October 18, 2016

The Board of Directors of the Redevelopment Agency of Salt Lake City, Utah, met on Tuesday, October 18, 2016 at 1:16 p.m. in Room 326, Committee Room, City County Building, 451 South State.

In Attendance: Directors Lisa Adam, Erin Mendenhall, Andrew Johnston, Derek Kitchen, James Rogers, and Charlie Luke.

Absent: Director Stan Penfold.

Staff in Attendance: Justin Belliveau, Chief Administrative Officer; Jackie Biskupski, Executive Director, David Litvack, Mayor Office; Edward Butterfield, Senior Project Manager; Kort Utley, Senior Project Manager; Tammy Hunsaker, Project Coordinator; Benjamin Davis, Project Manager; Jennifer Bruno, Council Office; Cindy Gust-Jenson, Council Office; Margaret Plane, City Attorney’s Office; Katie Lewis, City Attorney’s Office.

Director Adams presided at and conducted the meeting.

Some items may be discussed in an order different than listed on the agenda, time stamps shown indicate when items were discussed.

A.    Comments:

1.    1:16:16 PM Amendment No. 2 to the FY 2017 Budget, including plans for Housing Funds. View Attachment

Chairperson Adams called for public comments concerning the second amendment 2016/2017 Budget. No public comments were made.

Chairperson Adams stated that public comments concerning the budget would also be accepted later on in the meeting at approximately 2:00 p.m.

2.    1:16:43 PM General Comments to the Board.

Chairperson Adams thanked Katherine Potter for the hard work and dedication she provided in getting the Eccles Theater launched and opened. The RDA Board presented a gift to Ms. Potter to show their appreciation. The RDA Board wished her well as she moves forward in her new position at Rowland Hall.

Chairperson Adams also acknowledged that Jennifer Bruno was a key participant on the Eccles Theater project and thanked her for her contribution.

B.    Redevelopment Agency Business

1.    1:17:09 PM Approval of Minutes

Director Kitchen made a motion to approve the minutes from the September 13, 2016. Director Rogers second the motion. Upon roll call, the motion passed unanimously. Director Luke was not present for the vote. View Minutes

2.    1:20:18 PM Report and Announcements from the Executive Director.

None

3.    2:39:43 PM & 3:45:08 PM Amendment No. 2 to the FY 2017 Budget, including plans for Housing Funds. View Attachment

Chief Administrative Office Belliveau stated in an effort to help support the City’s housing goals and homelessness needs the RDA has been working with Housing and Neighborhood Development (HAND) on its request of $12 million to assist with securing the right to acquire real property for homeless resource centers. 

Chief Administrative Office Belliveau reviewed the following two options of potential funding sources. The first option, identified in the attached as “Option A” includes the RDA’s preferred sources of funding for this effort. The attached “Option B” identifies alternate resources that could be appropriated.  He added that any unused funds would be returned to the RDA through a legislative process.

Director Rogers and Director Johnston requested that the budget line item be retitled from “TOD Development Opportunities” to “Catalytic Development Opportunities”.

Chairperson Adams invited Ms. Bruno and Ms. Gust-Jensen to present the City Council Office’s internal analysis of the proposed accounts and other line items within the RDA’s budget.

Ms. Bruno noted that the information presented today by the Council Office was completed less than 24 hours ago and although the information was provided to the Administration it has not been vetted fully and discussions on potential operational concerns have not taken place.

Ms. Bruno presented the Council Office’s analysis and reviewed all RDA accounts where the Council Office felt funds may be available. 

Vice-Chairperson Kitchen proposed using the one half of Fund Balance accounts, Midblock Connection, 9-Line Project Area Seed funds, and State Street Project Area Seed funds and $6 million from the RDA’s Revolving Loan Fund towards the property acquisition for the homeless resource centers appropriation and any additional funds would be pulled from the Revolving Loan Fund Cash on Hand on a as needed basis, which equals $11,775,911.

 3:44:32 PM Chairperson Adams conducted a straw poll concerning Derek’s proposal for funding the acquisitions for the homeless resource centers. All Board members present were in support. 

 3:45:07 PM Chairperson Adams called for public comments concerning the Second Amendment to the 2016/2017 budget. There being no public comments, Director Luke made a motion to close the public hearing. Vice-Chairperson Kitchen seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the public hearing was closed. Chairperson Adams stated that an additional public hearing has been schedule for October 25^th at 7:00 PM.

Chief Administrative Officer Belliveau said that the RDA is comfortable with the direction the Board is going with regards to the sources of funding for the homeless resource centers, however requested time to engage the Bond Counsel on the appropriate fund balance to maintain to ensure that the RDA’s credit rating is preserved and meet its operational cash flow needs. 

Director Mendenhall asked Ms. Bruno to return to the table and present the spreadsheet the Council Office used for the homeless Resource discussion on potential available funds.

