HomeMy WebLinkAboutOrdinance 23293-06-2018 ORDINANCE NO. 23293-06-2018
AN ORDINANCE DESIGNATING AND RECOGNIZING THE
AREA COMPRISING TAX INCREMENT REINVESTMENT ZONE
NUMBER FOUR, CITY OF FORT WORTH, TEXAS (SOUTHSIDE
TIF)AS MEDIA PRODUCTION DEVELOPMENT ZONE NUMBER
ONE PURSUANT TO CHAPTER 485A, TEXAS GOVERNMENT
CODE.
WHEREAS, Chapter 485A, Texas Government Code (the "Act") allows for the
designation of media production development zones and locations in the State of Texas to
maintain, strengthen, and promote the media production industry in Texas; and
WHEREAS, the Act provides that persons certified by the Office of the Governor
may receive a two-year exemption from sales and use taxes on items used for the
construction, maintenance, expansion, improvement, or renovation of a media production
facility at a qualified media production location and the building housing that facility, as
well as on items used to equip such a media production facility; and
WHEREAS,the Act authorizes the governing body of a municipality to designate
and recognize a media production development zone under conditions outlined in the Act,
as more specifically set forth in this Ordinance; and
WHEREAS, the City Council wishes to encourage the development of media
production businesses in the City by designating and recognizing the area within Tax
Increment Reinvestment Zone Number Four, City of Fort Worth, Texas (the "Southside
TIF") as a media production development zone in accordance with the Act;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF FORT WORTH, TEXAS THAT:
Page 1
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
Section 1.
FINDINGS.
Taking into account all information known to it,the City Council hereby makes the
following findings of fact:
A. The City of Fort Worth (the "City") is located in the Dallas-Fort Worth-
Arlington, TX MSA (the "MSA"), as described on the State Metropolitan Statistical Area
Reference Table maintained by the Texas State Data Center, University of Texas at San
Antonio. The MSA is the fourth largest metropolitan statistical area in the United States
with a total population of 7,233,323, according to the 2016 Bureau of Economic Analysis
published by the United States Department of Commerce,which includes the City of Dallas
(with a 2017 estimated population of 1,341,075) and the City of Fort Worth (with a 2017
estimated population of 874,168). Therefore, the City meets the criterion specified in
Section 485.101(1)(A) of the Act in that it is located within a metropolitan statistical area
in which the principal municipality has a population of more than 250,000.
B. As part of the MSA,the City of Fort Worth has a vibrant workforce, strong
infrastructure, and established media production resources necessary to support a wide
array of visual and sound productions, including films, television programs, national and
multistate commercial productions, and digital interactive media productions. Therefore,
the City meets the criteria specified in Section 485.101(1)(B) of the Act in that it has the
adequate workforce, infrastructure, facilities, or resources to support the production and
completion of moving image projects.
C. Red Productions, LLC is a full-service film and production company. KCPFII
Bryan, LLC is a business venture created to develop and lease media studio space for full-
Page 2
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
time freelance creative entrepreneurs in various professions within the media industry to
work, meet with clients, and collaborate. Together, Red Productions, LLC and KCPFII
Bryan, LLC (collectively,the "Requestors") intend to renovate the improvements located
at 305 South Main St.,Suites 100-110(the"Location"),which is owned by KCPFII Bryan,
LLC, exclusively to convert that space solely for use as one or more media production
facilities. The Requestors have submitted written requests to the City that the City Council
nominate the Location for designation as a qualified media production location. In
accordance with the Act, by separate ordinance the City Council has nominated the
Location for designation as a qualified media production location. The Location is situated
within the boundaries of the Southside TIF. Therefore, the criterion of Section
485.101(A)(3) of the Act has been met in that (subject to approval by the Office of the
Governor, in accordance with the Act) the proposed media production development zone
will contain within its geographical boundaries a qualified media production location that
meets the requirements set forth in Section 485A.102 of the Act.
D. Based on the economic impact analysis of the proposed project, prepared
by TXP, Inc. and submitted to the City by the Requestors, the proposed redevelopment of
the Location will result in an expenditure of approximately $4 million in capital costs to
renovate and redevelop an existing 44,000 square foot building that is located in a targeted
development area of the City (the Southside TIF). In addition, once completed, the
proposed media production facilities at the Location are anticipated to result in at least the
retention of 9 current full-time jobs and to generate 15 new full-time jobs at an average
annual wage of$48,000.00 over the next 5 years. The City Council also believes that this
project will serve as a catalyst for attracting additional creative and video production
Page 3
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
enterprises to this area.As a result of this new capital investment and the economic benefits
that are likely to accrue, both directly and indirectly, from redevelopment of the Location
for use as media production facilities and the job retention and creation resulting therefrom,
the City Council hereby finds that recognition and designation of the Southside TIF area
as a media production development zone is in the best interest of the City and the State of
Texas.
Section 2.
RECOGNITION AND DESIGNATION OF
MEDIA PRODUCTION DEVELOPMENT ZONE.
On the basis of the findings set forth in Section I and otherwise in accordance with
the Act, the City Council hereby designates the area comprising the area comprising the
Southside TIF,as more particularly described and depicted in Exhibit"A",attached hereto
and hereby made a part of this Ordinance for all purposes, as a media production
development zone, to be known as "Media Production Development Zone Number One."
