Attachment F - Draft CityDDA Letter of Intent

CITY OF BOULDER LETTER OF INTENT REGARDING A DOWNTOWN DEVELOPMENT AUTHORITY The City of Boulder offers this Letter of Intent (“Letter”) regarding its future relationship with the Boulder Downtown Development Authority (“DDA”), if qualified electors vote to approve the formation of a DDA in the November 2026 election. This Letter is meant to be informative, outlining the City’s expectations and intentions if a DDA is formed, a possible structure for the DDA, and potential terms of agreement to help guide future discussions with the DDA Board. This Letter is not binding on the City and any proposed terms herein may change depending upon further due diligence and the decisions of the DDA Board, once formed. Upon formation of the DDA and appointment of its Board, the City will negotiate with the DDA Board to enter into an Intergovernmental Agreement (“IGA”) that will formalize agreed-upon terms and obligations.

PART I: PARTIES, PURPOSE, AND DEFINITIONS Section 1. Parties This Letter involves the following parties: • •

The CITY OF BOULDER, a home rule municipality organized and existing under the laws of the State of Colorado and its own Home Rule Charter ("City"); and The BOULDER DOWNTOWN DEVELOPMENT AUTHORITY, a Downtown Development Authority established and operated pursuant to the provisions of Part 8, Article 25, Title 31 of the Colorado Revised Statutes ("DDA").

Section 2. Purpose and Background The City has undertaken extensive planning and a community engagement process to evaluate the formation of a DDA, with the goal of providing dedicated governance and financing for reinvestment in Boulder's central business district. This Letter proposes: • • •

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An operational and financial relationship between the City and the DDA; A framework for tax increment financing (TIF) revenue coordination; An intention to transition management of General Improvement District (GID) parking operations and responsibilities to the DDA and to explore, through due diligence, the ability of the DDA to leverage GID assets through lease, management, transfer, co-ownership, or other operational agreements to develop operational efficiencies. Procedures for City Council oversight, transparency, and accountability over DDA operations and expenditures; and Steps to advance the goals of the DDA's Plan of Development as approved by the DDA Board and City Council.

City of Boulder Letter of Intent Regarding DDA

Section 3. Definitions For purposes of this Letter, the following terms shall have the meanings set forth below: •

"Base Year" means the applicable reference period for property and sales tax TIF calculations, as established in the Plan of Development and consistent with state statute."CAGID" means the Central Area General Improvement District. "GID Assets" means the off-street parking facilities, streetscape infrastructure, real property, equipment, contracts, leases, reserves, and related assets held by CAGID and UHGID as identified in Exhibit A. "Mill Levy" means the voter-approved mill levy authorized as part of DDA formation, projected at 3.674 mills across the DDA study area, replacing existing GID mill levies. "Plan of Development" means the governing policy and investment document for the DDA, as approved by the DDA Board and City Council and the term as defined in C.R.S. § 31-25-802. "Property Tax TIF" means the incremental property tax revenues generated above the Base Year within the DDA boundary, captured by the DDA pursuant to Colorado law. "Sales Tax TIF" means the incremental city sales and use tax revenues generated above the Base Year within the DDA boundary, captured by the DDA pursuant to Colorado law. "TIF" means tax increment financing, referring to both Property Tax TIF and Sales Tax TIF unless context indicates otherwise. "UHGID" means the University Hill General Improvement District. “Planning Group” means the advisory group of community stakeholders, including business owners, property owners, institutional representatives, and other community members, convened by the City to provide input and recommendations regarding the formation of the proposed DDA. “Plan of Development” means the development plan for the DDA, as defined in C.R.S. § 3125-802, which establishes the DDA's vision, goals, investment priorities, boundaries, financing strategies, and other elements required by law, as approved and amended from time to time by the DDA Board and City Council in accordance with applicable law.

