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HomeMy WebLinkAboutResolutions - 2018.03.08 - 23341MISCELLANEOUS RESOLUTION #18067 March 8, 2018 BY: Commissioner Tom Middleton, Chairperson, Finance Committee IN RE: BOARD OF COMMISSIONERS — PARTICIPATION IN THE CITY OF SOUTHFIELD DOWNTOWN DEVELOPMENT AUTHORITY AND APPROVAL OF CONTRACT To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS the Oakland County Board of Commissioners supports the economic growth of Oakland County; and WHEREAS the Downtown Development Authority ("DDA") Act, Public Act 197 of 1975, as amended, MCL 125.1651 et. seq., ("DDA Act') enables DDA's to utilize Tax Increment Financing ("TIF") to prevent deterioration, encourage historic preservation and promote economic growth in a business district; and WHEREAS on May 23, 1988 Southfield established the DDA in the southeast portion of Southfield; an area that contains Providence Hospital, Oakland Community College and the former Northland Center; and WHEREAS when the DDA was established, the County did not have the legal right to opt out of the capture of its taxes by the DDA; and WHEREAS after the approval of the Development Plan and Tax Increment Financing Plan (the "Development Plan and TIE Plan") in March of 1996, Southfield began to capture taxes in the Development Area. The Development Plan and TIF Plan were amended on June 12, 2000 and again on January 18, 2011; and WHEREAS Southfield has updated its Development and TIE Plan and intends to adopt a Restated Development Plan and TIE Plan at a public hearing in April of 2018; and WHEREAS on February 15, 2018 representatives of Southfield and the DDA presented their Restated Development Plan and TIF Plan to the TIF Review Committee and based on that presentation, the Board of Commissioners in Miscellaneous Resolution #18057 authorized Corporation Counsel to negotiate a contract with Southfield and the Southfield DDA; and WHEREAS the Restated Development Plan and TIF Plan support the redevelopment of the former Northland Center and the adjacent area into a mixed use, vibrant economic development bringing new life to a gateway property to Southfield and Oakland County; and WHEREAS the TIF Plan provides for the capture of County property taxes beginning with the collections attributable to tax year 2018 for up to a total of $10,253,859 or twenty-one years (through tax collections attributable to tax year 2038), whichever occurs first. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners finds that due to the special nature of this situation, the County will contribute 100% of the total amount of County ad valorem tax revenue available for capture and waives the limitations percentage established in the TIE Policy. BE IT FURTHER RESOLVED that the Finance Committee recommends County participation in the TIF plan in an amount not to exceed $10,253,859 or for a period of twenty years through collections attributable to tax year 2038, whichever comes first, beginning with the tax collections attributable to tax year 2018. BE IT FURTHER RESOLVED that the Board of Commissioners authorizes the County participation in the DDA as specified in the attached Contract. Chairperson, on behalf of the Finance Committee I move adoption of the foregoing resolution., Ci ofmmissioner Tom Midtfii-SR Chairperson, Finance Committee FINANCE COMMITTEE VOTE: Motion carried unanimously on a roll call vote with Taub absent. TAX INCREMENT FINANCING AGREEMENT BETWEEN THE COUNTY OF OAKLAND, CITY OF SOUTHFIELD, AND THE SOUTHFIELD DOWNTOWN DEVELOPMENT AUTHORITY THIS TAX INCREMENT FINANCING AGREEMENT ("Agreement") is entered this day f , 2018 between the COUNTY OF OAKLAND ("County"), 1200 North Telegraph Road, Pontiac, Michigan 48341, the CITY OF SOUTH FIELD ("Southfield"), 26000 Evergreen Road, P.O. Box 2055, Southfield, Michigan 48037 and the SOUTHFIELD DOWNTOWN DEVELOPMENT AUTHORITY ("DDA") 18000 M Nine Mile Road, Suite 320, Southfield, Michigan 48075. In this Agreement, the County, Southfield, and the DDA may also be referred to as "Parties." The Downtown Development Authority Act, Public Act 197 of 1975, as amended, MCL 125.1651 et seq., ("Act 197"), authorizes a municipality to establish a downtown development authority when the municipality determines that it is necessary for the best interests of the public to correct and prevent deterioration in a business district and to promote economic growth. One of the purposes for creating a downtown development authority is to permit a municipality to finance improvements in a designated area by capturing the property taxes levied on any incremental increase in property values within the Development Area; this is commonly referred to as tax increment financing. Section 14(4) of the Act 197 provides that a downtown development authority may enter into agreements with taxing jurisdictions and the municipality in which the development area is located. On May 23, 1988 Southfield adopted Ordinance Number 1246 establishing the DDA, formerly known as the Cornerstone District. The DDA was created in the southeast portion of Southfield; an area that contains Providence Hospital, Oakland Community College and the former Southfield DDA Page 1 of 8 03/06/18 Northland Center. The DDA was established when the area was beginning to experience economic blight and needed ways to increase property tax valuation and facilitate economic growth. The vitality and rebirth of this area is critical to Southfield's continued success as a thriving city. When the DDA was established, the County did not have the legal right to opt out of the capture of its taxes by the DDA. For the first eight years of its existence, the DDA did not capture tax increment revenue. The City later determined that utilizing tax increment financing was needed to support investment