Section 3.
SEVERABILITY.
If any portion,section or part of a section of this Ordinance is subsequently declared
invalid, inoperative or void for any reason by a court of competent jurisdiction, the
remaining portions, sections or parts of sections of this Ordinance shall be and remain in
full force and effect and shall noz in any way be impaired or affected by such decision,
opinion or judgment.
Page 4
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
Section 4.
IMMEDIATE EFFECT.
This Ordinance shall take effect and be in full force and effect from and after its
adoption.
AND IT IS SO ORDAINED.
APPROVED AS TO FORM AND LEGALITY: ATTEST:
Peter Vaky "j. kay,�ej)*
Deputy City Attorney City Secreta
ADOPTED AND EFFECTIVE: June 26, 2018
M&C: G-19325
Page 5
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
EXHIBIT "A"
DESCRIPTION AND DEPICTION OF THE ZONE
Ordinance Designating and Recognizing Media Production Development Zone Number One
within Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas(Southside TIF)
May 30, 2018
Mr. Red Sanders
President
Red Productions
1075 Foch Street
Fort Worth,Texas 76107
Dear Mr.Sanders,
Thank you for the.opportunity to provide consulting services to KCPFII Bryan, LLC.The attached memo
highlights TXP's findings related to the economic and tax impact of fully functional studio space, named
"Backlot Studios",to rent for various productions.This space can be used to film different productions,
photography shoots, and scoring by different media professionals throughout Fort Worth.TXP has
organized the analysis and results based on the requirements of the State of Texas Media Production
Facilities Development Program.
To assist the City of Fort Worth and State of Texas in reviewing your application, I have summarized the
State of Texas Media Production Facilities Development Program.This document is intended to satisfy
the requirements of the economic impact analysis.
Please do not hesitate to contact me with any questions or comments.
Best regards,
Travis D.James
Vice President
Page 1
1310 South 152 Street, Suite 1015 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Red Productions New Facility Project Summary
• KCPFII Bryan, LLC is redeveloping and improving 44,000 square feet of existing commercial office
space in Fort Wort,Texas.
• The space will be home to multiple tenants working in the movie and video production sector.
• The total cost to redevelop the entire facility is approximately$3,710,521.
• As part of this project, KCPFII Bryan will offer a fully functional studio space, named "Backlot
Studios",to rent for various productions.
• This space can be used to film different productions, photography shoots,and scoring by
different media professionals throughout Fort Worth.
• Backlot Studios will occupy 27.4 percent of the new building space.
• This analysis is focused only on the proportional Backlot eligible construction and finish out
costs which is estimated to be$1,016,683(or 27.4 of the total cost of$3,710,521).
• Economic activity and spending from tenants using the facilities is not included in this analysis.
• The project will take 6 months to complete.
• Because the project is nonresidential,the majority of the project costs are subject to state and
local sales tax.
Figure 1: Building Exterior Renderin
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Source:Red Productions
Page 2
1310 South 1s'Street, Suite 105 Austin, Texas 78704 I(512)328-8300 phone (512)462-1240 fax www.txp.com
Figure 2:Backlot Studio Site Plan
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Backlot Studio
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Source:Red Productions
Page 3
1310 South 151 Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
. . . . . . . . . . . . . . . . .
Table 1:Red Productions Office Finish Out Construction Cost Estimate
Component Cost Estimate* Cost Estimate*
General Conditions $93,650 Fire Caulk(AL) $10,000
Temp Fence&Silt Fence $8,000 Doors/Frames $33,800
Temp Fall Protection $15,500 Overhead Doors $19,500
Testing(AL) $5,000 Entrance/Storefront $319,229
Landscaping(AL) $10,000 Hardware(AL) $15,000
Bollards at Plaza $4,000 Stucco $19,687
Site Utilities $12,000 Cyc Wall(AL) $15,500
Demolition $8,220 Drywall $92,950
Finish Grade $4,000 Flooring $6,850
Retaining Wall $39,000 Painting $62,500
Pavement Markings $3,000 Skylights $2,500
Concrete $314,651 Toilet Accessories $2,500
Masonry(AL) $152,950 Elevator $97,500
Structural&Misc Steel $233,472 HVAC $472,500
Shoring $35,000 Plumbing $314,650
Rough Carpentry $92,000 Fire Sprinkling $82,100
Finish Carpentry $9,100 Electrical/Fire Alarm $486,476
Insulation $8,500 Fee $262,870
Prefinished Panels $12,500 Demo $161,782
Roofing $103,500 Total $3,710,521
x 27.4%of
Awning $44,384 Backlot Space
Gutters/Downspouts $12,700 Total Eligible Spending $1,016,682
Sealants $11,500
Source:RJM Contractors
*These costs exclude sales tax
Page 4
1310 South 11t Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Media Production Development Zone Act Overview
The Media Production Facilities Development Program'encourages the construction and renovation of
media production facilities—including soundstages, animation facilities and game studios—by granting a
sales and use tax exemption that covers their construction or renovation costs. Enacted by the State of
Texas in 2009,the program is also known as the Media Production Development Zone Act(MPDZA).The
Texas Film Commission administers the incentive program.
