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HomeMy WebLinkAbout24-1507RESOLUTION NO. 24- 1507 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, APPROVING AND AUTHORIZING SUBMISSION OF THE 2022 – 2023 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. 2010-3 16, 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 July 24, 2024, the TIRZ #1 Board reviewed and recommended approval of the 2022 – 2023 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 2022 – 2023 Annual Report for Tax Increment Reinvestment Zone Number One, City of Denton, Texas, as of July 24, 2024, 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 2022 – 2023 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 K; ck: Br, J by the following vote B - D ]: was made by J At HaJJ4... J 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 : Jill Jester. At Large Place 6: \/ a a Jr \/ ,/ -Z PASSED AND APPROVED this the 20th day of R\v,SV ) +. 2024 ATTEST : LAUREN THODEN, CITY SECRETARY egaML& J}td'~ APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY iD Scott Bray, Deputy City Attorney Exhibit A Tax Increment Reinvestment Zone Number One 2022 - 2023 ANNUAL REPORT Reporting Period: Oct. 1 , 2022 to Sep. 30, 2023 Table of Contents Map........................................................................................................... 3 Mission Statement ................................................................................... 4 District Accomplishments ...._...........................__...._.......__............._... 4 Development Within the District Project Descriptions: Private Investment........................................ 4 Project Descriptions, Public Investment .......................................... 6 Summary of TIRZ Board Activity ...............__......................._............. 7 Downtown Reinvestment Grant Program ..._....._............................... 8 Summary of Expenses............................................................................ 8 Value and Increment Summary ............................................................ 9 Certified and Supplement Summary ....._..._......_......................_...... 9 Appendix A: TIRZ One Balance Sheet .__............._.............._........ 1 O 2022 – 2023 Annual Report Tax Increment Reinvestment Z©ne Number One DISTRICT MAP ;:: I :: }- J-- !UU Legend a A F 1B: o u m1b ] a ry Centedirte Streets Property Description F a A>reage w/orw/o Agr use il __] Cable CompanyHI DupIex I,_ II Exempt Gas Company w+ 1l{bRI Ihl Phone Company Multifamily krIIT 1 ',111!P--t I'ggFl®--–ill I aiTFrI.L:) I= SYtV Real and COITrTlercial FORE In SIngle FamIlyI= Townhome I= Vacant CommercIal Lob April 1S 2010 o ql&a) 01 02 0.3 Miles ThIs map is agraphk: reprwentalkjn preHred IV the CIty of Denton and is Intencbd for use only as a referern e. Dda depIcted F;----- is not guarar#eed for accuracy axl may be sutject to revIsIon at arV tIme u4thout notIfIcatIon A RegIstered Surveyor for the v' T State Of Texas was not cort9utted. For Survey level accuracy, 8qnrvlslon and certIfIcatIon of the pr(xluced data by a RegIstered Profenk>nal Land Surveyor for tIe State of Texas could reed to be performed 2022 – 2023 Annual Report issio rI 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 , 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: Participation District Accomplishments This report represents October 1, 2022, through September 30, 2023 (FY 2022–23). During FY 2022–23, $856,797 was collected after the end of the supplemental period determined by the City of Denton. An additional $1 20,323 in interest brings the total contribution in FY 2022–23 to $977.1 20 Downtown saw increased investment within the TIRZ #1 area in FY 2022-2023. 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 Mt Project Name 1XWM Chestnut Tree Steve’s Wine Bar Cam Theater Location Square Feet Status nt Invl Total Investme Mr1 38,200 $50,000115.341 $7,267$ 1 4,533 $2,500$7,963 grImm St1 07 W. Hicko 1 11 Industrial St 21 4 W. Hicko 115-117 W Hickol St 1 08 W. McKinne mm Complete Complete Complete Robert Moses Bullseye Bike Fagade 2.800 In Progress In Progress $3,695 $50,000 8TIRZ Investment is estimated for projects with “In Progress“ status. 305 S. Locust St., NV Salon The property, built in 1 930, had been vacant for more than a year and had received applications for remodeling from small business owners. However, the extensive repairs required caused 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 to combine 2022 – 2023 Annual Report 4 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. 