AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 21

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1 DATE: July 16, 2013 STAFF: Marty Heffernan AGENDA ITEM SUMMARY FORT COLLINS CITY COUNCIL 21 SUBJECT Items Relating to the Maintenance of Old Town Plaza. A. Resolution Authorizing the City Manager to Execute the 2013 Old Town Plaza Master Agreement with Restrictive Covenants Between the Downtown Development Authority, Progressive Old Town Square, LLC and the City Regarding Maintenance of Old Town Plaza. Resolution Authorizing the City Manager to Execute an Intergovernmental Agreement Regarding B. Maintenance of Old Town Plaza Between the Downtown Development Authority and the City. EXECUTIVE SUMMARY The purpose of this item is to consider approval of an agreement between the Downtown Development Authority (DDA), Progressive Old Town Square and the City regarding ownership, operation and maintenance of Old Town Plaza and an agreement between the City and the DDA regarding maintenance and repair of the Plaza. Resolution adopts the 2013 Old Town Plaza Master Agreement with Restrictive Covenants ( Master Agreement ), a three party agreement with the City of Fort Collins, the Downtown Development Authority (and Progressive Old Town Square, LLC ( POTS ). The Agreement redefines the parties operation and maintenance obligations for Old Town Plaza, defines POTS maintenance payments and how they relate to the purchase of the Kiosk at 13 Old Town Square, acknowledges POTS pledge to make a financial contribution towards the renovation of the Plaza, addresses the restrictive covenants set forth during the original construction of the Plaza, and further defines the rules and regulations governing Old Town Plaza. Resolution adopts the Intergovernmental Agreement Regarding Maintenance of Old Town Plaza ( IGA ) between the DDA and the City. The Master Agreement will supersede all previous agreements that defined roles for maintenance and repair/replacement of Plaza infrastructure, and because POTS is being removed from their previous role except for a continuing payment obligation, the City and DDA require an agreement to define their continuing responsibilities related to the operation and maintenance of the Plaza. The approval of these two items by Council will complete a chain of approvals that allow the DDA to acquire the Old Town Plaza Kiosk from POTS and begin steps toward the renovation of Old Town Plaza. BACKGROUND / DISCUSSION The vision and construction of Old Town Square by Gene Mitchell nearly 30 years ago has truly helped to define downtown Fort Collins. By turning a city street into a public plaza, it has provided a sense of place for downtown where people can gather to share in the numerous festivals and concerts performed in the square, enjoy the wonderful flowers and plantings, take innumerable photos in front of the fountain, and shop, dine or work at the wonderful establishments that line the Plaza. Because of consistent use by hundreds of thousands of people during the last three decades and infrastructure systems reaching the end of industry expected lifecycles, the infrastructure of the Plaza has deteriorated to a point where it is more desirable and makes greater financial sense for the DDA and City to renovate the infrastructure with new rather than to continue to repair original infrastructure. The DDA anticipates investing $1,000,000-$1,500,000 towards the renovation of the Plaza. The DDA will be working closely with the City on the renovation design of the Plaza as there is an anticipation of the City contributing towards the project. The City s 2011 Capital Improvement Plan for the downtown General Improvement District (GID) acknowledges the renovation of Old Town Plaza as its highest priority in the plan, with available funding up to $1,000,000 towards the project. However, adoption of the Resolutions does not commit the City to provide funding for the Plaza renovation.

