HomeMy WebLinkAboutR2016-0415:\Leeal\Ourdocuments\Resolutions\16\2015 Annual Report Resolution TIRZ Amd
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
APPROVING THE 2015 TAX INCREMENT REINVESTMENT ZONE NUNMBER TWO
(WESTPARK TIRZ) ANNUAL REPORT; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Denton recognizes the importance of its role
in local economic development initiatives and programs; and
WHEREAS, the City Council of the City of Denton has established Tax Increment
Reinvestment Zone Number Two (Westpark TIRZ) and established a Board of Directors for the
District to promote development or redevelopment in the Downtown area pursuant to Ordinance
No. 2012-366, authorized by the City Council on December 18, 2012, as provided by the Tax
Increment Financing Act, Chapter 311 of the Texas Tax Code, as amended; and
WHEREAS, on February 5, 2013, the City Council of the City of Denton adopted
Ordinance 2013-033 accepting an Agreement with Denton County to participate in TIRZ
WHEREAS, the Tax Increment Financing Act specifies that the governing body of a city
shall submit an annual report on the financial status of the district to the Chief Executive Officer
of each taxing unit that levies taxes on real property in a reinvestment zone, and a copy of the
report shall be forwarded to the State Comptroller; and
WHEREAS, on September 21, 2016, the Westpark TIRZ Board reviewed and
recommended approval of the 2015 Annual Report for Tax Increment Reinvestment Zone
Number Two to the City Council of the City of Denton;. NOW, THEREFORE,
SECTION 1. That the 2015 Annual Report for Tax Increment Reinvestment Zone
Number Two (Westpark TIRZ), City of Denton, Texas, as of December 31, 2015, a copy of
which is attached here to (Exhibit A), and is hereby accepted.
SECTION 2. That the City Manager is herby authorized to submit the 2015 Annual
Report for Tax Increment Financing Reinvestment Zone Number One to the Chief Executive
Officer of each taxing jurisdiction that levies tax on real property in the District; and to the State
Comptroller, as required by state law.
SECTION 3. This Resolution shall become effective immediately upon its passage and
approval.
5:\Legal\Ourdocuments\Resolutions\16\2015 Annual Report Resolution TIRZ Amd
PASSED AND APPROVED this the - day of _,NAVj4A"M. — ------- 1,2016.
c 1 -1, ]-� VR WATTS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARM
BY:
APPROD AS "1 LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Map........................... ....................................... ............................. .................. ..............1
MissionStatement........................................................................................................2
Backgroundand Purpose......................................................................................................,..1)
ParticipatingJurisdictions..........................................................................................................3
District History and Accomplishments ............ .................. ......... .................. ..............3
Summaryof TIRZ Board Meetings ................................................... .................. ..............4
Budgetand Project Status.......................................................» .................... ..............5
ProjectDefinitions ...................... ... -- ......... ................................................... ............,.5
Revenues............................................................... ........ ................... .................. ..............6
Expenditures.... .....---- ................. ................. .......i........ ...........,......7
2015 Work Program..........................................................:..................... ......,.................7
Appendices.............................................................................................................................9
Appendix A: TIRZ Two Balance Sheet ........................... ......... ......... ......... ......................10
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page ii
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Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 1
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Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 1
Mission Statement
The mission of the Tax Increment Reinvestment Zone (TIRZ) Number Two is to provide a
source of funding for public infrastructure improvements to encourage and accelerate necessary
development within the largest industrially zoned area within the City.
Tax increment financing originated as a tool for governments to publicly finance needed
improvements and enhance infrastructure within a defined area in order to stimulate private
development and redevelopment. A TIRZ is a defined area where public infrastructure
improvements are deemed necessary to promote development. The costs of the improvements to
the area are repaid by the contribution of future tax revenues. Specifically, each taxing entity
may choose to dedicate all, a portion, or none of the tax revenue that is attributable to the
increase in property values. The additional tax revenue that is received from the affected
properties is referred to as the tax increment. An ad valorem valuation base is established the
first year, and the revenue from the increased valuation from subsequent years is allocated into a
TIRZ fund to support development projects.
On December 17, 2012, the City Council adopted an Ordinance 2012-366 designating and
describing the boundaries of Tax Increment Reinvestment Zone Number Two for an industrial
district of Denton, Texas; establishing the duration of the Zone; establishing a Tax Increment
Fund; and establishing a Board of Directors for the Tax Increment Reinvestment Zone. The
City's second TIRZ consists of approximately 800 acres and is located north of Airport Road.
This industrial area (Westpark) lacks the public infrastructure necessary to encourage
development.
The Westpark TIRZ took effect on January 1, 2013 and will terminate on December 31, 2036 or
the date when all project costs are paid and any debt is retired, whichever comes first. It is
estimated that the TIRZ would generate approximately $14.3 million over a 25 year period for
infrastructure improvements. The City and Denton County will contribute $10 million and $4.2
million into the TIRZ fund, respectively. According to the Finance Plan, the City would retain
$43.9 million and the County would retain $18.8 million of real and business personal property
revenue over the life of the TIRZ.
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 2
Table 1: TIRZ Two Particirnitinu Jurisdictions
City of Denton 1-10
0.68975
40
11-25
0.71975
40
Denton County 1-10
0.282867
40
11-25
0.312867
40
Note: The tax rates are estimates
The TIRZ board is comprised of thirteen members. The City Council is responsible for
appointing eleven members and designating the board Chair. The governing body of Denton
County, which levies taxes on real property in TIRZ Number Two, has appointed one board
member. Westray Group L.P, the Developer, has also appointed a single board representative.
11 1
Lij; Inv inglimanvil in
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This is the third year of the Westpark TIRZ. During calendar year 2015, $3 were collected based
on the value of the last supplemental of the calendar year from the Denton Central Appraisal
District (DCAD). The City's and County's contribution in the TIRZ fund for 2015 was $3 and
$1, respectively. An additional $3 in interest was earned for the period bringing the total 2015
contribution to $7.
Denton City Council adopted an Ordinance accepting an Agreement with Denton County to
participate in Tax Increment Reinvestment Zone, Number Two; authorizing the City Manager to
execute the Agreement on February 5, 2013. On February 12, 2013, the board for TIRZ Two
was appointed by City Council. Economic Development staff coordinated with multiple City
departments, the developer and legal counsel to develop a Reimbursement/Developer Agreement
with the developer. The Agreement was approved by the Denton City Council on May 13,
2014, through Ordinance 2014-142.
The TIRZ Number Two board Ordinance was amended by the Denton City Council to establish
term limits for the TIRZ board be concurrent with the Economic Development Partnership (EDP)
board on February 4, 2014 (Ordinance No. 2014-039). On September 15, 2015, Ordinance No.
2015-074 added two new members to be appointed to serve, bringing the EDP Board
membership to eleven total.
On November 11, 2015, the following changes to Ordinance No. 2012-366 and 2014-039 to
establish a TIRZ Number Two board composition that incorporates the current EDP Board:
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 3
The Board of Directors shall consist of thirteen (13) members, eleven (11) of whom shall be
appointed by the City Council of the City. All members appointed to the board shall meet the
eligibility requirements set forth in the Act. Board membership shall consist of the following:
• The eleven members of the Economic Development Partnership Board;
• One member shall be appointed by the governing body of Denton County; and
• One member shall be appointed by the "Developer," Rayzor Investments,
LLP.
The terms of the board members shall be two-year terms; the eleven (11) members appointed by
City Council will serve terms concurrent with their EDP terms. A board member may serve no
more than three consecutive terms.
1, 3o@= --
The
The Westpark TIRZ Board recommended approval of the 2014 Annual Report for the Westpark
TIRZ on April 8, 2015. The board met on June 15, 2015, and recommended approval of an
Economic Development Program Agreement for Project Ranger One/ WinCo Foods and an
Amendment to the Reimbursement Agreement between the City of Denton, the Board of
Directors of the Tax Increment Reinvestment Zone Number Two and Westray Group, LP.
Board MemberAttendance
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 4
The following members were added to the TIRZ board on November 11, 2015: Dianne Costa
with CEMA of North Texas and John Baines from John E. Baines PC CPAs.
During 2015, the TIRZ Board received reports and took action on the following items:
1. Recommended approval of the 2014 Annual Report for Tax Increment Reinvestment
Zone Number Two to City Council
2. Recommended approval regarding an economic development incentive for Project
Ranger One (Denton -Tarrant PRW, LLC) to the City Council
3. Received reports on the following economic development prospect projects for Westpark:
a. Aspen
b. Composite Parts
4. Recommended approval of a First Amendment to the Reimbursement Agreement
between the City of Denton, the Board of Directors of the TIRZ Number Two, the City of
Denton, Texas, and Westray Group, LP.
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The Westpark TIRZ district has established in its Project and Finance Plans a budget for public
improvement expenditures necessary to support public infrastructure and private investment in
the district. Table 3, which follows, provides the TIRZ projects and estimated costs.
Table 3: TIRZ Proiects Costs
Street Improvements--- $8,000,000
Utilities and Drainage $5,000,000
Industrial Projects $1,275,430
TOTAL $14,275,430
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Street InipLovements: includes the construction and reconstruction of paving improvements
capable of handling heavy truck traffic and that provide common turning radius for semi trailers
and may consist of, but are not limited to, primary and secondary major arterial thoroughfares
and collector streets that will provide improved access within the industrial park, to State
highways, and Interstate 35.
Utilities and Drainago: includes the extension of water and wastewater lines along the right-of-
ways of the streets within the District. Water and wastewater lines will be built to adequately
accommodate the District at build -out and its anticipated industrial users.
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 5
A number of properties in the district are situated in the floodplain. Adequate stormwater
drainage will be built to accommodate the maximum use of the land and comply with the
drainage standards in the Denton Development Code.
Industi 1�0'ects: may include grants, loans and services for public and private development.
Eligible TIRZ project costs are not limited to public uses and may also include projects that
stimulate economic development. Chapter 380 of the Local Government Code grants
municipalities in Texas the authority to offer grants and loans of public funds to stimulate
economic development.
fown=
According to Denton Central Appraisal District (DCAD) supplemental figures, the 2015 total
appraised valuation of taxable real property in TIRZ Number Two was $120,538. This is a
$1,080 increase from the 2012 base value of 119,458 and represents a 1% change in valuation.
The valuation and contribution into the TIRZ fund is illustrated in the tables below.
Table 4: Civ Certified and Su
2012 119,458 119,458
2013 119,458 119,458
2014 566,436 555,807
2015 120,538 120,538
Totals
Supplemental Cut-off Period 12115
Interest for 2015 is earned through 1131116
ental TIRZ Two Valuation Summ
N/A
N/A
N/A
N/A
0
0
0
-0--"-
436,349
436,349..
1,204
7
1,211
1,080
3
3
6
437.429
1,207
10
1.217
Table 5: County Certified and Supplemental TIRZ Two Valuation Summ
2012
119,458
119,458
N/A
N/A
2013
119,458
119,458
0
0
2014
566,436
241,101
121,643
132
2015
120,538
120,538
1,080
1
Totals
122,723
133
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 6
Table 6: TIRZ Two Total Certified and Supplement Summary
2012
'119.458
119,458
N/A
N/A
N/A
N/A
2013
119,458
119,458
0
0
0
0
2014
566,436
555,807
436,349
1,336
7
1,343
2015
120,538
120,538
1,080
4
37—
Totals
437,429
1,340
10
1,350
LTotal City and County TIRZ Contribution 2015 - I
The 800 acre Westpark TIRZ is comprised of undeveloped land adjacent to the Denton Airport
Business Park. Currently, all of the land within the TIRZ boundary has an agricultural
exemption. While the net taxable value, after the agricultural exemption, is $120,538 the market
value of the district is $19,358,537. Once the property is sold and developed, the exemption will
be removed and the valuation will more accurately reflect the market value of the land.
r4TT11M=. I
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No funds were expended in 2015.
2015 or Program
The amendment to the Reimbursement Agreement was made in order to accommodate Project
Ranger One, a company that acquired approximately 77 acres in the Westpark Tax Increment
Reinvestment Zone Number Two.
Denton -Tarrant PRW/ WinCo Foods is a regional, multi -state distribution facility for consumer
products. The 800,000 square foot distribution facility is located on the west side of Western
Boulevard, north of Airport Road. WinCo Foods is a regional retailer with multiple distribution
facilities across the United States. This project includes approximately $130 million in capital
investment and will create 165 jobs with an annual payroll of around $7.2 million.
The Agreement with Project Ranger One, accomplishes two objectives: (1) full reimbursement
of the cost of Phase I improvements using a combination of funding mechanisms; and (2) after
full reimbursement, an economic development incentive of 60% of the City's ad valorem tax
revenue for a period of four years following full reimbursement of Phase I improvements.
The first term of the grant agreement ends when full reimbursement has occurred, and includes
the following forms of reimbursement: up to $1 million for water lines, utilizing the City's Water
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 7
Development Plan Line Fund; up to $865,000 in reimbursement for the sewer lines, utilizing the
City's Wastewater Development Plan Line Fund; 100% of the Sales and Use Tax for
construction materials, furniture, fixtures, and equipment for the construction of the project;
100% of the tax increment collected in the TIRZ Number Two fund associated directly with the
project, until full reimbursement occurs. The contribution includes the City's 40% contribution
to the TIRZ fund annually. The City's remaining 60% of ad valorem revenue will also be
utilized until full reimbursement occurs. It is anticipated that full reimbursement will occur in
approximately four years and will be approximately $6.5 million. The first year after full
reimbursement, the second term of the grant agreement shall commence, and will include the
following: a 60% rebate of the City's ad valorem revenue for a period of four years for an
estimated total incentive of $1.7 million.
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 8
Appendix
Balance
Tax Increment Reinvestment Zone Number Two 2015 Annual Report Page 9
CITY OF DENTON
TAX INCREMENT FINANCING REINVESTMENT ZONE (TIRZ) NUMBER TWO
WESTPARK
Budget versus Actual
1Ct1Y yr Oantan
Indem ntal
i.AtpMod
';AsyllsrWTJRZ
1ncl'drnental
'nRZ 2 ADOPTED BUDGET
Oorl'!od
�rBGT4tEa
TYRZ 2 ACTCI
Apdy'gialtkrasit
tno,T6merttw
'A40etad
; Annual TII'
(T3acraeae) fplift4oun
In�s5s4n stltkd
ettlfiest
1p,cMoaa
9rrt;remonkal
Ad Valorem,
GupOomenm
Wreesa
Tu VeAr T Valr4o
(ya%o) C;omflha;nlon
V*14-
I Reyendo
Frau Vol tsa' (Doccop 4) C ufulelaorsori
2013 $ 119,458
N/A N/A
N/A
N/A
5 119,458
N/A N/A
2014 566,43e
446,978 40%
178,791
2,500
555,807
436,349 40%
2015 120,538
1,080 40%
432
3
120,538
1,080 40%
Totals
_3 2,503.
M11111 Dor ky
T'IRZ 2 ADOPT -61) BUDW TlAZ 2 ACTT;
N/A N/A N/A
174,540 1,204 (1,296)
432 3
_--66 1,207 $. (1,296`.
N/A N/A N/A
48,657 132 (451)
432 1
3 130 $ (455)
$ 119,458 N/A N/A N/A N/A N/A N/A N/A
555,807 435,349 40% 174,540 1,330 (1,747) 7 1,343
120,538 1,080 40% 432 4 3 7
(1,747) $ 10 1,350
` Tex Year 2014 - Clty uses Supplement #18 dated 12/23/14 and County uses Supplement 020 dated 1/30/2015.
" Tax Year 2015 Includes Interest earned through 01/31/201e.
Indem ntal
i.AtpMod
';AsyllsrWTJRZ
1ncl'drnental
Oorl'!od
�rBGT4tEa
11rAt'Onti89tli0
Apdy'gialtkrasit
uppl mo k
$sFo esss
TAX J`ow 'toU 4Ue
(T3acraeae) fplift4oun
ValueF�rtVanU.d'
PTaxValuan {'k 44ra14ae) GmvlA1<ultpg1
2013
$ 119,458
N/A N/A
N/A
N/A
$ 119,458
N/A N/A
2014
568,435
446,978 40%
178,791
583
241,101
121,843 40%
2015
120,538
1,080 40%
432
1
120,538
1,080 40%
Totals
584
N/A N/A N/A
174,540 1,204 (1,296)
432 3
_--66 1,207 $. (1,296`.
N/A N/A N/A
48,657 132 (451)
432 1
3 130 $ (455)
$ 119,458 N/A N/A N/A N/A N/A N/A N/A
555,807 435,349 40% 174,540 1,330 (1,747) 7 1,343
120,538 1,080 40% 432 4 3 7
(1,747) $ 10 1,350
` Tex Year 2014 - Clty uses Supplement #18 dated 12/23/14 and County uses Supplement 020 dated 1/30/2015.
" Tax Year 2015 Includes Interest earned through 01/31/201e.