TIF #2 Board of Directors Minutes - 02/08/2012RECEIVED IN
CITY CLERK'S OFFICE
DATE: ILa 1 / 13
BY: � 0. _TIME: ?: OCAM
REINVESTMENT ZONE #2
TAX INCREMENT FINANCING BOARD
MINUTES
February 8, 2012
Members:
Ben Filer, Chairman
Ann Bishop
Jim Chandler
John Luig
Jerry Taylor
Michael Smith, Council liaison
Guests:
John Boyd, Realtex Development Corp.
Dick Bundy
John Hirschi
Andy Lee, Andy Lee & Company
Tom Stephens
Staff:
Leo Bethge, Planner II
Karen Gagne, Planning Administrator
Kevin Hugman, Assistant City Manager
Miles Risley, City Attorney
1. Call to Order, Introductions and Oath of Office
Chairman Filer called the meeting to order at 3:30 pm in Room #500 in the Municipal
Auditorium, and provided a welcome to all members and guests. After the
introduction, Ms. Gagne requested Mr. Luig recite the City's Oath of Office and sign
the paperwork in order to be sworn in as a TIF #2 Board member.
2. Review and Approval of January 13th, 2012 Minutes
Chairman Filer called for a motion to approve the minutes from the January 13`1', 2012
meeting; Ms. Bishop introduced a motion approving the January 2012 TIF#2 meeting
minutes, motion was seconded by Mr. Chandler. The minutes were unanimously
approved.
3. Status Report: Financial & Project (Intersection Realignment) Update
Ms. Gagne provided an update since the January TIF #2 Meeting. She discussed the
pledged commitment of TIF Funds for the Rhea/Call Field Road project. She stated in
May the City will receive the increment from the taxing entities; however, starting in
September 2012 through September 2026 there will be increased annual debt service
TAX INCREMENT FINANCING ZONE #2 February 8, 2012 Page 1
payments for the realignment project thus committing the TIF #2 funding. Staff
provided a spreadsheet that indicates the actual and projected revenues and
expenditures through 2026 when TIF #2 expires. Based on the 5th column (2011),
there was a $319,649 expenditure for the Maplewood Phase 11 extension debt service.
In September 2012 the annual expenditures will increase to $335,592 when the Call
Field/Rhea Road project commitment begins. At this point, the TIF #2 Fund is in
arrears to the 4B Fund in the amount of $83,000. Based on discussions with the
City's Chief Financial Officer, Mr. Dockery factored a 5% conservative annual growth
and using current increment levels it would allow the fund to cover an initial $15,533
for the Call Field/Rhea Road project by September 2012. The projections from June
2011 showed the TIF #2 fund free and clear of debt by 2015. However, based on the
TIF #2 Board's acceptance to assist with the realignment project costs, the Zone will
not be free of debt until 2019. With each subsequent year the increment fund will
catch up on the debt service to the 4B fund until it is able to meet the annual $150,000
debt payment for its portion of the realignment project. Ms. Gagne referred members
to the financial table's final column which indicates there may be up to $1.5 million
available for future projects through the close of the Zone but it is dependent upon
additional development and any associated interest.
Chairman Filer stated the Board could consider additional projects after 2019. Ms.
Gagne agreed, unless there is creativity in managing city funds and/or more
development that occurs within the Zone. She stated in May 2012 the Board will be
better able to judge timing for other projects when the increment is deposited which
will include the new development at Quail Creek and possibly Faith Village Shopping
L J Center.
