HomeMy WebLinkAboutOctober 14, 2008 Agenda
AGENDA
CITY OF DENTON CITY COUNCIL
October 14, 2008
After determining that a quorum is present, the City Council of the City of Denton, Texas will
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convene in 2 Tuesday Session on Tuesday, October 14, 2008 at 4:00 p.m. in the City Council
Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the
following item will be considered:
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NOTE: A 2 Tuesday Session is used to explore matters of interest to one or more City Council
Members or the City Manager for the purpose of giving staff direction into whether or not such
matters should be placed on a future regular or special meeting of the Council for citizen input,
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City Council deliberation and formal City action. At a 2 Tuesday Session, the City Council
generally receives informal and preliminary reports and information from City staff, officials,
members of City committees, and the individual or organization proposing council action, if
invited by City Council or City Manager to participate in the session. Participation by
individuals and members of organizations invited to speak ceases when the Mayor announces the
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session is being closed to public input. Although 2 Tuesday Sessions are public meetings, and
citizens have a legal right to attend, they are not public hearings, so citizens are not allowed to
participate in the session unless invited to do so by the Mayor. Any citizen may supply to the
City Council, prior to the beginning of the session, a written report regarding the citizen’s
opinion on the matter being explored. Should the Council direct the matter be placed on a
regular meeting agenda, the staff will generally prepare a final report defining the proposed
action, which will be made available to all citizens prior to the regular meeting at which citizen
input is sought. The purpose of this procedure is to allow citizens attending the regular meeting
the opportunity to hear the views of their fellow citizens without having to attend two meetings.
1.Receive a report, hold a discussion and give staff direction regarding the establishment of
a Tax Increment Reinvestment Zone for Downtown Denton.
NOTE: The City Council reserves the right to adjourn into a Closed Meeting on any item on its
Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended,
including without limitation, Sections 551.071-551.086 of the Texas Open Meetings Act.
C E R T I F I C A T E
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of
Denton, Texas, on the ________day of ___________________, 2008 at ________o'clock (a.m.) (p.m.)
____________________________________
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM IS ACCESSIBLE
IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED
AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE
CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR
THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE
INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY’S OFFICE.
AGENDA INFORMATION SHEET
AGENDA DATE: October 14, 2008
DEPARTMENT: Economic Development
CM: George C. Campbell
SUBJECT
Receive a report, hold a discussion and give staff direction regarding the establishment of
a Tax Increment Reinvestment Zone for Downtown Denton.
BACKGROUND
At the September 9, 2008 City Council meeting, the Council requested additional
information on the proposed Downtown TIF district. The following information is
provided in response:
TIF Boundary: A request was made to evaluate the impact if the properties on
the west side of Carroll Blvd and on the south side of Eagle Drive were removed
from the TIF boundaries. A map with those properties shown in black is attached
(Exhibit A). Previously, the total estimated revenue to be produced by the TIF
was $46 million. A recalculation of the TIF revenue, excluding these properties,
amounts to approximately $41.6. a $4.4 million reduction over the 30-year term.
The chart below shows the projected dollar amount that would be realized in the
General Fund and TIF Fund over the 30 year period for both the City and County,
using calculations based on the revised boundary map. The General Fund
revenue is based on 1) the existing base value of both real property and business
personal property; 2) 100% of the new increment for business personal property;
and 3) the percentage of new incremental value that is not dedicated to the TIF.
You may recall that the proposed TIF would receive 100% of the new increment
for the first 5 years; 95% years 6 thru 10; 90% years 11 through 20; and 85%
years 21 through 30.
Gen Fund TIF Fund
City of Denton $89.9 Million$31.2 Million
Denton County $32.4 Million$10.4 Million
Total TIF $41.6 Million
Impact on City Policies Question: Could the TIF impede the City’s ability to
develop good, sound policies if it is established prior to the development of a
Downtown Implementation Plan?
City staff is in the process of developing an implementation plan for Downtown.
This plan will incorporate the elements of the Downtown Master Plan, the TIP
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Strategies Economic Development strategic plan, and the RTKL Catalyst
Projects. The implementation plan will address:
Future parking needs
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Zoning analysis
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Design standards for Downtown and the area around the transit station
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Open space and linkages
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Solid waste service
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Staff recommends that the implementation plan be completed prior to the Council
approving specific TIF projects related to these issues so that commitments to
such things as parking garage sites are not made prior to having the study in place.