Board members continued the discussion concerning the proposed Second Amendment to the 2016-2017 budget, existing funds, ongoing obligations, Strategic Plan Priority Projects, housing funds, and urgent needs.

Director Mendenhall went through the list of project area accounts provided by Council Staff and suggested ways of appropriating approximately $11.2 million out of a variety of accounts and for affordable housing.  This proposal included $500,000 that RDA proposed for funding its Temporary Property Expenses.

Chief Administrative Office Belliveau identified his concern on ensuring adequate resources are available for Temporary Property Expenses, given that the current budget is based on funding these costs through October.

Director Rogers said he is concerned about not having adequate funds for maintenance and suggested not appropriating funds from Temporary Property Expense and asked for the Board to look at other ways to fund housing.

Vice-Chairperson Kitchen stated he agreed with Director Mendenhall’s proposal a suggested adding an additional $6.4 million out of some of the Depot District accounts.

Vice-Chairperson Kitchen asked the RDA Board, HAND, and the City Council and its staff to work together in creating a program to support our housing resources to address the need for deeply affordable housing.

Executive Director Biskupski said there is an interest at the State and County level to help with the homeless population issue. Plans such as the ones presented today should include the State and County in the discussions. It is important that the City partner with other agencies and legislative bodies in this effort.

Chief Administrative Office Belliveau asked for a recap of Director Mendenhall’s and Vice-Chairperson Kitchen’s proposed appropriations. Ms. Bruno reviewed the proposals.

 4:42:43 PM Director Rogers asked that no Temporary Property funds be used in the appropriation for housing. Chairperson Adams conducted a straw poll to not include Temporary Expense funds in the housing budget appropriation.  All Board members present were in support. 

 4:37:56 PM Chief Administrative Office Belliveau requested time to review the proposed appropriation from the Depot District to allow time for the RDA to discuss with legal counsel any contractual commitments that are in place to support ongoing and planned projects in Station Center.

 4:48:12 PM & 4:54:52 PM  Chief Administrative Office Belliveau and Mr. Utley reviewed projects with immediate funding needs throughout the RDA project areas, highlighting the need of the reconfiguration of the 500 West Park Blocks. Director Mendenhall stated she supported this project.

Director Mendenhall and Ms. Gust-Jenson requested a copy of the scope of work for the 500 West Park Blocks.

4:52:34 PM Vice-Chairperson Kitchen stated he would prefer not to change the proposal for affordable housing and recommends as an alternate source $100,000 proposed funding for public art in the Depot District once the scope of work has been reviewed.

 6:05:38 PM David Litvack requested that Board members give the Administration time to review the proposed appropriation that had been suggested by the RDA Board, in order to see the overall all impacts to the budget and prior commitments. Vice-Chairperson Kitchen stated that this item could be reconsidered at a later meeting, if the Administration requested and felt it was not necessary to vote on the item at a later meeting. Director Mendenhall offered that the Board could be receptive to other suggestions the RDA would have for achieving the same level of funding.

6:18:51 PM Director Mendenhall made the following motion:

1. Appropriate Revenue Budgets for all funds necessary to cover appropriations listed below. All expenditure funds, with the exception of those approved in Budget Amendment #1 and those funds specifically appropriated in budget amendment #2 action today are not available to be spent without further Board action, and consistent with Board Policy, no funds appropriated at this or any other time shall be spent on outside counsel without the specific direction of the City Attorney.

2. Appropriate an expenditure budget for the City and/or RDA to purchase sites for homeless resource centers:

a. $11,775,911 million Total Amount

b. Sources from each fund to be used on an as needed basis in the order listed below. (Based on Administration’s Proposed Budget Amendment #2)

3. Allocate funds to an unappropriated holding account for the City and/or RDA to further the City’s affordable housing goals. The intent of the board is to hold these funds until such time as a plan can be derived to expend these funds to meet the policy goals stated below.

a. $17,138,143 Total Amount (contingent upon legal review from Administration)

b. Sources from each fund below.

c.     Policy purpose – to have the Administration work with the Council staff to put together a proposal for Board consideration to further the City’s affordable housing goals

4. Appropriate expenditure budgets for the following urgent funding items:

a.    $500,000 in the Central Business District for Gallivan roof repair

b.    $25,000 in West Capitol Hill for Arctic Court utility undergrounding

c.    $102,400 in the Depot District for Community Connections Center tenant improvements

d.    $35,000 in the Depot District for 100 South utility undergrounding design

e.    $5,704,951 in Block 70 for Eccles Theater construction

f.     Council-added items:

i. $85,000 in Program Income Fund for West Temple Gateway utility undergrounding design and study

ii. $4,000 in the West Temple Gateway increment for 900 South soils testing (this is a subset of the 900 South street improvements project request in budget amendment #2)

 6:21:14 PM Vice-Chairperson Kitchen seconded the motion.

