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HomeMy WebLinkAbout2015-06-08 TranscriptionPage I ITEM 2. DEVELOPMENT AGREEMENT (CHAUNCEY) — APPROVING AGREEMENT FOR PRIVATE REDEVELOPMENT, INCLUDING THE TRANSFER OF LAND, BY AND BETWEEN THE CITY OF IOWA CITY, IOWA, AND THE CHAUNCEY, LLC Hayek: Just for the public's, uh, knowledge, uh, Council Member Payne is not participating in any of tonight's, uh, agenda items. She has through her employment at Mid American Energy, uh, she has a conflict and is therefore recusing herself. And, Jim, you had a question you wanted to (both talking) Throgmorton: Yeah, you know, Matt, when I first looked at the agenda, I could not understand why we would be voting on the development agreement before approving the rezoning, or at least considering the rezoning. Uh, it seemed to me that doing that, in that sequence, would commit the Council to rezo... would commit the Council to rezoning the property, rather than deciding it to ... deciding to rezone it and then subsidize a particular use of it through the development agreement. So I asked Eleanor about that and said wh... why in this sequence, and ... and she wrote back to me and I thought it'd be helpful, uh, for the public to hear, uh, what the rationale is. Dilkes: Sure! Uh, the project is spe... is dependent on the development agreement. I mean this project is not going to go forward, absent the development agreement, and because the conditional zoning agreement has conditions that are specific to this property, um, it's likely that if the development agreement fails, um, staff will recommend deferral on the rezoning to allow the Council to reassess what its goals are for this property. Throgmorton: Thank you. Dilkes: Uh huh. a. PUBLIC HEARING Hayek: Okay! (reads Item 2 title) This is a public hearing. The hearing is open. (bangs gavel) We are going to begin, uh, the public hearing, um, with some, uh, information provided by staff and then we will open it up for the audience. Ford: Good evening! My name is Wendy Ford and I am the Economic Development Coordinator at the City. I am going to start off with an overview of the process that brings us to tonight's consideration of a development agreement for the Chauncey. Following my presentation, you will hear from Doug Boothroy, Director of Neighborhood and Development Services who will talk about the affordable aspects, affordable housing aspects of the project. Then Tom Jackson with the National Development Council will speak about the due diligence process involved. After him, Dennis Bockenstedt our Finance Director will provide greater insight into the tax increment financing proposed for the project, This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 2 and finally Eleanor, uh, may speak a little bit more about the development agreement. Since the mid-1970s, the City has desired to control the development of the northeast corner of College and Gilbert Streets and began buying properties between the Chauncey Swan Park and the Chauncey Swan parking garage. After a City facility study in 2012 determined that the City would not be needing that land for its own purposes, the City set forth to request proposals from the development community and issued an RFP. There was great interest in the site, and the City received 10 proposals in September of 2012. A committee comprised of City staff and two City Councilors narrowed that list to five, who all presented their proposals at a City Council meeting on November 20 ... in November of 2012. The City Council further narrowed that list to three finalists at its meeting on December 18, 2012. During this process, the City received public input at Council meetings, in writing, via the web, and during presentations given to various community groups by staff and others. In January of 2013 then the City Council selected the Chauncey as the preferred development proposal. The developer proposes to build a $49 million, 15 -story, mixed use building that will include class -A office space, a hotel, a bowling alley, two movie theaters, and five units of low-income housing. It is an urban design with an open and transparent storefront at the street level, with inviting views to the interior. That would be on the right side of that image there primarily. The building's design will contribute to an active and pedestrian -friendly streetscape. Above the two floor... first two floors of glass will be two more floors of brick, which will complement other downtown buildings and add interest and variety to the ver... vertical surfaces of the building. The mix of uses, commercial on the first seven floors — including retail, office, and a hotel — combined with residential on the remaining eight floors is characteristic of the density and mix of uses found in urban high-rise buildings. The developer stated in his proposal, "The opportunity to build adjacent to what will be a beautiful park presents a rare and very special opportunity to create something spectacular." The scope of the project includes upgrading Chauncey Swan Park to create a more inviting and comfortable public space, enhancing its function for the Farmers Market and creating a space conducive to outdoor movie screenings. The size and mix of uses are shown in this chart. You can see commercial uses on the first seven floors, and up to 66 residential units will be on the upper floors. You can see that on level eight there are 14 studio apartments that are, uh, going to be planned into the building, and those will be built in a manner ... the same manner they ... they were in Hotel Vetro, in order to be able to be converted to additional hotel rooms, should that part of the project be especially successful and should the developer dedire... desire to expand the hotel. Rec ... required parking for the residential units will all be within and underneath the building. Parking for the remaining uses in the building, which are not required to have parking on site, will be provided by unused, on-site spaces and in the adjacent 457 -space Chauncey Swan ramp. The developer has committed to meet or exceed LEED silver standards. The LEED standards will be verified by LEED accredited architects, though LEED certification itself will not be required. The Chauncey will be heated and cooled in part by a geothermal system, energy system, that runs under the Chauncey This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 3 Swan Park, and for the rights to use land under the park for this system, the developer will pay the appraised value of $10/per square foot, or about $220,000 in total. Other sustainable design features will include wall and roof insulation that is 30% better than an ... energy code minimums require. The construction of the Chauncey will have an impact on the Chauncey Swan Park, because a portion of it will be used as a construction staging area, similar to how the Black Hawk Mini Park was used when the developer constructed the Park at 201 building downtown. Care will be taken to reserve adequate space for the Farmers Market activities and to limit disruptive construction activities during the Farmers Market hours of operation. At some point then during construction, the, uh, geothermal system will be installed underneath the park. The developer will then be responsible for reconstructing the park in cooperation with the Director of Parks and Recreation and the Parks and Recreation Commission to determine how the park will be rebuilt when the Chauncey is complete. The developer has committed to paying for the design and then spending $500,000 on the construction for the park rebuild. As part of the development agreement, the City will purchase five one -bedroom units to lease to income -qualified tenants with incomes at or below 60% of the area median income. These units will be scattered throughout the building and built to the same standards as the market - rate units. Doug Boothroy will describe in more detail this portion of the development agreement. As you can imagine, all of these features add up to an expensive building and they were re ... and they require multiple sources of funding. The City's policy, when considering financial participation, is that the financing is structured so that private debt is maximized and developer equity allows for a fair ret ... fair return, but does not provide undue enrichment. It has also been the City's policy to be the "last dollars in," if merited, and to not exceed developer equity. In the Chauncey, the minimum bank loan ... uh, the maximum bank loan financing the Chauncey can attract is $19.7 million. Tom Jackson will ... explain a little bit about the hows and whys of that number. $14.2 million is the developer's re ... required equity or cash contribution. There will be $1 million from the pre -sale of five of the affordable housing units, and that leaves a gap of $14.187 million. Then rather than issue TIF revenue bonds in this, uh, excuse me! Rather than issue TIF revenue bonds for this amount, the developer will first pay the City the appraised value of the City -owned parcels for $1.87 million, plus the appraised value of easement rights necessary for the project, and those include the approximately $220,000 for utility easement, uh, for the geothermal system, as well as an access easement through the Chauncey Swan Park... Swan parking ramp. That leaves $12.09 million, the developer's request for upfront tax increment financing. So I'd like to focus on a moment for what TIF is and how it works. TIF is the only source of funds for cities to use in economic development activities. The principle behind TIF is that there is a before improvement value and an after improvement value, and that taxes paid on the difference — the new value generating the new dollars — can be used to fund tax increment financing projects. These are new dollars that would not be available but for ... the project that generates them. The before value is the benchmark and referred to as the base value. In the case of the Chauncey, financing the $12.09 million requires This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 4 that the property have a $30.1 million, uh... uh, value to generate enough taxes to cover the tax increment financing debt. In fact, this minimum assessment agreement is part of the development agreement, as well, and it will bind the devel... bind the developer to having to pay property taxes on a ... at least a $30.1 million building. Again, that is the amount that he'll need to have in value to generate the property taxes that will create the TIF ... uh, increment. The ... that minimum assessment agreement also requires that if an increase in the minimum assessment is necessary to cover debt payments, that his value will be incre... increased and he also guarantees in the development agreement to cover any shortfall. Conversely, if the actual valuation comes in higher than expected, as happened in his earlier project the Plaza Towers, the TIF debt can be repaid earlier. In the case of the Plaza Towers, it was repaid 12 years ahead of schedule. In a TIF, the developer always pays 100% of the taxes due, and he pays them at the same rate as everyone in town does, every single year. For the Chauncey, that will amount to about $1.17 million every single year. In a TIF rebate, a portion of the taxes paid in are rebated back to the developer. In this case, because the City would provide funds upfront, the TIF levy is used to pay the City back for that. This slide shows what it looks like, uh, in the proposed Chauncey TIF, and note (clears throat) the before and after sides of the illustration. The before side on the left is our parking lot with a zero taxable value. That is also set as the base valuation for the project. The after side, on the right, is after the building is built. You can see from the base valuation to the top of that chart there, that is the TIF increment. Now of that, note that on the bottom there is a yellow shaded area, uh, labeled protected debt levy. That is a portion of the taxes that he pays that are reserved and protected and sent, uh, back to the taxing entities of the City, the County, and the School District. And in this particular project, that $31 million minimum assessment will generate about $250,000 per year of taxes that those three taxing entities will, uh, enjoy. The blue area on the top, the TIF levy, amounts to about 9... about $922,000. So you can see, the $922,000 is the TIF levy. That would be used to pay the City back for the upfront financing. The total then, 922 and 250,000 equal, you can see at the top, the $1.17 million a year the developer pays on this project alone for the taxes to help get the financing needed to get the project off the ground. And here's what this looks like over time. Note again ab ... along the bottom, the years are fiscal years, and the light yellow shows that protected debt levy, across time over the 25 years of this, uh, agreement that $250,000 a year would total $600, and uh... sorry! $6.25 million a year. And then in 2046 when all the TIF debt is repaid, if it takes as long as we conservatively have estimated that it will, then all $1.17 million will flow to all the taxing entities. The blue section there is the amount of TIF levy that will be used to repay the City's debt. You may be curious about that first year. Uh, in a project of this size it takes at least a couple of years to build it. Well, our City assessors are on that and they will be assessing that project as it develops and so that is anticipated to be about half the value (clears throat) as it moves forward. In considering all proposals from the very beginning of the process, the selection committee was charged with evaluating the proposals against the ... uh, stated goals that were written in the RFP. There were some general goals and there were This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 5 some goals for the project specifically. The proposal (clears throat) excuse me! The Chauncey proposal satisfied all of the downtown goals, and I'm not going to go through all of those, but I'll call your attention to just a couple in each of these cases. The second point here is to increase taxable valuation. The Chauncey will take us from zero to $30 million in increased tax base within just a few short years and ensure that the highest and best use of the ... of that lot for decades to come. The third point was for downtown, to encourage hotels, workforce housing, downtown groceries, arts, entertainment venues, etc. The Chauncey offers Iowa City a new hotel, which by the way will itself generate an additional new $99,000 or so a year in hote... new hotel/motel taxes. It will offer more low-income housing, which will add to the diversity of our downtown resident population. It will allow for the expansion of Film Scene, Iowa City's own art house cinema, a cafe, and other entertainment. For the project specific goals there were many, but I'd like to focus on the first one, which was to build an urban building with commercial uses on the first floor, office, hotel, residential, or a combination thereof. The Chauncey is an urban building that will include features that the entire town can enjoy — new dining options, more theater offerings, and bowling downtown for the first time in a generation. It adds much needed class -A office space for local companies to expand and new companies to move into and residential options for a range of incomes. Oh, and an updated Chauncey Swan Park as well! In other words, anything but generic! Having met every goal stated in the RFP, the project then ... can then be considered for financial participation if it also aligns with the City's adopted economic development policies. The Chauncey proposal does align with all of them, but let me point out #2 and #4. Policy #2 favors projects with energy efficiency and sustainability above and beyond building code requirements. The Chauncey will be built to LEED silver, while they'll aspire to go better than that, and one benefit of that will be that the wall and roof insulation will be 30% better than energy code minimums already require, and it will use the efficient geothermal energy to heat and cool the building, and this says nothing about the, uh, lessened impact on infrastructure that providing the same housing and office space at the fringes of town ha ... have on the energy use is to get there and infrastructure to put there. Policy #4 favors projects with associated high-quality job, uh, creation. Along with keeping 100 - plus contru ... construction jobs secure during the building of the Chauncey, there are also management jobs associated with the operations of the hotel and the ener ... en ... entertainment venues. The type of firm that will locate in the new class -A office space will also be the type of firm with high -paying, high-quality jobs. One perspective tenant states they've long had a desire for office space of this caliber, and this new building will allow them to increase their staff by 30%. And incidentally, their move to new space opens up class -B space for younger companies to be able to move into. Finally, the project must also be aligned with the City Council's strategic priorities. Relating especially to the fourth bullet point, but touching all three. A large investment at the outset will help ensure the highest and best use of this property for decades. The high density, multi -use building at a key intersection downtown will increase in value and provide dividends to the community. For example, property taxes increase from the day This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 6 the doors open. The building will house more residents, stem urban sprawl, provide more places to work in a walkable environment, and expand entertainment options downtown. When the TIF debt is retired, more than $1.1 million a year will flow to the City, the County, and the School District. It is for these reasons and the short and long-term returns on investment that I've listed here and agree are impossible to read because they're so numerous (laughs) that the Economic Development Committee has recommended this project, uh, for funding last July and the ... and the staff recommends to you today. I'd like to now introduce Doug Boothroy who will talk about the affordable housing aspects of the project. Botchway: (mumbled) ...questions until after everybody's finished? Hayek: If you're okay with that. Botchway: Okay, I just wanted to make sure! Hayek: Oh yeah, there... there's plenty of time for questions! Boothroy: Good evening, my name is Doug Boothroy and I'm the Director of the Department of Neighborhood and Development Services, and I'm here to talk about, uh, low-income housing in the Chauncey. Like to start with this statement: success in providing affordable housing is a somewhat small effort that's repeated project by project. Two and a half years ago we began talking about, in earnest, about affordable housing and the projects that we were reviewing, and since then, uh, we have approved low-income housing projects, uh, on Riverside Drive, uh, with the Hanick project, uh, Madison Street project down by the, uh, University Rec building. Uh... the Court/Linn project, the Sabin townhouse units ... excuse me, and, uh... we have been in the process of looking at, uh, developing an inclusionary housing ordinance, uh, with a committee that I've been working with that would make this policy, uh... uh, more specific and consistent as we go project by project. As mentioned, uh, the Housing Authority, uh, chose to, uh, buy five one -bedroom units, uh, in the, uh... uh, Chauncey project. At the time that was approximately 10% of the, um, rooms. Uh, that number, uh... varies a little bit because it depends on how many rooms are being used for the hotel. These units are scattered throughout the building, uh, as Wendy indicated they're constructed to the same quality as the market rate. They're at 667 -square feet, which is, uh, bigger than average, uh, one -bedroom unit. When we built 10 units in the Peninsula, I designed those at 500 -square feet. I think Ecumenical Tower, uh, elderly housing units are about 500 -square feet. Uh, so ... uh, that gives you kind of a perspective as to ... to, uh, the difference in size. These are much larger units and they, as I said, they'll be built to the same quality as the market -rate. They are in a building that's required to be 100% accessible because it's high-rise. It'll have elevator access, uh, access to the units will be accessible. They're energy efficient and of course that's important in terms of the cost of renting, uh, because it goes to your ho, ... housing costs, the energy that you have to pay for. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 7 Uh, the source of funds for this particular project, uh, are affordable set-aside housing funds. There are no local dollars involved and I think that's important to ... to, uh, remember. Uh, none of the money, the million dollars that we're using, uh, it comes from local sources. Uh, those are federal dollars, uh, most likely they'll come from the sale of the Broadway public housing units on Broadway Street, uh, down by Kmart that, um, we sold in 1995, uh, to HACAP. Uh, and that ... those particular funds are available for reinvestment for, uh, low- income housing opportunities. The purchase price of, uh... of $200,000 per unit, uh, is, uh, aligned with other standards for affordable housing programs. Uh, recently you have approved two workforce housing applications to the State that had a limit of $200,000 per unit. Uh, Home has a limit of $218,000 per unit. Uh... given the type of building that's under construction, the quality of the building, the size of the unit, uh, the $200,000 is a reasonable price for those particular units. Ownership ... in this situation, the Iowa City Housing Authority, uh... uh, which has been in existence since... since 1969, will own these units for the long-term. Uh, it's important to understand that the mission of the Housing Authority has, and will continue to be, uh ... affordable housing, maintaining what we have, expanding, leveraging what we have to expand affordable housing opportunities, uh, within, uh, Iowa City, actually within Johnson County. Uh, we've been doing that successfully, uh, as long as we've been in existence. We see these units as being part of the housing stock that we will maintain, uh... uh, and uh... through this process of our commitment to expanding affordable housing, uh... uh, you might know that ... that the Iowa ... Iowa City Housing Authority is the second largest housing authority in the state of Iowa. Des Moines is the only larger one. The units will be managed and leased, uh, compliant with all HUD regulations and the tenants will be selected of, uh, from the waiting list. So there'll... it'll... they'll follow the same processes and procedures we currently use, uh, for, uh, selecting tenants in the Peninsula apartments and other buildings that we own. Affordability — the first thing I would say that this is not workforce housing. Uh, the RFP called for workforce housing. Actually there isn't really a definition of what workforce housing is in terms of affordability. Uh, we had sent a memo to the Council about a year ago indicating that it... it would be between 80 and 120% of area median income. Uh, as mentioned earlier, uh, these units will not exceed 60% of the, uh, AMI for tenants, and uh... based on the clients that we will, uh, likely have, uh, seeking these particular units, uh, 60% of our clients are elderly, disabled. Uh... uh, I would expect that all five units, uh, will have elderly, disabled, and the income would be about, um ... uh, 30% of AMI. In the Peninsula which is ... which we've owned, it's similar to like the Chauncey, uh, we've never had a waiting list. The one -bedroom units, uh, have been long-term occupancy and in some cases, uh... uh, those occupancies have been from the date that we, um, built the buildings, which was 10 years ago. So I see a lot of stability once people take advantage of these units. The rent will not exceed the HUD fair market, uh, rent. Uh, that's currently at 630. 1 would indicate that that's below, uh, that's at the 40...40' percentile for the ... for the County. Uh, you can see rents at 695 or higher in North Liberty for one -bedroom units. Uh, of course in this downtown area, uh, you see rents for one -bedroom units because of, uh, This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 8 student demand, uh, over $1,000 to maybe $1,500. The home ownership, uh, association fees, uh... will be paid by the Iowa City Housing Authority. That's our ... we own the units. We manage the units, and we maintain the units, and just like we do in the Peninsula, just like we did at Longfellow and other properties that we've owned that have not been part of public housing, uh, where there have been homeowners asso... association fees, uh, we pay those. Um ... the homeownership association fees are, uh, actually comparable to what we pay in the Peninsula, from what we can, uh... uh, glean from preliminary numbers. Uh, Section 8 vouches are eligible, uh, for tenants to use. What we find is that our clients that are elderly, disabled often have a voucher and often are seeking one - bedroom units, uh, and so that guarantees not more than 30% of their income will be paid for rent. Urn ... as I mentioned we have a demand for one -bedroom units. Uh... uh, for ... from 7/13 through 6/14, 2014, uh, about 44% of our demand was one -bedroom units. So there won't be a problem, uh, filling these one -bedroom units, or using them. Um ... let's see ... the location is ideal for our clients. Uh, it's downtown. It's walkable to services, particularly for the clients that'll probably be renting this — elderly, disabled — uh, the Senior Center is very close by. The Iowa City Housing Authority office is quo ... is close by, uh, City Hall, uh, you know, grocery... shopping opportunities, uh, as well as other types of entertainment, uh, venues. Uh, the ... we're very excited about the opportunity to have our... our... our clients located, uh, in the downtown area. And the other thing I should mention is that they also have a wonderful building in terms of architectural design and amenities, and they can take advantage of all of this. One of...the fact that these units are scattered throughout the building, uh, that they're designed to the same, uh, scale, uh, that they have the same square footage. They're ... the one -bedrooms for the affordable housing are just like the one - bedrooms for the market rate. Uh, there is no way to identify the difference between the ones that are being used by the Housing Authority and rented to low- income families and those that are, uh, being used for market -rate, uh... uh, clients. Therefore, I hope that tonight you give favorable consideration to the developer's agreement (mumbled) interested in, uh, having affordable housing in downtown for all of the reasons that I mentioned. This is an opportunity for our clients. It's a... it's an opportunity to continue to grow the base of affordable housing in the downtown and near -downtown neighborhoods, as we've done with some of the other projects in the area and that I expect that we will continue, uh, as we look at more projects and if we get an inclusionary housing ordinance in place. Thank you. I'd like to introduce now Tom Jackson with the National Development Council. Jackson: Good evening, all. Hayek: Tom! Jackson: See if I can, uh... I might need Wendy's help in finding my presentation here. (talking off mic) Good evening, Mayor, Members of Council. My name is Tom Jackson. I'm a Technical Assistance Provider with the National Development This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 9 Council. Uh, under contract with the City to evaluate gap financing and, uh, regulatory needs, uh, for projects that request financial assistance from the City. I think an awful lot of detail's already been provided on the project. I'm going to try to keep mine very short and focused, uh, here. So to begin with, just an overview of what National Development Council means when we, uh, offer an analysis of the gap financing need of a project. We define the gap as total project costs, uh, with a reasonableness check there. Uh, permanent debt is subtracted from that number. Uh, the amount that is available in the private market, uh, size to market terms as evidenced by a term sheet. Net residential, commercial, condo sales are subtracted as another source of financing. And then as Wendy mentioned earlier, equity, sized to a market return, is subtracted. What we end up with is if we have a negative, uh... I'm sorry, a positive number there, still after taking out all those sources, uh, we have a financing gap. We don't have sources that are adequate to cover the total project costs. I'll just go through some of those elements, uh, individually. Um, but first let's look at the real numbers here, which again, uh, Wendy Ford has already given an overview of. The total project costs here just above $140 ... or I'm sorry, $49,142,000 and change. Permanent debt sized at ... $19,733,000. Our condo sales owing only in this analysis to the City's upfront purchase of the affordable units, and equity sized, again, to meet a market return at $14,221,000. In each case, uh, the amount of permanent debt, uh, when we're looking at our sources, we use multiple, uh... uh, points of information ratios provided by potential lenders, uh, to arrive at what we believe is maximum debt capacity. Uh, to get to that number first we have to arrive at a net operating income, which is the total gross income that we believe is available on an operating not a sales' basis, uh, year -in, year -out given the number of square feet of commercial space, uh, available for rent, for lease. Uh, the number of residential units, minus ... a likely vacancy rate, a market vacancy rate, minus operating expenses gets us our NOI. We then look at the loan to value ratio, the amount that the lender is willing to lend against the fair market value of the project, less a collateral cushion, so if for whatever reason the senior lender needed to foreclose on the project, uh, they would expect that they would have holding costs, transaction costs, commissions, uh, and the like, uh, and to make the repayment of the principle possible, uh, they will not loan 100% of the market value of the project. Debt coverage ratio, uh, is ... provides a measure of operating cushion. The first is collateral cushion on loan to value, operating cushion on debt coverage ratio. So again, if things change or the projections aren't met, rents are lower than projected, expenses are higher, vacancy is higher, the lender will not allow 100% of the net operating income to be dedicated to ... the available loan, uh, debt service because they're looking for a cushion in that number. Capitalization rate is taken from the market place. It's a blend of... interest rates available from lenders and developer returns observed in transactions across the market place. Interest rate, again, in a competitive environment, and we're in a very competitive environment here in Iowa City, um, they're at historic lows now. Uh, nobody expects them to stay at historic lows, uh, for, uh, you know, another 10, 20, 30 years. The life of this project certainly. Uh, but we've modeled them at a very low rate. Um, going back up the loan to value is very favorable to the This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 10 amount of debt that's available because your local lenders are very dedicated to, um, the strength of Iowa City's market, um, dedicated to but also appreciative of. So an 80% loan to value, we don't see that in very many market places, but we do see it consistently here in Iowa City, and it was offered on a preliminary term sheet on this project. Same with debt coverage ratio. 1.25 is more of a national norm. During the recession we saw debt coverage ratios as high as 1.35, 1.5. Here we have a 1.2 debt coverage ratio, uh, recognizing again the, urn ... faith that, uh, and experience that local lenders have had in, uh, the marketplace and the stability of rents and uh, vacancy rates. Uh, the term finally, the maturity, as well as the amortization is taken into account to come up with the maximum debt service which determines as well the maximum loan. When we look at the amount of equity that should be invested in the project, in this case we've modeled a 7.5% internal rate of return for the developer ... in determining this amount. Uh, internal rate of return, uh, based on the concept that a lot of us would recognize that a dollar received today is worth more to most of us than a dollar received a year from now. Conversely, if we have to wait for our money a year from now, we want a little bit more than a dollar. How much more is influenced by perceived risks, opportunity costs, and inflation. A 7.5% IRR, again, well below the rate that we see in an awful lot of markets across the country, and evidence of the strength of your local market. Uh, the confidence that developers, uh, such as the developer for this project have in ... rental rates, low vacancy, reasonable cost, uh, escalation, opportunity to sell units over time. Uh, once we have the assumptions of the IRR, we model the projected after-tax cash flows over the life of the project. In this case, 25 years. And that is what has contributed to the recommendation of, uh, a total equity number for, um, the sources of this project. When we look at just a couple of other ... uh, contributing factors to the gap here ... uh, we have uses — the bowling alley and the film theaters — uh, that command rents that are well below, uh, those for other commercial uses, both in the building and outside the project. Uh, for example retail, office, uh, etc., and these same elements require some atypical build -out. The lower rents, the high costs of some of that build -out is a very significant contributor to the gap, uh, in this project. On the flip side, the lack of a developer fee, which is something that we've seen from Mr. Moen, uh, in the past, uh, and his partners, uh... saves and reduces on the gap. So where it is very common to model or to see a developer asking for a developer's fee in the 8 to 15% range, uh, there is no developer fee modeled, uh, for this particular project. Uh, other fees in the project, uh... uh, general, uh, excuse me, general contractor overhead and profit, uh, some to 5% which is well below, uh, national averages, uh, as well. So, um, we're not seeing any issue here with, uh, a compounding of fees that's driving the gap, uh, kind of the, uh, the reverse instead. I will mention (mumbled) some other things and, uh, NDC's model, uh, that helped to mitigate the gap, uh, whereas the market study, uh... uh, procured for the project recommended a 5% vacancy rate on the residential. Uh, we've modeled a 3% given historic strength in the, uh, Iowa City, uh, rental market place. Uh, the vacancy rates for the commercial components, because of the identification of, uh, uses very early in the project here — the film theater, the bowling alley, the restaurant — uh, has This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 11 brought down the vacancy rates on the commercial space, uh, well, well below, um, what we see throughout the rest of the market, uh, here in Iowa City. So we've only modeled a 2.24% vacancy on commercial space, uh, which is outstanding. Uh, the market study recommended a range on residential rents of $1.85 to $2.00 a square foot, uh... all units on a square foot basis are calculated at the $2.00 rate, not at the lower, uh, $1.85 rate. Taken all together again, uh, here with some percentages that I believe again Wendy has already, uh, acquainted you with and that are included in our memo. Uh, the projected bank loan at just under $20 million for 40% of the financing, the affordable unit pre -sales at $1 million, TIF financing at just over $12 million, the rebate return of, uh, a portion of the total acquisition costs, so this is the City's, uh, appraised value, uh, on the development site. It does not include the costs associated with, uh, relocation, uh, acquisition of the, uh, transformer that the Mid America, uh, property. Required from the developer based on that 7.5% return at, uh, just shy of 29%, $14,221,714, uh, closes the gap and balances our project costs and our total permanent sources. That's, uh, it for my presentation. Thank you! I'd like to introduce Dennis Bockenstedt at this point. Hayek: Thank you! Bockenstedt: Uh, good evening, I'm Dennis Bockenstedt. I'm the Finance Director for the City. Uh, tonight is also the public hearing for the tax increment revenue bonds that will help fund the Chauncey building. Um, as part of the development agreement, there is a proposed economic development grant to the Chauncey building for $14,187,250. Uh, the proposed funding sources for that economic development grant include TIF revenue bonds of just under $12.1 million. The sale of property at the corner of College and Gilbert Streets of $1,870,000, and the sale of easements in the Chauncey Swan Park, uh, for geothermal wells of approximately $220,000. Uh, the proposed debt schedule for the bonds, we would look at issuing a construction note on June 1St of 2016. Uh, then there would be a partial tax assessment placed on the building on January 1St of 2018 and those taxes would be due and payable in our fiscal year 2020. Um, and then in 2020 we would refinance that construction note with, uh, long-term TIF revenue bonds, and then on January 1" of 2019, there would be the first full tax assessment. Uh, that first full tax assessment would be payable in our fiscal year 2021, which would be the first principle repayment of those bonds. Uh, for the construction note, uh, like I said the issuance date would June 1 st of 2016. That would be a four-year note that would mature on June 1St of 2020. Uh, we would look at capitalizing interest, uh, during the construction period of the building, approximately 30 months. Uh, then we would use the partial tax assessment to pay the remaining 18 months of interest on those notes. Uh, we would refinance that construction note on June 1St of 2020 with the long-term bonds. And the reason we would utilize a construction note is because of the long construction period for this building, and also to achieve short-term interest rate savings during that construction period. Uh, for the TIF revenue bonds themselves, uh, we would issue those on June 1st of 2020. Uh, those would be 25 -year bonds that This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 12 would mature on June l st of 2045. Uh, those bonds would include the grant amount, uh, plus the capitalized interest and the issuance costs. Uh, there would be a minimum tax assessment on the Chauncey building, which would cover 100% of the financing costs over the life of the bonds. And those bonds would also be secured by a minimum assessment agreement on the Park at 201 building, a debt service reserve, the developer's personal guarantee, and a City ... and the City University TIF District. Uh, for the bond structure itself, um, we have it arranged that the debt payments would actually be higher in the earlier years of the bonds. Uh, what this does it shortens the average bond life. Uh, it lowers the total debt service cost, and it reduces the overall risk of the bonds. Um, we then calculated the minimum assessment agreement, using the average bond payment over the life of the bonds, and we are creating a restricted debt reserve in the debt service fund. Overall the