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Home My WebLink About21-157RESOLUTION NO. 21-157 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING THE 2019 – 2020 TAX INCREMENT REINVESTMENT ZONE NUMBER ONE (TIRZ #1) ANNUAL REPORT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Denton recognizes the importance of its role in local economic development initiatives and programs; and WHEREAS, the City has established Tax Increment Reinvestment Zone Number One (TIRZ #1) and established a Board of Directors for TIRZ #1 (TIRZ #1 Board) to promote development or redevelopment in the downtown area pursuant to Ordinance No. 2010-3 16, authorized by the City Council on December 7, 2010, as provided by the Tax Increment Financing Act, Chapter 3 11 of the Texas Tax Code, as amended; and WHEREAS, on December 7, 2010, the City Council authorized the Project and Finance Plans for the TIRZ #1; and WHEREAS, the Tax Increment Financing Act specifies that the governing body of a city shall submit an annual report on the financial status of TIRZ #1 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 February 5, 2021, the TIRZ #1 Board reviewed and recommended approval of the 2019 – 2020 Annual Report for Tax Increment Reinvestment Zone Number One to the City Council. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DENTON: SECTION 1. That the 2019 – 2020 Annual Report for Tax Increment Reinvestment Zone Number One, City of Denton, Texas, as of February 16, 2021, a copy of which is attached here to as Exhibit A, is hereby accepted. SECTION 2. That the City Manager, or his designee, is hereby authorized to submit the 2019 – 2020 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 TIRZ #1; and to the State Comptroller, as required by state law. SECTION 3. That this resolution shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Denton, and it is accordingly so resolved. The motion to app,o„, thi, „,ol„tio„ w„ m,d, by ’-%\\r\ -K\lan and seconded by ----b=ktM=, the resolution was passed and approved bythe following vote LI - a : Aye ..// Z ,/rJ V/ ZJ Nay Abstain Absent Mayor Gerard Hudspeth: Birdia Johnson. District 1 : Connie Baker. District 2: Jesse Davis. District 3 : John Ryan, District 4: Deb Armintor, At Large Place 5 : Paul Meltzer, At Large Place 6: PASSED AND APPROVED thi, th, t3e d,y ,f FaD CUt\Cl _, 2021. Z--4// GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY ,\\1111111FD ‘- 4572: APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY Downtown Tax Increment Reinvestment Zone Number One E . ) ’:If 2019 – 2020 Annual Report Reporting Period October 1, 2019 to September 30, 2020 City of Denton Economic Development Department 215 E. McKinney Street Denton, Texas 76201 940-349-7776 www.cityofdenton.com Table of Contents Map............................................................................................................................................ 3 Mission Statement ..............__......._........__........_._..__.._...._........._........._......_........._.. 4 District Accomplishments.................................................................................................. 4 Value and Increment Summary ....................................................................................... 5 Summary of TIRZ Board meeting ......._............_._......._..._..........._...__......_............... 5 Budget and Spending Status ..._............_.._............__............_......_....._....................... 6 2019 – 2020 Work Program.............................................................................................. 7 Appendix A: TIRZ One Balance Sheet .._............._......................_...............__........_._ 8 2019 – 2020 Annual Report Downtown Tax Increment Reinvestment Zone Number One District Map H D G) dila (aJ a)T iTT-iC 1'i; r.}, Ib2 II@ Cb)LU Legend [HnF Boundary Centedire Streets Property Description F Acreage w/orwlo AOr we Cable Company Duplex I Exempt Gas Company I= Phone Company Multifamily \-el Il - -–-- ' Real and Corrrnerchl Z; P a =HI Single Famlyr--, :Tomlhorre i:[ U)aj \hcant C»mrnercial Lots t '] ! jb April 16 2010 o M 01 0.2 0.3 Miles ThIs map t8agr8Fnk: teprnentatbn prepared tv the CIty d anton and is Intenad lot use orgy as a nfennc& Data aNoted ii '--- 18 tnt guarar#eed for accuracy ard may tn suq ut to nvlsk>nat arv tIme v#thaR notHbatlon. A RegIstered Surveyor for the -' - State of Texas ww not eon9unal. For SUIvey level accuracy. sqnwblon and ceRtfleat Ion of the pralued data by a RegIstered Pndeuk>naI Land Surveyor for tIe State