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Home My WebLink About22-45022-450RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,APPROVING THE 2020-2021 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 the District to promote development or redevelopment in the Downtown area pursuant to Ordinance No. 2010-316, authorized by the City Council on December 7, 2010, as provided by the Tax Increment Financing Act, Chapter 311 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 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 March 23, 2022, the TIRZ #1 Board reviewed and recommended approval of the 2020 – 2021 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 2020-2021 Annual Report for Tax Increment Reinvestment Zone Number One, City of Denton, Texas, as of March 23, 2022, a copy of which is attached here to as Exhibit A, is hereby accepted. SECTION 2. That the City Manager, or her designee, is hereby authorized to submit the 2020-2021 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. 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. Th, m,ti,„ t, ,pp„„, thi, „„1„ti,„ w„ m,d, by :hSe bMs ,„d „conded by a, the o) roved by the following vote LL - I] Aye t/ r b/’ 1// \/‘ W/ r/ Nay Abstain Absent Mayor Gerard Hudspeth: Vicki Byrd, District 1 : Brian Beck, District 2: Jesse Davis, District 3 : Alison Maguire, District 4: Deb Armintor, At Large Place 5 : Paul Mekzer, At Large Place 6: PASSED AND APPROVED this the n„, ., IN ' 2022. GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY A11111111 .#2/% , d%'v APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY Digitally signed by Scott BrayDate: 2022.04.11 14:37:03 -05'OO' DOWNTOW N TAX iNcieMENT ENT ZONE NO. 1 2020 - 2021 ANNUAL REPORT Reporting Period: Oct. 1, 2020 to Sep. 30, 2021 Table of Contents Map ........................................................................................................ 3 Mission Statement ................................................................................ 4 District Accomplishments ..................................................................... 4 Value and Increment Summary ......................................................... 5 Summary of TIRZ Board meeting Budget and Spending Status............................................................. 7 2020 – 2021 Work Program........................................................... 8 Appendix A: TIRZ One Balance Sheet ..................._....._................ 9 6 22020 – 2021 Annual Report Downtown Tax Increment Reinvestment Zone No. 1 DISTRICT MAP a TIn=:1 \$PrrHI_ IIItiTIE nj a I 4£=E Legend a TIF Boundary Centerline Streets Property Description I= Cable Company Acreage w/or w/o Ayr we DU)lex I ] Gas CompanyIlila MuttihmiV Exempt In Phone Company ] RaI and Corrrnercial Irl Single FamilyI= Townhome Vacant Commercial Lots PI April 16 2010 o OQm 0.2 0.3 Miles ThIs Irnp is agraphk: repruentatbn prepared tV the Ctty d anton and is Intenad for use orgy n a reference Dda chplctedFa - -- is not guarar+eed for aeeuracy aId may be 8utject to revIsIon at atV tIme vUthotR notIfIcatIon A Regbtend Surveyor for thev' = State of Tocas wu nd consulted. For Survey level neuralv, 8tpewlslon and eertHlcatbn of the pr<xlueed data by a RegIsteredProfnslonal Land Surveyor for tIn State of Texn would reed to be performed 2020 – 2021 Annual Report ission StatementM 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, 201 1, and will terminate on December 31, 2041, or whenthe budget of $24.8 million has been collected. The City of Denton is the sole participating jurisdiction. The City’s participation is as follows: Participation1 00% 95% 90%85% istrict Accomplishments This report represents October 1, 2020 through September 30, 2021 (FY 2020 – 21 ). During FY 2020–21, $867,747 was collected after the end of the supplemental period determined by theCity of Denton. An additional $1 0,882 in interest brings the total contribution in FY 2020 – 21 to$878,629. D In FY 201 9-20, 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 with a focus on the analysis todetermine if the PEC 4 (Phases 3 and 4) could be funded by the TIRZ #1. Due to COVID, changeswere made to the timeline and the analysis parameters with a focus to have a broader use of the TIRZ for different projects. Stakeholder consensus found that additional downtown parking is not a priority and that downtownbusinesses are struggling with COVID, suggesting that the timing of a significant infrastructure project will need to be addressed. Smaller projects focused on lighting and sidewalk improvements, which are more appropriate in the short-term. Although, drainage improvement projects arenecessary to create development opportunities – new projects might not occur in the short-term. Additional stakeholder input provided that downtown needs more daytime office employment andtraffic to balance