NOTICE OF A REGULAR MEETING OF THE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD TUESDAY, NOVEMBER 28, :00 PM

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1 NOTICE OF A REGULAR MEETING OF THE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD TUESDAY, NOVEMBER 28, :00 PM Notice is hereby given as required by Title 5, Chapter of the Government Code that the Argyle Tax Increment Reinvestment Zone No. 1 Board will meet in a work session and regular meeting November 28, 2017 at 6:00 pm at the Argyle Town Hall, 308 Denton Street, Argyle, Texas. The items listed below are placed on the agenda for discussion and/or action. A. CALL TO ORDER AGENDA 6:00 PM B. ELECTION OF OFFICERS (Note: The Mayor is designated as the Board Chairperson in accordance with Ordinance ) 1. Elect Board Vice Chairperson 2. Elect Board Secretary C. NEW BUSINESS: 1. Consider a resolution adopting the bylaws for the Reinvestment Zone Number One. 2. Consider a resolution adopting the Reinvestment Zone Number One Final TIRZ Project and Finance Plan and the TIF Agreement by and between the TIRZ Board of Directors, the Town of Argyle and Terra Manna, LLC for Waterbrook of Argyle. D. OLD BUSINESS: None E. CONVENE INTO EXECUTIVE SESSION: PURSUANT TO TEXAS GOVERNMENT CODE, ANNOTATED, CHAPTER 551, SUBCHAPTER D: 1. Section Deliberation regarding economic development negotiations; (1) to discuss or deliberate regarding commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and with which the governmental body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect described by Subdivision (1). 2. Adjourn into Open Meeting. 3. Consider action on executive session items. TIRZ No. 1 Board Meeting November 28, 2017 Page 1 of 2 November 28, 2017 TIRZ Board Packet Page 1 of 69

2 F. RECEIVE REQUESTS FROM BOARD MEMBERS/STAFF FOR ITEMS TO BE PLACED ON NEXT MEETING AGENDA (discussion under this item must be limited to whether or not the Board wishes to include a potential agenda item on a future agenda) G. ADJOURN CERTIFICATION I hereby certify that the above notice was posted in the bulletin board at Argyle Town Hall, 308 Denton Street, Argyle, Texas, by 5:00 pm on the 22 nd day of November, Kristi Gilbert, Town Secretary NOTE: If, during the course of the meeting, any discussion of any item on the agenda should be held in a closed meeting, the Council will conduct a closed meeting in accordance with the Texas Open Meetings Act, Texas Government Code, Chapter 551, Subchapters D and E Persons with disabilities who plan to attend this public meeting and who may need auxiliary aid or services are requested to contact the Argyle Town Hall 48 hours in advance, at , and reasonable accommodations will be made for assistance. TIRZ No. 1 Board Meeting November 28, 2017 Page 2 of 2 November 28, 2017 TIRZ Board Packet Page 2 of 69

3 Item C. 1. TIRZ NO. 1 BOARD DATA SHEET Agenda Item: Consider a resolution adopting the bylaws for the Reinvestment Zone Number One. Meeting Date: November 28, 2017 Requested by: Kristi Gilbert, Town Secretary Background: The Argyle Tax Increment Reinvestment Zone No. 1 Board (TIRZ No. 1) was created by the Town Council on September 27, 2016 through the adoption of Ordinance No The adopting ordinance created a Board of Directors with the initial membership being comprised of the Mayor, Council Members and one representative from Denton County. With this being the first TIRZ Board meeting, it is appropriate to consider the adoption of bylaws. Attached are proposed bylaws prepared by staff. The TIRZ board will take action on the bylaws which will be presented to the Town Council for their approval immediately following the November 28, 2107 TIRZ board meeting. Financial Impact: There is no cost associated with adopting the bylaws. Staff Recommendation: Staff recommends approval of the resolution. Requested Action: Motion to approve a resolution adopting the bylaws for the Reinvestment Zone Number One. Attachments: Resolution November 28, 2017 TIRZ Board Packet Page 3 of 69

4 Item C. 1. ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 RESOLUTION NO. A RESOLUTION OF THE ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD APPROVING BYLAWS FOR THE BOARD WHEREAS, the Argyle Tax Increment Reinvestment Zone No. 1 Board (the "Board") has been duly appointed in accordance with State law; WHEREAS, it has hereby been determined by the Board that it is necessary to establish bylaws for the Board to be approved by the Town Council; and, WHEREAS, all constitutional, statutory and legal prerequisites for the passage of this Resolution have been met, including but not limited to the Open Meetings Act. NOW THEREFORE BE IT RESOLVED BY THE ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD, THAT: SECTION 1. The recitals set forth in the WHEREAS clauses of this Resolution are true and correct and are incorporated as part of this Resolution. SECTION 2. The Board approves the Reinvestment Zone Number One bylaws attached hereto at Exhibit A. SECTION 3. This Resolution shall become effective from and after its date of passage in accordance with law. DULY PASSED BY THE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD, ON THE 28TH DAY OF NOVEMBER, ATTEST: APPROVED: Town Secretary, Kristi Gilbert Chairman- Mayor Donald Moser APPROVED AS TO FORM: Matthew C.G. Boyle, Town Attorney November 28, 2017 TIRZ Board Packet Page 4 of 69

5 Item C. 1. EXHIBIT A REINVESTMENT ZONE NUMBER ONE BYLAWS November 28, 2017 TIRZ Board Packet Page 5 of 69

6 Item C. 1. BYLAWS OF REINVESTMENT ZONE NUMBER ONE TOWN OF ARGYLE, TEXAS (TAX INCREMENT REINVESTMENT ZONE) ARTICLE I PURPOSE AND POWERS Section 1. Development or Redevelopment in the Zone. In order to promote the development and redevelopment of a certain area within its jurisdiction, the Town of Argyle, Texas (the "Town") has authorized the creation of Reinvestment Zone Number One, Town of Argyle, Texas (Tax Increment Reinvestment Zone) (the "Zone"), as authorized by the Tax Increment Financing Act, Chapter 311, Texas Tax Code, as amended (the "Act"), and pursuant to the Act has established a Board of Directors for the Zone ("Board of Directors" or "Board"). Section 2. Powers. The property and affairs of the Zone shall be managed and controlled by the Town Council based on the recommendations of the Board of Directors, subject to the restrictions imposed by law, the ordinance creating the Zone, the resolution creating the policies and conditions for TIRZ participation, and these Bylaws. It is the intention of the Town Council that the Board of Directors shall function in an advisory capacity with respect to the Zone and shall exercise only those powers which are either granted to the Board pursuant to the Act or delegated to the Board by the Town Council. ARTICLE II BOARD OF DIRECTORS Section 1. Powers, Number and Term of Office. As set forth in the ordinance creating the Zone, the Board of Directors shall consist of seven directors; the Town s Mayor and Town Council members places 1,2,3,4, and 5. Place 7 shall be appointed by the Commissioners Court of Denton County, Texas, if the County participates in the Zone. If the County does not participate in the Zone, the Commissioners Court shall be deemed to have waived its right to appoint such members and the Places remain vacant. The Town s Mayor shall serve as the chairman of the Board. The Board is authorized to elect a vice-chairman, secretary, and other officers as determined by the Board. There shall be no limitation on the number of terms to which a Director may be reappointed. In the event of a vacancy caused by the ineligibility, resignation, death or removal, for any reason, of a director, the governing body of the respective taxing unit (i.e. Town or County) which made such Board appointment shall be responsible for filling the vacancy. Section 2. Meetings of Directors. The directors may hold their meetings within a building accessible to the public in the Town as the Board of Directors may from time to time determine. Section 3. Regular Meetings. Regular Meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time, by the Board of Directors. Notice of all regular and emergency meetings of the Board and any committees thereof shall be conducted and posted in accordance with the provisions of the Texas Open Meetings Act, Texas Government Code, Chapter et seq. There shall be at least one Regular Meeting held each year \ November 28, 2017 TIRZ Board Packet Page 6 of 69