in the DDA Development Area (the "Development Area"). After the approval of the Development Plan and Tax Increment Financing Plan (the "Development Plan and TIF Plan") in March of 1996, Southfield began to capture taxes in the Development Area. The Development Plan and TIF Plan was twice amended on June 12, 2000 and again on January 18, 2011. On January 18, 2017 Southfield discussed its 2017 Restated Development Plan and Tax Increment Financing Plan (the "Restated Plan") at a public meeting. Southfield intends to hold a public hearing in April of 2018 to adopt its Restated Plan. The Restated Plan is attached and incorporated as Exhibit A. Before Southfield held its public hearing concerning the Restated Plan, representatives of Southfield and the County conducted a series of meetings and discussions concerning the County's continued involvement in the Southfield DDA Development Plan and TIF Plan. On February 15, 2018 representatives of Southfield appeared before the County's Tax Increment Financing District Review Policy Ad Hoc Committee ("Review Committee") to explain their plans for the DDA Development Area. The Review Committee is charged with evaluating and recommending to the Finance Committee the County's potential tax sharing agreements. The Parties have determined that to help promote economic development throughout Southfield and Oakland County, it is in their best interests to have this Agreement. Southfield DDA Page 2 of 8 03/06/18 Under the terms set forth in this Agreement, made pursuant to Act 197, the Parties agree as follows: 1. The County agrees that the DDA may capture the tax increment revenue generated by the County's millage rate from the properties listed in Exhibit B, or any future divisions of such properties for the limited purpose of paying County's Pro-Rata Share (defined below) of the funding required for the DDA as set forth herein. (a) "County's Pro-Rata Share", pursuant to the Restated Plan, is defined as the County's proportionate share of the combined millage funds captured by the DDA from all participating taxing jurisdictions, which include: County of Oakland (for general operating and Parks & Recreation), City of Southfield, Oakland Community College, the Huron Clinton Metropolitan Authority and the Oakland County Public Transportation Authority (previously "SMART") With respect to the levy of any new additional millage by County, either to restore amounts reduced by the Heal:Ilee Amendment, or a new additional millage approved by County electors after the date of this Agreement, such millages shall be exempt from this Agreement unless the County Board of Commissioners, in its sole discretion, adopts a Resolution submitting such additional millages to this Agreement for capture by the DDA. (b) The DDA Development Area is approximately 1 square mile (640 acres). The total estimated capture during the period of the Restated Plan is $59,295,077. The total estimated project costs are $59,240,885. (c) Southfield, the DDA and County acknowledge that the total anticipated capture is an approximation only. The expenditures for projects within the DDA shall be subject to applicable Southfield public bid procedures and the final cost will be adjusted accordingly. However, notwithstanding the above acknowledgments, Southfield and the Southfield DDA Page 3 of 8 030/18 DDA agree that County's participation from the Oakland County General Operating Millage and the Oakland County Parks and Recreation Millage shall not exceed a total of $10,253,859 or a period of 21 years, whichever occurs first, subject to the requirements herein. (d) The capture and retainage of County's millage will be based upon the initial assessed value being established under the Restated Plan as the assessed value, as equalized, of all the taxable property within the boundaries of the Development Area at the time the ordinance establishing the Restated Plan is approved, as shown by the most recent assessment roll of the municipality for which equalization has been completed at the time the ordinance is adopted, and as further defined in Act 197, which is anticipated by the parties to be the 2017 taxable value of the properties as set forth in Exhibit B beginning with the tax collection and capture attributable to tax year 2018 continuing through collections attributable to tax year 2038. The Parties understand that the list of properties provided in Exhibit B is subject to change in the future to account for any real property split/combination activity, new personal property or other legally required changes. (e) Except as follows, the capture from County's millage shall not be used to bury existing above ground electrical lines, for land acquisition, for municipal buildings used to house Southfield's departments or operations, or for event and marketing materials not directly related to the implementation of projects approved within the TIF Plan. Notwithstanding the foregoing the capture from County millage can be used for the implementation of a project for a police substation located in the Development Area and for the acquisition of such property interests as are needed to implement the public infrastructure projects provided for in the Restated Plan. Southfield DDA Page 4 of 8 03/06/18 (f) The elected or appointed officials of Southfield and the DDA, or their immediate family members, shall not engage in a business transaction with the DDA funded by the expenditure of Tax Increment Revenues (defined below). This provision does not prohibit members of the governing body of Southfield or the DDA from having an ownership or business interest in the DDA Development Area. Any plans by the DDA to purchase property in the DDA Development Area from elected or appointed officials of Southfield or the DDA, or their immediate family members, shall be disclosed in writing to the County. Immediate Family means a City official or employee, his or her spouse, parents or children. 