0 M for new Fire
Station
• If more development, City
will collect additional Fire
Impact Fees above $3
million down payment
• Extends payments from
current agreement which
ends in 2024 to 2031
Scenario A: Development Occurs Early
A B C D E
Payment Date Segale Payment Total Payments Impact Fees Paid Segale refund Non - Refundable
Dec. 1, 2017 $ 500,000 $500,000 $ 250,000 $ - $ 500,000
Dec. 1 2018 $ 300,000 $800,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2019 $ 300,000 $1,100,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2020 $ 300,000 $1,400,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2021 $ 300,000 $1,700,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2022 $ 300,000 $2,000,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2023 $ 300,000 $2,300,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2024 $ 300,000 $2,600,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2025 $ 300,000 $2,900,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2026 $ 300,000 $3,200,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2027 $ 300,000 $3,500,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2028 $ 300,000 $3,800,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2029 $ 300,000 $4,100,000 $ 250,000 $ 50,000
Dec. 1, 2030 $ 300,000 $4,400,000 $ 300,000
Dec. 1, 2031 $ 350,000 $4,750,000 $ 350,000
Total Payments $ 4,750,000 $4,750,000 $ 3,000,000 $ 3,000,000 $ 1,750,000
City collects total of $4.75 million in guaranteed payments
City collected $3 million in fire impact fees which $3 M were refunded to Segale
Net Present Value of Non - Refundable portion is $1.43 M at 2%
Scenario B: Development Occurs Later
A B C D E
Payment Date Segale Payment Total Payments Impact Fees Paid Segale refund Non - Refundable
Dec. 1, 2017 $ 500,000 $500,000 $ - $ 500,000
Dec. 12018 $ 300,000 $800,000 $ - $ 300,000
Dec. 1, 2019 $ 300,000 $1,100,000 $ - $ 300,000
Dec. 1, 2020 $ 300,000 $1,400,000 $ - $ 300,000
Dec. 1, 2021 $ 300,000 $1,700,000 $ 250,000 $ - $ 300,000
Dec. 1, 2022 $ 300,000 $2,000,000 $ 250,000 $ 250,000 $ 50,000
Dec. 1, 2023 $ 300,000 $2,300,000 $ 250,000 $ 250,000
Dec. 1, 2024 $ 300,000 $2,600,000 $ 250,000 $ 250,000
Dec. 1, 2025 $ 300,000 $2,900,000 $ 250,000 $ 250,000
Dec. 1, 2026 $ 300,000 $3,200,000 $ 250,000 $ 250,000
Dec. 1, 2027 $ 300,000 $3,500,000 $ 250,000 $ 250,000
Dec. 1, 2028 $ 300,000 $3,800,000 $ 250,000 $ 250,000
Dec. 1, 2029 $ 300,000 $4,100,000 $ 250,000 $ 250,000
Dec. 1, 2030 $ 300,000 $4,400,000 $ 250,000 $ 250,000
Dec. 1, 2031 $ 350,000 $4,750,000 $ 250,000 $ 250,000
Total Payments $ 4,750,000 $4,750,000 $ 2,750,000 $ 2,500,000 $ 1,750,000
City collects total of $4.75 million in guaranteed payments
City collected $2.75 M in fire impact fees which $2.5 M were refunded to Segale
Net Present Value of Non - Refundable portion is $1.62 M at 2%
Conclusion
1) Ordinance - Amendment #3
Maintains existing Development Agreement except for
accounting protocols
Provides financial assurances for bonding of future fire
station
2) Fire Services Agreement
Secures minimum payments over 15 years
$4 million of bonding for future fire station
Provides $1.75 M of non - refundable payments