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HomeMy WebLinkAbout23-917RESOLUTION NO. 23-917 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING THE 2021 – 2022 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 Reinvestment Zone Number One, City of Denton, Texas (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 April 12, 2023, the TIRZ #1 Board reviewed and recommended approval of the 2021 – 2022 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 2021 – 2022 Annual Report for Tax Increment Reinvestment Zone Number One, City of Denton, Texas, as of April 12, 2023, a copy of which is attached here to as Exhibit A, is hereby accepted. SECTION 2. That the City Manager or their designee is hereby authorized to submit the 2021 – 2022 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. The motion to approvE this Resolution seconded by 6,,,_,J t4wJsr4L-.by the following vote D was made by ]+B-_ and _, the Resolution was passed and approved Aye Nay Abstain Absent Mayor Gerard Hudspeth: Vicki Byrd, District 1 : Brian Beck. District 2: Paul Meltzer. District 3 : Joe Holland. District 4: Brandon Chase McGee, At Large Place 5 : Chris Watts, At Large Place 6: / + 1/ ./ J ,/-L PASSED AND APPROVED this the /6+\ day of mAy , 2023 %iARD mND ATTEST: JESUS SALAZAR, INTERIM CITY SECRETARY :3:„El:::?qap APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY Exhibit A n BUg Ifa FmB Fri 11 V &n•:;iI Downtown Tax Increment Reinvestment Zone No. 1 2021 - 2022 ANNUAL REPORT Reporting Period: Oct. 1, 2021 to Sep. 30, 2022 Table of Contents Map ........................................................................................................... 3 Mission Statement ................................................................................... 4 District Accomplishments ____.._____.__.........._____..._......_.....____. 4 Development Within the District Project Descriptions, Private Investment........................................ 4 Project Descriptions, Private Investment........................................ / Summary of TIRZ Board Meetings ....____..____._...___._.....___.__. 9 Downtown Reinvestment Grant Program........................................ 1 0 Value and Increment Summary......................................................... 1 O Certified and Supplement Summary ...__.__.._._...._....____....._... 1 1 Appendix A: TIRZ One Balance Sheet ............................................ 1 2 2021 – 2022 Annual Report Downtown Tax Increment ReinvestmentZone No. 1 DISTRICT MAP Legend a TIF Boundary Centedire Streets Property Description a Cable Company A£reage w/or w/o Agr tse In DupIex I _ ] ExemptPbinIli I I Gas Company; ] MuttihmilynI]:Ph In Phone CompanygUI[] Si„gl, F,mly Real and Colrrnercial = TowntDme Vbmnt Comrnercial Lots LUhbn April 16 2010 o 1833101 0.2 M Miles ThIs map is agla16b reHe$entatbn prepared tV the CIty d ChIlton aId is Intencbd for use orgy n a refererne. Dda dedcteda4 –- is not guatatReed fa accuracY ard mW be suqed to revlsk>n at aw tIme #thoU notHkatlon -A ngbtered Surveyor fo-r the-'- State d Texas was nd consulted. For SUIvey level anuracy, SWewHon and cettHicatlon of the pr&fueed data by-a RegbtetedProfubnal Land Surveyor for tIn State of Texas wuld neid ta- b performed 2021 – 2022 Annual Report ission StatementM The mission of the Downtown Tax Increment Reinvestment Zone Number One (TIRZ #1 ) is to provide asource 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, 2039, 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, Yearm6– 1011 –2021 –30 Participation1 00% 95%90%85% istrict Accomplishments This report represents October 1, 2021 through September 30, 2022 (FY 2021-22). DuringFY 2021–22, $730,631 was collected after the end of the supplemental period determined by the City of Denton. An additional $19,667 in interest brings the total contribution in FY 2021–22 to $750,298. D Downtown saw an increase in investment within the TIRZ #1 area in FY 2021 -2022. Identified below are private/public partnership projects supported by the TIRZ #1 and public investment projects that will support future development within the district. Development Within the District Project Descriptions: Private Investment Private/Public Investment Total Investment TIRZInvestment8 $ 1 ,205 $50,000 $50,000 $50,000 $2,410 $785,575 $ 1 38,200 $33 1 ,600 $1 1 5,341 $50,000 $20,000$40,000 2021 – 2022 Annual Report 4 IOI W. Oak St, Ste. 108, 3 Wishes Gifts 3 Wishes Gifts is a new business located on the Downtown