Mr. Hugman provided an update on the Rhea/Call Field Road project noting the
former Strategic Realty building was totally demolished and the City was currently
working with utility (eg. Oncor) companies until the end of February. At this point the
City Property Administrator is working to acquire the necessary right of way and to
realign utilities along with acquiring a small piece of land from the Faith Village
Shopping Center. Mr. Hugman explained the Kohl's component of the project was
complicated. Sub -tenants are putting pressure on Kohl's to make a determination for
the right-of-way agreement. Mortgage lenders are now progressing, along with the
appraisal and offer. Bid opening is now delayed until February 215t as the City is
waiting for a willing right of way negotiation but has already taken the steps to proceed
with condemnation if necessary. Kohl's wants this process completed prior to the
Christmas 2012 shopping season. The realignment project construction should begin
in March/early April and is scheduled for completion by November 2012.
4. Review, Discussion and Action Regarding Request to Change TIF Zone #2
Priorities for Maplewood Extension and Drainage Channelization to McNiel
and Propose Funding for these Projects as Demonstration of Support for
Proposed Meadow Place Development
Ms. Gagne referred members to the packet provided by Realtex Development
'-r Corporation for their potential development of affordable housing units on 8 acres
} located east of McNiel Avenue and north of South Regent Drive at 3601 McNiel Ave.
Staff introduced the Realtex representatives Mr. Boyd and Mr. Lee along with the
TAX INCREMENT FINANCING ZONE #2 February 8, 2012 Page 2
current land owner partnership group (Stephens, Bundy & Hirschi). Mr. Lee,
Orepresenting Realtex, approached the Board and discussed other recent
developments within the area, i.e., Denim & Diamonds along Kell Blvd., etc, along with
current site restrictions for the northeastern TIF #2 District area where Wenonah
Boulevard could extend to the north from Maplewood Ave. He stated there is ten
acres of land in this area, which currently houses several existing businesses.
Mr. Lee provided a brief historical overview as TIF #2 was set up based on an
anticipated catalyst project that was originally slated to occur at Arthur and Wenonah
extension but did not materialize. The real catalyst project was on Lawrence Road
with Quail Creek, as a developer for this project Mr. Lee worked closely with City staff
to assist in developing the TIF #2 Plans. Mr. Lee outlined issues with the Wenonah
extension indicating he'd worked closely with the railroad company to agree to acquire
right of way for road development and attempted to work with City. However, the City
was not at the same stage in the development process and costs were too high.
The current proposal is for an 80-unit multi -family development directly west of the
City's transfer station and precipitates a need for Maplewood extension to McNiel Ave.
Mr. Lee noted the project could have street access via the current Regent Dr. North or
from the future Maplewood extension which appears will be a 4 lane facility based on
plans on file via the City Thoroughfare Plan and Engineering. He outlined the need for
Maplewood having a higher priority and estimated costs, noting that five years ago
right of way costs to extend Maplewood Phase II by Quail Creek were $366,000, with
projected engineering costs of $1.2 million. Access is important for the project and
4 - developing this portion of the TIF #2 District would make way for other projects.
Regent North and South should connect and at some point Maplewood extension will
need to cross the drainage channel and connect to Regent North. Mr. Lee added that
in conjunction with Maplewood extension, the drainage channelization west from the
transfer station will need to be addressed with possible funding via a development
agreement with the TIF #2 Board, loan or bond from 413 Fund and/or use of dedicated
storm water drainage funds.
Mr. Lee explained the estimated value of the proposed Meadow Place Apartments
would be $8-10 million which will add approximately $44,000 per year back into the
TIF #2 District fund. Mr. Lee outlined various, potential scenarios to address the
drainage channelization and Maplewood priority in addition to potential project
assistance from the City. Mr. Lee added a total of $24,000 from the City could be
made as a one-time payment to the project, over a ten year timeframe. Additional
associated costs today include $350,000 for the cost of drainage channelization, and
$650,000 for extension of Maplewood. The next question is how to purchase right of
way, for construction of Maplewood. In order to reprioritize the extension of
Maplewood, this issue would need to obtain further review by the Metropolitan
Planning Organization (MPO). Priorities need to be established, such as devoting
right of way for all properties along Maplewood extension. The Letter of Map Revision
(LOMR) for Wal-Mart was started in 2006, and was just recently approved, to
delineate the location of the 100-year floodplain in the area from Lawrence to McNiel.