 6:21:31 PM Director Johnston said that although he understands the Board’s concerns, there is no need to rush the approval of this item and felt the Board could allow time for the Administration to review the changes.

6:23:24 PM Upon roll call, Chairperson Adams declared the motion approved with Director Mendenhall, Director Rogers, Director Luke, Vice-Chairperson Kitchen, and Chairperson Adams voting yes and Director Johnston voting nay.

4.    5:03:29 PM Utah Paperbox Terms – Motion to Reconsider. View Attachment

5:03:49 PM Chairperson Adams called for a vote to reconsider the terms for the Utah Paperbox project, located at 340 West 200 South. Director Kitchen made a motion to reconsider the resolution. Director Rogers seconded the motion. Upon roll call, the motion passed unanimously. Director Mendenhall was not present for the vote.

Chief Administrative Office Belliveau explained that during the September 2016 meeting, the Board approved that the development team of Property Enhancement Group, Inc. include within the development of the Property, 36 residential units with rents at 60% of the Area Median Income (AMI) for a period of 30 years in exchange for discounting the purchase price of the Property from $3,220,000 to $0. At that time, the Board also required that the property sale be subject to a post-closing, 30-year deed restriction requiring affordability throughout the term. The Board’s motion also required the Developer to execute a deed of trust or other document amortizing the value of the Purchase Price Discount for a period of 15 years, with a 15-year reporting period to follow.

Chief Administrative Office Belliveau stated that the RDA requests that the Board reconsider its motion and follow the Redevelopment Advisory Committee (RAC) original recommendation to require the developer to sign a deed of trust or other document amortizing the value of the Purchase Price Discount over the full 30 year Affordability Term as a mechanism to ensure that the units remain affordable for the entire term.

 5:06:51 PM Director Rogers made a motion to approve a new resolution (Resolution R-34-2016) requiring the Developer to sign a deed of trust or other document amortizing the value of the Purchase Price Discount, $3,220,000, over the full 30 year Affordability Term to ensure that the units remain affordable for the entire term. Vice-Chairperson Kitchen seconded the motion. Upon roll call, the motion passed unanimously.

5.       5:07:28 PM Loan Forgiveness Request from NeighborWorks/Citifront Apartments. View Attachment

Ms. Wilkerson-Smith provided background on NeighborWorks’ original loan and its requirements and then reviewed their loan forgiveness request. She explained the RDA Loan Committee has also reviewed the request and forwarded the following recommendation of denying the request and grant NeighborWorks with two repayment options: 1) pay the Replacement Note in full upon the maturity date of October 31, 2017; or 2) request the RDA issue a new 10-year note on October 31, 2017 to be amortized over 20 years at a 3% interest rate, with principal and interest payments due annually.

Ms. Wilkerson-Smith stated that after reviewing NeighborWorks request and the Loan Committee’s options, the RDA presented the following option for the Board to consider:

•     Option 1: Approve NeighborWorks’ request to refund City Front’s loan payment and waive the Replacement Note (i.e., refund $529,213 and forgive the $422,266

Replacement Note)

•     Option 2: Deny the NeighborWorks request entirely, but allow NeighborWorks one of two payment options per Loan Committee’s recommendation: 1) pay the Replacement Note in full upon the maturity date of October 31, 2017; or 2) request the RDA issue a new 10-year note on October 31, 2017 to be amortized over 20 years at a 3% interest rate, with principal and interest payments due annually.

•     Option 3: Deny the NeighborWorks request to refund City Front’s loan payment, but waive the Replacement Note (i.e., retain the $529,213, and either maintain or update the

existing Replacement Note for $422,266).

5:20:16 PM Director Rogers made a motion to recommend Option 3: Deny the NeighborWorks request to refund City Front’s loan payment, but waive the Replacement Note. Director Mendenhall seconded the motion. Upon roll call, the motion passed unanimously.

6.       6:24:04 PM Outside Counsel Policy. View Attachment

Ms. Lewis reviewed the proposed resolution regarding the RDA’s utilization of the City Attorney’s Office for all legal work. She added there may be times the Attorney’s office may deem it necessary for the RDA to seek outside legal services, but that would be determined on an as needed basis.

6:26:09 PM Director Johnston made a motion to approve the resolution (Resolution R-38-2016). Director Rogers seconded the motion. Upon roll call, the motion passed unanimously.

7.       6:26:57 PM Land Disposition Policy Discussion. View Attachment

Ms. Hunsaker reviewed the Land Disposition policy and the additional information the RDA Board requested on approaches to include Strategic geographic locations within the project area that are vital to the redevelopment of the project area are identified in the Project Area Plan

as identified in project area plans in the Tier 1 classification criteria.