Square. It is a female-owned business that specializes in home d6cor and gifts made in Denton and North Texas. The business was founded by three female entrepreneurs who had previously operated separate kiosks within another business indowntown Denton. However, those kiosks were not meeting their needs, so they decided to join forces and become business partners in 3 Wishes Gifts. The business was named to represent each woman in the partnership. When the store opened in June of 2020, the awning on the storefront was missing. The partners decided not to replace themissing canopy immediately. Instead, they agreed to wait at least a year before making any improvements so they could focus on building their business. The new Shoreline blue awning has been added and includestheir business name, 3 Wishes Gifts, on the front edge. Improvements includes: Awning 222 S. Elm, Station 222In 201 8, One-Way Street Investments, LLC purchased the property located at 222 S. Elm St. as their current location at 21 2 S. Elm was not large enough for their growing firms. Since its purchase, theyhave leased 222 S. Elm to several businesses. In 2021, they decided to renovate the property to contribute to improving the look and feel of Elm St. moving south from the Downtown Square. The front portion of the structure was built in approximately 1937 by the Gulf Oil Corporation and has been home to several auto-based businesses over the years. The renovation plan was to modernize the front "service station" while preserving as much of the original look and feel as possible. The building was converted from automotive use to office use, and a second story was added to the space by doubling the existing footprint of the shop bays in the back. The 3,000 SF space now houses Axis Realty Group, NorthBridge Management, Eagle Surveying, Archden Construction, and Valle Quest Design. The renovated "service station" portion of the building serves as a large conference room and common area for the various businesses in the building. It is also available as an event space for the public to rent out. This new event space will likely increase traffic for other surrounding businesses in the evenings and weekends. The redevelopment of this property retained the historical significance of the 84-year-old buildingwhile introducing energy-efficient materials and increasing the available office and event space downtown. The updated space supports the growth of five small businesses in the downtown area and encourages development in an inactive area of the Downtown. Moreover, this project impacts the advalorem tax collected in the Downtown TIRZ #1. Improvements include, fagade and building rehab, awnings, utility upgrades, and interior and code improvements. 305 S. Locust St., NV Salon The property, which was built in 1930, had been vacant for more than a year and had received applications for remodeling from small business owners. However, the extensive repairs requiredcaused them to reconsider. To lease the planned remodeled and expanded retail space, 310 S. Locust LLC, invested the necessary capital to renovate the historic structure. The building layout was converted combining two suites, to create 2,440 SF of space for salon services. This renovation allowed NV Salon to relocate to a larger space that could accommodate more staff, customers, and parking. 2021 – 2022 Annual Report 5 The renovation project included updating all utilities to meet Building Safety Codes, repairing the historic brick walls, refinishing and staining of the concrete floors, replacing the roof, adding spray foam installation, and installing energy-efficient lighting, HVAC, and windows. These improvements made the building more modern, cost-effective, and comfortable for the tenant. Additionally, freshpaint, awning, and signage were added to the facade. This renovation project, along with the planned work at 309-31 1 S. Locust St., will fill the gap betweenother recently remodeled buildings, updating the block. The improvements made will benefit the tenant, NV Salon, as well as the community, as it brings new life to a historic building and helps torevitalize the area. Proposed Improvements includes: Fagade/Building Rehab, Awnings, Utility Upgrades, Interior/Code Improvements 309-311 S Locust, Bakery BuildingThis 19405 building has been vacant for over five years and is now ready for renovation. 