nighttime activity, as office rents are not high enough to justify new construction.Developers would like to use TIRZ funds to incentivize larger and more transformative economicdevelopment projects. Existing businesses would like to use TIRZ funds on expanded buildingimprovement and fagade programs and felt that downtown lacks an overall vision which makes prioritizing TIRZ projects a challenge. At the October 2020 Board meeting, the Board recommended funding the PEC-4 Tributary Phases 3 & 4 drainage project from the TIRZ and recommended changing the TIRZ boundaries toencompass the project. In addition, the Board directed staff to review additional funding optionsfor the PEC-4 Phases 3 & 4 project so that the TIRZ can split the cost.. The Board also recommended continuing to use additional TIRZ funds for smaller public infrastructure projects, such as lighting andsidewalks, and the downtown grant program. With any remaining funds, the Board recommended considering economic development incentives for development programs. The Board also directedstaff to explore costs associated with drainage projects on the north side of the TIRZ and to involvethe Parks department in a discussion of public spaces. In working with the Parks department, 2020 – 2021 Annual ReF)on 4 Industrial Street Park, a pocket-park located in the TIRZ, was renovated and received a public art installation. The Board provided input on the park’s renovation design, but TIRZ funds were used. As aforementioned, the transfer of $1 02,453.25 from the Downtown Tax Increment Reinvestment Zone Sidewalk and Lighting Project was made to the Downtown Storm Drain Phase I Project to allowfor the construction of a segment of sidewalk along McKinney Street from Frame Street to Bell Place. While being part of the City’s complete sidewalk program, this segment of sidewalk will alsosupport the quite-zones being installed within the TIRZ. Construction on the sidewalks began in FY 2020 – 21 and will be completed in the first quarter of FY 2021 – 22. As a topic recommended in the TXP Stakeholder Input Summary, the Downtown Reinvestment Grant Program budget was increased from $1 00,000 to $200,000 beginning with the Fiscal Year 2021-2022 budget. The Grant Program policy will also be updated to reflect the increased budget. TheGrant Program is a 50 – 50 fund-match up to $50,000 per redevelopment, new construction, or fagade update project within the TIRZ. Value and Increment Summary According to Denton Central Appraisal District supplemental figures, the FY 2020 – 21 total appraised valuation of taxable real property in TIRZ #1 was $234,054,363. This represents a$24,428,1 12 increase from the previous supplemental value of $209,626,251. The annual TIRZ#1 fund contribution of property taxes and interest income for FY 2020 – 21 is $878,629. Sinceits inception, the final value with supplements of the TIRZ #1 has increased an estimated $154.7 million, which represents a 1 94.9% increase in valuation. (continues next page) 2020 – 2021 Annual Report Summary of TIRZ #1 Board MeetingsBoard Member List and attendance Meetings from Oct. 2020 to Ma y 2021 were held virtuall I Pl•l•l r a N\ N Ill?a e in[XM Me !I Business Owner PropertyOwner Council Member PropertyOwner PropertyOwner PropertyOwner QualifiedVoter QualifiedVoter Council Member CouncilMember Council Member 1 0/21 /2 O 02/05/21 03/24/21 OS/26/21 07/28/21 09/22/21 MeetingEmzljeBmEHIWe Ben Esely Melissa Lenaburg X X X X X x 1 x X X X X x 1 x 1 x Paul Meltzer X X X X X X Alex Payne JimmyMeredith8 Mary beth Doyle;b Eric Pruett8 X Daniel Abasolo8Gerard Hudspeth88 Connie Baker#8 X x 1 x Vicki Byrd$8 X X Member terms end in Aug. and begin in Sep. of each year depending on where they are in theirterm. The following Board Member seats were changed during FY 2020 – 21 :8 Member Meredith’s term ended and new member Doyle, began in Sep. 2021. 8 Member Pruett’s term ended, and new member, Abasolo, began in Sep. 2021.88 Member Baker replaced Hudspeth in Feb. 2020. Byrd replaced Baker beginning inMay 2021. During FY 2020 21, the TIRZ #1 Board acted on the following items: Recommended to City Council approval of the following: • Approve a resolution approving the 2019-2020 Downtown Tax Increment Reinvestment Zone No. 1 Annual Report.