FEB February 24, 2016

Transcription

1 COUNCIL CHAMBER. February 24, 2016 WHEREAS, the City recognizes the importance of its role in local economic development initiatives and programs; and WHEREAS, the City established Tax Increment Financing Reinvestment Zone Number Twenty ( or District ) and established a Board of Directors for the District pursuant to Ordinance No , authorized by the City Council on May 14, 2014, as authorized by the Tax Increment Financing Act, Chapter 311 of the Texas Tax Code, as amended; and WHEREAS, on June 17, 2015, City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the by Ordinance No ; 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 jurisdiction 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 December 10, 2015, the Board of Directors passed a motion accepting the for the Mall Area Redevelopment TIF District and recommending approval of same by the City Council. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS: Section 1. That the for Tax Increment Financing Reinvestment Zone Number Twenty (), City of Dallas, Texas, as of September 30, 2015, a copy of which is attached hereto (Exhibit A) is hereby accepted. Section 2. That the City Manager is hereby authorized to submit the FY 2015 Annual Report for Tax Increment Financing Reinvestment Zone Number Twenty to the Chief Executive Officer of each taxing jurisdiction that levies taxes 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 Dallas, and it is accordingly so resolved. FEB 2 225

2 MALL AREA REDEVELOPMENT TIF DISTRICT (REINVESTMENT ZONE NUMBER TWENTY) ANNUAL REPORT FY 2015 Exhibit A City of Dallas Office of Economic Development 1500 ManIla Street, 2CN Dallas, Texas (214) (October 1, 2014 to September 30, 2015)

3 Mall Area Redevelopment TIE District EY 2015 Annual Report Table of Contents Table of Contents 2 District Map 3 Mission Statement 4 District Accomplishments 5 Value and Increment Revenue Summary 5 Objectives, Programs, and Success Indicators 6 Year-End Summary of Meetings and Council Items 7 Budget and Spending Status 9 FY 2016 Work Program 10 Appendix: Financials 12 2

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5 Mission Statement The Mall Area Redevelopment Tax Increment Financing District (TIE District) represents the City of Dallas effort to encourage the sustainable redevelopment of properties including and around two obsolete shopping malls while taking advantage of each area s strategic regional location at the crossroads of key transportation corridors. As allowed by Chapter 311 of the Texas Tax Code, the TIE District comprises two non contiguous sub-districts the Montfort-IH 635 Sub-District for the Valley View Center Mall area in northern Dallas and the Westmoreland-IH 20 Sub-District for the Southwest Center Mall area in southern Dallas. The Montfort-lH 635 Sub-District is generally bounded by Alpha Road, Preston Road, Noel Road, and Interstate Highway 635 (LBJ Freeway). The Montfort-lH 635 Sub-District encompasses approximately acres, not including rights-of-way. The Montfort-lH 635 Sub-District is recommended by and consistent with the City s adopted Valley View Galleria Area Plan (2013) and serves as a long-term funding tool to help implement the shared vision for the area by further leveraging other implementation tools (PD 887 formbased zoning and Thoroughfare Plan amendments) enacted by the City Council. The Westmoreland-IH 20 Sub-District is generally bounded by Westmoreland Road, Camp Wisdom Road, Highway 67 (Marvin D. Love Freeway), and Interstate Highway 20 (LBJ Freeway). The Westmoreland-IH 20 Sub-District encompasses approximately 96.6 acres, not including rights-of-way. The Westmoreland-lH 20 Sub-District is recommended by and consistent with the City-sponsored Advisory Services Panel report entitled Southwest Center Mall published by the Urban Land Institute (2009) and serves as a long-term funding tool to help implement many of the report s recommendations over time. The mission of the TIE District is to provide a source of funding for a program of public infrastructure improvements, economic development grants, and land acquisition/assembly for public open space, which is intended to stimulate private investment in each mall area to occur earlier and to a much greater extent than would occur solely through private investment in the reasonably foreseeable future. Originally, the Valley View Center Mall and the Southwest Center Mall were created by complex configurations of super-blocks, private land ownership, and reciprocal easement agreements that bound multiple owners together. Over the last decade as market conditions have shifted significantly, these same configurations have heavily burdened each mall area, making redevelopment and revitalization extremely difficult without public participation. With the assistance of this TIE District, each mall area is to be reconfigured into a traditional pattern of public streets, public open space, public infrastructure, and smaller parcels of private land ownership, thereby setting the stage for incremental redevelopment that is flexible to meet market demands and community needs. 4

