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TIF #2 Board of Directors Minutes - 05/25/2005oft CITIZENS ADVISORY COMMITTEE RECEIVED IN CITY CLERK'S OFFICE Date PA _A Q g Time ORGANIZATIONAL MEETING ) TAX INCREMENT FINANCING ZONE #2 MINUTES MAY 25, 2005 Members: Ben Filer, Chairman • Ann Bishop • Susan Plies • James Welburn • Charles Elmore, Council Liaison • Karen Gagne, Planner III • Diane Parker, Planning staff • Others Present: Andy Lee —Andy Lee Co. /Blackburn Properties Absent: David A. Clark, Director of Community Development Al Flack, Jr. • PROGRESS REPORT Mr. Filer provided an overview of the proposed TIF #2 Zone proposal for other members. Planning staff outlined the draft Project Plan for the proposed TIF #2 Zone. Staff reported that initial presentations regarding the TIF Zone creation were held with the Wichita Falls Independent School District (WFISD) Board, Wichita County Commissioners Court and with the Wichita Falls City Council. All taxing entities were in agreement with pursuing research and additional information to determine if a TIF Zone in the area by Lawrence Road is feasible. The three taxing entities have also met to officially appoint a representative to the Community Advisory Committee for TIF Zone #2. Those representatives include: Mr. Al Flack for WFISD; Mr. James Welburn for Wichita County; and Ms. Ann Bishop, Ms. Susan Plies and Mr. Ben Filer for the City of Wichita Falls. Ms. Gagne explained that although the WFISD is in favor of creating the TIF Zone, they will not be participating due to penalties that would be incurred from the State in reduced funding allocations. Unfortunately, the WFISD portion of the local property taxes is 60% and the combined County and Wichita Falls taxes consist of 40 %. CITIZENS ADVISORY COMMITTEE - TIF #2 MAY 25, 2005 PAGE 1 OF 2 PROJECT PLAN REVIEW Ms. Gagne informed the Committee members that information provided in their meeting packets was an early draft of what will become the TIF Zone #2 Project Plan. The Plan is very preliminary and explained the purpose of creating a secondary TIF Zone. The Zone area is generally bounded by Kell frontage roads to the north, Garfield and Arthur to the east, Kemp /Call Field /Rhea Roads to the south and then along portions of McNiel. Staff explained how the identified area is considered eligible according to State legislation, based on: obsolete structures, inadequate street layout, an abandoned rail line and an area within a designated floodway. TIF Zone #2 will differ from TIF Zone #1 with regard to eligibility of projects. Funds generated within TIF Zone #2 will specifically be used for public infrastructure improvements, such as street connectivity, construction /relocation of utilities, and flood control through channelization of McGrath Creek. Individual property owners will not have the opportunity to apply for project funds. The increment generated within TIF Zone #2 will be utilized only for public improvement projects. Staff referred members to Exhibit A that outlines the proposed Zone boundary and potential street connections /realignments. At this time staff have not prioritized the public improvements, as the potential increment for the Zone is yet to be determined. Ms. Gagne explained the reasoning for including various street segments in the proposed Project Plan — noting that the majority of the streets projects are: 1) identified and proposed in the City Thoroughfare Plan, and 2) are not likely to be constructed through the traditional development process. The street segments identified in Exhibit A include the extension of Trade Drive east of Lawrence to connect at Kemp with Maplewood. It is anticipated that a portion of Trade will be component of a redevelopment proposal. Staff noted that at this time, the City does not have a designated fund for completing the identified street connections, part of the interest from developers in requesting the City consider the potential for a TIF Zone #2 is to hopefully generate sufficient increment over the life of the Zone to cover the cost of improvements. Three other street segments include the westward extension of Trade Drive to McNiel, the realignment of Lawrence /Rhea Road and the development of South Wenonah from Kell frontage Road to the eastern extension of Trade Drive. All the proposed street projects, upon completion, will help alleviate the congestion along Kemp and Call Field. Staff referred Committee members to page 15 of the draft Plan, and commented that the TIF Board and City Council would have the discretion to consider other public infrastructure projects that would benefit the community. Staff outlined some general statistics of the proposed Zone. It will consist of 236 acres with 112 land parcels and based on the certified property valuations from the Wichita County Appraisal District (WCAD), the Zone will have abase value of $25,626,101. Members inquired about the inclusion of Lowe's. Staff indicated that it appears that Lowe's is within the Zone but only two small portions (0.43 ac) along the rear lot line will be included. A portion of the parcel may be necessary as right -of -way for the