Multi-Family Development Question: The City Council has discussed
establishing a target ratio of single family to multi-family units within the City.
At this time, the Council has not determined the preferred ratio. The proposed
catalyst projects for Downtown include a considerable amount of multi-family
development. How will the encouragement of multi-family in Downtown impact
the City’s ability to formulate or maintain an appropriate ratio?
The previous studies/plans regarding Downtown indicate that density is needed in
order to encourage redevelopment and create a vibrant, livable downtown. At the
time the Downtown Master Plan was developed, the residential/commercial ratio
was 20:80. The consultant indicated a minimum ratio of 50:50 is desired, but that
60% residential would be preferred. It is recommended that the Council consider
excluding the Downtown area when establishing their target ratio of single family
to multi-family or that they consider allowing a higher density in Downtown.
Feedback from Other Cities: The City Council requested that staff contact other
cities with TIFs to develop a list of pros and cons. Exhibit B is a summary of the
feedback staff received. Overall, most cities were very pleased with the results of
their TIFs. Suggestions/recommendations included:
20-year TIFs were not long enough to accomplish the needs of their zones.
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Include a large area in the TIF. One city is expanding their boundaries
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and others have several smaller TIFs.
Private sector investment is very important to projects.
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Be sure you generate enough revenue to retire debt service.
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One community met resistance from the press and some citizens. Those in
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opposition said, “Let downtown pay for downtown.”
Five-Year Forecast: The City Council requested that staff look at the City’s five
year budget projections and provide information on the impact of the TIF. Bryan
Langley, Budget Director has prepared the attached report (Exhibit C). Bryan
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will be present at the October 14 work session to present his information.
Taxpayers vs. Ratepayers: A concern was raised regarding using TIF funds
(revenues from taxpayers) to pay for utility improvements within the TIF, which
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would normally be paid by the utility ratepayer. Utility infrastructure is a
qualified use of funds within a TIF. The Council could choose to remove “utility
improvements” from the eligible projects list or limit the utility improvements to
drainage improvement projects, a General Fund operation.
Staff recommends that Council consider leaving the language as proposed so as
not to limit the projects that could be funded. An example where Council might
consider using TIF funds may be electric service. There are many large
transformers in downtown that impede pedestrian access or are placed along the
curb, reducing the amount of available parking. Removing/consolidating/hiding
transformers in Downtown may be costly. The final solution may not improve the
electric service to Downtown residents and businesses, but it could improve the
appearance of the area. The Council may consider this a property owner issue
rather than an electric customer concern.
Powers of the Board: Council requested further explanation regarding the
powers of the TIF Board.
Pursuant to the proposed ordinance establishing the TIF, the City may authorize
the board of directors to exercise any of the City’s powers with respect to
administration, management or operation of the zone or the implementation of the
may not
project plan for the zone. However, the City authorize the board of
directors to:
Issue bonds
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Impose taxes or fees
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Exercise the power of eminent domain
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Give final approval to the project plan
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Additional provisions of the ordinance are:
The board of directors may exercise any of the powers granted to the City
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under Tax Code 311.008, except that the city must approve any
acquisition of real property. However, the City, by ordinance, may choose
to restrict any power granted to the board of directors by Chapter 311 of
the Tax Code.
The board of directors has all the powers of a municipality under Chapter
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380 of the Local Government Code, including the power to make grants
and loans from the increment fund for the purpose of developing the
zone’s economy, combating employment problems in the zone, and
developing or expanding any zone business activity.
The board of directors may also contract with the City to pay for city
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services in the zone out of the portion of the increment fund produced by
the city, regardless of whether the services or their cost is identified in the
project or financing plans.
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The board of directors may consist of five to fifteen members. It is
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composed of one appointee from each taxing unit that levies taxes on real
property in the zone. A taxing unit may waive its right to appoint a
member. The remaining board members are appointed by the City
Council. Board members must be eligible to vote in the municipality, or
be at least 18 years of age and own real property in the zone. State law
specifies that a member of the board of directors of a TIF is not considered
a public official. Because of this provision, the Attorney General has held
that a city council member is not prohibited from simultaneously serving
as a member of the board of directors of a TIF created by his or her
municipality.