bond structure was created to ... intended to minimize the finance costs of the issue. Um, and this chart here, uh, represents the, um, minimum TIF payments from the Chauncey against the estimated debt payments of the bonds. Uh, the green bars represent the minimum tax increment financing payments that would, uh, be derived from the building, and the gold bars represent the projected debt payments. Um, you can see in the earlier years, we are estimating that the debt payments would exceed the minimum TIF. Um, about the midway point it would cross and then the minimum TIF payments would exceed the estimated annual bond payments. Uh, to summarize, uh, there is a development grant, uh, to the Chauncey building for $14,187,250. Uh, of that grant we would use bond financing for just under $12.1 million. Um, initially there would be a four-year construction note, which would be refinanced with 25 - year TIF revenue bonds. Uh, there would be a minimum tax assessment on the Chauncey building which would cover 100% of the costs of the bond financing, and just as an additional note, that these, uh, debt coverages and these revenue projections do not include, uh, any of the other revenues that we would expect to be generated by the Chauncey building, including hotel/motel taxes, uh, the protected property tax levies, parking fees, or utility or rather franchise taxes. And I will now turn over to Eleanor to cover the development agreement. Hayek: Thank you ... Dennis! Dilkes: Um, I'm not going to go into a lot of detail cause essentially what the development agreement does is put down in writing much of what you've already heard, but I just want to draw your attention to a few things. Um, Section 1 of the agreement obligates the developer to construct what are called the minimum improvements, and you can find a summary of those in Exhibit D to the agreement. Section 3, uh, is the provision that ... that governs the sale of the property to the developer. Uh, as has already been noted, it includes a purchase agreement, um, for the appraised value of $1.87 million, and also the appraised $10/per square foot value of the geothermal easements in the event, um ... those are needed. Um, I ... the important thing to look at is Section 6 of the agreement, which are the what we call the conditions precedent to the conveyance of the property. So those are the things that have to happen before the City would be This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 13 obligated to sell the property and before the developer would be obligated to purchase the property. Um, a couple of the significant ones are, uh, there must be approval of the schematic plans as well as the site preparation and foundation plans. Uh, the developer's, uh, financing commitments must be in place to the satisfaction of the City. A performance and payment bond which guarantees performance and payment of the project, um, must be in place. Uh, the City has done what ... what is necessary in the City's, uh... uh, determination to, uh, arrange for the financing. Uh, the minimum assessment agreements that have already been referred to must be executed. Any permanent and temporary easement agreements must be ex ... executed. The developer must have acquired the Mid American property or have a purchase agreement in place that, uh, indicates to the City's satisfaction that that property will be acquired. Uh, the City staff design review committee must have approved the exterior of the building. Um, and of course the alley must be vacated and the rezoning must be, uh, complete. Um, Section 7 talks about the minimum assessment agreements which you've already heard a lot about. And uh, Part 2 sets forth the City's contributions, which you've also heard a lot about. The, uh, construction... or economic development construction grant, the purchase of the five, uh, one -bedroom units, uh, to be used for affordable housing, and there are also, um, conditions to the ... uh, provision of the grant, which include the completion of financing, um, or sale of bonds on terms that are acceptable to the City on a no -change in the financial condition of the developer as determined by the City. I can answer any questions you've got. Hayek: Thanks, Eleanor. So, Kingsley and Jim, you had asked if we could ask questions of staff before we open it up to the public, and you certainly can do so of any of the City staffers who presented. Botchway: So I guess I mean ... to start off, you know, consistently throughout the previous process we talked about the fact that, you know, we were going to look at the rezoning and now we're looking at the development agreement, and so I'm just kind of putting that on record as far as we're looking at, you know, kind of the details of the development agreement, correct? Um... so... some of the questions were answered during the presentations, so I really appreciate that. Um ... I had a question about the protected levy. So the one question I want to focus on right now is, um, the affordable housing, and so I guess going to you, Doug, from an affordable housing standpoint, I know that we have agreed to the five units, um... and I guess obviously those negotiations happened, um, prior to our discussion now, but I guess my biggest question is is ... is five units enough? I mean, uh, from what you talked about before from the fact that a lot of these local funds won't be, um, won't be used. Local funds won't be used for this property that we're purchasing, correct? Um, is there more monies in that particular revenue stream for us to purchase, um, additional units? Botchway: It's not a revenue stream. (both talking) It ... it's a fixed dollar amount that... that, it's a result of the sale of the Broadway, uh, public housing units in, um, 1995. I ... couple things I'd say is that ... the sale of the Broadway units, uh, This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 14 allowed us to expand affordable housing in a couple different ways. Uh, one, uh, it provided... at that time in 1995 when we did that agreement, HUD and, uh, provided replacement units, and so we applied for and instead of 18 replacement units, we got 33 replacement units and we built those in Whispering Meadows. The 18 units were sold to HACAP, uh, for transitional housing. So they continue to be at the same income lev... income level as public housing, but we also got 33 additional public housing units as a result of that sale, without using the money from the sale. Uh... over the years, uh, the $750,000 has grown, uh, through, uh, contract sale to HACAP and ... and interest and other, uh, to, uh, about $1.2, uh, $1.3 million, but that's a fixed dollar amount. Uh, this is not the first project that we've looked at. We looked at partnering, uh, not to own but to partner with, uh, senior housing development in Towncrest. Uh, fi... state funding fell through. That project fell through. Uh, we looked at, uh, partnering with people to buy Town Campus Apartment to ... and that funding fell through and that project fell through. And there's several other projects. Uh, this project gave us the opportunity to, uh, once again we used to have some units downtown, uh, once again have units downtown as a result of... of this development. Um ... I would tell you that as ... the statement made is that we never have enough affordable housing, and so, uh, we just continue to chip away at it. I think we have a plan to chip away at it. Uh, we started thinking about it more in earnest with the Chauncey. Now we've looked at other projects and we're growing it. Uh, and we have a lot more units, uh... uh, scheduled to come online as a result of, uh, different developments that we've ... we've looked at to date. So, I think that's been a success and that's... that's the way I would look at it. Botchway: So I guess ... so there's no ... there's no more money to possibly put towards buying additional units if it was, uh, available? At the same price point? Boothroy: We have a fixed amount of money in the Broadway, uh... uh, funds, and so, uh... we're spending $1 million out of, uh, $1.2 or $1.3 million, so there's a... what.. . whatever that difference is, uh, there's a little bit left in there, yes. Botchway: Okay. Um ... oh, go ahead! Oh! So, that's not (mumbled) My next question is for, um, Wendy. Um ... and this is a tricky one and so I know I talked to you a little bit about this before but ... just to be clear. So the class -A office space is not going to be City owned. Ford: That's correct. Botchway: Okay. When we were talking about it, and I know this may have come up before, but when we were talking about, you know, parking requirements and everything else, did that ... did that include the potential of businesses having, you know, the potential for that office space having businesses, which would then require parking from individuals. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 15 Ford: Uh, when and if the project gets the zoning that it needs, that zoning does not require any other parking on-site than that for the residents. Botchway: Okay. Um ... all right, I think that's ... it, and last question would be for Tom. Hayek: Thanks, Wendy! Botchway: Thanks, Wendy. Thanks, Doug, too. Sorry! Appreciate that (mumbled) Jackson: I thought you said you were done so... Botchway: No, no (mumbled) um, so the... just... just so I'm understanding some of the points that, again, I talked to you a little bit about before and then you kind of brought up in the presentation, which I appreciate... Jackson: Right. Botchway: ...is that the... currently the Film Scene space in the bowling ... or ... currently the Film Scene space in the bowling alley will be at reduced "rent" or lease or whatever the case may be. Jackson: Yeah, there's not really ... a market for those types of special uses, uh, that provides for going out and surveying what other people are paying. They're fairly unique spaces, especially in the case of the art theater for the non-profit. Um, all I can say at this point what my, uh, analysis pointed out was that ... the rents for both of those fairly substantial uses within the building are... substantially below the market for other uses. So, um, the, urn ... office was modeled at 17.50 a square foot. Um, the market study was at 17. The developer wanted to be at 18. Uh, we put it in the middle, uh, on that ... in that particular case. The restaurant's at $20 a square foot. Um, these are ... are, uh, I believe 11.50, uh, a square foot. So if the same space had been dedicated to, um, office uses and found a good, uh, office use, uh, then that would have leveraged more debt, more equity. It would have brought the, um ... the gap down. At the same time, the vacancy rate for office use in downtown is higher than the 2.24% that we've modeled for the collective, uh, commercial space, and a lot of that has to do with the committed, um, non-profit tenant as well as the, uh, bowling alley at this time. Botchway: Okay. The other question is you talked about the fact that these, um ... uses have driven out the gap, and I don't think you used the word substantially, but it's driven out the gap in some type of way, sha... shape, or form. Do we have any kind of analysis or estimate how much is driven that out? Jackson: Um, I think I actually included some, uh, examples here in the, uh, my memo, um ... so you know, just pointing out that if...the, uh... um, space had been at ... the full amount, then, um ... it would have provided, you know, actually, I'm sorry. It wasn't 11. 50, it was $10 per square foot, uh, for the film theater and all of that. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 16 That ... just pointing out that, you know, the $300 per square foot for sale residential is what that's been priced at. $2.50 per square foot, uh, in value for the office space is 81% higher. $275,000 ... or $275, I'm sorry, per square foot on the cafe, 99% higher. If you took any one of those or a combination of them and took them against the area of the two uses, you know, then you'd get that range of... of values. Um, you know, here in this particular case, it's just under $2 million, uh, is the number that I attributed to that lower value, um, based on that differential in the three different residential office and restaurant, um, value structure. Botchway: Okay. Thank you. Jackson: You bet! Botchway: Then I had one more question for Eleanor ... just kind of a ... so, um ... what is the, um, developer's personal guarantee? Dilkes: What that means is ... if the ... the minimum assessment is calculated to provide the necessary taxes for repayment of the debt. If, um, because of for instance changes in the tax laws that actual value or that taxable val... value has to come up in order to, uh, generate that revenue, then, urn ... the assessor and the developer agree to increase that minimum assessment. And the al ... the developer also agrees that if there is any shortfall, um, that he personally will pay that. Hayek: Thanks, Kingsley. Throgmorton: My turn? Hayek: Sure! Throgmorton: Yeah. I ... I'd like to ask a few questions that have, uh, already been answered actually but I learned as an instructor that it's pretty good to do some repetition so that certain concepts sink in. So, um, Wendy, I think maybe you'd be the best person for me to start with, and maybe you could deal with either all or most of my ... I don't know, six questions or whatever the number is. So do I understand correctly that the TIF debt will not be fully retired for approximately 27 years, or until approximately 2046? Ford: That's correct. Throgmorton: Okay. Just wanted to make sure. Thanks! Also you referred to the protected levy and I'm ... I'm really happy that, um, that's been discussed explicitly tonight because, uh, to be honest I've been confused about the protected levy. So, can you help me, uh, become clear about this. Is ... is the protected levy something that's mandated by the State or is that a City policy? When was it adopted? This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 17 Ford: Um, yeah, the ... uh, let's see, the way I explain it. Kevin, er, uh... Dennis might better be able to explain the difference between the consolidated, uh, property tax rate and the TIF levy, uh, and ha ... having to do with the, uh, each taxing entity's debt. (several talking) Dilkes: Preliminarily though it's a matter of State law. Bockenstedt: Yeah. It... it is State law, and there is a total property tax rate that one pays when they pay their property taxes. Um, for the ... the TIF rate or tax increment rate, it...it is. The City would collect the levies from the other jurisdictions, other than those protected levies. Um, the debt service levies from ... from the college, um, from the school, from the county, and then the instructional support levy from the School District, and the PPEL levy are all (mumbled) considered protected levies, meaning that they would continue to collect those levies on that value. So if the total rate's $39, minus those protected levies, the TIF rate would thus be around $30. So that difference is protected and paid out to those jurisdictions. That... Throgmorton: Okay. Bockenstedt: ... okay. Throgmorton: Good. That's helpful, and we've al ... always been following that with regard to each of our past TIFs, okay? Is that right? Bockenstedt: Yeah, it ... it's State law. It's not optional. Throgmorton: Okay. All right, thanks! Uh, okay, so uh... the hotel/motel tax, uh, I ... I think Wendy and maybe somebody else, uh, indicated that approximately $100,000 per year would go, uh, would be hotel/motel taxes. Can you just remind me and the audience where those hotel/motel tax revenues go? Ford: Sure! Uh, in Iowa City, uh, the hotel/motel tax is a 7% tax above, uh, the State sales tax, and uh, 50% of those go for funding the Police Department in Iowa City. 25% goes to the Convention and Visitors Bureau and their efforts in marketing to get more people to come and stay over in hotels and continue generating the ... tax dollars. And the remainder is, um ... mostly Parks and Recreation. Some for parkland acquisition as well. I think I got it all in there! Yeah. Throgmorton: Okay, good! Thank you. That ... that's helpful. I know we ... we go over this during the budget... session, but uh ... (mumbled) lot of material! So, uh, the next question has to do with what happens in the event something unexpected goes wrong. Uh... for example, uh... um ... um, a global financial crisis or some other thing that we can't fully anticipate at the moment, right? So I know that there are This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 18 various kinds of s ... securities and so on at play here, but I wonder if you could restate what the expectations are with regard to future difficulties. Dilkes: Yeah, I'll do that one. Throgmorton: Okay. Sure! Dilkes: It's really... impossible to answer that question, unless you're going to tell me exactly what ... the issue is at what stage of the project it happens. The ... the agreement preserves all the City's remedies, including, um, actions per... specific performance to require the develop to do what he's committed to do, actions for damages, um, the ability to purchase the property, um, in the event that it's in foreclosure, um, or to cure the defaults, and ... what remedy the City would exercise in any particular sys ... situation is due to many factors, um, that would have to be examined at the time. Throgmorton: Okay. Unforeseen events might occur but they'll have to be dealt with when they come up. Dilkes: Yep! Throgmorton: All right. Got it! Uh, my next question, Wendy, has to do with Chauncey Swan Park. Ford: Uh huh. Throgmorton: Uh, I wonder if you could restate, uh, maybe in different language, but just restate, uh, what the agreement stipulates with regard to Chauncey Swan Park, the parking ramp, and the parking spaces on College Street. Uh, and with regard to the geothermal heating system. So, mainly what I'm wondering about has to do first with... and primarily with the construction phase. The staging area. I found it very hard to grasp exactly what components of Chauncey Swan Park were going to be affected directly ... by this construction staging area, and so on, so I wonder if you could just... Ford: (both talking) Sure! Well ... as I had noted, the... the... there's limited space there for the construction staging to happen and the only place really to do that would be a portion of...of Chauncey Swan Park. A portion that would leave the Farmers Market activities, uh, whole and uh... while being a fenced area with construction e ... equipment in it, not interfere with the activities of the Farmers Market, uh, goings on. At some point during the construction, um, not sure exactly where that line will be. I don't know if that is detailed out in the plans, but there will be the construction or the, um, installation of the geothermal well system under the park. It'd be my estimation that they would have to do some ... some restaging of their construction equipment in order to get that work done, as well, but in any case, the activities for the Farmers Market will remain, uh... the way they always have This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 19 been and the way we love them, and then the construction must also, uh, not limit or not be intrusive to Farmers Market activities either. And I have to confess, I don't know about the parking spots on College Street. Throgmorton: (mumbled) I know in the images that, uh, we see in the documents, there aren't any parking spaces on College Street. Ford: As far as what's in the development agreement (both talking) I ... I'm not aware. And then you had asked ... I think about the ... the Chauncey Swan ramp, as well? Perhaps? Throgmorton: Oh, uh, yeah (both talking) I ... I don't remember what I was saying about that, so ... forget the ... the ramp for right now. Dilkes: There's nothing in the agreement about the parking spaces on College Street. Throgmorton: Bet they go away! Why do they go away? Dilkes: And specifically you can find the ... the, uh, Farmers Market provisions in Section Lb and in Exhibit F, which is the contemp ... temporary construction easement agreement at... l.c. Throgmorton: Okay! So, I don't know. Others might have questions? Dobyns: Wendy, while you're still up there. Could you comment on the extrinsic value that a project of this scope would have on adjacent properties, um, like in the ... in that block? You know, that might be realized. Ford: Sure, I think. Extrinsic values? Dobyns: Sure, in ... in terms of over the life of this tax increment, uh, financing project, how bout properties that, um, if... improved would add to the financial stability of the, uh, City? Ford: Sure, um ... I ... I guess the first thing that came to my mind was, uh, what happens when your ... when your neighbors invest in their property and you look at yours and you think, oh! Maybe I should be keeping up with mine a little bit. I think an investment in property, especially in our downtown area, will, uh, perhaps be a catalyst for others to at least consider investment or reinvestment in their own properties, as well. A rising tide kind of effect. Dobyns: Thank you. Ford: Uh huh. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 20 Dobyns: Dennis, I had a question for you. Um, intrinsically you were mentioning that, um, the life of the tax increment financing is essentially 27 years. Can you, um, suggest a likely scenario where it would be less, possibly based on, uh, previous experiences with this developer? Bockenstedt: Sure. Um, the... development agreement and the data's based on the minimum TEF ... minimum TIF collections from the property, which sets the ... the lowest, uh, collections that we would receive. Uh, it is entirely possible that the valuation the collections would exceed that amount, and that has happened in the past with some of the developments from this developer, and so in the event that the valuations and increment would exceed that minimum, um, those could be, uh, reserved and used towards retiring the debt early. Dobyns: Thank you. Hayek: Unless there are other questions I think we should hear from the audience. All right. So, we will ... I'll open it up to the audience now for ... for public input. We're going to follow with the protocol we fou ... we have followed all along, which is to request that people speak for four minutes or less. We'll ask that you come forward, sign in, verbally give us your name, and, uh, as you speak try to provide, uh, unique information and ... and try not to repeat what has been said by previous speakers. It helps us! Thank you. Johnson: (speaking loudly) Mr. Mayor and Members of the Iowa City Council, are there benefits to a given TIF? Well, one would certainly hope so! But benefit cost analysis requires we examine the harms as well. Consider an organization of teenage drug dealers. It provides them experience working in teams. Providing customer service. The math challenges in weighing the drugs, calculating prices, and making change, designing your business plan. But no one here this evening would say, gee, I guess drug rings really are good for kids! And certainly no one would propose we support their business with taxpayers' money. TIFs, like teenage drug rings, are a really bad idea. Here's a summery — only some of the reasons why, cut me off when my time has expired! Corporatism, putting taxpayers' money into private -for-profit enterprises is seldom a good idea regardless of how it's done. In Italy during World War II it was called `fascism.' In Washington it involves billions of dollars. In Des Moines hundreds of millions. In Iowa City we call it TIFs. Ideological hypocrisy. How can those supporting free private enterprise, capitalism and marketplace forces, who think government is the problem and want it off their backs, justify taking money from the public collection plate! Anti -democratic! We've got it backwards! There are legitimate, traditional government expenditures for things like roads and bridges and parks and public schools and libraries or jails. And democracy dictates that governments often need voters' approval for bonds, for these legitimate government projects. Yet city councils can give our money to their friends' private projects on a whim! Even over the opposition of taxpayers! Shouldn't it be the other way around? Opportunity costs, spending money on one thing costs This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 21 a lost opportunity to spend it elsewhere! Uh, Supervisor Sullivan once found a diversion of $700 million of property off the tax rolls! Now as a result, we either pay more taxes, uh... or schools and neighboring communities have to cut needed programs. Unfairness to competitors, TIFs tilt the playing field! They unfairly upset a free market, punishing honest competitors, and benefitting no one or... but at least primarily the TIF recipient. Risky business! Money's always available for good deals. If an entrepreneur, his or her family, friends, investors, venture capitalists, and banks aren't willing to fund a project, is it possible taxpayers shouldn't either? TIFs are unnecessary. The corridor is one of the fastest growing, lowest unemployment areas of Iowa. We already have what businesses want — skilled labor, transportation and communications infrastructure, quality education, cultural attractions, and outdoor rec ... recreation. If that's not enough, we don't need `em! The subsidy grantor's record is not great. Elected officials are more skilled at keeping contributors and constituents happy than at evaluating taxpayer funded business proposals. TIF'd projects have gone belly -up, missed deadlines, and new jobs' goals. And TIFs in Iowa have more lenient provisions and less oversight than in most other states. Hayek: Professor, you are at your fi ... four minutes. If you could finish up. Johnson: I can! One last paragraph for this purpose. (speaking loudly) Need is unknowable. Many projects will go ahead without subsidy. If tax breaks are available, of course developers will say they need them! Maybe this is blackmail! Maybe they need to look harder for funding! Maybe they need to cut back on the project. There's no way to know. There's more but I've used my time. Thank you. Hayek: Thank you for the comments. Farkas: Uh, my name is Linda Farkas and I strongly approve the Chauncey. I wanted to benchmark the treatment of the TIF against other projects that the developer has done, and got some information. I'm sure you guys know it well, but the Plaza Towers has a 15 -year TIF which was paid off in five or six years. All tax dollars now go to the City, School District, etc. About a million dollars a year. And plus they give about $150,000 a year in hotel/motel tax. Park is now assessed at about the minimum amounts that was agreed upon. Both buildings have won American Institute of Architect Awards, and the Plaza Towers has become the gold standard in the state for the TIF'd use, uh, properly. So, thank you! Hayek: Thank you for your comments. Ross: Hi, my name is Brandon Ross. Um ... we spent about an hour talking about finances and, uh... but one thing that's... that's not clear to me is how can we continue to build ... uh, buildings that have a tiny percent of what may be workforce, whatever that it, or even possibly affordable housing, and um, have 90 to 99% unaffordable housing. The growing population in our town, as in many This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 22 towns, as in most, is of working class people — not middle class, not upper middle class — poor people, uh, that group is growing. Yet this particular building has, uh... apartments, condos, space for sale that nobody, uh, nobody that I know, uh, can go to their ATM and, uh, and pay for. Um, what about the working people? I spoke with a friend today works at the, uh, New Pioneer Co -Op. Uh, people work at most of the businesses in town and getting $7, $8 an hour, they're making $15,000, uh, a year. Uh, the National Housing Association, uh, not the National Housing Association. But one of the other alphabet soups (laughs) says that, uh, it's healthy if you pay 30% of your income for an apartment. Or your house mortgage. Well, I don't think ... I don't think these people making $15,000, uh, are even at 33%. Uh, that would mean $5,000 a year and $400 a month. That's affordable housing. That's affordable for half of the people in this town. But for the other half, nothing is affordable. Five units for the elderly, I appreciate that and I ... bless ... bless everyone's heart who lives in those apartments, but $650 is still not exactly affordable to ... to people and we're talking about a space of about a room or two. Um ... that we were ... we were quoted that the, uh, that the national averages say that these are okay, but in certain national averages, having people live in drawers, uh, you know would also make sense! This is not humane. This does not account, uh, for the people who are in the working classes, those who make their money by working, not by trading in capital, in real estate and diamonds and furs and other such stocks and commodities and other such things. We're talking about people who are handicapped. They fit in the working class. The elderly, children, homeless, single mothers, anybody here want to talk about women's rights? Well I would say that these buildings that are unaffordable in our town, these buildings that have the access, these buildings are not affordable to these people. Now maybe to people around here, everybody with the suits and the gold watches and the gold i -phones and the gold ... I don't know (mumbled). Maybe for you people it's affordable! Okay? All the people involved here — the Manager, the Councilors, uh, you know the people who are the "experts," who talked numbers left and right, uh, they're all upper middle class and... and... and upper class. The architect is going to get an apartment in this building! Where is the affordable housing? If for instance in this city, you've got over 50% of the people struggling just to make rent, just to make mortgage, how can you possibly create buildings like this one that has virtually no affordable housing? Some of the elderly people, I suppose, will get in. What about the minority people who are working two jobs? What about the people can't get enough money? What about the ethnic groups in this town, the Afro Americans, the Latinos, the ... the Euro people, uh, Caucasians who are in working class. Let's talk about even the people building this building. None of those people are going to be able to live in there, and I'm talking to my brothers and sisters who are in the union. They can't afford that! Yeah, jobs'll come up for them. What about the people working in the bowling alley? Not a one of them will be ... will afford to work ... to live in this, uh, particular building, if in fact they're able to live in Iowa City alone. I'm trying to keep you from (both talking) Hayek: ...over four minutes, Mr. Ross (both talking, laughter) This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 23 Ross: Yeah, I appreciate your time. Hayek: Thank you. Ross: Uh, so in ... in closing, this building is unaffordable, unaffordable to 80 -something percent of Iowa City, and we need to take care of the 80% before we take care of the ... the 10% or whatever that percentage would be. Thank you! Hayek: Thank you for the comments. Farkas: Good evening. My name's Ed Farkas. And I have a very simple statement, uh, and that is I concur with the Moen Group, and their proposal regarding the development of the Chauncey. Thank you for your time. Hayek: Thank you for your comments. Coffin: Hi! Please consider the impact your decision will have on the work that I and other street artists do to enhance Iowa City. Hayek: Could we get your name, please? Coffin: Lorelei Coffin. Hayek: Thank you. Coffin: I would like to know what exactly we are putting the tax revenue that this, uh, new building will ... we've been shown will generate for us that will benefit everybody. Um... and will merit the risk inherent in change. Uh... our particular concerns are safety. Um, density, population density, traffic density — will that attract other, more impolite solicitors who make us all look bad? Urn ... and of course ... the shadow of tall buildings impacts what we do ... a little bit. Bye! Hayek: Thank you. Thank you for your comments. Sorensen: My name is Donna Sorensen. Uh, and I would just like to say that I think we as a community through all of you as our elected officials have really already determined what we view as important for the redevelopment of this property by the very detailed RFP that you put out for that, which kind of sets out at the policy level and then to a great degree with some detail what we view as important, uh, for the ... for the use of this property. The ... through an exhaustive selection process, you have chosen a developer to do this who has complied, as we saw, with great detail as presented by our City staff, who has complied with every single thing that was requested to ... to move forward on the project. And I think of particular importance, and I ... I hope everybody, uh, whatever your opinions are realizes one of the most powerful things I think up there was the amount of tax This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 24 revenue generated that goes to the City, the County, and our School District and how very important those things are to maintain the quality of our, uh, free public education we have here, and to support different City services, and to help care for a lot of the people in the community, um, who need our help ... via those services. I would just step back and offer two kind of bigger picture perspectives maybe. It ... for a project of this size and sophistication, coming to a community our size, generally the developer would be an out-of-state, faceless corporate entity, and I think we have a bonus and we are blessed in this community to have a local developer who lives among us, who is a proven, um, quality, in terms of.. has proven quality in terms of what they've already done, and has also had a decade's long history of putting profits back into this community voluntarily, not contractually obligated, to support every kinds of arts and culture venue and performance, every human service, and evel... every social service with an additional enhancement. That's a bonus to us! I'm not sure we really appreciate that. And we're used to it. Um, also from a broader picture perspective, I would say the ... having done some work with different State and, uh, local economic development groups, community's our size — not just in this state, but throughout ...throughout anywhere I think in the country, would be jumping for joy (laughs) to have a chance to have a project like this developed in their community that would enhance the quality of life and would generate additional revenue to support the community. Um, and again, I ... I think we, uh, maybe somehow because we're used to it, fail to appreciate the value there. Lastly, and quickly, I think there's been a lot of talk that almost sounds like it's an either/or situation. We can either move forward with new, uh, different kinds of projects, or we can preserve what makes our community special and unique and has over the years, you know, and I ... I would offer that this project is ... I don't see it as in lieu of, um, retaining and preserving what we have, but in addition to. In very many ways, and as something again we should all remember, uh, we need to not stagnate. We need to move forward. People have choices where they want to live, spend their time, spend their money, what they view as destination locations, and we have very aggressive communities around us — one kind of attached ri... right to us and certainly up the highway and down the highway and in ... any other direction who are aggressively enhancing and improving their communities to attract people. So, I think this is a ... this is a win-win for our community, and it would be, not to be melodramatic, but uh... almost tragic if we don't move forward with it! Thank you. Hayek: Thank you for your comments. Bird: Thank you, Mayor, and City Council. My name's Nancy Bird. I'm the Executive Director of the Iowa City Downtown District. Um, first and foremost, uh, thank you for your time through all of these discussions. It's very important and I really am appreciative of the fact that you've given so much weight to everyone's opinions because it's an important decision. On behalf of the Iowa City Downtown District, I really want to thank you for your leadership over time in supporting projects with gap financing. One of the most important things I think This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 25 that's happened to downtown Iowa City, and this was before I came, is the, um, leadership on the City's behalf to, uh, stop a certain segment of the market that was taking over downtown and the rule to put in stopping, uh, bars within 500 - feet of one another was really critical to today's success and our evolution or revolution downtown, and really taking, uh, downtown Iowa City to a place where both the community and the students, um, can really enjoy. So thank you for that. I see this project in a similar light where, um, and I know from working with our own downtown property owners, um, it's very, very challenging to get these projects to pencil for a use that everyone can be really excited about and that's a healthy... healthy driver, and so um, I think with this project, the fact that the City is helping to support with gap financing, um, cultural amenities and affordable housing is a step in the right direction. So thank you for that, uh, on behalf of the Downtown District. I hope you support the project. Hayek: Appreciate your comments. Fleming: Hello, uh, my name's Matthew Fleming. I'm a physician at Mercy Hospital and I live in the Plaza Towers building. Um, I think there's a paucity of affor... or, there's a paucity of housing, um, for young professionals, uh, in downtown Iowa City, and I think that ... this paucity contributes, uh, to the ongoing problem of brain -drain affecting, uh, Iowa City and the state of Iowa as a whole. Um, I think this project will begin to address that issue and, uh, help, uh, Iowa maintain its competiti ... competitiveness, um, amongst similar sized (mumbled) or ... similarly sized cities, uh, in the United States. So I support this project and thank you for your attention. Hayek: Thank you for your comments. Carsner: Good evening, I'm Tom Carsner. Uh, I am not against all TIFs or other incentives, uh, for developers, and I realize especially with City -owned properties, there are ... distinct reasons to want to have some control over the (mumbled) development and gain leverage over the project, and let me just state that I have nothing against the group of developers in this project. They're just taking what off ...what's offered. But I do want to speak against the finance model and the larger, uh, policy of TIFs and incentives. As a governmental policy, it corrodes the sense of egalitarianism because you end up with a very few people profiting at the expense of very many, the opposite of what government should be encouraging. My hope is that this is the last time that we see a TIF of this size and dimension. $14 million out of $49 million, 30% -- we may as well be an equity partner in this project. We'd get more taxes, more quickly. The City would see more revenue more quickly. So I ask myself, what did the City and the residents get for its 30% stake? Not