Minutes 09/25/2012 - Laserfiche WebLink

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September 25, 2012 o Subject to annual appropriation by City Council, EDA will provide a cash grant to Breeden until the balance of the site development costs are reimbursed. The annual appropriation will not exceed the amount of real estate taxes collected. The annual appropriations are projected for five years, but may be less. Final terms will vary based on the actual cost of reconstruction, actual sales price of the properties and real estate tax receipts. Discussion: • The City and EDA desire to have the North Pier and Desks Inc. properties developed in accordance with the Downtown Development Plan and Waterfront Strategy. This project is by a reputable regional development firm and meets that goal. The North Pier is structurally dilapidated and has a significant cost associated with its reconstruction. To enable its development a public contribution of the infrastructure is contemplated in the Agreement of Purchase and Sale. The public contribution will be offset by the use of the real estate sales proceeds and an annual contribution to the Breeden Company by the EDA in an amount not to exceed actual real estate tax receipts over a period of five years or less. The City will make those funds available to the EDA. The attached Cooperation Agreement will allow the development to proceed. Financial Impact: • Funds for the annual appropriation to the EDA will be paid from the increase in the tax revenue from the Real Estate taxes paid by the developer. The City is only required to make payments that are equal to or less than the actual receipts. The length of time for the payments shall not exceed five years. All other taxes associated with the development and its residents or tenants shall accrue 100% to the City. At the end of the five year period, all taxes accrue directly to the City. Over a subsequent five year period the real estate tax receipts are estimated to exceed $3,200,000. Recommended Action: • Adoption of a Cooperation Agreement between the City of Portsmouth and the Economic Development Authority of the City of Portsmouth to provide an annual appropriation to the EDA for the purpose of paying for site development costs associated with the reconstruction and development of the North Pier. Vision Principles: Change and New Directions, A Robust Economy for Working Men and Women, Neighborhoods and a Sense of Community, and Quality of Life. Next Steps Following Council Action: • EDA will enter into an Economic Development Incentive Grant Agreement with the Breeden Company providing for the site development costs. • The Breeden Company will complete its due diligence and submit all project plans to the City for its review and approval. 1. Mark Geduldig-Yatrofsky, P. O. Box 50141, spoke in support of this item. Motion by Mr. Heretick, and seconded by Mr. Whitehurst, to adopt the following resolution, and was adopted by the following vote: "RESOLUTION AUTHORIZING A COOPERATION AGREEMENT BETWEEN THE CITY OF PORTSMOUTH, VIRGINIA AND THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF PORTSMOUTH PERTAINING TO NORTH PIER SITE DEVELOPMENT COSTS. WHEREAS, the Economic Development Authority of the City of Portsmouth, Virginia ("EDA") is the owner of the North Pier, a waterfront parcel of land in the downtown area of the City; and WHEREAS, the EDA entered into an Agreement of Purchase and Sale, dated June 26, 2012, for the sale and development of the North Pier; and WHEREAS, under the terms of said Agreement, the EDA has agreed to provide financial assistance to the developer with the goal of making the North Pier site suitable for multi-family residential development, a stated goal for the downtown waterfront; and