The City Council has the ability to limit the powers of the Board in the language
of the ordinance that establishes the Board.
Project Information: The City Council requested detail on the types of projects
to be considered for TIF funding. The following general projects were listed:
ProjectEstimated Cost
Parking/Transportation $13.0 Million
Streetscape Projects $ 7.6 Million
Support for Downtown Projects $13.0 Million
Utility Improvements $13.0 Million
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Catalyst Projects: Catalyst projects could receive funding from any of the
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above categories. For example, Catalyst Project A – Transit Oriented
Development – is transportation-related and includes a public parking
structure. The land surrounding the site is industrial in nature and would
require streetscaping and street improvements as well.
Exhibit D provides a one-page summary of each of the five catalyst
projects developed by RTKL. Also included is RTKL’s summary of
public resources that could be considered to assist in the financing of these
projects. Each summary identifies the types of use, size, units, cost and
the margin gap as identified by RTKL. Please note that this report was
completed in 2005. Therefore, the costs and revenues reflect 2005
estimates and tax rates.
Parking: Estimated costs for parking structure construction are included
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in the catalyst projects summaries. Upon completion of the Downtown
Implementation Plan, a recommendation for location(s) and size of the
garage(s) would be available. If appropriate, a parking garage project
could then be scheduled for TIF funding.
Catalyst Project No. Parking Spaces Estimated Cost
A 756 $7.6 Million
B 315 $3.2 Million
D 476 $4.8 Million
Drainage: Approximately 141 acres of Denton’s downtown is located in
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a flood plain. In April of 2007, the downtown area received nearly seven
inches of rain during a six-hour period, flooding over 150 properties city-
wide.
Implementation of three major drainage projects would remove all of the
properties within the TIF boundaries from the flood plain at a total cost of
approximately $72 million in 2008 dollars. Understanding that the funds
for these projects would need to be provided over a period of at least ten
years, the total costs could be significantly more. It is estimated that
removal of the properties from the flood plain could double or triple the
value when redeveloped.
Pedestrian Streetscapes: Hickory Street and Oak Street from Bell Avenue
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to Locust Street are very wide streets that narrow to two-lane sections at
the Square. By creating landscaped medians, narrowing the sections to
two lanes, widening the sidewalks, improving the access to the future
transit station and installing public art, benches, etc., it is expected that
shoppers, transit riders, and office workers would be encouraged to forego
automobile transportation for walking and bicycling.
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It is estimated that these two projects would cost approximately $3 million
each. The projects fit within the urban lifestyle that the Downtown Master
Plan promotes, and it is believed that the properties located along Hickory
and Oak Streets will redevelop if improvements are made. The current
width and traffic activity make the streets unsafe to cross and undesirable
for pedestrian traffic.
Water/Sewer Improvements:
The Council should take into
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consideration the issue of taxpayer vs. ratepayer when determining
whether or not water and wastewater projects are appropriate for TIF
funding. The following information is provided to show what the
water/wastewater needs might be at current day costs. We used the Cedar
Street water/sewer bids to calculate the costs:
There are 83,000 linear feet of water and 83,000 linear feet of sewer lines
within the TIF district. 39% are substandard and an additional 42% are 50
years and older. This means that 81% are either substandard or 50 years
old. Applying the high bid amount from the Cedar Street project to
67,000 linear feet of water and sewer, the costs equal:
Water @$139 per linear foot: $9,313,000
Sewer @$115 per linear foot: $7,705,000
ESTIMATED SCHEDULE OF PROJECT
In order to use 2008 as a base year, the City must hold a public hearing and adopt an
ordinance forming the TIF by December 2008.
PRIOR ACTION/REVIEW
The Downtown Task Force met several times in 2007 and 2008 to establish their
recommendation to the Economic Development Partnership Board. The Board reviewed
the task force recommendation at their May 12, 2008 meeting and recommends City
Council approval. The City Council approved a resolution authorizing issuance of a
Notice of Intent at the June 3, 2008 Council meeting. The Council discussed the
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proposed TIF at their June 3, 2008 and September 9 work session meetings.