6 TIF District Accomplishments FY 2014 The City Council established (i.e. designated) the Mall Area Redevelopment TIF District by Ordinance Number in May FY 2015 The City Council approved By-Laws for the Board of Directors by Resolution Number in June The City Council approved the Project Plan and Reinvestment Zone Financing Plan by Ordinance Number in June The Dallas County Commissioners Court approved the participation of Dallas County in the Mall Area Redevelopment TIE District by Court Order in August The TIE Board approved a Grant Program and associated Guidelines to implement the Project Plan and Reinvestment Zone Financing Plan for the Mall Area Redevelopment TIE District in September o The TIF Board approved Urban Design Guidelines for Projects located in TIE Districts in the City of Dallas to be applied to the Mall Area Redevelopment TIE District in September Specifically in the Montfort-IH 635 Sub-District, staff coordinated extensively with several development groups regarding prospective projects, including detailed TIE incentive negotiations with an entity led by Jeffrey and Scott Beck on a planned Dallas Midtown Phase 1 catalyst project on the site of the existing Valley View Center Mall. Components of the project received preliminary review by the City s Urban Design Peer Review Panel (UDPRP) in March and May Beck Ventures formally submitted an application for TIE incentives in late April 2015 but subsequently withdrew the application in late July Specifically in the Westmoreland-IH 20 Sub-District, staff coordinated with several investors considering a potential bid to purchase the in-line portion of Southwest Center Mall, including detailed incentive negotiations with the winning bidder, an entity led by Peter Brodsky. Value and Increment Revenue Summary The base value of the zone is the total appraised value of all taxable real property in the TIE District as determined by the Dallas Central Appraisal District in the 2014 certified 5

7 roll. The TIF District s base value was $168,357,630 ($148,591,740 in the Montfort-IH 635 Sub-District and $19,765,890 in the Westmoreland-IH 20 Sub-District). In 2015, the total appraised value of all taxable real property in the TIE District as determined by the Dallas Central Appraisal District in the 2015 certified roll was $170,084,490, representing an increase of $1 726,860 (1.0%) over the base year. Eor the individual sub-districts, the total appraised value of all taxable real property in the Montfort-IH 635 Sub-District in 2015 was $149,713,500, representing an increase of $1,121,760 (0.8%) over the base year, and the total appraised value of all taxable real property in the Westmoreland-IH 20 Sub-District in 2015 was $20,370,990, representing an increase of $605,100 (3.1%) over the base year. The positive increase in the TIE District s tax base is primarily attributed to slightly appreciating property values. In future years, the TIE District will report captured incremental tax revenue deposited into the TIE fund. However, because the City s participation and the County s participation in the TIE District are both 0% for tax year 2015, there will be no captured incremental tax revenue deposited into the TIE fund for tax year Objectives, Programs, and Success Indicators The final Project Plan and Reinvestment Zone Einancing Plan for the Mall Area Redevelopment TIE District was approved in June The following goals are included in the Project Plan and Reinvestment Zone Einancing Plan: Goal 1: To create additional taxable value attributed to new private investment in projects in the Montfort-IH 635 Sub-District totaling approximately $3.92 billion in total dollars over the 30-year life of the Sub-District. Goal 2: To create additional taxable value attributed to new private investment in projects in the Westmoreland-lH 20 Sub-District totaling approximately $295.2 million in total dollars over the 30-year life of the Sub-District. Goal 3: To attract new higher density private development in the Montfort-IH 635 Sub-District totaling approximately 707,870 square feet of new retail space; 72,991 square feet of renovated movie theater; 3,987,022 square feet of new office space; 957 new hotel rooms; and 7,674 new residential units (including apartments and condominiums). Goal 4: To attract new higher density private development in the Westmoreland IH 20 Sub-District totaling approximately 140,000 square feet of new retail space; 45,000 square feet of movie theater; 70,000 square feet of new office space; 80 new hotel rooms; and 1,620 new residential units (including apartments and town homes). Goal 5: To encourage the sustainable redevelopment of properties including and around two severely declining shopping malls in a manner in which negative fiscal 6

