Introduction

By now, we have all had a fair amount of time to reflect upon the results of the recent special election. I know that all of you have been thinking hard about where to go from here and what the City should do next. Conversations about this topic are taking place all over town and that is a good thing.

The Council has two resolutions before it for consideration at its regular meeting on April 14^th which if approved, would authorize the City to enter into new contracts to continue work on the planning and design of the City Hall / Town Square Project. These resolutions will open the door for a broader discussion about how to proceed from here.

The purpose of this Memorandum is to describe and outline the options that are available to the Council. It is my hope that this outline will help to facilitate the discussion about where to go from here. This memo is intended to provide a framework for the discussion. I started out with many options but decided that it would be best to simplify and keep it to four basic ones. All of these options have advantages and disadvantages associated with them. There are probably other options that you have thought of yourself. And the options here are broad enough that the elements of each can be mixed and matched with others.

The Options listed here include extremes (Options 1 and 4) and moderate proposals in the middle. This analysis has been complicated to some degree by CIRI’s recent announcement that it intends to sell its land within the Town Center however, that development has been factored into these options.

Option 1: Cancel The Project

· Reject 65% plan contract resolutions

· Return grant money or request re-appropriation for another project

· Assist University with re-appropriation of its legislative grant

· Terminate purchase agreement negotiations with University

· Terminate land acquisition discussions with CIRI

· Consider future expansion of existing City Hall or remodeling of old middle school

Discussion: This option assumes that the voters have rejected the project in its entirety. It is a statement that the Council heard the voters loud and clear and is ready to drop the idea and move on.

Option 2: Keep Project Active but Proceed Slowly

· Suspend consideration of 65% contracts

· Suspend negotiations on Purchase Agreement with University

· Engage the public about the project through existing Committee, focus groups, and other forums to help determine why the project failed

· Consider an advisory vote on the project for the fall municipal election

· Make an offer to purchase the land for the square and the necessary ROW to keep options open for the future.

Discussion: This option assumes that eventual project approval by Homer residents is possible and that it is in the public interest to keep the project alive to some degree and to keep options open. This option places the project on hold for an indefinite amount of time. It focuses on engaging the public, gathering more information, and perhaps placing an advisory proposition on the fall ballot to measure public opinion on how and if to proceed. It also recommends putting the City in a position to execute Town Center plans at some time in the future if it is deemed to be in the public interest and/or when the timing and other conditions are right by attempting to purchase the land needed for the square and necessary ROW. The advantages of this option are that the City keeps the project alive to some degree and preserves options for future Councils but shows maximum deference to and respect for the voters. It also seeks maximum input from residents before doing anything further. The primary disadvantages are that it causes uncertainty for the University and costs will continue to climb.

Option 3: Delay Project for One Year

· Approve the 65% design contracts

· Keep negotiations active with adjacent property owners and attempt to acquire land for Town Square and ROW

· Refine and repackage project / close information gaps : make public the draft purchase agreement with University, the terms of any trade with adjacent property owner, precise costs associated with infrastructure development, refine budget and scope of project, reduce the amount of money to be borrowed.

· Transfer more funds (revenue sharing, excess revenues, etc.) into construction account.

· Continue fund raising and develop a legislative CIP request for FY 2010.

· Continue engaging public about the project

· New Bond Election in March 2009

Discussion: This option assumes that the voters rejected the ballot proposition because there were too many unanswered questions and not because they were opposed to the project in general. This option keeps the project alive but sends the City back to the drawing board in a sense. It provides more time to finish the design, revise and reprioritize the scope of the project and the project budget, provide answers to questions about what the infrastructure will cost and what the deals are with adjacent property owners, and reduce the requested loan / indebtedness authorization request. The advantages of this approach are that the City provides some certainty to the University, it reduces potential losses due to increases in construction costs, it builds upon the effort and planning that has gone before, it provides more time to fully develop the project scope and budget, and it provides time to answer the outstanding questions. The disadvantages include a possible disconnect with and alienation of the voters.

Option 4: Move Forward Aggressively with Different Financing Plan

· Approve 65% design contracts and complete design

· Finalize purchase agreement with University and all land transfer and acquisition agreements with adjacent landowners

· Continue public discussion and information effort.

· Prepare RFP for private sector financing and construction through lease to own, triple net lease approach

· Continue fund raising effort

· Transfer additional funds into construction account to be used as down payment on the lease to minimize lease term and/or annual payments.

Discussion: This option assumes that the voters were simply rejecting the bond sale and long term indebtedness but that they were not necessarily opposed to the project or to Town Center development generally. The advantages to this approach include the fact that the City could stay close to the identified construction schedule (perhaps a 6 month delay), it could minimize losses associated with rising construction costs, it could provide some certainty to the University, and it could achieve its Town Center Goals. The disadvantages include the fact that annual lease payments would likely exceed the projected bond payments, it would be more expensive in the long term, and it would risk real alienation with city residents.

RECOMMENDATION:

From my perspective, I think that it would be a real shame and an overreaction if the Council chose to cancel the project completely because of one (admittedly large) setback. In my view, this project represents the culmination of many years of planning by multiple City Councils, Planning Commissions, and advisory Committees. Support for this project (in some form) exists in every community planning document the City has adopted over the past 20 years. There is too much history here to simply shut the door. This Council showed the leadership and a willingness to take the definitive and bold steps necessary to make a long-term community goal a reality. It could also become the Council that ended up closing the door on this project; perhaps forever.

There is no doubt that the Council must give due deference to and pay close attention to what the voters have said. However, the reality is that this was a very complex project. There were many players, many details that were hard to explain, many unanswered questions, and a serious lack of trust on many levels. The voters may have simply rejected the product they were presented. But does that mean that voters are opposed to Town Center, Town Square, and the project generally? Or does it mean that they want to see some changes first, to know the precise costs of the infrastructure, or the exact nature of any transactions with adjacent property owners? Were the voters really saying no to the Town Center Plan, college campus consolidation, in-filling and greater density, a walk able community, implementation of the Climate Action Plan, economic development, and a vibrant and cohesive downtown core? Probably not.

I would recommend keeping the project alive to some degree by enacting a version of Options 2 or 3. As I noted above, this project has too much history behind it to simply walk away from it because the voters rejected a bond sale authorization. We don’t know exactly what the voters meant by their rejection. Further, if the information I am receiving is correct, there seem to be a significant number of people out there who say they voted no, but really like the project overall. They just did not like the package as presented this time around.

I think the Council would be well served to keep the project alive but slow down and take the time to re-evaluate the project and engage the public regarding its concerns. The City’s Legislative grant does not expire until 2011 and the term can be extended if there is good reason. Other than constantly increasing costs, there is no reason why the City could not take more time. The University is not necessarily in the same position.

I would suggest that the City Hall / Town Square Committee continue to operate and focus on these issues. Perhaps the membership could be changed to include people who voted no but support the general concept. I would also suggest that the Council authorize focus groups, or another types of forums that would provide a venue for voters who voted no to become directly involved. We should also immediately sit down with the University to determine their needs and desires.