Phoenix Park: Urban Renewal Case Study


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Urban city park and private redevelopment project in Eau Claire, WI. Present to Municipal Attorney Institute in June 2008

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Phoenix Park: Urban Renewal Case Study

  1. 1. Phoenix Park Eau Claire, Wisconsin Emerging from the Ashes: A Redevelopment Case Study
  2. 2. Mission: Build it up from the Ashes <ul><li>The objective of the North Barstow Redevelopment project was to develop a brownfield site into a first-rate destination downtown park surrounded by high quality mixed use development to create a vibrant urban environment, funded through TIF and grant resources. </li></ul><ul><li>The Legal Tools Utilized: </li></ul><ul><li>Local Government Unit Liability Protection </li></ul><ul><li>Liability Clarification Letters </li></ul><ul><li>Indemnity Provisions </li></ul><ul><li>Traditional TIF Financing </li></ul><ul><li>Federal Grants </li></ul><ul><li>State Brownfield Grants </li></ul><ul><li>Modified Pay-as-you-go TIF Provisions </li></ul><ul><li>Tax Valuation Guarantees </li></ul>
  3. 3. Historic Phoenix Park <ul><li>The Phoenix Park site has an industrial past. A coke-gas plant existed on the site, as well as the Phoenix Steel Corp. manufacturing facility, a sawmill and lumber yard. The site is located in the heart of downtown Eau Claire at the confluence of the Chippewa and Eau Claire Rivers. </li></ul>
  4. 4. Downtown Eau Claire – Redevelopment Site <ul><li>The City first acquired property in this area from the Phoenix Steel Corporation in 1981. The City completed a clean-up in 1994. The land was capped and left vacant. </li></ul><ul><li>The City acquired the adjoining Xcel Energy property at the confluence of the rivers in 2002, jump starting redevelopment. </li></ul>
  5. 5. Acquisition of the Xcel Site <ul><li>Xcel Energy Commercial Purchase Agreement </li></ul><ul><li>Sec. 1 Method and Purpose of Acquisition . The Buyer, a local government unit (“LGU”), shall acquire the premises for the purpose of blight elimination, per § 292.11(9)(e)1m.d, Stats. </li></ul><ul><li>Sec. 16 WDNR Liability Clarification Letter Contingency . This Agreement is contingent upon the Buyer obtaining a liability clarification letter pursuant to § 292.55, Stats., indicating that: </li></ul><ul><ul><li>a) Buyer shall have and be entitled to the LGU exemption; </li></ul></ul><ul><ul><li>b) Buyer will be able to develop the Property as a park, trail head facility, and commercial development on the remainder of the Property without losing that exemption; and </li></ul></ul><ul><ul><li>c) no additional remediation will be required for completion of the RCU development. </li></ul></ul>
  6. 6. Site Remediation by Xcel <ul><li>Xcel Commercial Purchase Agreement </li></ul><ul><li>Sec. 9 Environmental Issues . Seller has submitted a RAP for the Property to the WDNR. The WDNR approved the RAP as a voluntary response under Wisconsin Statute Section 292.11. Seller hereby covenants to Buyer that Seller will promptly undertake and diligently complete all work or other activities required by the RAP or as revised by Seller with WDNR’s approval. Seller shall use all reasonable efforts and resources at its disposal to obtain Regulatory Closure </li></ul><ul><li>City waived its discussed cost recovery option against Xcel under § 292.33. </li></ul><ul><li>City worked with DNR and Xcel to create site specific RAP that was consistent with future park use. </li></ul>
