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TIF #1 Board of Directors Minutes - 05/24/2007 Tax Increment Financing Board #1 MINUTES MAY 24, 2007 Members: Susan Plies, Chairman • Ann Bishop • Al Flack, Jr. • James Welburn • Charles Elmore, Council Liaison • David A. Clark, Director, Community Developm •RECEIVED w Karen Gagne, Planner III CITY CLERK'S OFFICE • Others Present: Date 9/li/o7 Nancy Berend, owner, The Uniform ShopB 1..tQ(i Time "5a wt • Mark Brown, owner, The Uniform Shop y • Cynthia Laney, Downtown Wichita Falls Development, Inc. (DWFD,Inc.) • Vicky Chaney, Downtown Wichita Falls Development, Inc. (DWFD,Inc.) • Rowena Jackson, Board member, DWFD, Inc. • Delores Culley, Exec. Director, Wichita County Heritage Society • Absent: Bruce Harris • ..is. Plies, chairperson, called the meeting to order at 3:00pm and requested Board members introduce themselves along with staff and visitors. I. APPROVAL OF MINUTES Mr. Flack introduced a motion to approve the minutes of the February 28, 2007 meeting, seconded by Ms. Bishop. The minutes were unanimously approved. II. TIF FUND STATUS UPDATE Chairperson Plies requested staff provide an overview of the fund status. Mr. Clark referred members to TIF Fund spreadsheet. He explained the current revenue and interest to the fund for 2007 while also reminding members of the loss of the WFISD funds in February. Staff commented the Planning and Finance Divisions calculate the Fund balances differently. Finance reviews revenues and expenditures by fiscal year commitment. At this time, the fund has already incorporated expenses for the Casa Manana project ($23,764); annual Coliseum Debt Service ($105,000); and the Downtown Plan project ($100,000). Looking ahead to Fiscal Year 2008 projections, Mr. Clark stated this would be the final year for income and part of the future's remaining balance depends on the decisions today with the pending applications. Mr. Clark added if the Board chose to fund Downtown Wichita Falls Development Inc. (DWFD) at the $80,000 level along with the Coliseum debt service of$105,000; that would leave $166,000 +/- for fund balance. He explained ultimately there is $150,000 in the TIF #1 Fund for the remaining 19-mos of its existence based on current commitments to DWFD,Inc. Mr. Clark TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 1 of 6 commented there is potential for funding projects during summer 2008 if there are funds remaining in the account. There would be potential, if the Board so chose, to continue funding the DWFD, Inc. organization. Chairperson Plies stated that in 2008 the Board might choose to consider looking at funding the Downtown organization at $60,000 for their FY 2008/09. Mr. Clark also informed the Board another application for a completed project arrived on May 22'1 involving an auto shop on Scott Street. Mr. Flack inquired about Mr. Clark's opinion regarding the new application. Mr. Clark stated the application would be included on the next meeting agenda for consideration, adding that he was aware of another pending application. Mr. Flack requested clarification regarding City Council action to remove the WFISD's participation in TIF Zone #1. Both Mr. Clark and Councilor Charles Elmore responded Council passed the Ordinance exempting WFISD's continued participation in TIF #1 and they will not receive any (if funds remain)final dispersement if funds remain unspent at Zone expiration. Councilor Elmore inquired if the Wichita River area was included in TIF #1 Zone, staff responded that a large portion was included in the Zone. He asked if a sidewalk on the south side of the river could be developed to connect the existing trail across the Railroad bridge to the Wee-chi-ta sculpture and Berend's landing. Board members discussed whether it was even structurally feasible to rehabilitate the old bridge. Councilor Elmore stated he had someone assess the bridge for repair and he was informed it was structurally sound but would require some repair and painting. Mr. Clark recalled discussion in previous years of converting the trestle-bridge into a restaurant. Mr. Welburn and Mr. Flack both remembered discussions for a restaurant but were cautious,knowing the history of many start-up restaurants within the City. III.-IV. ACTION ON REQUEST FOR FUNDING FOR: a. THE UNIFORM SHOP - 1714 9th Street b. DOWNTOWN WICHITA FALLS DEVELOPMENT INC. (DWFD) c. WICHITA COUNTY HERITAGE SOCIETY— 801 Ohio Street Chairperson Plies provided a preliminary overview of the Zone's current funding availability and outlined the total amount of funds (The Uniform Shop - $25,000; DWFD - $80,000; WCHS - $45,000 =$150,000) requested with the three pending applications. Mr. Clark provided a brief overview for The Uniform Shop's application, indicating a request of $25,000 and total project expenses of $235,000 and the project was essentially completed at the time of submittal for TIF #1 funds. Chairperson Plies asked the applicants to provide additional information about the nature of their request. Ms. Nancy Berend and Mr. Mark Brown, owners, presented their proposal noting they originally started the rehabilitation of the former Stout's laundry building on 9th Street two years ago. A situation arose in October 2006 when The Monogram Shop owners were retiring and approached The Uniform Shop to take over their business. Ms. Berend explained that she wasn't able to submit the TIF #1 application during this time waiting for a meeting to be scheduled and review the application. The monogram business had a small window of opportunity to add to their existing business. Currently there are three businesses operating at 1714 9th Street: The Uniform Shop; Stitch Makers Monogramming and a franchise footwear dealer. Ms. Berend provided photos of the building both pre and post project for Board members to review. Chairperson Plies thanked Ms. Berend for her overview and commented that this was a new situation in her experience — considering a project that was already completed and asked staff how the rules apply in this case? Mr. Clark stated this situation had never really occurred TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 2 of 6 before with 'retro-actively' awarding TIF funds to a completed project. Ms. Berend explained why the application was submitted essentially 'post-project' based on how the instructions were worded on the City's website and the difficulty not knowing all the project costs prior to commencing the project. Ms. Berend stated that they financing the project as they went through the process to try and reduce having a major debt at completion. Staff informed Board members the TIF #1 application was revised to clearly state submissions are only accepted prior to commencing the project. Mr. Clark indicated this was the last application accepted where the project was complete prior to consideration by the Board. Mr. Flack stated as a life-long resident of the community this was a significant improvement to the building and area. He added from his understanding of the TIF Zone's function this project did improve the area and additional taxes will be collected from improving the property/building. Mr. Flack said there was no definite rule regarding completed project but customarily people submit estimates for proposed projects not bills noting the project was finished prior to application consideration. Members discussed the merits of the application and the unique situation. Mr. Clark commented this was the Board's decision but did reiterate the limited funding availability in TIF #1 Fund. Mr. Welburn stated he recalled in the past, rejecting applications that requested funding retroactively. Mr. Clark said he could only recall one project that requested funds retroactively but it was already situated outside the TIF #1 District. Mr. Flack requested a motion. Mr. Clark suggested the Board review all application requests and then determine funding. Ms. Bishop was in agreement with Mr. Clark's suggestion to consider all applications before approving each individually. Mr. Clark provided a brief overview for the other two applications. The Wichita County Heritage Society (WCHS) requested funds to assist with a building restoration at 8th/Ohio Streets, the former Peterson Garage. Ms. Culley, Executive Director WCHS provided additional information, noting this location had the Wichita Falls Broom Manufacturing Company in 1902 but after a fire in 1907 and again in 1911 the original building was destroyed. In 1912 the current brick building was constructed and housed the U.S. Post Office. She explained the organization also applied for Community Development Block Grant (CDBG) funds and will be submitting requests to area foundations and embarking on a fundraising campaign to assist with the cost of the project. WCHS's intention is to sell the adjacent Kemp- Kell Building to a private individual that will result in the building being put back on the tax rolls. Both Mr. Clark and Ms. Culley outlined there were some issues that developed with the sale of the Depot building since it's rehabilitation was essentially paid via use of Federal Transportation Enhancement funds. The original contract between the City and the State had no specified end-date, so a large portion of the building's sale price will go back to the State/Feds to repay the Enhancement funds. As a result, there will be little funds available to help pay for another rehabilitation project. Ms. Culley stated the TIF #1 funds would be used to stabilize the building, replace the roof and assist with