2017 CEDA APPLICATION

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Clarence Denis Boyd
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1 2017 CEDA APPLICATION All Applications Must Be Received By August 18, 2017 The 2017 TEDC Community Economic Development Awards (CEDA) will be presented during TEDC's Annual Conference Award s Luncheon on October 19, 2017, in Houston, Texas. The recipients will be judged in each of the five categories that have made the most significant contribution to economic development in their community and the State of Texas. AWARD CATEGORIES The CEDA will be given to one community from each of the following five population categories: (as currently marketed). I. Population less than 10,000 II. Population of 10,001 to 20,000 III. Population of 20,001 to 50,000 IV. Population of 50,001 to 100,000 V. Population of 100,001 to 250,000 VI. Population of 250,001 and above NOMINATION: Name of Community: Fort Worth, Texas TEDC Member Name: Brenda Hicks-Sorensen (individual member, not organization) Address: 1150 S. Freeway, Fort Worth, TX Telephone #: Fax #: Address: Brenda.Hicks-Sorensen@fortworthtexas.gov Social Media Accounts: Twitter FaceBook Page: Community Population (as currently marketed): 854,113 Application Submitted By: Brenda Hicks-Sorensen, Assistant Director, City of Fort Worth Economic Development Department Telephone #: Address: Brenda.Hicks-Sorensen@fortworthtexas.gov Media Contacts: (limit 3) Organization: Fort Worth Star-Telegram Contact Name: Sandra Baker Address: sabaker@star-telegram.com Organization: Dallas Morning News Contact Name: Paul O Donnell Address: podonnell@dallasnews.com Organization: KXAS Contact Name: Noelle Walker Address: noelle.walker@nbcuni.com SUBMITTED FOR: (CIRCLE ALL THAT APPLY) Business Retention Business Attraction Business Expansion Community Involvement

The successful development of Fort Worth s Pinnacle Bank Place marks a major achievement in a decades-long effort to support the revitalization of the historic and strategically important Lancaster

2 The successful development of Fort Worth s Pinnacle Bank Place marks a major achievement in a decades-long effort to support the revitalization of the historic and strategically important Lancaster Avenue. This successful project offers a valuable case study to communities across the country wishing to jumpstart, reinforce, or accelerate their revitalization and development efforts. The City-led, TIF-supported project utilized a unique financing structure and a highly entrepreneurial approach to economic development. The result is a $30 million 130-unit mixed-use project that has accelerated the ongoing transformation of Lancaster Avenue into a vibrant pedestrian-friendly boulevard along the southern edge of downtown Fort Worth. The addition of this project has, from the moment it broke ground, reinvigorated interest and investment in Lancaster Avenue, making the project a true catalyst for economic development and district revitalization. The Background The revitalization of Lancaster Avenue has been decades in the making. Once a major anchor for growth and commercial activity in downtown Fort Worth, Lancaster Avenue is home to several monumental buildings of notable architecture, such as the art deco Texas and Pacific Railroad Terminal Building and the beaux arts U.S. Post Office building. In the mid-1950s, an elevated freeway overpass linking I-35 to I- 30 was constructed along nearly a mile of Lancaster Avenue, effectively cutting off several adjacent blocks that had railroad to one side and an elevated freeway overpass to the other. After multiple proposals for the freeway s expansion met civic opposition, the overpass became the subject of litigation for a decade, beginning in This continuous period was followed by nearly two decades of planning and construction that resulted in a fully realigned overpass in 2001 and the uncovering of Lancaster Avenue beneath it. Left in the wake of the relocated overpass were blighted conditions, several vacant but architecturally important buildings, and a line of vacant parcels of land. Intense planning activity followed by the creation of the Lancaster Corridor TIF district committed resources to the transformation of Lancaster Avenue into an attractive, walkable, mixed-use environment capable of serving as a suitable gateway to downtown Fort Worth. The Challenge City and TIF investments in streetscaping, utilities, and public art along Lancaster Avenue as well as public-private partnerships with key property owners set the district well on its way to a successful revitalization. The critical missing ingredient had been private investment in new ground-up development along the north side of Lancaster Avenue. City economic development staff observed reluctance in the market, not on whether to invest in the area, but whether to be the first to do so. Despite the important public investments in infrastructure that made Lancaster Avenue far more appealing to citizens and helped to destigmatize the area, there remained a perception of risk that prevented desirable new development from occurring. The desire was the construction of a mixed-use development that could bring residents and pedestrians to the district and bring a higher level of activity at all hours of the day.

3 Although limited in the amount of resources available, the City did have some tools at its disposal, and those that it did not have it created. The realignment of the freeway overpass resulted in several parcels of former right-of-way along the north side of Lancaster Avenue that could now be developed. Since the parcels were now owned by the City, the City had become the dominant property-owner along the north side of Lancaster Avenue. However, given the limited depth of the parcels, any near-term development would require partnership with surrounding property owners or the purchase of additional property. There had been some success by that time in improving the area near Lancaster Avenue, with the TIF district committing several million dollars to public improvements in the district. However, TIF funds alone were not capable of supporting a privately-led mixed-use development, and the nature of the desired project made municipal bond financing an unlikely option. Without a significant new development along the north side of Lancaster Avenue, the substantial progress that had been made in revitalizing the district was at risk of stalling out. The Project In the challenge, the City of Fort Worth found an opportunity. Rather than wait for a developer with the capability and risk profile necessary to deliver the desired project, the City chose to act as the developer itself. In 1987, the City of Fort Worth created the Fort Worth Local Development Corporation (LDC) under the Texas Non-Profit Corporation Act to administer Economic Development Administration Grants. The LDC is a 501(c)(3) corporation organized to promote, sponsor, and coordinate a wide range of activities centered around job creation and economic development within the City of Fort Worth. The Mayor and City Council serves as the LDC s Board of Directors. The LDC is funded from several sources including lease revenue from property it owns as well as royalties from mineral leases. While the use by the City of the LDC was fairly limited, its potential was well-recognized. In 2011, the City incorporated Lancaster Corridor Redevelopment, LLC a private and fully taxable corporation wholly owned by the LDC. Lancaster Corridor Redevelopment, LLC would be used as a single-purpose corporation serving as the developer of the new mixed-use project so desired for Lancaster Avenue. A two acre site was chosen for the project, half of which was City-owned former overpass right-of-way and the remainder purchased from a private owner using funds provided by the LDC. The site is situated near the midpoint of the Lancaster Corridor and, as a result, is well-positioned to serve as catalyst for growth and activity throughout the district. With a sufficient site in hand, Lancaster Corridor Redevelopment, administered by City staff, guided the design and engineering of a five-story, 130-unit multi-family building fronting approximately five hundred feet of Lancaster Avenue. The design of the building also incorporated approximately 30,000 SF of ground-floor retail space arranged to encourage pedestrian activity along Lancaster Avenue. The architectural design of the building is complementary to the area, providing attractive and necessary infill while still allowing nearby historic architecture to shine. As is often the case with downtown projects in nearly any community, parking presented an additional challenge. To support the density required to make the southern portion of downtown Fort Worth a

4 highly walkable environment, it would be necessary to avoid surface parking, too much of which already dominated the area. To address the issue of parking, the City of Fort Worth utilized the Central City Local Government Corporation (CCLGC), a non-profit government corporation wholly owned by the City and created in 2005 for the ownership and management of public parking garages in key urban locations. However, at a cost of approximately $10 million, the CCLGC lacked the necessary funds for the garage. To close the financial gap created by the construction of the parking garage, the Lancaster Corridor TIF district entered into an agreement with the CCLGC for the use of up to $9.2 million in available TIF funds. The investment by the TIF not only resolved the financial challenge created by the necessary construction of the parking garage, but it enabled the construction of additional parking capacity that could be used to promote evening and weekend use by the public, further supporting efforts to revitalize the south end of downtown. Since the garage replaced existing surface parking lots used by Tarrant County College, the CCLGC entered into a lease agreement to incorporate the lost spaces into the garage for use by the college. Generally centered on the interior of block, the garage also allows for the possibility of future development surrounding it on adjacent street-facing property owned by Tarrant County College and the Fort Worth Diocese. Specifically, there are opportunities for new retail or mixed-use development in these locations, which would extend the activity and walkable environment now established along Lancaster Avenue northward toward an area now dominated by surface parking, civic, and institutional properties. As this occurs, the vibrancy and vitality of Fort Worth s southern downtown will grow even stronger. The cost of the remaining project, nearly $20 million in total for the mixed-use building exclusive of the parking garage, required significant creativity to be fully realized. To begin with, the project team needed to find a lender and in so doing, it identified an opportunity to reduce the overall cost of the project to Lancaster Corridor Redevelopment, LLC while ensuring activity at street level from day one. Pinnacle Bank had been seeking a presence in downtown Fort Worth and, as part of a broader lending agreement for the project, entered into a condominium agreement for approximately 15,000 SF of space which it purchased from Lancaster Corridor Redevelopment, LLC for the operation of a branch bank and additional offices for corporate operations. To secure additional funds for the project and to assist the bank in increasing its visibility downtown, the naming rights were sold and the project was thereafter named Pinnacle Bank Place. To close a remaining financial gap of approximately $1.4 million necessary to break ground on the project, the City utilized HUD s HOME Investment Partnership Program (HOME). HOME is a Federal block grant program designed to support the construction or rehabilitation of affordable housing by forprofit and non-profit developers. Through its participation in the HOME program and in coordination with the City s Neighborhood Services Department that administered it, the City was able to close its remaining $1.4 million financial gap through the inclusion of 11 HOME-eligible affordable units. Doing so not only overcame a financial challenge for the project, but supported a broader aim of the City to promote the development of mixed-income residential buildings in downtown which, by its success, had become too expensive a place to live for many who worked within it.

5 With the necessary capital stack assembled, Lancaster Corridor Redevelopment, LLC, with ongoing assistance by development consultants from the private sector, began construction in 2015 and celebrated its completion on March 10, Only a few months after opening, the project s residential lease-up surpassed 60%, and the retail space is 100% leased. Leases have been signed with a 3,000 SF coffee shop, a 2,600 SF dentist, and a 9,500 SF day spa that, together with the bank, bring a range of new activity to the neighborhood and increase its desirability to residents. Financially, the property s operations and debt service are fully supported by the apartments. Therefore, the property is not financially dependent on its retail tenants, allowing the project to absorb changes in the market and allowing the City to change the tenant mix as might be necessary to its strategy for the property and for the revitalization of the area. The mix of tenants and new residents are an important addition to Lancaster Avenue, bringing increased pedestrian and commercial activity to the area. The tenants also bring increased sales tax revenue for the City and lease income for Lancaster Corridor Redevelopment, LLC. The newly created income stream and general financial success of the project will also create new opportunities for the Fort Worth Local Development Corporation to support other projects in the city. The Impact The impact of the project was felt almost immediately. From the point that the project was first publicly announced, and even more so with the start of construction, the City s Economic Development Department witnessed an increase in interest by private developers in opportunities along Lancaster Avenue. By taking Pinnacle Bank Place from concept to construction, the City was able to reduce anxiety among developers and investors over whether or not Lancaster Avenue was ready for that type of development. Since the beginning of construction, the City s Economic Development Department has helped to attract two additional private development projects to Lancaster Avenue. These projects have committed to the construction of over 450 new residential units and approximately 6,000 SF of new retail. Additionally, nearly $100 million in new investment is in the planning stages for sites surrounding Pinnacle Bank Place. Through these and other future projects anticipated for the area, Pinnacle Bank Place is serving as a true catalyst for development in the area. Activity in the area and the success of the Lancaster Corridor will be further enhanced in the years ahead by the soon to be constructed Lamar-Hemphill Connector, a $44.9 million underpass that will connect downtown Fort Worth to Fort Worth s highly successful Near Southside Medical Innovation District. Through the investment, creativity, risk, and staff time committed to the project, the City has ensured that visible progress has been brought to one of its most important downtown districts. The initial investments made by the City have produced a self-supporting asset and an active new piece of real estate. But just as important as the initial investment, the greater success of Pinnacle Bank Place and the lesson to be shared with other communities is the role that the project has served as a catalyst for new growth and investment in the area. An even more significant impact will be felt on Lancaster Avenue in the intermediate term as the once blighted area becomes the location of ongoing pedestrian and commercial activity and home to hundreds of new residents. That future activity and additional development already in discussion will mark Lancaster Avenue s transformation from a once blighted collection of real estate beneath a freeway overpass to the appropriately successful southern end of Fort Worth s celebrated downtown. Today it marks renewed momentum for this historic and strategically important district.

Davis Garden TIF District: Overview and Taylor Farms, I-30 Frontage Road, and Kessler Theater Projects

Davis Garden TIF District: Overview and Taylor Farms, I-30 Frontage Road, and Kessler Theater Projects Economic Development Committee November 2, 2009 1 Purpose Review three proposals for TIF funding in