Title
A resolution of the City of Colorado Springs, Colorado approving the issuance of Tuscany Plaza Metropolitan District Limited Tax General Obligation Bond Series 2026 in an aggregate amount not to exceed $4,225,243.00 for properties located northeast of Powers Boulevard and Dublin Boulevard.
Council District: 6
Presenter:
Drew Foxx, Planner II, Planning Department
Kevin Walker, Planning Director, Planning Department
Body
Summary:
This is a request to approve issuance of Limited Tax General Obligation Bonds, Series 2026, in the total amount of $4,225,243.00. These bonds will be issued by Tuscany Plaza Metropolitan District (the “District”). The issuance of this debt will be in the form of a tax-exempt bank loan. The purpose of the proposed bond issuances is to reimburse the District’s developer, Izzy, LLC (“the Developer”), a Colorado limited liability company (the “Developer”) for certain certified eligible public infrastructure costs that have been constructed and installed for the Tuscany Plaza commercial development.
The City’s Special District Policy and the Tuscany Plaza Metropolitan District’s service plan (see Attachment 1-Tuscany Plaza MD Service Plan) require that City Council’s approval be obtained prior to issuing any debt.
In furtherance of the Service Plan, and in order to facilitate the payment for completed public improvements contemplated by the Service Plan (the “Public Improvements” listed in Exhibit D), the District and the Developer entered into an agreement pursuant to which the Developer agreed to fund Bond Series 2026 for the payment of rendered services including acquisition, construction and installation of Public Improvements authorized by the Service Plan.
Approval of this debt issuance will require a 2/3rds majority of the entire City Council (at least six affirmative votes) pursuant to City Charter Article 7-100.
Background:
The Tuscany Plaza Metropolitan District was created in 2009 via Resolution 164-09. The purpose of the District is to plan for, design, acquire, construct, install, relocate, redevelop, and finance the Public Improvements within this approximately 42.5-acre portion of the Dublin North Master Plan development located northeast of Dublin Boulevard and N Powers Boulevard (see Attachment 2-Tuscany Plaza MD Boundary Vicinity Maps).
Pursuant to the District’s Service Plan, the District has a maximum debt authorization in an aggregate principal amount of $6 million dollars. Since the Service Plan was approved before the latest Model Service Plan in 2022, the maximum mill levies are based on old Model policy. Presently, the maximum debt mill levy is 30 mills for residential land uses and 50 mills for commercial land uses. The operations and maintenance mill levy is capped at 10 mills. The District currently consists of only commercial property and no residential property. The District has retained the same boundaries and no amendments to the Service Plan or other debt issuances have occurred since the District’s creation. As such, the District’s request to issue debt is within the permitted amount set forth in the service plan.
The purpose of the Bond is to reimburse the commercial District’s developer, Izzy, LLC,
for certain certified eligible public infrastructure costs that have been constructed and installed for the Tuscany Plaza commercial development. The cost of the public infrastructure was certified by an independent third-party engineer, IDES, LLC, who was engaged by the District to conduct a review and certification of the eligible public infrastructure cost installed for the Project. Pursuant to the District’s service plan, IDES concluded that the expenditure for the improvements was found to be reasonable and comparable to other similar projects in Colorado. The Certified Cost Report is enclosed with the District’s Letter of Intent, which describes in further detail the nature of the public infrastructure installed for the Project. Pursuant to development agreements with the City, the developer designed, constructed, and installed the public infrastructure (i.e., earthwork, erosion control, traffic controls, and utility and stormwater improvements) contemplated and authorized in the District’s Service Plan. Although the Certified Cost Report is dated November 2018, for the past seven (7) years the Developer delayed seeking public infrastructure reimbursement from the District electing to wait until there was sufficient vertical construction of taxable property within the District that would support the repayment of the Bond. Given the vertical development progress that occurred within the Project over the past few years, the District is now in a financial position to issue the Bond and reimburse the developer for the certified costs of the public infrastructure.
Included as attachments are the following documents:
• City Council resolution
• Financial plan and Projections
• Draft District loan resolution
• Letter of Intent
• Tuscany Plaza MD Service Plan
• Tuscany Plaza MD Boundary Vicinity Maps
Financial Implications:
Pursuant to the District’s Service Plan, the City Special District Policy, and the loan documents, the issuance of this debt does not constitute a financial obligation of the City. The documents will contain the “limited default” provisions required by the City’s Special District Policy. This debt is being arranged with the “Developer” for reimbursement and to be further reimbursed to the District through the applicable commercial mill levy.
City Charter Article 7-100 requires that the total debt of any proposed district shall not exceed ten percent (10%) of the total assessed valuation of the taxable property within the District unless approved by at least a two-thirds vote of the entire Council.
Board/Commission Recommendation:
N/A
Stakeholder Process:
The staff-level Special District Committee has been provided with the materials associated with this request. As of the date of this staff report, there have been no comments or questions from the Committee on this request.
Previous Council Action:
The Tuscany Plaza Metropolitan District service plan was approved by Council on July 28, 2009 (Resolution 164-09). No other previous Council action has occurred since the District’s creation.
Alternatives:
City Council has the options of approving or denying the issuance of debt. Council could also continue the item with specific directions provided to staff and the petitioners.
Recommended Action
Proposed Motion:
Adopt a resolution of the City of Colorado Springs, Colorado approving the issuance of Tuscany Plaza Metropolitan District Limited Tax General Obligation Bond Series 2026 in an aggregate amount not to exceed $4,225,243.00 for properties located northeast of Powers Boulevard and Dublin Boulevard.
Deny a resolution of the City of Colorado Springs, Colorado approving the issuance of Tuscany Plaza Metropolitan District Limited Tax General Obligation Bond Series 2026 in an aggregate amount not to exceed $4,225,243.00 for properties located northeast of Powers Boulevard and Dublin Boulevard.
Summary of Ordinance Language
N/A