Nancy Harris, Mayor Billy Jones, Post 3 Marsha Anderson ... · Nancy Harris, Mayor Marsha Anderson Bomar, Post 1 Marline Thomas, Post 2 AGENDA SPECIAL CALLED MEETING MAYOR AND COUNCIL

PLEASE NOTE: This and other City meetings may be audio and/or videotaped for broadcast, transcription and/or archival purposes. As set forth in the Americans with Disabilities act (ADA) of 1992, the City of Duluth government does not discriminate on the basis of disability in the admission or access to or treatment of employment in its programs or activities, and complies with the requirements contained in section 35.107 of the Department of Justice regulations. All agenda packets may be converted to WCAG 2.0 compatibility format by emailing [email protected]. In addition, any requests for reasonable accommodations required by individuals to fully participate in any open meeting, program, or activity of the City of Duluth government should be made seven days prior to the event. Direct inquiries to the ADA Coordinator in the City Clerk office, located at 3167 Main Street, Duluth, GA. 30096, or by telephone at 770.476.3434.

Nancy Harris, Mayor Marsha Anderson Bomar, Post 1

Marline Thomas, Post 2

AGENDA SPECIAL CALLED MEETING

MAYOR AND COUNCIL CITY OF DULUTH, GA

3167 Main Street Duluth, GA 30096

Billy Jones, Post 3 Kelvin J. Kelkenberg, Post 4

Greg Whitlock, Post 5

SEPTEMBER 28, 2020 CITY HALL – COMMUNITY ROOM 5:30 pm

5:30 P.M. - CALL TO ORDER Mayor Harris or Mayor Pro tem I. NEW BUSINESS

1. CONSIDERATION OF INTERGOVERNMENTAL AGREEMENT – CARES ACT

The Mayor and Council to consider entering into an Intergovernmental Agreement with Gwinnett County for the acceptance of CARES Act funding for expenses incurred relating to COVID-19 from March 1 through December 30, 2020. II. ADJOURNMENT

mailto:[email protected]

PLEASE NOTE: This and other City meetings may be audio and/or videotaped for broadcast, transcription and/or archival purposes. As set forth in the Americans with Disabilities act (ADA) of 1992, the City of Duluth government does not discriminate on the basis of disability in the admission or access to or treatment of employment in its programs or activities, and complies with the requirements contained in section 35.107 of the Department of Justice regulations. All agenda packets may be converted to WCAG 2.0 compatibility format by emailing [email protected]. In addition, any requests for reasonable accommodations required by individuals to fully participate in any open meeting, program, or activity of the City of Duluth government should be made seven days prior to the event. Direct inquiries to the ADA Coordinator in the City Clerk office, located at 3167 Main Street, Duluth, GA. 30096, or by telephone at 770.476.3434.

Nancy Harris, Mayor Marsha Anderson Bomar, Post 1

Marline Thomas, Post 2

WORK SESSION AGENDA MAYOR AND COUNCIL CITY OF DULUTH, GA

3167 Main Street Duluth, GA 30096

Billy Jones, Post 3 Kelvin J. Kelkenberg, Post 4

Greg Whitlock, Post 5

SEPTEMBER 28, 2020 CITY HALL – COMMUNITY ROOM 5:30 pm

The leaders and staff of the City of Duluth are dedicated to ensuring that Duluth is:

an Attractive Destination, a Quality Community, a World Class Government, and promotes a Sustainable Economic Environment.

5:35 - PM CALL TO ORDER (or upon adjournment of special called meeting) I. PUBLIC COMMENTS

Five minutes per person, maximum 6 speakers. Sign-up sheet available. II. DISCUSSION ITEMS

1. ENTERTAINMENT SURVEY – DOWNTOWN Event staff began securing entertainers for Parsons Alley and Festival Center Stage on Friday and Saturday evenings starting in May 2020 to provide ambient music for those venturing out during the pandemic. This was in conjunction with securing outdoor seating and event tents in the same space to bolster socially distanced options for patrons, restaurants, and retailers. Recently, staff solicited comments from downtown merchants using an on-line survey for feedback and suggestions regarding the weekly entertainment offerings. Staff will present results of the survey and discuss potential options for future programming.

IMPACT TO BUDGET: N/A

mailto:[email protected]

M&C Work Session Agenda September 28, 2020

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2. FESTIVAL CENTER LEASE – EVERLEIGH

SUMMARY: Greystar Corporation has requested permission to lease the Fountain View room of Festival Center to house their temporary leasing office for the downtown active adult community Everleigh Duluth. Festival Center has hosted leasing offices in the past for the Woodley Townhome project and for the multi-family complex District at Duluth. Staff proposes hosting the leasing office in the first floor space known as Fountain View to accommodate ADA accessibility. The lease is month- to-month until the permanent leasing office is established at Everleigh Duluth. Please note Festival Center rentals have been suspended until further notice due to COVID-19 concerns. IMPACT TO BUDGET: potential $1,200 per month to revenue

3. W.LAWRENCEVILLE WALL LEASE – BUREL FAMILY BUILDING SUMMARY: The Burel Family building on West Lawrenceville Street was severely damaged by a restaurant fire in October 2019. The fire disrupted Crave Pie, Farm House, and closed Main Street Mediterranean Cafe. Restoration has been completed to include roof, HVAC, wiring, interior and exterior paint. Crave Pie has reopened, Provisions On Main has opened, and Harper Row now fills the restaurant space. The large painted exterior wall on West Lawrenceville Street presents an attractive centrally located opportunity for murals and advertising for groups and businesses. Staff is proposing the City and or DDA enter into a long-term lease for the wall space to explore advertising and mural opportunities that promote Duluth in this high visibility space. IMPACT TO BUDGET: Requires budget amendment

4. AWARD OF BID – TOWN GREEN DECK SUMMARY: At the last work session, council directed staff to move forward with authorizing construction of a deck area adjacent to the fountain on Town Green (see attached graphic that shows the deck layout with potential seating). Accordingly, staff received five (5) bids for the work. The results are as follows: ABC Construction $30,215 Gibson $42,488 Beaubien $38,818 Horizon Remodeling $45,989 Heard Home Improvement $24,500 Staff recommends awarding the bid to Heard Home Improvement. If acceptable staff will place this item on the next council agenda for approval. IMPACT TO BUDGET: budget amend will be required.