To be eligible for the sales and use tax exemption on the construction or renovation of a media
production facility:
• The applicant must own (or lease for four years)the land/building where the project is located
• The proposed facility must be used elusively for the creation of moving images projects.
• Acceptable media production facilities include:
o Soundstage
o Motion capture studio
o Animation facility
o Game facility
o Sound studio
o Scoring stage
o Editing facility
o Production office
Each application will need to provide the following documentation to support and justify the request:
• Specific and detailed description of the project
• Site plan for proposed media production location
• Floor plan for the proposed media production facility
• An itemized budget for project
• A schedule of media production equipment to be bought, rented, or leased
• An economic impact analysis
• A financial statement and background information on requestor
A MPDZA exemption cannot be granted unless the Texas Comptroller of Public Accounts certifies that
the project will have a positive impact on state revenue.The Comptroller makes this determination, in
part, by reviewing the economic impact analysis.
1 http://gov.texas.gov/film/programs/mpdza
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1310 South 1s'Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Economic Impact of Methodology
An economy can be measured in a number of ways. Four of the most common are"Output"which
describes total economic activity and is equivalent to a firm's gross sales, "Value Added"which equals
gross output of an industry or a sector less its intermediate inputs, "Labor Income"which corresponds
to wages and benefits, and "Employment"which refers to permanent jobs that have been created in
the local economy.
In an input-output analysis of new economic activity, it is useful to distinguish three types of
expenditure effects:direct, indirect,and induced.
Direct effects are production changes associated with the immediate effects or final demand changes.
The payment made by an out-of-town visitor to a hotel operator is an example of a direct effect, as
would be the taxi fare that visitor paid to be transported into town from the airport.
Indirect effects are production changes in backward-linked industries caused by the changing input
needs of directly affected industries—typically, additional purchases to produce additional output.
Satisfying the demand for an overnight stay will require the hotel operator to purchase additional
cleaning supplies and services,for example, and the taxi driver will have to replace the gasoline
consumed during the trip from the airport.These downstream purchases affect the economic status of
other local merchants and workers.
Induced effects are the changes in regional household spending patterns caused by changes in
household income generated from the direct and indirect effects. Both the hotel operator and taxi
driver experience increased income from the visitor's stay,for example, as do the cleaning supplies
outlet and the gas station proprietor. Induced effects capture the way in which this increased income is
in turn spent by them in the local economy.
The interdependence between different sectors of the economy is reflected in the concept of a
"multiplier."An output multiplier,for example, divides the total (direct, indirect and induced)effects of
an initial spending injection by the value of that injection—i.e.,the direct effect.The higher the
multiplier,the greater the interdependence among different sectors of the economy.An output
multiplier of 1.4,for example, means that for every$1,000 injected into the economy, another$400 in
output is produced in all other sectors.
For this project, TXP used Dallas-Fort Worth MSA RIMS II multipliers(2007 U.S. Benchmark 1-0 data and
2015 Regional Data).
Page 6
1310 South 11'Street, Suite 10,15 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Tax Revenue Impact Methodology
To provide an"order of magnitude"estimate for tax revenue attributable to the Backlot Studios project,
TXP focused on the ratio of government tax collections to gross domestic product(GDP)and wages.
Four datasets were used to derive the ratio: 1) U.S. Department of Commerce Bureau of Economic
Analysis GDP estimates by state and metropolitan area;2)the U.S. Census Bureau State Government
Tax Collections'(STC)report;3)Texas Workforce Commission Tarrant County Quarterly Employment
and Wages(QCEW)3;and 4) City of Fort Worth budget documents.A brief description of the STC data
collection methodology follows:
In this survey,"taxes"are defined as all compulsory contributions exacted by a government for
public purposes,except employer and employee assessments for retirement and social
insurance purposes, which are classified as insurance trust revenue. Outside the scope of this
collection are data on the unemployment compensation "taxes" imposed by each of the state
governments. However, all receipts from licenses and compulsory fees, including those that are
imposed for regulatory purposes, as well as those designated to provide revenue are included.
Over the past five years,the state tax revenue as a percent of state GDP was 3.36 percent.
Table 2:State of Texas Tax Revenue as a Percent of State GDP
2012 2013 2014 2015 2016
Tax Revenue($M) $48,597 $51,714 $55,261 $55,086 $52,132
GDP($M) $1,437,893 $1,536,472 $1,614,127 $1,611,189 $1,616,801
Tax Rev as%GDP 3.38% 3.37% 3.42% 3.42% 3.22%
Source:TXP,Inc.
Note:2017 GDP data is not available
Over the past five years,City of Fort Worth total general fund tax revenue as a percent of Tarrant
County wages was 1.39 percent.
Table 3:City of Fort Worth General Fund Tax Revenue as a Percent of Tarrant County Wages
FY2012 FY2013 FY2014 FY2015 FY2016
Tax Revenue($M) $553.7 $552.1 $581.5 $586.0 $618.2
Wages($M) $37,944.56 $39,477.34 $41,887.51 $44,288.41 $44,892.68
Tax Rev as%Wages 1.46% 1.40% 1.39% 1.32% 1.38%
Source:TXP,Inc.