the environmental assessment (Phase I — asbestos). The building will be rehabilitated similar to the success with the Holt which has 100% occupancy for the residential units. Ms. Culley added, ultimately the Society's objective is to restore/rehab the building, sell it and get it back on the tax rolls. Councilor Elmore questioned why the funds from the sale of the Depot building couldn't be applied to the Peterson building? Ms. Culley and Mr. Clark stated this wasn't an option because those were Federal DOT funds which would tie the Society into the same restrictions currently on the Depot building. Mr. Clark informed the Board that 5-months were tied-up into trying to sell the Depot to a willing buyer due to federal and state regulations. Chairperson TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 3 of 6 Plies questioned if the CDBG grant allocation was determined. Mr. Clark replied no, and then outlined the process. A subcommittee of Council will meet next week to review all the CDBG applications; a recommendation is presented to Council, then Council reviews the requests for funding and makes a final approval to allocate the funds. Mr. Clark did note WCHS proposal was eligible for funding consideration. Ms. Culley added the Society has purchased the Peterson Building and will move ahead with the project even without CDBG funds — more funds will have to be garnered through fund-raisers. Chairperson Plies stated the third request was from Downtown Wichita Falls Development, Inc. (DWFD) for $80,000. Members discussed the request for the same level of funding as in 2006/07. Mr. Clark commented the proposed Downtown Plan is anticipated to give some options/ideas for continued funding of DWFD Inc. functions. Chairperson Plies questioned if this request would allocate funds through 2008. Staff replied the current request would only assist the organization through June 2008. Mr. Welburn recalled discussion about 3-years ago, the Downtown organization stated they would be developing a Plan to reduce funding requests. Mr. Clark referred members to the budget spreadsheet included with DWFD's funding request. Members again discussed the DWFD request and were in general agreement with Chairperson Plies comment to fund their organization at the $80,000 requested level. She added that this will leave $20,000 +/- for another 1 1/2 years. Board members returned to discussion on funding for the other two applications. Mr. Flack questioned WCHS with their $45,000 request but no funds have been secured from other sources. Ms. Bishop asked if the Society could come back and request funds from the Board in the future after other funds were secured for the project. Ms. Culley responded that funds were needed now to stabilize the building because if basic roof repair isn't conducted quickly there is a serious concern of roof collapse and/or irreversible building damage. She noted the Society is committing $175,000 initially and will begin a major fundraising campaign for additional funds. She pointed out the actually building is structurally sound but the roof replacement is critical to avoid it caving-in. Mr. Clark stated he encouraged the WCHS Board/staff to submit the application sooner than later due to the potential number of funding requests being presented to the TIF Board for consideration and funds being limited. Mr. Flack stated he had no problem with committing $45,000 contingent upon other funds being secured to cover the total costs for the project. He also asked if WCHS had the $175,000 available today. Ms. Culley responded the $175,000 are in endowments and not immediately accessible. The total project costs may be +/- but the Society won't know until the project begins and they find out the results of the environment report and roof repair. Chairperson Plies suggested $20,000 funding at this time and additional funds could be requested in the near future. Mr. Flack commented $45,000 was much higher than the traditional 10% funding level considering there is only an `anticipation' of other funds for the project. Ms. Culley referred Board members to the anticipated project budget of $525,000 and WCHS actually requested less than 10% of the total project cost. Chairperson Plies called for any other comments. Ms. Bishop asked collectively how much funding was provided to the Downtown organization over the years. Mr. Clark indicated VISIONS/DWFD Inc. received $40,000 for four (4) years and $80,000 for one (1) year; approximately $240,000. Mr. Flack posed a question to DWFD, in another year the TIF Fund has essentially no funds what will the organization do for additional funds? Ms. Cynthia Laney, Executive Director, commented how important it was to continue working with the City and for the DWFD organization to be