SGA/SEGA Investment Partnership Policy City Council Briefing December 10, 2013
Updated Investment Partnership Policy Policy Report: SGA Office and Finance Department, reviewed by Planning, Economic Development, Management Services, City Attorney s Office. Proposed Draft Policy: Revision to existing Council Policy (January 2001). Bring forward to City Council in the form of a Resolution for consideration January 14, 2014. Policy Purpose: Refines investment partnership qualifications and incentives and focuses on Strategic Growth Areas and Special Economic Growth Areas. Policy Objective: Encourage SGA and SEGA plan compliant development 2
SGA and SEGA Areas 3
Types of Investment Incentives Annual revenue and/or fee incentive grants (typically based on % of certain tax revenues) Density bonuses Special service districts (SSD) Economic Development Incentive Program (EDIP) grants Land swaps, grants, and transfers Lease agreements Assisted Plan Review Public infrastructure, parking, and amenities Sustainability and/or rehabilitation tax relief Other 4
Successful Projects Cavalier Hotel Renovation: Annual incentive revenue grant, EDIP, public infrastructure support. 25th Street Parking Garage: Annual incentive revenue grant, long-term lease, and land transfer. 31 Ocean (Laskin Road Gateway): Fully funded public utility and roadway infrastructure CIP,EDIP and public parking lease. 31st Street Mixed Use Development: Land lease and parking infrastructure CIP. Sportsplex Fieldhouse: Annual incentive revenue grant and long-term land lease. Lynnhaven Mall Renovation: Tax increment financing revenue grant for parking infrastructure upgrade. Sportsplex: Public amenity infrastructure cost sharing CIP Town Center Project: TIF for parking garages, SSD for services, and adjacent streetscapes. 17th Street Park Development: Conditional use permit granted in exchange for public amenity use on private property. 9th Street Parking Garage: Long-term parking lease with option to purchase. Virginia Beach Amphitheater: Public amenity infrastructure cost sharing CIP. 5
Typical Guidelines Compliance with City Council goals. The project is located within a Strategic Growth Area or Special Economic Growth Area. The private sector investment is a minimum of approximately $30 million. The project aligns with SGA/SEGA design principles. Proximity to light rail stations (SGA only). Historical financial and construction development integrity of the Developer. Generates jobs and supports target industry development. Projects support pedestrian and bicycle connectivity. Offers housing stock variety. 6
Financial Feasibility (for the City and the private partner) Fiscal, economic, and/or social benefits will be greater because of a public investment partnership based on a due diligence evaluation. A fair and reasonable return is provided to the private and public sector partners. The project will not proceed, or will not proceed at a desired quality level, but/for a public sector investment partnership. Developer and the City/VBDA enter into a Development Agreement that fairly delineates responsibility and risk. 7
Review Process 1. Formal Request 2. Additional Information 3. Briefing to City Council & Appointment of Council Liaisons 4. Assign Project Manager and complete a study of economic, fiscal and social impacts 5. A Term Sheet may be developed, in concert with the City Attorney, and presented to City Council for concurrence. 6. The Project Manager will undertake stakeholder input that is appropriate based upon the size and scope of the project. 7. A Development Agreement is prepared with the developer/partner. 8. The Development Agreement is brought before the City Council and/or Development Authority for formal approval. 8
Policy Next Steps Review and Comment by City Council Virginia Beach Development Authority Review: December 17, 2013 Revise if necessary and finalize the policy. Resolution for Council Consideration: January 14, 2014. 9