Presenting a live 90-minute webinar with interactive Q&A Development Agreements Between Municipalities and Private Parties Leveraging Agreements to Attract Private Funding for Long-Term Development Projects and Address Land Use and Infrastructure Issues WEDNESDAY, SEPTEMBER 18, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Rob Killen, Shareholder, Kaufman & Killen , San Antonio Brent O. Denzin, Attorney, Ancel Glink Diamond Bush Dicianni & Krafthefer , Chicago Shelby D. Green, Professor, Pace Law School , White Plains, N.Y . The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Development Agreements between Municipalities and Private Parties: Value of Development Agreement Presented by Rob Killen
Why Enter into a Development Agreement? Value for Municipality Certainty in the development process Generation of incremental real property tax and sales tax Incentivize certain types of development Job creation Protection of environmental features (e.g. endangered species habitat, trees, water resources) 6
Why Enter into a Development Agreement Value for Developer: Certainty in the development process Creation of necessary public infrastructure Offset development costs 7
Why enter into a Development Agreement? Value for Municipality Value for Developer • Certainty in the • Certainty in the development process development process • Generation of incremental • Creation of necessary real property tax and sales tax public infrastructure • Incentivize certain types of development • Offset development costs • Job creation • Protection of environmental features (e.g. endangered species habitat, trees, water resources) 8
Potential Development Agreement Incentives Direct Municipal Assistance Applicability of Current or Future Ordinances Tax Abatement or Reinvestment Annexation Special Districts 9
Direct Municipal Assistance Grants Fee Waivers Construction of pubic improvements Participation in costs of public improvements 10
Applicability of Current or Future Ordinances Permitted land uses upon annexation Grandfathering/Vested rights Special zoning districts 11
Tax Abatement or Reinvestment Tax Abatement Tax Rebate Tax Increment Reinvestment Zone 12
Annexation Non-Annexation Agreement Delayed Annexation 13
Special Districts Districts with Land Use Controls Districts that use existing tax revenues Districts that can collect taxes and assessments Examples in Texas Municipal Utility District (MUD) Water Control & Improvement District (WCID) Public Improvement District (PID) Special Improvement District Road District Municipal Management District (MMD) Municipal Development District County Development District 14
Example 1 SunEdison Solar Farm Project: Solar farm in south San Antonio Incentive: Non-Annexation Agreement, Tax Abatement Value to developer: No City taxes Value to Municipality: Additional renewable energy 15
Cibolo Canyons & JW Marriott Resort Example 2 Project: Residential development, 1000+ room hotel and 2 TPC golf courses Incentive: Special district, non-annexation agreement Value to developer: District collects property, sales, and hotel occupancy taxes Value to Municipality: Aquifer recharge zone protection and destination resort 16
PETCO Headquarters Project: Creation of Example 3 corporate headquarters Incentive: Tax abatement and grant Value to developer: Cash and no taxes Value to Municipality: Over 400 high paying jobs 17
City Base West Shopping Center Project: Retail shopping center Example 4 Incentive: Purchase of real property and drainage improvements Value to developer: Equivalent of grant for public improvement Value to County: Job creation, public infrastructure, new retail in underserved area 18
Broadway Apartments Project: Apartment complex Example 5 in central San Antonio Incentive: Tax abatements and fee waivers Value to developer: Reduced city taxes and significant fee reduction Value to Municipality: Creation of housing near downtown 19
Development Agreements between Municipalities and Private Parties: Community Benefit Agreements Presented by Rob Killen 20
What is a Community Benefit Agreement? “A Community Benefits Agreement … is a contract signed by community groups and a real estate developer that requires the developer to provide specific amenities and/or mitigations to the local community or neighborhood.” (Source – Wikipedia) 21
What is a Community Benefit Agreement? “In exchange, the community groups agree to publicly support the project, or at least not oppose it. Often, negotiating a CBA relies heavily upon the formation of a multi-issue, broad based community coalition including community, environmental, faith-based and labor organizations.” (Source – Wikipedia) 22
Why Enter into a Community Benefit Agreement Value to • Reduce risk by establishing community support Developer Value to • Enforceable agreement to provide community benefit group 23
Difference Between CBA & Development Agreement Developer Development CBA Agreement Community City Group 24
Examples of CBAs and Benefits 25
Atlanta Beltline Benefits Affordable Housing Historic preservation Art (Light rail loop) 26
Denver Gates-Cherokee Benefits Affordable housing Living wage Ban on big box (retail/residential) 27
Hollywood & Vine Benefits Living wage 20% of units are affordable Job training grant Arts grant Employee healthcare (hotel, housing, retail) 28
Staples Benefits Park and rec facilities Parking permit program, living wage Job training 20% affordable housing Interest free loans to (LA Lakers arena, housing, retail) non-profits 29
Similar Agreements Even if your jurisdiction has not adopted a formalized CBA process, there may be similar types of agreements: Example: Deed restrictions with zoning – usually negotiated with neighborhood association, community group, park conservancy, etc. 30
San Antonio San Antonio does not have a formal CBA process. However, there is a provision in the development code that encourages such dialogue between developers and neighborhood groups, called the “Citizen Participation Plan”. 31
Acknowledgments Thank you to The Public Law Center at Tulane University Law School for all of their material on Community Benefit Agreements. www.law.tulane.edu/tlscenters/PublicLawCenter 32
Rob Killen rob@kk-lawfirm.com 100 West Houston Street, Suite 1250 San Antonio, Texas 78205 (210) 227-2000 www.kk-lawfirm.com 33
Shelby D. Green Pace Law School sgreen@law.pace.edu September 2013
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