FISCAL INFORMATION
Depending upon the level of participation by the City and County, it is estimated that the
TIF would generate approximately $41.6 to $46 million over a 30 year period for
infrastructure improvements.
EXHIBITS
Exhibit A – TIF Boundary Map
Exhibit B – Feedback from Other Cities
Exhibit C – Five Year Forecast Impact
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Exhibit D – Catalyst Project Summaries
Respectfully submitted:
_______________________________
Linda Ratliff, Director
Economic Development Department
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EXHIBIT B
Advantages and Disadvantages of TIFs
Texas Examples
City of Arlington
Arlington currently has four active TIRZ districts which include two that are project-specific and
two that are redevelopment projects. The downtown district is the oldest district. It has seen
limited activity in its initial 10 years but has realized increased activity in recent years due in
part to the establishment of a professionally-managed downtown management effort.
Arlington strives to ensure a 3:1 private to public investment ratio for the downtown program.
They are currently working with Tarrant County to amend the downtown Project and Financing
Plans to allow for 380 grant participation from the TIRZ Board. This was not an option when
the TIRZ was initially established but they believe that this will provide for an additional tool for
them.
City of Austin
The Austin TIF #15 encompasses four city blocks in downtown Austin near City Hall. The TIF
was described as a streetscape and retail district project. It is a single entity TIF that does not
have participation from the County. The City does not issue bonds to fund projects in the
district. The TIF generates 100K annually and is utilized as more of a maintenance fund. The
City used CIP funds to build the necessary infrastructure and they are utilizing the TIF funds to
reassure developers there is sufficient funding to maintain the area in the future. The property
in their TIF was previously owned by the city and was not on the tax rolls. An advantage of
their TIF is that they are now pulling in taxes off of the retail development.
Austin reported that the negative of using this public financing method occurs during economic
downturns in the economy. The Arlington contact felt that it reduces the city’s ability to
address a budget shortfall since the funds are dedicated for a specific purpose.
City of Fort Worth
Fort Worth’s downtown TIF was created by petition in 1996. All taxable entities participated at
100 percent (including their ISD). The TIF was originally capped at $50M, but was so
successful that it was expanded to 72M in 2003. A large portion of the revenue was utilized
for parking leases, for example Bass Hall, Sundance East and Sundance West. The
administrative costs to operate the TIF were $117,000 this year and a projected $52,000 this
next fiscal year. The lack of utilizing tax abatements was not perceived by our contact as a
negative. The contact provided a riverfront example of using both the TIF for infrastructure
and a Chapter 380 Agreement to entice businesses to locate within the district.
Fort Worth stated it was challenging to foretell the future when developing a project plan to last
the life of a 30-year TIF. They suggested we limit the list of possible projects to the top
priorities of the TIF's partners (if entities beyond the City of Denton are involved) and make
reasonably sure the financing will be available when needed to accomplish the designated
projects.
It was suggested that we devise projects for the plan, and funding them as the TIF goes
forward, that will entice private investment and work to raise property values. The ultimate
purpose of a TIF is to generate increment to fund improvements to generate increment, so that
when the TIF ends, it has accomplished a significant increase in tax revenues that would not
be there, except for the TIF's existence. That is what can sell other taxing entities on
participating in the TIF.
As for unique partnerships, etc., practically all of the Downtown TIF's investment involve a
private partner, or in one case, a public partner (Tarrant County Family Law Garage lease).
Fort Worth usually waits for private entities to express an interest in specific redevelopment
and make a request of the TIF. The developer needs to show that a financing gap exists.
The Downtown TIF's investments are guided by the Downtown Strategic Action Plan, which is
a Downtown Fort Worth, Inc.-driven, City Council-approved road map for downtown that is
updated every 5-10 years. It's helpful to have the private partners fully involved in the creation
and management of the TIF, including representation on the TIF Board.