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PART II: ADMINISTRATIVE STRUCTURE AND STAFFING Section 4. City Administrative Support During the DDA's formative period (Years 1 through 3), the City is willing to provide or facilitate the following administrative support to the DDA if agreeable to its Board: •

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Transition Period Defined. The City is agreeable to a transition period from the creation of the DDA by voters up to three years thereafter, through 2029, in which the City will provide administrative support, subject to reimbursement from the DDA for staff time and resources. Staff Liaison. The City Manager will designate a city staff liaison to coordinate between city departments and the DDA during the transition period. Departmental Support. The City will provide reasonable administrative support through its relevant offices and departments (finance, legal, HR, IT, facilities) as determined appropriate by the City Manager and when requested by the DDA Board. Consultant Procurement. The City may procure a management consultant to operate DDA administration during the transition period. The consultant will report to the city staff liaison designated by the City Manager. City of Boulder Letter of Intent Regarding DDA

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Insurance. The City and DDA will explore the possibility of including the DDA under city insurance policies as needed and when cost-effective. Reimbursement. The DDA will reimburse the City for all direct and indirect administrative support services, and other expenses paid or incurred on behalf of the DDA. Annual Staffing Plan. The DDA and the City will coordinate on an annual staffing plan each year of the transition period. This includes coordination on the term and scope of the management consultant and the timing of hiring a permanent Executive Director for the DDA.

PART III: TAX INCREMENT FINANCING — REVENUE FRAMEWORK Section 5. Sales Tax TIF — General Framework Under Colorado law, Sales Tax TIF represents the growth in city sales and use tax revenues collected within the DDA boundary above the established Base Year. The City’s sales and use tax rate of 3.86% applies, impacting the General Fund and all sales-tax-supported funds (Open Space, Transportation, Parks and Recreation, Arts/Culture/Heritage, and CCRS) in proportion to their respective rates. If there is a change in sales tax percentage levied by the municipality that includes all or part of the DDA, the portion of the sales tax for the base year and the excess must be proportionally adjusted in accordance with such reassessment or change. See CRS 31-25-807(3)(e). The City asserts the following core policy principles regarding the use of Sales Tax TIF: • • • •

Projections of future Sales Tax TIF growth involve significant uncertainty; the DDA boundary has historically underperformed citywide growth trends during economic disruptions. The city has a legitimate long-term fiscal interest in growth within the district, particularly as the DDA matures and its reinvestment activities generate above-baseline economic activity. Council will retain active oversight over the use of TIF revenue through mandatory review periods, annual reporting, and approval rights over the revenue-sharing framework. The DDA must utilize Sales Tax TIF in a manner that maximizes benefit to the DDA area as a whole, including consideration of bond issuance and other debt vehicles that may support development.

Section 6. Sales Tax TIF — Revenue Sharing Terms Upon formation of a DDA and appointment of its Board, the City and the DDA will negotiate revenue sharing terms. The city acknowledges that legally binding revenue sharing terms are necessary to establish a stable and predictable revenue base to attract and assure investors should the DDA want to pursue bond financing. During Phase 1 (Years 1 through 5), it is the City’s intent to pledge 100% of Sales Tax TIF revenues generated within the DDA Boundary to obligations that support the DDA. This structure is intended to: • •

Allow the DDA to build organizational capacity and establish stable operations; Maximize the DDA's early implementation flexibility for programming, redevelopment feasibility, and district investment; and

City of Boulder Letter of Intent Regarding DDA

•

Allow sufficient time for district economic activity to respond to DDA investments before revenue sharing obligations take effect.

After Year 5, any prospective revenue sharing terms will be set through the parties’ IGA or a separate revenue sharing agreement. While subject to future negotiations, the City is open to a Phase 2 period (Years 6 through 10), wherein Sales Tax TIF revenue is allocated as follows: • •

DDA Share: 75% of annual Sales Tax TIF revenues above the Base Year. City Share: 25% of annual Sales Tax TIF revenues above the Base Year.

Any further revenue sharing terms will be determined and agreed upon through the IGA or revenue sharing agreement. After execution of the IGA or revenue sharing agreement, any amendments thereto will take into consideration: actual TIF collection and performance; DDA debt obligations; the City’s fiscal position; and Plan of Development benchmarks and implementation priorities.

Section 7. Property Tax TIF Any revenue sharing agreement will also address Property Tax TIF Revenue, i.e., incremental property tax revenues above the Base Year generated within the DDA boundary. During Phase 1 (Years 1 through 5), it is the City’s intent to pledge 100% of the Property Tax TIF to pay indebtedness of the DDA. Any further revenue sharing terms will be determined and agreed upon through the IGA or revenue sharing agreement. Property Tax TIF is deferred across multiple taxing entities (City of Boulder, Boulder Valley School District, Boulder County, and Boulder Library District). This Letter only speaks to the prospective revenue sharing terms agreeable to the City of Boulder. The decision whether to negotiate sharing agreements with other taxing jurisdictions will be at the discretion of the DDA Board.