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5. PLEASANT HILL RD LANDSCAPING

SUMMARY: Staff presented two options to Council for landscaping along the Pleasant Hill Road Corridor between the River and McClure Bridge/Howell Ferry Road. After review and discussion of both alternatives, Council agreed they would like to see a hybrid design that keeps the budget under $300,000. Staff has an updated hybrid design to share with an associated budget just under $300,000. Staff requests Council approve moving forward with the process of having Gwinnett County DOT review and comment on the updated/hybrid design so that an intergovernmental agreement can then be developed for the implementation and maintenance of the proposed landscaping. The work is anticipated to be done in late 2021, if approved by the City and the County, pending completion of the County's upcoming sidewalk project at the River. IMPACT TO BUDGET: No Impact to Budget until late 2021

6. PEACHTREE INDUSTRIAL BLVD LANDSCAPING

SUMMARY: Staff was asked to develop a concept for landscaping the medians of Peachtree Industrial Blvd from SR 120 to Sugarloaf Parkway in an effort to be consistent with Council's campaign to raise the standards within Duluth. Staff has a concept and cost estimate to share with Council for their consideration. Staff requests feedback and timeline for desired improvements. IMPACT TO BUDGET: TBD

7. COMPREHENSIVE PLAN UPDATE Consistent with O.C.G.A 110-12-1 (Minimum Standards and Procedures for Local Comprehensive Planning), local governments are responsible for maintaining their Comprehensive Plans to accurately reflect current community conditions and the community’s goals and priorities for the future. The City of Duluth has established a goal to update ForwardDULUTH regularly to ensure it meets the needs of the community. Staff will provide a brief presentation of updates being proposed to the Character Areas, Short Term Work Program and Report of Accomplishments. IMPACT TO BUDGET: N/A


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III. PRESENTATIONS/UPDATES

1. FINANCIAL UPDATE/TAD BOND FINANCING Based on Council's request during the budget adoption, the City Manager will provide an update on the City's FY20 financial performance and the FY21 budget performance thus far. It is important to note we are just over two months into the new budget and it is somewhat premature to establish a twelve-month trend from the data. However, staff will provide an early look based on the data available. Staff is working with Gary Mongeon, Bleakly Advisory Group to update the forecast for the future TAD tax increment revenue based on current development in the TAD. Staff intends to use the updated forecast to secure bond financing for the Transportation and Redevelopment bonds. Council will be updated on this progress. In the current year budget, expenditures are being incurred that were not contemplated when the budget was adopted. Mostly expenditures related to COVID-19, including PPE, additional landscaping cost, and contract cleaning of City buildings. One item, not COVID related, is credit card fees. When customers make online payments, they are charge a convenience fee that is revenue to the City. The credit card processor then charges a credit card fee to the City, which is offset by the revenue received. Credit card fees were removed from the budget, anticipating these fees would be paid directly by the customer. Staff will propose a budget amendment for Council consideration on the next council agenda.

2. PUBLIC SAFETY SECURITY FENCING Staff will provide an update to questions asked about possible change orders associated with the visual improvement of the security fencing/gate at the Public Safety Building.

3. PLANNING & DEVELOPMENT UPDATES Planning staff to provide the Mayor and Council with an update of public hearings, development activities and permits. IV. MATTERS FROM COUNCIL V. ADJOURNMENT

The next scheduled meeting of the Mayor and Council is October 12, 2020 at 6:00 p.m.

LEASE AGREEMENT

THIS LEASE AGREEMENT (hereinafter referred to as Lease) is made and entered into this

__________day of October 2020, by and between the CITY OF DULUTH, GEORGIA, a

municipal corporation, Party of the First Part, (hereinafter referred to as Lessor), and John

Roberson, Hill Street NW Apartments Investors, LLC, Parties of the Second Part, (hereinafter

referred to as Lessee).

W I T N E S S E T H

That the said Lessor, for and in consideration of the compensation, covenants, agreements

and stipulations hereinafter mentioned, to be paid, kept and performed by the Lessee, has leased and

rented, and by these presents does lease and rent, unto the said Lessee, and the said Lessee hereby

agrees to lease and take upon the terms and conditions which hereinafter appear, the following

described property (hereinafter called Premises), to wit:

1.

LEASED PREMISES

A portion of that building which lies in Gwinnett County, Georgia, having an address of

3142 Hill Street, Duluth, Georgia 30096. The Lessee shall have access to common restroom

facilities located on the first floor and shall have access to the common stairwell for ingress and

egress. The Lessee shall not have access to any Festival Center facilities other than those

specifically referenced herein. Lessee shall lease space known as Fountain View.

Also leased herewith is the nonexclusive right and privilege to utilize the parking areas which

are paved and located in back of said leased Premises and any other public parking space controlled

by the City of Duluth.

2.

TERM

The Lease term shall commence on the _____ day of October, 2020, and shall continue

on monthly basis unless sooner terminated or extended as hereinafter provided, and may be

renewed by written agreement.

3.

RENTAL

A. BASE RENTAL: Lessee agrees to pay Lessor, promptly on the first day of each

month, in advance, during the term set forth herein, a monthly rental of Twelve

Hundred dollars ($1200.00) payable on the 15th day of each month commencing

on the 15th day of October 2020. Said rental shall be paid at the Office of the

Lessor at the City Hall Business Office. Lease rates are subject to change with a

60 day notice.

_______ John Roberson Date:__________

_______ James Riker Date:__________

4.

USE OF PREMISES

The premises shall be used for the conduct of the business of the Lessee, and shall

primarily be used as an office. Use shall not interfere with the operation of the Festival

Center or its clients. Festival Center uses shall hold a superior position. The Lessee shall

be required to keep the office in a clean and neat condition at all times. Lessee will be

notified of events which necessitate vacating the office. Notice will be given 48 hours before

the need to vacate but will not negate the owners need to vacate the space if notice is less

than 48 hours. Owner shall have access to the space without a notification requirement to

allow for normal maintenance activities.

Lessee agrees that Lessee shall not use its premises in such manner as to interfere with the

quiet enjoyment of other users of other leased space on the premises (premises shall mean the

property Lessor on which the leased premises is situate). Lessee shall cooperate with each of the

other users in the use of parking and other common facilities so as to not unreasonably interfere

with or impair vehicular or pedestrian access to the various buildings located on the tract by other

users, their customers, guests, employees and invitees.

The premises shall not be used for any illegal or deceptive purpose; nor in any manner to

create any nuisance or trespass; nor in any manner to vitiate the insurance on the premises

required to be maintained in effect by the terms of this Lease or which would have the effect of

causing any insurance carried by Lessor to be subject to cancellation or increased in premium

rate or otherwise adversely rated or classified.

