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TIF #1 Board of Directors Minutes - 12/15/2003 Tax Increment Financing Board RECEIVED IN CITY CLERK'S OFFICE MINUTES Date December 15, 2003 By Time Members: Debbie White, Chairman 0 Members Ben Filer 0 Al Flack 0 David White 0 James Welburn 0 City: Bill Altman, Mayor 0 Jim Berzina, City Manager 0 Staff David A. Clark, Director of Community Development 0 Jim Dockery, Director of Finance 0 Bill Sullivan, City Attorney 0 Karen Montgomery-Gagne, Planner III 0 Others Present: National Development Council — Stephanie Dugan Andy Lee Visions — Jim Johnson, Vickie Crump Studio Hotel/LaSalle Crossing — Christy Graham, Rick Graham I. Minutes Mr. Filer moved to accept the minutes from the June 25, 2003 meeting. Mr. Flack seconded this motion. The minutes were approved as submitted. II. Financial Status Mr. Clark explained the TIF fund status, and outlined dispersements to date and projected funds anticipated for 2004. Mr. Flack inquired about level of funding currently available? Mr. Clark referred the Board to the meeting packet and noted that with the remainder of the Holt allocation to be spent, the Coliseum debt service, and VISIONS funding, $125,455 was available for allocation. Holt Hotel Stephanie Dugan from the National Development Council (NDC), who will be serving as developer for the Holt, was introduced. Ms. Dugan thanked the TIF Board for their assistance with the project. In response to a question about the status of the project from Ms. White, Ms. Dugan indicated that they have secured public and private funding and an appraisal is being prepared to secure the bank loan. She added that the project committee aims to be under construction in January with a local contractor— Electra Construction. TAX INCREMENT FINANCING BOARD DECEMBER 15,2003 PAGE 1 OF 5 Mr. Clark highlighted the complexity of the project and multiple funding sources. He noted that the Community Development Block Grant (CDBG) portion of the funding stream has limited uses due to regulations. He explained that the remaining CDBG funds ($239,944.73) could be utilized to cover architectural fees and pay back the TIF fund in that same amount. TIF funds would then be available for the construction phase and other eligible costs, still not exceeding the overall commitment of $500,000. Mr. Berzina commented reallocating the CDBG portion would allow better use of the funds. Ms. White asked about the level of TIF funding for the Holt project. Mr. Clark indicated $500,000 of TIF funds was allocated, originally $300,000 for architectural design through bidding and then, when project funding was in place, the remaining $200,000 could be utilized for construction and related costs. Mr. Clark stated no additional TIF funds were being requested — only a shift in use. Mr. Filer asked staff if action was necessary from the Board on this matter. Mr. Sullivan indicated that there should be a motion filed by the Board regarding the shift in funding allocations. Mr. Flack introduced a motion to endorse a change in scope of services in the Wichita County Heritage Society (WCHS) contract to authorize the use of remaining TIF funds (after repayment from CDBG and with a TIF total to still not exceed $500,000) for purposes of construction and eligible related project costs. Seconded by Mr. Filer, the motion passed unanimously. III. Future of TIF Mr. White questioned the TIF fund allocation and the length of commitment to the Coliseum debt service bond. Mr. Dockery explained the State statute does not allow the TIF Zone to extend beyond 2008 in order to pay back a committed bond. TIF funds are obligated for partial repayment of the bond through the existence of the Zone, then the City will need to find other sources of revenue (other bonds will be amortized at that time). Mr. Filer indicated he understood the issue, reiterating that in order to extend the length of the zone a bond commitment would have to be a 'TIF Bond ' not a standard general obligation bond. Mr. Sullivan provided a legal perspective that the City's TIF Ordinance specifies termination of the Zone in 2008. Under State statutes, a TIF bonds would not extend the ending date. He added that