'http://www.census.gov/govs/statetax/
3 http://www.tracer2.com/cgi/dataAnalysis/AreaSelection.asp?tableName=Industry
°http://fortworthtexas.gov/finance/
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1310 South 15t Street, Suite 105 Austin,Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Economic Impact of Red Productions Construction&Renovation of Facility
Table 4 depicts how Backlot Studios'construction and renovation-related spending(less contingency)
ripples through the Dallas-Fort Worth MSA economy.This spending increases regional economic activity
by$2.2 million, labor income by$0.7 million, and employment by 15 jobs.This table illustrates how the
Backlot Studios project encourages and promotes regional economic growth in other sectors of the
economy.
Table 4:Total Economic Impact of Red Productions Construction&Renovation of New Facility
Sector p at; Value Add
Agriculture,forestry,fishing,hunting $813 $305 $203 0.0
Mining $16,267 $10,370 $2,643 0.0
Utilities $19,622 $10,472 $2,948 0.0
Construction $1,028,070 $552,872 $379,019 6.2
Durable goods manufacturing $183,613 $69,338 $37,312 0.7
Nondurable goods manufacturing $92,823 $29,992 $15,657 0.3
Wholesale trade $89,570 $60,696 $27,857 0.4
Retail trade $132,779 $86,926 $46,564 1.6
Transportation and warehousing $60,899 $29,992 $18,605 0.4
Information $51,546 $29,890 $9,862 0.1
Finance and insurance $117,224 $61,001 $32,432 0.6
Real estate and rental and leasing $164,296 $113,97D $25,824 1.0
Professional,scientific,tech.services $80,725 $50,631 $37,211 0.5
Management of companies $24,705 $14,844 $10,268 0.1
Administrative and waste services $39,447 $25,620 $17,995 0.5
Educational services $10,574 $6,507 $4,982 0.2
Health care and social assistance $85,096 $51,037 $38,736 0.8
Arts,entertainment,and recreation $10,065 $5,795 $3,762 0.2
Accommodation $9,760 $6,202 $2,745 0.1
Food services and drinking places $32,331 $16,979 $10,574 0.5
Other services 1 $41,887 $23,180 $15,657 0.4
Households $0 $1,017 $1,017 0.1
Total Impact $2,292,111 $1,2�7,637 $741,873 14.7
Source:TXP,Inc.
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1310 South 1St Street, Suite 105 Austin,Texas 78704 (512)328-8300 phone , (512)462-1240 fax www.txp.com
State of Texas Tax impact of Impact of Backlot Studios Construction and Finish Out Spending
Applying the percentage of state tax revenue to GDP(3.36 percent) against new economic activity
attributable to the Backlot Studios construction and renovation project,the state is projected to receive
$42,287.88 in new tax revenue.
_$1,257,637 Constriction-related Value-Added (or GDP)x 3.36%
_$42,287.88
City of Fort Worth Tax Impact of Impact of Red Productions
Applying the percentage of city general fund tax revenues to regional wages (1.39 percent)against new
economic activity attributable to the Backlot Studios construction and renovation project,the City of
Fort Worth is projected to receive$10,306.39 in new tax revenue.
_$741,873 Constriction-related Wages x 1.39%
_$10,306.39
5 Property,sales, utility transfer,and other tax revenue
Page 9
1310 South 1st Street, Suite 1015 Austin,Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
About TXP, Inc.
TXP is an economic analysis and public policy consulting firm founded in 1987 in Austin,Texas.Since
then,TXP has grown into a team of professionals whose diverse backgrounds allow us to craft
customized solutions to client problems. Our clients have discovered that TXP is the firm to hire when
there is not an immediate,obvious, or simple solution to their economic or public policy challenge.Our
reputation for having the right people to analyze issues from a variety of perspectives has made TXP the
firm to call first for professionals in the public sector and business arenas. In addition to drawing on the
expertise of our firm members,we regularly partner with urban planning, engineering, and public policy
firms — as well as Ph.D.s in varying disciplines—to put together teams uniquely suited to our clients'
needs.
TXP has worked with a wide range of not-for-profits and private sector clients to provide illumination
through analytical support,always with a strategic view of the big picture. Members of TXP are involved
in the community and understand the challenges faced by an increasingly complex world, as heightened
media attention and an ever more diverse set of stakeholders shine a brighter spotlight on public
decision-making and public policy.
TXP, Inc.
1310 South 1st Street;Suite 105
Austin,Texas 78704
(512)328-8300 phone
(512)462-1240 fax
www.txp.com
Page 10
1310 South 15'Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
: : : : : : : :
Legal Disclaimer
TXP reserves the right to make changes,corrections and/or improvements at anytime and
without notice. In addition,TXP disclaims any and all liability for damages incurred directly or
indirectly as a result of errors,omissions,or discrepancies.TXP disclaims any liability due to
errors,omissions or discrepancies made by third parties whose material TXP relied on in good
faith to produce the report.
Any statements involving matters of opinion or estimates,whether or not so expressly stated,
are set forth as such and not as representations of fact,and no representation is made that
such opinions or estimates will be realized.The information and expressions of opinion
contained herein are subject to change without notice,and shall not,under any circumstances,
create any implications that there has been no change or updates.