2 July 16, ITEM 21 After lengthy negotiations, the DDA, City and POTS have structured new agreements that will allow the City and the DDA to take next steps towards the renovation of the Plaza. Because POTS also desires to see the Plaza renovated, it is pledging a donation ($61,525) toward the capital improvements. If all of the following agreements and transactions are fulfilled by August 2013, DDA staff would propose to begin the public outreach and design process for the renovation of the Plaza in 2014, with the intention to begin and complete the renovation of the Plaza in Below is a synopsis of the four agreements that have been negotiated between the DDA, City, and POTS. These four agreements are all interrelated, though the City is a party to only two of the agreements: the 2013 Old Town Plaza Master Agreement and the IGA Regarding Maintenance of Old Town Plaza. An explanation of all the agreements is provided in this agenda item summary in order to demonstrate their interrelationships Old Town Plaza Master Agreement With Restrictive Covenants In 1993, the DDA, City and POTS entered into an agreement establishing the rights and obligations of each party as they relate to operation and maintenance of Old Town Plaza and the adjacent Rights-of-way. Numerous agreements and amendments to the agreements have followed. The proposed 2013 Master Agreement supersedes the previous agreements and is the final agreement, which has been long anticipated by the parties. The Agreement redefines the parties operation and maintenance obligation for Old Town Plaza, defines POTS maintenance payments and how they relate to the purchase of the Kiosk at 13 Old Town Square, acknowledges POTS pledge to make a financial contribution towards the renovation of the Plaza, addresses the restrictive covenants set forth during the original construction of the Plaza, and further defines the rules and regulations governing Old Town Plaza. This agreement does not specify the roles and obligations of the DDA and the City as related to the maintenance and Management of Old Town Plaza; these will be defined and specified in the IGA. Staff recommends Council approval of this Agreement. Intergovernmental Agreement Regarding Maintenance of Old Town Plaza It is necessary for the City and the DDA to enter into an Intergovernmental Agreement because the 2013 Agreement absolves POTS from any of the maintenance and/or repair responsibilities (provided POTS is current with its maintenance payments) and makes the DDA and the City the responsible parties for the management, maintenance, repair and replacement of Old Town Plaza and the rights-of way. The IGA defines the responsibilities of both parties as they relate to the operation and maintenance of the Plaza until both parties enter into a second IGA for the renovation of the Plaza. The DDA and the City recognize that the operation and maintenance needs of the Plaza during a renovation project will be different than the current needs. This IGA also addresses the needs of the DDA and the City to enter into a third post-renovation IGA to further define the operation and maintenance of the Plaza after a renovation project takes place. Staff recommends Council approval of this IGA. Kiosk Purchase Contract The DDA would like to purchase the Kiosk in Old Town Plaza, owned by POTS, as part of the renovation of Old Town Plaza. After two appraisals of the property and negotiations between POTS and the DDA, a purchase price of $121,243 has been mutually agreed upon. In lieu of a cash payment, POTS Old Town Plaza maintenance payments in 2017 ($65,272) and 2018 ($55,971) will be credited to the purchase price of the Kiosk. This arrangement is further detailed in the Master Agreement. The City is not a party to this Purchase Agreement, but execution of this Purchase Agreement is contingent upon Council s approval of the 2013 Master Agreement and the IGA. Termination and Release of Declaration of Covenants, Restrictions and Easements Old Town Project When Old Town Plaza was originally constructed, it was agreed to that the Plaza would be subject to the declaration of covenants, restrictions and easements of the Old Town Project. Because POTS is now the declarant of the covenants for the Old Town Project and the DDA is the owner of the Plaza subject to the covenants, both parties have mutually agreed to terminate the covenants because of the promises made in the 2013 Master Agreement. The DDA Board has consented to the Termination and Release of the Declaration of Covenants, Conditions, Restrictions and Easements Old Town Project as this is desired by the DDA and has been negotiated as part of the 2013 Agreement.

3 July 16, ITEM 21 The City is not a party to the Termination and Release of Declaration of Covenants, but execution of this Agreement is contingent upon Council s approval of the 2013 Master Agreement and the IGA. FINANCIAL / ECONOMIC IMPACTS Upon execution of the 2013 Master Agreement, the DDA and the City will be the responsible parties for the management, maintenance, repair and replacement of the Old Town Plaza and the Rights-of-way. POTS is obligated to make a monthly payment to the City in the amount of $4,856, with a 3% increase adjusted annually each calendar year as its share of the cost to perform the maintenance/repair responsibilities through October Recognizing the DDA and the City s desire to renovate the Plaza in 2015, and that maintenance during that year will be minimal, the parties agree that POTS shall not be required to make its 2015 Maintenance Payment. Because POTS also desires to see the Plaza renovated, it has pledged to donate the equivalent amount of its 2015 Maintenance Payment ($61,525) to the DDA in 2014 to be used towards the renovation of the Plaza. The DDA desires to purchase the 13 Old Town Square (Kiosk) from POTS in anticipation of the Old Town Plaza renovation. The DDA and POTS have mutually agreed on a purchase price of $121,243 and, in lieu of a cash payment, POTS Old Town Plaza maintenance payments for 2017 ($65,272) and 2018 ($55,971) will be credited to the purchase price further detailed in the agreement. Any monies needed to cover a shortfall of funds to maintain the Plaza prior to renovation as a result of the Kiosk purchase will be the responsibility of the DDA. The DDA and the City shall continue to make an annual contribution towards the maintenance of the Plaza and rightsof way in the amount of $63,046, with an annual adjustment to reflect changes in the consumer price index. Any additional service requirements needed to the Plaza beyond the scope of service described in the IGA will be paid for by the DDA. This arrangement reflects the current practice between the DDA, City and POTS. Contributions for Plaza maintenance after the renovation will be determined in a post-renovation IGA to be negotiated between the City and the DDA. ENVIRONMENTAL IMPACTS Old Town Plaza is developed around high intensity use, consisting of raised planter beds, a water feature and hardscape consisting of pavers. The 2013 Agreement and IGA will keep the Plaza safe and operational until such time that the Plaza is renovated. The hard surfaces will continue to be periodically power washed, where all reclaimed water is captured. Flower beds will be installed and maintained, utilizing annual planting and backed up with perennial plants. Watering will be kept to a minimum with needed amounts determined by the weather and temperature. The compost used in the flower beds is generated exclusively by the City s earth tub pilot project where downtown restaurant food waste is diverted from the landfill. STAFF RECOMMENDATION Staff recommends adoption of the Resolutions. BOARD / COMMISSION RECOMMENDATION The DDA Board and POTS have both approved and signed the 2013 Master Agreement with Restrictive Covenants. The DDA Board has approved and signed the IGA. The DDA Board and POTS have both signed the Termination and Release of the Declaration of Covenants. ( This is contingent upon Council approval of the 2013 Master Agreement and the IGA) The DDA Board and POTS have both signed the Kiosk Purchase Contract. (This is contingent upon Council approval of the 2013 Master Agreement and the IGA)

