2010 Legislative Highlights For Redevelopment (Community Development and Urban Renewal) J. Craig Smith Kyle C. Fielding S mith | H artvigsen, PLLC 215 South State Street, Suite 600 Salt Lake City, UT Text © 2010 Smith|Hartvigsen, PLLC Slide 1

2010 Legislative Highlights for Redevelopment (Community Development and Urban Renewal) Text © 2010 Smith|Hartvigsen, PLLC Slide 2 S.B. 197 becomes effective as of May 11, 2010 New notice requirements Attorney certification for TEC approval Inter-project-area loans Enhanced protection against challenges Earlier collection of tax increment in certain circumstances Statutory relief from housing fund obligations Summary of Significant Changes

2010 Legislative Highlights for Redevelopment Text © 2010 Smith|Hartvigsen, PLLC Slide 3 Technical and grammatical improvements Expressly authorizes environmental remediation activities within an economic development project area (previously was only expressly authorized under urban renewal) If the agency disposes of property then the agency must provide a summary on the Utah Public Notice Website (new requirement) and by newspaper publication (old requirement, still effective) “Successor Taxing Entities” bound under a CDA interlocal agreement or resolution Summary of Other Changes

“Limited Purpose Local Government Entities ― Community Development and Renewal Agencies” Title 17C: Chapter 1: General provisions regarding all development activity. Chapter 2: Urban Renewal (remediation of blight) Chapter 3: Economic Development (creation of nonretail jobs) Chapter 4: Community Development (promotion of necessary or desirable development) In order to promote its policy of empowering counties, cities, and towns to address their own local development needs as efficiently as possible, the Utah legislature made the Community Development “track” rather more flexible than either the Urban Renewal or Economic Development Tracks. Title 17C outlines three separate development mechanisms or “tracks”: Text © 2009 Smith|Hartvigsen, PLLC Slide 4

1. The Agency Designates a Survey Area 2. Parcel-by- parcel Blight Study 4. Blight Hearing 5. Agency Finding of Blight & Project Area selection The TEC must approve the blight finding or demonstrate the absence of blight. 7a. Preparation of the Draft Project Area Plan 3. Mailed and published notice of public Blight Hearing 7b. Preparation of the Draft Project Area Budget Inactive Superfund, Industrial, & Airport sites blighted de jure 6. Preparation of Plan and Budget The TEC must approve the Budget, setting the Project Area Base Value; attorney must Certify 8a.Public review of Draft Plan 8b. Public review of Draft Budget 9a. Mailed & published notice of Draft Plan Hearing 10. Public Hearings on DRAFT PLAN & DRAFT BUDGET. 11.Agency adoption of Plan & Budget. 12. Community Legislative adoption of the Plan by Ordinance. 13.Transmission of post-adoption notice to county officials and taxing entities. 9b. Mailed & published notice of Budget Hearing Urban Renewal 1.Agency selection of Project Area & authorization for preparation of Plan and Budget 2a. Preparation of Draft Plan 3a. Public plan review3b. Public budget review 4a. Notice of Plan Hearing 2b. Preparation of Draft Budget The TEC must approve the Budget; attorney must Certify TEC approval process 5. Public Hearings on the Draft Plan and Budget 7.Community legislative adoption of Plan by ordinance. 8. Transmission of post-adoption notice to county officials and taxing entities. 6.Agency adoption of Plan & Budget Economic Development Text © 2009 Smith|Hartvigsen, PLLC Slide 5 4b. Notice of Budget Hearing Compare the complexity of Urban Renewal & Economic Development …

Community Development Text © 2009 Smith|Hartvigsen, PLLC Text © 2009 Smith|Hartvigsen, PLLC 1. The Agency Selects a Project Area and authorizes preparation of the Project Area Plan and Negotiations with relevant Taxing Entities. 2b.Preparation of the Draft Project Area Plan 3b.Public review of Plan3a. Tax increment Agreements with willing Taxing Entities: Adopted by Resolution or Interlocal Agreement 4b.Notice of Plan Hearing 5.Public Hearing: Draft Plan. 2a. Consultation with various Taxing Entities. 6. Agency adoption of Plan. 7. Community Ordinance adopting the Plan by. 8.Transmission of post-adoption notice to county & taxing entities. NOTES: Budget Adoption is optional; no hearing is required. Community Development doesn’t require TEC approval either: The Agency deals directly with each taxing entity. Slide 6 … with the straightforward simplicity of Community Development.