310 S. Locust LLC will invest the necessary capital for repair and renovation. The building's 3,540 SF will be transformed into a bakery and restaurant concept with two apartments on the second floor. This renovation will allow a cottage business that has been a staple of the Denton Community Market to expand into a permanent location where they can operate their bakery, expand their menu, and offer catering services. These additional services will require more staff and provide a valuable service toneighboring businesses and residents beyond the Square. The proposed improvements for this renovation project include updating all utilities to meet Building Safety Codes, repairing the historic brick walls, refinishing and staining the concrete floors, replacing the roof, adding spray foam insulation, and installing energy-efficient lighting, HVAC, and windows.These upgrades will create a more modern building that is cost-effective and comfortable for the tenant. Additionally, fresh paint, awning, and signage will be added to the facade. This renovation project, along with the work planned at 305 S. Locust St., will fill the gap betweenother recently remodeled buildings, updating that block. These improvements will benefit the tenant,the neighboring businesses, and residents by bringing new life to a historic building and creating a new space for the community to enjoy. Proposed Improvements includes: Fagade/Building Rehab, Awnings, Utility Upgrades, Interior/Code Improvements I07 W. Hickory, Chestnut Tree The Chestnut Tree Teahouse and Bistro has been open since 1 994 and is the oldest restaurant on theSquare. Previously, the restaurant focused on serving breakfast and lunch. However, due to the pandemic, owner Suzanne Johnson had to pivot and reinvent her business. Chestnut Tree expanded its services to include happy hour, brunch, and catering for events ranging from weddings to university events. During the pandemic, they operated a community marketplace and now have a manufacturing license that allows them to produce quiche for five Sweetwater Tea & Coffee chain locations. Inaddition, they added a coffee kiosk, The Mug, inside the restaurant. Before 2020, the restaurant employed 1 4 people. It now has 24 employees, including an Italian chef and a sommelier who focuses on happy hour and catering events. The proposed remodel of the restaurant is being coordinated with Texas Historical Commission architects for the facade, and local Hispanic-owned small business, Imagine Renovations, which is a Denton Chamber Small Business award winner. The interior renovation plan includes a new updated 2021 – 2022 Annual Report 6 electrical system to support the entire restaurant and a new ductless air system. The new wiring will eliminate the stress of overloaded circuits. The drop-ceiling will be replaced with new sheetrock at the correct ceiling height. Additionally, a new bar will be installed, the original wood floors will be repaired and refinished, and the restrooms and restaurant will be made ADA compliant. After the interior improvements, the restaurant's original brick walls will be revealed, and new lighting fixtureswill be installed. Proposed Improvements includes: Fagade/Building Rehab, Awnings, Utility Upgrades, Interior/Code Improvements III Industrial St., Steve’s Wine Bar Steve’s Wine bar opened in August 201 6 on E. Hickory and relocated to Industrial Street in May of 201 9, filling a vacancy. The building, constructed in 1 950 as a grocery store had cement floors and limited amenities. The space needed many updates to meet code requirements and convert the open space into a comfortable setting for drinks and live music. Before opening, many updates were made, including installing new walls, utility upgrades, and plumbing for new restrooms and bar area. Later, a covered patio was added on the Russell Street side of the building, providing additional space for customers to enjoy the weather. During the COVID shutdown, a mural was commissioned on the buildingfacade on Industrial Street. The mural provides color and interest to the otherwise non-descript building The proposed improvements will create a new deck/patio at the business’s main entrance on IndustrialSt. The new addition will be a wood deck with built-in planters filling the vacant space between theparking bumpers and the existing raised sidewalk. The design will create a safety barrier for pedestrians from vehicles and address the 12-inch rise between the asphalt and sidewalk. By activating this unused space for outdoor seating, it will add seating for up to 30 people; provideadditional ADA seating; provide a safe transition from the parking spaces to the sidewalk; and beautify the street by adding shade through the planting of small trees, shrubs, and flowers in the planter boxes of the patio. Additionally, three of the five businesses on this block use front patio areasfor their customers. Proposed Improvements includes: Fagade/Building Rehab Project Descriptions: Public InvestmentPublic Investment EMaeB]mm 1Complete Complete Complete Proiect[m ADA Sidewalk Segments New Sidewalk Seq SWolff Park L mi 1 N. EW McKinney St. Bell Ave Industrial St Development Service Center, 401 N. Elm St. The City of Denton aimed to make the permitting process easier and more convenient for its citizensby creating a one-stop center. To achieve this goal, they renovated a vacant 28,000 SF building that provides access to planning, zoning, building permitting and inspection, stormwater, and other utility requirements, as well as the Denton Chamber of Commerce and Discover Denton staff. The Cityrepurposed an empty building in the downtown area, which helped in the revitalization of thedowntown core. The building was originally a grocery store built in the 1950s and received an updated exterior fagade, as well as a completely new energy-efficient infrastructure for the interior. 2021 – 2022 Annual Report 7 Overall, this renovation project provides a valuable resource for the citizens of Denton, making iteasier for them to navigate the permitting process and access various City services. Additionally, repurposing an empty building in the downtown core not only revitalizes the area but also preserves the City's history and character. The project had a budget of $5,522,000. Sidewalk Segments As part of the Complete Sidewalk Project by Capital Improvements the City worked to create new sidewalks, connect missing segments, and make ADA compliant sidewalks and cross-walk intersections.• McKinney Street between Bell Place to Frame Street. $102,000 TIRZ Funding (FY 2019-20) – to improve pedestrian mobility and safety and be ADA compliant. • Bell new sidewalk segment between Sycamore and Hickory in September 2022 – $1 08,000, Funded by 201 9 Sidewalk Bond Funds and DCTA TRiP Funding to improve pedestrian mobility and safety and be ADA compliant. Wolff/Industrial Street Park, 108 Industrial St. Wolff Park, previously known as Industrial Street Park, is a community park on iust under an acre. The park features an interactive art monument, trees, open space, and decorative lighting to make thespace inviting. It to celebrates Denton’s arts and culture, giving it a unique Denton character.Construction of the park began in the summer of 2021 and was completed in December 2021. However, due to shortages and delays in construction materials, the park currently lacks lights andpark name signs. These missing elements are expected to be installed in the fall of 2022. The cost of the park was about $320,000 and Denton Women’s Interracial Fellowship Monument was $96,000. (continues next page) 2021 – 2022 Annual Report Summary of TIRZ #1 Board MeetingsBoard Member List and attendance Member terms end in Aug. and begin in Sep. of each year depending on where they are in their term. The following Board Member seats were changed during FY 2021 – 22: 8 Member Meltzer’s resigned and new Member Watts, began in Sep. 2022. FY 2021 - 22 Activity of the TIRZ #1 Board City Council approved eight items recommend by the TIRZ #1 Board Approved proposed changes to Downtown Reinvestment Grant Program policy, increasing the budget to $200,000 annually for the program. Additionally, Remove property grantcap; allow applicants to receive up to $50,000 per application; successful applicants cannot reapply for 3 years, unless the property is transferred to different ownership, a new business is located at the property, or the business ownership is transferred; and to increases to grantamounts and scoring criteria. Approved the 2020-21 Downtown Tax Increment Reinvestment Zone No. 1 Annual Report. Approved Downtown Reinvestment Grant Applications for the following projects, o 222 S. Elm St. in the amount of $50,000 o 305 S. Locust St. in the amount of $50,000o 309-31 1 S. Locust St. in the amount of $35,000o 11 1 Industrial St. in the amount of $20,000 o 1 07 W. Hickory St. in the amount of $50,000 Approved the FY 2022-23 Downtown Denton Tax Increment Financing Reinvestment ZoneNo. 