it is unclear whether if the termination date were extended the increment would utilize current value or the value when the zone was initially established in 1987/1988. If the current value is used there will be no funds in the TIF Zone for the first few years until values increase. Mr. Flack questioned if the City Council would be able to extend the TIF Zone. Mr. Sullivan noted the State statutes do not address the extension of a TIF Zone, only that an expiration date is required. Mr. Dockery commented that the City's Bond Counsel outlined that the Attorney General's opinion on extensions would be viewed favorably if all procedures were followed, eg. updated plan, public hearings, and agreement from the other taxing entities. Ms. White requested that Board members Mr. Flack (WFISD) and Mr. Welburn (Wichita County) discuss this issue with their agencies to determine interest in extending the TIF Zone. IV. Funding Request— The Studio Hotel Mr. Rick Graham presented information on The Studio Hotel (LaSalle Crossing Apartments) at 530 Seventh St. He noted that they originally purchased the building for $30,000 and, after the initial improvements they have made, the property was recently assessed at $340,000. He distributed a historic photo to illustrate how the intended changes to the exterior of the building relate to the entire structure and Depot Square District. Changes to include two permanent TAX INCREMENT FINANCING BOARD DECEMBER 15,2003 PAGE 2 OF 5 awnings or mansards, new storefronts, installation of low-E glass, and muntins in each window. Mr. Graham brought samples of the materials that will be utilized in the project, including roofing materials for the awnings and a sample muntin that will be custom sized to each window due to their irregular dimensions. Mr. Graham outlined the history of the building, it's connection with the Holt and the downtown area and that it was a component of a National Register application for both individual and historic district recognition. Mr. Graham indicated that project costs have increased since initial submittal in June 2003 and requested that the Board consider a commitment to the project in order that he can move forward in the process of obtaining a bank loan for construction. Mr. Clark stated the request was for $58,000. Mr. Filer questioned if the project would receive federal tax credits. Mr. Graham responded that the tax credit application was a long process and after expenses, 20% of the cost expended may be obtained as a credit. He further added that currently there is an outstanding bank loan of $400,000. Mr. Clark reminded the Board that there is a $125,455 projected balance for 2004, of which approximately $40,0000 - $50,000 might be requested to continue the operations of Visions. Mr. Graham indicated a willingness to deed the façade of the building to the City to ensure protection (a common practice in metro areas). Mr. White questioned whether Mr. Graham previously received TIF funds. Mr. Graham noted that TIF funds were obtained for Travis Crossing (Travis/10th St). Mr. Flack noted concern regarding requested level of funding for the project, as it would encumber approximately 50% of the funds available for 2004. Mr. White commented that he would prefer to see the majority of the project funded - $40,000. The Mayor provided an observation that Mr. Graham has demonstrated his ability to follow through on completing projects within the downtown, suggesting that the Board may consider a commitment to this project with the possibility of spreading out the funding allocation over a 3- year period. Mr. Flack stated, historically the Board does not fund projects in this manner, generally the first year is funded and project progress is reviewed to determine future commitments. Mr. White introduced a motion to recommend a grant of $40,000 for the façade improvements at The Studio Hotel at 530 Seventh Street, seconded by Mr. Flack. Ms. White called for discussion. Mr. Filer questioned the level of 'tax' (federal, local, etc.) funds going toward this project? Mr. Graham responded that 1/5 of the total project would be received in tax credits (federal). The motion passed with unanimous support. V. Report