8 impacts for the remainder of the City are limited and a walkable development pattern is achieved that is a net benefit to the City from a fiscal, land use, and quality of life standpoint. Goal 6: To increase public open space in the District. Goal 7: To generate approximately $431.4 million (net present value of approximately $182.5 million in 2014 dollars) in TIF fund revenues over the 30- year life of the District. Year-End Summary of Meetings and Council Items The Board of Directors met four (4) times during FY The Board can consist of up to seven members, including six (6) City of Dallas appointees and one (1) Dallas County appointee. During FY 2015, the Board members were (FY 2015 Board meetings attended): Fred Wells City representative (4 of 4 meetings) B.J. Bass City representative (4 of 4 meetings) Josh Womack City representative (4 of 4 meetings) Bruce Bernbaum City representative (3 of 4 meetings) Arthur Hollingsworth City representative (3 of 3 meetings) Jeff Kitner City representative (2 of 2 meetings) Rick Loessberg County representative (1 of 1 meeting). During FY 2015, the Board approved and forwarded five (5) substantive items to City Council: On December 9, 2014, the Board approved the FY 2014 Annual Report. On February 19, 2015, the Board approved By-Laws for the Mall Area Redevelopment TIF District. On May 14, 2015, the Board approved the final Project Plan and Reinvestment Zone Financing Plan for the. On September 24, 2015, the Board approved a Grant Program and associated Guidelines to implement the Project Plan and Reinvestment Zone Financing Plan for the. 7

9 Mall Area Redevelopment TIE District On September 24, 2015, the Board approved Urban Design Guidelines for Projects located in TIF Districts in the City of Dallas to be applied to the Mall Area Redevelopment TIE District. During FY 2015, the City Council took action on ten (10) items associated with the Mall Area Redevelopment TIE District: On Eebruary 25, 2015, the City Council passed Resolution Number accepting the EY 2014 Annual Report on the status of the Mall Area Redevelopment TIE District and authorizing the City Manager to submit the annual report to the Chief Executive Officer of each taxing jurisdiction that levies taxes on real property in the District and to the State Comptroller. On June 17, 2015, the City Council passed Ordinance Number approving the Project Plan and Reinvestment Zone Einancing Plan and authorizing the City Manager to execute a participation agreement with Dallas County for the Mall Area Redevelopment TIE District. On June 17, 2015, the City Council passed Resolution Number authorizing approval of By-Laws for the Board of Directors of the Mall Area Redevelopment TIE District. On June 17, 2015, the City Council held a public hearing for zoning file Z (SM) and passed Ordinance Number granting an amendment to Planned Development District No. 887, the Valley View-Galleria Special Purpose District, on property generally south of Alpha Road, west of Preston Road, north of LBJ Freeway, and east of Montfort Drive. Recommendation of Staff and CPC: Approval,.subject to a revised streets plan and conditions. o On June 17, 2015, the City Council held a public hearing and passed Ordinance Number authorizing an amendment to the City of Dallas Thoroughfare Plan to change the dimensional classifications of: (1) Peterson Lane from Preston Road to Unnamed EN6 from a special two-lane undivided collector (SPCL 2U) roadway with parking within 69-feet of right-of-way and 44-feet of pavement to a special four-lane divided collector (SPCL 4D) roadway within 70-feet of right-of-way and 45-feet of pavement; (2) Peterson Lane from Unnamed FN6 to a local street Road I from a special two-lane undivided collector (SPCL 2U) roadway with parking within 69-feet of right-of-way and 44-feet of pavement to a special two-lane undivided (SPCL 2U) roadway with parking within 65-feet of right-of-way and 40- feet of pavement; and (3) Peterson Lane from Road 1 to Unnamed ENS from a special two-lane undivided collector (SPCL 2U) roadway with parking within 69- feet of right-of-way and 44-feet of pavement to a special one-lane couplet (SPCL I CPLT) Peterson East and Peterson West with one-travel-lane and one-parking lane in each direction within 38.5 feet of right-of-way and 26-feet of pavement. 8

10 . During FY 2015, the Dallas County Commissioners Court took action on two (2) items associated with the : On August 18, 2015, the Dallas County Commissioners Court passed Court Order authorizing: (1) the participation of Dallas County in the City of Dallas, beginning on January 1, 2020, subject to Valley View Mall (excluding Sears and the existing theater) being demolished by the same date, by providing 55% of its increment for either twenty years, until the County s total net present value contribution reaches $21.6 million (using a discount rate of 4%), or the City of Dallas terminates the district, whichever comes first and (2) the County Judge to sign any related participation agreement with the City of Dallas. On August 18, 2015, the Dallas County Commissioners Court passed Court Order appointing the County s Director of Planning & Development, Rick Loessberg, to serve as the County s representative to the Mall Area Redevelopment TIF District Board of Directors and that he serve in this capacity until a successor is named. Budget and Spending Status Each TIF district establishes a budget for the public improvement expenditures necessary to support private investment in the district. As included in the Project Plan and Reinvestment Zone Financing Plan for the, the budget is shown below: Projected Increment Revenue to Retire TIF Fund Obligations Category I TIF Budget** I Allocated TIF Balance B C B-C Public Infrastructure Improvements; Environmental Remediation & Demolition; Grants for Economic Development Set Aside for Land Acquisition for Sub-District-Wide Central Open Space*** Set Aside for Sub-District-Wide Infrastructure Improvements $257,864,296 $0 $70,929,777 $0 $23,643,259 $0 $257,864,296 $70,929,777 $23,643,259 UVstmnrwind-IH 20 Sub-District Public Infrastructure Improvements; Environmental Remediation & Demolition; Parks, Open Space, Trails, Gateways; Grants for Economic Development $71,278,447 $0 $ Administration and lmplementation* $ $401,601 I $7,282,458 Total Project Costs $ $ $430,998,237 TiFAdministration costs are pending until collection ofsufficient tax increment to reimburse the City. Collection is scheduled to begin with tax year ** TIF Budget shown above is in total dollars. For land acquisition and associated costs; not for design, construction, maintenance, or operating/programming costs. 9