Section 8. Annual Reporting and Transparency The City will expect the DDA to provide it with an annual Sales Tax and Property Tax TIF performance report no later than March 31 of each calendar year, covering the prior fiscal year. The report will include: • • • •

Actual Sales Tax and Property Tax TIF collections against earlier projections; How TIF revenues were allocated across operations, programming, capital investment, debt service, and reserves; Economic vitality indicators for the district, including commercial vacancy rates, sales tax trends, and redevelopment activity; and Any material changes in district conditions that may affect future TIF projections.

City of Boulder Letter of Intent Regarding DDA

After receiving the annual report, City Council may request a joint study session with the DDA Board to review performance.

PART IV: PARKING ASSETS AND GID TRANSITION Section 9. GID Operation and Asset Transition — General Framework Subject to DDA formation approval by qualified electors, it is the intention of the City to transition the operations and responsibilities currently held by the Central Area General Improvement District (CAGID) and the University Hill General Improvement District (UHGID) regarding off-street parking and related district assets to the DDA to the extent legally and practically permissible and agreeable to the parties. On-street parking policy, management, and operations will continue to remain under the City. It is the intention of the City to also allow the DDA to leverage the GID assets through lease, management agreement, transfer, co-ownership, or other structure or agreement to streamline operations across the area. However, further due diligence is required by both parties to determine the appropriate methods by which to leverage the GID assets. The transition is intended to: •

Maintain continuity of off-street parking operations and customer service throughout and after the transition period;

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Preserve the financial self-sufficiency of the off-street parking system, with revenues continuing to support operations, maintenance, and capital reinvestment in parking assets;

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Enable the DDA to integrate parking assets, redevelopment strategy, and district economic vitality goals into a coordinated framework;

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Ensure long-term stewardship of off-street parking infrastructure in a manner consistent with the City's adopted plans and policies as outlined in section 12 below; and

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Protect the value of the properties and comply with existing responsibilities under condominium declarations and other cooperative agreements.

The specific method of asset transfer — including whether conveyance through deed, lease, cooperative ownership agreement, or some other means — will be determined and if occurs, will be memorialized in written agreement by the parties during the transition period, in consultation with the City Attorney’s Office and DDA legal counsel. The parties will have flexibility to structure the transfer in the manner that best serves long-term stewardship, financing, and legal objectives. Any conveyance will contain necessary covenants regulating the use and ownership of the property to protect the City’s interests, including terms to ensure adequate compensation to the City or a right of first refusal on the disposition of any property, and the reversion of the property or the use of the property (including, but not limited to, any revenue-generating use and/or revenue reserves) back to the City at the time the DDA dissolves, terminates, or at such time as mutually agreed upon by the parties.

City of Boulder Letter of Intent Regarding DDA

Section 10. DDA Authority Over Off-Street Parking Assets It is intended that the DDA will assume the responsibilities currently held by CAGID and UHGID with respect to those off-street GID parking assets within DDA boundaries that may be legally and practically transferred, leased, cooperatively owned, or shared with the DDA. These responsibilities may include: •

Long-term capital planning, reinvestment, and lifecycle management of parking facilities which includes the garages and their respective commercial spaces;

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Management and compliance with any relevant agreements (e.g., cooperative development agreements, condominium declarations, etc.);

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Strategic evaluation of parking assets for potential redevelopment, repositioning, joint development, or adaptive reuse consistent with the Plan of Development;

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Management of revenue collection, commercial leases, maintenance agreements, and other revenue arrangements associated with parking facilities;

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Off-street parking operations and maintenance; and

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Establishing parking rates through the annual budget process as described in Section 13.

It is the intent of the City to explore a full or partial transfer of CAGID capital reserves to the DDA at the time the DDA begins to manage parking operations. Such reserves will remain dedicated to parking system operations and capital reinvestment.

