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25.06.02 DDA FINAL Website Packet 970.748.4088 predmond@avon.org TO: Chairperson Tony Emrick and DDA Board Members FROM: Paul Redmond, Chief Finance Officer RE: Early Childhood Education Center Funding Agreement DATE: May 28, 2025 SUMMARY: This report presents a draft funding agreement between the Avon DDA and Town of Avon to provide funding to Eagle River Valley Childcare (“ERVC”) for the construction of an early childhood education facility on the eastern part of Planning Area E, Village (at Avon). The Vail Valley Foundation is the organization that is leading the design, funding, construction and programming of this Facility. Vail Valley Foundation formed ERVC as a non-profit entity to oversee this Facility and hopefully additional early childhood education facilities in Eagle County. ERVC is controlled by the Vail Valley Foundation. The funding agreement approves remittance of $400,000 of Avon DDA tax increment financing funds received by the Avon DDA to the Town of Avon, who will then provide the funds to ERVC. The Avon DDA Plan describes the procedure for approval of use of tax increment financing revenues and approval of projects. BACKGROUND: This Facility will be 13,600 sq.ft. with twelve classrooms and will have capacity for 160+ children ages 0-5. The estimated construction cost is $13,500,000. Vail Valley Foundation is in the process of raising these funds from private donors and through investments by various employers based in Eagle County that secure a limited number of enrollment positions. Vail Valley Foundation hopes to begin construction this July and complete construction and open by October 2026. The Town of Avon received the Property as a dedication for school purposes under the Village (at Avon) Planned Unit Development Guide and the Consolidated, Amended, and Restated Annexation and Development Agreement (“CARADA”). Vail Valley Foundation conducted a request for proposal process for an Operator and selected Access Early Education and founder Jennifer Knott, who has successfully opened early childhood education facilities in Glenwood Springs, Rifle, Grand Junction and Crested Butte. On April 8th, 2025 the Avon Town Council approved a 50-year land lease with ERVC with the lease beginning on May 1, 2025. Avon Contributions: In addition the 50-year Land Lease, the Town of Avon would contribute the following: • Construction of a bus stop (estimated costs $50K to $70K) • Installation of Photovoltaics and Battery Capacity (estimated costs $100,000) • Cash contribution of $400,000, coming from the Avon Downtown Development Authority funds and conditioned upon approval of agreement between Town of Avon and Avon DDA • Complimentary passes to Avon Recreation Center for all employees of the Facility • Waiver of Use Tax, Sales Tax, Real Estate Transfer Tax (estimated value of $270,000) • Waiver of Plan Review and Building Permit Fees (estimated value of $113K) Page 2 of 3 • Avon would receive a de minimus ownership interest in the Facility so that it is exempt from property taxes to all jurisdictions. PROJECT REVIEW: The Avon DDA Plan specifically contemplated the use of Avon DDA tax increment financing to support construction of an early childhood education facility. The third recital of the Funding Agreement references the language in the Avon DDA Plan as follows: WHEREAS, Section 5.3 of the Avon Downtown Development Authority Plan document, dated Oct 2, 2023 (“DDA Plan”), states in part, “Support for early childhood education facilities will also enhance the attractiveness of the Downtown Area as a desirable place for workforce living; Section”; 6.5 of the DDA Plan identifies an early childhood education center as a project that may benefit from financial support from the DDA; and Section 7.3.b. of the DDA Plan contemplates that Avon and the DDA would enter into agreements to provide financial assistance in support of development projects consistent with the DDA Plan; PROCESS: Section 8.0 of the Avon DDA Plan states: 8.0 PROJECT APPROVAL PROCESS. Projects which are proposed to be financed in whole or in part with DDA tax increment financing sources shall be reviewed by the DDA Board to determine if such project advances the purposes and objectives in this DDA Plan. The DDA Board shall conduct such work sessions as are appropriate. Projects be subject to: review and recommendation by the Avon Planning and Zoning Commission as set forth in the Avon Development Code; review, comment and