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HomeMy WebLinkAbout1981-11-30 Town Council MinutesPUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 i WILTO: OK, let's call this meeting to order. The purpose of this evening's meeting, first of all,we'll be going through a rather formal public hearing process having to do with the Lionshead Improvement District. We have some attorneys here and they have to do what they usually do, so if you'll bear with that part of it, they'll go through their process and then you all will have a chance to say whatever you'd like for or against the improvement district. Before we get into that I should announce who is here and who isn't here. The entire Town Council is present with the exception of Rodney Slifer who is out of town. Also present is Loring Harkness who is bond counsel for the Town of Vail and Jeff Winston from Gage Davis and Associates who is also here to advise us. With that I might mention that after the public hearing the Council will open a discussion on the ordinance itself but there will be no vote on the ordinance this evening. The actual vote will take t: place next Tuesday evening. So at this time 1 would like to introduce Loring E. Harkness who is with the firm of Ballard, Spahr, Andrews and Ingersoll to start the formal presentation. HARKNESS: Thank you, Bill. Bill's already made my apology for me and has indicated that the public hearing tonight will be rather a formal process but its basic purpose is to provide information to affected property owners and as you know, the Lionshead Improvement Project .was initiated by a resolution of the Town Council ##21, Series 1982, which was adopted on October 5, 1982 and thereafter notice of this hearing was published in the Vail Trail on November 12, 1982 and the notice and form of protest were also mailed to all affected property owners by first class mail on November 12, 13 and 16. I'm told that the mailing was so large it required three days to accomplish. As Bill has indicated, the purpose of the hearing is for the Town Council to receive evidence concerning the proposed district of the construction and installation of improvements therein and the methods of proportioning the assessments which PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 2 • would be levied to pay the cost thereof. And it's also for the purpose of hearing and passing on the protests, objections or comments made by the general public and also to discuss the form of the ordinance to be considered for adoption on December 5th. Many of the words that will be spoken tonight will be directed towards providing evidence to the Town Council upon which to make certain findings that are required by the Town's procedural ordinance in the case of all local improvement districts and in order to make sure that all of the necessary facts are brought forward I'll be calling a series of witnesses and they will include Town Manager Richard Caplan, who will talk about the background and description of the project and participation of the Town in the financing. Dick Ryan, the Director of Community Development, will provide further detail in connection with the project. Jeff Winston, the Town's land- scape architect, from Gage Davis Associates will talk about the plans for the project which are evidenced on the maps and renderings on the bulletin board. Don Wallace who's a real estate economist and consultant to the Town has a great deal of experience in assessment procedures. Bill Pyka will talk a little bit about the financing of the improvements and then there will be an opportunity for public comment. So with that sketch of who's going to talk about what, I'd like to call each witness in turn and then,,with the Council's p=:-mis�ion, ask that any questions be directed to thos(- people be mate at the conclusion of each session. Rich Caplan, I guess you're en first. Please state your name, address and position for the record please. CAPLAN: Richard Caplan, Town Manager, 75 So. Frontage Road, Vail, Colorado. HARKNESS: I'd like you to start your testimony, Rich, with some back- ground on the project and I understand that .in aid of this you have a bit of a slide presentation that Jeff Winston will assist .you with. PUBLIC HFARiNG LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 3 CAPLAN: I'd be happy to answer any questions, but I'd like to call on Jeff Winston first to explain the background on the program of the Lionshead Improvement Program through some slides that we have prepared. Jeff. WINSTON: The purpose in meeting tonight is to address the problem that concerns all of the Town of Vail, both Lionshead and Vail Village. We have the opportunity at this point in time to bring to fruition a number of years..of effort by a great many people to bring about some significant and important improve- ments to Lionshead we think will be of benefit to not only Lionshead but the entire Vail community. It's a program that most people in Lionshead and throughout the village feel is essential, not only for Lionshead and the Lionshead of the future and for all of the Town. It brings us the opporunity to bring the entire Town up to a level of finish and producti- vity in terms of commercial activity in support of the major industry here in town - skiing - all will benefit both residents and commercial property owners as well. First some background might be in order. When it was initially established, Lions - head was planned to be a contemporary European resort prototype. It was to be the second major doorway to the mountain and a number of studies were undertaken to identify the character of the village and how it should operate, and large plazas were introduced and it was very well thought out. Over the years in a very short period of time it was implemented and gained solid momentum from the beginning and it was turned over to the Town of Vail in 1978. However, since its earlier days time and deterioration have taken their toll. The brief overview now is now is the time when we have a chance to go back and revisit the original plan and make some adjustments and changes that are essential to Lionshead's future and in fact, all of the Town, frankly. Why does Lionshead need help? PUBLIC HEARING Y-IONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 i Page 4 Over the years time and weather have taken their toll. There are many areas of the mall that have begun to deteriorate although the best technology at the time was implemented. The materials selected have begun to wear and fray around the edges. A lot of areas were not finished completely. There were areas where there are not only appearance problems but safety problems to people walking the.mall. Some <areas were never finished. Design changes that were introduced created new problems. In areas where plazas were invisioned landscaping was introduced which give Lionshead a lot of the quality that it has but it has become a serious impediment to stores and merchants ability to attract people from the major walkways. Some of the plazas just never reached their potential. Several years ago, back in the spring of 1979, the Town initiated at the request of the Lionshead Merchants, a series of options to address the problem and three sessions were held and two of the sessions really dealt with Lionshead's immediate sur- roundings. Merchants, property owners, Town officials, interests parties, interested citizens rolled out in day and a half work- shop sessions at each one of these workshops to provide their best ideas about what changes needed to happen, new ideas, identifying th, problems and coming up with various kinds of solutions. These various ideas were collected, but together in an overall master plan that was then presented to the work- shop participants and later to the Town Council for their approval as the general master plan and we then proceeded with a long period of about six months of subsequent smaller work- shops dealing area by area with all of the problems and all of the improvements that nec,d to be made. Some important accomplishments have been made since that time, The east and . west entrances of Lionshead have been dramatically changed. Those of you who can remember the old days. The east entrance has undergone a similar transformation. It's about one half to two thirds the completed at this point. Over $300,000 of PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 • Page 5 Town's funds have been spent in these two improvements alone. Additionally, temporary resurfacing of the Lionshead Parking Structure and kiosks and improvements in the lighting system have been made and of course a major effort in the terms of planting and landscaping throughout Lionshead. There still are many areas that need improvement. Many areas again that were unfinished. There are a number of ragged edges that just are not as attractive and do not contribute a bit to Lionshead as a viable place to live or shop or to attract tourists. Not • only in the mall areas but in the outlying areas significant areas are needed. Through the workshop process alot-of these improvements were identified. In many areas it means shifting the location of planters so that pedestrians can get closer to the shops so as not to block access, a great desire was indicated to have a central focal point to attract people much as the fountain near the covered bridge in Vail Village. Something with a similar attraction and level of quality that really becomes the focal point and center of gathering for LionsheadA. The result of all of that was the general urban design or master plan of improvements. Many of those improvements are illustrated in the perspective drawing on the right. They include a number of different kinds of improvements. The most dramatic change is replacing all thr-• concrete with stamped concrete throughout the mall. Replacing that with concrete and interlocking •oncrete pavers, a material that has been used successfully on the east and west entries. It implies moving ;Lome of the planting areas into the walkways an,,' ,pening up some of the walkways, reusing many of the plant materials, introducing more trees, benches, sitting areas, kiosks, directory signs. In the central plaza coming down from the north day lot is invisioned a large fountain and green space and sculpture areas have been identified throughout the mall. In addition, PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 6 emergency access which is not lacking throughout the mall would be provided from one end to the other and in thi; out- lying areas the significant areas would include sidewalks and