enough! And I think either we didn't negotiate well enough or this is a lousy business proposition. I tend to think it's the second. TIFs in general don't end up that well for the taxpayers, or the residents of the cities. Uh, we're better off demanding developers for projects like this to reach out to two or three or four, or however many more investors, to This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 26 pay the full freight. Just in the last few months in some of the housing projects that have come before the City, we had developers asking for zero. Zero money from the City! It can be done! It's proven that it's (laughs) that these proposals are there, and I don't know why you didn't grasp at those, uh, proposals, uh, when ...when they were presented to you, but I think it's time for these types of TIFs to stop. Um, when you have ... it ... it's called the free market! it's ... it's the way things, uh, used to be done. As Nick said, we used to bond for projects of the ... of this size if they were big enough. They used to be called the free market, where you had the money ... you made the investment. I think we should stop with TIFs of this size and this dimension. It's an economic developments arm race that needs to end someplace. It's way too opaque to be understood. The benefits come far too ... long down the road to really be grasped. We're losing money that we could need in the next 20 years to fund social services or other projects that's instead being tied up in this project. The payoff is too far down the road to really be grasped, and the re ... rewards go to too few, while the rest of us pay the price. Thank you. Hayek: Thank you for the comments. Parkes-Perret: Hello, I am Ariane Parkes-Perret, you've seen me here before. Um, a couple weeks ago a lot of people were mentioning their excitement about the location and how central it is, and ... that they can experience all Iowa City has to offer without having to drive from place to place. Um, I'm sure there are many of us who will probably be able to say... who can say the same thing. I am fortunate enough to be able to have an affordable apartment to live in that is fairly close to the downtown Iowa City but ... for a lot of people that's not the case. Um, one of the es ... escalating to barriers is of course affordability and a lot of the poorest of Iowa City's citizens have to spend whatever little money they do make to be able to drive downtown or get a bus pass to be able to access some of those amenities. Um, so one of the big huge, I guess things that have been cropping up is just simply location, location. Um, now I mean I admit I was somewhat ... I was very excited about ... hearing about the Chauncey when I first hea... like the bowling alley and everything, but like location and height are two big huge problems, and um, after the meeting last week some questions arise ... or had arisen about the use of the space in the case that if were the Chauncey were to be relocated, and I'm just throwing it out, an idea out there. Um, the Iowa City Farmers Market has served Iowa City for over 40 years. I love going there. It's an amazing, just opportunity to meet various people, and I mean, it's just people from all walks of life — the rich, poor, you know, young, old — and they go there to just simply either for their own personal enjoyment or to be able to have access to nutritional, healthy food, and I think I mean just as an idea, thrown out there, I mean, why not borrow some of the inspiration from Cedar Rapids New Bo Marketplace and even like have like a permanent indoor farmers market like ... like just the location, like as a location where the Chauncey might be, just a permanent indoor farmers market where, um ... that can be year-round and ... it could also be like a hub for Ecopolis or Iowa City ... some workshops or ... things where people can, like an This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 27 educational center where people can learn about sustainability and we call it ... we pride ourselves in being a Blue Zone. I think it would be just a wonderful location just to have all these amaz... like we have an outdoor farmers market. Then we can have the indoor farmer's market right next to it, urn ... let's see (making noises) I mean this ... I mean this, uh, has drawn a lot of controversy for the last two years and ... anywhere from out ... like people just being frustrated about just how high it is and the fact that it will, you know, shadow the Trinity Church to just downright just ... very like ... lot of animosity where people are just ... just tempers are flaring. Um, such as what I observed last week, unfortunately (laughs) but um ... just why not like bring an idea together that can make everybody happy and like the whole community because we're just having this great divide. There's a lot of people who are for it and a lot of people who are against it, and just ... just, it just seems that the location and just the sheer height of the building ... is drawing up a lot of problems and um ... I just would like to see something like a happy medium maybe, just ... just something where everyone can be happy. So, anyway, thank you very much for your time. Hayek: Thank you for your comments. Van Horne: Uh, good evening, Councilors and Mayor. Thank you very much for the opportunity to speak. My name is Sam Van Horne. I'm speaking on behalf of myself and my wife Amanda Van Horne. We are members of Trinity Episcopal Church, but we are speaking as private citizens, uh, and not ... and we do not represent Trinity Episcopal Church. (clears throat) I'd like to first, uh, speak with regard to the TIF arrangement. My understanding is that as part of the TIF agreement, the City foregoes property taxes to help finance the development for 25 years. If we are choosing to give up taxes for 25 years, then I believe we should have a building that we will look at in 25 years and say, wow, the City planners at that point in time had a lot of foresight. They really saw the future needs of this town very well. One future need that I believe to be clear now, or I believe to be ... that we need is environmental sustainability. We see that climate change ... we see what climate change is doing to our community and the increased frequency of flooding, and in other communities by widespr ... wide- spread drought. We as individuals and as comm .... as a community have the opportunity to make a difference in the amount of fossil fuels being used. The project gets most of the points it needs for silver LEED simply by existing in this location — in -fill development on a bus line and high-density housing. I think that new development can easily do better and do more, and I think in 25 years we'll be retrofitting with ... with the adaptations we could have put in now to make this gold or platinum LEED. A long-range vision should include a vision for the children of the future and the future of the planet, not just for profit in this moment. Another long-term concern in Iowa City is housing. A 2007 affordable housing market analysis for Iowa City pointed out that the Iowa City metro area is producing more high-priced units than the Iowa City, um, than ... than moderate, low priced units despite the fact that there was a need for low, moderate priced units. A variety of barriers interfere with bringing affordable housing to market, This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 28 especially in the downtown area. These include hesitation on the part of banks to provide financing, pressure from the student rental market, and zoning concerns. I'm unaware of any substantial policy or market changes that would improve the situation since 2007. The 2009 floods have likely worsened it substantially and despite the building of new dorms, affordable and workplace housing continue to be a concern. We have heard repeatedly from high-income single people about how desirable it is to live downtown, but we haven't heard from newly hired assistant professors in the humanities, the elderly who live on fixed incomes or two parent families with 2.63 kids that this is an affordable place to live. Nor have we heard from secretaries, staff at the University, the finance directors for local churches, or waitresses. It would be easier to support a TIF agreement whereby the developer was giving up some amount of revenue in order to better support the community. Instead of in addition to the TIF agreement the City is pre -purchasing five units for a few ... for a few million, um, for a million dollars. I am very grateful for this, but we do desperately need more low-income housing, but is this enough? Is this all we get for the taxes we give up? We can do better in Iowa City. We can live up to the sense of ourselves as a truly progressive town in two ways — by requiring greater LEED standards in this building and by requiring more affordable and workforce housing to be included. For this reason I en ... I encourage you to vote against the development agreement before you tonight and instead ask for a better agreement that more clearly benefits the citizens of Iowa City, including those unable to be here tonight speaking for themselves. Thank you. Hayek: Thank you. Cole: Good evening. My name is Rockne Cole and I reside at 1607 E. Court Street. I come to you tonight as a candidate for the at -large seat of the Iowa City Council. We increasingly are becoming a tale of two cities — polarized between the rich and the poor. And I'd like to congratulate this Council because you indeed have created a gilded age for some. You have created an environment where there are beautiful towers downtown. There are entertainment options that abound. There are high-priced restaurants. If you have the money, if you have the stake, if you have the ... the stocks, it is a golden age, but the question is is who is being left out of this equation. This Council and past councils have been on this TIF binge since 2005. During that time we've been repeatedly told that the TIF will trickle down to those who need, that in order to pay for essential City services like affordable housing, like jobs, like being able to reduce property taxes for some, we need to ensure the well-being of the elite so some wealth will trickle down and we'll be able to fund some essential City services. But if you look at the fact that's happened during this very ... very time, poverty in this communic... in this community has become worse. And I... and I point to you, uh, Cedar Rapids' Gazette article from September 22, 2014, pointing out the number of families living in poverty in this community, and I ask you to remember them. The number of pam... families in poverty in the urbanized area, and this includes in fairness Iowa City, North Liberty, as well as Coralville, has increased, not This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 29 decreased, increased by 60% from 2000 to 2012. Proportionate to population growth, it is up 33%! During that same time, the proportion of severely cost - burden renters, that is those paying more than 50% of income for housing, has increased from two ... from 2000 to 2012 by 7.3%. Poverty is getting worse. Affordable housing is becoming a greater crisis. And what do we do? We have $1 million held in trust that we've been saving since 1995. And we're told that the only thing that we can do with those services is to use five ... or $1 million for five units. There is a credibility gap before this Council. The question is is do you want to provide access for our working poor, for our families? Brandon Ross brings up a good point. Why aren't families part of those five units? While I commend the Council for providing housing for the elderly and the disabled among us, where are the low-income families in the Chauncey unit? They're not there! We've ho ... we've heard from many Members on this Council that this... that our community faces a $50 million reduction in tax revenues over the next 10 years. And yet at the same time, and they say we may have to cut jobs, we may have to cut services, we may have to increase property taxes, and at the very same time you're preaching austerity, you're gifting! Gifting $2 million parcel from the community to a private entity. You're gifting $12 million of tax increment financing off of the backs of working poor, and you're giving it to people who do not need it! We commend the successful that have come down to Iowa City, but they do not need subsidized housing, and they do not need taxpayer support to make this work. We stand with all of the hardworking members and families in this community. Right now there's probably someone sitting at a table, wondering how they're going to pay rent. Hayek: Mr. Cole (both talking) finish up please. Cole: (both talking) ...if they're going to be able to make their mortgage payment, and so we ask you to find common ground. We ask you to follow your moral duty, and we ask you to stand with the entire community rather than the privileged elite. Thank you very much. Hayek: Thank you for your comments. Lyon: Lauren Lyon. I'm the Rector of Trinity Episcopal Church. One purpose of tax increment financing is to support projects that serve the general public across a range of categories such as economic status, age, ability, and racial/ethnic identity. Such projects receive public resources because they will ultimately be public resources. Another purpose of TIF is to pri ... provide incentive for the development of projects that will serve the public good, but embody significant risk or barriers to success for those who undertake them. The Chauncey is neither of these. It's condominiums although fantasized as drawing cards to Iowa City for 20 -somethings weighing life here against the siren call of Chicago, San Francisco, and New York will carry price tags that demand a decade or more worth of job experience or very specific professional credentials. Its office space is meant for high -paid tech and creatives. Perhaps its entertainment options will This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 30 attract the average man or woman on the street to a gallery opening or an art film, or maybe to what I can only surmise based on previous public comment will be the first bowling alley I have ever heard of that has no bar. But I will not be surprised if its entertainment venues turn out to be places where many ordinary citizens of Iowa City perceive that they do not belong, not because they are overtly excluded, but because their clothing, their appearance, or the way they express themselves is not a fit for the upscale environment. Are there serious potential barriers to success for this project? Is it in an area where prospective patrons or future residents fear to tread? Be there dragons on that block of Gilbert Street? For the last several months I've sat in this room and heard a steady stream of people beg you to get it built sooner rather than later. Building trades people are lining up to swing hammers. The young, hip, and accomplished are certain that it will attract more of their numbers to our city, and well-heeled persons of my generation are putting their cars on the block and pulling out their checkbooks to buy condominiums. That sounds like a recipe for success to me. What downside motivates the necessity of an incentive? This building will be a wonder. It will be a success without sweetening the bargain with public funds. Levity aside, this is a serious business. The process that has brought us to this point has been flawed. The Council has an opportunity to set things right tonight. This project is not an appropriate use of public funds. I urge you to vote against the approval of the development agreement. Hayek: Thank you for your comments. Neades: Good evening, Rebecca Neades, Iowa City Area Chamber of Commerce. The Chamber believes the Chauncey is a good project and good for our community. We also believe in the responsible use of tax increment financing. It's typical for developers to charge a development fee, um, and this developer doesn't do that. As a matter of fact, they only realize profit or financial gain at the end of the project. This is exactly how tax increment financing should be used. This is a perfect example. Please support TIF and the Chauncey. Hayek: Thank you for your comments. Cilek: Uh, hi I'm Dan Cilek and I live in Iowa City. Uh, I'm here representing Meta Communications and we are in favor of the, uh, financing, as well as the building of the building. Uh, Meta has been a success story for Iowa City. Um, when we moved from south Gilbert Street last August, we had 33 employees and I think we're pretty close to 50 right now. And in terms of the, uh, tax dollars, I think, uh... (clears throat) if you want to, uh, look at people going in and out of the building at 201 Washington on a ... during the lunch hour, you'll see, um, from our, uh, offices and the ones up on the top floor, you see close to 100 people probably going in and out, and they're going to places like the Bread Garden and ... and the coffee house and, um ... I hear a lot about how it's not helping, uh, everybody, but, uh, they are going to restaurants and there's, uh, waiters and waitresses there and they're spending money and, uh, so I think, uh, from a This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 31 financial standpoint it is going to be a... a gain for the Iowa City and uh, we're in support of the project. Thank you. Hayek: Thank you for your comments. Christensen: My name is Laura Christensen. I'm a member of the elected lay... leadership group at Trinity Episcopal Church and a Corporate Officer of the parish. I would like to comment on the City's use of tax increment financing. As you may know, central to the mission of Trinity and to all faith communities is the care and advocacy of persons whose physical, emotional, and financial resources limit their participation in a competitive marketplace. Many would also argue that this is part of a mission of governments, and that any community that has an interest in assuring that the basic needs of its residents for housing and foods are met for the benefit of all. I've recently learned that as many as 28% of Iowa City residents, not including students, live at or below the poverty line and thus question the wisdom of the City in their commitment to the Chauncey. I'll skip to the meat of the ... of my point, which is I believe that the plan to use $1 million in public funds for the purchase of only five one -bedroom apartments stretches credulity. I believe that most middle-class people in Iowa City would agree with me, and that this is not really affordable housing. Those same funds could provide five houses that would each house a family of five or more. This is an inappropriate and cynical use of public funds. I urge you to vote against the Chauncey plan as it currently stands. Thank you. Hayek: Thank you for your comments. Holton: Good evening. My name is Ann Holton and I'm a member of Trinity Episcopal Church. What has struck me the most about this process for the last few months that I've been listening to it is how flawed it has been. I don't know if the City originally thought that any project on the corner of College and Gilbert would be welcomed with open arms. This must have been the case. For we are told that the call for projects went out even before the neighbors were no ... informed, telling developers that the project chosen would likely be a CB -10 size building. Of course this would require the City to get the Comprehensive Plan changed... because after all that was the biblical guide for development. But no problem! Nobody would object, would they? Final projects included four designs that would meet CB -5 height guidelines, a height that was fine with most neighbors and more in line with the concept of transition. But