4 July 16, ITEM 21 ATTACHMENTS 1. DDA Resolution approving the 2013 Old Town Plaza Master Agreement 2. DDA Resolution approving IGA Regarding Maintenance of Old Town Plaza

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9 RESOLUTION OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE THE 2013 OLD TOWN PLAZA MASTER AGREEMENT WITH RESTRICTIVE COVENANTS BETWEEN THE DOWNTOWN DEVELOPMENT AUTHORITY, PROGRESSIVE OLD TOWN SQUARE, LLC AND THE CITY REGARDING MAINTENANCE OF OLD TOWN PLAZA WHEREAS, the Downtown Development Authority (DDA) is the owner of certain real property located in Fort Collins, Colorado, known as Old Town Plaza, as shown on Exhibit A attached and incorporated herein by reference; and WHEREAS, the City is the owner of certain rights-of-way adjacent to Old Town Plaza including Trimble Court Alley (collectively, the Rights-of-Way ) as shown on Exhibit A; and WHEREAS, Progressive Old Town Square, LLC ( POTS ) is the owner of certain real property located adjacent to Old Town Plaza, as shown on Exhibit A; and WHEREAS, on July 5, 1983, the DDA and Old Town Associates Ltd., POTS s predecessor in title, entered into an agreement (the Implementation Agreement ) for the development of Old Town Plaza and adjacent private property (the "Project") which set forth the duties and responsibilities of each party in connection with the Project; and WHEREAS, on October 29, 1993, the DDA, POTS and the City entered into an agreement which set forth the rights and obligations of each party in connection with the Project and the Rightsof-Way (the 1993 Agreement ), which superseded the Implementation Agreement in its entirety; and WHEREAS, on July 13, 2005, the DDA, POTS and the City executed an agreement that established certain rights and responsibilities of the parties in connection with the use, operation, maintenance and repair of Old Town Plaza while the parties worked on restructuring the 1993 Agreement (the Interim Agreement ) and, on April 21, 2010, executed the Second Interim Agreement for the purpose of ratifying the performance of the parties from and after June 14, 2006 and establishing the rights and responsibilities of the parties through December 31, 2011; and WHEREAS, on March 6, 2012, the parties executed the First Amendment to Second Interim Agreement for the purpose of extending the term of the Second Interim Agreement until December 14, 2014, unless prior to such time the parties had executed an agreement restructuring the 1993 Agreement; and WHEREAS, the DDA contemplates making major renovations to Old Town Plaza in 2015 (the Renovation Project ); and