Public Notice Requirements Text © 2010 Smith|Hartvigsen, PLLC Slide 7 Quiz: Currently, what public notice is required for a public hearing regarding a draft Project Area Plan or draft Project Area Budget? Answer: 1)One newspaper publication (14 days) 2)Mailed notice to property owners and taxing entities (30 days)

Public Notice of Plan and/or Budget Hearing Text © 2010 Smith|Hartvigsen, PLLC Slide 8 S.B. 197: 1)30-day mailed notice to property owners and taxing entities, and 2)14-day notice by either*: i.publishing in the newspaper, OR ii.posting on both the Utah Public Notice Website and the community website *You can always post and publish, if you want to, but you are only required to do either one or the other

When to Begin Tax Increment Collection? Text © 2010 Smith|Hartvigsen, PLLC Slide 9 Before: “Tax increment may not be paid to an agency for a tax year prior to the tax year following: (i) for an urban renewal or economic development project area plan, the effective date of the of the project area plan; and (ii) for a community development project area plan, the effective date of the interlocal agreement that establishes the agency’s right to receive tax increment.” S.B. 197: Allows the taxing entity committee, or the taxing entity under a CDA interlocal agreement, to waive this requirement, thus allowing immediate tax increment collection

Inter-Project-Area Loans Text © 2010 Smith|Hartvigsen, PLLC Slide 10 Quiz: Currently, can you take tax increment generated from Project Area “A” and provide a development incentive for property within a different Project Area “B”? Answer: Only for infrastructure, and only after determining that Project Area “A” will benefit from the expenditure in Project Area “B”

Inter-Project-Area Loans Text © 2010 Smith|Hartvigsen, PLLC Slide 11 S.B. 197: o Allows loans from one project area fund to another o Requires approval by the Agency Board and the Community Legislative Body (Commission, Council) o Projections for future tax increment in the borrowing project area must be sufficient to repay the loan for timely use in the loaning project area o If the borrowing project area is unable to repay the loan then the authorizing community must repay the loan to the project area fund

Attorney Certification Requirements Text © 2010 Smith|Hartvigsen, PLLC Slide 12 S.B. 197 requires “attorney certification” of: Taxing Entity Committee Approval of a Project Area Budget (Urban Renewal or Economic Development), and Taxing Entity consent to tax increment under an interlocal agreement or resolution for a Community Development Project *An agency cannot adopt a Project Area Budget requiring TEC approval before obtaining attorney certification

Attorney Certification Requirements Text © 2010 Smith|Hartvigsen, PLLC Slide 13 Why require attorney certification? Justifies a 30-day contestability period. After 30 days, nobody can contest TEC approval Protects the community and agency Protects property owners by providing a safeguard over the rather unusual TEC approval process

Attorney Certification Requirements Text © 2010 Smith|Hartvigsen, PLLC Slide 14 What does the attorney certify? Compliance with the procedures set forth in the Community Development and Renewal Agencies Act 10-day meeting notice Proper TEC appointments and authority Compliance with procedures in the Open and Public Meetings Act 24-hour notice of TEC meeting agenda Other procedural requirements

Attorney Certification of TEC Approval Text © 2010 Smith|Hartvigsen, PLLC Slide 15 Practical Pointers: Involve an attorney before scheduling a TEC meeting, or anytime before executing a resolution or interlocal agreement for a CDA Involve the attorney in reviewing and/or drafting timelines, notices, agendas, and resolutions before they go out If any statutory procedures are not fully complied with, the attorney will not be able to provide a certification and the TEC will need to meet again Attorney certification of TEC approval is required before the Agency may adopt a Project Area Budget, or before an Agency may use funds under a CDA interlocal agreement or resolution

Housing Requirements Text © 2010 Smith|Hartvigsen, PLLC Slide 16 2 Changes in S.B. 197: (1) Expressly requires annual housing allocations in the Project Area Budget (no backloading) BUT, IF YOU ALREADY BACKLOADED: (2) Provides relief from making housing allocations to the extent tax increment is insufficient in the final years of the project

Questions? Redevelopment Attorneys J. Craig Smith Kyle C. Fielding S mith | H artvigsen, PLLC 215 South State Street, Suite 600 Salt Lake City, UT Text © 2010 Smith|Hartvigsen, PLLC Slide 17