Mr. Lee explained he may need to tap into the Capital Improvement Plan (CIP) $4
TAX INCREMENT FINANCING ZONE #2 February 8, 2012 Page 3
million budget, to apply for funds to extend a bridge over the existing drainage channel
f for Maplewood to extend to McNiel.
Mr. Boyd, Vice President of Realtex, approached the Board stating his company was
founded in 1998, to specialize in affordable multi -family housing. Realtex uses Low
Income Housing Tax Credits (LIHTC) and Community Development Block Grants to
assist in funding these large scale affordable housing projects. Their apartment
complexes are not public or Section 8 housing, though they would be required to
accept housing vouchers if the complex was certified.
Since 1998 they have developed 30 properties. All developments use bonded general
contractors and managers that are long-term. Realtex has two properties in Wichita
Falls - the first being Woodview, built in 2004/05, located on 32n,Street. The second
being Washington Village Apartments — built in 2007/08. Realtex looks for projects
that need revitalization, and that will create a catalyst for further community
investment.
Currently, Realtex has a pending contract for eight acres of the 14 acre site at 3601
McNiel. Mr. Boyd stated the project, called Meadow Place Apartments, will be
situated on the western edge of the parcel and has access via Regent North.
However would prefer the main entry from the proposed extension of Maplewood. He
expressed a concern with potential traffic flow, water drainage, and utility extensions.
Mr. Boyd further stated this is a good location, near amenities such as shopping, and
good access, although the site needs to be rezoned from LI — Light Industrial, to GC —
General Commercial to allow the multi -family complex.
Texas Department of Housing & Community Affairs (TDHCA) will score all
applications and make a final determination on all LIHTC proposals in July 2012.
Currently, Wichita Falls competes with the City of Abilene within Region #2. The
application deadline is March 1st; however, there is only enough funding for one
project. Mr. Boyd provided a timing overview noting within 90-100 days of the deal
approval, they must close on the property with construction taking 10-12 months, so if
approved construction should begin by January 2013. Mr. Boyd and Mr. Lee noted
they have requested a development agreement with the City via 4B for Maplewood
extension. Mr. Boyd thanked the Board members for their support letter. Discussion
ensued among the TIF #2 Board members and Realtex project representatives.
Realtex representatives explained the tax credits become equity for the project, in
working with large banks — then that's how the development company receives
construction and permit loans. This helps to keep the multi -family apartments
affordable for a minimum period of 15 to 30 years. Residents must be qualified based
on verifiable income, pass criminal background checks, no sex offenders or people
with misdemeanors are allowed. All residents must go through annual recertification.
Realtex properties focus on working families where their income is too high to qualify
for other low income/Sec. 8 programs.
Mr. Taylor questioned the use of the eastern portion of the site and if it will serve as a
"buffer" from the Transfer Station or as the storm water detention area for the project.
Mr. Boyd stated the company still needs to review the design drawings for exact
TAX INCREMENT FINANCING ZONE #2 February 8, 2012 Page 4
location of storm water detention and parking ratios. A key factor in utilizing the
western portion of the 14 acre tract was the City's 370ft communication tower to the
-y east on the Transfer lot. Mr. Boyd stated it was their intent to stay out of the tower's
fall zone which impacts a significant area of the adjacent properties. Some of the
members from the land partnership group commented that after the City opted to erect
the tower in this location it reduced long-term development viability for some of the
surrounding property. The developer stated if Maplewood is not extended, the
alternative is to extend North Regent Drive. Councilor Smith asked two key questions
— if the project doesn't receive tax credits would Realtex continue to pursue the
project. Mr. Boyd stated yes, but hasn't discussed future options. Realtex has a long
term outlook on Wichita Falls and knows the market from past projects. Currently,
there is a waiting list of 75 potential residents for Woodview so a demand has been
established. Councilor Smith's second question related to the location of a grey fox
colony in this region. Mr. Boyd stated he has a good, working relationship with state
agencies. He would assist in humanely relocating the animals' habitat to a safer
locale. Mr. Stephens, land partnership member, stated he mows the property so
collecting the animals shouldn't be a problem. Chairman Filer asked if there were any
additional questions for the developers or land owners. Mr. Boyd thanked the TIF
Board for their time and review of the project.
