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TC Ord. No. 2006-08 Amending title 3 avon muni code concerning the public accommodations tax and real property transfer tax to provide a credit against such taxes due if certain public improvement fees have been paid in connection with the development knoTOWN OF AVON, COLORADO ORDINANCE NO. 06-08 Series of 2006 AN ORDINANCE AMENDING TITLE 3, AVON MUNICIPAL CODE CONCERNING THE PUBLIC ACCOMMODATIONS TAX AND REAL PROPERTY TRANSFER TAX TO PROVIDE A CREDIT AGAINST SUCH TAXES DUE IF CERTAIN PUBLIC IMPROVEMENT FEES HAVE BEEN PAID IN CONNECTION WITH THE DEVELOPMENT KNOWN AS THE CONFLUENCE WHEREAS: A. The Town is a municipal corporation duly organized and existing under its Home Rule Charter adopted pursuant to Article XX of the Constitution of the State of Colorado. B. The Town desires to cooperate in the development of certain property within the Town known as "The Confluence" and to cooperate in the funding of public improvements related to such development. The Town has heretofore entered into a Facilities Operation Agreement, dated May 10, 2006 (the "Facilities Agreement"), by and between the Town and Confluence Metropolitan District (the "District") and into an Amended and Restated Development Agreement, dated as of March 14, 2006 (the "Development Agreement") by and between the Town and Avon Confluence LLC (together with its successors and assigns, the "Developer"). C. Pursuant to the PIF Covenant (as defined in the Facilities Agreement), the Developer has imposed a public improvements fee on certain lodging sales and services occurring within the property known as The Confluence and described in the PIF Covenant as the PIF Property, which public improvement fee is to be used to contribute to the operation of public improvements within the Town. D. The Developer is authorized pursuant to the PIF Covenant (as defined in the Development Agreement) to impose a public improvements fee on the first real property transfer of certain real property located within the property known as The Confluence and described in the PIF Covenant as the PIF Property, which public improvement fee is to be used to contribute to the financing of public improvements within the Town. E. Pursuant to the Facilities Agreement, the Town desires to provide a tax credit against the obligation to pay the public accommodations tax to the Town for persons or entities who pay the public improvement fee defined in the Facilities Agreement as the "Lodging PIF". F. Pursuant to the Development Agreement, the Town desires to provide a tax credit against the obligation to pay the real property transfer tax to the Town for persons or entities who pay the public improvement fee defined in the Development Agreement as the "Real Property Transfer PIF." NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 2. Public Accommodations Tax Credit. Chapter 3.28, Title 3, Avon Municipal Code, is amended by the addition of a Section 3.28.076 to provide as follows: Notwithstanding any other provisions of this Chapter, and in order to implement the provisions of the Facilities Operation Agreement, dated as of May 10, 2006 (the "Facilities Agreement"), by and between the Town of Avon and Confluence Metropolitan District, there shall be granted to each person or entity owing the public accommodations tax on the sale or provision of lodging services which are subject to Town public accommodations tax occurring within the PIF Property, as defined in the PIF Covenant, and incorporated herein by this reference, a temporary tax credit against collection of the public accommodations tax as hereinafter set forth. Such tax credit shall be granted in the form of a credit in an amount equivalent to the rate of the applicable public accommodations tax levied by the Town, and shall attach to a particular transaction only to the extent that the Lodging PIF is collected and received by the Collecting Agent for such transaction. The tax credit for the public accommodations tax shall be automatic and shall take effect immediately upon the first remittance to and receipt by the Collecting Agent of the Lodging PIF (reflected on the retailer's periodic tax report relating to the Ordinance No. 06-08 Tax Credit Page 2 of public accommodations tax to the Town) following the PIF Commencement Date with respect to the Lodging PIF. The tax credit for the public accommodations tax shall be granted during each PIF Collection Period with respect to the Lodging PIF and shall not exceed the amount of the public accommodations tax. All capitalized terms used in this section and not otherwise defined herein shall have the meanings given to them in the Facilities Agreement. Section 3. Real Property Transfer Tax Credit. Chapter 3. 