recommendation by the Avon Financing Committee; and review and concurring approval by Council. The DDA Board, Avon Planning and Zoning Commission, Avon Finance Committee and Council shall each conduct a public hearing prior to taking final action or providing a recommendation. Avon Staff is scheduling public hearings by Avon Planning and Zoning Commission on June 9, 2025, Avon Finance Committee on July 7, 2025, and Avon Town Council on July 22, 2025. FINANCIAL CONSIDERATIONS: The DDA is asked to consider a funding agreement with ERVC. The DDA would make a financial donation not to exceed $400,000 over a three-year period dependent on the cash flow of the DDA. Per the DDA documents, at least fifty (50%) percent of the DDA revenues should be designated for Community Housing. The revenues anticipated in 2025 are $412,000. 50% would amount to $206,000. Property tax revenues are received in the fall after Eagle County conducts all property tax collections. The funding would be used for the construction of the Early Childhood Education Center. Projected funding to ERVC is as follows: 2025 – estimated $200,000 2026 – estimated $200,000 TOTAL $400,000 RECOMMENDATION: Staff recommends approval of a funding agreement. This will be a great use of DDA funds and benefit our community by adding much needed additional pre-school capacity serving the Avon community. Attachment A, is a draft fund agreement with ERVC and is subject to attorney review. If Page 3 of 3 approved, Staff will bring Resolution 25-01 Amending the 2025 budget to an Avon DDA meeting later this summer. TOWN MANAGER COMMENTS: The estimated cost for the ERVC facility has increased over the last year. The Town of Avon offered support in a variety of areas in addition to providing the land. We understand that VVF is raising $13+ million to fund construction of the facility. This project represents a collaborative partnership to achieve a high quality and high capacity facility that will serve an important public need. The Northwest Colorado Council of Governments early childhood education report documents the need and importance of such facilities to support the regional workforce. I support this project and the funding from the Avon DDA. PROPOSED MOTION: “I move to approve the Eagle River Valley Childcare Funding Agreement with the Town of Avon as presented subject to review and revision by the Town Attorney”. Thank you, Paul ATTACHMENTS: ATTACHMENT A: Draft ERVC Funding Agreement DRAFT DRAFT Funding Agreement – Early Childhood Education May 30, 2025 Page 1 of 2 FUNDING AGREEMENT EAGLE RIVER VALLEY CHILDCARE FACILITY THIS FUNDING AGREEMENT (“Agreement”) is entered into on July 1, 2025, by and between the Avon Downtown Development Authority, a Colorado Authority (“DDA”), and Town of Avon, a Colorado Home Rule Municipality (“Avon”), (collectively referred to as the “Parties”). RECITALS WHEREAS, Eagle River Valley Childcare desires to support early childhood education in the Avon community and construct a 13,600 sq ft facility to be located on the eastern portion of Planning Area E, in the Village (at Avon) (“Facility”); WHEREAS, Avon approved a Land Lease with Eagle River Valley Childcare stating that Avon, through the DDA, would provide $400,000 in funding to support the construction of the Facility; WHEREAS, DDA and Avon desire to promote an early childhood education center in the Avon community; WHEREAS, Section 5.3 of the Avon Downtown Development Authority Plan document, dated Oct 2, 2023 (“DDA Plan”), states in part, “Support for early childhood education facilities will also enhance the attractiveness of the Downtown Area as a desirable place for workforce living; Section”; 6.5 of the DDA Plan identifies an early childhood education center as a project that may benefit from financial support from the DDA; and Section 7.3.b. of the DDA Plan contemplates that Avon and the DDA would enter into agreements to provide financial assistance in support of development projects consistent with the DDA Plan; WHEREAS, Avon and the DDA find that the construction and operation of the early childhood education facility proposed by Eagle River Valley Childcare will promote the purposes stated in Section 1.2 of the DDA Plan, will provide an attractive, high-quality amenity for full-time residents in the area, and will promote the healthy, safety and general welfare of the Avon community; and WHEREAS, Section 8.0 requires the DDA, Avon Planning and Zoning Committee, the Avon Finance Committee and Avon Town Council to hold a public hearing on projects proposed to be financed in part by the DDA, and the DDA held a public hearing on June 2, 2025, the Avon Planning and Zoning Commission held a public hearing on June 9, 2025, the Avon Finance Committee held a public hearing on July 7, 2025, and the Avon Town Council held a public hearing on July 22, 2025. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS CONTAINED HEREIN, AVON AND ERVC AGREE AS FOLLOWS: 1.CONSTRUCTION SUPPORT: DDA agrees to remit to Avon FOUR HUNDRED THOUSAND DOLLARS ($400,000) (“Construction Support”) commencing on October 1, 2025, and payable each year in the amount of 50% of the total tax increment funds received, less administrative costs, until the total Construction Support amount has been paid to Avon. Avon agrees to use the funds to remit to Eagle River Valley Childcare exclusively for the purpose of defraying the cost of construction of the Facility. 2.Term of Agreement. This Agreement shall be effective until the Construction Support is paid in full to Avon, and then this Agreement shall automatically expire. 3.Modification. This Agreement contains the entire agreement between the Parties, and no agreement shall be effective to change, modify, or terminate in whole or in part unless such ATTACHMENT A DRAFT DRAFT Funding Agreement – Early Childhood Education May 30, 2025 Page 2 of 2 agreement is in writing and duly signed by the Party against whom enforcement of such change, modification, or termination is sought. 4.NO WAIVER OF GOVERNMENTAL IMMUNITY: Nothing in this Agreement shall be construed to waive, limit, or otherwise modify any governmental immunity that may be available by law to Avon or the DDA, its officials, employees, contractors, or agents, or any other person acting on behalf of Avon and the DDA and, in particular, governmental immunity afforded or available pursuant to the Colorado Governmental Immunity Act, Title 24, Article 10, Part 1 of the Colorado Revised Statutes. 5.NO THIRD-PARTY BENEFICIARIES: Nothing contained in this Agreement is intended to or shall create a contractual relationship with, cause of action in favor of, or claim for relief for, any third party, including any agent, sub-consultant or sub-contractor of contractor. Absolutely no third-party beneficiaries are intended by this Agreement. Any third-party receiving a benefit from this Agreement is an incidental and unintended beneficiary only. 6.Article X, Section 20/TABOR. Avon and DDA understand and acknowledge that Avon and DDA are subject to Article X, §20 of the Colorado Constitution ("TABOR"). The Parties do not intend to violate the terms and requirements of TABOR by the execution of this Agreement. It is understood and agreed that this Agreement does not create a multi-fiscal year direct or indirect debt or obligation within the meaning of TABOR and, therefore, notwithstanding anything in this Agreement to the contrary, all obligations of the Parties are expressly dependent and conditioned upon the continuing availability of funds beyond the term of the Parties’ current fiscal period. Financial obligations of the Parties payable after the current fiscal year are contingent upon funds for that purpose being appropriated, budgeted, and otherwise made available in accordance with the rules, regulations, and resolutions of the Parties, and other applicable law. Upon the failure to appropriate such funds, this Agreement shall be terminated. 7.Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. The Parties agree that venue in any action to enforce or interpret this Agreement shall be in the District Court for Eagle County, Colorado. AVON DOWNTOWN DEVELOPMENT AUTHORITY: BY:__________________________________ ATTEST:__________________________________ Tony Emrick, Chairperson Chris Neuswanger, Secretary AVON TOWN COUNCIL: BY:__________________________________ ATTEST:__________________________________ Tamra N. Nottingham, Mayor Miguel Jauregui Casanueva, Town Clerk ATTACHMENT A DDA MEETING MINUTES MONDAY, APRIL 14, 2025 HYBRID MEETING, IN PERSON AND VIA MICROSOFT TEAMS AVON DDA MEETING MINUTES APRIL 14, 2025 PAGE 1 | 2 ROLL CALL Present in Person: Chair Tony Emrick, and Board Members Gregg Cooper, Brandt Marott & Wayne Hanson Present Virtually: Board Members Scott Tarbet, Rob Tartre, Councilor Chico Thuon (3:08 p.m.), Matthew Fitzgerald (3:24 p.m.). Absent: Board Members Lisa Mattis, Chris Neuswanger and Marcus Lindholm. Staff: Community Development Director Matt Pielsticker, Deputy Town Manager Patty McKenny, CFO Paul Redmond and CAO Ineke de Jong. The meeting was called to order at 3:06 p.m. DDA Board Chair Tony Emrick presided over the meeting. There was quorum with 6 Board Members present at the time. 2.APPROVAL OF AGENDA Board Member Gregg Cooper motioned to approve the agenda as presented. Board Member Tony Emrick seconded the motion. The motion was approved with a 6-0 vote of those present at that time. 3.DISCLOSURE OF ANY CONFLICTS OF INTEREST RELATED TO AGENDA ITEMS Board Chair Emrick asked if there were any conflicts of interest, and none were disclosed. 