Section 11. Parking Operations and Maintenance Transition Period. During the transition period, the City is available to continue to operate and maintain all off-street parking facilities currently managed under CAGID and UHGID on a status quo basis, subject to the legal requirements imposed on GID operations. The parties will agree in writing to any changes to staffing, service levels, rates, or operational practices. Ongoing Operations. It is the intent of the City to have the DDA manage the parking operations and maintenance of parking facilities long-term, to the extent legally and practically permissible and agreeable to the parties. Upon DDA formation and appointment of the Board, the parties will negotiate the best structure to permit this to occur, including: •

The specific parking assets to be managed;

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Streetscape repair, snow and ice removal, equipment maintenance and storage, and other operational obligations to be assigned to the DDA;

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The scope of services to be provided by City staff and any corresponding reimbursement terms;

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The legal and procedural role of the existing GIDs;

City of Boulder Letter of Intent Regarding DDA

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The City’s role in existing condominiums and other responsibilities to third parties;

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Third-party parking operator involvement, if any; and

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Performance standards and service level metrics.

Long-Term Operations Model. The parties acknowledge that the appropriate long-term model for parking operations — including whether City staff continue in their current capacity, whether operational responsibilities are partially or fully transitioned to DDA staff, or whether a third-party operator is engaged — should be determined collaboratively as the DDA matures and its organizational capacity develops. The DDA must ensure any third-party operator is subject to the parking policies and rate setting priorities outlined in the following sections.

Section 12. Parking Policy Alignment with City Goals The DDA's management and strategic direction of parking assets must be consistent with the City of Boulder's adopted plans, policies, and values governing transportation and mobility. Parking management in Boulder is not an isolated operational function but an integral component of a broader multimodal access and economic vitality strategy. The DDA's parking-related decisions will be guided by and consistent with the following City frameworks: •

Access Management and Parking Strategy (AMPS): The City's adopted framework for parking regulation and access management, which establishes principles including customerfocused technology, support for multimodal access, equity across ages and abilities, economic vitality, and alignment with the Transportation Plan.

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Transportation Plan: The City's long-range transportation framework, which establishes goals for safe and complete streets, transportation demand management, regional travel, and advanced mobility.

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Boulder Valley Comprehensive Plan: The City's comprehensive land use and policy guide, which establishes principles for sustainable growth, mobility network investment, and the integration of parking and transportation with land use goals.

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Sustainability, Equity, and Resilience (SER) Framework: The City's overarching framework for evaluating decisions against environmental sustainability, social equity, economic vitality, and responsible governance.

In practice, this means the City intends that the DDA's parking strategy will seek to: support access to the district for all users regardless of mode; use pricing, technology, and supply management to reduce unnecessary driving and support turnover for commercial customers; align parking asset decisions with long-term land use and redevelopment goals for the district; continue TDM programs, such as the Employee EcoPass program, funded by off-street parking revenues; and coordinate with the City's Transportation and Mobility Department on any changes that affect district access or the broader transportation network.

City of Boulder Letter of Intent Regarding DDA

It is intended that the DDA and City Transportation and Mobility Department will maintain a standing coordination relationship, meeting no less than semi-annually, to align parking operations and strategy with citywide transportation goals. The DDA will be obligated to provide advance notice to the Transportation and Mobility Department of any proposed material changes to off-street parking supply, access, or pricing strategies, and the City should have discretion to approve or deny the implementation of such proposed changes.

Section 13. Parking Rate Setting It is the intention of the City to permit the DDA Board to have authority to propose parking rates for DDA-managed parking facilities. Regular parking rates and special event parking rates will be established through the DDA's annual budget process, which is subject to City Council review and approval. The City intends that parking rates will be coordinated with City parking strategies for special events and demand management, in addition to the considerations appropriate for the DDA’s operational requirements.

Section 14. GID Dormancy or Dissolution After transfer, lease, management agreement, cooperative ownership, or other agreement has been made regarding the GID assets, the City intends to place CAGID and UHGID in dormancy or initiate dissolution proceedings. Because the DDA is initially authorized for a finite statutory duration while parking infrastructure and related property improvements require perpetual stewardship, any conveyance of the GID assets or the use of such assets will include: • •

A reversion clause specifying that, in the event of DDA dissolution or expiration or at a mutually-agreed upon time, GID Assets and associated reserves revert to city ownership unless an alternative governance structure has been established by prior agreement; and A requirement that any disposition of GID Assets (sale, ground lease, joint development) receive prior City Council approval and include a right of first refusal and/or structured compensation for public investment in the property as appropriate.

PART V: GOVERNANCE, OVERSIGHT, AND ACCOUNTABILITY Section 15. DDA Board Composition and Appointments The DDA Board will consist of between 5 and 11 members as authorized by state statute. Consistent with state law requirements: • • •

A majority of board members shall be property owners, residents, business owners, or business operators within the DDA district; One City Council member shall be appointed to the Board; and The Mayor shall appoint, and City Council shall confirm, all board members.