7 Item C. 1. Section 4. Quorum. A majority of the directors holding current appointments shall constitute a quorum for the consideration of matters pertaining to the purposes of the Zone. The act of the majority of the directors present at a meeting at which a quorum is in attendance shall constitute the act of the Board of Directors, unless the act of a greater number is required by law. Section 6. Conduct of Business. At the meetings of the Board of Directors, matters pertaining to the purposes of the Zone shall be considered in such order as from time to time the Board of Directors may determine. At all meetings of the Board of Directors, the chairman shall preside and in the absence of the chairman, the vice chairman shall exercise the power of the chairman. The secretary of the Board of Directors shall act as secretary of all meetings of the Board of Directors, but in the absence of the secretary, the presiding officer may appoint any person to act as secretary of the meeting. Town staff shall provide notice of meetings and prepare meeting agendas. Within five business days following each Regular and Emergency Meeting, a copy of the minutes of the meeting shall be submitted to the Town Secretary of the Town. Section 7. Compensation of Directors. Directors as such shall not receive any salary or compensation for their services, except that they shall be reimbursed for their actual expenses incurred in the performance of their duties hereunder. Section 8. Attendees. Board Members shall make every effort to attend all Regular and Emergency Meetings of the Board and/or Committees. Section 9. Books and Records: Approval of Programs and Financial Statements. The Board of Directors shall keep correct and complete books and records of account and shall also keep minutes of its proceedings and the proceedings of committees having any of the authority of the Board of Directors. All books and records of the Zone may be inspected by any director or his agent or attorney for any proper purpose at any reasonable time; and at all times the Town Council, the Town Manager and the Town Auditor will have access to the books and records of the Zone. The Town Council must approve all programs and expenditures for the Zone and annually review any financial statements of the Zone. ARTICLE III OFFICERS Section 1. Titles and Term of Office. The officers of the Zone shall consist of a chairman, a vice chairman, a secretary, and such other officers as the Board of Directors may from time to time elect or appoint; provided, however, that the Town Council shall, on an annual basis, appoint the chairman in accordance with the Act. One person may hold more than one office, except that the chairman shall not hold the office of secretary. Terms of office for officers, other than the chairman, shall not exceed two years. All officers, other than the chairman, shall be subject to removal from office, with or without cause, at any time by a vote of a majority of the entire Board of Directors. A vacancy in the office of any officer, other than the chairman, shall be filled by a vote of a majority of the directors. Section 2. Powers and Duties of the Chairman. The chairman shall be the chief executive officer of the Board of Directors and, subject to the approval of the Town Council, he/she shall be in \ November 28, 2017 TIRZ Board Packet Page 7 of 69

8 Item C. 1. general charge of the properties and affairs of the Zone and shall preside at all meetings of the Board of Directors. Section 3. Vice Chairman. The vice chairman shall be a member of the Board of Directors, shall have such powers and duties as may be assigned to him by the Board of Directors and shall exercise the powers and duties as may be assigned to him by the Board of Directors and shall exercise the powers of the chairman during that officer's absence or inability to act. Any action taken by the vice chairman in their performance of the duties of the chairman shall be conclusive evidence of the absence or inability to act of the chairman at the time such action was taken. Section 4. Secretary. The secretary may be a member of the Board of Directors or may be a member of the Town Staff, as determined by the Board of Directors and shall keep the minutes of all meetings of the Board of Directors in books provided for the purpose, he/she shall have charge of such books, records, documents and instruments as the Board of Directors may direct, all of which shall at all reasonable time be open to inspection, and he/she shall in general perform all duties incident to the office of secretary subject to the control of the Town Council and the Board of Directors. Section 5. Compensation. Officers as such shall not receive any salary or. compensation for their services, except that they shall be reimbursed for their actual expenses incurred in the performance of their duties hereunder and in the event the secretary shall be a member of the Town Staff, said individual shall not receive any compensation other than as provided by the Town. Section 6. Staff. Staff functions for the Board of Directors may be performed by the Town Manager and/or designee. ARTICLE IV PROVISIONS REGARDING BYLAWS Section 1. Effective Date. These Bylaws shall become effective upon the adoption of these Bylaws by the Board of Directors. The adoption of these Bylaws must be approved by the Town Council, which approval shall, unless specified otherwise, affirm such effective date. Section 2. Amendments to Bylaws. These Bylaws may be amended by majority vote of the Board of Directors, provided that the Board of Directors files with the Town Council a written application requesting that the Town Council approve such amendment to the Bylaws, specifying in such application the amendment or amendments proposed to be made. If the Town Council by appropriate resolution finds and approves the form of the proposed amendment, the Board of Directors shall proceed to amend the Bylaws. After providing notice to the Directors, the Bylaws may also be amended at any time by the Town Council by adopting an amendment to the Bylaws by resolution of the Town Council and delivering the Bylaws to the secretary of the Board of Directors. Section 3. Interpretation of Bylaws. These Bylaws and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. If any word, phrase, clause, sentence, paragraph, section or other part of these Bylaws, or the application thereof to any person or circumstance, shall ever be held to be invalid or unconstitutional by any court of competent jurisdiction, the remainder of these Bylaws and the application of such word, phrase, clause, sentence, paragraph, section or other part of these Bylaws to any other person or circumstance shall not be affected thereby \ November 28, 2017 TIRZ Board Packet Page 8 of 69

9 Item C. 1. ARTICLE V GENERAL PROVISIONS Section 1. Notice and Waiver of Notice. Whenever any notice whatsoever is required to be given under the provision of these Bylaws, said notice shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper addressed to the person entitled hereto at his post office address, as it appears on the books of the Zone, and such notice shall be deemed to have been given on the day of such mailing. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except.where a director attends a meeting for the express purposes of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened. A waiver of notice in writing signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Section 2. Resignations. Any director or officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Town Council. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Section 3. Approval or Delegation of Power by the Town Council. To the event that these Bylaws refer to any approval by the Town, such approval of delegation shall be evidenced by official action of the Town Council. Section 4. Official Office and Records Repository. Argyle Town Hall shall be the official office for the Zone and all records of the Zone shall be maintained by Town Staff in said Town Hall \ November 28, 2017 TIRZ Board Packet Page 9 of 69

10 TIRZ NO. 1 BOARD DATA SHEET Agenda Item: Consider a resolution adopting the Reinvestment Zone Number One Final TIRZ Project and Finance Plan and the TIF Agreement by and between the TIRZ Board of Directors, the Town of Argyle and Terra Manna, LLC for Waterbrook of Argyle. Meeting Date: November 28, 2017 Requested by: Matt Jones, Town Manager Trent Petty, Petty & Associates, Town ED Consultant Background: On August 9, 2016, the Council approved the Development Agreement between the Town of Argyle and Terra Manna, LLC for the Waterbrook Development located on the Southeast corner of FM 407 and US 377. The development agreement included components related to the creation of the Public Improvement District (PID), as well as the creation of a Tax Increment Reinvestment Zone (TIRZ) which will be used to buy down the PID assessment on the project as well as reimburse eligible developer costs. The Waterbrook Development Agreement deal points are recapped as follows: 1. The PID and TIRZ are both necessary for this project due to the extraordinary cost of extending the S1 sewer line to the project. 2. The term of the TIRZ and PID will be 30 years. 3. As modeled, the project does provide a positive revenue stream to the Town sufficient to cover operating expenses with a varying degree of surplus annually. 4. There are performance based sales tax contributions to the project included in the TIRZ model that will be reimbursed to the Developer via a separate 380 Agreement. All sales tax reimbursements are performance based in that they will not be paid unless the commercial and retail components of the development occur and produce according to the estimates. 5. Denton County has formally endorsed the TIRZ and appointed a representative to the TIRZ Board. 6. The Development Agreement is intended to establish broad deal point parameters which will be subject to review and possible alteration contingent upon the consent of the Council as the project progresses. November 28, 2017 TIRZ Board Packet Page 10 of 69