10 WHEREAS, in contemplation of the Renovation Project, the DDA, the City and POTS wish to enter into an agreement called the 2013 Old Town Plaza Master Agreement, a copy of which is attached and incorporated herein as Exhibit B (the 2013 Agreement ); and WHEREAS, the 2013 Agreement would supersede any and all provisions of the 1993 Agreement and amendments thereto, the Second Interim Agreement and the First Amendment to Second Interim Agreement, and would set forth the continuing rights and financial obligations of POTS regarding the maintenance, repair and replacement of the Old Town Plaza infrastructure; and WHEREAS, the City Council is being asked to approve the 2013 Agreement because the agreements it supersedes were approved by the City Council; and WHEREAS, on June 13, 2013, the Board of Directors of the DDA adopted Resolution No approving the 2013 Agreement and authorizing its execution by the Chairperson. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Manager is hereby authorized to execute the 2013 Agreement in substantially the form attached as Exhibit B, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, deems necessary or appropriate to protect the interests of the City or to effectuate the purposes of this Resolution. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 16th day of July A.D ATTEST: Mayor City Clerk

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41 RESOLUTION OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE AN INTERGOVERNMENTAL AGREEMENT REGARDING MAINTENANCE OF OLD TOWN PLAZA BETWEEN THE DOWNTOWN DEVELOPMENT AUTHORITY AND THE CITY WHEREAS, the Downtown Development Authority (DDA) is the owner of certain real property located in Fort Collins, Colorado, known as Old Town Plaza, as shown on Exhibit A attached and incorporated herein by reference; and WHEREAS, the City is the owner of certain rights-of-way adjacent to Old Town Plaza including Trimble Court Alley (collectively, the Rights-of-Way ) as shown on Exhibit A; and WHEREAS, Progressive Old Town Square, LLC ( POTS ) is the owner of certain real property located adjacent to Old Town Plaza, as shown on Exhibit A; and WHEREAS, on July 5, 1983, the DDA and Old Town Associates Ltd., POTS s predecessor in title, entered into an agreement (the Implementation Agreement ) for the development of Old Town Plaza and adjacent private property (the Project ) which set forth the duties and responsibilities of each party in connection with the Project; and WHEREAS, on October 29, 1993, the DDA, POTS and the City entered into an agreement which set forth the rights and obligations of each party in connection with the Project and the Rightsof-Way (the 1993 Agreement ), which superseded the Implementation Agreement in its entirety; and WHEREAS, on July 13, 2005, the DDA, POTS and the City executed an agreement that established certain rights and responsibilities of the parties in connection with the use, operation, maintenance and repair of Old Town Plaza while the parties worked on restructuring the 1993 Agreement (the Interim Agreement ) and, on April 21, 2010, executed the Second Interim Agreement for the purpose of ratifying the performance of the parties from and after June 14, 2006 and establishing the rights and responsibilities of the parties through December 31, 2011; and WHEREAS, on March 6, 2012, the parties executed the First Amendment to Second Interim Agreement for the purpose of extending the term of the Second Interim Agreement until December 14, 2014, unless prior to such time the parties had executed an agreement restructuring the 1993 Agreement; and WHEREAS, the DDA contemplates making major renovations to Old Town Plaza in 2015 (the Renovation Project ); and WHEREAS, in contemplation of the Renovation Project, the DDA, the City and POTS wish to enter into an agreement called the 2013 Old Town Plaza Master Agreement, (the 2013 Agreement ), the approval of which the City Council is considering under a separate Resolution; and

42 WHEREAS, the 2013 Agreement would supersede any and all provisions of the 1993 Agreement and amendments thereto, the Second Interim Agreement and the First Amendment to Second Interim Agreement, and would set forth the continuing rights and financial obligations of POTS regarding the maintenance, repair and replacement of the Old Town Plaza infrastructure; and WHEREAS, because the 2013 Agreement only specifies the obligations of POTS regarding Old Town Plaza, the City and the DDA wish to enter into a new Intergovernmental Agreement Regarding Maintenance of Old Town Plaza, a copy of which is attached and incorporated herein as Exhibit B, to memorialize their respective rights and obligations regarding maintenance, repair and replacement of improvements in Old Town Plaza (the IGA ); and WHEREAS, pursuant to Section 1-22 of the City Code, the City Council is being asked to approve the IGA by resolution because the direct monetary payments to be made by the City under the IGA exceed $50,000; and WHEREAS, on June 13, 2013, the Board of Directors of the DDA adopted Resolution No approving the IGA and authorizing its execution by the Chairperson. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Manager is hereby authorized to execute the IGA in substantially the form attached as Exhibit B, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, deems necessary or appropriate to protect the interests of the City or to effectuate the purposes of this Resolution. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 16th day of July A.D ATTEST: Mayor City Clerk

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