City of Boulder Letter of Intent Regarding DDA

The Planning Group will submit preliminary board member recommendations to City Council prior to the November 2026 election. The City will strive to make initial board appointments by December 31, 2026.

Section 16. Annual Budget Approval The DDA's annual budget will be subject to City Council approval, consistent with state statute. The DDA will: • • •

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Present a proposed annual budget to City Council no later than October 1 of each year; Hold at least one noticed public hearing on the proposed budget prior to City Council review; Include in the budget proposal: (i) detailed revenue projections by source; (ii) expenditure allocations by Plan of Development category; (iii) parking system financial summary; (iv) TIF performance compared to projections; and (v) status of any outstanding bonds or financial obligations. City Council will strive to approve, amend, or return the budget to the DDA Board with comments no later than November 1 of each year.

Section 17. Transparency and Reporting Requirements The City will require the DDA to provide certain reports to City Council. The graph below offers a conceivable reporting schedule: Report

Frequency

Key Content

Annual Budget

Annual (by Sept. 1)

Revenue projections, expenditure plan, TIF performance

TIF Performance Report

Annual (by Mar 31)

Actual vs. projected TIF, district economic indicators

Parking System Report

Annual (by Mar 31)

Revenue, expenses, capital reserves, rate changes

Plan of Development Progress

Annual

Projects completed, programs active, benchmarks

Year 5 Revenue-Sharing Review

Year 5 mandatory

Full financial and performance assessment

Bond/Debt Notice

Prior to issuance

Terms, security, fiscal impact analysis

Capital Disposition Notice

Prior to action

Any GID Asset sale, ground lease, or redevelopment

Section 18. City Council Study Sessions

City of Boulder Letter of Intent Regarding DDA

The City and DDA will hold at least one joint City Council/DDA Board study session annually to review DDA progress, financial performance, and alignment with Plan of Development goals. Additional study sessions may be convened prior to any of the following: • • • • •

TIF revenue-sharing renegotiation; Proposed bond issuance; Proposed amendment to the Plan of Development; Proposed disposition or material alteration of GID Assets; and Material changes to parking rate structure.

Section 19. Plan of Development Amendment Amendments to the Plan of Development will require approval of both the DDA Board (by majority vote) and City Council (by ordinance or resolution as applicable). Material amendments — those affecting district boundaries, authorized TIF uses, or major project categories — will require a public hearing before each body.

Section 20. Cooperative Agreements For specific projects, capital improvements, or programs that advance shared city and DDA goals, the parties may enter into individual cooperative agreements. The City Manager is authorized to execute cooperative agreements with the DDA where the City's financial commitment or staff time is within the City Manager's purchasing authority. Agreements above that threshold will require City Council approval.

PART VI: FINANCIAL PROVISIONS AND BONDING Section 21. Mill Levy Subject to voter approval as part of the DDA formation ballot measure, the City will impose on the DDA’s behalf a mill levy projected at 3.674 mills across the DDA study area assuming the GID boards decrease the existing CAGID and UHGID mill levies. Mill levy revenues will support DDA operations, district programming, business assistance, maintenance supplementation, and other pay-as-you-go expenditures consistent with the Plan of Development. Mill levy revenues will not be pledged for bond repayment, consistent with the Colorado DDA statute. The mill levy rate may not be increased without separate voter approval.

Section 22. Bonding Authority With voter approval, the City can issue on the DDA’s behalf bonds secured by TIF revenues (and other authorized sources) to fund capital investments and Plan of Development activities. The DDA may also issue certain other bonds, such as bonds repaid by the revenue of the parking assets. The

City of Boulder Letter of Intent Regarding DDA

parties will work together to memorialize in the IGA the process by which a bond may be proposed and approved by City Council.

Section 23. City Loans The City may provide loans to the DDA for specific projects or property acquisition, with repayment through future TIF revenues. Terms and conditions of any loan, including repayment schedule and interest, shall be set forth in a separate written agreement approved by both City Council and the DDA Board.

Section 24. Grant Applications The City and DDA may pursue joint grant applications and funding opportunities to support shared initiatives. Either party may apply independently for grants consistent with its respective authority; the parties shall coordinate to avoid duplication and maximize district benefit.

City of Boulder Letter of Intent Regarding DDA