11 Summary of action on the Waterbrook of Argyle development: April 26, 2016 Council approved zoning and Master Development Plan (MDP) September 13, 2016 Council approved a resolution calling for a hearing on the creation of a TIRZ September 27, 2016 Conducted a public hearing and approved the creation of TIRZ No. 1 through the adoption of Ordinance No The TIRZ Agreement and the Final Project and Finance Plan are the remaining items that require action by the TIRZ Board as well as Town Council. These two documents detail the elegible projects and expedetures as well as provide measures for the reimbursement of TIRZ funds to the developer as indicated by the approved development agreement. Financial Impact: The developer has also escrowed with the Town funds to reimburse all Town expenses associated with reviewing the application. Staff Recommendation: N/A Requested Action: Motion to approve a resolution adopting the final project and finance plan and agreement for the Reinvestment Zone Number One. Attachments: TIRZ Agreement Final Project and FinancePlan November 28, 2017 TIRZ Board Packet Page 11 of 69

12 ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 RESOLUTION NO XX A RESOLUTION OF THE ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD APPROVING THE REINVESTMENT ZONE NUMBER ONE FINAL PROJECT AND FINANCE PLAN AND TIF AGREEMENT FOR THE WATERBROOK DEVELOPMENT WHEREAS, the Argyle Tax Increment Reinvestment Zone No. 1 Board (the "Board") has been duly appointed in accordance with State law; WHEREAS, the Town of Argyle Town Council previously approved the creation of Tax Reinvestment Zone Number One for the Waterbrook Development ( Waterbrook ); WHEREAS, the Town of Argyle Town Council previously approved the Development Agreement and Preliminary Project and Finance Plan for Waterbrook; and WHEREAS, the Development Agreement anticipated the creation of a TIF Agreement; and WHEREAS, the Final Project and Finance Plan has been prepared for Waterbrook; and WHEREAS, upon full review and consideration of the TIF Agreement and the Final Project and Finance Plan and all matters attendant and related thereto, the Board is of the opinion that the terms and conditions thereof are in the best interests of the Town and its citizens and should be approved; and WHEREAS, all constitutional, statutory and legal prerequisites for the passage of this Resolution have been met, including but not limited to the Open Meetings Act. NOW THEREFORE BE IT RESOLVED BY THE ARGYLE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD, THAT: SECTION 1. The recitals set forth in the WHEREAS clauses of this Resolution are true and correct and are incorporated as part of this Resolution. SECTION 2. The Board approves the Reinvestment Zone Number One Final Project and Finance Plan and the TIF Agreement Waterbrook of Argyle attached hereto at Exhibits A and B. SECTION 3. This Resolution shall become effective from and after its date of passage in accordance with law \ November 28, 2017 TIRZ Board Packet Page 12 of 69

13 DULY PASSED BY THE TAX INCREMENT REINVESTMENT ZONE NO. 1 BOARD, ON THE DAY OF, ATTEST: APPROVED: Town Secretary, Kristi Gilbert Chairman- Mayor Donald Moser APPROVED AS TO FORM: Matthew C.G. Boyle, Town Attorney \ November 28, 2017 TIRZ Board Packet Page 13 of 69

14 EXHIBIT A REINVESTMENT ZONE NUMBER ONE FINAL PROJECT AND FINANCE PLAN \ November 28, 2017 TIRZ Board Packet Page 14 of 69

15 REINVESTMENT ZONE NUMBER ONE, TOWN OF ARGYLE FINAL PROJECT AND FINANCING PLAN (the "Final Plan") November 28, \ November 28, 2017 TIRZ Board Packet Page 15 of 69

16 1. INTRODUCTION. 1.1 Authority and Purpose. The Town of Argyle, a Texas general-rule municipality (the "Town"), has the authority under Chapter 311, Texas Tax Code, as amended (the "Act") to designate a contiguous or noncontiguous geographic area within the corporate limits of the Town as a tax increment reinvestment zone to promote development or redevelopment of the area if the governing body of the Town (the "Town Council") determines that development or redevelopment would not occur solely through private investment in the reasonably foreseeable future, that the zone is feasible, and that creation of the zone is in the best interest of the Town and the property in the zone. The purpose of the zone is to facilitate such development or redevelopment by financing the costs of public works, public improvements, programs, and other projects benefiting the zone, plus other costs incidental to those expenditures, all of which costs are authorized by the Act. 1.2 Eligibility Requirements. An area is eligible under the Act to be designated as a tax increment reinvestment zone if it is predominantly open or undeveloped and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impairs or arrests the sound growth of the Town. The Town cannot, however, designate a zone if more than 30% of the property in the proposed zone, excluding property that is publicly owned, is "used for residential purposes" (defined by the Act as follows: "... property is used for residential purposes if it is occupied by a house having fewer than five living units...") or if the total appraised value of taxable real property in the proposed zone and in existing reinvestment zones exceeds 50% of the total appraised value of taxable real property in the Town and in industrial districts created by the Town. 1.3 The Proposed Zone. By Town Council action on September 27, 2016, the Town created a tax increment reinvestment zone to be known as "Reinvestment Zone Number One, Town of Argyle" (the "Zone") that includes approximately acres as described by metes and bounds in Exhibit A to that certain Development Agreement approved by the Town on August 9, 2016 (the "Property" and the "Development Agreement"). The Property meets the eligibility requirements of the Act. The Property is undeveloped, and due to its size, location, and physical characteristics, development will not occur solely through private investment in the foreseeable future. The Property substantially impairs and arrests the sound growth of the Town because it is predominately open and undeveloped due to factors such as the lack of public infrastructure and the need for economic incentives to attract development to the Zone for the purpose of providing long-term economic benefits including, but not limited to, increased real property tax base for all taxing units in the Zone, increased sales and use tax for the Town and the State of Texas, and increased job opportunities for residents of the Town, Denton County (the "County"), and the region. If the public works, public improvements, programs, and other projects are financed as contemplated by this Final Plan (hereinafter defined), the Town envisions that the Property will be developed to take full advantage of the opportunity to bring to the Town, the County, and to all of north Texas a master-planned development. 1.4 Preliminary Plan; Hearing. Before the Town adopted the ordinance designating the Zone, the Town Council prepared a preliminary reinvestment zone financing plan in accordance with the Act and held a public hearing on the creation of the proposed zone and its Page \ November 28, 2017 TIRZ Board Packet Page 16 of 69