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, fresh paint, 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 between other 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 to revitalize the area. Proposed Improvements include: Fagade/Building Rehab, Awnings, Utility Upgrades, Interior/Code Improvements 1 07 W. Hickory, Chestnut Tree The Chestnut Tree Teahouse and Bistro has been open since 1 994 and is the oldest restaurant on the Square. 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. In addition, they added a coffee kiosk, The Mug, inside the restaurant. Before 2020, the restaurant employed 14 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 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 fixtures will be installed. Improvements include, Fagade/Building Rehab, Awnings, Utility Upgrades, Interior/Code Improvements 311 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 building facade on Industrial Street. The mural provides color and interest to the otherwise non-descript building 2022 – 2023 Annual Report 5 The proposed improvements will create a new deck/patio at the business’s main entrance on Industrial St. The new addition will be a wood deck with built-in planters filling the vacant space between the parking 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; provide additional 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 areas for their customers. Improvements include: Fagade/Building Rehab 108 W. McKinney St., Bullseye Bike Bullseye Bike Shop, a well-established business in Denton with a 14-year history, has experienced significant growth and success, leading to the need for expansion. Bullseye Bike owner Kevin Marshall, and Dallas preservationist Mlichaella Ramier teamed up to purchase 108 W. McKinney, formerly home to Walt's Garage. The 2,800 square feet historic building location will house Bullseye Bike Shop as the anchor tenant, providing space for various local small businesses and creative pursuits, further contributing to Denton's vibrant community atmosphere. The building dates back to an early 19005 build and is currently in disrepair with a deteriorating roof and empty interior. Extensive rehabilitation is planned, including installing a new roof, upgrading the mechanical systems, electrical wiring, plumbing, and HVAC. These improvements will ensure structural integrity and provide customers and employees with a safe, comfortable environment. In addition to housing Bullseye Bike Shop, the building at 108 W. McKinney can accommodate various uses, such as an artists' makerspace, micro retail, gym, yoga studio, office space, live/work retail, or a barber shop. By offering a mix of these potential uses, the building could become a thriving hub of activity for the Denton community, providing valuable services and resources to Downtown residents and contributing to the ongoing preservation and revitalization of the area's unique charm and heritage. Proposed Improvements include: Fagade/Building Rehab Project Descriptions, Public Investment Public Investment Project Way Crossing/Diagonal Crossin Location[M are Status Cjrm Investment $437MB All - Way Crossing, Denton Square Funded by DCTA TRiP Funds, providing diagonal crossings at all four intersections around the Square. The pedestrian-only traffic phase stops all vehicle traffic within the intersection when a walk signal is activated, allowing pedestrians to safely and simultaneously cross an intersection in any direction. 2022 – 2023 Annual Report 6 Surnmary of TIRZ #1 Board Activity Board Member List and attendance Board Mem_ ... JH Name 11/16/22 04/12/23 09/1 3/23 Meeting Dates and Attendance Ben Esely Melissa Lenaburg Property Owner Council Member Business Owner Property Owner Qualified Voter Council Member Chris Watts Suzanne Johnson Mary beth Doyje Daniel Abasolo Vicki Byrd Members serve two-year terms, which begin in October and end in September of each year, depending on their current position. FY 2022 - 23 Activity of the TIRZ #1 Board City Council approved five items recommended by the TIRZ #1 Board Approved proposed changes to Downtown Reinvestment Grant Program policy to support fire sprinkler installation grant applications, making them automatically eligible for the grant o 214 W. Hickory in an amount not to exceed $2,500 maximume Approved the 2021 -22 Downtown Tax Increment Reinvestment Zone No. 1 Annual Report. Approved Downtown Reinvestment Grant Applications for the following projects, o 115-117 W. Hickory up to 50% of the eligible amount of the project’s actual costs. o 108 W. McKinney in the amount not to exceed $50,000 The Board engaged TIRZ consultant David Pettit to evaluate the TIRZ performance. A report was • • • presented to the Board. No action was taken. 