City, developer outline West Greeley predevelopment agreement; COPs and GID financing central to plan

City staff and outside legal advisers summarized the draft predevelopment services agreement (PDSA) for the West Greeley redevelopment plan at an April 2025 work session, describing the roles, financing sequence and key risk‑mitigation terms the city will ask the developer to accept before the council considers related financing and lease documents.

Stacy (city staff) told the council the PDSA starts the next contractual phase with the developer and that the agreement sets roles for a two‑part project: a city‑owned “catalyst” entertainment district (arena, ice center, hotel, waterpark, plaza and supporting infrastructure) and a separately developed Cascadia mixed‑use area intended to be catalyzed by the entertainment district. The city will purchase the land for the catalyst project from the developer for the price the developer paid (staff cited a just‑over $5.0 million figure discussed in the presentation) and -- if the council approves the PDSA and related financing documents -- will own the land beneath the entertainment district.

The PDSA sets a maximum cap on eligible predevelopment costs for the current phase at $115 million and contemplates interim financing with certificates of participation (COPs) to draw down funds as design, due diligence and preconstruction work proceed. Dalton, an outside attorney working on the deal, described the $115 million as a drawdown facility and said staff’s current modeling shows an initial budget near $105 million but the PDSA establishes a $115 million ceiling for this stage. The expectation discussed in the presentation is that conduit revenue bond proceeds, General Improvement District (GID) bonds, and enterprise (water/sewer) bonds would ultimately replace short‑term COPs when permanent financing is available.

Legal and finance advisers described several cash‑flow and credit elements that underlie the financing plan: a conduit borrower (a nonprofit or conduit entity) would be the conduit issuer of bonds to finance the entertainment district; a GID would be formed to finance regional supporting infrastructure and could be backed by a pledged sales‑tax credit or dedicated public‑improvement fees (PIFs); and enterprise revenues would potentially support water and sewer components. The PDSA contemplates a mix of private‑activity public‑improvement fees (examples discussed included a 3% add‑on PIF and credit PIFs for hotel and retail uses) and a GID credit PIF that could be structured to support GID bonds or offset the city economic development payment.

Jason, the finance speaker brought in to explain COPs, described certificates of participation as a common lease‑based financing tool that is subject to annual appropriation and therefore typically rated one notch below the issuer’s implied rating. “Certificates of participation are a very common financing tool used in the state of Colorado for capital needs and then for also economic development purposes,” Jason said, explaining the staff plan to use COPs as an interim drawdown vehicle and later convert to long‑term bonds.

Staff described credit enhancements in the financial structure that would support conduit bond pricing: the project contemplates an economic‑development payment to be made by the city (roughly modeled at $12 million per year escalating 2% beginning in 2028) and a city moral‑obligation resolution to replenish a debt‑service reserve if necessary. Staff said the city’s exposure is intended to be limited by contractual controls, budget review, approval of scope and contracts for eligible costs, and design‑to‑cost checks at schematic and construction‑document milestones.

Councilors and counsel discussed other risk‑mitigation features in the draft PDSA: the city will approve budgets and service contracts for eligible expenses before reimbursements are made, the city’s consultants are invited into design meetings, retainage on construction contracts will be used (staff said the city will not hold separate retainage on the developer fee), and the agreement includes “step‑in” rights allowing the city to hire or require third‑party marketing if commercial leasing or development milestones are not met. The PDSA also contains a narrowly tailored non‑compete tied to the city‑owned components (chiefly to limits on another proximate hotel/waterpark that would undercut the project) and provisions that treat the plans as city property after city payment for them.

Staff and outside counsel noted major items still to come before the council if the PDSA is approved: the conduit bond issuance documents, the site lease to the conduit borrower, a business‑incentive agreement for commercial tenants, the formal Eagles arena lease (the club is envisioned as the anchor tenant), and final GID formation documents including any ballot questions required for GID authorization and debt. The city’s legal team confirmed it will bring the PDSA, COP ordinance and related financing documents to council next week for first reading and that final approvals (including public hearings) would follow in the next month.

Councilors were shown revenue scenarios and draft PIF rates used in modeling. The presentation included two related cost totals shown on different slides: one slide displayed roughly $641 million (catalyst components), while another showed an $850.5 million all‑in figure; staff said modeling will be refined as schematic design, construction documents, and market assumptions are finalized.

Council action at the end of the presentation: the council moved, seconded and approved going into an executive session to receive legal advice and to instruct negotiators on the PDSA. The meeting convened the executive session at 9:21 p.m., as recorded on the transcript.

Why this matters: the PDSA governs how the city will spend public funds to advance a large entertainment/downtown catalyst project, how interim COP financing will be replaced with permanent bond financing, and how the city will limit exposure through contract controls, step‑in rights and design‑to‑cost measures. The fiscal and legal commitments in this phase will determine whether the broader, multi‑hundred‑million‑dollar project advances to construction and how much long‑term city risk is created.

What’s next: staff to bring the PDSA and COP ordinance for council consideration next week, provide more detailed budgets and a draw schedule, finalize the Eagles lease term sheet and present the proposed business incentive and GID formation steps for council review.