Page 11
1310 South 151 Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
April 10, 2018
Mr. Red Sanders
President
Red Productions
1075 Foch Street
Fort Worth,Texas 76107
Dear Mr. Sanders,
Thank you for the opportunity to provide consulting services to Red Productions.The attached memo
highlights TXP's findings related to the economic and tax impact of Red Productions' proposed new
location in Fort Worth, Texas. TXP has organized the analysis and results based on the requirements of
the State of Texas Media Production Facilities Development Program.
To assist the City of Fort Worth and State of Texas in reviewing your application, I have summarized the
State of Texas Media Production Facilities Development Program. This document is intended to satisfy
the requirements of the economic impact analysis.
Please do not hesitate to contact me with any questions or comments.
Best regards,
Travis D.James
Vice President
Page 1
1310 South 151 Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Red Productions New Facility Project Summary
• Red Productions, LLC was created in 2005 to perform all services associated with video-
production.These services include development, pre-production, production, post-production,
and distribution.
• Red Productions also offers a co-working space called Backlot for full-time freelance creatives in
various professions within the media industry to work, meet with clients, and collaborate.
• Currently, Red Productions has 9 full-time Fort Worth employees with an average annual wage
of$44,000.
• Red Productions is contemplating moving its operations to a new location in Fort Worth,Texas.
• The legal entity purchasing and renovating the facility is KCPFII Bryan, LLC. Red Productions is an
equity partner in KCPFII Bryan, LLC and is the anchor tenant for the building.
• The partnership will redevelop and improve 44,000 square feet of existing commercial office
space. KCPFII Bryan will spend approximately$4.0 million on this renovation.
• Red Productions will occupy a portion of the first floor of the building.
• The second floor would be leased by the partnership to other creative and video production
firms.
• This analysis is focused only on Red Productions Office Finish Out which is estimated to cost
$0.8 million.
• Because the project is nonresidential,the majority of the project costs are subject to state and
local sales tax.
• Red Productions anticipates adding 15 full-time jobs at an average annual wage of$48,000 over
the next 5 years.Table 1 depicts Red Productions current Fort Worth footprint and projected
growth figures based on moving to the new facility.
Table 1: Red Productions Project Summary by Year
Current Growth Attributable
Facility to New Facility
2017 2018 2019 2020 2021 2022
Revenue $1,409,000 $1,878,667 $2,348,333 $2,818,000 $3,287,667 $3,757,333
Wages $396,000 $540,000 $684,000 $828,000 $972,000 $1,116,000
Employment 9 12 15 18 21 24
Source:Red Productions
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1310 South 151 Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Table 2: Red Productions Office Finish Out Construction Cost Estimate
Component Cost Estimate* Component Cost Estimate*
Dumpsters/Haul Away $4,250 Appliances $15,000
Framing/Drywall/Insulation $82,600 Wall Finishes-Paint $50,000
Rough Carpentry $2,900 Wall Finishes-Wall Covering $45,000
Electrical $60,000 Flooring/Tile $32,000
Lighting Package $60,000 General Labor $7,500
Plumbing $45,000 Clean Up $7,500
Mechanical $80,000 Misc $5,000
Roofing $2,500 Subtotal Categories $667,250
Doors/Frames/Hardware $70,000 Supervision/Project Management $33,600
Glass&Glazing $35,000 Contractor Fee $42,051
Restroom Accessories $8,000 Subtotal $742,901
Fire Alarm $8,000 Insurance $14,858
Fire Protection $10,000 Remodel Tax @ 8.25% $61,289
Millwork $25,000 Grand Total $819,048
"a6im-
$12,000
Source:CG Northern Development,LLC
*These costs exclude sales tax
Figure 1: Building Exterior Rendering
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Source:Red Productions
Page 3
1310 South 1st Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax I www.txp.com
Figure 2: Red Productions Project Site Plan
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Page 4
1310 South 15t Street, Suite 105 Austin, Texas 78704, (512)328-8300 phone (512)462-1240 fax www.txp.com
Media Production Development Zone Act Overview
The Media Production Facilities Development Program'encourages the construction and renovation of
media production facilities—including soundstages, animation facilities and game studios—by granting a
sales and use tax exemption that covers their construction or renovation costs. Enacted by the State of
Texas in 2009,the program is also known as the Media Production Development Zone Act (MPDZA). The
Texas Film Commission administers the incentive program.
To be eligible for the sales and use tax exemption on the construction or renovation of a media
production facility:
• The applicant must own (or lease for four years)the land/building where the project is located
• The proposed facility must be used elusively for the creation of moving images projects.
• Acceptable media production facilities include:
o Soundstage
o Motion capture studio
o Animation facility
o Game facility
o Sound studio
o Scoring stage
o Editing facility
o Production office
Each application will need to provide the following documentation to support and justify the request:
• Specific and detailed description of the project
• Site plan for proposed media production location
• Floor plan for the proposed media production facility
• An itemized budget for project
• A schedule of media production equipment to be bought, rented, or leased
• An economic impact analysis
• Afinancial statement and background information on requestor
A MPDZA exemption cannot be granted unless the Texas Comptroller of Public Accounts certifies that
the project will have a positive impact on state revenue.The Comptroller makes this determination, in
part, by reviewing the economic impact analysis.
