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HomeMy WebLinkAbout1037 - Recovery Zone Bonds BILL N0.2010-061 ORDINANCE NO. �� AIV ORDINANCE DESIGNATING A RECOVERY ZONE PURSUANT TO THE AMERICAN RECOVERY AND REINVESTMENT TAX ACT OF 2009 FOR THE PURPOSE OF ISSUING RECOVERY 20NE FACILITY BOND5. WHEREAS, the City of Riverside (the "City") has received an allocation of Recovery Zone Facility Bonds in the amount of $20,000,000 from the Missouri Department of Economic Development pursuant to a reallocation to the State of Missouri of amounts originally allocated under the American Recovery and Reinvestment Tax Act of 2009, codified in Title 26 of the United States Code and Internal Revenue Service, Notice 2009-50, issued on June 12, 2009 ( the "Allocation"); and WHEREAS, the City understands that the Allocation is to be used for the issuance of Recovery Zone Facility Bonds pursuant to Section 1400U-3, of the Internal Revenue Code of 1986, as amended (the "Code"), such bonds referred to herein as "Recovery Zone Bonds"; and WHEREAS, the City understands that Recovery Zone Bonds are to be issued with respect to or to finance certain expenditures located in an area, within the jurisdiction of the City, that the City determines has a significant level of one or more of the following factors: poverty, unemployment, home foreclosures, or general distress (such factors referred to herein as the "Distress Factors"); and WHEREAS, the City has determined that the Distress Factors have been caused by one or more of the "Underlying Conditions of Distress" described in Section 1 hereof; and WHEREAS, the City desires to designate the area described in Section 3 as a "Recovery Zone" to provide for the possible issuance of Recovery Zone Bonds (such area being referred to herein as the "Recovery Zone"); NOW THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY OF RIVERSIDE, MISSOURI, AS FOLLOWS: SECTION 1- UNDERLYING CONDITIONS OF DISTRESS. The Board of Aldermen of the City (the "Governing Body") hereby finds and determines that the Recovery Zone identified in Section 3 suffers from one or more of the following conditions (each an "Underlying Condition of Distress"�: • The Recovery Zone has experienced significant increases in unemployment during the calendar years 2008 and 2009. • The Recovery Zone suffers from significant poverty. • Within the entire Recovery Zone there is a significant number of buildings and ', improvements which, by reason of dilapidation, deterioration, age or obsolescence, illegal use of individual structures, presence of structures below minimum code standards, abandonment, excessive vacancies, inadequate provision for ventilation, light, air sanitation, utilities or open spaces, high density of population and overcrowding of buildings, overcrowding of land, the existence of conditions which endanger life or property by fire and other causes, excessive land coverage, deleterious land use or layout, depreciation of physical maintenance, and lack of community planning, or any combination of such factors, is conducive to ill health, transmission of disease, infant I mortality, juvenile delinquency and crime or constitutes an economic or social liability and is detrimental to the public health, safety, morals, or welfare of the Recovery Zone. SECTION 2- DISTRESS FACTORS. The Governing Body hereby finds and determines that, as a result of the Underlying Condition(s) of Distress, the Recovery Zone has experienced a significant level of one or more of the Distress Factors (i.e. poverty, unemployment, home fareclosures, or general distress): SECTION 3- DESIGNATION OF RECOVERY ZONE. Based upon the findings and determinations of the Underlying Conditinn(s) of Distress and the resulting Distress Factors, the Governing Body hereby designates the entire area within the jurisdictional boundaries of the City as the "Recovery Zone" for the City. SECTION 4- FURTHER ACTION. The appropriate staff and officers of the City are authorized and directed: to take all necessary steps to indentify appropriate projects for which the issuance of bonds will further the goals established for Recovery Zone Bonds in order to cure the Distress Factors within the Recovery Zone; to identify other economic development incentives and programs which may be available under Federal or Missouri laws for such projects which will further the goals established for Recovery Zone Bonds; and to work with the Missouri Department of Economic Development to plan for the issuance of Recovery Zone Bonds for identified projects. BE IT REMEMBERED that the above was read two times by heading only, passed and approved by a majority of the Board of Aldermen and ap roved by the Mayor of the City of Riverside, Missouri, this � day of `�r,/o .�,� , 201 �. ,' . � � _ a leen L. Rose, Mayor ATTEST: ��� �+ ��a Robin Littrell, �ity Clerk APPROVED A5 TO FORM: y Tho pson, City Attomey -2- CITY OF - RIVERSI�. '`�-•• +�''''��MISSOLJRI Upstreorn �'rom ordFnary. 2950 NW Vivion Road Riverside, Missouri 64150 MEMO DATE: October 28, 2010 AGENDA DATE: November I, 2010 TO: Mayor and Board of Aldermen FROM: Mike Duffy, Community Development Director Nancy Thompson, City Attorney RE: Designation of Recovery Zone BACKGROUND: Recovery Zone Bonds are an economic development tool created by the American Recovery and Reinvestment Act of 2009 to help local governments obtain financing for economic development projects in areas particularly affected by job loss. The use of Recovery Zone Bonds is restricted to projects inside designated recovery zones, as determined by the city. In order for the City to avail itself of the opportunity to utilize an allocation of Recovery Zone Bonds from the State of Missouri it is necessary for the Board of Aldermen to evaluate and consider whether or not the required conditions of eligibility exist within the City. Staff has evaluated the criteria and recommends the Board make the findings contained within the proposed ordinance to designate the entire city limits of the City of Riverside as a recovery zone area. There are two types of bonds which were made available as tools under the recovery and reinvestment act legislation. Of particular interest to the City is the Recovery Zone Facility Bond program. The Recovery Zone Facility Bond program offers tax- exempt bonds that offer lower interest rates similar to private activity tax-exempt bonds. As a general rule, proceeds from these bonds can finance new capital improvements that will be owned and used by almost any industrial, commercial, retail, office or other business activity that is located in a designated recovery zone. Debt service on the bonds can be funded directly byu the private business that owns and uses the property. The Recovery Zone Bond program is capped by an overall allocation amount available through the Missouri Department of Economic Development. There is a possibility the City may be in a position to receive an allocation of bonds which may become available before the end of the year. The lack of designation of any areas of the City as a"recovery zone" will prevent the City from accessing any allocation of Recovery Zone Bonds which may become available. Staff recommends adoption of the ordinance.