12, Title 3, Avon Municipal Code, is amended by the addition of Section 12.066 to provide as follows: Notwithstanding any other provisions of this Chapter, and in order to implement the provisions of the Amended and Restated Development Agreement, dated as of March 14, 2006 (the "Development Agreement"), by and between the Town of Avon and Avon Confluence LLC (together with its successors and assigns, the "Developer"), there shall be granted to each person or entity owing the tax on transfers of real property which is subject to Town real property transfer tax occurring within the PIF Property, as defined in the PIF Covenant, and incorporated herein by this reference, a temporary tax credit against collection of the real property transfer tax as hereinafter set forth. Such tax credit shall be granted in the form of a credit in an amount equivalent to the rate of the applicable real property transfer tax levied by the Town and shall attach to a particular transaction only to the extent that the Real Property Transfer PIF is collected and received by the Collecting Agent for such transaction. Further, such tax credit shall apply only with respect to real property transfer tax payable on the first transfer of real property [from the Developer to a third party] and any subsequent transfer of real property which are subject to the Town real property transfer tax shall not be subject Ordinance No. 06-08 "fax Credit Page 3 of 5 to this tax credit. The tax credit for the real property transfer tax shall be automatic and shall take effect immediately upon the first remittance to and receipt by the Collecting Agent of the Real Property Transfer PIT following the PIF Commencement Date with respect to the Real Property Transfer PIT. The tax credit for the real property transfer tax shall be granted during each PIF Collection Period with respect to the Real Property Transfer PIF and shall not exceed the amount of the real property transfer tax. All capitalized terms used in this section and not otherwise defined herein shall have the meanings given to them in the Development Agreement. The credit provided for herein shall expire, and this Section 3.12.066, shall be deemed repealed upon the satisfaction of the obligations of the Town pursuant to Section 5.1 of the Development Agreement. Section 4. Effect of Credit. The Town Council hereby determines that the creation or termination of this credit does not constitute a tax increase, the imposition of a new tax, or a tax policy change directly causing a net tax revenue gain to the Town, and that nothing herein, in the Facilities Agreement or in the Development Agreement creates a multiple fiscal year financial obligation or other indebtedness of the Town. Nothing herein, in the Facilities Agreement, in the Development Agreement or in the PIF Covenant prohibits the Town from amending or terminating this tax credit. Section 5. Repealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed. Section 6. Ratification. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the Town Council and other officers and employees of the Town in connection with the Facilities Agreement and the Ordinance No. 06-08 Tax Credit Page 4 of Development Agreement and the implementation of the provisions thereof are hereby ratified, approved and confirmed. Section 7. Effective Date. This Ordinance shall be in full force and effect seven days after posting following final adoption. INTRODUCED, PASSED ON FIRST READING AND ORDERED POSTED the 9th day of May, 2006, and a public hearing hereon shall be held the 23rd day of May, 2006 at 5:30 P.M. in the Council Chambers, Avon Municipal Building, 400 Benchmark Road, Avon, Colorado. TO VON, COL DO C~ <~i r ^SY _..i n onald C. Wolfe, Mayor ATTEST: a..tl. C Pa y Mtnn), o n Clerk ADOPTED ON SECOND READING AND ORDERED POSTED the day of 12006. TOWN AVON, COLORA O cc. Ronald C. Wolfe, Mayor ATTEST: ty M Kenny lerk ; % rt X. APPROVED AS TO FORM: John W. Dunn, Town Attorney Ordinance No. 06-08 Tax Credit Page 5 of5 e i. • MEMORANDUM TO: TOWN COUNCIL FROM: TOWN ATTORNEY RE: RIVERFRONT SUBDIVISION TAX CREDIT ORDINANCE oLV DATE: Ma y~q 06 On the Council agenda is an ordinance providing for a credit against the real estate transfer tax and the public accommodations tax under certain circumstances. This ordinance is recommended for adoption by the Council as a part of the implementation of the Council's approval of the Amended and Restated Development Agreement and Facilities Operation Agreement for The Confluence on March 14, 2006. The Annexation and Development Agreement provides fora rebate of incremental real estate transfer taxes to the developer of Riverfront Subdivision in the amount of $1,557;000. The rebate is subject to annual appropriation although it is anticipated that most if not all of that amount will be rebated upon opening of the Westin Hotel. The Facilities Operation Agreement obligates the Town to make annual contributions to the operation and maintenance of the gondola. and public plaza and restrooms. That obligation is