'http://gov.texas.gov/film/programs/mpdza
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1310 South 15'Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Economic Impact of Methodology
An economy can be measured in a number of ways. Four of the most common are "Output"which
describes total economic activity and is equivalent to a firm's gross sales, "Value Added"which equals
gross output of an industry or a sector less its intermediate inputs, "Labor Income"which corresponds
to wages and benefits, and "Employment"which refers to permanent jobs that have been created in
the local economy.
In an input-output analysis of new economic activity, it is useful to distinguish three types of
expenditure effects: direct, indirect, and induced.
Direct effects are production changes associated with the immediate effects or final demand changes.
The payment made by an out-of-town visitor to a hotel operator is an example of a direct effect,as
would be the taxi fare that visitor paid to be transported into town from the airport.
Indirect effects are production changes in backward-linked industries caused by the changing input
needs of directly affected industries—typically, additional purchases to produce additional output.
Satisfying the demand for an overnight stay will require the hotel operator to purchase additional
cleaning supplies and services,for example, and the taxi driver will have to replace the gasoline
consumed during the trip from the airport.These downstream purchases affect the economic status of
other local merchants and workers.
Induced effects are the changes in regional household spending patterns caused by changes in
household income generated from the direct and indirect effects. Both the hotel operator and taxi
driver experience increased income from the visitor's stay,for example, as do the cleaning supplies
outlet and the gas station proprietor. Induced effects capture the way in which this increased income is
in turn spent by them in the local economy.
The interdependence between different sectors of the economy is reflected in the concept of a
"multiplier."An output multiplier,for example, divides the total (direct, indirect and induced)effects of
an initial spending injection by the value of that injection—i.e.,the direct effect.The higher the
multiplier,the greater the interdependence among different sectors of the economy.An output
multiplier of 1.4,for example, means that for every$1,000 injected into the economy,another$400 in
output is produced in all other sectors.
For this project,TXP used Dallas-Fort Worth MSA RIMS II multipliers (2007 U.S. Benchmark 1-0 data and
2015 Regional Data).
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1310 South 151 Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Tax Revenue Impact Methodology
To provide an "order of magnitude"estimate for tax revenue attributable to the Red Productions
project,TXP focused on the ratio of government tax collections to gross domestic product (GDP)and
wages. Four datasets were used to derive the ratio: 1) U.S. Department of Commerce Bureau of
Economic Analysis GDP estimates by state and metropolitan area; 2)the U.S. Census Bureau State
Government Tax Collections2(STC) report; 3)Texas Workforce Commission Tarrant County Quarterly
Employment and Wages (QCEW)3;and 4)City of Fort Worth4 budget documents.A brief description of
the STC data collection methodology follows:
In this survey, "taxes" are defined as all compulsory contributions exacted by a government for
public purposes,except employer and employee assessments for retirement and social
insurance purposes,which are classified as insurance trust revenue. Outside the scope of this
collection are data on the unemployment compensation "taxes" imposed by each of the state
governments. However,all receipts from licenses and compulsory fees, including those that are
imposed for regulatory purposes, as well as those designated to provide revenue are included.
Over the past five years,the state tax revenue as a percent of state GDP was 3.36 percent.
Table 3:State of Texas Tax Revenue as a Percent of State GDP
2012 2013 2014 2015 2016
Tax Revenue($M) $48,597 $51,714 $55,261 $55,086 $52,132
GDP($M) $1,437,893 $1,536,472 $1,614,127 $1,611,189 $1,616,801
Tax Rev as%GDP 3.38% 3.37% 3.42% 3.42% 3.22%
Source:TXP,Inc.
Note:2017 GDP data is not available
Over the past five years, City of Fort Worth total general fund tax revenue as a percent of Tarrant
County wages was 1.39 percent.
Table 4:City of Fort Worth General Fund Tax Revenue as a Percent of Tarrant County Wages
FY2012 FY2013 FY2014 FY2015 FY2016
Tax Revenue($M) $553.7 $552.1 $581.5 $586.0 $618.2
Wages($M) $37,944.56 $39,477.34 $41,887.51 $44,288.41 $44,892.68
Tax Rev as%Wages 1.46% 1.40% 1.39% 1.32% 1.38%
Source:TXP,Inc.
2 http://www.census.gov/govs/statetax/
3 http://www.tracer2.com/cgi/dataAnalysis/AreaSelection.asp?tableName=Industry
4 http://fortworthtexas.gov/finance/
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1310 South 1g'Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Economic Impact of Red Productions Construction&Renovation of Facility
Table 5 depicts how Red Productions'construction and renovation-related spending(less contingency)
ripples through the Dallas-Fort Worth MSA economy.This spending increases regional economic activity
by$1.7 million, labor income by$0.5 million,and employment by 11 jobs.This table illustrates how the
Red Productions project encourages and promotes regional economic growth in other sectors of the
economy.