1 budget • • • • 2021 – 2022 Annual Report 9 owntown Reinvestment Grant ProgramD In FY 2021–22 the Grant Program had a beginning budget of $200,000 funded by the TIRZ #1 . The Grant Program had two projects reach completion creating expenditures of $51,205 and four project approved, but still in progress at the end of FY 2021-22. Grant Project Activity Completed Grant Projects A Downtown Reinvestment Grant in the amount of $50,000 was paid to the property locatedat 222 S. Elm St. for Station 222 A Downtown Reinvestment Grant in the amount of $1,205 was paid to the property locatedat 101 W. Oak St. for 3 Wishes Gifts • • Approved Grant Projects in Proqress 305 S. Locust St. in the amount of $50,000 309-31 1 S. Locust St. in the amount of $35,000 111 Industrial St. in the amount of $20,000 1 07 W. Hickory St. in the amount of $50,000 ®© Exterior & interior photos of Project Station 222located at 222 S. Elm St. e Value and Incremenl 'urnrna ry According to Denton Central Appraisal District supplemental figures, the FY 2021–22 total appraised valuation of taxable real property in TIRZ #1 was $222,831,388. This represents a $11 ,222,975decrease from the previous supplemental value of $234,054,363. The annual TIRZ #1 fund contribution of property taxes and interest income for FY 2021–22 is $750,298. Since its inception,the final value with supplements of the TIRZ #l has increased an estimated $143.5 million, which represents a 1 80.8c7, increase in valuation. 2021 – 2022 Annual Report 10 Certified and Supplement Summary FISCAL TIRZ CERTIFIEYEAR AS OF9/:YEAR TAX VALUE [ [ 1 [I D SUPPLEMENTALTIRZ TAX VALUE D ONTRIBUTIO0 PPLEMENTAL TAL TIRZ INTERESTTIRZ REVENUE 2010 0 0 201 0-201 1 79,356,854 79,356,854 80,33 1 ,050 93,040,263 1 1 6,769,435 1 27,204.599 150,021 ,979 161,351 ,215 170,678,753 209,626,25 1 234,054,363 222,83 1 ,388 l 201 1 201 1 -2012 8 1 ,657,808 N /A 17 297 1 ,084 2,821 5,855 1 1.439 6.712 11.589 1 6,930 WO 19,667 $87,293 ;974,1 96D3 83,409 $2 1 ,095,446 $37,4 1 2,58 1 $47,847,7457 $8 1 ,994,36 1 $91 ,321 ,899 $ 1 30,269,397 1 $ 143,474,534 6,720 94,38 1 145,506 258,053 330,030 458,739 496,856 538,300 730,722 867,747 730,631 $4,657,685 N /A 6.737 94,678 146,590 #O,874 335,885 470.178 503,568 549,889 747.652 878.629 750,298 $4,744,978 2032 201 2.2013 89,605,635 2013 2014 201 3-2014 96,287,950 201 4-2015 1 114,885,073 2015 201 5-20 1 6 1 1 8,440,576 2016 201 6-2017 1 36,02 1 .478 2017 201 7-2018 '5 1 2018 201 8-2019 167,000,575 2019 201 9-2020 21 0,529,1 39 2020 2020-2021 232,747,807 202 1 2021 -2022 232.894,462 TOTALS Fund Balance as of 9/30/2022 is $2,678,05 1 TOTAL TIRZ REVENUE $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 ,IIII5300,000 5200,000 $100,000 $- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2021 – 2022 Annual Report 11 Appendix A:TIRZ One Balance Sheet City of Denton Tax Increment Financing Reinvestment Zone (TIRZ) Number One Downtown Actual Revenue Incremental Increase Ad]usted (Decrease) Contribution incremental Value Annual TIRZ Ad Valorem I Interest Total Tax Rate Revenue I Income'• Total Revenue Expenditures Fund Balance'Tax Year FIscal Year as of 9/30 Supplemental Tax Value 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Totals 2010-2011 2011-2012 2012-2013 2013-2014 2014.2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 I ----–-! '+f'-–IH In =ll•l•=HHll ll•ll•HH IHl•In ==•HlIH• lll••Hll•a=n l•l•ll• Hl•IHI ll• S 79,356,85480,331,050 93,040,263 100,452,300 116,769,435 127,204,599 150,021,979 161,351,215 170,678,753 209,626,251 234,054,363 222,831,388 N/A 974,196 13,683,409 21,095,446 37,412,581 47,847,74570,665,125 81,994,361 91,321,899 130,269,397 154,697,509 143,474,534 N/A 100% 100% 100% 100% 100% 95% 95% 95% 95% 95% 90% 974,196 13,683,409 21,095,446 37,412,581 47,847,74567,131,869 77,894,64386,755,804 123,755,927 146,962,634 129,127,081 0.68975% 0.68975% 0. 68975% 0, 68975% 0. 68975% 0. 683B1% 0.637856% 0. 620477% 0.590454% 0.590454% 0.565823% N/A 6,720 94,381 145,506 258,053 330,030458,739 496,856 538,300730,722 867,747 730,631 4,657.685 N/A 17 297 1,084 2,821 5,855 11,439 6,712 11,589 16,930 10,882 19,667 87,293 N/A 6,737 94,678 146,590 260,874 335,885 470,178 503,568 549,889747,652 878,629 750.298 4,744,978 N/A N/A 6,737 94,678 146,590 260,874 259,885394,178 (1,039,277) 393,889 608,065 853,641 698,791 2,678,051 76.000 76,000 1,542,845 156,000 139,587 24,988 51,507 2,066,927 $$$$$ 2021 – 2022 Annual Report 12 REPORT CREATED BY: City of Denton, Economic Development Department 401 N. Elm, Denton, Texas 76201 • 940-349-7776 • www.cityofdenton.comApproved March 29, 2023 'i i-:,@iHl;