also subject to annual appropriation by the Council. The proposed ordinance has been agreed to as a part of both agreements. It is understood that the tax credit concept contained in the ordinance is necessary to give lenders an assurance that the developer and the Confluence Metropolitan District will have an alternate revenue stream in the event of non-appropriation by the Council. The ordinance therefore provides that, in the event_of non-appropriation, public improvement fees (PIF's) in the same amount will be collected and paid to the developer and the District. One PIF would mirror the real estate transfer tax, and the other PIF would mirror the public accommodations tax. Pursuant to the two agreements, the Town's finance director would serve as collecting agent to assure that the correct amount is collected. The Amended and Restated Development Agreement commits the Council to the approval of this ordinance within 15 days of the effective date of the agreement. Inasmuch as purchase of the property by the developer was closed on April 28, it is necessary that Council approve the ordinance on first reading at this time. JWD:ipse 0 .1 TOWN OF AVON, COLORADO • ORDINANCE NO. 06-08 Series of 2006 AN ORDINANCE AMENDING TITLE 3, AVON MUNICIPAL CODE CONCERNING THE PUBLIC ACCOMMODATIONS TAX AND REAL PROPERTY TRANSFER TAX TO PROVIDE A CREDIT AGAINST SUCH TAXES DUE IF CERTAIN PUBLIC IMPROVEMENT FEES HAVE BEEN PAID IN CONNECTION WITH THE DEVELOPMENT KNOWN AS THE CONFLUENCE WHEREAS: A. The Town is a municipal corporation duly organized and existing under its Home Rule Charter adopted pursuant to Article XX of the Constitution of the State of Colorado. B. The Town desires to cooperate in the development of certain property within the Town known as "The Confluence" and to cooperate in the funding of public improvements related to such development. The Town has heretofore entered into a Facilities Operation Agreement, dated May , 2006 (the, "Facilities Agreement"), by and between the Town and Confluence Metropolitan District (the "District") and into an Amended and Restated Development Agreement,- dated as of March 14, 2006 (the Development Agreement") by and between the Town and Avon Confluence. LLC (together with its successors and assigns, the "Developer") C. Pursuant to the PIF Covenant (as defined in the Facilities Agreement), the Developer has imposed a public improvements fee on certain lodging sales and services occurring within the property known. as. The Confluence and described in the PIF Covenant as the PIF Property, which public improvement fee is to be used to contribute to the operation of public improvements within the Town. D. The. Developer is authorized pursuant to the PIF. Covenant (as defined. in the Development Agreement) to impose a public improvements fee on the first real property transfer of certain real property located within the property known as The Confluence and described in the PIF Covenant as the PIF Property, which public improvement fee is to be used to contribute to the financing of public improvements within the Town. E. Pursuant to the Facilities Agreement, the Town desires to provide a tax credit against the obligation to pay the public accommodations tax to the Town for persons or • entities who pay the public improvement fee defined in the Facilities Agreement as the "Lodging PIF". F. Pursuant to the Development Agreement, the Town desires to provide a tax credit against the obligation to 'pay the real property transfer tax to the Town for persons or entities who pay the public improvement fee defined in the Development Agreement as the "Real Property Transfer PIF." NOW THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON, COLORADO: Section 2. Public Accommodations Tax Credit. Chapter 3.28, Title 3, Avon Municipal Code, is amended by the addition of a Section 3.28.076 to provide as follows: Notwithstanding any other provisions of this Chapter, and in order to implement the provisions of the Facilities Operation Agreement, dated as of May , 2006 (the "Facilities Agreement"), by and between the Town of Avon and Confluence Metropolitan. District, there shall be granted to each person or entity owing the public. accommodations tax on the sale or provision of lodging services which are subject to Town public accommodations tax occurring within the PIF Property, as defined in the PIF Covenant, and incorporated herein by this reference, a temporary tax credit against collection of the public accommodations tax as hereinafter - - - set forth. Such-tax credit shall be granted-in the form ofa credit in - an amount equivalent to the rate of the applicable public accommodations tax levied. by the Town, and shall attach to a particular transaction only to the extent that the Lodging PIF is collected and received by the Collecting Agent for such transaction. The tax credit for the public accommodations tax