5.

UTILIITES

Utilities are covered in the lease rate.

6.

SPECIAL RESTRICTIONS

Lessee further covenants and agrees that Lessee shall not store within the leased premises

any explosive such as dynamite or any highly inflammable liquids or substances which would

exceed a normal one day supply requirements of Lessee. Lessee further covenants and agrees

that Lessee shall not store within the leased premises any dangerous or hazardous chemical,

substance, or material except as permitted by any Federal, State, or Local ordinance or Law and

any Regulations promulgated thereunder and as otherwise permitted by the insurance

underwriters and then such storage shall be in strict compliance with any and all such Federal,

State, or Local Laws, Ordinances and Regulations and in particular, any and all requirements of

Law governing hazardous chemicals and those Laws relating to or being known as a Fire Code

and as required by the insurance underwriters. Lessee further covenants and agrees that Lessee

shall not dispose of any such hazardous chemicals into the sanitary septic tank system serving

leased premises (or into any sanitary sewer system in the event such should become available in

the future during the term or any renewal or extension of this lease). Lessee shall not dispose of

any such hazardous chemicals, materials, or substances in any other manner on the leased

premises.

7.

LESSORS ACCESS

Lessor shall have the right to enter the leased premises at all times and to use the remainder of

the premises. Lessor’s entry rights shall extend to contractors, architects or other personnel who

have need to examine the leased premises and/or surrounding areas. Lessor will use its best

efforts not to interfere with Lessees use of its portion of the premises.

8.

ALTERATIONS AND ADDITIONS

Lessee agrees to accept the leased premises in its condition. Lessee shall not make any

structural alterations, improvements, modifications, or additions within, on, or about the leased

premises without the prior written consent of Lessor. To the extent that Lessor may consent or

agree in writing to any structural or non-structural modifications, alterations, or additions within,

on or about the leased premises, Lessee understands and acknowledges that any such alterations,

modifications, or additions shall be at Lessees sole expense and Lessee shall pay all bills for

labor and material incurred by Lessee in connection therewith and Lessee shall permit no

materialmens or suppliers lien to be levied, claimed, or filed against the leased premises, the real

property upon which such leased premises in situate or any part or portion thereof.

In the event of the filing of any such lien, Lessee shall take such action as may be

required to cause said lien to be removed, cancelled, or satisfied as respects the leased premises

and the real property on which it is situate. Lessee understands and agrees that any and all

structural alterations, modifications, or additions made within, on or about the leased premises

may become permanent fixtures and may not be removable by Lessee on the normal termination

or prior termination of this lease as provided for herein in this Lease Agreement. Lessee must

present leasehold improvement plan to City Manager and Community Development

Department. Improvements may not proceed without express written approval from City

Manager. All improvements remain the property of the owner and may not be removed

except by express written permission of the City Manager.

9.

DESTRUCTION OF OR DAMAGE TO PREMISES

If the premises are totally destroyed by storm, fire, lightning, earthquake, or other

casualty, or so substantially damaged as to be untenantable by reason of such causes, this lease

shall terminate as of the date of such destruction or damage, and rental shall be prorated between

the Lessor and Lessee as of such date. If the premises are damaged but not rendered wholly

untenantable, rental shall abate to such proportion as use of the premises has been destroyed and

Lessor shall have the option to cancel Lease in its entirely or restore the premises to substantially

the same condition as before the damage, as speedily as practicable, or to terminate the lease. In

the event that the Lessee opts to repair the damge, the cost of any and all repairs required in the

event of such damage shall be the sole responsibility of the Lessee.

10.

INSURANCE

Lessor shall not be required to carry any insurance, with respect to the contents of the

premises hereby leased and the sole risk of loss shall be on Lessee of any such contents as may

be placed by Lessee within the premises.

Lessee shall, at its expense, procure and throughout the time that this lease is in force,

maintain the following insurance:

Comprehensive Public Liability Insurance (also known as General Liability

Coverage), on an occurrence basis with minimum limits of liability of not less

than One Million Dollars ($1,000,000.00) for bodily injury, personal injury, death

and medical payments to any one person and Two Million Dollars

($2,000,000.00) for bodily injury, personal injury or death to more than one

person and Five Hundred Thousand Dollars ($500,000.00) for damage to

property.

11.

INDEMNITY

Lessee shall indemnify and save harmless Lessor from and against any and all loss, cost

(including reasonable attorney’s fees), damage, expense and liability (including statutory

liability and liability arising under the Workmen’s Compensation Laws) in connection with any

and all claims for damages as a result of injury or death of any person or property damage to any

property sustained by:

A. Lessee, its partners, customers, invitees, agents, employees, contractors, and

subcontractors, their partners, agents, and employees; and

B. All other persons, including Lessor’s agents and employees, if such injury, death

or property damage arises from or in any manner grows out of any act or neglect

on or about the leased premises by Lessee, Lessee’s partners, agents, employees,

customers, invitees, contractors, and subcontractors, their partners, agents, and

employees, or which arise from or in any manner grow out of any defect in any

undertaking hereunder by Lessee or any failure of Lessee to comply with the

provisions of this lease.

C. In the event that any action or proceeding is brought against Lessor by reason of

any such claim, then Lessee, upon notice from Lessor, shall defend such action or

proceeding at Lessee’s cost, and Lessee shall pay all costs and attorney’s fees

and any judgment or decree and interest thereon which may be entered against

Lessor. The obligations imposed on Lessee by this paragraph accruing prior to

any termination of the initial or any subsequent term of this lease shall survive

such termination.

12.

GOVERNMENTAL ORDERS

Lessee agrees, at its sole expense, to promptly comply with all requirements of any

legally constituted public authority made necessary by reason of Lessee’s occupancy of said

premises. Lessee further agrees that Lessor provides no warranty or assurance that Lessee

complies with applicable laws and regulations of the City of Duluth, State of Georgia, or the

United States of America, and that inability or failure by Lessee to pursue or further its business

purpose or any portion thereof shall not equate to any liability on Lessor’s part for such inability

or such failure.

13.

ASSIGNMENT AND SUBLETTING

Lessee may not sublease all or any portion of the leased premises to others nor shall

Lessee permit the use of the premises by any party other than Lessee. In the event Lessee

attempts any assignment or sublease of all or any portion of leased premises to others, then, and

in that event, Lessor, at is sole option, shall have the right to terminate this lease immediately

upon obtaining knowledge of such purported assignment or sublease unless prior written consent

by Lessor is obtained by Lessee. In the event that Lessor, in the exercise of its sole discretion,

should consent to the substitution of another person, firm or corporation as Lessee hereunder, the

provisions of this paragraph shall remain of full force and effect with regard to any such

assignment, sublease or substitution of any person, firm or corporation as Lessee.