• Approve a resolution approving a Downtown Reinvestment Grant in the amount of $302.02for 225 W. Oak St. • Approve a resolution approving a Downtown Reinvestment Grant in the amount of $1,205for 1 08 W. Oak St. The Board recommended funding the PEC 4 Phases 3 & 4 drainage project from the TIRZand recommended changing the TIRZ boundaries to encompass the project. In addition, the Board directed staff to review additional funding options for the PEC 4 Phases 3 & 4 project so that the TIRZ can split the cost. The Board also recommended continuing to use additional • 2020 – 2021 Annual Report 6 TIRZ funds for smaller public infrastructure projects, such as lighting and sidewalks, and the downtown grant program. With any remaining funds, the Board recommended considering economic development incentives for development programs. The Board also directed staff to explore costs associated with drainage projects on the north side of the TIRZ and toinvolve the Parks department in a discussion of public spaces. Approved the Fiscal Year 2020 – 2021 TIRZ #1 budget. Recommend approval of the transfer of $102,451.25 from the Downtown Tax IncrementReinvestment Zone Sidewalk and Lighting Project to the Downtown Storm Drain Phase I Project to allow for the construction of a segment of sidewalk along McKinney Street fromFrame Street to Bell Place. Recommend approval of increasing the Downtown Reinvestment Grant Program budget to$200,000 beginning with the Fiscal Year 2021-2022 budget and update the GrantProgram policy to reflect the increased budget. • • Budget and Spending StatusThe 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 2020 – 21, $878,629 of property taxes and interest income was collected. Expenses TIRZ #1 expenditures in FY 2020 – 21 amounted to $24,988 for a Downtown Reinvestment GrantProgram payment to the approved 1 04 W. McKinney St. project. owntown Reinvestment Grant ProgramD with Expenditures In FY 2020 – 21 the Grant Program had a beginning budget of $100,000 from the TIRZ #1 . DuringFY 2019-20, a grant was awarded to 1 04 W. McKinney. Due to COVID related challenges, the project was not completed on its original timeline and was extended into FY 2020 – 21. This wasthe only grant payment made in the fiscal year and the remaining Grant Program budget wasreturned to the TIRZ #1 fund balance. Grant Activity: • A Downtown Reinvestment Grant in the amount of $302.02 was granted to the propertylocated at 225 W. Oak St. for signage to Salvage Second Hand. • A Downtown Reinvestment Grant in the amount of $1,205 was granted to the propertylocated at 1 08 W. Oak St., Ste. 101 for an awning to 3 Wishes Gifts. • The following Downtown Reinvestment Grant was paid:o 1 04 W. McKinney St. in the amount of $25,000. 2020 – 2021 Annual Report 7 2020 21 Work ProgramThe TIF Valuation and interest contribution into the TIRZ fund are illustrated in the table that follows. Certified and Supplement Summary FISCALYEAR AS OF TIRZ CERTIFiE TAX VALUE ANNUAL CAPTURESUPPLEMENTAL SUPPLEMENTTIRZ TAX VALUEVALUE D SUPPLEMENTALCONTRIBUTION TO TIRZ9/30 201 0-201 1 201 1 -2012 201 2-2013 201 3-201 4 201 4-2015 2015-2016 2016-2017 2017-2018 201 8-2019 201 9-2020 2020-2021 D INTEREST REVENUE TOTAL TIR7 2010 201 1 201 2 201 3 2014 2015 2016 2017 2018 2019 2020 TOTALS 79,356,854 8 ] ,657,808 89,605,635 96,287,950 1 1 4,885,073 _1 1 8.440,576 1 36,02 1 ,478 1 42.050,751 167,000,575 2 1 0.529,1 39 232,747,807 79.356,854 80,33 1 ,050 93,040,263 1 00,452,300 1 1 6,769,435 1 27.204,599 1 50,02 1 ,979 161 ,351 ,215 1 70,678,753 209,626,251 234.054,363 N/A 17 297 1 .084 2.821 5,855 1 1 ,439 6,7 1 2 1 1 ,589 1 6,930 1 0,882 $67,626 N/A 6,737 94,678 1 46,590 260,874 335,885 470.1 78 503,568 549,889 747,652 878,629 $3,994,680 $974,1 96 3W95,446 $37,41 2,581 $47,847,745 $70,665.1 25 8 91 ,32 1 .899 1 30,269,397 1 54,697,509 6,720 94,38 1 J 45.506 258,053 330,030 458.739 496,856 538,300 730,722 867,747 $3,927,054 Fund Balance as of 9/30/2021 is $1,979,260 (continues next page) 2020 – 2021 Annual Report Appendix A:TIRZ One Balance Sheet City of Denton Tax Increment Financing Reinvestment Zone (TIRZ) Number OneDowntown Actual Revenue AdjustedIncremental IncrementalFiscal Year as Supplemental Increase Contribution(Decrease)of 9/30 Tax Value Value Tax Rate Annual TIRZ Ad Valorem Revenue Interest Total Income Total Revenue Expenditures Fund Balance 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 $ 79,356,854 80,331,050 93,040,263 100,452, 300 116,769,435 127,204,599 150,021,979 161,351,215 170,678,753 209,626,251 234,054,363 N/A 974.196 13,683,409 21,095,446 37,412,581 47,847,745 70,665,125 81,994,361 91,321,899 130,269,397 154,697,509 N/A 100% 100% 100% 100% 100% 95% 95% 95% 95% 95% 974.196 13,683,409 21,095,446 37,412,581 47,847,745 67,131,869 77,894,643 86,755,804 123,755,927 146,962,634 0.68975% 0.68975% 0.68975% 0.68975% 0.68975% 0.68334% 0.637856% 0.620477% 0.590454% 0.590454% TOTALS: N/A 6,720 94,381 145,506 258,053 330,030 458,739 496,856 538,300 730,722 867,747 4,273,287 N/A 17 297 1,084 2,821 5,855 11,439 6,712 11,589 16,930 10,882 $ 67,627 N/A 6,737 94,678 146,590 260,874 335,885 470,178 503,568 549,889 747,652 878,629 3,994,680 N/A N/A 6,737 94,678 146,590 260,874 259,885 394,178 (1,039,277) 393,889 608,065 853,641 1,979,260 76.000 76.000 1,542,845 156,000 139.587 24,988 2,015,420$$$$ REPORT CREATED BY: City of Denton, Economic Development Department 401 N. Elm, Denton, Texas 76201 1 940-349-7776 1 www.cityofdenton.com 2020 – 2021 Annual Report