Ms. Gagne referenced the TIF Board's Project and Financial Plan revision from
November 2010. She noted the four project rankings were partially based on future
anticipated needs and the MPO 2010-11 Prioritization Transportation Project List.
" The Wenonah project ranked higher than the Maplewood extension. A big change
-� since 2010 is the Rhea/Lawrence/Call Field Road realignment which is currently
underway. Members discussed the MPO project listing for 2011-12 which showed
Maplewood extension with a higher priority. Chairman Filer asked if the Wenonah
project changed because of ownership. Ms. Gagne responded that other
transportation needs for the area were viewed as having higher priority and outranked
Wenonah. Chairman Filer stated the Board needs to consider their project priorities in
conjunction with the MPO's priorities. Councilor Smith stated the MPO reprioritizes
their transportation priorities every year. Ms. Bishop questioned why consider the
changing priorities. He stated based on growth around the Maplewood extension and
a variety of other reasons including other priority transportation projects within Wichita
Falls. Chairman Filer noted that you can already see improvement with the traffic flow
since the completion of Maplewood Phase II and its connection to McNiel as Phase III
could be a logical next priority. Lawrence Road is busy and the realignment will help
relieve that congestion; however, a westerly connection to McNiel would alleviate
other congestion. Chairman Filer stated an alternate route for the Transfer Station to
the west is needed to parallel the drainage ditch. Councilor Smith stated a bridge over
the channel to get to McNiel is important. Chairman Filer recommended realigning the
four project priorities within the TIF #2 District based on the priorities of the MPO. Ms.
Bishop seconded the motion. The motion was unanimously approved. Staff will
revise the Project Plan to reflect moving Maplewood extension to McNiel (Phase 111)
up as the 2Id priority and moving Wenonah to 4th priority.
TAX INCREMENT FINANCING ZONE #2 February 8, 2012 Page 5
5. Other Business
a) Copy of TIF #2 Support Letter
Ms. Gagne provided copies of the signed letter, dated January 31", in support of the
proposed Meadow Place Apartment project.
b) Proposed Rezoning TIF #2 Area from Light Industrial (LI) to General
Commercial (GC) District
Ms. Gagne stated there may be a rezoning request for 3601 McNiel but it was too
preliminary to include with the meeting packets. She discussed the proposed
rezoning, noting it would also encompass a large portion of the TIF #2 District,
approximately 200 acres. Rezoning the remaining Light Industrial (LI) acreage to
General Commercial (GC) would complement the surrounding commercial big -box
retailers as compared to the former industrial uses. The actual rezoning request from
Realtex would rezone the 14 acre tract. The GC District would permit multi -family
apartment development. Staff indicated when zoning was enacted in the mid-1980s
the area consisted of industrial uses. Today, the area has transitioned to commercial
uses. The Planning & Zoning Commission will consider the request at their March
meeting, enroute to the City Council for a final determination.
Councilor Smith questioned if there were any upcoming projects this spring for the
northeastern TIF #2 area where Wenonah Boulevard is proposed for extension to Kell
Frwy. Mr. Lee stated he is attempting to attract other businesses, though hotels and
retailers want frontage on either McNiel or Kell.
6. Adjourn
Chairman Filer motioned to adjourn the meeting. Ms. Bishop seconded the motion.
The motion was unanimously approved. The meeting was adjourned at 4:35 pm.
Q/i3
Ben�iler, Chairma D e /
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