14.

DEFAULTS BY LESSEE/CANCELLATION OF LEASE BY LESSOR

It is mutually agreed that (I) if the Lessee shall default in the payment of rent herein

reserved, when due and fails to cure said default on demand; or (ii) if Lessee shall default in

performing or complying with any of the terms, covenants, conditions and requirements imposed

on Lessee under the provisions of this lease, other than the provision requiring the payment of

rent, and the Lessee fails to cure such default within ten (10) days after the date of receipt of

written notice of default from Lessor; or (iii) if Lessee is adjudicated bankrupt; or (iv) if a

permanent receiver is appointed for Lessee’s property and such receiver is not removed within

sixty (60) days after written notice from Lessor to Lessee to obtain such removal; or (v) if,

whether voluntarily or involuntarily, Lessee takes advantage of any debtor relief proceedings

under any present or future law, whereby the rent or any part thereof is, or is proposed to be,

reduced or payment thereof deferred; or (vi) if Lessee makes an assignment for benefit of

creditors; or (vii) if Lessee’s effects should be levied upon or attached under process against

Lessee, not satisfied or dissolved within thirty (30) days after written notice from Lessor to

Lessee to obtain satisfaction thereof; then, and in any of said events, Lessor, at its option, may at

once terminate this Lease by written notice to Lessee; whereupon this lease shall end. Any notice

provided for in this paragraph may be given by Lessor or his attorney or agent. Upon such

termination by Lessor, Lessee will at once surrender possession of the premises to Lessor and

remove all of Lessee’s effects therefrom; and Lessor may forthwith reenter the premises and

repossess himself thereof, and remove all persons and effects therefrom, using such force as may

be necessary without being guilty of trespass, forcible detainer or other tort.

15.

MORTGAGEE’S RIGHTS

Lessee’s rights shall be subject to any bona fide mortgage or bonded indebtedness or deed

to secure debt which is now, or may hereafter be, placed upon the premises by Lessor. Lessee

agrees to execute any tenant estoppel letter or Attornment Agreement which any present or future

lender may require acknowledging that this lease shall be subject and subordinate to any such

mortgage or loan deed or Deed to Secure Debt.

16.

NO ESTATE IN LAND

This contract shall create the relationship of Lessor and Lessee between the parties

thereto; no estate shall pass out of the Lessor. Lessee has only a usufruct, not subject to levy and

sale, and not assignable by Lessee.

17.

HOLDING OVER

If Lessee remains in possession of premises after expiration of the lease term hereof,

including any renewal or extension thereof, with Lessor’s acquiescence and without any express

agreement of parties, Lessee shall be a tenant at will at rental rate in effect at end of this lease;

and there shall be no renewal of this lease by operation of law.

18.

ATTORNEY’S FEES AND HOMESTEAD

If any rent owing under the terms of this lease is collected by or through an attorney at

law, Lessee agrees to pay fifteen (15%) per cent thereof as attorney’s fees. Lessee waives all

homestead rights and exemptions which he may have under any law as against any obligation

owing under this lease.

19.

RIGHTS CUMULATIVE

All rights, powers and privileges conferred hereunder upon parties hereto shall be

cumulative but not restrictive to those given by law.

20.

WAIVER OF RIGHTS

No failure of Lessor to exercise any power given Lessor hereunder, or to insist upon strict

compliance by Lessee with his obligation hereunder, and no custom or practice of the parties at

variance with the terms hereof shall constitute a waiver of Lessor’s right to demand exact

compliance with the terms hereof.

21.

TIME OF ESSENCE

Time is of the essence of this agreement.

22.

CONDITION OF PREMISES

Lessee shall be responsible for cleaning the premises regularly and shall leave the

premises in the same condition as delivered free and clear of litter and trash.

23.

SIGNS

No sign, billboard, or other advertising may be placed on the leased premises or the

building which is located on the premises, or on the grounds outside the leased premises by

Lessee without Lessor’s prior written approval. Lessor reserves the right to approve the size, and

style set forth on any such sign and Lessor shall have the right to specify and designate wherein

any such sign shall be placed with reference to the leased premises as well as the manner and

method of installation of any such sign.

24.

LATE PENALTY ON RENT

In the event that Lessor does not receive the rents due to be paid by Lessee hereunder on

or before the fifth (5th) day of each month during the lease term hereof, then and in that event, the

Lessee shall be liable to pay a late charge in the amount of five (5%) per cent of such monthly

rental not so paid which late charge of five (5%) per cent shall continue to accrue for each and

every month or part thereof during which such monthly rental is not paid. In the event that

Lessee makes a rental payment which is received by Lessor after the first day of the month,

Lessor shall be privileged to accept such regular lease payment and Lessor shall not be deemed to

have waived Lessor’s right to demand the late charges provided for herein by virtue of the

acceptance of such rent check and Lessor may invoice Lessee for such late charge, which late

charge shall be due and payable by Lessee upon receipt of such invoice from Lessor.

25.

RENEWAL

This Lease shall be automatically renewed for subsequent periods of one month unless

terminated in writing by Lessor or Lessee at least thirty (30) days prior to the date of termination.

26.

ENTIRE AGREEMENT

This Lease contains the entire agreement of the Parties hereto and no representations,

inducements, promises or agreements, oral or otherwise, between the Parties, not embodied

herein, shall be of any force or effect, and no modification of this agreement may be made or

shall be effective unless the same shall be reduced to writing and signed by the Parties hereto.

27.

APPLICABLE LAW

The parties hereto acknowledge and agree that this Lease Agreement shall be governed

and interpreted in accordance with the laws of the State of Georgia.

28.

DEPOSIT

Deposit is not required.

30.

DECLARATION

IN WITNESS WHEREOF, the Parties have executed this Lease under their hands and

seals, the day and year first above written.

