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May 05, 2014 Minutes CITY OF DENTON CITY COUNCIL MINUTES May 5, 2014 After determining that a quorum was present, the City Council convened in a Work Session on Monday, May 5, 2014 at 11:30 a.m. in the North Branch Meeting Room at the North Branch Library, 3020 N. Locust Street, Denton, Texas. PRESENT: Mayor Burroughs, Mayor Pro Tem Kamp, Council Member Engelbrecht, Council Member Gregory, Council Member Roden, and Council Member Hawkins. ABSENT: Council Member King 1.Receive a report,hold a discussion, and give staff direction about the Rayzor Ranch mixed-use development, including information regarding the overlay district and design standards for the project, and the economic impact of the project. Bryan Lockley, Director of Planning and Development, provided an update on development at Rayzor Ranch and anticipated future development. Those included proposed overlay amendments for the Marketplace and Town Center and the Rayzor Ranch design itself. He reviewed recent development for the Marketplace on north side of Rayzor Ranch and showed the new Academy Sports building design. A Cinemark Theater would be the first development on the south side. Rayzor Ranch Marketplace Proposed Overlay Amendments – there were two proposed amendments to the overlay. One would create a subarea of RR-2 to allow for quick vehicle servicing and/or vehicle repair for automotive retailers in the area. These uses were not originally permitted but there had been some interest from those types of services. Mayor Burroughs noted that there had been no specific discussion about quick vehicle uses. He questioned if there were other limitations on neighborhood services such as dry cleaners, local banking, etc. Lockley stated no because those types of services were already present on three corners of the development and Rayzor Ranch was supposed to be higher end development. Council Member Gregory asked why that type of service was originally excluded. Lockley stated that the original use focus was not on tire sales, oil changes, etc. The thought was that the Walmart and Sam’s could do that type of service and that the uses were permitted elsewhere in the surrounding area. A second amendment to the overlay would permit mass clearing and grading. The amendment would allow mass clearing and grading at one time and not as individual site plans and plats were approved. Staff felt this procedure made more sense as it was a more efficient use for Rayzor due to its large holding. This permit would require Planning and Zoning Commission approval of the final plat and construction documents. Staff had developed a checklist to facilitate this review for the grading permit. Council Member Gregory felt that this was a big area to be graded all at once. With the current drought and with spring winds, this grading would make a lot of dust which might cause problems with the surrounding uses. He questioned if there were requirements for grading on that scale to reduce the dust and reduce the runoff. City of Denton City Council Minutes May 5, 2014 Page 2 Lockley stated that was part of the current grading process. It would be done on a small scale with a few users at a time and not done all at once. There were dust control and run off measures that would have to be followed. Council Member Gregory stated that given the negative reaction when the property was originally graded and the fact that nothing happened with no planting, he was underwhelmed with the request and would expect some commitment on the part of developer to replant that portion of the property which was not used immediately with native plants to reduce the negative visual impact and runoff impact. Lockley continued that another issue was the design guidelines with minimum standards and architectural features. Staff was questioning if this was a collection of independent stores or a unified development. Rayzor indicated the stores would like to keep their branding. However, it was possible to do both such as with the Ross store. That store had its branding and color scheme but the design standards of the development were also incorporated. A question to consider was if there was a minimum amount of stone expected for future buildings. Mayor Burroughs stated that from prior discussions he did not think that it had to be identical and that was not the intent. The intent was to allow differentiation but to have some continuity of the patterns. Key elements maintained throughout the development were needed. Maintain that continuity to show that it was part of a whole but not a cookie cutter design. Council Member Gregory stated that the Petco building was more of what he was led to believe what would be developed as opposed to the Famous Footwear building. He was troubled that it might be a pattern to offer what was supposed to be, then showing something much less desirable. Overall, he was pleased with the look on the north side. He felt it might be helpful for staff to provide standards percentages for the development. Lockley stated that there was a balance to those standards with the end user in order to attract development. He felt it would be beneficial to indicate that there was a need for consistency between some of the retailers that balanced those two issues out. He would work with staff and the developer to best work that out for Council to consider. Council Member King arrived at the meeting. Mayor Burroughs questioned if there was supposed to be a differentiation in the roof line every certain amount of development. Council Member Hawkins asked if the developer built the buildings and leased out the space or worked with the tenant for the design of the building. Lockley stated that the developer worked with the tenant and the tenant then came to the City with the design. Bissett stated that each individual tenant had their own expectations and would come forward with minimum standards so then it was up to the developer and staff to negotiate the design standards. City of Denton City Council Minutes May 5, 2014 Page 3 Council Member Engelbrecht stated that in terms of Academy, the retailer came in with a minimum but were working with the developer for a village concept. The developer allowed Academy to present a design which was not in keeping with the rest of the development. That concept got through the developer and to staff in an incorrect form. The village concept for a unified whole was being diminished which was not what was promised. The developer was also asking for more and more amendments and the City getting less and less quality from the developer. His expectation was that the developer would provide more resolution before the concept came to staff but now staff had to do that. Mayor Burroughs stated that he understood that there were three parties involved; the tenant, developer and City. His observation was that from time to time a developer needed the City’s help with the tenant and at times the tenant was in charge such as Dillard’s decision to stay at Golden Triangle Mall. Mayor Pro Tem Kamp stated that she was concerned that staff had the tools necessary to move forward with negotiations with future tenants. Council Member Engelbrecht felt that the City was asked to reduce the standards while it really needed to increase the standards. Council Member King stated that he would like to maintain the flexibility to