4.PUBLIC COMMENT No public comments were made in person nor virtually. Councilor Chico Thuon joined virtually at 3:08 p.m. 5.BUSINESS ITEMS 5.1 Work Session: Overview of Avon’s Community Housing Efforts (Community Development DirectorMatt Pielsticker) Community Development Director Matt Pielsticker delivered his presentation on the high level / wide overview of Avon’s Community Housing efforts and every possible lot in Town. The DDA board members asked questions and made comments. Board member Matthew Fitzgerald joined virtually at 3:24 p.m. Staff reminded the board that this is a broad overview and reminder of all the ongoing efforts. Although there is no vertical development right now, there are a lot of ongoing efforts in progress. As this was a work session, no motion was made. 5.2 Work Session: Review of Draft RFP for Sun Road Conceptual Design Services (Community Development Director Matt Pielsticker) Community Development Director Matt Pielsticker delivered his presentation on the draft RFP for Sun Road Conceptual Design Services. He gave kudos to staff including Patty McKenny for writing and getting awarded a $200,000 DOLA grant for a design process for conceptual design planning. There are 3 draft RFPs in the packet and the services are broken into 3 segments: 1) Transit Planning RFP 2) Conceptual Design RFQ 3)Fiscal Analysis RFP DDA MEETING MINUTES MONDAY, APRIL 14, 2025 HYBRID MEETING, IN PERSON AND VIA MICROSOFT TEAMS AVON DDA MEETING MINUTES APRIL 14, 2025 PAGE 2 | 2 Matt Pielsticker expressed that we would like to get started with this process as soon as possible and welcome any feedback and comments that the DDA members may have. If anyone is interested, please let staff know. The DDA agreed that getting 3 different firms with expertise to look at the 3 different parts makes sense. Staff expressed we would like to get going with the transit part this month and then stagger the other 2 parts/RFP’s. The DDA board members provided input and comments. Gregg Cooper expressed his interest to be on the selection committee to assist Town staff with the selection process. If others are interested also, please email Matt Pielsticker. As this was a work session, no motion was made. 5.3 Work Session: Early Childhood Education Center Funding Agreement (Chief Finance Officer Paul Redmond) DDA Board Chair Tony Emrick asked CFO Paul Redmond to confirm the current DDA fund balance. Paul confirmed the 2024 year end balance is $45,690 with a projected ending fund balance for 2025 of $112,781. CFO Paul Redmond delivered his presentation on the Early Childhood Education Center Funding Agreement. VVF is confident that they will have 80% of the funding secured by May 31, 2025. There is a proposal for the Town to contribute $400K from the DDA fund in the next 3 years to help fund construction. If VVF is successful and secures 100% of the funding without needing the DDA’s help, the $400K would be contributed towards an endowment fund. The DDA Board discussed the $1,000/SF estimated building cost to build this facility and wondered if it’s really that high. Paul explained there is no action by the DDA Board at this meeting but staff will bring back a proposed agreement at the June board meeting for the DDA Board to review and approve. 6. MINUTES Board Member Gregg Cooper presented a motion to approve the Minutes from Avon DDA Board Meeting held February 3, 2025. Board Member Wayne Hanson seconded that motion. They were approved unanimously by those present at that time. 7. ADJOURNMENT DDA Board Chair Emrick adjourned the meeting at 3:56 p.m. Respectfully submitted by: Ineke de Jong Chief Administrative Officer These minutes are only a summary of the proceedings of the meeting. They are not intended to be comprehensive or to include each statement, person speaking or to portray with complete accuracy. The most accurate records of the meeting are the audio of the meeting, which is housed in the Town Clerk' s office.