ORDINANCE NO. BL2016-123

An ordinance approving Amendment No. 8 to the Rutledge Hill Redevelopment Plan.

WHEREAS, the Rutledge Hill Redevelopment Plan (the “Rutledge Hill Plan”) consisting of text, exhibits, and maps currently exists as approved by Ordinance No. O80-133, and subsequently amended by the adoption of Ordinance Nos. O86-1131, O87-1695, O91-1520, O97-754, O97-755, BL2005-875, BL2013-377, and BL2014-699; and

WHEREAS, under the laws of the state of Tennessee including Tennessee Code Annotated Section 13-20-102(1), for purposes of the Rutledge Hill Plan, the Metropolitan Development and Housing Agency (“MDHA”) is an “authority” and a “housing authority”; and

WHEREAS, under the laws of the State of Tennessee including Tennessee Code Annotated Section 13-20-102(13), the Metropolitan Council is a “governing body”; and

WHEREAS, the Rutledge Hill Plan is a “redevelopment plan”, as defined in Tennessee Code Annotated Section 13-20-203(a)(1), that was approved by the Metropolitan Council, a “governing body” under applicable law; and

WHEREAS, under the laws of the state of Tennessee including Tennessee Code Annotated Section 13-20-202(a)(5), in connection with any redevelopment plan, MDHA may acquire real property and also may “[s]ell or lease land so acquired for uses in accordance with the redevelopment plan…”; and

WHEREAS, the original Rutledge Hill Plan (the “Original Plan”) approved by Ordinance No. 80-133 described the source of Development Resources to be used by MDHA to implement the Rutledge Hill Plan; specifically, the Original Plan stated:

Proceeds from all land sold by the Metropolitan Development and Housing Agency, whether purchased for resale or previously publicly-owned, shall be placed in a revolving fund for further purchase of land for resale and redevelopment, public improvements and facilities, and plan implementation. The revolving fund will be held and managed by MDHA. At the completion or close of the project, all funds remaining will be deposited to the General Fund of the Metropolitan Government.

WHEREAS, in this way, the Original Plan was clear that any proceeds from the sale of land owned by MDHA in this redevelopment district were to be re-invested in the Rutledge Hill redevelopment district, or returned to the General Fund; and

WHEREAS, in subsequent amendments to the Rutledge Hill Plan, this clear statement was deleted and not replaced with any different language or direction to MDHA; and

WHEREAS, the current Rutledge Hill Plan now is silent on how MDHA is to apply the proceeds from the sale of property owned by MDHA in this redevelopment district;

WHEREAS, the Metropolitan Council, as a “governing body” under Tennessee Code Annotated Section 13-20-203(a)(1), has an obligation to ensure that any “redevelopment plan” is sufficiently complete to “indicate definite local objectives about appropriate land uses” in the redevelopment district; and

WHEREAS, because MDHA may only “sell or lease land in accordance with the redevelopment plan” (under Tennessee Code Annotated Section 13-20-202(5)), and because the Rutledge Hill Plan is currently silent about what to do with proceeds with the sale of land, and because therefore MDHA currently does not have proper authority to do anything with proceeds from the sale of land in this redevelopment district, the Metropolitan Council should clarify how the proceeds from the sale of land in this redevelopment district should be applied; and

WHEREAS, in the most recent amendment to the Rutledge Hill Plan, which was Ordinance No. BL2014-699, the amendment appears to inadvertently identify the “Tax Increment” section of the plan as “Section G” when it should have been identified as “Section H”; and

WHEREAS, in the most recent amendment to the Rutledge Hill Plan, which was Ordinance No. BL2014-699, language was added that appears to inadvertently allow tax increment financing related to the Rutledge Hill Redevelopment Plan to be used to carry out different adopted and approved redevelopment plans; and

WHEREAS, under the laws of the state of Tennessee as well as the terms of the Rutledge Hill Plan, upon the retirement of all bonds, loans, or other indebtedness incurred and payable from tax increment funds, or at such time as moneys on deposit in MDHA’s tax increment fund(s) are sufficient for such purpose, all property taxes resulting from the incremental development under the Rutledge Hill Plan shall be retained by the Metropolitan Government; and

WHEREAS, there currently is no source readily available for the Metropolitan Government or the public to know the amount, terms, or duration of any bonds, loans, or other indebtedness incurred and payable from tax increment funds related to the Rutledge Hill Plan; there currently is no source readily available for the Metropolitan Government or the public to know the amount of money on deposit in MDHA’s tax increment fund(s) related to the Rutledge Hill Plan; and it would be for the good of the public if this information were publically available; and

WHEREAS, the Metropolitan Council has held a public hearing and has carefully considered and reviewed the proposed amendment to the Rutledge Hill Plan.

NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:

Section 1. The Rutledge Hill Plan is hereby amended by adding a new Section C.3 that states as follows:

Proceeds from all land sold by the Metropolitan Development and Housing Agency, whether purchased for resale or previously publicly-owned, shall be placed in a revolving fund for further purchase of land for resale and redevelopment in the Project Area, public improvements and facilities in the Project Area, and implementation of this redevelopment plan. The revolving fund will be held and managed by MDHA. At the completion or close of the project, all funds remaining will be deposited to the General Fund of the Metropolitan Government.

Section 2. The following language in Section 6 of Ordinance No. BL2014-699 is hereby deleted:

That the Rutledge Hill Plan is amended by replacing Section G “Tax Increment” of the Plan in its entirety and replacing it with the following…

and instead is hereby replaced with the following:

That the Rutledge Hill Plan is amended by replacing Section H “Tax Increment” of the Plan in its entirety and replacing it with the following…

Section 3. The Rutledge Hill Plan is hereby amended by deleting the following text from the end of Section H “Tax Increment”:

…or other adopted and approved redevelopment plans.

Section 4. The Rutledge Hill Plan is hereby amended by adding the following text at the end of Section H “Tax Increment”:

Within 90 days after the end of each fiscal year, MDHA shall deliver to the Metropolitan Council, a written report about the fiscal year that just ended (the “Fiscal Year”) that includes the following:

Projects providing tax increment funds to MDHA: For each project for which MDHA received any tax increment funds under the terms of the Rutledge Hill Redevelopment Plan during the Fiscal Year, the report shall state: (1) the name and address of the project; (2) the date(s) that MDHA provided tax increment financing for the project; (3) the amount of tax increment financing provided by MDHA for the project; (4) the maturity date of that financing; (5) the balance, if any, remaining due at the end of the Fiscal Year; and (6) the amount of tax increment funds received by MDHA during the Fiscal Year for the project. The report shall also state the total amount of tax increment funds received by MDHA in connection with the Rutledge Hill Redevelopment Plan during the Fiscal Year.

MDHA Indebtedness: The report shall state the total amount of bonded or other indebtedness obligation(s) owed by MDHA related to the Rutledge Hill Redevelopment Plan. For each obligation comprising this total amount of bonded or other indebtedness, the report shall state: (1) the original principal amount of the obligation incurred by MDHA; (2) the terms of such obligation including without limitation, the maturity date, any interest rate, whether the interest rate is fixed or floating, whether there are any associated interest rate swap or other derivative or hedge obligations, and the required payment schedule; (3) the balance remaining due at the end of the Fiscal Year; (4) a summary of any changes to the terms of the obligation during the Fiscal Year; (5) whether any financial or other defaults by MDHA occurred in connection with the obligation during the Fiscal Year; and (6) the amount reserved by, or otherwise on deposit with, MDHA in connection with the obligation at the end of the Fiscal Year.

Section 5. That this Ordinance shall take effect from and after its final passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Bob Mendes, Erica Gilmore