TIF #2 Board of Directors Minutes - 11/17/2010O REINVESTMENT ZONE #2
TAX INCREMENT FINANCING BOARD
MINUTES
November 17, 2010
Members:
Ben Filer, Chairman •
Ann Bishop •
Jerry Taylor •
Michael Smith, Council liaison •
Staff:
Leo Bethge, Planner II •
Karen Gagne, Interim Planning Supervisor •
Kevin Hugman, Assistant City Manager •
Davis Powell, City Engineer •
Others In Attendance:
Charlie Berry, applicant •
Andy Lee, developer, Quail Creek Crossing •
Martin Litteken, President, Cornerstone Engineering •
Joe Nield, applicant •
1. Call to order & Introductions
Chairperson Filer called the meeting to order at 3:04 p.m. and asked Board members
to introduce themselves.
2. Approval of Minutes
Chairperson Filer called for a motion to approve the minutes from the January 5, 2009
meeting; Ms. Bishop motioned to approve the January 5, 2009 TIF#2 Meeting
minutes, motion seconded by Chairperson Filer. The minutes were unanimously
approved.
3. Staff Update — City Council Action Regarding TIF#2 Board Composition
Ms. Gagne outlined WFISD's initial involvement in the development of the TIF#2
District. She stated during the preparation of the TIF#2 Project Plan, WFISD officials
discovered their funding allocations would be negatively impacted as a participant. A
WFISD Board member was originally appointed but the term expired and the WFISD
Board did not appoint anyone. Staff contacted WFISD Superintendent's office and
they confirmed no future interest with participation in the TIF#2 District - the Board
position for a WFISD representative could be removed. City Council
reviewedlapproved staffs recommendation on November 10tI" to revise the TIF#2
Board based on reassigning the former WFISD position. Ms. Gagne stated the Board
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composition for TIF#2 will include three City and two Wichita County appointments.
Within the next few weeks the County will appoint a person to fill this open position.
Staff inquired if there were any other updates to the roster. Ms. Bishop requested an
update for her e-mail address, to: abishop@wf.net.
4. Status Report — Staff Update Financial Structure & Plan Projects
Ms. Gagne discussed the project priorities with the Board based on the TIF#2 Zone
Boundary Map, financial spreadsheets and memo outlining staff's recommendations.
She stated after four years the TIF area has generated a total of $749,000 in revenue,
as collected from City and County sources. At this point, the zone is beginning to
generate more annually than the debt service payments of $231,000; though, as she
explained, the Fund is still in a deficit mode, owing 4B $176,591. In 2006 the City tied
various infrastructure projects together and obtained a 20-year $16.9 million bond to
move projects forward. She further explained that as a result, the TIF Fund is
responsible for 18% of that debt service, plus interest, for a total repayment amount of
$4.6 million over the 20-year life span of the TIF Zone which ends July 2025.
Ms. Gagne explained, per Table #3 of the handout, the intent of this TIF Zone is to
reimburse the 4B Fund as increments are generated. Those previously committed
funds are debt service to the City's 4B Fund for the life of the TIF, in order to cover the
initial $3.4 million in construction costs borrowed to up front the infrastructure
associated with developing Maplewood extension (Phase I and ll) along with Quail
Creek drainage improvements. Based on an estimated 5% annual increase present
trends suggest this TIF Zone will create enough revenue ($94,000 by 2015 and $2.4
million by 2025) to create a fund balance above the annual debt service payment.
Chairperson Filer reiterated that no additional funds are available until 2015, until the
City "digs out" first.
5. Consider Action to Amend TIF ##2 Plan Project Priorities
Ms. Gagne and City Staff discussed the priorities of the plan with the TIF Board,
based on referencing the TIF Map to review other City project plans, and staffs
memo. The remaining public projects noted in the original plan include: Lawrence
realignment at Rhea Road, Maplewood (Phase lll) from Lawrence to MCNiel (to
include McGrath/Quail Creek drainage improvements), Wenonah from Maplewood to
Kell Frwy., and additional McGrath/Quail Creek improvements outside the TIF #2 area
-- from Kemp to Midwestern. Chairperson Filer reiterated "this is the plan," as
opposed to TIF #1 where the intent was focused on development and downtown
growth, as compared to TIF #2 which focuses on public infrastructure. Councilor
Smith added that flooding on Arizona Avenue, directly south of Maplewood, has
stopped due to McGrath/Quail Creek drainage improvements.
Chairperson Filer discussed the future construction of Wenonah Boulevard. He stated
this would pull traffic from Lawrence Road. Ms. Gagne stated the plan for Wenonah is
to serve as a north --south reliever, to connect Gregory and Tarry Streets, and to divert
delivery truck traffic away from Lawrence Road.
