ABBEY SKRIVSETH

By ABBEY SKRIVSETH

Bellevue City Administrator and Clerk

The City Council and City staff are receiving many questions regarding the upcoming public hearing and agreements with Offshore Enterprises.

There appears to be confusion on the purpose of this public hearing and what agreements the City is entering into with Offshore Enterprises along with how TIF works and some facts on the City’s municipal swimming pool. This editorial is to, hopefully, provide additional information and more clarification for citizens.

1. What is the purpose of April 5 Public hearing?:  The April 5 public hearing is to amend the urban renewal plan for the Bellevue urban renewal area.  Again, the public hearing is to amend the urban renewal plan.  What does this exactly mean?  An urban renewal plan is necessary for a City to utilize Tax Increment Financing (TIF) to itself or developers.  In order to approve a TIF development agreement, per state regulations, there must be a plan in place and specifics must be listed on this plan. This plan is the urban renewal plan.  

Amending the urban renewal plan gives the city the option to then enter into a new agreement, at a later date.  It does not mean the City will enter into all agreements or the city will carry out all the projects listed on the urban renewal plan but it provides the option for the City to do so.  

Specifically, this amendment would allow the Council to enter into an agreement (Aquatic Center Development Agreement) with Offshore Enterprises for the development of an aquatic center using TIF revenues not to exceed $1,000,000 over 20 years.

2.What is the Aquatic Center Development Agreement?: In order for the Council to approve a new development agreement with Offshore Enterprises, the City will need to set a date for another public hearing to enter into a new agreement.  This public hearing would be held sometime after April 5th and would require notifying the public 10-20 days before the public hearing.  After this proposed public hearing is held, then the City could look to approve the development agreement via a resolution.  This agreement is for the aquatic center only and will include: pool, playground, jump pad, lake, and beach.  The agreement also discusses Offshore Enterprises providing swimming lessons.  If Offshore Enterprises does not fulfill its requirements for improvements, then the agreement would become void.  Each year the agreement will be evaluated by representatives from Offshore Enterprises and the City to make sure the agreement is a win/win for both.

3. Is the City going to pay $30,000 per year to Offshore?  The proposed Aquatic Center Development Agreement requires Offshore Enterprises to give city residents a discounted rate for the aquatic center. In return for this resident discount, the City would contribute $30,000 each year from the general fund, which has always supported the pool.  

This is for city residents only.  Details are still being worked out on how rates and discounts would be issued, but this partnership would secure residents a discounted rate.  See below for more details on the City’s existing pool financing.  This $30,000 will not be paid if a city citizen discount is not provided.  

Again, each year the agreement will be evaluated by representatives from Offshore Enterprises and the City to make sure the agreement is a win/win for both.

The City is on a 6/30 FYE so the following years run from July 1 to June 30 and would contain a combination of two half pool seasons to make up one full year.

FYE 2021        FYE 2020    

Budget        *Actual

Exp    $66,350        $52,221

Rev    $20,800        $4,915

Shortfall $45,550    $47,306

Tax %    0.456%            

*COVID-19 impacted the actuals: FYE 2020 does not include May & June 2020 as the pool was closed.

FYE 2019        FYE 2018    

Actual            Actual

Exp    $53,420        $48,029

Rev    $23,445        $21,272

Shortfall $29,975    $26,757            

4. Did the City already enter into an agreement with Offshore Enterprises?  On December 21, 2020, a public hearing was held to amend the urban renewal area and the council then approved an Amended and Restated Development Agreement with Offshore Enterprises. This agreement was the original agreement that the City still had in place with AJ Spiegel (whom formally owned Offshore/Baymont) along with increasing the maximum TIF revenue amount and extending the term.  This would cover Offshore Enterprises proposed development plans to the campground, event center, restaurant, boat docks, and fuel pumps.  

5. Is the City’s 1965 Municipal Swimming Pool going to open up this summer and hold swimming lessons?  Yes, the Council has budgeted and is planning for the opening of the pool for 2021, assuming the City’s (56-year-old) pool fills, and to offer swimming lessons. The Council will also continue open communication with Offshore Enterprises on the opening of their new pool.  The Council has had long discussions on the pros and cons of the City pool.  If the City pool were to permanently close after the 2021 season, the future of what the pool site might become is unknown at this time.

6. Should the City consider building its own pool?: If the City were going to build a new pool, a large bond referendum would need to be approved by city citizens.  This would lead to an increase in property taxes.  

In the past, a committee was formed and detailed efforts were completed but the referendum did not pass.  The early 2000’s bond referendums were for $1,000,000 along with an additional $1,000,000 being fundraised, today’s prices would be much larger due to inflation and cost of materials:

September 2004    April 2006

Yes: 265; ~39%    Yes: 298; ~54%

No: 422; ~61 %     No: 254; ~46%

7. Will my taxes go up because of these agreements and TIF revenue being reimbursed to Offshore?  No.  Offshore Enterprises will still pay taxes on their properties.  They will then be reimbursed for a portion of the increased property taxes related to improvements on the site.  There is also a cap on the total rebate.  All tax asking bodies that rely on taxes for certain levies (such as debt service) will still receive their share of increased property taxes before Offshore Enterprises receives their reimbursement.  The more capital improvements made, the more property taxes would be increased.  Yes, they will receive reimbursement from most of these property taxes but after 20 years, these property taxes will no longer be reimbursed.  When reimbursement is no longer received, then this growth in property taxes will be distributed to the city, county, school district, etc.  

8. How does my business or a future developer receive TIF revenue reimbursement?  First, the City Council and the Jackson County Economic Alliance are always open to discussing development opportunities with existing and new property owners.  

Assuming the Council would be in favor of an agreement, then a public hearing would need to take place to update the urban renewal plan (if the project is not already listed) and a second public hearing would need to be held along with passing a resolution for the new agreement.  Note, Offshore Enterprises is investing approximately $6,500,000 of improvements into the site, on top of the property’s purchase price.  This project brings much more than just the large capital investment.  Offshore Enterprises will provide job opportunities and bring many tourists to Bellevue.  

An increase in tourism will translate into more sales for other businesses in the community as well as increases sales tax revenue for the community.  

A few recent TIF agreements include the Old Button Factory Renovation, the Hefel Subdivision, and the City’s Downtown Incentive Grants.  One could question, would AJ Spiegel have stuck money into transforming an industrial piece of property into a Baymont Hotel, event center, and restaurant without a private/public partnership in TIF?  Would Hefel subdivision exist without a private/public partnership, which all tax asking bodies are now receiving property taxes on?  The City’s Downtown Incentive Grants would not have occurred without TIF; the City has paid out roughly $105,000 in grants that lead to an additional ~$260,000 in private funds being invested into our downtown area.