17 benefits to the Town and to the Property, at which public hearing interested persons spoke for and against the creation of the proposed zone, the boundaries of the proposed zone, and the concept of tax increment financing, and at which hearing the owners of the Property (the "Owners") was given a reasonable opportunity to protest the inclusion of the Property in the proposed zone. The requirement of the Act for a preliminary reinvestment zone financing plan was satisfied by the preliminary p dated September 27, 2016 (the "Preliminary Plan"), the purpose of which is to describe, in general terms, the public works, public improvements, programs, and other projects that will be undertaken and financed by the Zone. A description of how such public works, improvements, programs, and projects will be undertaken and financed will be determined by the Final Plan and by the TIRZ Agreement (both hereinafter defined), which require approval by the Board (hereinafter defined) and by the Town Council. 1.5 Creation of the Zone. Upon the closing of the above-referenced public hearing, the Town Council adopted an ordinance in accordance with the Act creating the Zone after the Town Council found that development or redevelopment of the Property would not occur solely through private investment in the reasonably foreseeable future, that the Zone is feasible, and that creation of the Zone is in the best interest of the Town and the Property. The ordinance creating the Zone appointed a Board of Directors for the Zone (the "Board"). 1.6 Board Recommendations. After the creation of the Zone, the Board during its November 28, 2017, meeting reviewed the Preliminary Plan and approved and recommended to the Town Council a Final Tax Increment Reinvestment Zone Project and Financing Plan for Reinvestment Zone Number One, Town of Argyle (as amended, the "Final Plan") and (1) a "TIRZ Agreement" between an owner or developer and the Town pursuant to which the Town will contribute a portion of its ad valorem tax increment and one-cent sales tax increment attributable to new development in the Zone (the "Tax Increment") into a tax increment fund created by the Town and segregated from all other funds of the Town (the "TIF Fund") to pay to such owner or developer or its assignees, in accordance with the TIRZ Agreement, the costs of public works, public improvements, programs, and other projects benefiting the Zone; and, (2) the "County Participation Agreement" between the Town and the County. 1.7 Council Action. The Town Council, taking into consideration the recommendations of the Board, will consider approval of the Final Plan, the TIRZ Agreement and the County Participation Agreement. If the TIRZ Agreement is approved, the Town Council will authorize and direct its execution. If the County Participation Agreement is approved, the Town Council will authorize and direct its execution.descriptions AND MAPS. 2.1 Existing Uses and Conditions. The Property is currently located in the County and in the Town's corporate limits. The Property is undeveloped, and there is no public infrastructure to support development. Development will require extensive public infrastructure that: (1) the Town cannot provide; and (2) will not be provided solely through private investment in the foreseeable future. If the Property were to be developed today, it would be developed consistent with the terms of the Development Agreement. A map of the Property and the proposed zone are shown on Exhibit A and in the Development Agreement. 2.2 Proposed Uses. The proposed uses of the Property are consistent with the Development Agreement. The Property was zoned and platted consistent with the Development Page \ November 28, 2017 TIRZ Board Packet Page 17 of 69

18 Agreement. A map of the Property and description of the proposed uses of the Property are shown on Exhibit B. 2.3 Metes and Bounds Description. Metes and bounds descriptions of the Property is provided on Exhibit C. 3. PROPOSED CHANGES TO ORDINANCES, PLANS, CODES, RULES, AND REGULATIONS. Development of the Property will involve only those changes established by the Development Agreement. 4. RELOCATION OF DISPLACED PERSONS. No persons will be displaced or relocated due to the creation of the Zone or implementation of this Final Plan. 5. ESTIMATED NON-PROJECT COSTS. Non-project costs are private funds that will be spent to develop in the Zone but will not be financed by the Zone. The list of non-project costs includes lot development costs and home construction costs. The total non-project costs are estimated to be approximately $15,000, PROPOSED PUBLIC IMPROVEMENTS. 6.1 Categories of Public Improvements. The categories of public works and public improvements (the "Public Improvements") that are proposed to be financed by the Zone are as follows: road improvements, sanitary sewer improvements, storm drainage and detention improvements and landscape and open space improvements, including associated real estate acquisitions. All Public Improvements shall be designed and constructed in accordance with all applicable Town standards and shall otherwise be inspected, approved, and accepted by the Town. At the Town's option, the Public Improvements may be expanded to include any other category of improvements authorized by the Act. 6.2 Locations of Public Improvements. The estimated locations of some of the proposed Public Improvements are shown and described on Exhibit D. These locations are provided for informational purposes only and may be revised from time to time without amending the Final Plan. 7. ESTIMATED PROJECT COSTS. The total project costs for the Zone (the "Project Costs") include the Administrative Costs defined below, the costs of the Public Improvements, including costs associated with grants reimbursing the payments of public improvement district assessments ("PID Assessments"), as further described in Section 13 and Section 16, and are estimated to be $17,758,965 in 2016 Dollars, as set forth on Exhibit E. 7.1 Administrative Costs. The Project Costs for administration of the Zone shall be the actual, direct costs paid or incurred by or on behalf of the Town to administer the Zone (the "Administrative Costs"). The Administrative Costs include the costs of professional services, including those for planning, engineering, and legal services paid by or on behalf of the Town. The Administrative Costs also include organizational costs, the cost of publicizing the creation of the Zone, and the cost of implementing the project plan for the Zone paid by or on behalf of the Town. The Administrative Costs shall be paid each year from the TIF Fund before any other Project Costs are paid. Page \ November 28, 2017 TIRZ Board Packet Page 18 of 69

19 8. ESTIMATED TIME WHEN COSTS ARE TO BE INCURRED. The Administrative Costs will be incurred annually. It is estimated that the remainder of the Project Costs will be incurred during the time intervals set forth on Exhibit F. 9. ECONOMIC FEASIBILITY. For purposes of this Final Plan, economic feasibility has been evaluated over the term of the Zone, in part, on the Financial Analysis and, in part, on the "Feasibility Study" prepared by Petty & Associates, Inc., a copy of which is attached as Exhibit G. This evaluation focuses only on "direct" financial benefits (i.e., tax revenues from new development in the Zone) and does not take into consideration the "multiplier effect" that will result from new development that occurs outside the Zone. As illustrated in Exhibit G, during the term of the Zone, new development that occurs in the Zone (which would not have occurred but for the Zone) will generate approximately $19.37 million in total new real property tax and sales tax revenue over the term of the Zone. As the taxing units that will participate in and benefit from new development within the Zone, the Town will retain approximately $10.24 million in net additional tax revenues in the Town's general fund and the County will retain approximately $8.7 million in net additional tax revenues in the County's general fund over same time period if they elect to participate as described in the Development Agreement. The remaining additional tax revenues will deposited in the TIF Fund to pay Project Costs in accordance with the Final Plan and the County Participation Agreement. Based on the foregoing, the feasibility of the Zone has been demonstrated. A portion of the new tax revenue generated for all taxing units by new development within the Zone will be retained by those taxing units. The remainder of the new tax revenue generated by new development within the Zone will be available to pay actual Project Costs until the term of the Zone expires or until the Zone is otherwise terminated. Upon expiration or termination of the Zone, 100% of all tax revenue generated within the Zone will be retained by the respective taxing units. During the term of the Zone, the Town will deposit into the TIF Fund each year an amount that equals 40 percent of the Town's real property tax rate levied and collected and 50 percent of the Town's 1 percent sales tax rate levied and collected within the Zone. 10. ESTIMATED BONDED INDEBTEDNESS. No bonded indebtedness issued by the Town pursuant to the Act is contemplated. 11. TOTAL APPRAISED VALUE. The current total appraised value of taxable real property in the Zone is $1,767,516. It is estimated that upon expiration of the term of the Zone, the total appraised value of taxable real property in the Zone will be more than $150 million in 2016 Dollars. 12. ESTIMATED CAPTURED APPRAISED VALUE TAXABLE BY THE TOWN. The amount of the Town's tax increment for a year is the amount of property taxes levied and collected by the Town for that year on the captured appraised value of the Property less the tax increment base of the Property. The tax increment base of the Property is the total taxable value of the Property for the year in which the Zone was designated. The tax increment base of the Property will be $6,165 which amount is the tax amount the Town levied and collected on the Property during the year of creation. Page \ November 28, 2017 TIRZ Board Packet Page 19 of 69