Table 5:Total Economic Impact of Red Productions Construction&Renovation of New Facility
Sector output Value Add arnln i rr (a Ilnt
Agriculture,forestry,fishing,hunting $594 $223 $149 0
Mining $11,886 $7,578 $1,932 0
Utilities $14,338 $7,652 $2,154 0
Construction $751,221 $403,990 $276,953 5
Durable goods manufacturing $134,168 $50,666 $27,264 0
Nondurable goods manufacturing $67,827 $21,916 $11,441 0
Wholesale trade $65,450 $44,351 $20,355 0
Retail trade $97,023 $63,518 $34,025 1
Transportation and warehousing $44,500 $21,916 $13,595 0
Information $37,665 $21,841 $7,206 0
Finance and insurance $85,656 $44,574 $23,699 0
Real estate and rental and leasing $120,053 $83,279 $18,870 1
Professional,scientific,tech.services $58,986 $36,996 $27,190 0
Management of companies $18,052 $10,846 $7,503 0
Administrative and waste services $28,825 $18,721 $13,149 0
Educational services $7,776 $4,755 $3,640 0
Health care and social assistance $62,181 $37,294 $28,305 1
Arts,entertainment,and recreation $7,355 $4,235 $2,749 0
Accommodation $7,132 $4,532 $2,006 0
Food services and drinking places $23,624 1 $12,406 1 $7,726 1 0
Other services $30,608 $16,938 $11,441 0
Households $0 $743 $743 0
ImpactTotal a $542,095 11
Source:TXP,Inc.
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1310 South 15t Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Economic Impact of Red Productions Annual Operations
Table 6 illustrates how normal business activity at Red Productions ripples through the Dallas-Fort Worth
MSA economy.Over the next five years, Red Production's annual impact on the regional economy will
more than double.The figures for year 2017 represent the current impact or"baseline"of Red
Productions.TXP has removed or"subtracted"this baseline activity so as to focus on the net new
economic and tax impact of project.
Table 6:Total Economic Impact of Red Productions Annual Operations(Direct+Indirect+Induced)
Year Output Value Add(or GDP) Earnings emptIMM9
2017 $2,596,083 $1,466,065 $980,615 20
2018 $3,374,907 $1,905,884 $1,337,202 26
2019 $4,153,732 $2,345,703 $1,693,789 32
2020 $4,932,557 $2,785,523 $2,050,376 37
2021 $5,711,382 $3,225,342 $2,406,964 43
2022 $6,490,206 $3,665,161 $2,763,551 49
MEN
Source:TXP,Inc.
State of Texas Tax impact of Impact of Red Productions
Applying the percentage of state tax revenue to GDP (3.36 percent)against new economic activity
attributable to Red Productions'expansion project,the state is projected to receive$252,733 in net new
tax revenue over the next five years.
Table 7:State of Texas Estimated Tax Revenue Impact of Red Productions Annual Operations
Annual Less Existing Net Change in Annual Tax Impact
Phase Value Add/GDP Activity(2017) Value Add/GDP (8.36%ratio)
Construction $918,969 $0 $918,969 $30,900
2018 $1,905,884 $1,466,065 $439,819 $14,789
2019 $2,345,703 $1,466,065 $879,639 $29,578
2020 $2,785,523 $1,466,065 $1,319,458 $44,367
2021 $3,225,342 $1,466,065 $1,759,277 $59,155
2022 $3,665,161 $1,466,065 $2,199,097 $73,944
Total Net New State Tax Revenue $252,733
Source:TXP,Inc.
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1310 South 15'Street, Suite 105 ; Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax , www.txp.com
City of Fort Worth Tax Impact of Impact of Red Productions
Applying the percentage of city general fund tax revenues to regional wages (1.39 percent)against new
economic activity attributable to Red Production's expansion project,the City of Fort Worth is projected
to receive$81,839 in net new tax revenue over the next five years.
Table 8:City of Fort Worth Estimated Tax Revenue Impact of Red Productions Annual Operations
Total Annual Less Existing Net Change in Annual Tax Impact
Phase Wages Impact* Wages(2017) Value Add/GDP (0.1.39%ratio)
Construction $542,095 $0 $542,095 $7,531
2018 $1,337,202 $980,615 $356,587 $4,954
2019 $1,693,789 $980,615 $713,174 $9,908
2020 $2,050,376 $980,615 $1,069,762 $14,862
2021 $2,406,964 $980,615 $1,426,349 $19,815
2022 $2,763,551 $980,615 $1,782,936 $24,769
Total Net New City Tax Revenue $81,839
Source:TXP,Inc.
s Property,sales,utility transfer,and other tax revenue
Page 10
1310 South 1st Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
About TXP, Inc.
TXP is an economic analysis and public policy consulting firm founded in 1987 in Austin,Texas. Since
then,TXP has grown into a team of professionals whose diverse backgrounds allow us to craft
customized solutions to client problems. Our clients have discovered that TXP is the firm to hire when
there is not an immediate, obvious, or simple solution to their economic or public policy challenge. Our
reputation for having the right people to analyze issues from a variety of perspectives has made TXP the
firm to call first for professionals in the public sector and business arenas. In addition to drawing on the
expertise of our firm members,we regularly partner with urban planning, engineering, and public policy
firms — as well as Ph.D.s in varying disciplines—to put together teams uniquely suited to our clients'
needs.