work with the tenants and developer for the standards. Lockley stated that was part of the process to work with the tenants and developers to maintain the standards. There was a balance on how far to take the standards so that they did not impact the ability of the tenant to locate in Denton. Council Member Roden felt there was a need to look at what tools were available. There were design standards in Highland Village and he questioned why they were there and not in Denton. He felt there was a need to look at details as Denton was losing shoppers due to the second best mentality in Denton. Mayor Burroughs felt a subdivision of middle income was needed that would make a large impact on the economic status of the City. Mayor Pro Tem Kamp stated that a difference had been made in the past 10 years but Denton had a lot of students with part-time jobs which reflected on the economic status of the City. She questioned if more policy direction was needed or could staff work with what they already had. Lockley stated that Council had provided good direction and he would go back and work with staff on what might be needed. Council Member Gregory felt that standards on way things looked were vital to economic development. Lockley presented Rayzor Ranch design details for development along University. Those standards would include (1) orientation towards University, (2) four sided architecture, (3) enhanced landscaping and (4) no solid waste revetments along University. City of Denton City Council Minutes May 5, 2014 Page 4 Council Member Engelbrecht asked if any elevations had been submitted for Cinemark. Lockley stated they had not seen any yet but felt they would be consistent with their brand. Council Member Gregory questioned if there would be any other issues Planning would recommend to look at for standards and levels that might be needed to be reviewed or clarified before moving any further on the south side. Council Member Engelbrecht stated that he was not against the Rayzor Ranch development but felt the direction was going contrary to what was expected in the beginning. He was also concerned about the south side anchors now there were was not going to be a large retail anchor in the development. Aimee Bissett, Director of Economic Development, reviewed the economic impact of Rayzor Ranch Marketplace in terms of sales tax revenue, the 380 grant, net sales tax revenue, the valuation of the property, increment over 2010 and property tax revenue increment. 2013 Rayzor Ranch Marketplace analysis – the total property tax value was approximately $94 million with property tax revenue of approximately $650,000. The sales tax revenue after grant was approximately $830,000. Annual 2013 revenue for the City was $1.5 million direct dollars which was equivalent to a 2% property tax increase. That amount did not include Kohl’s, Ross, Academy, Panera, Five Below and Boot Barn Council Member Roden questioned if Rayzor Ranch was taking away from other shopping areas in the City as opposed to producing new dollars. Bissett stated that the analysis did not show that Rayzor Ranch was taking away from other areas in Denton. Marketplace and Town Center at Build-Out – it was anticipated that at build-out Marketplace and Town Center would generate $2.5 million per year in ad valorem tax revenues (City only) and $4.5 million in sales tax (after grant). The project would generate 1200-1850 direct full-time jobs, 1000-1400 indirect full-time jobs, 1000 direct construction jobs and 1500 indirect construction jobs. PID Term Sheet – (1) maximum total indebtedness would be $40 million, (2) estimated total qualified development costs would be $32 million, (3) maximum total indebtedness for Assessment Area #1 would be $12 million, (4) maximum annual assessment rate as equivalent tax rate upon completion of development for Assessment Area #1 would be $.050 per $100 of assessed value, (5) maximum construction costs to be funded would be $8,100,000, (6) minimum appraised value to lien ratio at date of each bond issue would be 3:1, (7) maximum years of capitalized interest for each bond issue would be 2 years and (8) maximum term of each bond issue would be 30 years. The PID timeline was reviewed. Chapter 380 amendments – Time - currently the threshold had to be met by January 1, 2015. The developer was requesting a three year extension to January 1, 2018. The Marketplace timeline was slower than anticipated but was highly successful. City of Denton City Council Minutes May 5, 2014 Page 5 Additional Phasing – the phasing established in 2010 allowed the Marketplace to be successful. The Phase 2 requirement of 600,000 square feet presented timing issues. The developer was requesting to have Phase 2 split to 300,000 and 300,000 square feet. The reimbursement total would be split as well. Another amendment was the removal of the sell-back clause for the Dillard’s building. Chapter 380 Amendments Revenue Streams – A suggested amendment was an expanded definition of total taxable sales to include sales tax from construction materials if local, mixed beverage tax and the removal of all Golden Triangle Mall provisions. An extension of the 380 term for Phase II was also proposed. That extension would include extending the agreement from 20-25 years which gave the developer more time to recover costs and be fully reimbursed. The 380 agreement was performance based; if the sales tax was not being generated, there was no reimbursement. Other considerations included the 380 funds were for public infrastructure only and the long-term ownership and reinvestment in the property. Council Member Engelbrecht stated that he was not in favor of a construction rebate. Chapter 380 Amendments – Additional Costs – the developer was requesting a cap increase from $62 million to $68 million and that PID expenditures be eligible for reimbursement. The PID debt was paid by the developer, was funded over time by special assessments to the property owner, and provided public infrastructure with private dollars. Council and representatives from Rayzor Ranch discussed incentives, sales tax and associated agreements and the provisions of the Golden Triangle Mall. 2.Receive a report and participate in a tour of The Forge, Denton Public Library’s new technology makerspace located within North Branch Library. Council participated in a tour of The Forge at the North Branch Library. Following the completion of the tour of The Forge, the City Council convened in a Closed Meeting at 2:15 p.m.to consider the specific item listed below under the Closed Meeting section of this agenda. 1.Closed Meeting A.Consultation with Attorneys – Under Texas Government Code Section 551.071. 1.Consult with and provide direction to City’s attorneys regarding legal issues and strategies associated with Gas Well Ordinance regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including Constitutional limitations, statutory limitations upon municipal regulatory authority, statutory preemption and/or impacts of federal and state law and regulations as it concerns municipal regulatory authority and matters relating to enforcement of the ordinance. City of Denton City Council Minutes May 5, 2014 Page 6 With no further business, the meeting was adjourned at 2:57 p.m. ____________________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS ____________________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS