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Home My WebLink About32. 15-406AUGUST 25, 2015 15-406 RESOLUTION (CARRIED___7-0_____LOST________LAID OVER________WITHDRAWN________) PURPOSE: APPROVE TERM SHEET WITH THE MORGAN DISTRICT, LLC FOR RIVERWALK IMPROVEMENTS & FUTURE TAX INCREMENT FINANCING FOR UPLAND DEVELOPMENT INITIATED BY: COMMUNITY DEVELOPMENT PLAN COMMISSION RECOMMENDATION: Approved WHEREAS, The Morgan District, LLC owns or controls property on the south side of the river formerly known as the Jeld-Wen property, now known as the Morgan District, and has provided the City with an overall master plan of development which is generally consistent with the master plan of the City, and WHEREAS, the owners have indicated that in order to provide the scope and quality of development sought by the City, it may be necessary to seek Tax Incremental Financing from the City in order to attract the capital necessary to develop the site, and WHEREAS, the City has indicated its willingness to install a Riverwalk system to connect this site to an overall system of trails within the City , thereby improving the desirability of the site for prospective users and increasing the value of the property, and WHEREAS, the owners have not finalized plans and funding for redevelopment of the site, but do not wish to impede the City’s construction of the Riverwalk in this area. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that the attached term sheet with The Morgan District LLC outlining a preliminary agreement on the general parameters of a future Tax Increment District Development Agreement for development of the Morgan District, as well as riverwalk improvements by the City, is hereby approved in substantially the same terms as attached hereto, any changes in the execution copy being deemed approved by their respective signatures, and the proper City Officials are hereby authorized to carry out all actions necessary to implement the City’s obligations under the term sheet, and to execute any and all documents necessary for purposes of same. City of Oshkosh Community Development Department 215 Church Avenue, Oshkosh, WI 54901 � OIHKOIH ON THE WPTEft TO: FROM: DATE: Honorable Mayor and Members of the Common Council Allen Davis, Community Development Director August 20, 2015 SUBJECT: Approve Term Sheet for future Tax Increment Financing in anticipation of private development at the Morgan District BACKGROUND The City Council is being asked to approve the Term Sheet for the redevelopment of the Morgan District. The owners anticipate developing the site over several years, and while no specific plans have been submitted or approved, the public development of the riverwalk has been proceeding. The Morgan District owners support the extension of the riverwalk, but the timing of the public and private investment does not match. The Morgan District owners have requested a preliminary agreement on the general parameters of a future Tax Increment District Development Agreement. The Term Sheet is modeled on the terms that the City used in acquiring the Boatworks property located to the west of the Morgan District. With the Boatworks acquisition, the City was obligated to pay the heirs $225,000 upon development of the property. In this case, the City would only pay the Morgan District for the donated land and easements if the City fails to approve a TIF assistance application within 5 years. ANALYSIS The exact development schedule for the Morgan District redevelopment is unknown. The owners think the redevelopment may take longer than anticipated. At the same time, the owners want to enable the City to continue work on extending the rivervvalk through the Morgan District. The key elements of the Term Sheet related to the rivervvalk are: 1. The owner shall provide an easement for the riverwalk construction and maintenance. 2. The owner shall execute all documents related to the grants and permits necessary for the riverwalk. 3. The City shall compiete the construction of the riverwalk through the Morgan District within 5 years. 4. The City shall vacate the easement if the City does not construct the rivervvalk. Key elements of the Term Sheet related to the future Tax Increment Finance District are: 1. The owner must submit a complete Tax Increment Finance application to the City within 5 years of the approval of the Term Sheet. 2. The City may provide a Pay-go TID of up to 75% of the net increment generated by the TID. No funding would be up-front. 3. If the City fails to approve the TID, the City shall pay the owner $225,000 for the riverwalk land. 4. The Joint Review Board, per statute, retains final authority to approve the future TID. FISCAL IMPACT To complete the riverwalk, the City will continue to pursue grant funding for about half the cost of the riverwalk — estimated to be about $2 to $3 million for the remaining segments of the Morgan District section. TIDs #20 and #21 would provide the City match of about $1,500,000, spread over 2 or 3 years. Staff is optimistic and believes that the all the Morgan District riverwalk segments can be completed in 2017. If all grant efforts fail, the City could fund the riverwalk in 2018, 2019, and/or 2020 with City borrowing. This would complete the riverwalk within the 5 years and avoid the $225,000 deferred purchase price. Alternatively, the city could turn the easement back to the owners if it chose to not pursue the riverwalk. RECOMMENDATION