2. Southfield and the DDA hereby warrant and agree that the portion of the captured County ad valorem property taxes ("Tax Increment Revenue") shall be applied to and limited to County's Pro-Rata Share of the funding necessary for development in the DDA. 3. The DDA and Southfield agree to the following: (a) The DDA shall within three (3) months after the end of the Authority's fiscal year, send copies of the annual financial report to the County Treasurer, the Economic Development and Community Affairs Department and the Board of Commissioners. The report shall include: i. The amount of taxes captured by the DDA. ii. The amount spent on each project in the Restated Plan. iii. The amount of private sector investment received. iv. The number of buildings rehabilitated, the square footage per building rehabilitated, and the amount spent per building. Southfield DDA Page 5 of 8 03/06/18 v. The amount of new construction including the dollar amount spent and the square footage added. vi. The number of new businesses locating in the DDA Development Area. vii. The number of new jobs created. viii. The increase/decrease in the taxable value. ix. Any financial information the County is required to report in its financial statements to the Michigan Department of Treasury. (b) The DDA will appear before the TIF Review Committee, at the Committee's request, within the first five (5) years of the Contract execution date, and each five (5) years thereafter, to present the DDA's current return on investment, which is defined as the increase in total value of the properties in the DDA since the inception of this Agreement, and discuss the financial information required in this Agreement. (c) The DDA will promote the services available from the County Economic Development Community Affairs Department including the One Stop Shop Business Center and the Oakland County Economic Development Corporation and the Oakland County Business Finance Corporation. (d) Southfield will adopt/amend its community master plan to accurately incorporate the 2017 Restated Development Plan and TIF Plan with its next scheduled community master plan review. 4. The DDA and Southfield shall submit to County's Review Committee any proposed modification or amendments to the Development Plan and TIF Plan that is required under Act 197 to be submitted to County for review and approval. Southfield DDA Page 6 of 8 03/06/18 5. Southfield agrees that in the event the County provides documentation that demonstrates that the DDA has retained tax increment revenue in excess of the County's Pro- rata share of the funding for the Project, and if upon presentation of such documentation from County to Southfield and the DDA, the DDA and Southfield fail to provide documentation that demonstrates that the DDA has not retained tax increment revenue in excess of the County's Pro- rata share, then without waiving any legal claims under this Agreement, County shall be entitled to reduce, set-off, and permanently retain any amount due to Southfield from the County's Delinquent Tax Revolving Fund ("DTRF") by any such amount then still due and owing to County pursuant to this Agreement at the time the County distributes funds to Southfield from the DTRF. 6. This Agreement sets forth the entire agreement between County, Southfield, and the DDA and fully supersedes all prior agreements or understandings between them in any way related to this subject matter. It is further understood and agreed that the terms and conditions herein are contractual and are not a mere recital and that there are no other agreements, understandings, contracts, or representations between the Parties in any way related to the subject matter hereof, except as expressly stated herein. This Agreement shall not be changed or supplemented orally and may be amended only in writing and signed by the Parties. 7. County, Southfield and the DDA warrant that they each have the appropriate authority to enter into this Agreement and that each of them are bound by the respective signatures below. FOR AND IN CONSIDERATION of the mutual assurances, promises, acknowledgments, warrants, representations, and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the undersigned Southfield DDA Page 7 of 8 03/06/18 hereby execute this Agreement on behalf of the Parties, and by doing so legally obligate and bind the Parties to the terms and conditions of this Agreement. THE SOUTHFIELD DOWNTOWN DEVELOPMENT AUTHORITY By: By: Al Aceves, Executive Director Dr. Daveda 3. Colbert, Secretary Date: Date: THE CITY OF SOUTHFIELD By: By: Kenson J. Slyer, Mayor Sherikia L. Hawkins, Clerk Date: Date: OAKLAND COUNTY By: By: Michael J. Gingell, JoAnn Stringfellow, Chairperson, Board of Commissioners Board of Commissioners Secretary Date: Date: 2017-1421 Southfield DDA 030618 Southfield DOA Page 8 of 8 03/06/18 Resolution #18067 March 8, 2018 Moved by Fleming supported by McGillivray the resolutions (with fiscal notes attached) on the amended Consent Agenda be adopted (with accompanying reports being accepted). AYES: Crawford, Dwyer, Fleming, Gershenson, Gingell, Hoffman, Jackson, Kochenderfer, KowaII, Long, McGillivray, Middleton, Quarles, Spisz, Taub, Weipert, Woodward, Zack, Berman, Bowman. (20) NAYS: None. (0) A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended Consent Agenda were adopted (with accompanying reports being accepted). If-IMMO:MOVE IS R SOLUTION CHIEF DEPUTY COUNTY EXECUTIVE ACTING PURSUANT TO MCL 45.559A (7) STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on March 8, 2018, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 8th day of March, 2018. 67eVS-f" Lisa Brown, Oakland County