11 Mall Area Redevelopment TIE District EY 2015 Annual Report. Mail Area Redevelopment TIE District Project Plan Budget (NPV)* Category TIF NPV Budget Montfort-IH 635 Sub-District Public Infrastructure Improvements; Environmental Remediation & Demolition; Grants for Economic Development $109,123,655 Set Aside for Land Acquisition for Sub-District-Wide Central Open Space $30,000,000 Set Aside for Sub-District-Wide Infrastructure Improvements $10,000,000 Westmoreland-lH 20 Sub-District Public Infrastructure Improvements; Environmental Rem ediation & Demolition; Parks, Open Space, Trails, Gateways; Grants for Economic Development I $30,088,432 Administration and Implementation $3,250,000 Total Project Costs $182,462,088 *AS approved in the Project Plan and Reinvestment Zone Financing Plan. FY 2016 Work Program The FY 2016 work program for the includes: Consideration of any potential TIE District boundary amendments and/or plan amendments. Consideration/adoption of policies for the TIF District, including Mixed Income Housing Guidelines and an Increment Allocation Policy. Coordination and staff support for City-initiated public infrastructure projects in/near the TIF District, including street improvements and water/wastewater improvements. Consideration of a development agreement with a development entity led by Jeffrey and Scott Beck for TIF eligible expenditures in conjunction with a Dallas Midtown Phase 1 catalyst development project expected to exceed $200 million in private investment on the site of the existing Valley View Center Mall. Continue coordination efforts with other interested owners/investors/developers on potential TIE project proposals. property Coordination with Dallas County on execution of an interlocal agreement for participation in the TIF District. 10

12 Continue coordination and staff support for the implementation of the Valley View Galleria Area Plan and the ULI vision for Southwest Center Mall, including funding opportunities from other governmental entities or private philanthropic entities; City bond projects; park land acquisition; public improvement district. 11

13 . City of Dallas, Texas Mall Area Redevelopment Tax Increment Financing District Fund Reinvestment Zone Number Twenty As of September 30, 2015 Appendix: Financials Chapter of V. C.T.A. requires the following information as part of the annual report on the status of the TIF District. Information is contained in detail on the attached financial statements. 1. Amount and source of revenue in the tax increment fund established for the zone: $0 Interest Income $0 Ad Valorem Taxes (Collected in FY 15 based on 2014 Final Tax Roll) $0 Total Revanue Amount and purpose of expenditures from the fund: $ Administrativa Expense $0 Non-Capital Outlay $0 Capital outlay $0 Additional Subsidy in Form of Grant (in lieu of interest expense) $ Total Expenditures 3. Amount of Principal and Interest due-on outstanding indebtedness: a. The zone did not hay any bonded indebtedness at fiscal year end. 4. Tax increment base and current captured appraised value retained by the zone: Taxable Ease Year Est. Captured Taxing Jurisdiction Value 2015* 2014 Value Value 2015 City of Dallas $170,084,490 $168,357,630 $1,726,860 Dallas County $ ,490 $168,357,630 $ Taxable value shown for participating taxing jurisdictions. County values are approximate and may vary slightly from City values due to different exemption levels. *Based on Certiffed Taxable Value. The final values will be determined on February 01, Captured appraised value by the municipality and other taxing units, the total amount of the tax increment received, and any additional information necessary to demonstrate compliance with the tax increment financing plan adopted by the governing body of the municipality: A Estimated tax increment shared by the municipality and other participating taxing turisdictions Assessment Estimated 2015 Taxing Jurisdiction Per $100 lncremene* City of Dallas $0 Dallas County $0 Total for all Jurisdictions $ $0 City of Dallas and Dallas County do not participate in the zone in 2015 Participation rates for City of Dallas and Dallas County areas follows City of Dallas Dallas County 90% for tax years % for tax years % for tax year % for tax year 2044 B. The total amount of estimated tax increment to be billed for the 2015 tax year is $0. For the 2014 tax year, the Zone received increment of $0. 12