lighting in the mall as well as the outlying areas. Also included as a part of the plan but not at public expense is the provision for commercial expansion to allow shop owners to expand beyond the present limits of the right of way lines to encourage new commercial development, upgrading of store fronts and generally upgrading as you see presently in the Gondola Building. Those have been some of the initial improve- ments that have been made as a result of the urban design plan recommendations. Obviously, the key question is how to finance the project. The Town of Vail has many different demands on its operating budget. Town revenues are generated from property taxes and sales tax. Many of the improvements you saw had finance out of the year's proceeds. But a project of this scale and magnitude would take 15 years to finance at this rate. The answer that came out of the workshop was that we needed some form of a public and private partnership where the Lionshead property owners would take upon themselves a commitment to raise some of the money and the Town would take upon itself a commitment to raise the rest. The Lionshea(' Merchants, the way to raise that kind of money through the pr vate sector is through what is called a Special Improvement District, which sells a bond and then repays that bond out of tax assessments on the individual properties in the sp-=cial improvement district. In this case would be Lionshead. The Town for its part would propose to raise its share of the money through a general obligation bond which comes from the proceeds of sales tax and the sales tax rate in Vail would not be raised as a result of this effort, but .increasing business and having • paid off other bands previously.provides thl opportunity.to raise the money for this obligation bond through sales tax proceeds. What are the costs? Generally the costs are PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1984 . Page 7 broken down by the type of use between commercial and residential properties and also by related to the distance from the mall. As you see here, commercial properties range from about .8� a square foot the further distance from the mall to $3.53 a square foot for those commercial properties fronting on the mall. Residential properites would contribute a significantly less per square foot cost in the sense that there properties on the mall would be paying as high as $1.42 actually, a $1.41 here, down to about .7� a square foot furthest from the mall. As an example, one square foot of store front this is over the entire cost of the project, that would be then financed over 10 - 12 years. Financed in this way, a com- mercial property fronting directly on the mall would pay .83Q a square foot per year and a residential property furthest from the mall would pay about a, penny and a half a square foot per year financed over that period.of time. ):I The benefits. Obviously Lionshead is going to benefit. We hope that the attractiveness that is brought about through the improvements will make Lionshead a more competitive and viable place to attract tourists from the front range as well as the overnight tourist. Over 50% of the skies that visit Vail go through Lionshead to the gondola. And we think and the Council has expressed a desire that their impression of Vail comes to a great degree from their experience in Lionshead. To the degree that Lionshead is improved and they have a pleasant experience there, they're enthused to come back many times and we think that that helps tie both neighborhoods together and again expands the competitiveness of Vail as a ski resort to compete with other ski resorts. So it's not just ,.a program merely to assist Lionshead. We think it's going to have benefits for the entire community. Under the present provisions, if both bond issues are approved, we would begin the second general obligation.bond issue sometime in February. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 • Page 8 If that election is successful and this special improvement district is successful, we would begin immediately an intensive design process and begin construction sometime in mid• -April or the early part of May. Now we would be in a fast track process. We would begin some of the work before the design is completed in other areas. We would see construction going at a very excellerated rate flat out through November, obviously taking a break through the ski season and the finishing touches happening next year in April, May and June of next year, hopefully by the Fourth of July having an opening ceremony to finalize the whole construction. It's a fairly complex issue. The Town has made its commitment contingent upon Lil.onshead doing its share of the work, pulling its part of the load, so it really requires two issues. A special improvement district issue and Lionshead will raise approximately $1 million dollars, the general obligation bond by the Town will raise $1.6 million dollars for a maximum cost of $2.6 million dollars for Lionshead. It will require support not only for this issue currently being discussed but also the general obligation bond. To summarize however, many people have invested an awful lot of time over the last 2 or 3 years. At the same time inflation continues to deal with cost of construction. The mall continues to deteriorate. Some improvements that have been made this year by the Town, temporary resurfacing have helped to stay that, but have really not reversed the trend and the deterioration continues and the problems are still there. All of us who have been involved in the project feel that now's the time, 'the perfect time for Lionshead to pull itself up by the bootstraps and put on a new face and make some dramatic changes and regain as much of the momentum that has been lost over the last several years and help Lionshead • and Vail. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 9 HARKNESS. Thank you, Jeff. I think the slide show gives an excellent overview of some of the issues that will be discussed in greater detail this evening through the presentation of the .succeeding speakers. Rich, I'd like to return to your part of this program and i'irst observe that there is a great deal of evidence of a public/private undertaking in the slide presentatioD and to me that indicates that the Town conceives that there will be general benefits to the community derived from this project. I wonder if your could give us your views on the general benefits of the Town. CAPLAN: We feel that by improving Lionshead there will be more overnight guests staying in the Lionshead area, not only during the winter season but year round, we also believe that it would be therefore generating more business activity for the restaurants and the retail shops in the area. Also feel that with the improvement with the construction of the Lionshead Parking Structure that there is adequate parking in the area to accommodate increased activity and that the major attractions in the area in particular the gondola, is looking at as actively promoted the summer marketing of Vail as a summer attraction and other activities • including creation of a miniature golf activity and other diversification of activities there which would improve the general business activity in the area. HARKNESS: And in consideration of those general benefits to the Town, the slide presentation also indicated that the Town was going to participate in the cost of making improvements. Can you describe how allocation would be made in some more detail? CAPLAN: The Town would, if the improvement district is approved by the Town. Council, the Town would go to the reside-nts of the community at large to have them consider a general obligation bond of $1.6 million which would be a general obligation of the Town icapital improvements budget. That revenue comes from sales tax PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 10 • generated by revenues from throughout the Town, not just from the Lionshead area. So it would be a general contribution of retail sales tax plus a particular contribution of the property owners in Lionshead proper. HARKNESS: And the $2.6 million total cost of the project as proposed to the Town through the general obligation bonds would bear $1.6 million and the improvement d:i.strict through the issuance of special assessment district bonds $1.0? CAPLAN: That's correct. HARKNESS: Rich, does the staff have a general recommendation to make to 0 the Council in connection with the Lionshead Improvement Program? CAPLAN: Yes, it is the recommendation of the staff of the Town of Vail that the Town Council favorably consider the adoption of proposed Ordinance #40 at its regular meeting next Tuesday night after public hearing this evening and proceed with establishment of the special improvement district contingent upon the voter approval by the voters of the Town of Vail. HARKNESS: That concludes this segment of the program and consideration of the planned presentation of this evening. I think my preference might be to hold questions until the opportunity at the end of • public comment. Would I'd like to do is go on next to Dick Ryan. Dick, would you state your name and address and occupation for the record? RYAN: Dick Ryan, 75 South Frontage Road, Community Development Director for the Town of Vail. HARKNESS: And would you also describe briefly your responsibilities in connection with the project? RYAN: Yes, my responsibilities are, about three years ago the property owners, merchants and people in Vail/Lionshead came to me and. said that Vail/Lionshead needed some major improvements and needed them fairly soon because of the deterioration that had taken place in the Vail/Lionshead Mall. I then went to the Town Council who allocated funds in order to do the study for the improvements to the Vail/Lionshead area. In June of 1979 the Town had three major PUBLIC HEAPING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 11 • workshops - one for Vail/Lionshead, one for Vail Village and one looking at the connection between Vail Village and Vail Lionshead. The average attendance was approximately 50-60 people at those three workshops. After the initial workshop in Lionshead in June there were many many followup workshops in July, August, September, October and I believe up until November of 1979. Again, the pur- pose was to define the plan and get input from the people who were interested in the plan. Gage Davis and Associates of Boulder, Colorado, were the consultants who worked with the staff in -coming up with the plan. In June of 1980, Town Council approved the Vail/ is Lionshead as the Urban Design Guide Plan for Vail/Lionshead. This has been used for east and west Lionshead entries plus improvements to the Vail 21 building, to the Gondola Building and to the Lift - house Lodge. The anticipation is that there are other possibilities for commercial expansions to also use the plan. HARKNESS: OK, and in connection with the undertaking that you just described, would you identify the area within the Lionshead vicinity as appropriate for a special improvement district? RYAN: This was done with the assistance of Larry Smith and Company, who have a great deal of experience throughout the country in setting • up special improvement districts for mall areas. Which determin- ation in working with them is that boundaries for the special improvement district that they thought was viable was from the Vail Spa and the Mark on the west end over to the edge of the Vail/Lionshead parking center and the Lodge at Lionshead on the r,ast end. The north boundary is the Frontage Road and basical__y the south boundary is Gore Creek. HARKNESS: OK, and then once the boundaries of the district had been established did you then go about attempting to identify the owners of all the properties affected? RYAN: Yes, this was done a couple years ago by a search of the County • Assessor's Office of the affected property owners,. The list ha, been on file with the Community Development Department for several weeks and one was mailed out to all present property owners and was also published in the Vail Trail December 12th. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 12 DARKNESS: In addition to searching the records of the County Assessor in Eagle, did you also take steps to ascertain the current owners of property and their addresses for the purpose of mailing notice of this hearing? RYAN: Yes, we made a special effort by looking for timeshare units in Lionshead, calling timeshare managers asking for their owners. Also I did spend at least three quarters of a day down at the County Assessor's Office just generally rechecking to make sure I had a list of the current property owners. HARKNESS: And in the course of preparation for this hearing, did you also • with the assistance of consultants, make- available for public inspection certain maps and renderings and cost estimates and other information concerning the project? RYAN: Yes, this has been on file in the Community Development Department and also several maps have been on file of the Town Council Chambers. HARKNESS: I wonder if you could identify each of the maps or renderings and tell what the purpose of each of them is. RYAN: The first map is the map that shows the distance from major improvement which would be Vail/Lionshead Mall to the affected • properties and how many feet it is measured from those specific areas. The second map shows lots and blocks that we have of record for the assessment district area. There is also a list of all the lots that: are in the assessment area. The third map to the right shows the improvements that specifically are proposed to be made in the mall area itself. There's also on the wall a general description of improvements in the Lionshead area, the estimated cost, the notice that was sent out to all property owners. On the wall to the left is the proposed improvements that would be made in the outlying area, landscaping, sidewalks, lighting. To the f�Lr left is a sketch of what we hope Lionshead • will look like when the improvements are completed. There is a cascading water Call, there is a sculpture, benches, street lights etc. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 13 •ARKNESS: And, finally, after the adoption of the resolution initiating this project, did you and members of your team hold any informal meetings with businesses or business groups in order to explain the project more fully? RYAN: Yes, we did talk to some managers of condominium projects about the proposal. The results of a meeting last week with the Merchants Association of Lionshead anc'._ I did go through the project again. There has also been in the past many many meetings where this has been discussed. HARKNESS: Thanks, Dick. ARKNESS: Jeff Winston, you're next and your presentation by the slide show was so complete that I risk duplicating some of your testimony, but I would like to have you state your..name, address and occupation for the record. WINSTON: Jeff, Winston, working for Gage Davis and, ssociates, Boulder, Colorado,.address is 1985(':Glenwood, Boulder, Colorado. HARKNESS: OK, with reference to the maps that have been identified by Dick Ryan, I wonder if you could ;provide in greater detail a description of the improvements that are proposed to be made. WINSTON: There are really three key maps that id.-:!nt.fy the improvements. • No. 1, the last of the three on this side, the shaded area re- presents the area where the improvements are to be made. The improvements in that area generally consist of replacing most of the or stamped concrete in the area that is deteriora- ting, that would be replaced by interlocking concrete brick pavers. As I mentioned, this is being used in the east and west end entries. This is brick paver that's layed much like brick on a bed of sand on top gravel. The primary advantage is that we've discovered the use of this material at this altitude doesn't tend to swell and break apart as normal concrete does. And secondly, it can be re- moved for replacing utilities and then reinstalled putting the same material back in place and the maintenance cost is significantly reduced. The appearance is similar to brick ani1 we find it very attractive material for all of those reasons. There would also be PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 age 14 several of the planting islands, a mall area that would be re- located switched from their present location in front of the stores further into the middle of the walkway in front of each of the storefront isles. We intend to preserve as much as possible the existing landscaping, reuse that landscape material that is in the areas to be relocated. I.guess a key point in the improvement is to try and create a series of plazas with focal points. Places where the pedestrians, the tourists and the overnight visitors and guests can gather, one plaza leading to another, each one is interesting, has its own character and is improved by the private improvement of the shops in each of those areas. Additional planting over and above what is there now as well as lighting, lighting fixtures throughout the mall would be done to complement that, In the central part of the mall which is the artist's con- ception on the left, generally catches the spirit that we'd like to achieve throughout the mall area, particularly in this central plaza. That includes the water feature that is demonstrated in numerous places, water features just have that magic ability to become a photographic focal point as well as backdrops. It removes a large area of the descending staircase from the north day lot, • opens that whole plaza up into a pedestrian space and gives frontage to the buildings around the pedestrian plaza. There's some more practical improvements planned in the mall area, including replacing the electrical system which has been problemmatic for a number of years and making maintenance a little easier to do and certainly a lot more reliable. In:.a,ddition, emergency access will be provided, providing ramps and stairs, some areas are just, unaccessable to emergency vehicles. There are then a number of finishing touches we envision - bicycle racks, kiosks, directory signs, planters and other fine touches we think that, will make it a more enjoyable place to visit as well as reside. In the outlying areas there are • a number of sidewalks planned, landscape improvements on the sur- rounding lands as well as peripheral lighting on those sidewalks PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 16ge 15 in the outlying areas. We think this will benefit not only those fronting directly on the mall but all of the properties in the general vicinity. HARKNESS: Thank you. Is your office also responsible for furnishing the estimates for the cost of the project? WINSTON: Yes, working with the Town staff, the building departmant, I've done several cost estimates, refining the cost estimates several times over the period of time since the plan was initially developed. HARKNESS: Of the total $2.6 million, can you break that down into the costs associates with the different categories of improvements in a general way? WINSTON: Very generally, the construction breaks down into about $1.8 million of hard construction. That is utilities, bricks, furniture, planting, things like that. Then there's about $800,000. in what we term "soft costs". Those are not necessarily overhead costs, they're integral to the construction but typically a cost estimated format they're broken out separately. They include the contractor's general conditions, mobilization expenses, they include some money for the master electrical system that is not part of the cosmetic improvements. Surveying a lot of legal and design fees associated with the pro- duction of the work, drawings of construction documents and other costs associated with the organization of the project. HARKNESS: OK, thank you. The next speaker will be John Wallace. John, would you be good enough to state your name, address and occupation for the record? WALLACE: My name is John Wallace and my address is 61 Hamilton Avenue, Palo Alto, California. I'm a real estate economist consultant. HARKNESS: OK, I wond.=Ir if you can describe your education and experience as a real estate economist. WALLACE: Sure, as far as education I have an AA degree in liberal arts, a BA degree in business from the San Francisco State University and a • MBA from San Francisco State University with emphasis in finance and real estate. Currently I'm employed with Larry Smith and Company PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 �e 16 I have worked for Larry Smith and Company for about 6 years of the past 11 yea:r.