1. D OWNTOWN D EVELOPMENT I NCENTIVES P OLICY A N I NITIATIVE OF P ROJECT D OWNTOWN City Council Presentation May 17, 2011

2. P ROJECT D OWNTOWN – THE MASTER PLAN Charts a 20-year vision for Downtown Wichita Principles: culture, economic growth, community, sustainability and design

3. B USINESS P LAN FOR D OWNTOWN “A prudent public-investment policy designed to unlock private investment” Target investments to support market-driven development Maximize existing public investment “Build it as they come” Make public investments that bring lasting public benefits Target investments to enable people to benefit and invest further Bring clarity and predictability to applying for and administering public incentives

4. P OLICY D EVELOPMENT P ROCESS City-WDDC task team Best practices research other jurisdictions Review/guidance from Sarah Woodworth Coordination with WDDC Board of Directors and local lenders Developer Stakeholder Policy Review/Discussion

5. D EVELOPER C OMMENTS I NCORPORATED INTO THE P OLICY General comments/themes/key points: ROI is difficult to measure due to multiple variables (recommend flexible but market-based ROI calculation) Public Benefit and Project Sections should be weighted heavier than Developer Qualifications (agreed) Confidentiality of Financial Information is concern (recommend 3 rd party services) Basis for application fee needs to be developed; 3 rd party analysis included in the fee (fee based on actual costs) Proportion of developer equity/investment is a concern (recommend basing on proportion of complete phased project)

6. C RITERIA FOR P UBLIC /P RIVATE D EVELOPMENT I NCENTIVES Downtown Plan’s General Guidelines Developer: Past performance Appropriate expertise Capitalization Project: Appropriate uses per location Design supporting walkability, downtown character – transparent facades, historic compatibility Priority community benefits as defined by the particular district - river access, public parking, park enhancements

7. T HE P OLICY

8. P ROJECTS U SING THE F OLLOWING I NCENTIVES ARE S UBJECT TO THIS P OLICY : Tax Increment Financing (TIF) Capital Improvement Projects (CIP) Hotel Guest Tax Forgivable Loans STAR Bonds Land Cash Others to be determined by the City Council

9. O THER I NCENTIVE P ROGRAMS A VAILABLE FOR D OWNTOWN P ROJECTS B UT N OT S UBJECT TO THIS P OLICY : Industrial Revenue Bonds Tax Abatement EDX Abatement Façade Improvement Program Special Assessment Financing for Asbestos/Lead Paint Management Community Improvement District NRA Tax Rebate Historic Preservation Programs Housing Tax Credits First time Homebuyers Program Others to be determined by the City Council

10. P OLICY D EVELOPMENT G OALS Create objective, predictable evaluation criteria Use weighted scoring evaluation methodology Identify minimum threshold criteria to maximize staff time by only evaluating/scoring viable projects Benefits of methodology: Predictable and fair: everyone knows the rules Reduces subjectivity but will allow flexibility and reasonableness

11. P RELIMINARY R EVIEW P ROCESS Downtown Design Resource Center (DDRC) Initial meeting with developer to review project and develop streamlined approach to project assistance Assist with the preparation of requests for Downtown Development Incentives Review project design for consistency with Project Downtown design guidelines

12. D ESIGN G UIDELINES Project Downtown General Design Guidelines Project Downtown Project Development Criteria Requirements for all projects receiving incentives: Zoning Subdivision Building Code Other City Codes

13. P UBLIC I NVESTMENT IN P UBLIC A SSETS Lasting public benefit Facilitates additional private investment Types of public assets: Parking Streetscaping Parks Other public facilities with public benefit beyond the individual project

14. “G AP ” F INANCING R EQUIREMENT Demonstrate that a project is not possible without the requested development incentive Reasonable market rate of return Net operating income divided by development cost equals rate of return Rate of return compared to overall capitalization rate for the proposed use

15. D EVELOPMENT A GREEMENT Project design Sources and uses of funds Disbursement of funds Responsibilities and milestones Assignable with City consent

16. A NNUAL R EPORTING Submitted by developer Accounting of sources and uses of funds Progress report on activities Can be audited at City expense

17. T HE P ROCESS

18. C OMPONENTS OF E VALUATION C RITERIA (100 POINTS ) Minimum Submittal Criteria for Developer (threshold) Minimum Submittal Criteria for Project (threshold) Public Benefit/Compatibility with Downtown Plan (40) Project Characteristics (35) Experience/Qualifications of Developer (25)

19. P ROPOSAL R EQUIREMENTS Pre-Proposal Meeting – Downtown Design Resource Center Project Summary Description of Project: Purpose/Threshold Attainment Development Team Design Plan Site Plan/Perspective Drawings Business Plan Market analysis Pro Forma/Sources of Capital Amount and Purpose of Public Investment Repayment Plan/Shortfall Guarantee Developer Background Financial Statements Legal Structure of the Business Experience of Development Team Banking/Financial Qualifications and References Applicant Disclosure Questionnaire Application Fee

20. A PPLICATION F EE $8,500 due at time of formal submittal DDRC will provide assistance in preparing application prior to submittal Based on City’s direct and administrative costs Center for Economic Development and Business Research fee Third party financial analysis fee

21. T HIRD P ARTY F INANCIAL A NALYSIS Developers financial statements remain confidential City will be provided a summary report Cost will vary depending upon complexity Fee schedule will be determined by RFP

22. E VALUATION P ROCESS Review team comprised of City, WDDC, and private sector representatives appointed by the City Manager Review team trained in use of scoring matrix Team convened as needed to evaluate viable projects that have participated in preliminary development conference with DDRC Project/developer meet minimum score (70%) for each category Overall score used to negotiate the terms of the development agreement

23. R ECOMMENDED A CTION : A PPROVE THE D OWNTOWN D EVELOPMENT I NCENTIVES P OLICY