on the Status of TIF Projects Visions Jim Johnson highlighted the activities of the organization since July when Ms. Crump was hired as the new Executive Director. Ms. Crump outlined key activities of the organization via community outreach events: Day at the Holt', 'Teens Make a Difference Day', 'Do It In The Road Concert', and the City Lights program. The organization is aiming for a 4-point approach with the development of subcommittees to address: membership, design, promotion and economic restructuring. Ms. Crump indicated that monthly progress reports will be prepared and submitted to the Community Development Department and the agency is building a network of contacts with property owners, developers and other community organizations. Mr. Johnson informed the Board that during the coming year Visions will be focusing on economic development (ie. creation of a joint economic development packet with BCI), formulating a 5- year plan for the downtown and networking with state and national agencies in order to increase interest in downtown Wichita Falls. TAX INCREMENT FINANCING BOARD DECEMBER 15,2003 PAGE 3 OF 5 Iron Horse Pub Mr. Clark referred members to the before/after photos of the Iron Horse Pub façade at 615 8th Street. The project was completed in a timely manner and has made a significant improvement to the downtown and, particularly 8th Street. Ms. Crump noted that the TIF funds continue to add value in the downtown as the owners have expanded the initial rehabilitation project to include interior renovations. VI. Adjournment The Board adjourned at 5:29 p.m. L-14Lle. .9eY DEBBIE WHITE, CHAIRMAN DATE TAX INCREMENT FINANCING BOARD DECEMBER 15,2003 PAGE 4 OF 5 TIF FUND STATUS Dec. 2003 Fiscal 04 (Unaudited) 30-Sep Fiscal 04 FY2003 Projection Revenues: Taxes City 53,317.61 50,000.00 School 118,921.69 118,000.00 County 32,429.31 30,000.00 Interest 5,218.50 1,000.00 Total 209,887.11 199,000.00 Expenditures: Bundy Young Sims Potter 270,768.61 - Vision 100 26,666.64 40,000.00 615 Eighth 7,000.00 Holt Hotel - 229,231.39 Coliseum Debt Service 105,000.00 , 105,000.00 Total 409,435.25 374,231.39 Revenues Less Expend: (199,548.14) (175,231.39) Beginning Fund Balance: 500,235.00 300,686.86 Ending Fund Balance: 300,686.86 125,455.47 Reserved For Encumbrances: Holt Hotel 229,231.39 - Unreserved Fund Balance: 71,455.47 125,455.47 TAX INCREMENT FINANCING BOARD DECEMBER 15,2003 PAGE 5 OF 5 Downtown Wichita Fails Development, Inc. November 30, 2003 TIF Report Uuly-November 2003) New business: Mimi's Restaurant Crosby's Club Platinum Designing Spaces J.W.'s Lounge Pawpaw's Bar-B-Que Vintage Down Under New Life Church Skin Tattoo Parlor Adult Day Care North Texas Work Force Board Dr. Sanchez Leal (3)Recording Studios Suzuki Dealership—February 2004 buildings Sold: Stellar Art Gallery Eighth Street Strip Ebner Brothers Building TSO Building Improvement Projects: Iron Horse Pub Wichita Tower Marchman Building Club Platinum Noble Building Designing Spaces Depot Square National Register Historic District(40 Buildings) Recruitment Contacts: • DT Property Owners 11 • DT Business Owners 29 • Investors 18 • Restaurants 8 • Clothing,Boutiques 24 • Furnishing, Design 7 • Commercial 15 • Spa, Salon 4 • Art Gallery 3 • Antiques 12 Private Sector Reinvestment rigures: Private Sector Investment: $ 635,000 Public Sector Investment: $ 500,000 (Holt Project) Committees: Downtown Focus Group Membership Design Organization Promotion Economic Restructuring Membership(JFdate: New Members (Sept. —November 2003): 13 Members (total including new): 57 Private Investors: 28 Public (TIF): 1 vents: Annual Meeting— September 18, 2003 (13 New Members) Saturday at the Holt—October 25, 2003 (Raised$41,567) City Lights—November 22, 2003 (Approx. 7,000 in attendance) Event Panning: Art Train - Fall 2004 Summer Concert Series—June 2004 OTHER: Media contacts ongoing with TRN, TV, and Radio. Regular interviews on TV with a Downtown column to begin this month. Ongoing network with Texas Downtown Association, Texas Main Street Program, National Main Street Center and the National Trust for Historic Preservation. Speaking engagements to begin in January 2004 to civic and service organizations.