PARTY OF THE FIRST PART (LESSOR)

CITY OF DULUTH, GEORGIA

BY: _____________________________________

James Riker, City Administrator

ATTEST:

BY: ____________________________________

Teresa Lynn, City Clerk

PARTIES OF THE SECOND PART (LESSEE)

BY: _____________________________________

John Roberson

Hill Street NW Apartments Investors, LLC

251 Little Falls Drive

Wilmington, Delaware 19808

TITLE:

ATTEST:

BY:

9/24/2020

1

September 28, 2020

CITY OF DULUTH

PLEASANT HILL ROAD CORRIDOR HYBRID CONCEPT

9/24/2020

2

Key Map

Page 1

Page 2

Page 3

Page 4 Page

5

Page 6

Concept 2: Page 1

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3

Concept 2: Page 2

Concept 2: Page 3

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4

Concept 2: Page 4

Concept 2: Page 5

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5

Concept 2: Page 6

Cost Estimate

Council’s Directive :Stay within $250‐300k.Remove plantings shown on north side of the road between PIB and McClure Bridge Rd.Do not plant in front of Northside Hospital property – they will take care of that when they redevelop.

Arborguard gave instruction on which trees are in need of removal/replacement and/or pruning along the Sweetbottomfrontage.

Current Estimate is $298,080 and includes:Capital costTree Replacements10% contingency

9/24/2020

6

PEACHTREE INDUSTRIAL BLVD CORRIDOR MEDIAN LANDSCAPING CONCEPT

INSERT CONCEPT SHEETS

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9/24/2020

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9/24/2020

10


Cost Estimate

Directive to staff:PIB Corridor between SR 120 and Sugarloaf Pkwy.Median plantings only.

Concept Cost Estimate is $475k and includes:Capital cost10% contingency

9/24/2020

11

TAD Increment Forecast Update Downtown Duluth TAD #2

TAD INCREMENT FORECAST

Duluth TAD #2

Prepared for:

September 2020

Prepared by:


▪ TAD Digest Trends

▪ 2020 Tax Digest and existing TAD increment

▪ Updated TAD #2 increment forecast

PRESENTATION CONTENTS

1


STATUS OF TAD #2

• TAD#2 is performing better than projections contained in the 2013 Redevelopment Plan and is on schedule to reach effective build out by 2022 or 2023.

• The TAD gross digest has increased at a near 30% annual rate (compounded) since it was certified at the end of 2013. The TAD’s gross digest exceeds $77.2 million in 2020.

• The Tax Allocation Increment Ratio has reached nearly 83.4%, meaning that 83.4% of applicable property tax collections withinthe District accrue to the City’s TAD Special Fund.

• Based on the status of projects still in development, substantial digest growth can be expected to continue for a minimum of two to three more years.

Increment Growth History

$12,373,200 $12,666,840 $12,475,120 $13,582,960 $14,433,280

$28,412,720

$56,067,040

$77,211,560

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

Base 2014 2015 2016 2017 2018 2019 2020

Gro

ss T

AD

Dig

est

Duluth TAD #2 Digest History: Certification through 2020

2


CURRENT CONDITIONS

3

• This table details the current status of taxable parcels within the TAD, including value changes from 2019 to 2020. As shown, the ongoing construction of for-sale and rental housing accounted for most of the value growth within the TAD over the past year.

• Additional future value growth can be expected to result from:• The build out of 40 remaining

townhome pads and single-family lots that were not fully assessed when the 2020 digest was set,

• The completion of the Marriott Courtyard Hotel, Greystar apartments and 26-unit Stanley Martin TH development that was not yet platted when the 2020 digest was set,

• The potential completion of the 258-unit TRG Duluth II apartment development that has not yet closed,

• Additional commercial infill projects that may be proposed in the future and

• Value appreciation on remaining residential and commercial parcels.

• Observations regarding the current status of taxable development within TAD #2 appear on the following slides.

Property Type Parcels Acres Bld SF 2019 FMV 2020 Total FMV

Commercial Buildings [1] 45 32.36 248,657 $29,267,400 $33,298,200

Apartments [2] 5 13.75 456,740 $86,060,500 $107,062,200

Pre Existing Residential [3] 14 8.05 27,835 $2,396,400 $3,246,200

Completed/Sold Townhomes [4] 60 1.724 124,172 $15,661,000 $23,536,400

Completed/Sold SF Homes [4] 34 4.76 99,987 $1,360,000 $14,286,900

Commercial/Under Construction [5] 4 8.29 - $3,004,600 $6,498,100

SFR Lots and TH Pads [6] 40 1.95 26,686 $1,600,000 $3,865,300

Other Commercial & HOA Land [7] 22 17.444 - $808,580 $1,235,600

TOTALS: 224 88.328 984,077 $140,158,480 $193,028,900

Market Value Change: 2019-20

Property Type Land Val/AC Bld Val/SF Total FMV/SF Amount Percent

Commercial Buildings [1] $264,396 $86.06 $133.91 $4,030,800 13.8%

Apartments [2] $931,700 $224.21 $234.41 $21,001,700 24.4%

Pre Existing Residential [3] $73,821 $79.49 $116.62 $849,800 35.5%

Completed/Sold Townhomes [4] $61,000 $160.07 $189.55 $7,875,400 50.3%

Completed/Sold SF Homes [4] $87,000 $113.30 $142.89 $12,926,900 950.5%

Commercial/Under Construction [5] $1,326,300 NA NA $3,493,500 116.3%

SFR Lots and TH Pads [6] $49,505 $70.64 $144.84 $2,265,300 141.6%

Other Commercial & HOA Land [7] $56,118 NA NA $427,020 52.8%TOTALS: $146,106 $162.89 $196.15 $52,870,420 37.7%

Notes: [1] Includes reta i l , office and other ful ly developed commercia l properties .

[2] Includes exis ting and completed new apartment projects .

[3] Includes res identia l properties that exis ted prior to the TAD's formation.

[4] Includes ful ly assessed new s ingle fami ly homes and townhomes that have been completed and sold.

[5] Includes the Courtyard Marriott, Greystar and Stanley Martin TH s i tes that are permitted and under construction.

[6] Includes remaining res identia l lots and TH pads that have not been sold or are s ti l l under construction.

[7] Includes vacant commercia l land, tie back lots , accessory improvements and HOA Land.

Source: Gwinnett County Property Tax Assessment Records.

2020 Characteristics of Taxable Property

Downtown Duluth TAD # 2


CURRENT CONDITIONS

4

• Since certification, the number of taxable parcels within TAD #2 has increased from 89 to 224 and the total taxable value of all real estate has increased from less than $31 million to more than $193 million.