The City Council approves the Term Sheet. Approved, �li:-- ��s�C� City Manager Term Sheet Whereas, The City of Oshkosh (City) wishes to develop or redevelop the Iands as depicted on the attached map in order to significantly enhance the tax base, provide jobs, housing and retail shopping opportunities for its residents, and Whereas, The Morgan District, LLC (Developer) owns or controls this property and has provided the City with an overall master plan of development which is generalfy consistent with the Master Plan of the C'rty, and Whereas, the Developer has indicated that in order to provide the scope and quality of development sought by the City, it may be necessary to seek Tax Incremental Financing from the Cify in order io attract the capital necessary to develop the site, and Whereas, the Cify has indicated ifs willingness to install a Riverwalk system to connect this site to an overall system of trails within the City , thereby improving the desirability of the site for prospective users and increasing the value of the property, and Whereas in order to install such a system, the Citywill need a permanent easement from the Developer for lands it owns in order to instafl and maintain such a system, Whereas, the City has applied for and expects to receive grant funds to begin construction of fhe Rivenvalk on this site, and Whereas, Developer has not finalized its plans and funding for this project, but does not wish to impede the City's construction of the Riverwalk in this area. Now, therefore, the Parties to this term sheet hereby express their good faith intenf as follows. Developer Commitments 1.) Developer shall provide a permanenf easement on lands reflected in fhe attached map for the purposes of consfructing and maintaining a Rivenvalk system. 2.) Developer shall complete and/or execute all documents required forgrants and any necessary permits for fhe construction and/or maintenance of the Riverwalk project within the easement area. City Commitments 1) Construction of the Riverwalk a) The City agrees to vacate the easement if the City does noi receive the grant funds necessary to complete construction of the riverwalk system: b) The City will construct the Riverwalk, associated facilities and accompanying landscaping in the Easement Property within five (5) years of the recording of the Easement. If Yhe Riverwalk construction is not completed within five (5) years from the date of recording of the easement, the City will vacate the easement, except that if construction has begun and the City is diligent in pursuing such construction to compietion, the easement shall not be vacated. If the easement is vacated the City agrees that it will execute any documents necessary at such time to release the easement. 2) Tax Incrementaf Financing Commitment The City agrees to provide Tax Incremental Financing to the projeci (which, for purposes hereof, may be divided into one or more disfinct TIF Districts in order to beiter account for project timing) subject to the following terms and conditions: a) The City may provide UP TO 75% of the Net Increment generated by the developer's project. The final amount of City assistance for fhe project (or each phase thereo� shall be determined on a site 6y site basis. "Net IncremenY' is the amount of total increment less City administrafive costs. b) Any tax incremental financing is subject to the standard approval process of the Wisconsin Statutes. This term sheet is not a guarantee but a commitment to pursue, in good faith, all required approvals of one or more TIF plan(s) for the project. c) The provision of any TIF participation shall be subjecf to a formal deveiopment agreement between the parties but shall generally follow the principals as set forth herein. d) The form of TIF assistance shall be Pay as You Go financing. e) Within five (5) years from the date of acceptance of this Term Sheet, if Developer submits a complete application for TIF assistance meeting the requirements set forth within the City's TIF Policy and the City fails to approve such assistance, Ciiy shall pay to Developer $225,000 within 30 days of ihe date of non-approval of the request as compensaiion for the Easement. If no TIF application is submitted within five (5) years from the date of this Agreement, the City shall not be obligated to make payment to the Deveioper for the Easement and such Easement shall be considered a donation to the C ity. SIGNATURE PAGES FOLLOW Dated this dt�� day of V(� � , 2015. The rgan i f•ict, LLC By: / n Schwab, Managing Member STATE OF WISCONSIN ) ) ss. WINIJEBAGO COUNTY ) Personally came before me this ��day of JU� 2015, fhe above named Grant Schwab, of The Morgan District, LLC., to me known to be uch person who executed the Foregoing instrument and acknowled ed the same, for the ur se herein on/tain!ed. 9 P4�:�7'yvn� (.X - (/t",,,"`""/r' " Notary ublic, Winnebago Cou , Wlsconsin My Commission expires: , /� / — /� ' /'% CITY OF OSHKOSH � � Mark A. Rohloff, City Manager Pamela R. Ubrig, City STA7E OF WISCONSIN ) } ss. WINNEBAGO COUNTY ) Personally came before me this day of , 2015, fhe above named Mark A. Rohioff and Pamela R. Ubrig of the City of Oshkosh, to me known to be such persons who executed the foregoing instrument and acknowledged the same, for the purpose herein contained. Notary Public, Winnebago County, Wisconsin My Commission expires: APPROVED AS TO FORM: Lynn A. Lorenson, City Attorney