  7. 7. Commercial Development - RCU <ul><li>Royal Credit Union Purchase Agreement – Pass Through Indemnity </li></ul><ul><li>Section 6. Acquisition of Xcel Energy Properties; Environmental Indemnity . The City’s acquisition of the Xcel Property was strictly conditioned upon Xcel having completed its remediation of the Xcel Property evidenced by a liability clarification letter from the DNR. … [T]he City shall, with respect to such environmental matters, indemnify and hold harmless RCU… relating to that portion of the Property described as the Xcel Property, pursuant to the terms and conditions of the indemnity agreement. </li></ul><ul><li>No representations or warranties are or will be made regarding any environmental condition nor is or will any environmental indemnity be given on any portion of the Property not constituting Xcel Property as set forth in Exhibit B and such property is being purchased/sold “as is”. </li></ul>
  8. 8. RCU Development <ul><li>RCU Purchase Agreement </li></ul><ul><li>[T]he parties acknowledge that a non-typical foundation system is needed for the building to be constructed on Parcel I. The City shall contribute towards the cost of installation of such non-typical foundation system up to $300,000.00. </li></ul><ul><li>RCU shall execute and deliver to the City an easement which shall allow: </li></ul><ul><ul><li>(i) The City to utilize the RCU parking areas during non-business hours; </li></ul></ul><ul><ul><li>(ii) The public access to the adjoining park areas located in Phoenix Park, and </li></ul></ul><ul><ul><li>(iii) The public to utilize the plaza to be constructed and reasonably maintained by RCU on either or both Parcel I and Parcel II for recreational purposes in a manner consistent with the adjoining park area(s). </li></ul></ul>
  9. 9. Phoenix Park Final Design Plan
  10. 10. Commercial Development - PPL <ul><li>Development Agreement </li></ul><ul><li>Sec. 7. Tax Status . </li></ul><ul><ul><li>(a) As long as the District is in existence, PPL shall not convey any legal or equitable title to any portion of the Property to any party that is not subject to the terms and conditions of the Deed Restrictions. </li></ul></ul><ul><ul><li>(b) PPL agrees to construct Phase I Improvements to a quality and utility to attain a market value of the Property and improvements thereon of at least $9,700,000 as of January 1, 2010. Should the Phase I Property not be assessed at or above said amount on said date and for the next ten (10) years thereafter, PPL shall pay to the City annually a PILOT. </li></ul></ul>
  11. 11. Commercial Development - PPL <ul><li>Development Agreement </li></ul><ul><li>Sec. 8. Tax Increment . </li></ul><ul><ul><li>(a) The amount of the RDA’s Credit shall equal 50% of the tax increment revenue realized by the District for taxes collectible in each year of the credit. The credit shall be an offset of any remaining purchase price owed by PPL to the RDA. The credit is the sole responsibility of the RDA. </li></ul></ul><ul><ul><li>(b) PPL shall receive from the City an annual payment equal to fifty percent (50%) of the property taxes received by the City each year on the incremental increased assessed value of Phase I Property and improvements thereon. </li></ul></ul>
  12. 12. Top 10 Tips <ul><li>1. Conduct background checks. </li></ul>
  13. 13. Top 10 Tips <ul><li>2. Get the developer’s lender to the table. </li></ul>
  14. 14. Top 10 Tips <ul><li>3. Developer should have skin in the game. </li></ul>
  15. 15. Top 10 Tips <ul><li>4. Tax valuation guaranteed by a PILOT. </li></ul>
  16. 16. Top 10 Tips <ul><li>5. Remain consistent with city goals. </li></ul>
  17. 17. Top 10 Tips <ul><li>6. Conduct an open, public process. </li></ul>
  18. 18. Top 10 Tips <ul><li>7. Mind the “Gap”. </li></ul>
  19. 19. Top 10 Tips <ul><li>8. Consider public parking & access. </li></ul>
  20. 20. Top 10 Tips <ul><li>9. Include time sensitive performance measures. </li></ul>
  21. 21. Top 10 Tips <ul><li>10. Enjoy! </li></ul>
  22. 22. Top 10 Tips <ul><li>10. Relax! </li></ul>
  23. 23. Top 10 Tips <ul><li>10. Take a night off! </li></ul>