•s as a real estate professional. I have also worked and have been employed by Stanford Research Institute and there I was a real estate economist. Let me tell you a little bit about Larry Smith :and Company. Larry Smith and Company is an international real estate consulting firm. They spe:^ialize in retail as well as developing malls. They did some of the original work on the mall in Sacramento California and Kalamazoo and another 300. I've worked on some of those and worked in Napa, California as well as Twin Falls, Idaho. Also, and I should bring this up as well, another individual has also worked on this project from Larry Smith and his name is Everett Syske, and due to health reasons could rot be here this evening. He has approximately 25 years in experience and has probably worked on 50 pedestrian malls. HARKNESS: Could you state very briefly the expertise that you and your firm have that prompted the town to engage in these consultants in con- nection with this project? WALLACE: Yes, this is on the assessment district. We have rather recently done a nearby one in another part of Colorado and I think that was part of the reason we were called to do this type of work. HARKNESS: In the course of your engagement with the Town, did you become familiar with the documents that have been on file in the Town offices and that have been described by Dick Ryan and Jeff Winston? WALLACE: Yes I have. HARKNESS: In addition to that , have your also personally inspected the Lionshead area? WALLACE: Yes I have. We've have several field trips to the site in Vail. HARKNESS:` Are there other things that you did in preparation for your work on this project by way of background. WALLACE: As part of this study, we collected data from 80 other pedestrian malls around the United States and we evaluated these and, I'm not sure how much detail you want at this point, maybe I'll get into it a little bit later. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 17 HANESS: OK, I take it that the principal purpose of your engagement was to develop a formula which fairly apportions among the affected properties within the Lionshead area a method for apportioning the assessments and to develop a schedule of assessments to be levied against the property. Can you tell us how you went about that process? WALLACE: Certainly. What we are attempting to do is to equate benefit with assessment. What, therefore, we did was attempted to find the benefits that each of the properties in VaillLionshead would receive from the pedestrian mall and equate that to the properties. HAR*ESS: OK, in pursuing that objective, did you then develop a formula by which the total cost be assessed against the property owners benefited was to be made? WALLACE: Yes we did. HARKNESS: Could you describe that for me and how it works. WALLACE: OK, I'll describe it. As I told you earlier, I hope it isn't too difficult to do a mathematical formula verbally, but, what it is, for each property the formula is the Y factor which I'll explain in a minute divided by the sum of the Y factor times the assessment, the total assessment for the district which is this case is $1 million that will be borne by the district on equal individual property assessments. The Y factor is calculated by calculating first of all the square footage of the unit times the distance factor and times the use factor. In other words the type of use that the property is put to. The square footage came from the assessor's office. The distance factor was the factor that we arrived at through a complicated formula. I won't get into that now but I'll explain that later and the use factor also -came from the Assessor's Office with ;=ome modifications that we ourselves made depending upon th(- :relationship of the commercial property to the nearness of the mall. 0 PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 18 HANESS: OK, so, I have a little bit of difficulty in assimilating mathematical formulas, but is it correct to state that the formula proportions the cost considering the different factors? Among those factors are use of the property, proximity to the improvement, the square footage and WALLACE: And then for commercial properties the mall frontage is also important, not only distance. HARKNESS: In the course of your work have you formed an opinion as to whether the construction and installation of the improvements which have been described here tonight according to the plan • will confer special benefits as opposed to general benefits on the properties to be assessed? WALLACE: Yes. HARKNESS: OK, and in making that determination, what factors did you consider in determining whether special benefits would be confer? WALLACE: Well, there's a whole range of factors that we have and I think that the direction that the study should go. We've limited our- selves to two basic benefits. The first one was the reservat.on of the value of the properties. That would be caused by actually renevating the mall area and so forth. The second area was the affect on the market value of the property caused by the improve- ments on all the property values of the properties within the district. There are a whole variety of secondary ones such as the health and safety factor and that also goes back and directly affects even the value of the property as well as factors such as increased sales for the retailers in the mall and so forth. You know, that translates back into property value. HARKNESS: Based upon these considerations, what is your opinion about whether these improvements would confer special benefits on the properties. WALLACE: That they would. HAR&SS: OK, have you also developed an opinion regarding whether the value of those special benefits conferred will in the case of each property the levy to be assessed against that property? PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Pw 19 WALLACE: Yes we have and we believe the;: will. HARKNESS: Have you also formed an opinion as to whether ',he formula for appor`J oning the assessments will fairly apportion the total cost among the properties affected in porportion to the special benefits conferred? WALLACE: Yes we did, and we took a substantial amount of time and modified it many many times. We feel very confident that this is the fairest amount. HARKNESS; Thank you. The process that has just been described to you is a complicated one and in addition to the perplexity of the formula, • another factor is that a great number of individual properties in the Lionshead area who are affected, the undertaking by the Town with respect to identifying all those property owners and ascertaining from the records the square footage of each for the purpose of then calculating the assessments is a considerable one as you can well imagine. One of the purposes of a hearing of this sort and of the notice of receipt of it is to ellicit public input concerning the accuracy of that information and inevitably in a few cases, I under- stand, there were some errors in the Assessor's records concerning. the square footage of particular properties.. Rich, would you like to address yourself to that consideration and describe what the Town's approach to that matter would be? WILTO: May I interrupt for just a moment? In case we are experiencing difficulties do we have a backup recorder so that KLINE: It is recording, it's just doing very odd things. I apologize, it is recording though. CAPLAN: Yes, there are approximately 734 properties in the Lionshead area and notices as stated earlier were sent to those property owners with proposed assessments. During the last two weeks we have been contacted by the owners of 20 properties where there have been discrepancies indicated in what the records initially showed in terms of square 10 footage for the properties versus what in actual fact exists. In PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 20 r\ U some cases many of the property owners have added, completed a loft in their unit or in some cases there was some error in the County Assessor's re.ords or the like or some typographical error in the printing of the notice. So out of those 20 projects we have found that 2 of those and they are all residential, I would say 2 of those projects the assessments, I'm sorry, 10 of those 20 projects the square footage is too high and in fact should be reduced and therefore prior to final Council action we would recommend a reduction of, it varies but it's generally in the vicinity of $100 - $200 per condominium unit. Those are located, two are, located in the Lodge at Lionshead Phase II and 8 in the Enzion, but there would be a minor reduction in the proposed assessments and we would recommend that to the Town Council. In the other 10 cases, we found that forvarious reasons the records indicate that there is more square footage than on the record and in those cases properly speaking those assessments should be increased by a nominal amount. Anywhere from approximately $100 to $300 or $400. The total increase for those ten properties would be $3500. Should the Town Cou,)cil correct that error, we would bring back to the Town Council next . Tuesday and based upon the other possible conflicts in publication or Assessor's records that might be brought to our attention tonight, a. revision in the proposed assessments and the Town Council would amend those 20 assessments or a portion, perhaps some of those assessments with the understanding that currently the assessments total $999,099 and that any adjustments that would be made would as legally published would still have to be below the $1 million figure as we've published not to exceed $1 million, so there may be, it may be our recommendation without doing all the final calculations that there may be a slight less than fair increase in those 10 units rather than totally republishing all 734 and re- calculating all 734 properties. We anticipate that were we to recalculate all 734 properties there would be a total change in the properties that are not affected of less than $1 in the total PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 21 • assessment, so we don't feel that that warrants a whole repub- lication and recalculation considering the time and cost of recalculating and republishing those final assessessments. Those assessments, I'm sorry, those properties which there would be potentially some incrase in assessment that have been brought to our attention include two units, one unit in the Mark, two units in Vantage Point Phase II and three units in the Enzion and the remainder of the units in the Westwind. HARKNESS: So it is the intention of the Town Council and town administration in any event to utilize the public input that has been given pre- ceeding this hearing and at this hearing tonight for the purposes of applying the formula fairly based upon the facts as they are determined? CAPLAN: That is correct. HARKNESS: Final presentation tonight will be from Bill Pyka. Please state your name, address and occupation for the record. PYKA: My name is William Pyka, 4879 Meadow Drive, Town of Vail Finance Director. HARKNESS: OK, Bill, there are just two matters I want to