of Texas mIld reed to tn performed 2019 – 2020 Annual Report Mission Statement The mission of the Downtown Tax Increment Reinvestment Zone Number One (TIRZ #1) is to provide a source of funding for public infrastructure improvements to encourage and accelerate necessary development and redevelopment within the Downtown TIRZ District area. The TIRZ #1 took effect on January 1, 2011, and will terminate on December 31, 2041, or when the budget of $24.8 million has been collected. The City of Denton is the sole participating jurisdiction. The City's participation is as follows: Participation 100% 95% 90% 85% District Accomplishments This report represents October 1, 2019 through September 30, 2020 (FY 2019-20). During FY 2019- 20, $730,722 was collected after the end of the supplemental period determined by the City of Denton. An additional $16,930 in interest brings the total contribution in FY 2019-20 to $747,652. The final grant payment of $76,000 was distributed to Rail Yard Partners, LTD, through a Chapter 380 Agreement for a catalyst project located within TIRZ #1. The Agreement with Rail Yard Partners, LTD., involved an annual grant of $76,000 for five years, for a total incentive of $380,000. In FY 2019-20, the City was approached by multiple developers with interest in pursuing projects inside the TIRZ #1 and the consideration of public-private partnerships with the TIRZ #1 as a funding source for certain project components. Staff engaged a TIRZ consultant, TXP, Inc., an economic analysis and public policy consulting firm, to assist with the financial analysis of the proposed projects and assist the City in determining how to best prioritize TIRZ #1 funds for future projects. The focus of the analysis has been expanded to be more inclusive of overall TIRZ #1 performance and consideration of possible investments and projects to increase the long-term viability of the TIRZ #1 in a manner that generates the greatest benefit in downtown Denton. Five of the phases of the study have been completed and involved the review of foundational documents and holding discussions with the TIRZ #1 Board and relevant stakeholders; working with the City’s Capital Projects/Engineering and Finance departments to understand full project costs and possible impacts of construction inflation; identifying possible return on investment or future development value that would be created by making certain infrastructure improvements; creation of a modified tax revenue forecast; and gathering public input. 2019 – 2020 Annual Report 4 Value and Increment Summary According to Denton Central Appraisal District supplemental figures, the FY 2019-20 total appraised valuation of taxable real property in TIRZ #1 was $209,626,251. This represents a $38,947,498 increase from the previous supplemental value of $170,678,753. The annual TIRZ #1 fund contribution of property taxes and interest income for FY 2019-20 is $747,652. Since its inception, the final value with supplements of the TIRZ #1 has increased an estimated $130.3 million, which represents a 164.2% increase in valuation. Summary of TIRZ #1 Board meetings Board Member List and attendance Board Member Nov. 20, 2019 Jan. 22, 1 July 22, 2020 1 2020 Present x 1 x Sept. 23, 2020 X Name Ben Esely Ken Gold Gerard Hudspeth Melissa Lenaburg John Lenz Paul Meltzer Alex Payne Seat Business Owner Qualified Voter Council Member Property Owner Property Owner Council Member Property Owner X X X X X X X X X X X X X X X X X X X X During 2019 – 2020, the TIRZ #1 Board took the following action on items: •Recommended to City Council approval of the following: o Downtown Reinvestment Grant in the amount of $25,000 for 216 W. Oak St. o Downtown Reinvestment Grant in the amount of $25,000 for 211 N. Cedar St. o Downtown Reinvestment Grant in the amount of $7,188.59 for 109 W. Hickory St o Downtown Reinvestment Grant in the amount of $25,000 for 109 W. Walnut St. o Downtown Reinvestment Grant in the amount of $25,000 for 104 W. McKinney St. o Downtown Reinvestment Grant in the amount of $7,313 for 215 E. Hickory St Recommended approval of the 2018-2019 TIRZ #1 Annual Report to the Denton City Council Directed staff to move forward with a study and analysis by TXP Inc. on the TIRZ #1 • • 2019 – 2020 Annual Report 5 • Approved an update to the Downtown Reinvestment Grant Programs Policy • Approved the Fiscal Year 2020 – 2021 TIRZ #1 budget Budget and Spending Status The Downtown TIRZ #1 has established in its Project and Finance Plans a budget for public improvement expenditures necessary to support private investment