|
REGULAR MEETING September 10, 2018
<br /> petitioner submits a petition packet, and an SB-1 Form, as required by Municipal Code. The
<br /> Department of Community Investment analyzes this petition and brings it before Council to
<br /> receive an up or down vote. For the approval process in the Council portion,there is a designating
<br /> resolution, followed by a confirming resolution, then a memorandum of agreement is forged
<br /> between the City and the recipient. Then the project goes on with the investment and the
<br /> construction, or whatever else was agreed to in the MOA commences, and on the back end there
<br /> is reporting with CF-1 Forms,there is the reassessment from the Assessor and Form 11, then DCI
<br /> does its annual tax abatement report. Personal Tax Abatements are for a length of five (5) years,
<br /> Real Tax Abatements are for three (3) to ten (10) years depending on the project, and then the
<br /> designation period can be two (2) or more years. The abatements before you were two (2) years
<br /> originally, except for the Hall of Fame, which was three (3).
<br /> He Continued, Referring to the presentation, Mr. Mueller stated, On January 1St, is the effective
<br /> reassessed value for that tax year. The Assessor doesn't go around the entire City to reassess things
<br /> on day one (1), but that's when they have to estimate the assessed value gain valid for that year.
<br /> On May 15"', CF-1 Forms are due, in June our annual tax abatement report to Council is due, and
<br /> then between July and the fall, the Assessor provides the reassessment based off the January 1 Sc
<br /> value to the recipient in a Form 11. If you gave a designation period for a tax abatement of two
<br /> (2) years, as we do commonly, and they have a common eighteen(18) month project,there are no
<br /> delays and it goes on as planned, if you granted the tax abatement in October, there would be a
<br /> partial assessed value following January 1', then the project continues all the way through that
<br /> year,there is a partial reassessed value based off of that construction that year on Januar 1'. The
<br /> project concludes on time in April, and that is well before the October two (2)-year designation
<br /> period ends. They won't get their full assessed value on the project until the following January
<br /> 1St, they won't receive the Form 11 of July or September of that year, so they won't actually pay
<br /> this until the year after that.
<br /> He stated, They were all two (2) years before, except for the Hall of Fame which is three (3), and
<br /> now they are all proposed to be four (4) years with the exception of Imagineering which is three
<br /> (3)years for the Personal and Real Property Tax Abatements,and the portions of the Liberty Tower
<br /> that have not been completed, we're proposing to go to five (5) years as they are hoping to
<br /> complete next year. Referring to the summary of the project outcomes in the presentation, he
<br /> stated, the four (4) columns on the right show what was committed to. The second (2"d) two (2)
<br /> columns are the announced amount that was committed to in the MOAs, and the two (2) columns
<br /> to the left of that are what we've seen so far.
<br /> He continued, One (1) thing to note is that the job commitments are required to be fulfilled over
<br /> the length of the tax abatement, not necessarily right when the tax abatement starts. The status of
<br /> where their assessed value is in 2018 and 2019, and the status of their Form 11. We are not asking
<br /> for an extension of the tax abatement length itself, we are not asking for a change in the terms of
<br /> the tax abatement, what we're doing is allowing the projects to qualify for the tax abatement we
<br /> already agreed to, based off the designation period and getting it done and reassessed in time to
<br /> receive those benefits. With that, I'd be happy to answer any questions.
<br /> Councilmember Oliver Davis stated, My biggest concern is that we are going to have to revamp
<br /> our abatement policies because that argument could be used throughout many of the abatements
<br /> that we've had, based on the issue of when they are actually approved here, and when they get
<br /> going depending on what is going on in terms of the different projects that happen. So the
<br /> timeframe would impact a lot where you could start a trend where you see many of the businesses
<br /> that currently have abatements will now come back to us to do likewise.
<br /> Mr. Mueller stated, In committee, some of your colleagues recommended that now that we have a
<br /> better understanding of the process, we should set the designation period to be more amenable to
<br /> the process, so projects that stay on schedule do not have to come back for these types of changes.
<br /> Projects can face delays for any number of reasons. Liberty Tower has already invested over$10
<br /> million more than they promised for doing all four (4) components, but they've only completed
<br /> two (2) of the components. There are inevitabilities in development projects that they may need
<br /> 5
<br />
|