• Over the past 7 years, the TAD’s tax digest has increased by more than 516%, growing from roughly $142,000 to $874,000 per acre. The main sources of past value growth are summarized as follows:

• The assessed full market value (FMV) of 94 completed and sold single-family and townhome units at Hill & Main now exceeds $37.8 million. Sold home values currently average nearly $402,400 per unit, distributed as follows:• 60 completed and sold townhomes average 2,070 SF and

$392,275 each ($189.55 per finished SF)

• 34 completed and sold single-family homes averaging 2,940 SF and $420,200 each ($142.90 finished SF)

• Another 40 remaining townhome pads, house lots and units under construction are valued at $3.86 million or $96,600 per parcel. At minimum, this average will triple when those remaining units are completed and sold.

• The District at Duluth has now been fully assessed at a value of nearly $101.6 million. This FMV is more than $183 per gross SF and $290/SF of “rentable” apartment and retail space - substantially above initial projections. If similar unit values are applied to other planned apartment developments, the TAD’s future value at build out will be well above earlier forecast estimates.

• Greystar’s apartment project under construction at 3221 Hill Street was partially reassessed (land only) at just under $4.99 million in 2020, up from $2.4 million in 2019.

• The Courtyard Marriott under construction in conjunction with the City’s new downtown parking deck was partially assessed at $1.83 million. The site had taxable market value of only $94,400 in 2019.

• The portion of the City assembly that makes up Parsons Alley and Dreamland BBQ that is within the TAD is currently assessed at a full value of more than $7.5 million and $252/SF. With the recent sale of the project to multiple buyers, its full value increased by nearly $1.99 million (36%) over 2019.

• Another 19 parcels that were already developed when the TAD was formed, were reassessed to a higher value in 2020. The full value of these parcels increased from roughly $7.3 million to $10.1 million, resulting in a combined $2.83 million (39%) value increase in a single year. Roughly 35% of the TAD’s 55 taxable parcels that have not significantly changed since 2013, increased in value in 2020.

Sources of Recent Value Growth

2013 2020

Indicator Base Actual Amount Percent

Taxable Parcels 89 224 135 151.7%

Taxable Acres 87.2 88.328 1.128 1.3%

Taxable Full Market Value $30,933,000 $193,028,900 $162,095,900 524.0%

Tax Digest @ 40% $12,373,200 $77,211,560 $64,838,360 524.0%Average FMV/Parcel $347,562 $861,736 $514,174 147.9%

Average FMV/Acre $354,736 $2,185,365 $1,830,629 516.1%

Average Tax Digest/Acre $141,894 $874,146 $732,251 516.1%Source: Gwinnett County Property Tax Assessment Records & Bleakly Advisory Group, Inc.

Summary Change: 2013-2020

Downtown Duluth TAD # 2Change: 2013-2020


NEAR-TERM FUTURE CONDITIONS

5

• The potential for additional value growth within TAD #2 include the following developments:

• As noted, 37 partially assessed TH pads and 3 lots within the Hill & Main development were either still unsold or under construction when assessed in 2020. These parcels are currently assessed at a FMV of $3.87 million ($96,600 per unit). If completed units are sold at a conservative average of $395,000 each, the remaining unsold inventory could reach a total FMV of $15.8 million when completed and fully assessed.

• Stanley Martin owns 2 parcels that were assessed at a combined $510,200 in 2020 and have been permitted for 26 townhomes. Land values for the townhome pads should be reassessed to $55,000 per unit and $1.43 million in total in 2021. If sold out at an average price of $390,000, similar totownhomes already sold in the area, these parcels could expect to reach a full value of $10.14 million when completed and fully assessed in 2 to 3 years.

• Greystar’s apartment project at 3221 Hill Street was partially reassessed at just under $4.99 million in 2020. This assessment reflects the site’s land value (only) and averages $23,900 per permitted unit. If when completed the building improvements are valued at 85% of The District at Duluth, the Project’s taxable market value could reach $45.7 million and nearly $254,000 per unit based on 180 units and an estimated 182,800 SF of rentable area.

• The parking deck portion of the Courtyard Marriott under construction is assessed at $1.83 million in 2020. BAG had previously estimated the hotel’s full real estate value at $8.3 million when completed. We will retain that estimate until more information becomes available.

• The 4 parcels that make up the Residential Group’s planned 258-unit “Phase II” off Davenport Rd. were assessed at a combined taxable full value of $2,792,900 in 2020 (one parcel is tax exempt). Applying a marginally lower valuation than Greystar to TRG’s Phase II project would yield a total FMV of nearly $55.6 million and $215,000 per unit at completion.

• The combined 2020 taxable full value associated with these 5 projects totals nearly $13.5 million. Based on the above analysis, the remaining potential incremental increase when completed could add another $122.0 million in full market value – resulting in a potential additional 63% increase in the TAD’s Digest over the next 2 to 3 years. The updated estimate of the TAD Digest at build out is summarized in the following table:

• This revised TAD Digest estimate at build-out is $18.2 million (17.5%) higher than BAG’s previous estimate of $103.8 million prepared in August of 2019. The revised forecast is “driven” by much higher than expected 2020 County tax assessments on new projects as noted above, plus the resulting positive impact of these investments on surrounding commercial property values in the TAD.

Potential for Future Value Growth

2020 Duluth TAD #2 Digest $77,211,560

Additional Potential Digest Associated

with Projects in Development $48,819,648

Estimated TAD Digest by 2023-24 $126,031,208

2013 TAD Certified Base Digest $12,373,200

Percent Increase 919%


COUNTY HOMESTEAD EXEMPTIONS

6

• Owner occupants within the TAD are eligible to apply for County homestead exemptions, which are credited against the County’s annual TAD contribution.

• BAG estimates that 44 single-family and townhome units within TAD #2 appeared to be owner occupied (parcel location and taxpayer billing address were identical) in 2019. Of those, 21 (48%) received County homestead exemptions ranging from $9,750 to more than $62,400. The average of 21 granted exemptions was $23,300 per homeowner.

• It is uncertain why 52% of owners in TAD #2 did not receive exemptions in 2019. It is possible that the owners did not purchase their homes soon enough to apply or qualify. It can be assumed that many of those owners will receive County exemptions in 2020.

• Homestead exemptions granted in 2019 totaled $489,400 and reduced the County’s gross TAD payment by $4,329. After the City’s remittance of the County PILOT payment for recreation, the net deduction in County TAD payments totaled $3,864 or an average of $185 per homeowner.

• BAG estimates that as many as 101 owner occupied units may be eligible to receive County homestead exemptions in 2020. Eventually, as many as 173 units could eventually quality for homestead exemptions within TAD #2 by the time all units are fully assessed.

• If it is assumed that 95% of sold homes will be owner-occupied and eventually receive County exemptions averaging $23,000 per unit, the impact on the County’s TAD digest could reach $3.5 to $4.0 million and reduce total County tax collections within the TAD by a range of $40,000 to $45,000 per year. The impact of that reduction on TAD payments to the City would depend on tax increment ratios and County millage rates in future years. The following revenue forecast accounts for a reduction in future County proceeds due to homestead exemptions

Tax Digest County 2019 Net

Parcel ID Address Class Code 2019 FMV 40% Exemption Tax Digest

R6293 026 3047 Hill Street Single Family $259,800 $103,920 $61,269 $42,651

R6293 410 3230 Ridge Town Place Townhome $416,600 $166,640 $9,749 $156,891







R6293 427 3605 Ridgeway Rd. Townhome $406,300 $162,520 $9,749 $152,771

R6293 429 3601 Ridgeway Rd. Townhome $415,600 $166,240 $9,749 $156,491

R6293 433 3177 HILL ST Townhome $402,800 $161,120 $28,908 $132,212






R6293 024 3586 West Lawrenceville St Single Family $157,900 $63,160 $9,749 $53,411

R6293 022 3597 West Lawrenceville St Single Family $235,900 $94,360 $62,430 $31,930

R6294 021 3585 Abbotts Bridge Rd Single Family $243,800 $97,520 $9,869 $87,651

R6293 182 3041 Hill Street Single Family $217,500 $87,000 $58,149 $28,851

R6293 337 3481 Jones St Single Family $82,800 $33,120 $14,949 $18,171

TOTALS 21 $7,326,400 $2,930,560 $489,372 $2,441,188

Average $348,876 $139,550 $23,303 $116,247

2019 Impact of County Homestead Exemptions on

Downtown Duluth TAD # 2

TAD Increment Forecast Update Downtown Duluth TAD #2 7

• Based on the above inputs, BAG prepared a forecast of annual TAD revenues from 2020 through the scheduled TAD termination date at the end of 2043. The forecast includes an allowance for future value growth after completion of ongoing projects. We have also deducted an allowance for County homestead exemptions granted to owner-occupied single-family residences and townhomes. The forecast assumes that City and County millage rates will remain unchanged over the term of the forecast.

TAD FORECAST

Duluth TAD #2 Revenue Forecast

2020 to End Date

Forecast Year 0 1 2 3 4 5 6 7 8 9 10

TAD Year 7 8 9 10 11 12 13 14 15 16 17

Calendar Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

2013 TAD Certified Base Digest $12,373,200 40%

2020 Build Out Build Out

Ongoing Approved Projects FMV FMV Digest

Stanley Martin (26 Townhomes) $510,200 $10,140,000 $4,056,000 $204,080 $1,419,600 $2,230,800 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000

TRG Duluth II $2,972,900 $55,594,420 $22,237,768 $1,189,160 $5,559,442 $16,678,326 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768

Marriott Courtyard $1,830,600 $8,300,000 $3,320,000 $732,240 $2,490,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000

Balance of South on Main $3,865,300 $15,790,000 $6,316,000 $1,546,120 $6,000,200 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000

Greystar $4,298,800 $45,702,500 $18,281,000 $1,719,520 $11,882,650 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000

Subtotal: Ongoing/Approved Projects $13,477,800 $135,526,920 $54,210,768 $5,391,120 $27,351,892 $46,826,126 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768

Balance of TAD $179,551,100 $179,551,100 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440

City TAD Digest Forecast $193,028,900 $315,078,020 $126,031,208 $77,211,560 $99,172,332 $118,646,566 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208

Plus Future Value Appreciation @ 1.5% per annum $0 $1,487,585 $3,267,283 $5,157,752 $7,048,220 $8,938,688 $10,829,156 $12,719,624 $14,610,092 $16,500,560 $18,391,028

Total City TAD Digest Forecast>>> $77,211,560 $100,659,917 $121,913,849 $131,188,960 $133,079,428 $134,969,896 $136,860,364 $138,750,832 $140,641,300 $142,531,768 $144,422,236

County TAD Digest

Less Homestead Exemptions (Digest) -$489,372 -$3,821,765 -$489,372 -$1,528,706 -$2,866,323 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765

Appreciated Value of Exemptions @ 3.0% per annum $0 -$45,861 -$131,851 -$246,504 -$361,157 -$475,810 -$590,463 -$705,116 -$819,769 -$934,421 -$1,049,074

Total Net County TAD Digest Forecast $76,722,188 $99,085,350 $118,915,675 $127,120,691 $128,896,506 $130,672,321 $132,448,137 $134,223,952 $135,999,767 $137,775,582 $139,551,397

Total Annual Property Tax Collections

City @ 0.00655 $505,813 $659,423 $798,658 $859,419 $871,803 $884,188 $896,572 $908,957 $921,341 $933,726 $946,110

County @ 0.01136 $871,487 $1,125,510 $1,350,763 $1,443,964 $1,464,135 $1,484,307 $1,504,478 $1,524,650 $1,544,821 $1,564,993 $1,585,164

Total Annual Tax Collections within TAD #2 $1,377,300 $1,784,934 $2,149,421 $2,303,383 $2,335,939 $2,368,495 $2,401,051 $2,433,607 $2,466,163 $2,498,718 $2,531,274

Tax Allocation Increment Ratio: 83.97% 87.71% 89.85% 90.57% 90.70% 90.83% 90.96% 91.08% 91.20% 91.32% 91.43%

Total TAD Special Fund Proceeds (Gross) $1,156,587 $1,565,528 $1,931,273 $2,086,137 $2,118,752 $2,151,366 $2,183,978 $2,216,588 $2,249,197 $2,281,804 $2,314,411

Less County Recreation PILOT (0.00095) -$72,886 -$94,131 -$112,970 -$120,765 -$122,452 -$124,139 -$125,826 -$127,513 -$129,200 -$130,887 -$132,574

Net TAD Special Fund Revenue $1,083,701 $1,471,397 $1,818,303 $1,965,373 $1,996,301 $2,027,227 $2,058,152 $2,089,075 $2,119,997 $2,150,918 $2,181,837

Annual Percent Change: TAD Revenue 35.8% 23.6% 8.1% 1.6% 1.5% 1.5% 1.5% 1.5% 1.5% 1.4%

Source: City of Duluth, Gwinnett County Property Tax Assessment Records and Bleakly Advisory Group, Inc.