touch on with you. One is that the assessments that have much discussed tonight and to be levied against the property owners on substantial completion • of the project could be paid by the property owners pursuant to either of two options. Could you describe the options each property owner would have? PYKA: Yes, after subsequent completion of the project the property owner would have the option to pay the entire assessment in a lump sum payment within thirty days after the assessment becomes finalized and if that does not happen the property owner is assumed to have elected the installment benefit payment whereby he would pay the assessment over a period of between ten and fifteen years, probably twelve years at an interest rate that cannot exceed 16 percent. DARKNESS: OK, and how would that interest rate ultimately be determined? PUBLIC HEARING LIONSHEAD IMPROVEMENT PROJECT NOVEMBER 30, 1952 Page 22 •PYKA: OK, the interest rate will be determined by the rate on the special improvement district bonds that are issued, possibly adjusted to recover any interest incurred during construction period or the period during which, the period between substantial completion and the assessment period. HARKNESS: OK, we have also discussed tonight two methods of financing. One has been described as special improvement district financing through the issuance of special assessment bonds for the local share and other other general obligation bonds financing to nay the Town's share. Can you describe just briefly how each of those kinds of bond issues are structured and your opinion as to the feasibility of issuance of such bonds? PYKA: Yes, the special improvement district bonds are essentially bonds that are secured by properties listed on the notice for Lionshead. The bonds that would be issued would most likely be term bonds callable at any date, or callable on interest payment dates and the assessments collected from the properties assessed would pay those bonds off. The G.O. portion, the general obligation bonds, would require an election of the entire Town of Vail, a successful election, and would be paid from sales tax revenues generated within the Town limits, specifically payable, the debt services would be specifically payable from the open space and capital improvements fund, of which half of the sales tax is pledged. The term of that bond would probably be set for years and would be paid off in that period of time. HARKNESS: Thanks. Mr. Mayor, that concludes the formal part of the hearing. WILTO: Thank you, Loring. I would like to call on Town Clerk Colleen Kline. Colleen, for the record, would you state your position with the Town of Vail and comment upon any protests that have been filed? KLINE: Colleen Kline, I am the Town Clerk of the Town of Vail. My business address is 75 So. Frontage Road. The total number of affecteed properties, that would be a $17,000,042, the estimated PUBLIC HEARING LIONSHEAD IMPROVEMENT PROJECT NOVEMBER 30, 1982 Page 23 • total number of individual property owners includes , we received in writing 84 protests prior to the 5:00 p.m. deadline on November 29th. A have a certified copy of that report if you'd like copies of it. In addition, I'd just add that we received three written protests after the deadline and one letter in favor of going ahead with it. WILTO: For the audience, I'd like to comment that any of you who have not had an opportunity to file a protest will have an opportunity to do so tonight and that will be added to what has been received. Thank you, Colleen. We'll be opening the public hearing part of the presentation this evening. Since there are so many people here and we'd like to give every one of you an opportunity to speak, we'd like to ask that you organize your thoughts and just speak one time. I will ask you to step forward to the microphone, identify yourself and place of business or interest in the improve- ment district or whomever you may be representing and as soon as we replace the microphone, we'll start that. I'd also like to thank everyone for their patience through the formal part of this hearing. The hearing is now open. Who would like to be first to speak? Craig. HOESFALFER: Mr name is Craig Hoesfalfer and I own Vail Glo Lodge and I have just filed with Rich Caplan a record of objections and to the proposed creation of the district. And I'd just like those made a part of the record. CAPLAN: By your submittal tonight, they are part of the record. LIATIO. My name is Dean Liatio, I am a business owner in Lionshead and I have some questions and some statements. First of all, it's everyone's opinion here that Lionshead is falling apart, people don't want to go there, and everybody's interested in taking care of this thing. My question is, 500 of the people come skiing in Lionshead right now, according to this gentlemen here, how many more are going to come when this is completed? PUBLIC HEARING LTONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 24 WINSTON'': I doubt that many more skiers, but I think more people that stay in Vail. LIATIO: I'd like to know how this improvement compares to the Boulder Mall or the Aspen Mall. WINSTON: I don't know exactly. I don't know either of those costs. LIATIO: I like to know how many square feet are being improved in Lionshead? My main concern is, I mean there's no way in the world that this thing is not going to pass. This gentlemen here had a very reheased testimonial with witnesses, or whatever they wore and the manner in which the voting was requested, things being mailed out to Mexico on the 16th of November and they expect to be back in Vail by 5:00 yesterday, everybody is Lionshead is supposedly interested in this thing, but according to the Lionshead Business Association when they had a meeting to this whole matter a week ago, the first event of things is the attendance of the meeting on November 23rd was very disappointing. Now, my main concern on this whole matter is yes, I want the thing done but I would hope that we can get a good value for our dollar. We're talking $2.6 million here which $800,000 go for surveying, the design, the legal fees and $1.8 million for hard construction costs. I just hope the Council will take a hard look on where theses dollars are being spent. The asphalt is really nice and moving a few trees around is a good idea, but it might not be necessary. I think that the way the economy is in Vail right now, who knows what sales tax is going to be, you're looking at a lot of money and I just hope that you're getting a good value for your money and I think that $2.6 million of which $800,000 are:soft costs, I think it's really ridiculous. I'd like to know what the design cut is going to be out of the $800000. So-20% of the $800,000 goes to the design. Then my next question would be, Mr. Ryan, why can't they design the mall (Town staff) and save . the Town $200,000? PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 25 SWINSTON: These are not called soft costs. This cost estimate is based on labor and materials. The actual physical improvements to the mall willcost $2.6 million. LIATIO: Well, all I can say is before this thing is passed, we'd better make sure what the costs are going to be, that's my main concern. WILTO: Thank you. Any questions that are brought up that perhaps can't be answered this evening, if the Council would like them answered prior to our vote next week during the hearing, you can let those wishes be known. HARKNESS: Mr. Mayor, I'm not sure whether the tape picked up Jeff Winston's • responses to the questions that were asked. Did you get it? ESKWITH: It's doubtful. It's not a particularly sensitive ... WILTO: Mary, are you taking HARKNESS: Were all the members of the audience able to hear that too? WILTO: Jeff, why don't you go ahead and repeat your responses. WINSTON: The actual cost of the mall, that is the physical improvements to the mall, will turn out to be about $2.26 million. Just because of the way cost specifics in this state are broken down, the $800,000 are not, in fact, soft costs or overhead costs,it's just broken out so they're evident to anybody who wants to inspect them. We could have taken the utilities, mobilization stock- piling costs, and added those back into the unit costs up in the cost estimate and nobody would have known the difference. This is why it's important for people who do straight contracts to know what exactly those numbers are. But typically, those costs will be added to the cost of the materials and labor and that would put the cost at about $2.26 million just a quick estimate, we've not worked out the total square footage other than through the demolition and some removal of the plant materials, but my estimate is it's about 90 - 100,000 square feet in the mall, which would put the cost at about $50 a square foot overall. Of . the soft costs, the engineering and design fees are about $190,000 to $200,000 which is about 8.4% of the fee. Now the overall construction costs which is significantly lower than what's typically done with this kind of detail for construction engineering you can typically expect anywhere from 10 - 12%. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 #age 26 ILTO: Who would like to speak next? Mr. Parker, did you have any comments? Bob, would you like to say anything? Packy? Mr. Lazier. LAZIER: I would like to make mention of the fact that WILTO: Why don't you step to the microphone and identify yourself. LAZIER: My name is Bob Lazier and I represent Lazier Properties in Lionshead. I'd like to make mention of the fact that now appears to be a pretty good time to make an investment on a capital basis because labor costs in the area are probably a little lower than has been for 5 or 6 years. I recently completed an addition to the Tivoli and I thought a lot of my costs actually came below • what I had anticipated they would be based on estimates I did. a year ago. In that light it might be a very good time. WILTO: Thank you. Del or Dinah, would you care to say anything? OWENS: My name is Dinah Owens, 500 East Lionshead Circle, Vail. I've been working on this project since it began 3 years ago and I'm definitely for it and my landlord will assess me, I'm sure, and that's OK, Bob. BRYAN: My name is Nan Bryan, I'm a part time resident of Vail and live in Denver full time. We've been here ten years and I'm not negative against this project but I do feel also that being here ten years and bringing up three daughters there are some of the projects we have here that we haven't taken care of. When we came here ten years ago we would walk down the bikepath very easily by the A frame with no problem. Now, in the past five years it's been a large problem and there's been several letters to the Vail Trail and I sure to the Council as well as the Town of Vail. And nothing seems to be done about the lighting system. And so, consequently, I have. very mixed emotions that starting this project, as the gentleman said earlier, it's a tremendous amount of money and yet, somehow, I find that a fountain in the middle of Lionshead Village is sort of a secondary project to • the safety of my children and I had a 20 year young girl get up today and say the first thing she heard on KVMT was that "this would never happen in Vail". We had a crime, I guess, that was not very pleasant. So before we start on alot of these amenities PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 27 I think we ought to take a look at what we can approve upon and also one other thing I have to say is that being a condominium owner not a property owner, that sometimes the condominium owners are asked to be assessed for very viable things, but also when things such as the hospital got in trouble, they came to us immediately and said it was our duty to help them and I think we all, especially in Lionshead, did that and until we get our priorities squared away, I somehow think that maybe fountains and beautifucation should be given very very serious consideration. Thank you. �TLTO: Thank you. Linda Hawkins? B.J. BRITTON: My name is B.J. Britton. I have A Place on Earth in Lionshead. Three years ago I sat with Diane and some of the other people that started looking into the Lionshead and redoing it and what we could do to it and what we can't do to it. It was a good workshop and because of it we've created this in a sense. I look at it now with the economy the way it is and, let's face it, it's not good. We live in Vail, Colorado, and we have been in years past, ammuned to all of this. But we're not ammuned to it anymore. We've all seen it. I am for the project to be done sometime. I don't think this is truly the time. I think this a good time to look at it, but I don't think this is the time to start getting into it. My concern is that if we do have a good winter we probably also need a good summer and are we going to have a good summer with this construction going on? I really doubt it and I think a lot of people doing business have to look at it that way. That's all I have to say. CAPLAN: I'd like to make one comment for the public record. In terms of the construction timetable, we on the Town staff discussed two or three alternatives with the members of the Lionshead Association of Businesses. Basically they involved doing all of the con- struction over, a majority of the construction over a one-year PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 28 period or phasing it over two or three period, or phasing over a five year period. Each of those alternatives had different cost implications in terms of the total project and each had different implications in terms of business activity in the Lionshead area. The reason this didn't come up during the earlier testimony, the reason for a majority of the construction being recommended during the 1983 year was based on a recommendation from the Lionshead Association of Businesses as to trying to get it all over in one year and recognizing there would be more disruption during the summer of '83 but that it would better to have a lot during one summer than to have a continuing disruption over 2 or 3 years, or summers. I think one potential option that the Town Council could consider if they wanted to modify the plan in any way might be to phase the plan over a 2 year period or 3 year period, however, we'd have to recognize that that would have potentially some implications on the construction cost. BENEDICT: My name is Bud Benedict. I live a 680 West Lionshead Place here in Vail. My wife and I have lived in Vail for 16 years. We've lived in the Lionshead area for a little over 9 years. She has her retail shop in the Lionshead Mall and I manage the Antlers Condominiums in Lionshead. We also have a small little summer • miniature golf course business in Lionshead. I happen to agree with B.J. to a certain degree in that we are looking at harder times and yes, the economy, the recession has hit Vail. where we possibly didn't expect that to happen. I think we will all agree that we are in better shape though than probably any other area in the country, we're feeling it but we're not being hurt or crippled by it. When I look at it and analyze it I try to say to myself, what do we have to offer in Vail, what type of business are we in, what are we doing. We have the finest product in the United States right here in Vail.. We have the most beautiful • community, most beautiful setting, the best ski mountain, the most activities of any small destination resort area in the United States. We are not in a position where we can sell our PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 29 • product on a cheaper basis. We cannot be the cheapest, we cannot sell our prices the lowest. We have to have the best and the most sought after product possibly available. We're seeing a deteriora- tion in.the Lionshead area and we have for years. It was not designed properly. It was not laid out properly. In order to have a viable community you have to have viable businesses in that community. This is what bring the people and it is the people that ultimately help pay the bills. It's a better experience for the people who own condominiums, it's a better experience for the guests that come to that area and it's a • better experience for the business people. I happen to think that now is the best time to spend that money and make that project go and make it fly and make Lionshead become a very beautiful and great competitive area because the competition is getting keener and we can't set back and say "let's wait and see what happens". That's the way you get buried. WILTO: Thank you. Next? I'd like to emphasize the importance of this hearing. Although there won't be a vote taken this evening on the ordinance, comments make either pro or against this evening that will be considered by the Council when they are making their vote, even the first part of the meeting seemed very contrived, it • was because of legal statutory requirements and I'd really like you to feel to make any comments you feel you would like to. There being no further comments, we will close, yes, sir. SILBER: My name is Ron Silber. I live at 4595 Bighorn Road and I have the La Petite Cafe in Lionshead and also one in the Village. The comments that I have to make is that the charm of the town, and I think that having two cafes in two locations and I'll just address that rather than being repetitious, would indicate that Lionshead needs some charm and that's the reason that we want to attract it and improve it. I think that it is the esthetics that are very important to bring people here. I've been coming here for 11 years and I would hate to see or pass up the opportunity and watch further deterioration go on, and my comment would be PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 30 • mostly directed to the fact that we are a resort community and it takes neonle that want to have an experience and I think we need this desperately. WILTO: Thank you. SMITH: My name is Darrell Smith and I'm the owner of and I wonder if any consideration has been given to cost overruns and should they occur how will they affect the funding? STAUF'ER: According to the ordinance on page 8 it says the Town is going to pay for it and I don't agree with that. We're going to talk about it I'm sure. C PLAN: The Town is obligated by its own constraints not to exceed $1 million for the proposed assessment district. The voter authorization would be anticipated to be for $1.6 million. That means in terms of financing opportunities the Town would have $2.6 million. Should there be, there is a small contingency in the proposed budget of, I think, 5 or 7 %, some reasonable amount but relatively small. We feel that the construction costs are reasonable based on 1982 experiences, but should there be any cost overruns the burden would ly upon the Town of Vail and most likely the Town Open Space and Capital Improvements Fund. ANDERSON: May I say one thing, because I brought that up and Council hasn't • done it, and before I vote in favor of this ordinance I find this ordinance puts a constraint on the Town to build this according to the plans which are a sketch plan and hardly construction drawings so we are dealing with estimated costs and the cost overruns are an obligation to the Town and before I vote in favor of this we're going to have to have some resolution to this. WILTO: Bob. My name is Robert I owns Currents Jewelers in the Lionshead Mall. Two factors that strike me, first of all that improved traffic patterns for people to circulate on the mall, • the increased tax revenues that would be brought in by the Town over a 10 or 12 year period would probably tremendously offset PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 31 • more than what people anticipate in the down cycle up to now, and secondly, if we were to get into a down cycle over next summer, that would be a time to interrupt business rather than a high period and wish that we would have done it already and I would not want to interrupt two or three years from now it business does pick up. That wouldn't be the summer I'd want to interrupt. The summer I'd rather interrupt is when the revenues perhaps might be down but in fact, I think that a long hard look would have to be made at the increased sales revenues over a 10 year period to offset a good year. I really think this is a positive move. Thank you. ORKER: My name is Bob Parker. I represent Vail Associates, Inc., in Vail, Colorado. You're probably wondering about Vail Associates' position. I think that Vail Associates would be in a most affected position in terms of assessment of any business in the community. Vail Associates is supportive of the project and depending on the outcome of tonight's hearing, we'll probably go on record publicly in favor of the project. We do have a concern regarding the size of the projected budget for the project. Considering the economic times that we're all experiencing, we ask whether it would be a good idea to look at the project in phases in such a way that all iof the fundamentals of the project, that is mall surface, basic landscaping, lighting, and so on, would be accomplished in Phase I and the more esthetic elements of the project like the