future extension of South Wenonah. Staff indicated that any land parcel(s) recently developed (ie. Home Depot, Sam's, Texas Roadhouse, etc.) were not included in the Zone because they would not contribute any additional increment. The Zone is characterized (191.3 acres /81 %) by a mix of commercial and light industrial land uses. There are also numerous vacant commercial lots and a municipal Park (Tesco Park) •within the Zone. The residential component is limited to three main areas: 1) Arthur /Ave Y; 2) Ave Z (Arthur- Kemp); and 3) Faith Rd (Call Field- Gossett Dr). The legislation only permits CITIZENS ADVISORY COMMITTEE - TIF #2 MAY 25, 2005 PAGE 2 OF 2 10% of the zone to be utilized for residential purposes, with the current boundaries, TIF Zone #2 is comprised of only 5.4% residential land uses. Mr. Lee, a representative for Blackburn Properties the development company that requested the City consider a secondary TIF Zone, presented information to the Committee. He stated they recently hired an engineering firm to submit a drainage study of the McGrath Creek channel that abuts their development area. Both the Public Works Department and FEMA will review the study to determine if the proposed drainage improvements will remove the area from a floodway designation. Mr. Lee informed the Committee that with the anticipated drainage improvements, their investment to purchase various easements (ONCOR, BNSF, etc.) and lease options for big box retailers their land area will be valued around $15 -17 million. Mr. Lee outlined other recent development projects that would be captured in the TIF Zone increment, such as McAlister's Deli, Mazzio's Pizza, and Kohl's potentially adding $10- 15million in value. Mr. Lee referenced the Blackburn Properties' positive development impact in Wichita Falls having redeveloped the former Albertson's site at Kemp /Call Field with Ross, Shoe Carnival and Linen's n Things. Ms. Bishop asked if the land they anticipate developing is under contract. Mr. Lee noted that they are still in negotiation for land parcels along the eastern portion of Lawrence Road and with the utility companies. FINANCIAL PLAN REVIEW Planning staff indicated that in order to create a TIF District a Financial Plan must be developed that outlines the projected revenue, sources of those funds, estimated redevelopment costs and a statement of feasibility. Staff is still in the process of gathering information about the future anticipated valuation for each parcel in the Zone. In order to determine the increment for the Zone, staff has to determine an estimated development value for all vacant/underdeveloped properties. After the proposed "developed value" within the Zone is identified and projected over the 20 -year lifespan - it is subtracted from the base valuation thus the increment for the Zone. Ms. Gagne said the base year for the Zone is 2004. Total taxes generated within the Zone for the base year were $663,291. However, the City and County portion of the taxes generated only $265,134. Councilor Elmore asked if there will be sufficient increment generated in the Zone to support the identified public improvement projects without financial support from WFISD. Staff stated they are trying to determine that question and aim to have an answer within the next few weeks. ACTION STEPS Mr. Filer asked staff to outline the next steps in the process. Ms. Gagne indicated that staff is waiting for information from the developers regarding anticipated projects and their value in order to finish the Financial Plan. She suggested that to provide the Committee members sufficient review time of the draft Project Plan a follow -up meeting would be scheduled in the next 3 weeks. Mr. Filer confirmed that the Members are to review the draft Plan and provide feedback to Planning staff. Staff indicated that a formal public hearing would be held in late June /early July with the County Commissioners and City Council. Property owners will be notified prior to the • hearings. CITIZENS ADVISORY COMMITTEE - TIF #2 MAY 25, 2005 PAGE 3 OF 2 • Councilor Elmore inquired about the timeframe needed to develop an increment when the School Board will not be participating. Ms. Gagne stated that if TIF Zone #2 is created the earliest any increment would be returned to the fund is 2007. At this time staff does not have sufficient information to know if it will take the full 20 -year lifespan of the Zone to generate funds to pay for the identified public improvements. Councilor Elmore suggested that someone discuss this the TIF Zone #2 project with Ray Clymer to investigate his interest. Ms. Plies inquired about the level of public knowledge regarding TIF Zone #2. Staff responded that there is general knowledge in the community about a potential TIF Zone #2 but no specific numbers /development proposals have been released to the media. Ms. Gagne stated that all the information discussed /presented at the meeting is subject to the Open Records Act and may be requested via the City Clerk's office. ADJOURN The Committee adjourned the meeting at 5:20 pm. DATE CITIZENS ADVISORY COMMITTEE - TIF #2 MAY 25, 2005 PAGE 4 OF 4