20 13. ESTIMATED CAPTURED APPRAISED VALUE TAXABLE BY THE COUNTY. The captured appraised value of the Property taxable by the County for a year is the total taxable value of the Property for that year less the tax increment base of the Property. The tax increment base of the Property is the total taxable value of the Property for the year in which the Zone was designated. The tax increment base of the Property will be approximately $4,028. The actual captured appraised value will be used to calculate annual payments by the County into the TIRZ Fund pursuant to the County Participation Agreement. 14. METHOD OF FINANCING. Each Owner has paid and will in the future pay, through PID Assessments or otherwise, certain Project Costs. The Final Plan, the TIRZ Agreement, and the County Participation Agreement shall obligate the Town to pay from the TIF Fund to each Owner or its assignees all actual Project Costs paid by such Owner or its assignees. Funds deposited into the TIF Fund shall always first be applied to pay the Administrative Costs. After the Administrative Costs have been paid, funds in the TIF Fund shall next be used to pay the Annual Credit Amount applicable to residential development as defined and described in the Development Agreement. After payment of the Annual Credit Amount applicable to residential development, funds in the TIF Fund shall be retained in the TIF Fund until the Retained Credit Reserve amount is reached as defined and described in the Development Agreement. Any excess funds in the TIF Fund after the payment of the Administrative Costs, Annual Credit Amount, and funding of the Retained Credit Reserve shall be used to pay the Annual Credit Amount applicable to commercial development as described in the Development Agreement. All payments of Project Costs shall be made solely from the TIF Fund and from no other funds of the Town or the County unless otherwise approved by their respective governing bodies, and the TIF Fund shall only be used to pay the Project Costs, unless otherwise approved by the Owner. The Town's approval of the Final Plan shall obligate the Town to deposit into the TIF Fund each year for the duration of the Zone an amount calculated as a millage rate per $100 of captured appraised value in the Zone that equals 40 percent of the Town's real property tax rate levied and collected and 50 percent of the Town's 1 percent sales tax rate levied and collected within the Zone. The County Participation Agreement shall obligate the County to deposit into the TIRZ Fund each year for the duration of the Zone the agreed upon amount of the County's tax rate collected within the Zone. The method of financing may be revised when the Town Council approves the Final Plan. 15. DURATION OF THE ZONE; TERMINATION. The stated term of the Zone shall commence on September 27, 2016, and shall continue until December 31, 2046, unless otherwise terminated in accordance with this section. The Town shall have the right to terminate the Zone prior to the expiration of its stated term if all of the Project Costs have been paid in full to the Owner or its assignees. If upon expiration of the stated term of the Zone the Project Costs have not been paid to the Owner or its assignees, neither the Town nor the County shall have any obligation to pay the shortfall. The provisions of this section shall be included in the ordinance that creates the Zone, in the TIRZ Agreement, and in the County Participation Agreement. Nothing in this section is intended to prevent the Town from extending the term of the Zone in accordance with the Act. 16. ECONOMIC DEVELOPMENT PROGRAMS. The Town Council has determined it to be necessary and convenient to the accomplishment of the objectives contained in and to the implementation of this Final Plan to establish and provide for the administration of economic Page \ November 28, 2017 TIRZ Board Packet Page 20 of 69

21 development programs that may be used to accomplish the purposes described in this Section 16. The programs and grants authorized by this Section 16 are authorized by Section (h) of the Act and by Article III, Section 52-a, Texas Constitution, as amended. Section (h) of the Act provides that the Board, subject to the approval of the Town Council, may establish and provide for the administration of one or more programs as the Board determines is necessary or convenient to implement and achieve the purposes of this Final Plan, which programs are for the public purposes of developing and diversifying the economy of the Zone and developing business and commercial activity within the Zone. Such economic development programs may include, to the extent permitted by law, programs to make grants of any lawfully available money from the TIF Fund, both of which are for activities that benefit the Zone and stimulate business and commercial activity in the Zone. Lawfully available money from the TIF Fund may be used to fund the costs of reimbursing PID Assessments. This Section 16 is intended to be an economic development program authorized by Section (h) and by Article III, Section 52-a of the Texas Constitution, as amended. Development of the Zone will further the public purpose of developing and diversifying the economy of the Zone. The Town Council and the Board have determined, and it is recognized, that such development will not occur through private investment in the foreseeable future, nor will such development occur only through public participation in the cost of the Public Improvements. All grants that are part of the economic development programs described in this Section 16 serve the public purpose of attracting new business and commercial activity to the Zone for the purpose of providing longterm economic benefits including, but not limited to, increases in the real property tax base for all taxing units within the Zone, and increased job opportunities for residents of the Town, the County, and the region, all of which benefit the Zone and the Town. 17. LIST OF EXHIBITS. Unless otherwise stated, all references to "Exhibits" contained in this Preliminary Plan shall mean and refer to the following exhibits, all of which are attached to and made a part of this Preliminary Plan for all purposes. Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Map of the Property and TIF Zone Map and Description of Proposed Uses of the Property Metes and Bounds Description of Property in the Zone Location of Proposed Public Improvements Estimated Project Costs Estimated Time When Costs are to be Incurred Feasibility Study Page \ November 28, 2017 TIRZ Board Packet Page 21 of 69

22 Exhibit A Map of the Property and TIF Zone Exhibit A \ November 28, 2017 TIRZ Board Packet Page 22 of 69

23 Exhibit B Map and Description of Proposed Uses of the Property Exhibit B \ November 28, 2017 TIRZ Board Packet Page 23 of 69

24 Exhibit C Metes and Bounds Description of the Property LEGAL DESCRIPTION ACRES BEING a tract of land situated in the S. CHAMBER SURVEY, ABSTRACT NO. 308, Town of Argyle, Denton County, Texas and being all of Lot 1-R, Block 1 of SHADY OAKS ESTATES, REVISED, an Addition to the Town of Argyle, Denton County, Texas according to the Plat thereof recorded in Cabinet C, Page 9, Plat Records, Denton County, Texas and being all of Lot 1 & Lot 2, Block A of CHANEY ADDITION, an Addition to the Town of Argyle, Denton County, Texas according to the Plat thereof recorded in Cabinet I, Page 18, Plat Records, Denton County, Texas and being all of that tract of land described in Deed to Champion Investments, L.L.C., as recorded in Document No , Deed Records, Denton County, Texas and being all of that tract of land described in Deed to Argyle Church of Christ, Inc., as recorded in Document No , Deed Records, Denton County, Texas and being part of that tract of land described as Exhibit B in Deed to EM Land Holdings, LLC, as recorded in Document No , Deed Records, Denton County, Texas and being all of those tracts of land described as Exhibit C and Exhibit D in Deed to EM Land Holdings, LLC, as recorded in Document No , Deed Records, Denton County, Texas and being more particularly described as follows: BEGINNING at a 3/8 inch iron rod found in the south line of Farm to Market Road No. 407, a variable width right-of-way, for the common northeast corner of that tract of land described in Deed to John P. Stafford and Karen Sue Stafford, as recorded in Document No , Deed Records, Denton County, Texas and an exterior ell corner of said Exhibit B tract; THENCE North 89 degrees 33 minutes 36 seconds East, with said south line, a distance of feet to a point for the most northerly northeast corner of said Exhibit B tract; THENCE Southerly, with the east line of said Exhibit B tract, the following three (3) courses and distances: South 00 degrees 36 minutes 53 seconds East, leaving said south line, a distance of 1, feet to a point for the common southwest corner of Lot 12 of FRENCHTOWN MANOR, an Addition to the Town of Argyle, Denton County, Texas according to the Plat thereof recorded in Cabinet U, Page 135, Plat Records, Denton County, Texas and northwest corner of Lot 3 of LYNCH S WHIPPOORWILL ESTATES, an Addition to the Town of Argyle, Denton County, Texas according to the Plat thereof recorded in Cabinet B, Page 198, Plat Records, Denton County, Texas; South 89 degrees 26 minutes 04 seconds West, a distance of feet to a point for corner; South 00 degrees 42 minutes 54 seconds East, a distance of feet to a point for corner in the north line of Frenchtown Road, a variable width right-of-way, from which point a 1/2 inch iron rod with a yellow plastic cap stamped G&A CONSULTANTS found bears North 60 degrees 24 minutes 42 seconds West, 0.28 feet; THENCE South 89 degrees 26 minutes 15 seconds West, leaving said east line and with said north line, a distance of 1, feet to a point for corner; THENCE North 00 degrees 31 minutes 43 seconds West, leaving said north line, a distance of feet to a point for corner; THENCE North 85 degrees 00 minutes 32 seconds West, a distance of feet to a point for corner; THENCE North 77 degrees 52 minutes 14 seconds West, a distance of feet to a point for corner; Exhibit C \ November 28, 2017 TIRZ Board Packet Page 24 of 69