heavily involved with the Downtown Plan to see what economic opportunities may be available for the downtown area. She noted they are already looking at other potential funding sources and since being hired in December both she and Ms. TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 4 of 6 Chaney are working with the Board to change the goals and direction of the organization to help better revitalize downtown. Ms. Plies thanked Ms. Laney for her overview and requested clarification from staff regarding timing of DWFD's contract. Staff indicated their contract was .,m from July 1st through June 30th, if this application is deferred until the next Board meeting the organization's funding will lapse. Ms. Laney informed Board members the organization was working with Board of Commerce & Industry to develop an inventory of downtown assets (eg. how many people work downtown, live downtown, etc.). DWFD Board member Ms. Rowena Jackson noted there's already been discussion about bringing the organization under the City's offices as a stabilizing force for downtown. Mr. Flack commented the Fund has sufficient monies to carry all three projects. Chairperson Plies agreed funds are currently available, suggested funding DWFD at $80,000 and hope the Board members would consider funding the other two applications but up to entire Board to figure out an appropriate amount funding level. Members continued deliberating the merits of each project. Chairperson Plies suggested for consideration WCHS be funded at $20,000, review their funding progress and consider funding more in the future. Ms. Culley informed the Board the organization already paid $50,000 to purchase the building which was not incorporated into the total project budget. Mr. Flack suggested $25,000 because when combined the existing $175,000 in WCHS endowments will provide the organization with $200,000. Members had questions regarding timing and availability of CDBG Funds. Mr. Clark explained CDBG funds are requested annually but timing is important. Ms. Bishop reiterated The Uniform Shop application is already a completed project. Chairperson Plies stated a reluctance to fund The Uniform Shop at the requested $25,000 and suggested the potential for $15,000. Ms. Bishop requested Mr. Flack's opinion about funding a completed project. Mr. Flack stated that it certainly wasn't the norm and it wasn't encouraged but no reason not to fund the project since it cleaned up a problem site and is back on the tax rolls at a higher amount than previously. Ms. Bishop introduced a motion that the TIF Fund #1 Board recommends to City Council funding the following at the specified amounts: Wichita County Heritage Society - $35,000 The Uniform Shop - $10,000 Downtown Wichita Falls Development - $80,000 $125,000 Mr. Welburn seconded the motion. All members voted unanimously for the allocations as outlined in the motion. Chairperson Plies stated these were difficult decisions for the Board arid she hoped the Downtown Plan is successful and outlines a variety of options. VI. UPDATE REGARDING TIF PROJECT STATUS Chairperson Plies requested Mr. Clark provide an update on the Downtown Plan project. Mr. Clark informed Board members City Council selected a consultant at their May 15th meeting. The consulting team of: Freese & Nichols and Associates/TIP Strategies/Dunkin, Sefko & Associates, Inc. and Dunkin, Sims, Stoffels, Inc will conduct all three components of the planning services. At this time, staff is working with the consultants to develop a detailed Scope of Services that will be incorporated into the contract with the City. Ms. Laney proudly announced the mural project was completed and placed on the north façade (riverside) of the Hotter'n Hell 100 building (100 Scott St.) and a secondary mural was added to the south façade. She also outlined record attendance at the March St. Patrick's Day event with 2,200 people; their next event is the June 23rd music festival and plans are in the works for a September wine and shrimp festival at the Farmer's Market. The organization is TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 5 of 6 pleased with the results of their downtown events as they are growing in size and gaining profits. Ms. Laney outlined other activities and Board involvement with downtown projects. VII. & VIII. OTHER BUSINESS & ADJOURN Ms. Plies called for discussion of other business, there being none called for a motion to adjourn. Ms. Bishop motioned to adjourn, seconded by Mr. Welburn. The TIF Board unanimously approved the motion to adjourn at 4:25 p.m: Mr. Clark will email potential meetin9ates/times to the Board members for determination of the next quarterly meeting. q /0/0 SUSAN PLIES, CHAIRMAN ATE TAX INCREMENT FINANCING BOARD#1 MAY 24,2007 PAGE 6 of 6