ANNUAL TAD #2 INCREMENT FORECAST

8

Duluth TAD #2 Revenue Forecast

2020 to End Date

Forecast Year 11 12 13 14 15 16 17 18 19 20 21 22 23

TAD Year 18 19 20 21 22 23 24 25 26 27 28 29 30

Calendar Year 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043

2013 TAD Certified Base Digest

Ongoing Approved Projects

Stanley Martin (26 Townhomes) $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000 $4,056,000

TRG Duluth II $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768 $22,237,768

Marriott Courtyard $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000 $3,320,000

Balance of South on Main $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000 $6,316,000

Greystar $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000 $18,281,000

Subtotal: Ongoing/Approved Projects $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768 $54,210,768

Balance of TAD $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440 $71,820,440

City TAD Digest Forecast $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208 $126,031,208

Plus Future Value Appreciation @ $20,281,497 $22,171,965 $24,062,433 $25,952,901 $27,843,369 $29,733,837 $31,624,305 $33,514,773 $35,405,242 $37,295,710 $39,186,178 $41,076,646 $42,967,114

$146,312,705 $148,203,173 $150,093,641 $151,984,109 $153,874,577 $155,765,045 $157,655,513 $159,545,981 $161,436,450 $163,326,918 $165,217,386 $167,107,854 $168,998,322

County TAD Digest

Less Homestead Exemptions (Digest) -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765 -$3,821,765

Appreciated Value of Exemptions @ -$1,163,727 -$1,278,380 -$1,393,033 -$1,507,686 -$1,622,339 -$1,736,992 -$1,851,645 -$1,966,298 -$2,080,951 -$2,195,604 -$2,310,257 -$2,424,910 -$2,539,563

$141,327,213 $143,103,028 $144,878,843 $146,654,658 $148,430,473 $150,206,288 $151,982,104 $153,757,919 $155,533,734 $157,309,549 $159,085,364 $160,861,180 $162,636,995

Total Annual Property Tax Collections

City @ $958,495 $970,879 $983,263 $995,648 $1,008,032 $1,020,417 $1,032,801 $1,045,186 $1,057,570 $1,069,955 $1,082,339 $1,094,724 $1,107,108

County @ $1,605,336 $1,625,507 $1,645,679 $1,665,850 $1,686,022 $1,706,193 $1,726,365 $1,746,536 $1,766,708 $1,786,879 $1,807,051 $1,827,222 $1,847,394

Total Annual Tax Collections within TAD #2 $2,563,830 $2,596,386 $2,628,942 $2,661,498 $2,694,054 $2,726,610 $2,759,166 $2,791,722 $2,824,278 $2,856,834 $2,889,390 $2,921,946 $2,954,502

Tax Allocation Increment Ratio: 91.54% 91.65% 91.76% 91.86% 91.96% 92.06% 92.15% 92.24% 92.34% 92.42% 92.51% 92.60% 92.68%

Total TAD Special Fund Proceeds (Gross) $2,347,015 $2,379,619 $2,412,221 $2,444,823 $2,477,423 $2,510,022 $2,542,620 $2,575,217 $2,607,813 $2,640,408 $2,673,002 $2,705,595 $2,738,188

Less County Recreation PILOT -$134,261 -$135,948 -$137,635 -$139,322 -$141,009 -$142,696 -$144,383 -$146,070 -$147,757 -$149,444 -$151,131 -$152,818 -$154,505

Net TAD Special Fund Revenue $2,212,755 $2,243,671 $2,274,586 $2,305,501 $2,336,414 $2,367,326 $2,398,237 $2,429,147 $2,460,056 $2,490,964 $2,521,871 $2,552,777 $2,583,683

Annual Percent Change: TAD Revenue 1.4% 1.4% 1.4% 1.4% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.2% 1.2% 1.2%


• BAG estimates that annual TAD proceeds should approach $2.0 million by 2023-24, with a modest allowance for annual appreciation thereafter to accommodate additional infill projects and general background growth. TAD fund revenues from year 11 through the end of the forecast range from $2.2 to $2.5 million per year.

• This is a gross revenue forecast and does NOT deduct current pay-go obligations under existing development agreements. The forecast is also heavily influenced by the projected end values of two apartment projects which may or may not be assessed comparably to The District at Duluth. To remain conservative, initial consideration of bonding scenarios should probably be based on +/- 85% of forecast revenues until the completion value of the apartment and hotel projects are known.


CONCLUSIONS

9

• Cumulative TAD proceeds from the previous table are summarized below over varying time periods on a nominal and discounted (net present value) basis. The discounted TAD proceeds are intended to illustrate how much up-front capital could be leveraged under varying interest rates and terms. The higher discount rates illustrate scenarios that would insulate the City from the possibility that digest growth and TAD increment may not meet forecast expectations. The lower discount rates would more closely simulate the City’s maximum capacity to leverage TAD proceeds given currently available interest rates and other financing terms.

• As noted, these estimates do not deduct the City’s current pay-go obligations, which would need to be either deducted from total TAD proceeds available for debt service or folded into and retired as part of a future bond issue(s).

• Assuming a 15-year or maximum 20-year term, this table suggests that total bond issues in the range of $17.5 to $27.6 million would be realistic. As one example, applying a blended interest rate of 3.25% to simulate a mix of taxable and tax-exempt issues, borrowing $21 million over 20 years would result in an annual debt service obligation of roughly $1.6 million or 80% of forecasted TAD revenues in 2024, when all ongoing projects should be completed and fully assessed.

Aggregate Forecast NPV Rate 10 Years 15 Years 20 Years 23 Years

Aggregate TAD Proceeds $18,780,444 $29,998,793 $41,989,972 $52,139,267

NPV of Net TAD Proceeds Discounted @ 4.0% $14,974,902 $21,715,432 $27,637,734 $31,838,649

5.0% $14,194,939 $20,150,431 $25,138,607 $28,527,049

6.0% $13,471,591 $18,740,604 $22,949,594 $25,688,581

7.0% $12,799,922 $17,467,773 $21,025,588 $23,244,273


Cumulative TAD Proceeds Collected Over

Aggregated Forecast Summary of Nominal and Discounted

Duluth TAD #2 Proceeds: 2020 to 2043

Documents

Nancy Harris, Mayor Billy Jones, Post 3 Marsha Anderson ... · Nancy Harris, Mayor Marsha Anderson Bomar, Post 1 Marline Thomas, Post 2 AGENDA SPECIAL CALLED MEETING MAYOR AND COUNCIL