HomeMy WebLinkAbout102714MINUTES OF THE CITY COUNCIL SPECIAL JOINT WORKSHOP MEETING WITH
FORT WORDEN PUBLIC DEVELOPMENT AUTHORITY BOARD OF OCTOBER 27,
2014
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Councilmembers present at roll call were Pamela Adams, Kris Nelson, David King,
Robert Gray, Catharine Robinson, Michelle Sandoval, and Deborah Stinson.
Staff members present were City Manager David Timmons, City Attorney Steve Gross,
Community Services Director Rick Sepler, Public Works Director Ken Clow, and
Finance Director Nora Mitchell .
Fort Worden Public Development Authority Board Members present were Bill Brown,
Bill James, Anne Murphy, and Scott Wilson. Executive Director Dave Robison was also
present.
Councilmember Nelson arrived at 6:44 p.m.
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VISCUSSION OF POSSIBLE FUNDING SOLUTIONS FOR FOR7111ORDE11
BUILDING 202
City Manager David Timmons introduced a funding structure and partnership for
assisting the Fort Worden Public Development Authority on renovating Building 202.
The plan would involve getting agency commitments to an agreement to concur with the
tax credit structure and then securing a private investor to assist in buying the tax
credits. He then reviewed a Memorandum of Agreement between Peninsula College,
Fort Worden Life Long Learning Center PDA and City of Port Townsend. The
agreement would be brought back before the individual entities for approval.
Executive Director Dave Robison gave background on the goal of the PDA which was to
serve as a conduit for the renovation of Building 202. He reviewed funding received
from the State ($4.3 million), City ($500,000), Peninsula College received a Department
of Commerce loan ($700,000), and some private fundraising totaling $5.6 million.
Toward the $6.1 million construction cost estimate, the selling of $1.2 Million in tax
credits to individual investor would help the PDA reach is fundraising goal. He
explained the PDA's agreement with Artifacts Consulting who is assisting with the
historic tax credit application. The PDA has been approved for Parts 1 and 2. Part 3
would involve identifying a willing tax investor. He explained a transaction process
involving the creation of an LLC. The memorandum outlines a tax credit legal structure
and the proposed roles for each organization. In the tax credit structure, neither the Cit
nor the PDA has a role and Peninsula College would retain control over project
management for the building. Mr. Timmons then explained a similar scenario he saw
work in Vermont. Assuming the parties are in agreement, Peninsula College would ne
to act quickly to re -bid the construction. Another concern is that the State appropriated
funds could be re -appropriated for another purpose when legislators come back into I
Staff then responded to questions regarding differentiating between new market tax
credits and historic tax credits. Mr. Robison noted that new market credits are only listed
for comparison. Councilmembers also asked if payments made by the PDA for Artifacts
work, etc. would be paid. If parties agree to go forward with Phase 11, and assuming we
are successful, those historic tax credit funds could be reimbursed through the
proceeds. There was discussion about the timeline for a response to concerns of
Peninsula College from the Office of Financial Management.
Mr. Timmons talked about the need to receive a commitment from all parties to support
the project and the risks in waiting for all of the answers. The focus of the agencies
should be to find a path to ensure the process moves forward. Mr. Timmons then
outlined proposed actions and decisions broken into Phases. There is a need to go out
to bid quickly to firm up the construction costs. There would also be a need for a long-
term lease with State Parks to create an equity ownership interest. Mr. Timmons noted
the agreement would next go to the college president.
During discussion, there was concern about the timeline, construction costs
exceeding available funding, and some questions about needed changes to the MOU
(to include Peninsula College in all paragraphs and include more information about the
fundraising campaign). It was noted that there may be a request to the City to guarantee
the debt based on specified terms.
Julie McCulloch, a Peninsula College board member (but not speaking for the board),
said she believes the Board remains committed to Building 202 and they are anxious to
get a response from OFM.
There being no further business, the meeting was adjourned at 7:58 p.m.
Attest:
Joanna Sanders, CMC
City Clerk