Downtown South development

[keita]

City Council’s agenda for tomorrow (Nov. 4) had an interesting set of memos about DTS. They’re basically calling OneWake’s bluff, taking their requests seriously (unlike @Francisco’s post apparently, lmao), and are coming up with ways to knead them into the strategy for planning and funding Downtown South.

20201104CMODowntownSouthStaffMemo.pdf

Some key excerpts:

Are something like TIFs a viable option for making DTS happen?

@Pg. 6 - memo from City Manager Ruffin

TIG is different than a Tax Increment Financing (TIF) tool because […] with a TIG, the City does not issue or take on the debt associated with the project.

[W]ith a TIF the City borrows the money to pay for the public improvements of the development project and pledges incremental tax revenues to repay the debt. […]

The City of Raleigh currently does not have a policy to guide the development of a TIG agreement. If Council wishes to proceed with a TIG policy and grant, City staff would need to involve Wake County to determine their interest.

@Pg. 11-12 - memo from city attorney

A Tax Increment Grant (“TIG”) is an economic development tool where the City enters into a contractual obligation with a developer to provide financial assistance to a project in exchange for the project providing public benefits […] that the City […] otherwise […] provide[s] directly on its own. […]

Such assistance would be provided as reimbursement over an extended period of time for qualifying costs incurred by the developer during project buildout.

What's needed to get an Opportunity Zone grant? How can residents be informed about DTS?

@Pg. 10 - memo from City Manager Ruffin

If the Council would like to proceed with developing a public private partnership agreement at Downtown South [to be eligible for Opportunity Zone funding], the staff recommends the following next steps:

Authorize City staff to develop a public private partnership framework […] which will support the Downtown South project. Upon completion staff will [prepare]

• A Citywide Tax Increment Grant (TIG) policy;
• A community engagement process, including Council appointment of a community engagement committee; and
• An outline of key business terms that would comprise a Tax Increment Grant (TIG)
agreement.

Can the city make a Community Benefits Agreement (CBA) with Kane et al.?

@Pg. 12 - memo from city attorney

A Community Benefits Agreement (“CBA”) is a private contract between a developer and one or more local community groups, wherein the developer agrees to incorporate certain amenities and programs into the developer’s project that benefit the local community and mitigate undesirable effects that the local community groups believe the project would otherwise create. […]

In exchange for incorporating the local community groups’ desired amenities and programs, the groups agree to either publicly support or not speak out in opposition against the developer’s project. Following the creation of the CBA, the local community groups must […] monitor and enforce the provisions of the CBA because in North Carolina, a local government cannot be a party to a CBA and, therefore, cannot assume those responsibilities

These are my takeaways from this document:

1. Wake County needs all-new rules for how TIGs work, which will take time, probably by next summer. Note they’re talking about tax investments grants, which would be different from TIFs that several people mentioned here. In TIGs, the city would reimburse Kane for eligible expenses instead of paying for all fees upfront and getting into debt.

2. If Kane wants a P3 for federal grant funding, he needs to solve the TIG issue and work with the city to create a custom public engagement plan. This public review is required for the city to enter a development agreement with Kane Realty.

3. CBAs could let OneWake enforce project requirements they want and give Kane Realty peace and quiet as they build DTS. State law prohibits cities from being a part of CBAs, so I think this means OneWake can’t drag the city into their potential negotiations.