14 City of Dallas, Texas Mall Area Redevelopment Tax Increment Financing District Fund Balance Sheet as of September 30, 2015 (Unaudited) With Comparative Totals for September 30, 2014 and 2013 (Audited) Assets: Pooled cash and cash equivalents Interest receivable Total assets Liabilities and Fund Balance (Deficit): Liabilities: Accounts and contracts payable Due to other ftnds Total liabilities Fund Balance (Deficit): Fund Balance (Deficit) Total Liabilities and Fund Equity $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $401,601 $0 $0 $401,601 $0 $0 ($401,601) $0 $0 $0 $0 $0 $0 $0 $0 Mall Area Redevelopment Tax Increment Financing District Fund Statement of Revenues, Expenditures and Changes in Fund Balance (Deficit) For the Period September30, 2015 (unaudited) With Comparative Totals for September 30, 2014 and 2013 (Audited) ltd Rewnues: Tax increment-govammental $0 $0 $0 $0 Tax increment-intergovammental $0 $0 $0 $0 Interest income $0 $0 $0 $0 Net increase (decrease) in fair value of inwstments $0 $0 $0 $0 Expenditures: Administratiw expenses Non-Capital Outlay Capital Outlay Interest and fiscal charges Total rewnues Total expenditures Excess (Deficiency) of Rewnues oser Expenditures Fund balance (Deficit) at beginning of year as preiousiy reported Fund balance (Deficit) at beginning of year as restated Fund balance (deficit) at end of year $0 $0 $0 $0 $401,601 $401,601 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $401,601 $401,601 $0 $0 ($401,601) ($401,601) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($401,601) ($401,601) $0 $0 Note FY15 unaudited financial statements are based on preliminary close numbers and are subject to review by the City Controller s Office prior to approval by the City Council. In case of any material changes TIP board will be provided with the updated financial statements. :13

15 City of Dallas, Texas Mall Area Redevelopment Tax Increment Financing District (Reinvestment Zone #20) Notes to Financial Statements for the Year Ended September 30, The measurement focus used for the TIE Zone fund is a flow of financial resources. The financial statements are prepared using the modified accrual basis of accounting. Under the modified accrual basis of accounting, tax increment revenues and interest are recognized as revenue when they become both measurable and available to finance expenditures of the current period. Expenditures are recognized when the liability is incurred. 2. State statute requires that each taxing jurisdiction remit its ad valorem taxes to the Zone by May 1 of each year (remittance to occur no more than 90 days after taxes for the jurisdiction become delinquent). 3. The TIE Zone fund s cash balances are invested in the City s investment pool and include amounts in demand deposits as well as short-term investments. Pooled investments and short-term non-pooled investments are treated as cash equivalents. Investment income on the pooled investments is prorated monthly based upon the average daily cash balance in each fund. 4. The TIE Zone s Einancing Plan permits expenditures not to exceed $7,684,059 over the life of the TIE Zone to reimburse the City for administrative expenditures. Through FY 2015, the TIE Zone had recognized an actual total of $401,601 in administrative expenditures, comprised of the following: (1) $47,562 in staff time for FY 2015, which will be reimbursed to the City s General Eund upon collection of sufficient increment anticipated in FY 2017; (2) $98,002 in staff time for EY 2014, which will be reimbursed to the City s General Eund upon collection of sufficient increment anticipated in EY 2017; (3) $248,137 in a grant to the North Dallas Chamber of Commerce for the Valley View-Galleria Area Planning Study, which will be reimbursed to the City s Public/Private Partnership Eund upon collection of sufficient increment anticipated in EY 2017; and (4) $7,900 for real property appraisal services necessary to assist the City with implementation, which will be reimbursed to the City s Public/Private Partnership Fund upon collection of sufficient increment anticipated in FY Any future remittance for administrative expenditures would come from excess cash as tax increment revenue increases as a result of increased assessed values. 5. In the Balance Sheet, the due to other funds amount of $401,601 at September 30, 2015 represents the TIE Zone s administrative costs that have been earned but will be reimbursed to the City s General Fund and Public/Private Partnership Fund in future years based on availability of TIF funds. 6. All project costs resulting in capital improvements which are owned by the City are capitalized in the City s fixed assets. 14