Title
Parking and Transportation Funding Options for Innovation Square (B)
This item involves a request for the City Commission to hear a presentation on Innovation Square parking and transportation funding options.
Explanation
In response to a request from the University of Florida Development Corporation, City staff began researching possible options for the City to construct and operate parking and transportation facilities and services to facilitate the development of Innovation Square. Staff met with Innovation Square stakeholders including the University of Florida Development Corporation and prospective Innovation Square developers to discuss needs and options. Staff also sought guidance from an experienced consulting firm, Government Services Group (GSG).
These efforts resulted in the identification of a special assessment for parking and transportation facilities and services as a possible option that would allow the City to assess benefitting Innovation Square property owners for capital and operating costs associated with new parking and transportation facilities and services. It is anticipated that the special assessment would be an optional tool that could be used if requested by property owners and approved by the City.
There are many key issues that must be addressed. The first is identifying whether there is a public need for parking and transportation facilities. This is the threshold question in order for the City to lawfully issue bonds and have the bond issue validated. Any improvements funded by a bond issue must be City-owned and operated (although the City could contract for management services) and open to the public.
The CRA has partnered with the University of Florida Development Corporation to fund an Innovation Square Parking Analysis & Strategy that is well underway and focusing on: 1) the parking spaces needed; 2) where the parking spaces should be located; and 3) how the parking spaces should be phased with the development of Innovation Square. The Study is also looking at maximizing the use of available parking inventory in the area and will consider the availability and opportunities for other modes of transportation such as transit, bicycles and pedestrians. The CRA is scheduled to hear an update on the Innovation Square Parking Analysis & Strategy at the September 16, 2013 CRA meeting.
The second key issue is determining where parking facilities will be constructed. It is anticipated the City would acquire the land (either fee title or a 99-year lease). Any land acquisition or lease costs would be passed through to those assessed.
The third key issue is determining the geographic extent of "special benefit" for specific parking and transportation projects. Separate studies would be necessary to identify the areas that are "specially benefitted" by the specific project and those benefitted properties would be assessed the project costs. Based on the meetings between City staff and the stakeholders, the current thinking is that the boundaries of where a special assessment for parking and transportation services could be established should be limited to the Innovation Square District. Another issue that must be addressed is the apportionment of benefit between vacant and improved parcels.
A fourth key issue is addressing the City's ability to collect all funds from benefiting property owners. The ownership of parcels within the special benefit area must be analyzed because property owned by the state is not assessable absent state legislative authority allowing such assessment. Much of the land within the Innovation Square District appears to be owned by the state or state related entities. At this point, City staff is not certain how these non-assessable parcels could be required to contribute. An agreement for payment-in-lieu of assessment may be an option, however, it does not provide the same level of certainty for a long-term funding commitment that a special assessment does since such an agreement would likely be subject to annual covenants to budget and appropriate. Perhaps the state could dedicate or pledge a funding source, such as rents or sales proceeds from development on the property. However, such funds would only be available once the property is developed. In addition, City staff is uncertain how the benefit (and associated cost) would be apportioned between assessed parcels and agreement parcels. If feasible, a more straight-forward approach may be for the non-assessable property owners to seek special legislative authorization for the parcels to be assessable.
Assuming the City is able to work out an apportionment methodology for a special assessment and obtain either legislative authorization to assess traditionally non-assessable parcels (or alternatively obtain multi-year legally binding agreements for payments in-lieu of assessments); the City should then validate the bonds that it seeks to issue to fund the infrastructure. To do so, the City files a bond validation action in local circuit court seeking an order to show cause why the bonds should not be issued. The Court will consider the validity of the bonds, the validity of the pledged revenues, the proceedings authorizing the bonds and any remedies provided for bond collection. The Circuit Court ruling can then be appealed to the Florida Supreme Court.
City staff is seeking direction as to whether the City Commission wants to pursue a Special Assessment for Parking and Transportation services for Innovation Square. If the City Commission wants to pursue a special assessment for parking and transportation services, City staff will need to work with stakeholders to investigate and report on the need for and feasibility of a special assessment for Innovation Square. City staff will contact all property owners within Innovation Square to determine their interest in funding parking services through a special assessment or other means. If there is significant interest, the City must determine which properties are assessable. Property owners may be asked to provide a legally binding method of collecting the special assessment. As mentioned above, this may require legislative waiver or separate agreements in the case of property owned by the State or State related entities. City staff will assess the level of interest among property owners and the means available to assure that properties pay for parking and transportation improvements and report back to the City Commission. If the need is established; there is a strong level of interest among property owners; and the means can be made available to assure payment from properties, staff anticipates seeking authorization to employ GSG to prepare an assessment study and methodology for the first project at Innovation Square which is expected to be a parking garage.
Fiscal Note
There are no direct costs anticipated at this time beyond the staff time necessary to assist in determining the feasibility of a special assessment.
Recommendation
The City Commission: 1) hear an update on Innovation Square; 2) hear a presentation on Innovation Square parking and transportation facility and service funding options; and 3) direct staff to return to the City Commission to report on the need for and general feasibility of a Special Assessment for Parking and Transportation Services for Innovation Square.