fountain, might be accomplished in another phase after the successful com- pletion of the first and some opportunity to observe the results of the first phase effort. Thank you. WILTO: Any other comments? If there are no other comments, we'll move on to a discussion of the ordinance but we'll continue the hearing on this portion of the hearing, to next week at our regular meeting on December 7 for the purpose of consideration of the ordinance . only. So we'll open discussion of Ordinance #40, Series of 1982, and ordinance creating the Lionshead Improvement District, approving PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 32 . the plan for and authorizing the construction, installation of special and local improvements. As I mentioned, a lot of the discussion on this ordinance this evening will be considered in the vote of next Tuesday. Do each of you have a copy of the ordinance in front of you? Are there any comments from the staff regarding this ordinance? CAPLAN: We've made a few minor changes that I don't think we need to point out but there's nothing of substance but they are in the revised ordinance which was on your desk before you this evening. They were basically technical changes, nothing that changed the basic substance of the ordinance. �ILT'O: Are there any comments from Council? WAHRLICH: Bill, I have a question regarding the installment way of paying. I don't know if Bill Pyka is still here or not. We talk about the interest shall be computed on the outstanding principal and interest and should be paid with each installment. Are we planning to collect interest on interest then? HARKNESS: That may be a typo, what page are you on. WAHRLICH: Page 9. CAPLAN: I don't think);we are, to answer your question. It's a good idea. WILTO: Bill Pyka, would you like to comment? I&KA: I'm not sure I HARKNESS: Perhaps I can comment on it. That shall read, "Interest shall be computed on the outstanding principal and shall be paid with each installment", so the answer to your question is no, we're not computing interest on interest. WAHRLICH: So we would strike out the words "with interest"? CAPLAN: Yes. ANDERSON: Bill, I would have, as I mentioned earlier, concerns on Section 2 (e) which says that the plans for the improvements are hereby approved, page 7. It would appear to me that were essentially working with . unless there are some drawings that I'm not aware of that we're working with design development drawings and I think that it should be noted that these are design development drawings in the PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 33 ordinance and that the Town may have the right to make some modifications between now and working drawings. And I think if we were to do that my second concern which is in paragraph F says that we will pay for any cost of overruns, would be somewhat mitigated, but I think it's very important when we're working with design development drawings, that Council has some flexibility on what the final outcome will be. CAPLAN: We did try to, the assessment district procedures require that plans be prepared and we tried to basically do as much as we could to satisfy the requirements of the law, but yet not lock the • Town Council and merchants out in the field who see things happening to a particular plan, so ANDERSON: Well I think the language right here though puts us in extreme financial liability in the position of the Town and is also somewhat deceptive to those people voting in favor of the district because we really don't see the specifics of what those plans are and I think it should be noted that they are design development plans. WILTO: Loring, is there any reason this can't be changed before first reading? HARKNESS: No there isn't. Typically in special assessment financing, as . Rich pointed out, preliminary plans and specifications are drafted for the purpose of deriving cost estimates and those cost estimates are generally specified as maximums and once the governing body concludes that it should go forward with the project, the next step would be to authorize the preparation of drawings of sufficient detail to go out to bid on the project and thereby fix the actual costs which would then govern the size of the bond issue, bearing in mind that the maximum cost has been locked in by the initial procedure and the hearing before the public. The concern about cost overrun is a very real one but there is some self control in the way the process works, because the Town's maximum liability • is the amount of the financing that is provided to pay the cost of the improvements and in this case the Town has concluded that PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 34 • it will issue no more than $1 million in special assessment bonds and then it will submit to the voters at a general obligation bond election a question that would authorize $1.6 million of general obligation bonds. So in order for the project to go forward, the Town would have to obtain fixed price contracts within the ability of the Town to issue bonds of these two types in order to fund the project. ANDERSON: Are you telling me that if we raise the $2.6 million and we did not have sufficient funds to complete the last 10percent of the paving, that that was the extent of the Town's liability? I would think we would have tremendous financial liability for not completing the plan. ;WINSTON; Typically, the ANDERSON: The question is, would we have the liability? WINSTON: Let me answer the question in this way. When contracts are let out for special assessment projects, they are conditioned on the availability of bond proceeds and the reason for that is the Town is prohibited from incurring contractual liability in excess of budgeted appropriated funds. The only exception to that is that bond proceeds are not subject to budget and appropriation and so the construction contracts are expressly conditioned upon the • availability of bond money to pay them, and so it does limit the Town's exposure in that regard. JOHNSTON: I would assume that in the $2.6 million of committed contract there would be a 10% plus or minus contingency factor. WINSTON:, Typically the way this works, and we've done several other mall projects of this nature, the contracts, at the conclusion of the construction documents phase, we then go to bid. If the bids exceed $2.6 million total cost of the project, the project is redesigned to match the $2.6 million. JOHNSTON: Including contingencies? INSTON:. Including contingencies. We would typically, as you suggested, that would be our typical request to have the 8-10% contingency upon submittal and at that point, once the bids are received and the contracts are awarded, then the contingency can be reduced slightly,you always need some contingency as there are things PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 35 • that neither we nor the contractor could anticipate, but if those prices exceed the $2.6 million then the project has to be redesigned and changed in some way to bring the price within 2% . ANDERSON: I think, Jack, that's my point, that we should state at this point in time that we are dealing with design development drawings, because let's take an extreme case if we have to eliminate the fountain. We, I think, would be in a position of liability if we did not state at the onset that we're dealing with design development plans. JOHNSTON: Chuck, would it make you more confortable if the term "preliminary" • was added - preliminary plans for the improvements are hereby approved? WINSTON: Technically, these plans are called "schematic" designs. Preliminary plans. STAUFER: The things you stated right now about a cushion, is that an automatic or should we list it in our ordinace, because I'm very concerned about an open-ended contract, what this is basically here. The Town will pay for any part of the project:cost which exceeds the estimated cost of the construction. Now all of us know whether you have a contract or not, usually the construction overruns at least 10%. Now is the Town would get stuck with $260,000, it would be a • hell of a burden on the Town to pay the $260,000, so are you going out and bid on the, let them bid 10% less rather than $2.6 million, you let them bid the $3.2 - $3.5 or something like this? WINSTON: Two things have happened. We built in about a 5% contingency, we've also taken a fairly conservative look at the costs that are here, we think are somewhat conservative. As we complete the construction documents phase, we will then do.a much more detailed cost estimate and have in that cost estimate the contingency fund. We did not do that with these plans. STAUFER: Well, I don't think that any of us would like to see the project • started and then have a -thing happen like in the Casino, when half of the building was finished and down there, I don't know if it's going to be the east mall or the west mall, which is going to get the short end of the stick. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 #age 36 INSTON: Well, what I'm telling you is that you'll know those numbers before the bid is awarded. STAUFER: What I'm talking about is the ordinance itself, because if we vote on that ordinance we're going to be committed to it. WINSTON: Yes, but you also have the responsibility and the opporunity to supervise the preparation of the construction documents to insure that they do not exceed the $2.6 million. JOHNSTON: But also, Hermann, we're not committed until the G.O. Bond election is passed. ANDERSON: Well, I'd just like to ask the Council if we could modify this . to state that we are based on schematic design which may be modified to keep the project within budget. HARKNESS: I think that's an appropriate addition and also perhaps in addition to the end of paragraph F, which would indicate that liability of the Town is subject to the availability of the receipt of bond proceeds. TODD: I found on page 5 the sentence that says, "said plans are satis- factory in all respects", part of it extends to the concerns raised by Chuck that we are working with very preliminary schematic drawings and I would like to have that sentence dropped but under no cir- cumstances would I want to have any wording in there that would • be construed to relieve the design firm of their customary responsibility for errors and omissions. And the second thing and I may just be misunderstanding the wording, but on page 8 where it talks about, after the consideration of the circumstances, etc., it comes down here and makes a statement that including but without limitation increased market value, in an amount which shall equal