Houston Main Street Market Square Redevelopment Authority
The Houston program partners with the City to use TIRZ funds for Capital Projects. The Rice
Hotel project was the first project of the TIRZ, and money was borrowed from the Houston
Housing Finance Corporation to do this project. The agreement is for 25 years at a set amount
each year but the debt is paid from increment from the first 9 blocks of the TIRZ. They have
since had 3 annexations of land and debt is not serviced by the increment from any of the
added area. The original debt is scheduled to be paid off in 2021 but they hope to pay it off
sooner.
They suggested we include anything that we might need to do in the area in the Project and
Financing Plan such as roadways, public space, historic façade restorations, infrastructure,
etc. Their plan only allows roadway work to be done in certain parts of the TIRZ.
City of Amarillo
Amarillo and Center City established the city’s first TIF zone in Dec. 2006, as a result of their
long-range plan developed by Gideon Toal of Fort Worth. Amarillo said a 30-year TIF is a
good idea. Their consultant said some of the Fort Worth TIFs were 20 years and that proved
to be too short a time for big projects.
They recommended making the zone large. Gideon Toal said that their first zones in Fort
Worth were too small. Now Fort Worth is dotted with many separate zones. In Amarillo, the
zone more than doubled the basic Main Street district.
They encountered much more resistance from the County and public than they predicted.
Their contact said, “A TIF is a crucial incentive for downtowns, but it doesn’t make for an easy
sound byte on the news.”
City of Keller
The City of Denton Finance Department provided an article from the September 30, 2008, Fort
Worth Star-Telegram.
The article provides an example of the disadvantage of issuing large amounts of bond debt at
the inception of the TIF. The City of Keller issued $42 M in certificates of obligation to act as a
catalyst for the development of their 352 acre Town Center TIF in 2001. Due to the state of
the current market and having issued the bonds at the front end of the project, the City now
must take funds out of their general fund to cover the shortfall in the TIF fund. It is anticipated
that the Town Center will generate $3.1 M in ad valorum taxes in the coming year, which is
insufficient to pay for their bond interest payment of $3.6 M.
National Examples
Pinckney, Michigan
Feedback from this contact said that a TIF will accelerate property valuation faster than without
a TIF. Even if the city contributes 100% of the increment, other contributions will be made,
such as new sales tax revenue, new jobs, new customers brought into the business district.
Pinckney considers the downtown as it’s “largest employer” in the community and, as such,
values it as a key asset.
Ferguson, MO
Ten years ago Ferguson’s downtown district was struggling. They established a TIF District
and used those funds for road improvements, new sidewalks, new lighting, and established a
façade improvement program. They indicated they still have a ways to go, but the difference
has been like night and day. New businesses are slowly coming back, residents have a
restored pride in their community, and they can tie it all back to the success they’ve had with
their TIF Districts.
One of our most recent and successful projects involved working with a local developer to build
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a three story building, with residential on the 2 & 3 floors, and commercial on the first. The
project was completed earlier this summer and they’re already building one of the commercial
spaces out for an incoming tenant. There’s a waiting list for the loft apartments.
Coldwater, MI
From a phone conversation with the downtown manager in Coldwater, MI:
A lot of Coldwater’s TIFs are 20 years old and they are now looking at recreating or extending
them. They said the TIF was the best thing that ever happened to Coldwater. They couldn’t
have raised the money to accomplish the improvements through traditional fundraising
resources. They indicated that if they were to use the same amount of money in another part
of town, there wouldn’t have been as much impact as there was downtown. They look at the
TIF as what they would be spending on economic development anyway.
Exhibit C-1
Finance Department * 215 E. McKinney * Denton, TX 76201
(940) 349-8224 * DFW Metro (972) 434-2259 * Fax (940) 349-7206
MEMORANDUM
DATE:
October 9, 2008
TO:
Honorable Mayor and Members of City Council
FROM:
Bryan Langley, Director of Finance
SUBJECT:
Downtown Tax Increment Financing (TIF) District
During a previous discussion of the Downtown TIF, the City Council requested that the long term
financial impact to the General Fund be identified.
