The Longmont City Council on Tuesday gave the OK to use property tax revenues and money diverted from its way to the emergency fund in order to pay for an upcoming debt payment for Village at the Peaks.
The city of Longmont helped finance the $90 million mall with $27.5 million in public improvements. The city used Certificates of Participation, which are similar to bonds, in order to raise the money. A payment of $636,227 in interest on the certificates is due in June.
The delayed opening of two of the mall’s three anchors — Sam’s Club and Whole Foods — meant receiving sales tax increment revenue later than the city financial staff originally projected.
Whole Foods announced in December that its quarterly earnings came in lower than expected and that the Longmont store would open in December 2016 instead of December 2015 as originally planned.
It’s unclear when Sam’s Club was originally supposed to open, but there was a perception in the community that most, if not all, of Village at the Peaks would open in time for Christmas 2015. Instead, the wholesaler is set to open in late June 2016.
Revenue of $105,000 from the Twin Peaks Metro District — through which the city receives 2.5 cents on every dollar of property value at the center — leaves the city with a projected gap of $531,227 to make up by June.
Some of that gap will be filled with $208,900 from COP savings, which include investment earnings and savings on a job the city found it didn’t need to fill, leaving $322,327 to make up by June.
The council approved by general consensus, rather than a vote, using $117,076 from undesignated property tax funds. The $117,076 comes from property taxes paid by Longmont residents. Using the money for Village at the Peaks would represent the first direct infusion of taxpayer dollars into the project, not counting salaries for city employees who work on the project.
The council also approved using $244,505 from money that was previously slated to go into the emergency fund, most of which will be used for the June payment but $39,254 of which will be used for a December debt payment.
Financing Village at the Peaks
• The city of Longmont is helping finance the $90 million new mall with $27.5 million in public improvements.
• The city issued Certificates of Participation, which are like bonds, to raise the $27.5 million.
• A bank is holding the titles to the Civic Center, the Safety and Justice Center, the library and the Development Services Building.
• The Twin Peaks Metro District will help to pay back the $27.5 million. The city gets 2.5 cents on every dollar of assessed property value.
• The city will also use a tax increment to pay back the $27.5 million. There’s a property tax increment and a sales tax increment.
• The property tax increment doesn’t start generating revenue until the property taxes on the property exceed the 2012 base level. Once it does, the city will get 9 cents on every dollar of assessed property value.
• The sales tax increment doesn’t start generating revenue until the sales tax for the property exceeds the 2012 base level. Once it does, 2 percent sales tax will go to the city.
Longmont Director of Finance Jim Golden said that projections indicate that the city will be able to make its future debt payments because most of the burden of the payments in the future will fall on the Twin Peaks Metro District and property tax increment revenues, with the sales tax increment revenues going toward the city coffers.
Golden said city staff recently got news that the county will assess the Village at the Peaks property sooner than staff originally thought, which will mean more Metro District and property tax increment revenues in 2017 than originally projected, although he could not say Tuesday how much more exactly.
Allen Ginsborg, NewMark Merrill regional director, assured the council that the businesses open at Village at the Peaks had large grand opening days and are doing well.
“To try to draw a trend line for this data, to me, is very premature because we don’t have huge trend lines,” Ginsborg said. “The good news is that the trend line we do have is particularly positive. … I don’t have a crystal ball, but the short data set we do have is highly encouraging to me among all the shopping centers I’ve been involved with.”
Mayor Dennis Coombs said, anecdotally, he felt there was a good positive vibe around Village at the Peaks.
“When it’s nice out, there’s a nice buzz down there at Village at the Peaks, as people hang out with the open fires and the chairs,” Coombs said. “You can tell people are enjoying it.”
Karen Antonacci: 303-684-5226, email@example.com or twitter.com/ktonacci