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Council approves downtown Casto redevelopment zoning, development agreement and school compensation; TIF, CRA and revenue split explained
Summary
Lakewood council voted to approve a three‑part package for a 5.7‑acre mixed‑use downtown redevelopment by Casto: zoning to Planned Development, a development agreement with construction/permitting timelines, and a school compensation agreement that allocates TIF/CRA and income‑tax sharing across city, schools and developer.
Lakewood council approved a three‑part legislative package on Dec. 16 to clear the way for a large downtown redevelopment by Casto Incorporated that will remake roughly 5.7 acres in the city's core.
City staff described the project as a mixed‑use redevelopment that includes renovation of the Curtis Block, ~25,000 square feet of retail, a public plaza, a parking garage and 298 apartments plus seven townhomes. The developer committed that 20% of the apartments will be affordable under the city's CRA No. 1 requirements, and the plan preserves public access to the plaza and park space via recorded easements and a forthcoming declaration.
Key financial and timing terms in the development agreement and school compensation agreement include: - Construction sequencing and permit deadlines: a 3‑month due‑diligence period (extendable by 3 months), then approximately 4 months to satisfy listed conditions before conveyance; a requirement to apply for commercial building permits by March 15, 2025 and for all necessary permits by June 1, 2025; and a construction commencement date of Aug. 30, 2025 provided permits issue timely, with a multi‑phase buildout described in the agreement. - Public parking and garage financing: the development includes a multilevel parking garage with 567 spaces; at least 100 spaces will be reserved for public use. The agreement contemplates a city loan for the parking garage. - Tax and revenue structure: staff described a 15‑year residential CRA on multifamily housing, a 30‑year non‑school TIF on the apartments, an 85% TIF on the commercial portion for 30 years (schools would receive 15% of what they otherwise would have received in property taxes), and a 30‑year 100% TIF on the parking garage. The school compensation agreement would split construction‑period income tax revenue 50/50 between the city and the Lakewood City School District and provides that any excess TIF revenue beyond projections would be split equally among city, schools and developer.
Staff also presented modeled revenue estimates: during construction the city and school were each modeled to receive roughly $308,000 (total ~$616,000). During the CRA (years 1–15) staff estimated roughly $352,000 in new shared income taxes per year (about $176,000 each). For years 16–30 staff projected larger annual revenues (model presented an estimate near $1.9 million per year overall), and staff provided a 30‑year total illustration in which the city—s estimated share was roughly $12.6 million and the school—s about $26.0 million (total ~ $38.16 million), noting these are estimates.
Council deliberations reviewed loan terms (project team described interest‑only initial period and later amortization), phasing (garage first, Building 1 ~20 months construction, Curtis Block integrated with plaza), and the townhomes (expected to come last as site laydown and logistics permit). Several council members raised concerns about the scale, housing types and effects on the broader tax base; proponents emphasized long‑term revenue and shared benefits. Members recused or abstained where conflicts were noted (members with tax‑funded affiliations flagged recusals on TIF matters).
Votes: council adopted ordinance 202024 (zoning map change to PD), ordinance 21‑2024 (development agreement) and ordinance 22‑2024 (school compensation agreement) after the Committee of the Whole review and public comment. Several members declared recusals/abstentions consistent with stated conflicts (members affiliated with property‑tax‑funded organizations flagged those recusals in the record).
What's next: The development agreement includes hard permit application dates in early 2025; if the developer meets due‑diligence and condition timelines, conveyance and permitting would proceed toward the August 2025 construction start listed in the agreement. The school compensation agreement (and the TIF projections) will be subject to monitoring and to final implementation mechanics as construction and valuation develop.