For your review, I have included an updated General Fund Five Year Financial Forecast that includes
the potential impact of the Downtown TIF (Exhibit C-2). If the Downtown TIF is approved, we expect
General Fund ad valorem tax revenues to be reduced by an average of $119,681 from FY 2010 to FY
2013. Due to the assumption that appraised values will continue to increase, the forecast predicts that ad
valorem tax revenues will be reduced by an average of $360,510 from FY 2014 to FY 2018 and
$641,532 from FY 2019 to FY 2024. In addition, the General Obligation Debt Service Fund is expected
to experience roughly 33% of the ad valorem tax revenue reductions forecast in the General Fund.
I have also included a copy of the adopted FY 2008-09 Five Year Forecast for the General Fund
(Exhibit C-3) for your reference.
I will present the revised General Fund Financial Forecast to your during the Council work session. If
you have any questions before that time, please let me know.
cc: George Campbell, City Manager
Jon Fortune, Assistant City Manager
“Dedicated to Quality Service”
www.cityofdenton.com
Catalyst Project A
Transit Oriented Development
When RTKL proposed this catalyst project,
the exact location of the transit station had
not been identified. RTKL recommended
the southeast corner of Bell and McKinney
as the best site. Although the site is not
the same, the concept of the TOD is still
valid.
Elements of the Project:
Historic fabric with targeted infill around a mid-block pedestrian promenade
Spaces consisting of shops, restaurants, etc. to link square to transit.
Anchor for gateway treatments
Catalyst A Development Program
Units/SpacesSquare Feet Assumption Factors
Retail/Office 16,700
Residential (Rental) 267253,650950 sf/unit
Residential (For sale) 814,4001,800 sf/unit
Project Land Area 287,4966.6 acres
Surface Parking 7123,075325 sf/space
Structured Parking 756245,700325 sf/space
Estimated Project Value
Office/Retail/Rental Housing $26,009,559
For-Sale Housing $1,302,000
Total Project Value $27,311,559
Estimated Project Cost
Estimated cost includes purchase of land, demo of buildings, 33,754,938
development of parking and facilities and developer profit of $3
million
Project Margin Gap largely due to structured parking (400 add’l 6,443,379
spaces). Total estimated cost of structured parking $7.6 million.
One of the best opportunities to create incremental value.
Catalyst Project B
Wells Fargo Development
RTKL recognized the potential for the
development of the land east of the
Wells Fargo building, as well as the
small parking garage owned by Wells
Fargo. The garage has since been
demolished. It was RTKL who
suggested the City contact Wells Fargo
regarding the catalyst project concept.
Elements of the Project:
Take advantage of under-utilized and undeveloped space
Provide shared parking garage to serve new and existing users
Strengthen core frame
Catalyst B Development Program
Units/SpacesSquare Feet Assumption Factors
Retail/Office 12,120
Residential (Rental) 110104,500950 sf/unit
Residential (For sale) 610,8001,800 sf/unit
Project Land Area 191,6644.4 acres
Surface Parking 4013,000325 sf/space
Structured Parking 315102,375325 sf/space
Estimated Project Value
Office/Retail/Rental Housing $12,433,533
For-Sale Housing $1,116,000
Total Project Value $13,549,533
Estimated Project Cost
Estimated cost includes purchase of land, demo of buildings, $18,423,214
development of parking and facilities and developer profit of
$1.7 million
Project Margin Gap largely due to structured parking (150 add’l $4,873,680
spaces). Total estimated cost of structured parking $3.2 million.
Opportunities to build on current quality investment.
Catalyst Project C
North Downtown
RTKL selected the area south of Parkway
and north of McKinney between Locust
and Bolivar as Project C. Although not
shown as a part of this project, RTKL also
suggested that the City might consider
including City owned property for this
project (Old Central Fire Station and City
Hall West).
Elements of the Project:
Infill residential of varying densities and price points to increase critical mass and
diversity in downtown.
RTKL suggested City facilities could become commercial properties. No costs or
values were included in this report for the City facilities.
Catalyst C Development Program
Units/SpacesSquare Feet Assumption Factors
Retail/Office 0
Residential (Rental) 7773,150950 sf/unit
Residential (For sale) 6597,5001,500 sf/unit
Project Land Area 333,2347.7 acres
Surface Parking 27288,400325 sf/space
Structured Parking 00
Estimated Project Value
Rental Housing $6,306,343
For-Sale Housing $9,672,000
Total Project Value $15,978,343
Estimated Project Cost
Estimated cost includes purchase of land, demo of buildings, $19,089,552
development of parking and facilities and developer profit of
$1.7 million
Project Margin Gap largely due to rent risk (proving up market).$3,111,209
Opportunities to build residential density to support downtown
commercial space.