one required CB -10 zoning. No problem, right? So the City chose the tallest option, and then the Planning and Zoning Commission actually said no to CB -10. But that was no problem! The City said that the Comprehensive Plan was nice but not necessary. No longer biblical. So they proceeded to make arrangements with the developer and rezoned the parcel as a separate entity. This project has met with significant resistance all along the way. It has been characterized as between those looking to the future and those stuck in the past. When east side neighbors talked about promises made by the City to protect neighborhoods and provide a transition from This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 32 the downtown district, they were disregarded. The good neighbor policy created by the City to ensure helpful dialogue was largely ignored. Trinity's consistent message has been we support development, but this is the wrong building for this place. But the City has gone too far down the road with the Chauncey, and has never really been willing to seriously consider any of the concerns of those who objected. Now Iowa City is be ... ready to become one of the most giving cities. Selling the land for $1.8 million and giving the money right back to the developer. All developers everywhere will want to come to Iowa City for the Rivercrossings area because there are now so many wonderful opportunities. And by giving away over $14 million in TIF money to the Chauncey group, the City is establishing a precedent of big TIF giving because to not give to other developments would be discriminatory, right? And now the City is throwing in the Chauncey Swan Park to boot! Oh the City will own it, but the Chauncey will have their geothermal wells, an energy source we do support. The Chauncey group will completely redevelop the park and can make changes and cut down trees that are proba ... problematic for them, forever! Memorial gifts to the existing park seem to be of no consideration to anyone. It makes one wonder if the City practiced the good neighbor policy with the Parks and Recreation Devel ...Department when this plan was being formulated. All in all, this project gives many reasons to question the City in its dealings, and when Iowa City criticizes Coralville for its use of TIF, that is little more than the pot calling the kettle black. Hayek: Thank you for the comments. Swanson: My name is Alan Swanson. I was born here at Mercy Hospital. I went to college here. I raised a family here. Um, and one thing I've noticed about Iowa City, even in my brief years here, in ... I travel a lot and I've seen it in other places, but this is a singular city. It's a special city that kind of comes together, piece by piece, and each piece that has been put in place has made it a better city. This is the next piece. Um, it's ... I think this building will be a cultural ... as well as an economic engine for the city, and it can be enjoyed by many people who can't afford to live in it. It won't solve all the problems of the city, but it will provide a city that people want to come to and may want to live close to, and other problems can be solved by the taxes that are raised by this. I also see the TIF as an investment, rather than an ... an encumbrance. I think the ... this, it's a long- term proposition that will be ... actually turn out to be shorter. And finally I would say I really want to say that I admire very much the Moen Group and their ... their bold ideas, and their initiatives they've taken to make this a better city, to add the next piece to the city, and I also ... admire this Council whether you're for this or against it for being so deliberative and really so forward thinking about the city. Wanting it to be the best it can be. I know that's true, and you're backed up by a staff of... amazing people who have done the figures. They feel it will work, and I trust this staff. I trust the Council, and I trust the Moen Group, and I admire all of you. Thank you. Hayek: Thank you for your comments. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 33 Conroy: My name's Tim Conroy and I'm here tonight to support this project and I hope that the City Council supports it as well and we can move on as a city, uh, to the progress that this project is going to bring. TIF can be a scary element in any time of the city, and it is good and healthy to question what those ramifications of TIF funding will be. I ... don't feel afraid or worry about ... the downfall of this project, simply because we have a local developer who has succeeded way above par on two projects that have both supplied a tremendous amount of...give-back to the community, both in the forms of taxes but also in revitalization of the ped mall. Uh, many people here tonight on both sides, uh, enjoy lunches on the open Bread Garden Market, which overlooks what has kind of become the center of the ped mall. Uh, that project succeeded, and it will succeed again in this location. Affordable housing is an issue that we have to confront as a city, and we are all frustrated that there is not enough affordable housing. To paint it with a broad stroke, if you wear a sports jacket you don't like affordable housing, well, that's not fair to those who live in affordable housing that are hoping to get affordable housing, and it's also not fair to those who want to support it through projects, through real estate, and through charity. I'm here tonight because I understand that this project will raise the tax base, will provide not an immediate dollar return for these services, but it will supply a revitalized area that gives families better use of the park, going to the movies, having birthday parties at bowling alleys, and in the long-term, these tax dollars can be used towards affordable housing. I don't live in Plaza Towers. I don't live in Park 201, and I can't afford to live in the Chauncey, but I live a stone's throw away from the building in the Peninsula that was cited tonight, and I cannot emphasize enough how successful that project has been, has continued to be, and how well managed it is, and how it speaks well of your staff who advise you on these issues. Affordable housing isn't only... giving shelter. It's giving a community. Thank you. Hayek: Thank you for your comments. Chrischilles: My name is Gene Chrischilles. First of all I wanted to comment that I have no objections to the design of the building, the placement of the building. I think it looks like it would be a great building, if it was built. I'm here tonight with a suggestion for the Council's consideration. The suggestion involves the funding model used for this project. Last week I sent an email to the Council stating, uh, this suggestion. In case any of the Council Members did not see it, I will summarize it. I think this developer's agreement should be changed to use the partial rebate model of TIF rather than the model proposed initially. The model proposed initially involves giving all of the $14 million in property tax rebates upfront to the developer. In contrast, the rebate model involves only part of the property tax being rebated to the developer and the rest above the protected debt levy is given back to the City. The partial rebate model is being used in the Madison Street project and was well received by the Council due to the extra property tax that will be gen ... that will we ... will be generated for the City's use or the life of that TIF. I would think the positive reception to this model should This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 34 carry over to the Chauncey project as well. On the Chauncey project, this would be an ongoing annual return on the $14 million investment that would benefit the public in general. While the amount of the rebate and the overall term of the TIF would have to be restructured and determined for the Chauncey project, the rebate model provides more useable property tax revenue each year, which can then be used for any other needs of the City. This model also lessens the risk to the City in the event of financial problems or failure of the project. Tonight I would urge you to vote against the proposed ... uh, developer's agreement and restructure it involving the ... partial rebate model. If it takes more time than just tonight to do this, so be it. It is better to get the best deal for the City, citizens of Iowa City, than to rush through it and regret it later. Thank you for your time, your service, and your consideration of this suggestion. Hayek: Thank you. Brown: I'm Mark Brown and I do like Chauncey, but I (unable to understand) I have a dog and most people don't have a job and they want to be independent. I want to have more (mumbled) affordable housing because (mumbled) How can you have (mumbled) independent. We need people to be independent and I want to see more affordable housing. I like the Chauncey, but I want everybody (mumbled) with my mom and my dad for years, and I moved out and we need... everybody (mumbled) and I don't think the Chauncey will (mumbled) Thank you. Hayek: Thank you for your comments. Nusser: Hello, I'm Bill Nusser. I'm a downtown business owner and I'm a native Iowa Citian. Uh, and I would just like to speak from the perspective of downtown, that ... that I, um ... uh, I'm ... as a business owner I'm very grateful for the amount of thought and investment you have put into this project, as well as other projects that have required TIF money. I've seen TIF investments, uh... in ... in the Chauncey, or in the Plaza Towers and 201 ... Park 201 generate, uh... places for businesses, such as Dan Cilek's business that has blossomed in its location downtown. Uh, I think the location downtown has provided quite a great deal for both... individuals and businesses that locate in these, um, projects. As a business owner, we've seen a benefit, a definite economic benefit to the downtown as a result of these projects and so I see the investment of the City, uh, in this particular project through TIF financing as being one that is also investing in the health of the downtown, which I think we all value and I think we all appreciate, and uh, and I'm very grateful for the interest that this ... that this Council has shown in the downtown, uh... and... and I appreciate the diligence with which the Council and the administration, and the staff, have, um, gone through to make sure that all the T's are crossed and the I's are dotted. So I'm for this use of the... of TIF funding. Thank you! Hayek: Thank you for your comments. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 35 Nolte: Good evening. Mark Nolte, uh, Iowa City resident, uh, with the Iowa City Area Development Group. Uh, not a lot of new information to add. There's been some great points made. Um, we do have to address workforce housing, but that wasn't really the premise of this project. Um, the City of Iowa City has one of the best bond ratings in the nation, uh, because it makes strategic investments and I think this is a very strategic investment to use a small amount of your bonding capacity to support this ... this TIF project. It's buildings like this, these 100 -year buildings that will lead to the long-term financial stability of this city. These are the most efficient ways to protect the long-term financial interest of the community, and uh, so we support that ... for that cause. Uh, and one other point, is for every job that's created at...at a company like Meta, there's 1.7 induced jobs in the retail and service sector, and so I think we lose sight of that sometimes. So we're ... the goal is to raise everybody's boat and to do that we need more office space, we need more properties. There's companies that want to be downtown. We need to create environments for that to raise all boats, so ... for those two reasons we support this project. Thank you. Hayek: Thank you for the comments. Moen: Good evening, my name is Marc Moen. Um ... I appreciate, uh, Mayor and Council, all the time you've spent on this. I have a very short PowerPoint I think ... that I'd like to, uh... run through and it ... and it really is just to demonstrate what I think, and I know there's a lot of controversy about this, but ... what I think, um, TIF financing can do. These projects are simply not possible without it. It's - a political decision whether it's a good idea or not, but I'd like to show you ... um, what we've been able to accomplish, and only because of the City's, uh, participation in these programs, uh, with us. So there's both quantifiable and unquantifiable benefits to these projects. Uh, the quantifiable benefits, obviously, are the taxes. There's also unquantifiable benefits. This is the site where the Library and Plaza Towers now stand ... which was possible only because of TIF financing. The 10 businesses that are housed in Plaza Towers, all very successful. And there's an astounding number that I really wasn't aware of until I went to each of those businesses and asked them about how many people come through a day. There are over a million people a year that come through Plaza Towers, not including hotel guests and not including the residents. But that go to those businesses. And the increase in value, assessed value from Plaza Towers alone is $34.3 million. Vito's, obviously a much smaller project, but a ... an old bar that was in ter ... terrible condition when we bought the building. Now houses four businesses, has been completely renovated. The City put $250,000 into a $2 million renovation. I think has got that money, uh, back in spades ... based both on tax revenues and on the vitality of that building. We agreed not to put a... or not to apply for a liq... liquor license for that building. Not to put a kitchen in the building. We agreed not to put apartments but an office upstairs, uh, in exchange for the, uh, contribution from the City, which essentially paid for the elevator. Film Scene has, uh, shown over 200 feature films in its first year and has welcomed over 35,000 patrons in a 65 -seat theater. And the increase in assessed This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 36 value on that building is in excess of a million dollars. Park at 201 has won, and all of these buildings have won American Institute of Architects' awards. The businesses have won awards, as well. The site, the in -fill site where Park was built, is 40 -feet wide. There are about 100 people that are working in that building. Twenty-five residential units. The increase in assessed value is $9.3 million. And we'd like to do the same thing on the Chauncey site. And here's another figure that I was really not aware of until 1, uh, talked to the Assessor and looked into the total value of property downtown. Entire downtown is assessed at $200.7 million. Plaza Towers, Park, and Vito's account for $45 million of that $200 million. Hayek: Mr. Moen, I will need you to finish up. You're over four minutes. Moen: This is the last one. And with Chauncey, that figure will raise to $83.6 million. Thank you. Hayek: Thank you for your comments. Byler: Hi, I'm Peter Byler. I want to thank the development team, the Council, and the staff, especially Wendy who always responds to my emails under the ... uh, she's under no obligation to do that and I appreciate that. These are really complicated agreements, so I kind of break `em into four questions that I ask, and I actually give `em points to see if I think they're worth supporting. My first question I always ask is are City's priorities protected. Um, you know, I think economic development, sustainability, and affordabil ... uh, affordable housing have been talked a lot tonight. The developer in the original agreement offered 20% workforce housing. So at some point we negotiated that down I guess to 9 or 10%, where we're at now. I wish we wouldn't have put that on the negotiating table. I mean, that's a clear City priority — workforce housing, affordable housing. He offered 20%. Now we're at 10%. So, I don't know what exactly happened there but I wish that wouldn't of been in the negotiation. The silver LEED requirement, it's not really a requirement. It's kind of a suggestion. Um, as one of the speakers said, that's kind of an average, uh, you know, requirement of new construction nowadays but ... the in -fill development is certainly a very sustainable feature, um, and it gets, you know, a great downtown business contribution, obviously, as Mr. Moen just said. So, the way I do my scoring here that gets 15 of 25 points. My second question, is general fund revenue being used to pay off the TIF debt, and you know, in part of the presentation we saw, you know, very clearly that only the TIF increment from that building goes to pay the bonds, but then in Dennis' presentation you saw that actually the whole downtown (laughs) basically is on the hook for these bonds. Like any tax revenue generated by any of these, you know, it says specifically an agreement Park 201, but then it even expands to the whole, you know, district downtown somehow. If something goes wrong with this building, all of those tax dollars are at risk. And the City won't get anything for it. Like if we have to pitch in general fund money because something goes wrong, we should get more units for affordable housing, This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 37 for instance, or something. So that's something I wish was tweaked. Urn ... so, you know, uh, I gave it zero points on... on that because I think we are putting general fund money at risk. My third question, is there maximum transparency. As usual, the NDC report, you know, the ... Tom Jackson put up there had a lot of really good words, not a lot of numbers. Um, I actually just read tonight, uh, Wendy's response. It was ... it was, uh, apparent to me from the proposal from the developer that the general contractor was actually a partner in this development. She has said that it's the City's understanding that he's not a partner, because that would totally convolute this $49 million thing if he was paying himself to build the building, but um, as has been explained to me, he's working at basically open - book -plus 5%, which is ... that is transparent. I mean, compared to actually partnering with the ... with the contractor where you're paying yourself. So... I really appreciate that. So (clears throat) my fourth question is, is there a development fee, um, which on a for-profit development, when we're maximizing the TIF we ask for ... I've talked about this before, but then the ... the developer asks for a development fee on day one. That's just a bait and switch, and I really appreciate the fact that, um, that the Chauncey LLC is not charging a development fee. So (clears throat) anyway, the Chaunc... you know, in ... in my scoring, you know, as I try to look at this, I gave it 55 out of 100 points. You know, when you're in elementary school that's an F, but then later on in school that might be an A, depends on how smart the other people in class are (laughter) so you know ... what I will say is it's 1000% better than the last TIF agreement. When I scored the hotel that we voted on, that got 5 points out of 100! So this is 55 points. So I don't mean, you know, I'm not trying to be funny here, but you know it's better, uh, I don't ... I don't, you know, I don't know where that leaves you. You have to make a tough vote tonight, whether you look at it as an F or an A though. I think it could have been tweaked in those couple of ways to be even better than it was. Might be too late for that; might not be too late for that. So, um, thank you for your time. Hayek: Thanks for the comments. Okay! I am going to close the public hearing at this time. (bangs gavel) b. CONSIDER A RESOLUTION Karr: Motion to accept correspondence. Botchway: So moved. Dickens: Second. Hayek: Moved by Botchway, seconded by Dickens. Discussion? All those in favor say aye. Opposed say nay. Motion carries 6-0. Dobyns: Move the resolution. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 38 Mims: Second. Hayek: Moved by Dobyns, seconded by Mims. Council discussion. Botchway: All right I'm going to I guess start, if you don't mind. So ... based on kind of how we voted for the, um ... for the rezoning, I'm assuming that, you know, we ... have already kind of decided this maybe, but ... I ... I guess there's a ... a couple of things that I kind of want to talk about that have come up in public comment from the rezoning process but also coming pu... come up in, uh, public comment tonight. You know, there's... there's been a lot of discussion about, you know, this building being, you know, something for the 20 -somethings, and something for, you know, the younger movement, and I appreciate that. Um, but I will say that, you know, at least for me and the reason why I stayed was that ... I stayed because of the community. I mean I've lived in other places and, um, for the 20 - somethings and other people, I mean, they've gone ... they can go to other places. I mean, there's, uh, there's Boulder, Colorado, I mean and ... uh, Mark can probably do it. Mark Nolte can probably do it better than me, the ... the places that, you know, the young people go, um, as far as, um, you know, outside of Iowa City from that standpoint, and so, I mean, I want us to focus on that particular point as far as, you know, I stayed because of the community, because of the people that were here, um, because of the intelligence I think of the community, because of the fact that I think this community can be different than a lot of other places that, you know, I and other people can go to. Now, I know the argument is going to consistently be that we need to generate property taxes, um, especially at this, you know, this ... this downflux, this downturn, um, with the $50 million, um, to make sure that we have the City services available and ... and I get that. Um, and I think that's been kind of a consistent argument every time we've come about... talking about a particular project. But again, over and over again and from public comment, I believe from the developers and other people, it's been talked about as a transcendent building. Something that we're going to look at 25 years down the road and say we got it right, and I ... I can appreciate, um, that is where ... and let me be clear, I feel like Mr. Moen has put a substantial amount back in the project, and I appreciate, you know, the ... the 55 to 100 point scale. I think that, you know, the presentation from, you know, everybody, um, on our team, from you know what's been going back from the developer. That's just drastically different than anything else. I think was important. But one of the things that I do want to talk about and I know that, uh, it was part of my campaign so I know I'm sounding like a broken record, was ... is the affordable housing piece. I mean we just sat not too long ago, and maybe it was two months ago, and we s ... we said that affordable housing was number one on our list. We also said, and this wasn't just me, I mean, other people said it, but we also said that we need to put our money where our mouth is, and I thought that was an amazing type of thing to say. An important thing to say as we look at, you know, doing that from an affordable housing standpoint. This is a City -owned space. We don't have that much space to do with what we want to do with. So because of that, I'm just kind of making a couple of suggestions. One, figure out how to increase the This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 39 affordable housing. I know that could mean, you know, uh, going into the coffers a little bit or whatever the case may be, but I think it's an important enough thing that we know that we need to do this, and I think this is a great transcendent building, as everybody has said on both sides, to be able to do this. The other part that I want to add is, you know, while we think about, uh, affordable housing and we think about, you know, property taxes and all those wonderful things, I think one part that does get missed is, again, that sense of community, about putting people in spaces where they can talk, where they can, um, have the opportunity to discuss, you know, many different things — whatever the case may be. I think the Iowa City Public Library does a wonderful job of doing that, as far as it being a free space that people can do ... can go and congregate. I'm hoping, and this is another suggestion I have to ... towards you, that we can have some type of free space for individuals, um, to do that same type of thing. I understand that Film Scene's in there as a non-profit at a reduced rate, whatever the case may be, but having another space, maybe City -owned, where, um, you know, you could use the Iowa City Public Library as a way to, you know, book or reserve, whatever the case may be, um, have that space, another free space, for individuals to participate in, and be a part of the building. I mean, I get it. I mean I think that there's going to be people that are going to use this space. Um, I plan on going to the movie theater there. I plan on ... I mean, the bowling alley's a little weird to me, but I plan on trying to, you know (laughter) go to the bowling alley. Oh, I like to bowl. I'm just saying that it's just a weird ... I'm not necessarily sold on the whole bowling alley part of it. But ... no, one of the things I did do, because I believe that, you know, our city... as... as we've kind of had these discussions about a building, have been fixed in the... the... the one people that you kind of want to, you know again, put us ... say that we need to put it on the map by doing these particular buildings and the other part it's more of a, you know, um, not wanting to see this type of development, and I get that, and I ... I think even if this is that type of development (mumbled) and so I get that. What I spent a lot of time over the last, you know, month or so doing is talking to people who don't care. Who have said many a times that, you know, you're' going to do whatever you want to do. I have no skin in this game, it's not a big deal, whatever the case may be, and that ... and they use some of the amenities downtown and that Moen's done. I do appreciate that, as well. So, but my ... my point is is that ... are we, when we're thinking about it from a community aspect, is this building going to be for the entire community? I mean forget about the fact that it's going to be, uh, there's a certain percentage of affordable housing, and so that's one of my arguments. I think there needs to be more. But I mean there's going to be a large majority of it that's not, and that's fine, but besides that, is there anything else that we can add to this agreement that's going to be for the entire community? And that's I guess my ... I guess my argument, my standing point, and that's where I want to kind of focus on because ... if it's going to be a building for the entire community, I want it to be that, and I think that having that free space, I mean, obviously the affordable housing, but having that free space I think would do that. So ... that's it! Thanks! (both talking) Thanks for listening. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 40 Hayek: Thank you, Kingsley. Who wants to go next? Dickens: I think the, uh, original RPF had certain specifics in it, and ... after listening to all the conversation, you know, what's truth and what isn't, uh, it makes it a little tougher to make a decision, but... the... the facts do rise to the top. Uh, yes, we'd all like to see a little more... affordable housing. That ... that still is number one on our list. The fact is that wasn't the strongest thing that was put into this RPF. It's a... it was suggested. I know we're working in the, uh, new River area, that we're going to be requiring more affordable housing in that as part of the ... the structuring of when you do, or you would pay a fee that we can use toward affordable housing. So ... trying to put everything onto that one area, this one piece of property in this one building to solve all of our affordable housing, I think's very ... very unfair. I think it still is number one. I think it's important. If we can change the agreement and get more, that's great. I did have a ... a little problem with the five units for ... for a million dollars. That ... that was the one sticking point that really ... I ... I thought that we could more with that money but knowing there's certain things that we can do with that money, it...it...it fits in there. But it doesn't really solve a major problem that we could use. I think we could use that money in better places. I ... I still support the project. I think it's a great project. Looking in long-term, I'm not going to be around probably by the time it's ... uh, TIF is over, but my kids and grandkids, all of `em that live in this town, they're going to benefit from it, and that's ... I have to look to the future because I'm ... I hope I'm here (laughs) in 25 years but ... like they said, a crisis could come. I could drop over dead tomorrow, but... (laughter) some people may wish that, but I ... I really am looking forward to this project moving forward. Hayek: I can talk! Um ... first of all, I appreciate the voluminous public input on this and on the other readings. Um, it is important. We do pay attention to it. We do read what comes in, and I think to a person this Council is very attentive to ... to the, uh, community input we get. I do think some context is in order. Um, and I would say, uh, to begin with, uh, I think it is an understatement to suggest that Iowa City, um, is known for its limited use of TIF. Um, whether you look at it from a percentage of our, uh, legal debt limit or our population or our tax base, uh, we ... we just do not use it much! Um, and we certainly don't use it like our neighbors do. Um, I ... there ... there's a chart, uh... uh, that I've looked at and it's ... it's a matter of public record. In Johnson County, Iowa City's, uh, tax aggregate, or TIF aggregate rather, is, uh, is about 2% of... of the overall TIF aggregate countywide. That puts us on par with Solon, Lone Tree, Shueyville. Um, and ... and, uh, and when you look at some of the big users of TIF in this county, we don't even compare. Um, I would not suggest that we're on a TIF - binge. Actually our TIF aggregate these days is quite a bit lower than it was, uh, just in 2008, and despite our reputation as the liberal bastion that is Iowa City, uh, I would say that our approach to economic development, our approach to TIF in particular is ... is marked by conservatism. Um ... uh, it is true that we are, um, now more engaged in economic development. Um, that ... than at past junctures. Uh, but the fact is that the ... that the predatory environment we operate within as a This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 41 city, urn ... uh, is one in which cities, other cities deploy TIF and other incentives, um, on staggering levels and without a lot of upfront analysis, um, and ... I ... I think that means that we as a city need to be more engaged, um, in economic development. And I think that those who are opposed to TIF, uh, on ... on philosophical levels make reasonable arguments. Um, I do find them to be somewhat lacking in pragmatism. Um, and, uh, and ... and ignorant of the reality we operate within. I think we can do, um, economic, uh, development in responsible fashion here in Iowa City. I think we do do economic development in responsible fashion, including through the use of TIF. Um, I think it has to be consistent with our values, and I think it has to involve thorough review of each project. Uh, with ... respect to the project in particular, um, the Chauncey is a mixed-use development. We've heard about that from multiple speakers tonight. It hits on, um, many City objectives that were the product of strategic planning and other processes we followed. Um, this includes the variety of uses in the building, uh, the ... the high-quality structure that we will get as a result of this that will stand the test of time. Um, permanent public housing, and I'm not sure it's quite appreciated how impactful public housing is. This is not just workforce housing, which by, uh, certain definitions could mean people making $80,000 - plus a year, um, it's not even a ... affordable housing, which is a broad range of incomes that could also, uh, be interpreted to mean people of substantial means. This is housing owned by the City, in perpetuity, that is targeted at a lower income level, the under 60% of area median ... median income. We can have a huge impact on ... on ... on the most underserved, uh, in terms of...of affordable housing. Um, and the project, as we saw, is marked by, uh, modest, short-term taxes that go to the City, the Schools, uh, and ... and the County through the protected debt levy, and a significant long-term tax benefit that we will, uh, all enjoy. Um ... I think the project will contribute to a vibrant downtown. Um, I think it diversifies our housing and our commercial stock downtown. I think it promotes a less auto -centric, uh, and more sustainable environment. Uh, and I think it accomplishes something very special on a blighted, uh, City property. And you can pick out... the... you can pick out individual aspects of this ... of this project because it has many components. You can say you don't like the bowling alley, or you can say there's not enough affordable housing, or ...or so on and so forth. I would say in the aggregate, um, this is a very strong project, and one that is good for the community. With respect to the review that we have undertaken, um, I would describe it as nothing short of exhaustive. Um, it...it has received untold amounts of, uh, time, uh, from our City Manager's office, our legal team, our economic development team, our finance department, our independent consultant, and many others within City Hall and outside of City Hall. Um, and these are people whose expertise and experience I trust. And in fact I would ... I would stack our... our team up against any other team at a municipal level in the state of Iowa. Um, is ... is the City's participation on this project substantial? Yes! Um, and ... uh, you know, dropping from 20 floors down to 15, and including certain, uh, of the ... of the public amenities, such as the theater and ... and certain other things have driven up, urn ... uh, the financial gap, um, somewhat. Um, and that's where the City's participation, uh, comes in, and I This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 42 would point out that most of the applications we saw in response to the RFP themselves involved substantial, uh, TIF requests. So this is not unique to this particular project. Um, I would also say that ... that this participation on the part of the City is repaid through taxes that will accrue only because a project of this scope is being undertaken. Um, there's a minimum assessment agreement. There are other, uh, protections that are embedded in the project, uh, so that the debt is retired on or ahead of schedule, and as others have pointed out, I would also point out that this developer, um, that our experience with this developer has been that the .... the debt is retired, uh, ahead of schedule. Um, this is not a wealth transfer as some have described. Um, primary tax ... or I'm sorry, property taxes are, uh, really the primary source of revenue for cities. Some two-thirds of the revenue we use, uh, for general fund purposes comes from property taxes. Um, and this, in my opinion, is an investment in the very tax base that we as a city use for the countless services we provide to the community. From basic health and safety, to the support of social services, to the ... to the support of numerous non -profits doing important work in the community, and to all the amenities, uh, that a city like Iowa City maintains, uh, which we maintain for all of the public to use, uh, and enjoy, and ... and there are some recent examples of financial participation on the part of Iowa City in projects that include ... what I think many people could characterize as higher -end housing. And the examples I will give are that, uh, this Council, uh, voted to support the, uh, Emrico project, which is the, uh, the project on Riverside Drive. We ... we voted to support the Ta ... the ... the Sabin townhomes, uh, project on ... on Harrison Street. Um, and we voted to support the Park at 201, which is on the pedestrian mall, and we've heard about that. Each of those projects involved financial assistance from the City. Each of those projects involved a pro ... some provision for affordable housing, though I would suggest not at the level of what we're doing here in terms of permanency or the targeted low-income, uh, population, and in each case the vote of this Council was unanimous. Um, and as Mayor, uh, Pro Tem Mims has indicated at, uh, at previous meetings, neither she nor I wanted to go with the Moen Group on this RFP. Uh, when we commenced the RFP process several years ago. Um ... he has done a lot for this community. Uh, and in my estimation is a creative and responsible developer. Which is not something I can say about all local developers in our community, but there ... but there's a degree of political controversy, uh, with anything Moen related, um, and ... and frankly I was hoping to avoid it. Um, and I went into that process predisposed to, uh, underweight or ... or discount, uh, anything that might come from this group, but through the RFP process several years ago, I reached the conclusion to my surprise that this project, the Chauncey project, was hands -down the best one that we had to choose from. Um, and I supported it then and I do now, knowing there would be an extra lair ... extra layer of...of opposition from within the community, just by virtue of those who are involved, uh, with it. Um, as one of the speakers in the audience indicated, um, there would be countless communities in Iowa and beyond our borders who would be thrilled to have an opportunity like this. I think, um, we should appreciate that. I am comfortable with the deal. I'm comfortable with the work that has gone into this. I think it has gone ... it has received an ... an This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 43 incredible amount of...of review. Um, I am sensitive to the concerns, uh, but I think in the aggregate this is good for the community. I will support it. Anyone else? Botchway: So before (noise on mic) I mean before Rick ... or Rick speaks, he might not speak, but I think I believe I hear Terry saying that if... if we were able to do more, um, with the developer agreement in conjunction with affordable housing you'd be for it? Dickens: Absolutely! Botchway: Okay. Hayek: I think we need to be very careful. We have a ... we have a ... we have a... Dickens: We have a signed agree ... or not a signed agreement but (both talking) Hayek: We have a ... we have a ... a deal that has been, uh, struck in principle at least, um, the result of a lot of time, and I am very, uh, reluctant to upset it, uh, at this time and I wouldn't be supportive of that. I think we are making strides in the area of affordable housing. Um, both Riverfront Crossings and more generally. Um, whether we want to look at those, uh, set-aside funds within the ... the Housing Authority for something else on some other project, I would be open to talking about that. Um, but I don't have interest in ... in re ... in upsetting this that's before us this evening. Botchway: So, I mean, let me ... let me make sure you're being, I mean, so you're saying we have an agreement in principle and so there's no way