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CP061B (Commercial Economic Development)CITY OF JANESVILLE Policy No. 61B Page 1 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development I. Overall Goal: To stabilize, maintain and foster redevelopment of Janesville’s downtown, older commercial areas and support multifamily construction, which will maintain and expand the City’s tax base by the following: a. Promoting reinvestment in existing commercial properties b. Promote the reuse of existing building stock (especially within the Downtown), c. Equalize or reduce the cost of redevelopment of older sites by funding demolition for sites to be cleared for redevelopment. d. Promote development of multifamily residential development that otherwise would not be constructed. The City will set a higher prioritization on downtown multifamily development but will also consider sites within the City with utilities adjacent to support the development. Workforce and affordable multifamily projects may be considered outside of the downtown as distribution of such projects throughout the City meets objectives of the Wisconsin Housing and Economic Development Authority (WHEDA). II. Primary Objectives: 1. To avoid the dilapidation and underutilization of existing commercial areas of the City. 2. To promote the reuse and redevelopment of existing properties by leveraging reinvestment. 3. To offset the cost of retrofitting existing buildings by providing economic assistance for reuse of existing buildings. 4. To reduce the cost of constructing a new building on a previously-developed parcel (brownfields) by funding teardowns, remediation and site preparation for redevelopment. 5. To close the financial gap on construction of multifamily residential projects that will provide needed housing stock. III. Implementation: The City Administration shall be responsible for implementing this downtown and commercial economic development policy. The City of Janesville Economic Development Office will have a lead role in facilitating these projects and coordinating efforts with the private sector. As development projects arise, the Administration shall have the authority to negotiate the types and level of development incentives needed in accordance with the provisions of this policy, subject CITY OF JANESVILLE Policy No. 61B Page 2 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development to final review and approval of the Common Council. The Administration shall regularly inform the City Council of the progress of negotiations. The City Council may help establish negotiation terms, conditions, and bargaining parameters in closed session(s). Both the City Administration and the City Council shall maintain the confidentially of all such negotiations prior to public announcement of the project. Financial assistance in the form of cash shall recognize the cash position of individual Tax Incremental District (TID). The City shall prioritize the pay-as-you go approach (PAYGO) over providing upfront assistance to a developer. The City will recognize that the upfront assistance is only available when a TIDis financially able to do so without significant risk to the City and its taxpayers. All agreements for PAYGO assistance shall incorporate a “lookback” clause within the agreement which requires the developer to provide the City with revenue information to ensure that they are not advancing revenues significantly more than what was projected when the assistance was requested. In the event the project has internal rate of returns greater than 15 percent, the agreement language shall require the developer to return the revenues that produce greater than 15 percent internal rate of return back to the City or for the City to withhold those funds. The City as a matter of practice will continue to extend financially viable TIDs for one year to capture an additional year of increment to fund affordable housing programs in accordance with State Statutes. The ability to capture additional increment from the extension of these Districts provides a significant source of upfront funding for affordable housing projects. Determining which Districts should be extended shall be completed by the Economic Development Office in consultation with the Finance Office, and with the approval of the City Council. Such funds shall be set aside and limited in application to affordable projects as determined by WHEDA and the Janesville Community Development Authority. The City Council shall have the final authority to review and approve all negotiated agreements and shall act on approval of them in a public meeting. IV. Application Requirements The City’s Tax Incremental Financing (TIF) application requirements will apply to all development within the City’s existing Tax Incremental Districts (TIDs). The types of development include downtown, non-downtown commercial, multifamily, and industrial CITY OF JANESVILLE Policy No. 61B Page 3 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development development. The City shall impose an application fee of 1% or $10,000 of the estimated project cost, whichever is less to all TID development projects. The fee will cover City costs associated with evaluating the TIF application. The fee does not include the costs for consultants, if required. These costs will be borne by the developer unless otherwise directed by the City. Payment of this fee can be made by credit, plus any applicable credit processing fees or by check made payable to the City of Janesville. Developers will be required to complete and submit the City of Janesville Tax Incremental Financing application and provide all required attachments, along with the applicable application fee to the Economic Development Office. City staff will review the application and related materials for completeness and accuracy. If approved by the Economic Development Office, a redevelopment agreement will be drafted with the developer. V. Downtown Redevelopment Policy The City of Janesville will work with private sector initiatives like Downtown Janesville, Inc. and Forward Janesville, Inc to attract and implement redevelopment projects in the downtown. This policy acknowledges that in many cases, successful downtown redevelopment projects require public assistance and/or incentives to overcome the extra costs associated with assembling multiple properties, remediating contamination, and demolishing structures to create a development site. Underground utilities may need to be relocated, street rights-of-way vacated, and environmental issues identified and remediated. The following criteria shall be used to guide decisions involving the use of downtown redevelopment incentives: A. Project Facilitation The City of Janesville's Economic Development Office will be available to assist developers and property owners to facilitate redevelopment projects. Assistance can take the form of providing information on available development sites; determining the necessary permitting for proposed projects; suggesting the packaging of public development financing; and helping firms complete proposals for state and federal development assistance. In addition, the Office will coordinate the CITY OF JANESVILLE Policy No. 61B Page 4 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development City's response to specific requests for redevelopment incentives such as the creation of new redevelopment TIDs as applicable and appropriate. All requests for development incentives shall be made in writing. B. Timing of Redevelopment Projects Where possible, the City will use non-Tax Incremental District (non-TID) funding sources (i.e. general funds, CDBG Blight Elimination Funds, etc.) to facilitate projects and leverage TIF funding sources for projects. C. Standards