OMr. Lee added to the discussion of economic development. He recommended the
future development of Wenonah to help pull traffic away from Lawrence Road and to
TAX INCREMENT FINANCING ZONE #2 November 17, 2010 Page 2
help businesses located on the eastern side of the street, such as Falls Distributing
--. and now the future Aldi's grocery store. He stated the Super Wal-Mart is performing
well - with an additional 200,000 square feet of retail space. This has generated 14.7
million in retail sales. Phase II of the Quail Creek Commercial Center will finalize
future tenants for an additional 55,000 square feet of retail space, at $70 per square
foot for construction costs. There have also been a great amount of property
enhancements from Kohl's up to Lowe's. Mr. Lee suggested TIF#2 borrowing is a
win --win situation for future construction of Wenonah - an additional 4.2 acres is
available for retail development and for job creation. This would also help in
alleviating some of the traffic on Lawrence since Super Wal-Mart has increased in
traffic by 10.7% over the last two years. National based retailers are recognizing
Wichita Falls as a potential new retail market. National chain stores are negotiating
and are being considered in the TIF #2 District -- Quail Creek Crossing.
Ms. Gagne added, $7.6 million is needed, based on 2008 cost estimates - including all
right of way improvements in order to construct the remaining public projects identified
in the TIF #2 Zone Plan. Mr. Powell, City Engineer, stated they are currently
reviewing improvements within the McGrath Creek area, from Kemp to Sike's Lake,
which is outside the TIF#2 Zone. Improvements for this eastern area currently stand
at $1.1 million. He stated this area is a "bottleneck" for drainage.
Discussion shifted to the Rhea Road realignment project. Ms. Gagne stated the MPO
annually ranks transportation projects within their region. The #1 project is the Rhea
Road project, which ranked 9.25 out of ten based on priority. Also receiving a top
score were the Wenonah extension and Maplewood extension projects, which tied
p p J
with a rank of seven. This project is currently a long-term consideration. Mr. Powell
referenced a Level of Service (LOS) Report prepared in January 2009 by the Traffic
Division for the Lawrence/Call Field/Kemp/Midwestern Corridor. He stated the
streetlight timing for this intersection (Rhea/Lawrence/Call Field) could drop from 180
seconds to an 80 second cycle. This would save time and improve mobility within this
area from Lawrence to Kemp Blvd. Chairperson Filer asked about the reduction of
waiting time, if this would hasten motorists driving south into the residential
neighborhood. Mr. Powell stated this would not increase traffic on Rhea Road or
change the local traffic pattern. The Board also reviewed alternative plans for the
realignment from Engineering, including shifting from the south to a northern
alignment at Lawrence Road. Councilor Smith stated this issue was discussed at the
January 2009 TIF meeting and he was under the belief it would be development
driven. Mr. Powell answered, stating the realignment is not financially viable for the
City, and that it should be development driven. Mr. Powell continued, stating that
during previous discussions with the developer a cafe was considered on Rhea Road,
however, negotiations stagnated since the developer requested a significant sum of
money for damages. Mr. Hugman, Assistant City Manager, asked to set up a meeting
in early December with the developer (Karns), who is planning an El Fenix Mexican
Restaurant and Jason's Deli at the southwest corner of Rhea / Call Field Road. He
stated this is the time to look at costs, reopen discussion with the developer and pitch
to their best interests the need for road realignment.
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Discussion commenced regarding the prioritization of the rankings, between Rhea
Road as #1 and Wenonah as #2 since they both serve a function to reduce traffic,
promote economic development and to create jobs. Chairperson Filer requested a
motion, to amend the TIF#2 Project Plan priorities. The first priority is the Rhea
Road/Lawrence Road realignment, the second being Wenonah Boulevard road
extension, third being the Phase Ill Maplewood projects, and fourth being
McGrath/Quail Creek drainage. Ms. Bishop motioned and Mr. Taylor seconded to
approve this prioritization plan. Motion passed unanimously.
6. Action on Request for Funding --- Maplewood Crossing at 3905 Lawrence
Road (Nield/Berry property)
Ms. Gagne discussed the Maplewood Crossing Preliminary Plat, at 3905 Lawrence
Road. Mr. Litteken, President, Cornerstone Engineering, came forward to discuss the
engineering of this area. He stated the development of these future lots is contingent
upon boring underneath the existing channel to obtain sewer access along
Maplewood Avenue. He considers this project as a public improvement based on
previous discussions when the road was being designed. He believed funds from the
TIF#2 District should pay for the cost of boring underground. The cost of the boring is
approximately $18,000, with the total project cost approximately $43,000. He further
stated sewer can be extended from Lawrence Road to service Lot #1; however, the
question is how to pull sewer connection for the eastern lots facing Maplewood. In
addition, the land owner needs permission from the utility company (TXU) to bore
underneath their property since it's located between Maplewood Crossing lots and
Maplewood Avenue.