we should ... we could be able to change the agreement or talk about changing the agreement? We don't have the power to do that? Hayek: Oh sure, we have the power to ... to vote it down and ... and go back to the drawing board. Botchway: I guess I'm not proposing that, but ... okay, I mean ... to be clear, what I'm saying is that presumably the ... the votes would be for this agreement to pass. All I'm asking for is a consideration that, you know, if that's the case, and if we can come to an agreement for more affordable housing, I would like us to have that discussion. I mean ... from a timeframe standpoint, again, let me be ... let me be clear. From a timeframe standpoint, we talked about it from ... we need to focus on the rezoning. And the rezoning being the only issue that we need to focus on, and I ... I appreciated that, and that was said not only from Council Members, but the public and everybody else. Now we've come to the developer agreement stage and I understand that it's, you know, something that's worked out in principle beforehand, and it comes before us, but I mean to me this has been the only opportunity that I felt, you know, from the public, from being able to talk This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 44 about in the public sense to the Council Members, and so I ... I just, I say that to say, you know, I understand it's in principle, but I ... I do want to make sure that, you know, we do have an opportunity just to ... if we can, do a little more. Hayek: Go ahead, Jim. Throgmorton: I ... I'd like to say a few words (several talking) that relate to what Kingsley has been saying, but in a different way. So, rather than get caught up in that particular detail I want to kind of say a few other things. So the first thing I want to do is, uh, express, uh, the fact that I have a great deal of respect for the ... for the developer, Marc Moen and the whole team associated with that ... with this particular project. And I greatly admire the technical competence that the staff, who spoke earlier tonight, uh, who could not. I mean, they ... they showed us a ... a great deal of, uh, knowledge about the whole situation. Thanks to them for the care and thoroughness with which they have crafted this developer agreement. Whether one likes it or not, I mean, we ... we should be able to recognize that and admire it. Also, as ea ... as is pretty easy to see, this is a very complicated agreement. As is the TIF that's embedded in the agreement. But I don't want to focus on the technical complexity, cause I don't think that's where the debate is. You know, we ... we all recognize the skill with which things have don ... been put together. So one of the things that's really striking, uh... uh, really a striking fact for me is that this is the first time the general public has had a chance to see, comment, and possibly influence the proposed TIF. First time. And it's ... and it's been in the public's hands at the ... at best since May 28`h. So ... that's not a lot of time to go through a very complicated document and figure out what you think about it and how you think it ought to be changed, put ideas together, make recommendations to the Council, have the Council deliberate, you know, and figure out what it wants to do. Not much time. Despite that limited amount of time that you, those of you in the public who have spoken, um .... um, despite the limited amount of time that you've had, you have brought your knowledge and values to bear on the question. So I want to thank all of you for doing that, you know, for committing your time and energy into doing that. So, that said, it ... it's pretty clear there are lots of very good reasons to either support or oppose the developer agreement as ... as proposed and as presented to us. In my view, this is not the best way ... well, it's not the way I would invest the City's limited public funds. Instead of investing them on this project in the way articulated in the developer agreement, in other words in a way that will not fully pay off its TIF debt for at least 27 years, or maybe up to 27 years, and will largely be focused on providing space for wealthy people and an elite class of highly trained workers, I'd spend those funds on improving the lives of people at the bottom ... in the bottom half of the income bracket. That is on job opportunities, living conditions, affordable housing... improving the neighborhoods they live in, and provide... improving transportated ... transportation related access to and from jobs and school and so on. I think that's where we need to be spending more money. Uh, and ... but that's not what's before us, right? But the question is, should we spend This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 45 $14 million on a .... on this particular TIF for this particular project, given the... the agreement that's been worked out, and I think the answer's no. Mims: I'm going to support the developers agreement. Um, we've ... let me just step back for just a second. You know we started with ... with a citywide facility study, probably about three, four years ago now. At that point we thought the City was probably going to need that location for City facilities, and once it was determined, uh, that we were not, we ... we had the RFP developed by staff. That was put out. Wendy showed tonight some of the general downtown goals and some of the project -specific goals, um, that were in that RFP. It's been mentioned that this project, um, has met all of those. Um, the Mayor has mentioned and ... and I will qualify, um, his comment on our earlier discussion about not wanting the Moen Group. Um, I ... I think he was pretty clear, but I'm just going to clarify it (laughs) a little bit more. It wasn't because it was anything against the Moen Group. It was simply because, as he I think alluded to, the fact that the Moen Group has done a lot of things in Iowa City, and ... and the City has partnered with them on some TIFs and things for some of those projects, and the fact as he mentioned it brings ... we knew it would bring an added layer of, uh, criticism, uh, whatever that we were, you know, people have alleged, uh... uh, that we're giving money to our friends or contributors, um, those kinds of...kinds of crazy allegations. So we did. We went into it, uh, very, very open minded to look at other developers' projects. Um, it wa... became very clear, um, in that pro... selection process with the City Council, um, that it was ... I think pretty close to unanimous. I think it might have been a 6-1 vote on going, uh, with the Chauncey. But to focus on the developer's agreement and the TIF. Um, Jim, you just commented on, you know, not using ... this isn't where you would use $14 million, okay? The ... the things that you commented on on terms of spending this money on, you know, the ... the bottom half financially or whatever in the community is a great idea, if it were possible. The problem is that people forget to key points here and they ... they keep getting this confused over and over. Number one, we don't even have these dollars unless the project is built. And number two, the project won't be built unless we have a TIF. We have used the National Development Council to do our gap analysis on this project and a number of other projects in the community. We have had at least one project come before the City where the developer requested a TIF. NDC did the gap analysis, showed that there was no gap, the developer smiled and said, yeah, I knew it, and went ahead and did their project anyways. As people have said, if money's available, people are going to ask for it, but we have I think a very, um, accountable process in terms of doing this analysis and making sure to the best of our ability and using NDC's expertise and our staff expertise that we are not just giving money away. So the idea that we could use this $14 million for, you know, affordable housing and transportation and job training, etc., is not possible! Again, the taxes don't exist unless the project is built. And based on gap analysis, the project doesn't get built without the TIF, and so the TIF dollars go back into help pay for the project. So that just doesn't work. Along with that, when people, and ... and the Mayor alluded to this in his comments, disagreeing that this is, you This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 46 know, taking dollars, uh, from the public plate to give it to corporations. Um, again, these are tax dollars that do not exist unless the project is built. And so, again, they're going back in to ... to help fund that gap that, um, has been identified. Um, comment was made that we're on a TIF -binge. You know, again, the Mayor's, you know, went through that in detail. We ... we certainly are not on a TIF -binge ... by any stretch of the imagination in Iowa City. Um, I also would... would significantly... strongly disagree with the comments earlier, trying to draw a relationship between our use of TIF and the increase in poverty, um, in Iowa City or in the corridor. I've seen the same Gazette article and other studies that talk about increased poverty. I'm not dismissing that. It ... it is serious, it is a concern, we all agree we need to do more with affordable housing. But to try and draw some causation between our use of TIF and the increase in pop ... poverty in the area quite frankly I think is ludicrous. Um, in terms of the design of this project, um, I ... the staff worked with the developer, um, in terms of decreasing the height that was originally proposed to make it at least somewhat more palatable to the community. Obviously there are people who still, um, are ... are very... disconcerted and unhappy with the height, but I think one of the most important things in terms of that design that was done that really helped was the setbacks that were negotiated between staff and the developer, to make this building, you know, from the street level appear much more like a four- or five - story building, which could have gone in there with no rezoning at all, and helped address some of the original concerns about shadow on Trinity Church. So for all of those reasons and ... and, I would like to thank the Mayor for his, uh, comments, which were very... obviously very well put together and... and I echo virtually everything that he said, um, I will be supporting this. I think it's a great project. We need to see the increase in tax base. Um, we've talked about the $50 million, um, that we may be losing in... in property tax money over the next 10 years. And this is one of those pieces that we're putting together in this community that will help us move forward. Dobyns: Well the decision before us today suggests there are three realities. The City of Iowa City needs to be a progressive community that provides security and fairness for the lives of those who live and work here.. The second is we live in a capitalistic democracy. Frankly some members of our community don't think much of capitalism's ability to solve our problems, and there's others aren't so sure that democracy can do this either. Well, as usual truth is somewhere in the middle. I think tax increment financing is underutilized in Iowa City. The capitalism question here has come under some scrutiny this time, and in the past. And in my four years on Council, I've seen many developers come back and renegotiate the original contract over and over again. Not this developer. Independent financial counsel has scrutinized this project. The market has scrutinize the project. The Council, myself have scrutinized the project, and the City has shaved off the developer's profit opportunity from 20 to 15 floors, and he still thinks downtown and the City are worth the investment. I've disagreed with the developers on other issues in the past vehemently. But not this issue. I ran for Council in part because I saw our city shrink away from progressive development This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 47 because the smaller town next door frankly never saw a TIF it didn't like. In this case, tax increment financing is appropriate. Too much tax increment financing and you rob the School District of its ability to educate our children, and for the County to provide services for our community. Too little tax increment financing and you steal away the finances we need to secure a hopeful future. By super- charging this development with the use of tax increment financing there will be an intrinsic gain in finances available to the City within I think 10 to 15 years. Well within Terry Dickens' life expectancy (laughter) With the use of tax increment financing there will be an immediate intrinsic gain to the adjacent properties and overall financial health of this city. This democracy has scrutinized this capitalist, and this project is worth our investment. I will vote for the development agreement. Botchway: So before we move forward can I ask a quick question? Hayek: Sure! Botchway: Um, can I ask the developer a question? Marc, do you mind coming forward? So I've asked this question before, um, I think at the, uh, the space in front of the, um, the new Rec Center, or the University Rec Center, and so I ... I guess are you opposed to looking at the developer agreement again and um, maybe giving more towards affordable housing, or opposed... and/or opposed to, um, providing some type of like city -free space that would be in conjunction with the Library and so forth? Moen: Sure, let me answer both of those. The, uh... the developer agreement has been signed by me, uh, it's been finalized as far as ... I ... I understood it. Um, the architect has told us that unless we start intensive design architecturally and mechanical engineering work by July 1St, that we ... there's no way we can meet the deadline dates that are set forth, which are many... including a completion in December of 2018. We've spent two and a half years... literally two and a half years negotiating the details of that agreement and the City came to us and asked us if we would sell those five units, at a very deep discount off of market rate. And ... and we agreed, and it was actually me that said I want to make sure that they're fit out to the same standards as the rest of the units, and I want them dispersed within the building. I don't want any stigma attached to those units. I don't want them to be on a certain floor, a certain location in the building. But there... they're a huge discount from the market rate of those units. And so that was a concession. They also don't play ... pay property taxes because they're owned by the City, which means the rest of the building has to make up that minimum tax assessment that we've agreed to. Because those five units are... are not going to pay taxes. And taxes (laughs) I mean it's ... it's astounding to me, but taxes on a one -bedroom apartment at Plaza Towers for example are $600 a month. Which the City won't be paying. So we have to make that up elsewhere. So I... I'm certainly not opposed to discussing further with the City ... if there's things we can tweak, but I ... I ... if we don't, if we don't get a decision yes or no tonight, I This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 48 don't know where the project is, and I know that the detractors from this project are hoping for a delay and ... we can't handle any more delays, honestly. In terms of public space, that's one of the things that... and we haven't really talked about it much expect back two and a half years ago. There's 15,000 square feet in this building that's open to the public. 15,000! That's one of the reasons it's so expensive (laughs) There's two story volume of space when you come in the building that's surrounds the theaters and the bowling alley that's all glass. It's artwork. It's ... it's sculpture gardens. There'll be a piano in there. It's open to anybody that wants to come in. And to me, I don't know if you were at Bill Strickland's, uh, when he came and spoke, but he's done inner-city schools where he does art work and sculpture and provides spaces for kids that otherwise wouldn't have access to that. That's ... I grew up in a poor family, but I somehow managed to get a... acclimated to art work and music and sculpture and architecture, and it's ... it's hugely important to me and it's hugely important that we provide that for everybody in Iowa City, and this building will do that, and it ...there's no cost of entry. That space is free. There's no ... it's not a profit center for the building. We'll have gallery space that's available to people that want to show art work that ... at no charge. That's very imp ... that's a critical component of this building. If you look at any other proposal that was made, of those 10 proposals, you will find an elevator lobby that is about five feet by five feet. We have 15,000 feet in this building. Hayek: Thank you. (several talking) Further discussion? Roll call, please. Uh, Item 2b passes 4-2, Botchway, Throgmorton in the negative. Let's take a five-minute break. We've been going for three hours. We will, uh, suspend the meeting, uh, for about five minutes and be back here at 10:00 to take up Item #3. (BREAK) This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 49 ITEM 3. URBAN RENEWAL TAX INCREMENT REVENUE BONDS [CHAUNCEY] — INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE ISSUANCE OF NOT TO EXCEED $14,200,000 URBAN RENEWAL TAX INCREMENT REVENUE BONDS, SERIES 2015B b. CONSIDER A RESOLUTION Karr: Motion to accept correspondence. Botchway: So moved. Dickens: Second. Hayek: Moved by Botchway, seconded by Dickens. Discussion? All those in favor say aye. Opposed say nay. Motion carries 6-0. Mims: Move the resolution. Dobyns: Second. Hayek: Moved by Mims, seconded by Dobyns. Discussion? Throgmorton: Yeah, I'd like to say, uh, given the previous vote, uh, which went counter to what I preferred, it still... creates a context, so I'm going to vote for this particular motion in... instead of voting against it. Hayek: Okay. Further discussion? Roll call, please. Passes 6-0. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 50 ITEM 4. NORTH EAST CORNER OF COLLEGE STREET AND GILBERT STREET [CHAUNCEY] — REZONING APPROXIMATELY 0.62 ACRES OF PROPERTY LOCATED AT THE NORTHEAST CORNER OF COLLEGE STREET AND GILBERT STREET, FROM PUBLIC (P-1) AND CENTRAL BUSINESS SUPPORT (CB -5) TO CENTRAL BUSINESS DISTRICT (CB -10). (REZ15-00006) (PASS AND ADOPT) Mims: Move adoption. Botchway: Second. Hayek: Moved by Mims, seconded by Botchway. Discussion? Any ex parte from the last reading? Throgmorton: No. Hayek: Uh, I did have a conversation with, uh, Joan, or... email conversation with Joan Jehle who, um, gist of that was that she felt that the, uh... uh, she didn't like the location, and I think she felt that the, uh, primary supporters were Chamber of Commerce types, urn ... but other than that, what she said was consistent with the record. Any other... ex parte? Discussion? Uh, is there anyone from the audience on this? Third reading. Council discussion? Roll call, please. Passes 4-2, Throgmorton, Botchway in the negative. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015. Page 51 ITEM 5. VACATION OF BLOCK 43 ALLEY [CHAUNCEY] — VACATING PORTIONS OF PUBLIC ALLEY RIGHT-OF-WAY LOCATED IN BLOCK 43, CITY OF IOWA CITY (VAC15-00001) (PASS AND ADOPT) Mims: Move adoption. Botchway: Second. Hayek: Moved by Mims, seconded by Botchway. Discussion? Throgmorton: Once again, given the rezoning that we just, uh, voted in favor of, I'm going to vote in favor of this particular alley vacation. Which I didn't do in the previous two. Hayek: Okay! Anyone from the audience? Any further Council discussion? Roll call, please. Passes 6-0. This represents only a reasonably accurate transcription of the Iowa City City Council special formal meeting of June 8, 2015.