2022 – 2023 Annual Report Downtown Reinvestment Grant Program In FY 2022–23, the Grant Program's beginning budget was $200,000, funded by TIRZ #1. Four projects reached completion, creating expenditures of $ 1 09,767, and one project was approved but still in progress at the end of FY 2022-23. Grant Project Activity Approved Grant Project in Progress 108 W. McKinney St. in the amount of $50,000 for Bullseye Bike Shop 11 7 W. Hickory St. in the amount not to exceed of $3,695 for Bob Moses • • Completed Grant Projects A Downtown Reinvestment Grant in the amount of $50,000 was paid to the property located at 305 S. Locust St. for NV Salon A Downtown Reinvestment Grant in the amount of $7.267 was paid to the property located at 1 1 1 Industrial St. for Steve’s Wine Bar A Downtown Reinvestment Grant in the amount of $50,000 was paid to the property located at 1 07 W. Hickory St. for Chestnut Tree A Downtown Reinvestment Grant in the amount of $2,500 was paid to the property located at 214 W. Hickory St. Denton Community Theater • • • • Interior photos of the project located at 1 07 W. Hickory St., The Chestnut Tree Bistro Expense Summary During FY 2022–23, expenses for TIRZ #1 totaled $1 29,767. Funds expended for the Downtown Reinvestment Program were $1 09,767 and $20,000 was expended for the TIRZ consultant. 2022 – 2023 Annual Report 8 Value and Increment Summary According to Denton Central Appraisal District Certified figures, the FY 2022–23 total appraised valuation of taxable real property in TIRZ #1 was $249,149,564. This represents a $1 6,255,102 increase from the previous certified tax value of $232,894,462. The annual TIRZ #1 fund contribution of property taxes and interest income for FY 2022–23 is $977, 1 20. Since its inception, the final value with supplements of the TIRZ #1 has increased by an estimated $1 69.7 million, representing a 21 4% increase in valuation. Certified and Supplement Summary PPLEMENTAL Z TAX VALUE FISCAL YEAR ! TIRZ CE AS OF 9/30 INCREMENTAL SUPPLEMENTAL INCREASE TIRZ(DECREASE) CONTRIBUTION 0 b M $974, 1 96 $ 1 31618M $21 ,095,446 $37,41 2,581 $47,847,745 $70,665, 1 25 $81 ,994,361 591.321,899 M a6 94,381 145.5061 2 330,0301 458,7391 9 538.3001 730,7221 8 730,631 856,7971 INTEREST REVENUE TOTAL TIRZ 2010 201 1 2012 2033 2014 2015 201 6 2017 2018 2019 2020 2021 2022 a Fund Balance as of 9/30/2023 is $3,525,393 201 0.201 1 201 1-201 2 201 2-201 3 201 3-2014 201 4-201 5 201 5-201 6 201 6-2017 2017-2018 201 8-201 9 201 9- 2020 2020-202 1 202 1 -2022 2022- 2023 79,356,8541 8 89.605,6351 9 8 1 1 8,440,5761 136,02 1 ,4781 142,050,75 1 1 67,000,5751 79,356,854 8 93,040,2631 M 17 D9 1 ,084 2,821 Q8 11.439 6,71 2 a1 a6 10,870 n9 120,323 @ 6,737 94,678 146,590 260,874 335,885 470, 1 78 503,568 549,889 747,652 878,629 750,298 977, 1 20 $ $ $ $ $ $ $ $ $ $ $ $ 207,605 Win 1 1 6,769,4351 1 27,204,5991 150,02 1 ,979 161.351 170.678,7531 2 2 =m=a–-– 234,054,363 222.831 ,388 249. 1 49.564 $ 1@IBggIBM $143,1,74,534 6249, 1 49,5641 TOTAL TIRZ REVENUE $1,200,000 $1,000,000 $800,000 5600,000 5400,000 , Ill 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $200,000 S- 2022 – 2023 Annual Report 9 Appendix As TIRZ One Balance Sheet City of Denton Tax Increment Financing Reinvestment Zone (TIRZ) Number One Incremental Adjusted Certified Tax Increase Incremental Tax Year Value (Decrease) Contribution Value Annual TIRZ Ad Interest Total Tax Rate Valorem Revenue M Income** Total Revenue Expenditures Fund Balance* 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $ 2022 Totals Fund Balance as of 9/30/2023 is 3,525,393 79,356,854 81,657,808 89,605,635 96,287,950 114,885,073 118,440,576 136,021,478 142,050,751 167,000,575 210,529,139 232,747,807 232,894,462 249,149,564 N/A 2,300,954 10,248,781 16,931,096 35,528,219 39,083,722 56,664,624 62,693,897 87,643,721 131,172,285 153,390,953 153,537,608 169,792,710 N/A 100% 100% 100% 100% 100% 95% 95% 95% 95% 95% 90% 90% N/A 2,300,954 10,248,781 16,931,096 35,528,219 39,083,722 53,831,393 59,559,202 83,261,535 124,613,671 145,721,405 138,183,847 152,813,439 0.68975 0.68975 0.68975 0.68975 0.68975 0.68334 0.63786 0.62048 0.59045 0.59045 0.56582 0.56068 N/A 15,871 70,691 116,782 245,056 269,580 367,851 379,902 516,619 735,786 860,418 781,876 856,797 5,217,229 N/A 17 297 1,084 2,821 5,855 11,439 6,712 11,589 16,930 10,870 19,667 120,323 207,605 N/A 6,737 94,678 146,590 260,874 335,885 470,178 503,568 549,889 747,652 878,617 750,298 977,120 5,722,086 N/A N/A 6,737 94,678 146,590 260,874 259,885 394,178 (1,039,277) 393,889 608,065 853,629 698,791 847,354 3,525,393 76,000 76,000 1,542,845 156,000 139,587 24,988 51,507 129,767 2,196,694 S$$$$ 2022 – 2023 Annual Report 10 REPORT CREATED BY: City of Denton, Economic Development Department 401 N. Elm, Denton, Texas 76201 • 940-349-7776 • www.cityofdenton.com 2022 – 2023 Annual Report 11