Ms. Gagne mentioned City Council gave approval (November 16'') to allow the
platting of lots without direct street frontage -- contingent upon having an access
easement on the adjacent property (utility or railroad). Currently, TXU has direct
frontage onto Maplewood Avenue, which restricts access for future lots at Maplewood
Crossing. Lot #1, however, has direct frontage onto Lawrence Road.
Chairperson Filer asked how the planning for public sewer access was missed. Mr.
Powell stated the cost for the boring should be development driven since the parcel
locations were not known at the time when Maplewood Avenue was constructed. The
City did not design/install the sewer connections at the time. Mr. Taylor asked where
the money is coming from? Ms. Gagne intervened, stating this TIF District is still in a
debt situation. This is going above the position of other properties. Chairperson Filer
stated he is concerned about money issues since there currently is no unallocated
money to fund a request. If the application was granted the TIF fund would go deeper
in debt. Chairperson Filer stated this goes against the intent of TIF#2. The staff
recommendation is to not approve the request.
Mr. Taylor asked if this request could be pushed out for another year. Mr. Berry, the
current land owner and applicant, stated back in 2007 and 2008 extending sewer was
not an issue. He further explained he is not an engineer, he is a land owner, and he's
trying to sell the land to a prospective tenant for a 16,000 square foot retail store.
Councilor Smith asked the applicant if he would consider the use of 4A funding, based
TAX INCREMENT FINANCING ZONE #2 November 17, 2010 Page 4
on job generation. Mr. Hugman stated this project would be difficult to justify not being
a primary job generator, though 4B funds may be an option.
Ms. Gagne stated this is the first request for private funding. Mr. Powell stated the
proposed sewer would become part of the public, not private, infrastructure. Ms.
Gagne requested clarification from Mr. Litteken and Mr. Berry regarding their funding
request. The letter requested $23,750 and the accompanying project estimate was
$43,000. Mr. Litteken stated one was an estimate and the $23,750 is the proposed
cost for boring -- which will not be finalized until the bid date. Mr. Hugman commented
if this request is approved it would create a precedent and "chip" away at funding for
future priority projects. Mr. Taylor viewed this as a "one of a kind" situation, based on
project complexities. City Engineer, Mr. Powell, stated this was an isolated case with
a unique set of circumstances.
The applicant stated he has 110 days for the store to be ready to go. The proposed
corporation owns 54 other stores. Mr. Berry stated he would like to see the Wichita
Falls store developed before the rodeo season.
Chairperson Filer called for a motion, for the TIF #2 Board to consider the applicants
request for assistance with funding for directional boring to the public sewer. Mr.
Taylor stated he would consider making the motion. Ms. Bishop stated the motion
needs to include a specific dollar amount. Chairperson Filer continued, stating the
motion should include a dollar amount not to exceed $23,750. Discussion among the
Board, City Staff and the applicant continued related to the motion.
Ms. Gagne provided additional information for the Board to consider/discuss. She
noted the owners indicated a business would be operable by summer of 2011 so
taxes generated, post -development, will be captured back to the fund in May 2012.
This will be the first private request which will set a precedent based on past TIF
history for future applicants seeking funds. Mr. Powell agreed. Chairperson Filer
reiterated the motion needs to be specific. Mr. Hugman responded, stating this matter
needs to be brought to the 4B Board to be considered for future funding since TIF #2
currently has no money available. After 4B consideration, this matter will then be
referred to City Council for consideration and approval. Chairperson Filer asked the
applicant if he could wait for the disbursement. The applicant stated he could possibly
wait until 2015 for disbursement, thus eliminating the need for the 4B fund. Ms.
Gagne stated a small portion could be available for reimbursement to upfront the
money between 2012-2015, if not sooner, depending on development within the Zone.
Chairperson Filer called for a revised motion regarding the application at 3905
Lawrence Road. Mr. Taylor introduced a motion recommending the Tax Increment
Financing Reinvestment Zone #2 assist only with costs directly associated with
placing directional borings under the McGrath/Quail Creek drainage channel to access
public sewer utilities along Maplewood Avenue, based on three conditions unique to
this site:
1) previous discussions with the City of commitments within the Zone for availability of
public sewer access to the site at the time of developing design plans for the
extension of Maplewood and the drainage channel; and,
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2) the potential availability of TIF##2 funds in 2012 for reimbursement, if not sooner;
and,
3) funding assistance shall not exceed $23,750.
Chairperson Filer called for discussion among the Board, staff and applicants. Ms.
Bishop seconded the motion. Motion passed unanimously.
7. Adjourn
Chairperson Filer motioned to adjourn the meeting at 4:37 pm.
•b
Bern Filer, Chaireron Date
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