Catalyst Project D
West Downtown
RTKL identified the area between Oak and
Hickory Streets and Cedar and Carroll
Blvd. as Project D.
Elements of the Project:
Infill residential of varying densities
and price points to increase critical
mass and diversity in downtown
Alternative office product with potential housing integration
Anchor for gateway treatments
Catalyst D Development Program
Units/SpacesSquare Feet Assumption Factors
Office 134,400
Residential (Rental) 3133,4801,080 sf/unit
Residential (For sale) 00
Project Land Area 267,8946.2 acres
Surface Parking 6822,100325 sf/space
Structured Parking 476154,700325 sf/space
Estimated Project Value
Office/Retail/Rental Housing $26,725,782
For-Sale Housing
Total Project Value $26,725,782
Estimated Project Cost
Estimated cost includes purchase of land, demo of buildings, $25,752,265
development of parking and facilities and developer profit of
$2.3 million
Project Margin Gap largely due to rent risk. Opportunity to $973,517
create live/work environment in downtown.
Catalyst Project E
McKinney Street
Catalyst E represents the property on the
south side of McKinney from Bell to Austin.
About one block of the area is owned by
Denton County and scheduled to be
abandoned in the near future.
Elements of the Project:
Historic fabric with targeted infill around mid-block pedestrian promenade
Spaces consisting of shops, restaurants, etc.
Estimates provided by RTKL referred to residential infill only
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Catalyst E Development Program
Units/SpacesSquare Feet Assumption Factors
Residential (Rental) 137130,150950 sf/unit
Residential (For sale) 916,2001,800 sf/unit
Project Land Area 303,6137.0 acres
Surface Parking 13443,550325 sf/space
Estimated Project Value
Rental Housing $11,220,376
For-Sale Housing $1,339,200
Total Project Value $12,559,576
Estimated Project Cost
Estimated cost includes purchase of land, demo of buildings, $13,792,702
development of parking and facilities and developer profit of
$1.2 million
Project Margin Gap largely due to rent risk. One of best $1,233,126
opportunities to create incremental value.
Examples of “Filling the Gap” for Catalyst Projects
The following examples were prepared by RTKL in November 2005. Please note that
the numbers have not been updated to reflect current tax rate or property values.
Tax Increment Financing District (TIF)
TotalMarketProperty
Sq Ft Value Per Total Market Assessment TaxableTaxTax
Development Type of Units SF/UnitValueRatio ValueRate Revenue
Retail/Office 163,220 $100$16,322,0001% $163,220 0.608$99,262
Residential (rental) 622 $100,000$62,200,0001% $622,000 0.608$378,269
Residential (for sale) 88 $200,000$17,600,0001% $176,000 0.608$107,034
Totals $96,122,000 $961,220 $584,566
Less Current Base-96,000
$488,566
Net Tax Increment
Special Improvement District (BIDs, PIDs, MMDs)
TotalMarketProperty
Sq Ft Value Per Total Market Assessment TaxableTaxTax
Development Type of Units SF/UnitValueRatio ValueRate Revenue
Retail/Office 163,220 $100$16,322,0001% $163,220 0.100$16,322
Residential (rental) 622 $100,000$62,200,0001% $622,000 0.100$62,200
Residential (for sale) 88 $225,000$19,800,0001% $198,000 0.10019,800
Totals $98,322,000 $983,220 $98,322
Sales Tax Sharing
Retails Total
TotalSales Total Retail City Sales Sales Tax D/T Share
Development Type Sq Ft Per Sq Ft SalesTax Rate Revenue 50%
Retail 163,220 $250$40,805,0001.5% $612,075 $306,038
Totals $40,805,000 $612,075 $306,038
Gap Fill Summary
Annual10-Year
Revenue Type Amount Amount
TIF $488,566 $4,885,659
Special District $98,322 $983,220
Sales Tax Sharing $306,038 $3,060,375
Totals $892,925 $8,929,254