for Incentives The City may use up to twenty (20) years of projected property tax increment from a downtown redevelopment project to provide appropriate development incentives. The development incentives may take the form of selling property for less than its fair market valuation; the implementation of off-site streetscape and/or signage improvements; the provision of off-street parking spaces; the relocation of existing water, sewer, storm sewer, electric, gas, and telecommunication utilities; reimbursements to the developer for specified eligible redevelopment costs, fees, and expenses; low/no interest project public financing; and site environmental remediation. D. Downtown Redevelopment Fund The City may use up to five (5) years of property tax increments from a key downtown redevelopment project to capitalize a downtown redevelopment fund. The redevelopment fund would provide development assistance for smaller projects within the downtown TID that would further improve the area surrounding the redevelopment project. VI. Non-Downtown Commercial Redevelopment Policy The City of Janesville will work with private developers to facilitate the redevelopment of older commercial corridors located outside of the downtown. Downtown is defined by the Downtown Comprehensive Tax Incremental District (TID 36). This policy recognizes that it may be necessary CITY OF JANESVILLE Policy No. 61B Page 5 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development to provide public incentives to overcome the extra costs of assembling smaller commercial properties into suitable redevelopment sites and demolishing existing dilapidated and/or blighted structures and buildings, and relocating current business tenants, commercial redevelopment projects may also require the vacating of street rights-of-way, relocating existing utilities, remediation of contamination, and upgrading transportation infrastructure to accommodate additional traffic. The following criteria shall be used to guide decisions involving the use of public incentives for commercial redevelopment projects located outside of the downtown: A. Project Facilitation The City’s Economic Development Office will be available to assist developers and property owners and facilitate redevelopment projects. Assistance can take the form of providing information on available development sites; determining zoning and permitting for proposed projects; working out site planning and traffic issues, and packaging public development financing. In addition, the Office will coordinate the City's response to specific requests for redevelopment incentives such as the creation of newTIDs. B. Standards for Non-Downtown Commercial Redevelopment TIF Incentives 1) Non-Downtown Commercial Redevelopment TIDs shall only be considered in commercial areas with the majority of existing structures older than forty (40) years old. The land within a proposed Non-Downtown Commercial Redevelopment TID shall not be located within the B-4 Business Highway Zoning District unless the property has remained vacant for more than five (5) consecutive years and the purpose of the incentive is to remove existing dilapidated and/or blighted structures and buildings to prepare the site for redevelopment. 2) The City may consider the creation of a new commercial redevelopment TID where a single “anchor” redevelopment project will create more than Seven Hundred and Fifty Thousand 00/100 Dollars ($750,000) in new property value on a redevelopment site larger than one (1) acre in size. 3) The City may draw the boundaries of the proposed commercial redevelopment TID to include additional properties beyond the immediate “anchor” redevelopment project to stimulate CITY OF JANESVILLE Policy No. 61B Page 6 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development further redevelopment activity and/or consider the creation of a “mixed-use” TID where the proposed redevelopment project includes the creation or rehabilitation of residential dwelling units. 4) Development incentives may take the form of selling property for less than its fair market valuation; the implementation of off-site streetscape improvements; the relocation of existing water, sewer, storm sewer, electric, gas, and telecommunication utilities; traffic control improvements, reimbursements to the developer for specified, eligible redevelopment costs, fees, and expenses; low/no interest project public financing; site environmental remediation, and/or other incentives needed to facilitate the successful redevelopment project. 5) For any specific project within a Non-Downtown commercial redevelopment TID, the cost of the City’s public incentives shall not exceed ten (10) years of projected property tax increments from the non-downtown redevelopment project unless the City Council decides to increase the incentive(s) to address specific redevelopment project and/or issue(s). VII. Multifamily Development Policy For those sites appropriate for multifamily development, the City of Janesville will work with private developers to facilitate the construction of projects that would be located on development sites within the City which include utilities adjacent to support development. The intent is to prioritize multifamily development within the downtown or on a site within the City and with utilities available and/or if the proposed project is a workforce or affordable project which meets the objectives of the Wisconsin Housing and Economic Development Authority who promotes the distribution of such projects throughout the City. A. Project Facilitation The City of Janesville's Economic Development Office and Economic Development Team shall have the discretion in the application of these policy standards. Ultimately the Common Council can choose to waive a standard if a project is deemed to be a community priority. The Economic Development Office will be available to assist developers and property owners to facilitate multifamily projects. Assistance can take the form of providing information on available development sites; determining the necessary permitting for proposed projects; suggesting the packaging of public development financing; and helping firms complete proposals for state and CITY OF JANESVILLE Policy No. 61B Page 7 of 7 COUNCIL POLICY STATEMENT Date Issued 2/8/2016 Revised 4/10/2017, 4/24/2017, 10/8/2018, General Subject: Administration 4/13/2020, 10/7/2022 Effective Date 10/24/2022 Note: The majority of this policy originates from the commercial portion of the former Council Policy 61 which has been split into 61A and 61B Specific Subject: Commercial Economic Cancellation Date _________ Development Supersedes No. ___________ Responsible Dept/Div: Economic Development federal development assistance (if available). In addition, the Office will coordinate the City's response to specific requests for development incentives such as the creation of new TIDs as applicable and appropriate. There may be instances that the modification of an existing TID or creation of a TID may not be possible due to state statutes limiting the use of TIF for residential development. B. Standards for Incentives The City may use up to twenty (20) years of projected property tax increment from a multifamily project to provide appropriate development incentives. The development incentives may take the form of selling property for less than its fair market valuation; the implementation of off-site streetscape and/or signage improvements; the provision of off-street parking spaces; the relocation of existing water, sewer, storm sewer, electric, gas, and telecommunication utilities; reimbursements to the developer for specified eligible redevelopment costs, fees, and expenses; low/no interest project public financing; and site environmental remediation.