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HomeMy WebLinkAboutCOW 2015-05-26 Item 4B - Powerpoint Presentation Shown at Meeting - Landscape Conservation and Local Infrastructure Program (LCLIP)Supporting growth and infrastructure with LCLIP: ir opportunities for Tukwil 1 May 26, 2015 ECONorthwe t ECONOMICS • FINANCE - PLANNING FORT&RRA H E A R T L A N D FORT&RRA Presentation Overview r • Program Overview: LCLIP oWhy use it? oWhat is it? • Study findings • Opportunities for Tukwila • Next Steps ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D FORT&RRA Presentation Overview r • Tukwila won a grant from Washington State Department of Commerce in 2014. • Grant objective is to evaluate the feasibility of a new tool - LCLIP - that supports redevelopment and helps cities achieve growth goals. • City contracted with Heartland, ECONorthwest, and Forterra to conduct the study. • Study builds on other community projects that the city has partnered on with Forterra and Heartland. ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D L FORT &RRA Program Overview: why use LCLIP? Cities need infrastructure to support growth ilibula intrriatign7al Blvd Station ECONorthwest f {:ONOMFGS - iINANCE - PLANNING H E A R T L A N D FOR °rSRRA Program Overview: What is LCLIP? Landscape Conservation and Local Infrastructure Program (LCLIP) • LCLIP is a new approach to funding infrastructure to support redevelopment while providing for a financial incentive to use TDR. TDR + TIF Conserved Farms and Forests Revitalized Communities for Our Families LCLIP A Better Future ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D 1. FORT&RRA Program Overview: TDR r Transfer of development rights +• t Rights Increase square footage, height or number of units Graphic: King County ECONorthwest ECONOMICS • FINANCE • PLANNING H E A R T L A N D FORT&RRA r Program Overview: what is LCLIP? S Tax Increment Financing Increment 1 Incremental Assessed Value Base Assessed Value LCLIP start ECONorthwest ECONOMICS - fFNANCE - PLANNING Time 1 LCLIP end (25 years later) H E A R T L A N D Program Overview: what is LCLIP? Milestones Credit Use 100% 75% 50% 0 ECONorthwest ECONOMICS - fFNANCE - PLANNWG Revenue 10 15 20 25 Time in years F©RT&RRA H E A R T L A N D FORT&RRA rQuestions to answer: • Can LCLIP work in Tukwila? • How much money could it generate? • When should the city begin to use it? • What are the risks? ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D FORT&RRA Feasibility Study Basic elements • Study area: what geography makes sense? • Assumptions about growth • How will the city use TDR? • Revenue scenarios ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D Feasibility Study r Geography: • TIB • TUC ECONorthwest ECONOMICS - fFNANCE - PLANNING 5.. City of Tukwila TIB Study Area TUC Study Area SOUNOTRANSIT LINK LIGHT RAIL • — — • Route O Station SOUND TRANSIT SOUNDER TRAIN Route V Station 518 Tukwila International Blvd (TIB) TUKWILA INTERNATIONAL BLVD STATION 405 TUKWILA STATION Tukwila %.- 'tI Urban II I,'; lei :r c 1 Center (TUC) I 1 1 1 1 1 1 H E A R T L A N D FORT &RRA Ludy rGrowth assumptions • Conservative • Meet growth targets • Exceed growth targets / large project 1. South 16O1 n Str, 5outh 170th Street South 176th Street • • Al r!lc{ C N � J. i ., • ,_ • • -• s •._ - • {' • • • • • ,c So iIhwosr 34tH n ••••}•••� • • i • • Southwest 41st • I •.f• M s % Srwttewest 43rd 70 3 • a Lti 5' 0 Li ▪ j• ! Ln ECONort!hwest ECONOMrcS - iINANCE - PLANNING H E A R T L A N D FORT&RRA Feasibility Study: using TDR I • Incentive zoning: o Not feasible in TUC o Small demand in TIB • Development agreements: o Difficult to predict o Potential for TDR credit use is high • Multifamily Tax Exemption: o Valuable incentive o Steadier stream of TDR use • City acquisition: o Gap purchase to meet program milestones o High certainty but reduces revenues ECONorthwest ECONOMICS - fFNANCE - PLANNING Private Action TDR Purchases Public Action H E A R T L A N D FDRT&RRA •ibility Study: potential revenue r Growth Assumption Revenue (NPV) Revenue (nominal) Conservative 1 $2.5 M $5.4 M Meet targets Exceed targets + Tukwila South $5.1 M $9.5 M $22.2 nn $10.3 M $18.2 M $41.9 M ECONorthwest PCONOMIC.S - fFNANOE - PLANNING H E A R T L A N D FORT&RRA Feasibility Study: TDR and revenue Drivers of revenue: • Growth: more new construction, more revenue • TDR utilization: more credits placed, more revenue collected 100% credits D c 0 0 a_ U J ECONorthwest ECONOMICS - fFNANCE - PLANNING Growth (New Construction) 50% credits 20% credits (minimum) H E A R T L A N D FORT &RRA Feasibility Study: Risks •Growth is lower than projected • Timing of growth • Private market doesn't place TDR credits oCity buys credits to meet milestones oILA: flexibility with county ECONort!hwest H E A R T L A N D FORT&RRA r Feasibility Study: Key findings Q: Will LCLIP work here? Under what conditions? A: YES. LCLIP could work even under conservative scenario. Q: How much money could it generate? A: Between $2.5M - $9.5M inflation adjusted ($5.1M - $18.2M revenue stream) Q: When should the city begin to use it? A: Time start of program with a project using TDR. Q: What are the risks? A: Low growth, city acquisitions. ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D FORT&RRA Informational only - no decision now Is there Council interest in following up on this? • Staff can develop a proposal for action • Bring back to council subcommittee for discussion ECONorthwest ECONOMICS - fFNANCE - PLANNING H E A R T L A N D FORT &RRA Discussion r Questions about presentation ECONort!hwest ECONOMFGS - iINANCE - PLANNING H E A R T L A N D Thank you Contacts: Matt Hoffman, Heartland mhoffman @htland.com Nick Bratton, Forterra nbratton@forterra.org ECONorthwest ECONOMICS • FINANCE - PLANNING FORT&RRA H E A R T L A N D