in the district. Revenue In FY 2019-20, $747,652 of property taxes and interest income was collected. Expenses TIRZ #1 expenditures in FY 2019-20 amounted to $139,587. The final payment of The Railyard Project in the amount of $76,000, was distributed in FY 2019-20. The Agreement with Rail Yard Partners, LTD. involved an annual grant of $76,000 for five years, for a total incentive of $380,000. Downtown Reinvestment Grant Program with Expenditures On September 17, 2013, Council adopted Ordinance 2013-237, which designated mixed beverage tax to the Downtown Reinvestment Grant fund. In 2017, Council adopted Ordinance 2017-251, removing the designation of future mixed beverage taxes, but committing the existing fund balance in the fund for the same purpose. On September 18, 2018, City Council amended Ordinance number 2012-001, changing the funding source, policy and procedures for the Downtown Reinvestment Grant Program. Changes included that grants will be funded by the TIRZ #1. Once the current fund balance reached $0, the approval sequence updated to the following process 1.) Recommendation from the Downtown Economic Development Committee (formerly Downtown Task Force) to the TIRZ #1 Board, 2.) Recommendation from the TIRZ #1 to City Council, 3.) Final approval from City Council. In this first year of funding the Downtown Reinvestment Grant, $74,000 was approved for the program in the TIRZ #1 budget. Of the $74,000 budgeted for the Downtown Reinvestment Grant $63,587 was expended, which leaves a balance of $10,413 at the close of the Fiscal Year, Grant Activity: • A Downtown Reinvestment Grant in the amount of $25,000 was granted to the property located at 216 W. Oak of which $18,726.24 was paid from the balance of the previous fiscal year’s funds creating a zero balance. The remainder of that approved grant, $6,274, was the first grant payment from the TIRZ #1 fund. • The following Downtown Reinvestment Grants were also paid: o $25,000 for 211 N. Cedar o $25,000 for 109 W. Walnut o $7,313 for 215 E. Hickory. 2019 – 2020 Annual Report 6 •The grant awarded to 104 W. McKinney has not been expended. 2019 - 20 Work Program The TIF Valuation and interest contribution into the TIRZ fund are illustrated in the table that follows. Certified and Supplement Summary ANtdUAL FISCAL SUPPLEMENTALCAPTURETIRZ SUPPLEMENTCERTEFiESUPPLEMENTAL TIRZ TAX VALUE VALUETAX VALUE INTEREST REVENUET}RZ T [b n•• D D OF 9/30 CONTRIBUTION 0 N/A 6,720 94,381 145,506 258,053 330,030 458,739 496,856 538,300 730,722 $3.059.307 TOTAL TfR7 2010 2011 2012 1 2012-201 2013 2014 2015 2016 2017 2018 2019 TOTALS 2010-2011 2011 -2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 79,356,854 81 ,657,808 89,605,635 96,287,950 114,885,073 11 8,440,576 136,021 ,478 142,050,751 167,000,575 21 0,529, 139 79,356,854 80,331,050 93,040,263 100,452,300 11 6,769,435 127,204,599 150,021 ,979 461,351.215 170,678,753 209,626.251 N/A $974, 1 96 $ 1 3,683,409 $21,095,446 $37,412,581 $47,847,745 $70,665,125 $81,994,361 91 ,321 ,899 130,269.397 N/A 17 297 1 ,084 2,821 5,855 _11,439 6,712 11,589 16, 930 $56.744 N/A 6,737 94,678 146,590 260,874 335,885 470, 1 78 .503,568. 549,889 747.652 $3,1 16,051 Fund Balance as of 9/30/2020 is $1,125,619 2019 – 2020 Annual Report Appendix A: TIRZ One Balance Sheet crrY OF DENTON TAX iNCREMEVr FINANCING REWVESTUEHI ZONE (nRa NUMBER ONE DOWIWOWN ACTUAL REVENUE Incnmutht Adjusted AlvaB]–itRZ fiscal Year SWIMnrerrtal inae3se incremultd Ad Yak>rem Tax Year as of mi Tax Value {Oecreae) Ccxrthbutim Vatue TaxR3te Revenue Interest hc<xneH Total Total Revenue Expenditures Fund Balancf I 2010 201 1 2012 2013 201 4 2015 2016 2017 2018 2019 Totals 2010-201 1 201 1-2012 2012-2013 201 >2014 2014-2015 2al$2016 2Q16-201 7 2017-2018 2018-2019 20lb2020 $ 79,356,854 80,331 ,050 93,040263 ICX3,452,30C) 116.769,435 127.204,599 150,021 ,979 161 ,351215 170.678,753 209,626.251 N/A 974.196 13,683,409 21 ,095,446 37.432.581 47.847.745 70.665.125 81.994.361 91 .321.899 130.2®.397 NIA 100% 1 00% 100% 100% 100% 95% 95% 95% 95% 974.196 13,683.409 21.095.446 37,412.581 47,847.745 67.131,869 77.M.643 86,755,804 123,755,927 NIA 0.68975% 6.720 0.68975% 94.381 0.68975% 145.506 0_68975% 258.053 0.68975% 330.030 Q.68334% 458.739 0.637856% 496.856 0.620477% 538.300 a_590454% 730,722 a N/A 17 297 1 .084 2.821 5.855It ,439 6.71 2 11 .589 N/A 6.737 94.678 146.590 260,874 335,885 470, 178 503.568 549.889 N/A N/A 6.737 94.678 146.590 260.874 259.885 394.178 (1 ,039,277) 393.889 76.000 76.000 1.542,845 1 56.000 16 747 0651 3g.587 ' Furxl Bataan as ofWantnr 3D. 2020 is S1.125,619