6:30:02 PM Director Mendenhall made a motion to approve the resolution (Resolution R-36-2016) adopting the land disposition policy. Vice-Chairperson Kitchen seconded the motion. Upon roll call, the motion passed unanimously.

8.       6:31:29 PM Role of the Redevelopment Advisory Committee (RAC) View Attachment

Ms. Wilkerson-Smith presented the draft policy governing the role of the Redevelopment Advisory Committee (RAC). She explained that RAC members’ insights would be most helpful in areas concerning policy formation, redevelopment plans, strategic plans, and financial incentives from the RDA.

Ms. Wilkerson-Smith stated the RDA proposes that certain RAC members be called upon to serve on either of two RDA Special Committees that will act as advisory groups on financial transactions and design review. She explained that one of the Special Committees will retain the role of the RDA’s current Loan Committee and added that the composition of the Special Committees may also include City representatives who provide additional expertise specific to each committee. 

Below is a summary of the proposed Special Committees:

•     RDA Finance Committee: The RDA Finance Committee will provide recommendations for approval on all loans, tax increment reimbursements, and land writedowns.

•     RDA Design Review Committee: The RDA Design Review Committee would review and provide insight and recommendations on the design of projects funded by the RDA.

Ms. Wilkerson-Smith said that RAC has reviewed the draft policy and recommended approval.

6:35:36 PM Director Mendenhall made a motion to approve the Role of RAC policy resolution (Resolution R-35-2016). Director Andrews seconded the motion. Upon roll call, the motion passed unanimously.

9.       6:36:05 PM Loan Approval Process/Forgiveness. View Attachment

Ms. Hunsaker and Ms. Wilkerson-Smith reviewed the Loan Program policy including the evaluation and approval, exceptions, loan modification, and reporting processes.

6:42:16 PM Director Johnston made a motion to approve the RDA Loan Program policy for approving and modifying loans and adopt the resolution (Resolution R-37-2016). Director Luke seconded the motion. Upon roll call, the motion passed unanimously.

10.     6:42:52 PM Report and Announcements from the Staff.

None

11.     6:43:02 PM Report of the Chair and Vice Chair.

None

C.    Written Briefings

None

D.    Consent

None

E.    1:20:58 PM Closed Session

The Board will consider a motion to enter into Closed Session for any purpose allowed under Utah Code 52-4-205.

Director Mendenhall made a motion to enter into a closed meeting to discuss matters of pending litigation and/or the acquisition/disposition of real property and/or attorney-client matters that are privileged. Director Luke seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved.

The closed meeting of the Board of Directors of the Redevelopment Agency of Salt Lake City was held at the City and County Building, 451 South State Street, in Room 326 at 1:15 PM on Tuesday, October 18, 2016.

The following members of the Board of Directors of the Redevelopment Agency of Salt Lake City were present:  Lisa Adams, Chairperson; Derek Kitchen, Vice Chairperson; Andrew Johnston, Director; Erin Mendenhall, Director; James Rogers, Director; and Charlie Luke, Director.

The following members of the staff of the Redevelopment Agency of Salt Lake City were present: Justin Belliveau, Chief Administrative Officer; Ed Butterfield, Senior Project Manager; Jolynn Walz, Office Manager; Louise Garcia, Administrative Secretary; and Crayola Berger, Accountant II.

Others present: Jackie Biskupski, Mayor’s Office; David Litvack, Mayor’s Office; Jennifer Seelig, Mayor’s Office; Lynn Pace, Mayor’s Office; Lara Fritts, Department of Economic Development; Katie Lewis, City Attorney Office; Margaret Plane, City Attorney Office, Megan Depaulis, City Attorney Office; Jennifer Bruno, City Council Office; Benjamin Luedtke, City Council Office; Russ Weeks, City Council Office; Cindy Gust-Jensen, City Council Office; Matt Dahl, Real Estate Services; Dan Rupp, Real Estate Services; Mike Akerlow, Housing and Neighborhood Development, Mike Reberg, Community and Neighborhoods; Nole Walkingshaw, Community and Neighborhoods; John Vuyk, City Finance Department; and Marybeth Thompson, City Finance Department.

The Board discussed the acquisition /disposition of real property and attorney client matters that are privileged pursuant to Utah Code.

There being no further business, Chairperson Adams called for a motion to exit the closed meeting. Director Luke made a motion to exit the closed meeting and Director Mendenhall seconded the motion. Upon roll call, Chairperson Adams declared the motion unanimously approved and the closed meeting was adjourned at 2:30 pm.

This document is not intended to serve as a full transcript as additional discussion may have been held; please refer to the audio or video for entire content.

This document along with the digital recording constitute the official minutes of the Redevelopment Agency of Salt Lake City Board of Directors meeting held October 18, 2016.

F.    Adjournment

There being no further business the meeting was adjourned at 6:45 p.m.