or exceed the maximum amount of of particular assessment to be assessed, each such property, while I concur that our consultant has made that, has come up with the opinion, I don't feel the Town should be in a position of insuring appreciation of property values and I think 0 we should be very clear about that. PUBLIC HEARING LIONSHEAD IMPROVEMENT PROJECT NOVEMBER 30, 1982 Page 37 *RKNESS: That's a very important part of the ordinance and I'd like to comment on that. The Town Council is charged with the responsi- bility of making a determination concerning this special benefit to be conferred. In assistance of that duty, an expert witness has to be called to testify as to. facts from which the Council might conclude that. If the Council cannot conclude that the special benefits at least exceeded the assessments in every case, then the underpinnings of the special assessment financing would be undermined. So that's a very important legal concern in the consumation of a special assessment district financing. The Town is not warranting that property values will increase. It is simply making a finding based on evidence that special benefits have been conferred, among which may be an increase in market value and among which may also be any number of the conditions that are specified in the Town's procedural ordinance about whichMr. Wallace testified previously. TODD: It is not a warrant then of property value increase? HARKNESS: That is correct. WALLACE: That's not an increase only in property values either. It could also limit a decline in property values. WILTO: Loring, how about Ron's first comment about, referring to the • sentence on page 5, I believe it was. HARKNESS: I think that what we need to do is to confine the finding there to approval of preliminary plans or schematic drawings as the language has been subjected. What we are attempting to do is to give preliminary approval to the preliminary plans at this stage and conclude they they conform to,the requirements of the Town's procedural ordinance. Perhaps satisfactory in all respects in not very artful. WILTO: Any other comments or questions from Council? Are there any comments from the audience? OERSON: I have some questions on our timing. In the presentation given earlier on the financing, it was suggested that if we were to carry forward with this project a bond issue would be held on the late first quarter of 1983. There are certain economists in the national market that would; -tell us that that's probably the worst possible PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 38 • time in the next 12 months we could be in the market. We've already had a little bad timing this year once. What would happen if we elected to delay that bond issue? What is being set in process at this point in time? HARKNESS: There really are 2 timing considerations with respect to general obligation bonds. One is the timing of the election and in terms of attempting to gain electorate approval, that is really a political question as to when the electorate is most receptive to approval of that question. Once the bonds are authorized at that election the timing can be for issuance of the bonds • can be delayed or advanced depending upon what advice the Town may have from its investment bankers as to market conditions then present. So, once the authorization is obtained there is some flexibility to either wait to speed up depending upon what the market it. ANDERSON: One more question on financing. It is my understanding that presuming that we proceed again, the funds for the special development district as they come from the development district, are not collected until the project's complete. HARKNESS: The bonds are issued based upon the results of the construction bids and then the bond monies are used to pay for that portion of • the project. When the project is substantially complete then the Town will hold hearings on the assessment, those costs, and then as Bill Pyka indicated in his testimony, the property owners may elect either to pay in lump sum or to finance that over the same term as the bonds. ANDERSON: I have one more question. Is Dick Ryan here still? Dick, in this construction, perhaps you can answer the question. Have we analyzed all of the various, first of all, if we started April 1st, how long do you think it would take to complete the project? 0 PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 39 QYAN: In talking with Jeff and Steve Patterson, the contractors will need basically the entire season. From April to November to get the mall operational for the winter ski season. And then in '84 it would be final'.landscaping, putting the sprinkler system in, benches, some of the finishing work. ANDERSON: Would there be access, would shops be open during this period of time? RYAN: There would be the option of having shops open, yes. ANDERSON: How hazardous would it be to get in and out of the shops? RYAN: I can tell you of one experience. I was working for the City • of Boulder during the construction of their mall. I think there was a very short period of time when some shops were not open. They actually had to rip out from the surface right next to the building. What they did was put in a series of boardwalks and there was the ability to get through the mall and I don't know if that will happen here in Vail, but the sales tax revenues in Boulder increased during the construction period. ANDERSON: Have we done any analysis to date on schedules of construction, to have the least possible impact on residents and merchants? RYAN: We have not done that. STAUFER: I have one more question. During the construction of the mall, • how many private properties are going to participate doing large enlargements to their store fronts to increase their commercial space during the same time. RYAN: OK, at this time we have not received any requests. There's been a couple of properties that have been working on it for a few years but have been having trouble getting a majority of owners approval to use their land. STAUFER: So you don't see any right now or during that time? RYAN: No, we have not received any requests. CAPLAN: We have spoken with at least one major property owner that would • anticipate doing it at that time if this proceeds. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 40 OHNSTON: According to the scenerio that Dick just gave us, and the timing on the assessment, would that mean that it would befall before the property owners would assessed? CAPLAN: That's correct. It would most likely be in fall of '83, which would mean that they would have that pay off time at that period, if they chose not to pay it off they would see it on their property tax statement beginning in 1984. JOHNSTON: OK, do all of you understand that? You would be paying in all probability in 1984. The first dollars would be paid by the general obligation bonds. When the project was some percentage along, then hearings would be heard and at a subsequent time you would be assessed. So you would not be paying dollars in all probability until the calendar year 1983, unless you elected upon assessment in say October of 1983, to pay all of yours at that time. If your elected to pay it out, finance it, then you would begin payments in January of 1984. So you're not really looking at the questionable economy of 1983 as far as the payout is concerned. WILTO: George, you had a questions? GEORGE: How would the decision be made as to which properties would be allowed to expand and to what extent? CAPLAN: In terms of which properties could be expanded, the Lionshead UYb-an Design Guide Plan designates which properties currently may be allowed to expand or modify. And some of those have chosen voluntarily to do so. There are always the opportunities which come before the Council from time to timefor other variances that are not perhaps part of the plan, plus the Town Council does review the plan on an annual basis, so there are those changes that could occur. GEORGE: It seems to me the time frame is such that those businesses or land owners that plan to expand are going to have to get with the program pretty quickly in order to receive the Town's or the designer's blessing for their proposal in order not to interfere with the proposed process. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 41 10APLAN: Yes, that's correct. WILTO: Somebody else have their hand up? Bob? LAZIER: Well, I would indicate that I would do some addition to the building in Lionshead. I consider that a good time to do any of the expanding and coordinate it at the beginning of the project. WILTO: Are there any other comments or questions about the ordinance? If you haven't had an opportunity to review it, there should be copies at the rear of the table, if there aren't, you can certainly pick up a copy in the morning here at the Town of Vail. CAPLAN: I would remind the Council that formally the procedure is if you • receive 50% protests or greater of the affected property owners, then you are obligated to kill the proposal. If you receive less than 50% protests, which you have received, then the decision lies in your hands whether or not to proceed or not to proceed, and that would be considered formally next Tuesday night at a regular meeting. WILTO: Are there any other questions or comments from the Council on the discussion? Loring, anything else that we should cover at this meeting? HARKNESS: No sir. WILTO: Before we adjourn, Mr. Caplan has a couple of items of information. PLAN: Yes, I'd like to request a member or members of the Town Council to attend the Design Review Board meeting tomorrow at 2:00 p.m. I understand there may be some affected property owners in conjunction with our radio station that will be discussing the matter and I think that since the Council has, let me update you first of all that after your work session last Tuesday, Mr. Eberle contacted members of the Design Review Boardand 4 of them gave their approval to proceed on a interim basis with the Ford Park telephone post. Since that time the residents of the Book Creek area have expressed, some of the residents have expressed a concern about the matter and the matter formally will be in front of the DRB tomorrow for further consideration basically based on your direction of last Tuesday. PUBLIC HEARING LIONSHEAD IMPROVEMENT DISTRICT NOVEMBER 30, 1982 Page 42. The other two items I have can wait. WILTO: May we have a motion to continue the meeting until our next regular meeting? JOHNSTON: So move. STAUFER: Second. Meeting adjourned. Respectfully submitted, r ATTEST: Pamela A. Brandmeyer, T#n Clerk 0 40