HomeMy WebLinkAbout1163 12-09-1997 TIF Zone 1 Project and Financing PlanREINVESTMENT ZONE NUMBER ONE, CITY OF EULESS,
TAX INCREMENT FINANCING PROTECT AND FINANCING PLANS
WHEREAS, in accordance with the provisions of the Tax Increment Financing Act.
V. T, C. A.. Tax Code, Chapter 311, (the "Act ") particularly § 311.011, the Reinvestment Zone
Board of Directors have prepared and adopted the Project Plan and Financing Plan for the
Reinvestment Zone;
WHEREAS, the Project Plan and Financing Plan are to be submitted to the City of
Euless, Texas, the governing body that created the Reinvestment Zone in accordance with the
Act;
WHEREAS, the Project Plan and the Financing Plan are as consistent as possible with
the preliminary project and financing plans developed for the Reinvestment Zone before creation
of the Reinvestment Board of Directors; and
WHEREAS, the Board of Directors hereby adopt the following Project Plan and
Financing Plan in accordance with the Act for development of the Reinvestment Zone Number
One, City of Euless, Texas and funded by the Tax Increment Financing ( "TIF "):
NOW, THEREFORE, BE IT RESOLVED BY THE REINVESTMENT ZONE BOARD
OF DIRECTORS OF REINVESTMENT ZONE NUMBER ONE, CITY OF EULESS, TEXAS:
That the facts and recitations contained in the preamble are hereby found and declared
to be true and correct and are hereby incorporated by reference for all purposes as if same had
been restated in this section.
PROJECT PLAN
1. Existing Uses and Conditions of Real Property
The Reinvestment Zone site consists of vacant land of approximately 98 acres at the
northeast corner of State Routes 360 and 183 in the City of Euless. The land is relatively flat
with access from existing surface roads. Limited utilities are available at the site, but will be
provided as part of the program funded by the TIF. The map of the TIF Reinvestment Zone
boundaries is provided as Attachment "A." and incorporated herein by reference. The map
showing existing uses and conditions of the real property in the zone is provided as Attachment
"l3." and incorporated herein by reference.
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2. Proposed Improvements and Uses of the Property
The Reinvestment Zone site is proposed to be developed into an entertainment and retail
complex. The site plan showing proposed improvements to and proposed uses of the property
is provided as Attachment "C." and incorporated herein by reference.
The site plan shows the proposed traffic circulation for the entertainment and retail
complex and notes the estimated improvements expected to be necessary for the complex to have
required utilities and ingress and egress to the site. The City of Euless, the municipality creating
the Reinvestment Zone, will acquire all necessary traffic right -of -way easements for the complex
entrances and for curb cuts, and any rights necessary to access offsite improvements.
3. Proposed Changes in Zoning or Other Municipal Discretionary Actions
The site is currently zoned to accommodate an entertainment and retail complex . The
complex is part of the larger Villages of Bear Creek, a master plan community. The Villages
of Bear Creek is predominately owned by the owners of the complex. There will be no
necessity to change any city master plans, building codes or other regulatory programs of the
city to accomplish the proposed development complex.
4. Estimated lion- Project Costs
All of the proposed costs related to the complex are characterized as "project costs ",
therefore, there are no anticipated non - project costs.
5. Method of Relocation of Persons
No business or residential units are located on the proposed site, and therefore, no
relocation will be necessary to carry out the development of the complex.
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FINANCING PLAN
6. Project Costs.
The estimated project costs for the land acquisition, on- and off -site improvements and
construction of the complex and contributions to department stores for construction of their own
stores are $171.9 million. The configuration is the most conservation program that would be
developed at the site. Additionally, approximately $52 million will be spent by the three
department stores and by end users which will lease an estimated eight pads on the perimeter
of the site. The estimated total project costs are $223.9 million. Of that amount, an estimated
$177.2 million is estimated as the assessment for the project. The difference in the costs and
the assessment are the soft costs necessary for the development, which are not included in the
assessment placed on the project as well as the costs funded with public assistance, that may not
be added to the tax rolls. The net new assessed value will be approximately $172.24 million
after deducting the assessed value at the time the TIF District was formed, of $4.96 million.
Of the total project costs, $29,250,000 are projected as the TIF District funded activities, and
is detailed m Section 7.
Administrative costs related to the TIF District may be included in the bond proceeds or funded
from City sources.
7. Public Improvements Within the Zone
A series of public improvements will be carried out as part of the TIF financing. The public
improvements requirements are subject to further study and engineering of the facilities, but have
been estimated for the purposes of this Financing Plan. Nathan Maier Engineering developed
costs and the location of each component with back up details on the infrastructure, and the
report has been provided to the City. Those include the following:
a. Relocating existing utilities $ 1,000,000
b. Off -sites - utilities to the site $ 2,930,000
c. Off-sites and On -site - roadway
construction, right -of -way
traffic acquisition and
infrastructure improvements $ 2,000.000
Total Amount $ 5,930,000
In addition to the off-site improvements, the district or the City will acquire property for public
parking, right - of-way traffic easements and improvements to the public parking. Those
estimated costs for the land within the district are as follows:
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Public parking land acquisition.
Improvements to the parking area
Total Amount
$16,100,000
$ 1,220,000
$17,320,000
The final item is the capitalized interest in the tax anticipation notes. That amount pays the
interest on the notes for the approximate 30 months from the time the notes are sold until they
are paid off with the long term tax allocation bonds.