shall be automatic and. shall take effect immediately upon the first remittance to and receipt by the Collecting Agent of the Lodging PIF (reflected on the retailer's periodic tax report relating to the Ordinance No. 06-08 'Fax Credit Ordinance Page 2 of 5 public accommodations tax to the Town) following the PIF • Commencement Date with respect to the Lodging PIF. The tax credit for the public accommodations tax shall be granted during each PIF Collection Period with respect to the Lodging PIF and shall not exceed the amount of the public accommodations tax. All capitalized terms used in this section and not otherwise defined herein shall have the meanings given to them in the Facilities Agreement. Section 3. Real Property Transfer Tax Credit. Chapter 3.12, Title 3, Avon Municipal Code, is amended by the addition of Section 3.12.066 to provide as follows: Notwithstanding any other provisions of this Chapter, and in order to implement the provisions of the Amended and Restated Development Agreement, dated as of March 14, 2006 (the "Development Agreement"), by and between the Town of Avon and Avon Confluence LLC (together with its successors and assigns, the 'Developer"), there shall be granted to each person or entity owing the tax on transfers of real property which is subject to Town real property transfer tax occurring within the PIF Property, as defined in the PIF Covenant, and incorporated herein by this reference, a temporary tax credit against collection of the real property transfer tax as hereinafter set forth. Such tax credit shall be granted in the form of a credit in an amount equivalent to the rate of the applicable real property transfer tax levied by the Town and shall.attach to a particular transaction only to the extent that the Real Property Transfer PIF is collected and received by the Collecting Agent for such transaction. Further, such tax credit shall apply only with respect to real property transfer tax payable on the first transfer of real property [from the Developer to a third party] and any subsequent transfer of real property which are subject to the Town real property transfer tax shall not be subject Ordinance No. 06-08 Tax Credit Ordinance Page 3 of 5 e. to this tax credit. The tax credit for the real property transfer tax shall be automatic and shall take effect immediately upon the first remittance to and receipt by the Collecting Agent of the Real Property Transfer PIF following the PIF Commencement Date with respect to the Real Property Transfer PIF. The tax credit for the real property transfer tax shall be granted during each PIF Collection Period with respect to the Real Property Transfer PIF and shall not exceed the amount of the real property transfer tax. All capitalized terms used in this section and not otherwise defined' herein shall have the meanings given to them in the Development Agreement. The credit provided for herein shall expire, and this Section 3.12.066, shall be deemed repealed upon the satisfaction of the obligations of the Town pursuant to Section 5.1 of the Development Agreement. Section 4. Effect of Credit. The Town Council hereby determines that the creation or termination of this credit does not constitute a tax increase, the imposition of a new tax, or a tax policy change directly causing a net tax revenue gain to the Town, and that nothing herein, in the Facilities Agreement or in the Development Agreement creates a multiple fiscal year financial obligation or other indebtedness of the Town. Nothing herein, in the Facilities Agreement, in the Development Agreement or in the PIF Covenant prohibits the Town from amending or terminating this tax credit. Section 5. Repealer. All bylaws, orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revise any bylaw, order, resolution or ordinance, or part thereof, heretofore repealed. Section 6. Ratification. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by the Town Council and other officers and Ordinance No. 06-08 'rax Credit Ordinance Page 4 of 5 employees of the Town in connection with the Facilities Agreement and the • Development Agreement and the implementation of the provisions thereof are hereby ratified, approved and confirmed. Section 7. Effective Date. This Ordinance shall be in full force and effect seven days after posting following final adoption. INTRODUCED, PASSED ON FIRST READING AND ORDERED POSTED the 9th day of May, 2006, and a public hearing hereon shall be held the 23rd day of May, 2006 at 5:30 P.M. in the Council Chambers, Avon Municipal Building, 400 Benchmark Road, Avon, Colorado. TOWN OF AVON, COLORADO Ronald C. Wolfe, Mayor ATTEST: Patty McKenny, Town Clerk ADOPTED ON SECOND READING AND ORDERED POSTED the day of , 2006. TOWN OF AVON, COLORADO Ronald C. Wolfe, Mayor ATTEST: Patty McKenny, Town Clerk APPROVED AS TO FORM: John W. Dunn, Town Attorney • Ordinance No. 06-08 Tax Credit Ordinance. Page 5 of 5