Title
A Resolution of the City Council of Colorado Springs, Colorado Approving the Proposed 2025 Operating Plan and Budget for the Creekwalk Marketplace Business Improvement District
Presenter:
Allison Stocker AICP, Planner II, Planning Department
Kevin Walker, Interim Director, Planning Department
Body
Summary:
The Creekwalk Marketplace Business Improvement District (BID) is a legal entity separate from the City of Colorado Springs. However, as required by State statute, it is necessary for City Council to review and approve the proposed 2025 Operating Plan and Budget for the BID.
In late 2024 the Creekwalk Marketplace BID requested to amend their Operating Plan to increase their maximum pre-authorized debt from $50,000,000 to $65,000,000 to allow for increased costs and for refinancing debt. This amendment is being considered by Council and is anticipated to receive approval. Additionally in late 2024, Creekwalk Marketplace BID anticipates issuing tax supported and special revenue bonds in an amount not to exceed $65,000,000 which is accounted for in the 2025 Operating Plan and Budget.
The Operating Plan and Budget for this BID anticipates increasing its mill levy in 2025. In 2024, the District imposed 10.587 mills for operations and maintenance and 52.938 mills for debt service. The District anticipates imposing 10.576 mills for operations and maintenance and 52.881 mills for debt service in 2025.
The Operating Plan and Budget advises this BID may refund existing bonds and issue additional bonds in 2024 and continue with Creekwalk North improvements as previously anticipated which will result in additional assessed valuation as anticipated in the bond financing plans. City Council approved both an inclusion and an exclusion for the BID in fall of 2024.
Background:
The initial boundaries of this development-specific BID were established pursuant to an election in 2016 with additional properties added in 2017, 2018, 2019, 2021 and 2023 for total of approximately 9 acres. As stated in the Operating Plan, the BID does not anticipate any inclusion or exclusion requests in 2024, but there could be inclusion or exclusions in future years. Under State statute, any such inclusions must be approved by separate City Council ordinance. This BID has a 5-member elected board comprised of individuals associated with this redevelopment project. The District is authorized to provide the acquisition and financing of improvements, construction of improvements, operation and maintenance of parking facilities, roadways, lighting, driveways, public utilities, and landscaping.
Pursuant to the Urban Renewal Plan, the City-Authority Agreement, the Redevelopment Agreement, and the Cooperation Agreement, dated July 26, 2019, with the Colorado Springs Urban Renewal Authority ("CSURA"), the District will receive tax increment financing ("TIF") generated from the urban renewal area to be used toward the repayment of the District's bonds.
This Operating Plan and Budget is provided in a format consistent with the standard template approved by Council in August 2022 for these documents.
Previous Council Action:
City Council approved the creation of this BID in 2016 (Ordinance No. 16-18). Council subsequently approved ordinances to include additional property on September 26, 2017 (Ordinance No. 17-87), February 27, 2018 (Ordinance No. 18-10), and March 12, 2019 (Ordinance 19-19). In May 2019 Council denied a petition requesting exclusion of a property from this BID that had previously been voluntarily petitioned for inclusion. Following this decision Council approved the issuance of debt in principal amounts of approximately $18,145,000 as Series 2019A and $3,030,000 as subordinate Series 2019B Limited Tax Supported and Special Revenue Bonds (Resolution No. 51-19). In November 2021 Council approved the inclusion of certain property into the boundaries of the District (Ordinance No. 21-93), and the issuance of additional debt in principal amounts not to exceed $16,500,000 (Resolution 188-21). In August 2023 Council approved the inclusion of two parcels within the BID that are not contiguous to other parcels within the District, however, are connected to the BID based on the various redevelopment efforts along the Nevada corridor (Ordinance 23-44). The two parcels in the 2023 inclusion are not within the URA and do not have any relation to URA activities or tax increment financing.
A request to amend the District’s 2024 operating plan to allow for an increase maximum pre-authorized debt from $50,000,000 to $65,000,000 was presented at City Council Work Session on October 7, 2024 together with a request for inclusion and a request for exclusion and to a request for approval to issue debt. The debt, not to exceed $65,000,000, will be heard by City Council on October 22, 2024 along with the Inclusion and Exclusion Ordinances. The 2025 Operations Plan amendment will be heard on the same day.
This item was introduced in a City Council Work Session on October 7, 2024.
Financial Implications:
The District issued $24,230,000 as Series 2019A and $2,500,000 as subordinate Series 2019B Limited Tax Supported and Special Revenue Bonds with interest rates of 5.0% and 8.0% respectively (for a total of $26,730,000). These bonds were issued for the intended purpose of construction of capital improvements with a public purpose necessary for development. On December 23, 2021, the District issued Series 2021A Limited Tax Supported and Special Revenue Senior Bonds in the principal amount of $11,040,000 and its Series 2021B Tax Supported and Special Revenue Subordinate Bonds in the principal amount of $2,500,000 with interest rates of 5.0%-5.75% and 8.0% respectively.
The District imposed 10.587 mills for operations and maintenance and 52.938 mills for debt service in 2024. The District anticipates imposing 10.576 mills for operations and maintenance and 52.881 mills for debt service in 2025.
This BID also levies a public improvement fee (PIF) of 2.5% on the sale of goods and services. For 2025, $625,000 in PIF revenues are projected. This District will also receive tax increment financing (TIF) generated from the Districts projects to be used toward the repayment of the District’s bonds. For 2025, $96,000, in CSURA TIF Revenues are projected. In 2025 the District is anticipating the collection of $155,000 in CAM (Common Area Maintenance) Revenue to offset the additional operations and maintenance expenses in 2025.
The District has estimated an outstanding developer advance balance of $3,010,569 at the end of 2024, which accrues interest at a rate of 8% for advances for operations and 6% for infrastructure. As of December 31, 2024, the accrued interest on the developer advance balance is expected to be $1,305,598 owed per the Facilities Funding and Reimbursement Agreement dated June 1, 2016. The 2024 budget includes an additional developer advance to fund operations of $1,032,786 for the principal and $275,847 in interest per the Operations Reimbursement Agreement dated March 14th, 2018.
It is anticipated that the continuous improvements and development of the District will positively impact property value assessments. The change in assessments was projected and capture in the ongoing efforts to change the bond financing plans that are currently being reviewed by Council as previously noted above.
As a separate legal entity, the financial activities of the BID are separate from those of the City. Any financial obligations are specifically associated with the properties within the BID boundaries and do not constitute an obligation of the City.
City Council Appointed Board/Commission/Committee Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
Move to approve the Resolution approving the proposed 2025 Operating Plan and Budget for the Creekwalk Marketplace Business Improvement District.
Summary of Ordinance Language
N/A