Note 1:
Capitalized Interest Included
In Notes $ 6,000,000
Total Amount $ 6,000,000
Grand Total for District Funding $29,250,000
Should the development venture decide not to fund tax anticipation notes, but
decide to be reimbursed for the eligible costs when long term bonds are sold, the
amount for capitalized interest would not be a use of the funds. In lieu of the
amount for the capitalized interest, the TIF bond proceeds would go toward the
on -site improvements on the land owned by the TIF District. The total
improvement costs to the public parking area are about $12,000,000. The costs
not covered by the TIF financing will be paid by other non -TIF public funds
and/or the development venture.
8. Market and Economic Feasibility Study
The projected tax increment revenues from the proposed project have been prepared by Mark
Briggs & Associates, Inc., which establish that the tax increment revenues will support the
financing proposed in this Financing Plan. Those tax proje'tions are provided as Attachment
"D. and incorporated herein by reference. The analysis shows that the creation of the
Reinvestment Zone will create a level of new tax generation that will benefit the City and the
residents and property owners in the Reinvestment Zone. The Entertainment Retail Complex
and the improvements to be funded by the TIF funds will significantly enhance the value of the
taxable real property in the Reinvestment Zone and will be of a general benefit to the
municipality .
Documentation provided to the City regarding the project has substantiated that the development
or redevelopment of the property in the Zone would not occur solely through private investment
in the reasonably foreseeable future.
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9. Estimate of Bonded Indebtedness to be Incurred
The financing will be done through tax exempt and taxable notes and/or bonds. The net
proceeds of the bonds and capitalized interest are supported by the tax increment revenues and
will support $31.25 million. The estimated par amount of the tax exempt and taxable notes
and /or bonds to be sold to finance the project activities is $35 million. The actual sizing of the
bonds will depend on the ultimate value given to the project by the County Assessor and the tax
rates of the various taxing entities at the time of the issuance of the bonds. The sizing will be
established by the City's financing advisor, First Southwest, based on the determination of the
tax - exempt status and the projected interest rates on the bonds. The bond analysis by First
Southwest has been provided to the City of Euless.
10. Time When Cost Will be Incurred
The project is expected to break ground in late fall of 2000 or early spring of 2001. Once the
construction has commenced and vertical construction is underway, tax anticipation notes may
be issued and the funds will be used to purchase the land within the district to be used for public
parking, pay for improvements to the parking area and fund utilities necessary for the
development and of site public improvements. Funds for the construction of the off -site
improvements, on -site utility relocation and improvements to the parking lot will be needed over
the 20 -month construction period. Any funds that have not been spent at any given time during
the 20 -month construction period will be invested by the Trustee in government insured
securities and will earn interest. When the project is completed and added to the tax rolls, 20-
year tax increment bonds will be issued to pay off the notes issued at the start of the project.
11. Description of Method of Financing
It is expected that the initial method of financing the TIF District activities will be via tax
anticipation notes, with capitalized interest for 30 months. At the end of the 30 months, the
project will be constructed and on the tax rolls and will have been in operation for approximately
one year. At that time, 20 -year tax increment bonds will be sold that will take out the notes.
This financing plan projects that 100% of the tax increment from each taxing unit (with the
exception of the Hurst- Euless - Bedford School District that will participate at 88%) will be
required during the 30 months of the tax anticipation notes and to support the long term tax
increment bonds. The issuance of the notes may be delayed until after the start of construction
and vertical construction is underway, or may be eliminated entirely.
At the beginning of the second year of the bonds, additional reserves will be available based on
unused funds required by the estimated 1.25 coverage on the bonds. At that time, and under
the provisions of the Official Statement to be prepared related to the bonds issue, the Trustee
will be authorized to repurchase bonds, starting with the longest term bonds with the tax
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increment revenues available in excess of the bond debt service. That procedurc will continue
and may result in the total bond issue being repaid in less than the full 20 years of the bonds.
The bond analysis shows that a coverage factor may be applied to the debt service on the bonds.
Based on accumulation of the TIF funds and using those funds to prepay bonds, it is projected
by the City's financing advisor First Southwest, that the 20 -year tax increment bonds may
actually be paid off in approximately 13 years. That analysis has been provided to the City.
The funding of the private development activities will come from equity and debt financing by
the developer and from internal or borrowed funds by the department stores that will construct
and fixturize their facilities.
12. Current Total Assessed and Appraised Value
The assessed value of the site at the time the TIF District was formed, was $4,961,660. No
current appraisal has been clone on the site, but valuation information has been provided to
substantiate a purchase price of $5.35 per square foot for the area of the Reinvestment Zone that
will include the entertainment and retail complex.
13. Estimated Captured Assessed Value
As has been noted above in the description of project costs, the development value after
deducting soft costs not counted by the assessor, would be approximately $216.2 million. From
that amount is deducted the assessed value that existed when the TIF District was formed, and
the public parking and improvements to the public parking areas. The City of Euless has also
committed to provide additional public assistance through non -TIF resources and to acquire
necessary traffic right-of-way easements. The deductions of the project costs paid for from
public funds and the assessed value when the TIF District was formed, bring the estimated
incremental assessed value to $172.24 million. The estimated tax increments, based on that
value and the current tax rate and participation levels for each of the taxing entities, is estimated
at $4,287,000 in the first year after the complex is completed with the construction of the
department stores.
14. Duration of the Zone
The statutory limitation on the tax increment bonds is 20 years. It is estimated that start of the
construction may be 5 years from the date of creation of the TIF District. Including the 30-
month period for the notes issued at the time of vertical construction, which will be taken out
by the bonds, and the total term of the zone will be 27 years.
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PRESENTED AND GIVEN FIRST READING and approved at a rneeting of the
Reinvestment Zone Board of Directors on the 9th day of December , 1997; by a vote
of 7 ayes, 0 nays and 0 abstentions.
ATTEST.
_ -1.0", -
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APPROVED:
BY: tetikt_A-
Its: Chai" person
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