25 Exhibit C Metes and Bounds Description of the Property THENCE North 87 degrees 51 minutes 37 seconds West, a distance of feet to a point for corner in the east line of State Highway No. 377, a variable width right-of-way; THENCE Northerly, with said east line, the following four (4) courses and distances: North 13 degrees 52 minutes 24 seconds East, a distance of feet to a point for the southwest corner of the above mentioned Lot 1-R; North 13 degrees 46 minutes 23 seconds East, a distance of feet to a point for the northwest corner of said Lot 1-R; North 89 degrees 10 minutes 51 seconds East, a distance of 2.70 feet to a point for the most westerly southwest corner of the above mentioned Lot 2, Block A; North 13 degrees 46 minutes 18 seconds East, a distance of feet to a point for the southwest corner of that tract of land described in Deed to Lone Star Gas Company, as recorded in Volume 540, Page 404, Deed Records, Denton County, Texas; THENCE North 89 degrees 42 minutes 17 seconds East, leaving said east line, a distance of feet to a t-post with aluminum cap stamped LONE STAR GAS found for the southeast corner of said Lone Star Gas Company tract; THENCE North 12 degrees 56 minutes 26 seconds East, a distance of feet to a point in the south line of the above mentioned Exhibit D tract for the northeast corner of said Lone Star Gas Company tract; THENCE South 89 degrees 20 minutes 45 seconds West, with said south line, a distance of feet to a point in the east line of the above mentioned State Highway No. 377 for the southwest corner of said Exhibit D tract; THENCE North 11 degrees 44 minutes 46 seconds East, with said east line, a distance of feet to a point for corner; THENCE North 35 degrees 44 minutes 20 seconds East, continuing with said east line, a distance of feet to a point for the northwest corner of said Exhibit D tract and the intersection of said east line with the south line of the above mentioned Farm to Market Road No. 407; THENCE North 89 degrees 33 minutes 36 seconds East, leaving said east line and with said south line, a distance of 1, feet to a point for the common northeast corner of the above mentioned Champion Investments, L.L.C. tract and northwest corner of the above mentioned John P. Stafford and Karen Sue Stafford tract; THENCE South 00 degrees 34 minutes 25 seconds East, leaving said south line, a distance of feet to a 1/2 inch iron rod found for the common southeast corner of said Champion Investments, L.L.C. tract and southwest corner of said John P. Stafford and Karen Sue Stafford tract; THENCE North 89 degrees 34 minutes 43 seconds East, a distance of feet to a point for the southeast corner of said John P. Stafford and Karen Sue Stafford tract; THENCE North 00 degrees 31 minutes 55 seconds West, a distance of feet to the POINT OF BEGINNING and containing acres of land, more or less. Exhibit C \ November 28, 2017 TIRZ Board Packet Page 25 of 69

26 Exhibit D Public Improvements Exhibit D - Page 1 November 28, 2017 TIRZ Board Packet Page 26 of 69

27 Exhibit D Sewer Improvements Exhibit D - Page \ November 28, 2017 TIRZ Board Packet Page 27 of 69

28 Exhibit D Sewer Improvements Exhibit D - Page \ November 28, 2017 TIRZ Board Packet Page 28 of 69

29 Exhibit E Estimated Project Costs Categories of Project Costs Estimated Cost in 2016 Dollars Road Improvements $6,072,745 Storm Drainage and Detention Improvements $2,136,600 Sanitary Sewer Improvements $2,980,670 Landscape and Open Space Improvements $2,306,700 Soft Costs $4,262,250 TOTAL $17,758,965 Estimated costs may increase or decrease. TIF Fund revenue will pay or reimburse only actual Project Costs. Exhibit E \ November 28, 2017 TIRZ Board Packet Page 29 of 69

30 Exhibit F Estimated Time When Costs Are to be Incurred Categories of Project Costs TOTAL Road Improvements $6,072,745 $6,072,745 Sanitary Sewer Improvements $2,136,600 $2,136,600 Storm Drainage and Landscaping Improvements $2,755,670 $225,000 $2,980,670 Landscape and Open Space Improvements $1,153,350 $1,153,350 $2,306,700 $1,180,000 $2,382,250 $100,000 $3,662,250 $20,000 $20,000 $20,000 $20,000 $20,000 $100,000 $1,200,000 $14,520,615 $1,498,350 $20,000 $20,000 $17,258,965 Soft Costs Administrative Costs TOTAL Administrative Costs will be incurred annually and are anticipated to be approximately $20,000 per year. Exhibit F \ November 28, 2017 TIRZ Board Packet Page 30 of 69

31 Exhibit G Feasibility Study \ November 28, 2017 TIRZ Board Packet Page 31 of 69

32 Economic Feasibility Study: Reinvestment Zone Number One Town of Argyle, Texas Petty & Associates, Inc. 11/16/2017 November 28, 2017 TIRZ Board Packet Page 32 of 69

33 Table of Contents Introduction... 1 Overview... 1 Economics of Argyle... 1 Waterbrook Value... 2 Zone Description... 3 TIRZ Financing... 3 Methodology... 3 Financial Feasibility... 4 Eligible Improvements... 5 Table 1: Improvement Costs... 5 Schedule of Values... 8 Table 2: TIRZ Schedule of Values... 8 Table 3: TIRZ Schedule of Revenues Available for Reimursement... 9 Estimated Payoff of Public Improvements Summary EXHIBITS EXHIBIT 1: TIRZ No. One Boundary Map EXHIBIT 2: Zoning Map EXHIBIT 3: Waterbrook Site Plan EXHIBIT 4: Comprehensive Land Use Plan November 28, 2017 TIRZ Board Packet Page 33 of 69

34 Introduction The Town of Argyle ("Town") has asked Petty & Associates, Inc., to perform a Tax Increment Reinvestment Zone No. One ( TIRZ ) or ( TIF ) feasibility study (the "Study") for the development known as Waterbrook, located at the southeast corner of SH 377 and FM 407 in Argyle, Texas. This study fulfills the requirement to perform an economic feasibility study, set out in Chapter (c)(3) of the Texas Tax Code, Chapter 311, the Tax Increment Financing Act, and demonstrates whether the plan is economically feasible. This study also illustrates the methodology of financing project costs in which the Town provides meaningful incentives to private developers willing to invest in Argyle, while the Town continues to ensure fiscal responsibility to the taxpayers. As defined in the Texas Economic Development Handbook, Tax increment financing is a tool that local governments can use to publicly finance needed structural improvements and enhanced infrastructure within a defined area. These improvements usually are undertaken to promote the viability of existing businesses and to attract new commercial enterprises to the area1. The Waterbrook development represents a significant economic benefit to the Town of Argyle, both in terms of on- and off-site public infrastructure and roadway enhancements and vital retail shopping and commercial services for Argyle residents. Overview Economics of Argyle The Town of Argyle comprises 11.1 square miles in Denton County. The Town has an estimated 2015 population of 3,905 and is experiencing rapid residential growth as the Interstate 35 West (I-35W) corridor from Fort Worth to Denton continues to mature. Since the 2010 census, the Town has averaged 4.1% in population growth each year. Argyle is located 6 miles south of Denton and 9 miles north of the Alliance Gateway of Fort Worth and is bisected by I-35W and US Highway 377. Median household income in Argyle is $111,616. Which is 52% above the state median income level and 52% of residents have Bachelor s Degree or higher. 2 Argyle is home to the highly sought after Argyle Independent School District and award winning private school, Liberty Christian. Home buyers in Argyle consistently rank the quality of schools as the number one reason for choosing to live in Argyle. Date accessed November 28, 2017 TIRZ Board Packet Page 34 of 69

35 In 2009, the Town adopted a comprehensive plan, which was updated in 2015, and is designed to protect the rural nature of the community while emphasizing and enabling quality development on the I-35W corridor as well as the major east-west thoroughfare of FM Road 407 and US Hwy 377. In addition to the comprehensive plan, the Town has adopted Form Based Code Zoning Districts (FBC) for key strategic intersections in the Town which will further a sustainable quality growth pattern for the community for decades to come, while always protecting the community s unique heritage and large residential estates. In order to protect the quality components of growth and incentivize desirable development, particularly commercial and retail development, the community must continue to enhance its roadways and expand the sewer infrastructure to accommodate new growth. Because such a large area of the community will always be low-density residential, capitalizing on development potential within the FBC Districts is crucial to maintaining economic viability and maintaining outstanding Town services to residents. Because of the relatively low residential population, the Town is very sensitive to the key intersection of US Hwy 377 and FM Road 407. This intersection today lacks sewer capacity to serve the contemplated FBC development as well as the surrounding area within the Town of Argyle and in adjacent unincorporated Denton County. Waterbrook Value The Waterbrook mixed-use development consists of 105 acres which will be developed approximately 80% residential with residential open space, 20% commercial uses. The property is predominantly open and undeveloped due to a lack of sewer infrastructure as well as a large flood plain which bisects the property impairing sound growth within this intersection corridor The quality of development required by the Town via the approved Waterbrook FBC zoning will result in home values ranging from $350,000 to $500,000.The estimated build-out value of Waterbrook is projected at approximately $150 million in new taxable value the Town of Argyle and Denton County, of which $30 million is projected to be commercial and retail uses. In addition, the development of the commercial component of Waterbrook estimates $200,000 in new annual sales tax dollars for the Town. Annual revenues associated with this growth represent an estimated 36% increase in current advalorem revenue and an estimated 43% increase in sales tax revenue for the Town. Denton County will realize an estimated $400,000 in new annual property tax revenues. Currently under consideration is the County s participation in the TIRZ to offset significant off-site sewer infrastructure costs for this region of the County. Zone Description Area Argyle TIRZ No. One consists of approximately acres, situated at the southeast corner of US Hwy 377 and FM Road 407 as depicted in Exhibit 1. The TIRZ boundary includes all the proposed Waterbrook 2 November 28, 2017 TIRZ Board Packet Page 35 of 69

36 residential and commercial development. TIRZ No. One is largely undeveloped with no existing residential or commercial uses. Two churches are currently located within the proposed boundaries, however both churches have relocation agreements in place, and will be relocated outside the TIRZ boundaries. There will be no displacement of residents necessitated by the proposed development within the TIRZ. Zoning Zoning for the uses within the TIRZ boundary are depicted in Exhibit 2. The zone change for the subject property was approved by the Town Council on April 23rd, 2016 within the Form Based Code (FBC) guidelines. No additional zoning changes are required in order for development to occur as presented in this Study. The Waterbrook Site Plan, Exhibit 3 is approved via a Master Development Plan ( MDP ) under the FBC zoning and in accordance with the Town s Comprehensive Land Use Plan, Exhibit 4 It includes sixty-three (63) 70 SF residential lots, one hundred forty seven (147) 50 SF lots and seventy seven (77) 41 SF lots for a total of two hundred eighty seven (287) residential lots. Commercial and retail zoning is approved for approximately 18 acres which will include retail, restaurant and office uses which surrounds a contemplated grocery anchor. TIRZ Financing Methodology The Argyle TIRZ No. One is a pay as you go TIRZ, meaning that no TIRZ debt will be issued by the Town. The developer will pay for the TIRZ improvements and will be reimbursed by the TIRZ increment after it has been collected into the TIRZ fund. A portion of the TIRZ revenue will be used to offset Public Improvement District assessments ("PID Assessments") associated with the Waterbrook of Argyle Public Improvement District (the "District"), created by the Council on August 9, The anticipated proportionate TIRZ contribution to offset PID Assessments will be determined by the Town Council at a later date with the finalization of the updated Service and Assessment Plan for the District is approved by the Town Council. As set forth in the Denton County Participation Agreement, approved by County Commissioners Court by Court Order on January 24th, 2017; Denton County will participate in the TIRZ with 50% of the county s ad valorem increment for 30 years or an estimated $2.3 million associated with the actual costs to pay for the S-1 Sewer line and lane on US Hwy 377 and FM Road 407. The Denton County Commissioners Court approved the County Participation Agreement which declares its support of the proposed TIRZ, and its intent to pay into the tax increment fund fifty percent (50%) of the tax increment attributed to the Captured Assessed Value (total taxable value) in the TIRZ attributable to the County; and shall fund the TIRZ as set forth in the Agreement to Participate in Tax Increment Reinvestment Zone Number One, Town of Argyle, Texas, beginning on the date the TIRZ is established and ending no later than December 31, November 28, 2017 TIRZ Board Packet Page 36 of 69

37 Financial Feasibility Financial Overview The strong residential housing market for Argyle continues. Annual new home values in Argyle start at an average $583,060 with homes under construction averaging $599,590. Annual closings total 37 homes as of Quarter 2 in Annual new home starts and closings have continued to trend upward in Argyle since Hillwood s development Harvest, which is located partially with the Argyle ETJ, west of I-35W and north of FM Rd 407 continues to enjoy stable growth. The Canyon Falls development by NASH and Newland Communities, located in the southern portion of Argyle, west of US Hwy 377 and north of FM Road Harvest reports 299 annual starts with average values of $346,570, while Canyon Falls reports 251 annual starts averaging $406,675. The lack of significant population in the immediate Argyle trade area coupled with the lack of sewer capacity has prevented significant commercial growth within the heart of the Town of Argyle. New residential and commercial projects, however, are beginning to find Argyle, including two newly approved restaurants in 2016 and a third on the way in Significant commercial potential also exists at the northwest corner of I-35W and FM Road 407 within the second phase of the Harvest development. Discussions are already underway to accommodate infrastructure to support this commercial corner. A medical office building is also under construction in the vicinity at the northeast corner of Crawford Rd and I-35W. Increased traffic and stable demographics continue to support the need for a grocery anchor within the Town limits as proposed for the Waterbrook development. 4 November 28, 2017 TIRZ Board Packet Page 37 of 69

38 TIRZ Eligible Improvements TIRZ eligible improvement costs for Waterbrook are estimated to be $17,758,965 as depicted below in Table 1. Table 1 Improvement Costs Soft Costs ENGINEERING & SURVEYING BOUNDARY SURVEY TOPOGRAPHIC SURVEY TREE SURVEY DUE DILIGENCE LAND PLANNING ZONING PID CREATION PRELIMINARY PLAT TRAFFIC IMPACT ANALYSIS PHASE I ENVIRONMENTAL GEOTECHNICAL - FINAL GEOTECHNICAL - DENSITY TESTING 404 WETLANDS ASSESSMENT/PERMITTING TXDOT PERMIT FLOOD STUDY/LOMR DETENTION DESIGN SWPPP/NOI PREPARATION SWPPP INSPECTIONS/REPORTING MISCELLANEOUS ENGINEERING ENGINEERING REIMBURSABLES TOPOGRAPHIC SURVEY CONTINGENCY 10% $22,500 $33,700 $40,000 $38,275 $30,400 $35,000 $40,850 $34,125 $27,300 $3,500 $40,950 $95,550 $60,000 $10,000 $20,000 $20,000 $4,500 $15,000 $24,000 $24,000 ENGINEERING & SURVEYING $139,000 $88,300 $846,950 5 November 28, 2017 TIRZ Board Packet Page 38 of 69

39 DEVELOPMENT FEES & PERMITS ZONING AND PLAT FEES Wetlands Mitigation LOMR application REVIEW/INSPECTION FEES (5%) Financing Costs (Cap I, Reserve Fund) and TIRZ Admin Costs DEVELOPMENT FEES & PERMITS SOFT COSTS TOTAL $18,900 $150,000 $8,500 $275,900 $2,962,000 $3,415,300 $4,262,250 Hard Costs ROAD IMPROVEMENTS: EROSION CONTROL EARTHWORK - ROADS PAVING - ON-SITE ROW & EASEMENTS (15 AC ROW + 10 AC DETENTION ESMT) STREET LIGHTS DECEL LANE PAVING CONTINGENCY 10% ROAD IMPROVEMENT SUBTOTAL STORM DRAINAGE AND DETENTION IMPROVEMENTS EARTHWORK DETENTION STORM DRAINAGE STORMWATER DETENTION CONTINGENCY 10% DRAINAGE IMPROVEMENT SUBTOTAL SANITARY SEWER IMPROVEMENTS ON-SITE SANITARY SEWER OFF- SITE SANITARY SEWER CONTINGENCY 10% SEWER IMPROVEMENT SUBTOTAL $191,650 $239,175 $2,370,275 $2,222,375 $203,500 $293,700 $552,070 $6,072,745 $120,000 $1,662,350 $160,000 $194,250 $2,136,600 0 $709,700 $2,000,000 $270,970 $2,980,670 6 November 28, 2017 TIRZ Board Packet Page 39 of 69

40 LANDSCAPE AND AMENITIES RETAINING WALLS PRIMARY ENTRY AND GREENBELT CONTINGENCY 10% LANDSCAPE / OPEN SPACE IMPROVEMENT SUBTOTAL DEVELOPMENT CONSTRUCTION 0 $1,097,000 $1,000,000 $209,700 $2,306,700 $13,496,715 SOFT COSTS: $4,262,250 DEVELOPMENT CONSTRUCTION $13,496,715 Total Costs $17,758, November 28, 2017 TIRZ Board Packet Page 40 of 69

41 Schedule of Values Anticipated new values produced by Waterbrook are depicted in Table 2 below. Table 2 41' SF 50' SF 70' SF Total Residential Value Commercial Development TOTAL NEW VALUE TIRZ Schedule of Values ,298,000 8,709,356 14,236,200 30,243, ,596,000 17,418,713 28,472,400 60,487, ,894,000 26,128,069 42,708,600 90,730, ,192,000 34,837,425 56,944, ,974, ,192,000 34,837,425 56,944, ,974,225 $0 $22,761,750 $25,832,730 $30,050,208 $31,790,430 $ 30,243,556 $ 83,248,863 $ 116,563,399 $ 151,024,433 $ 152,764,655 Schedule of Revenues Table 3 illustrates the estimated TIRZ revenues that will be generated from potential new construction over a 30-year period totaling $9 million after the public improvements are completed and the portions of the ad valorem increment from the Town and the County which will be available for reimbursement over the term. The public improvements will be constructed by Cal Atlantic Homes of Texas, Inc., or their affiliate, in partnership with Terra Manna, LLC., or their affiliate, (collectively, the "Developer"). The Town will not fund any public infrastructure cost with cash, but has committed to assist the Developer in acquiring necessary easements to accommodate the offsite sewer line by use of eminent domain, if necessary. 8 November 28, 2017 TIRZ Board Packet Page 41 of 69

42 TIRZ Schedule of Revenues Available for Reimbursement Table 3 Estimated Payoff of Eligible TIF Fund Balance Improvements Revenues from Town of Argyle $48,087 $132,366 $185,336 $240,129 $242,896 $245,325 $245,325 $245,325 $245,325 $245,325 $240,418 $241,900 $242,337 $244,818 $245,285 $247,776 $248,273 $250,774 $251,302 $253,813 $254,371 $249,262 $250,795 $251,239 $253,833 $254,308 $256,912 $257,419 $260,033 Revenues from Denton County $39,619 $109,056 $152,698 $197,842 $200,122 $200,122 $200,122 $200,122 $200,122 $200,122 $200,122 $200,122 $200, Total TIF Revenues from all sources $87,706 $241,422 $338,034 $437,971 $443,017 $445,446 $445,446 $445,446 $445,446 $445,446 $440,540 $442,021 $442,459 $244,818 $245,285 $247,776 $248,273 $250,774 $251,302 $253,813 $254,371 $249,262 $250,795 $251,239 $253,833 $254,308 $256,912 $257,419 $260,033 Cumulative TIF Revenues from all sources $87,706 $329,128 $667,162 $1,105,133 $1,548,150 $1,993,597 $2,439,043 $2,884,490 $3,329,936 $3,775,383 $4,215,922 $4,657,944 $5,100,402 $5,345,221 $5,590,506 $5,838,282 $6,086,556 $6,337,330 $6,588,632 $6,842,445 $7,096,816 $7,346,078 $7,596,873 $7,848,113 $8,101,946 $8,356,254 $8,613,166 $8,870,585 $9,130,618 The Town of Argyle anticipates that a portion of the TIRZ revenues will first pay administrative costs, then a portion of the TIRZ revenues (currently estimated at $7.5 million over the term with the final amount determined when the Town approves the updated Service and Assessment Plan for the District), and will 9 November 28, 2017 TIRZ Board Packet Page 42 of 69

43 be paid towards the reduction of the PID Assessments as described in the Development Agreement between the Town and the Developer, effective August 9, 2016, relating to the Waterbrook development. The remaining TIRZ dollars during the term will be used to reimburse the developer for other eligible costs as described in Table 1 above up to a cap of $1.5 million. The County TIRZ dollars will be used solely to reimburse the developer for costs related to the S-1 Sewer line and the deceleration lanes, as defined in the Final Project Plan and the TIRZ Agreement. Summary The Town of Argyle is optimistic about the development potential represented by the Waterbrook development. The Town will achieve many long-range goals with this development. First, the Town will realize the completion of the S-1 sewer line which will significantly reduce Town utility obligations to Trinity River Authority for its portion of Graham Branch costs, without having to issue debt or increase the tax burden on the Argyle tax payers. Second, Denton County will also realize new sewer capacity in the unincorporated area between Argyle and Flower Mound which represents significant new growth opportunities and new tax base potential. Third, the Town of Argyle will benefit from a master planned, mixed use development which fulfills all the requirements of the Town s Comprehensive Plan and the Form Based Code. Tax increment financing promises to create a means of achieving these goals without the Town having to issue debt or raise taxes to stimulate this investment. The investment on the part of the Town and the County of $9 million is projected to spark the development of $23 million in combined new sales and ad valorem value in year 1, for Denton County and the Town of Argyle, and $150 million at buildout, projected to be 4-6 years. Since the Zone is designed to be a pay as you go TIRZ, reimbursements will only be paid as new revenues are collected. Argyle taxpayers will not have to shoulder the financial burden necessary to produce this new value and will not have to back additional Town debt with their tax dollars. Project Costs are projected to be reimbursed to the Developer in 15 years, still leaving the TIRZ with sufficient funds to incentivize developers in constructing new improvements. The Town is still able to maintain appropriate operating costs to serve these developments. In addition, the TIRZ affords the Town the opportunity to remain competitive with the related PID Assessments so as not to overburden the new development. 10 November 28, 2017 TIRZ Board Packet Page 43 of 69

44 Exhibit 1 TIRZ Boundary Area 11 November 28, 2017 TIRZ Board Packet Page 44 of 69

45 Exhibit 2 Zoning Map 12 November 28, 2017 TIRZ Board Packet Page 45 of 69

46 Exhibit 3 Waterbrook Site Plan 13 November 28, 2017 TIRZ Board Packet Page 46 of 69

47 Exhibit 4 Comprehensive Land Use Plan 14 November 28, 2017 TIRZ Board Packet Page 47 of 69