TXP has worked with a wide range of not-for-profits and private sector clients to provide illumination
through analytical support, always with a strategic view of the big picture. Members of TXP are involved
in the community and understand the challenges faced by an increasingly complex world, as heightened
media attention and an ever more diverse set of stakeholders shine a brighter spotlight on public
decision-making and public policy.
TXP, Inc.
1310 South 1st Street;Suite 105
Austin,Texas 78704
(512)328-8300 phone
(512)462-1240 fax
www.txp.com
Page 11
1310 South 11'Street, Suite 105 Austin, Texas 78704 (512) 328-8300 phone (512)462-1240 fax www.txp.com
Legal Disclaimer
TXP reserves the right to make changes,corrections and/or improvements at any time and
without notice. In addition,TXP disclaims any and all liability for damages incurred directly or
indirectly as a result of errors,omissions,or discrepancies.TXP disclaims any liability due to
errors,omissions or discrepancies made by third parties whose material TXP relied on in good
faith to produce the report.
Any statements involving matters of opinion or estimates,whether or not so expressly stated,
are set forth as such and not as representations of fact,and no representation is made that
such opinions or estimates will be realized.The information and expressions of opinion
contained herein are subject to change without notice,and shall not,under any circumstances,
create any implications that there has been no change or updates.
Page 12
1310 South 1 I Street, Suite 105 Austin, Texas 78704 (512)328-8300 phone (512)462-1240 fax www.txp.com
Boundary]Description
Tax Increment Reinvestment Zone Number Four,City of Fort Worth,Texas
Being a tract of land in the City of Fort Worth, Tarrant County, Texas, which tract is more
particularly described as follows:
Beginning at the southwest corner of Lot 25, Block 20, Fairmount Addition, being in the
easterly line of an alley and in the northerly line of West Arlington Avenue;
Thence westerly along the northerly line of said West Arlington Street to the easterly line of
the Fort Worth&Western Railroad main track right-of-way;
Thence with said Railroad to its intersection with the south line of Park Place;
Thence with the south line of Park Place to its intersection with the extension of the west
line of Berkley Street;
Thence crossing Park Place and with the west line of Berkley Street northerly to the south
line of Edwin Avenue;
Thence easterly crossing Berkley Street and along the north line of Block 7 of Forest Park
Place, commonly known as the Lily B. Clayton School Property, crossing the afore
mentioned Fort Worth&Western Railroad to the east line of said Railroad;
Thence northerly along the cast line of said railroad to its intersection with the north line of
All Saints Episcopal Hospital Block 2;
Thence easterly with the north line of said Block 2 to its intersection with the western line of
Fort Worth&Western Railroad right-of-way;
Thence northerly along the west line of said railroad to the southerly line of Mistletoe.
Boulevard;
Thence westerly along the south line of said Mistletoe Boulevard to the easterly line of the
Fort Worth& Western Railroad right-of-way.
Thence northerly along the east line of said Railroad to the southerly line of West Rosedale
Street;
Thence westerly along the south line of said West Rosedale Street to the easterly line of
Forest Park Boulevard;
Thence northerly along the east line of.said Forest Park Boulevard to the southerly line of
line of the Union Pacific Railroad;
Thence northeasterly along the southerly line of said Union Pacific Railroad to the north line
Exhibit"A" Page 1
of West Vickery Boulevard;
Thence easterly alorig the north line of said West Vickery Boulevard to the southerly right-
of-way line of new Interstate Highway 30;
Thence easterly along the southerly right-of-way line of said new U.S. Highway 30,
crossing Interstate Highway 35W to the east line of Kentucky Street;
Thence southerly along the east line of said Kentucky Street to its intersection with the
south line of Terrell Street;
Thence westerly with the southerly line of said Terrell Street to the northeast corner of Lot
1,Block 2 McNulty and Nesbit Subdivision;
Thence southerly along the easterly line of said Lot 1 and Lot 30 of said McNulty and
Nesbit Addition to the northerly line of Humbolt Street;
Thence easterly along the northerly line of said.Humbolt Street to a point on the northerly
extension of the last line of lots 32 and 32A,Block 2 of said McNulty and Nesbit Addition;
Thence southerly crossing said Humbolt Street and along the east line of said lots 32 and
32A and continuing on said line to the southeast comer'of Lot 4, Graves and McDaniel
Subdivision and being in the north line of Maddox Avenue, (this line to run generally along
the east line of the first tier of lots on the east side of Evans Avenue from Humbolt to
Maddox);
Thence westerly along the northerly line of said Maddox to a point on the northerly
extension of Lot 553,Block 22,Hyde Park Addition;
Thence southerly crossing said Maddox Street along the easterly line of lots 553 and 580 of
said Hyde Park Addition to the southerly line of said East Allen Avenue;
Thence westerly along the southerly line of said East Allen Avenue to a point on the
southerly extension of the westerly line of South Main Street;
The northerly crossing said East Allen Street and along the westerly line of said South Main
Street to the southerly line of Feliks Gwozdz Place;
Thence westerly along the southerly line of said Feliks Gwozdz Place to a point on the
southerly.extension of the east line of Lot 2, Block D, of the Hendricks Subdivision of
Fields-Welsh Addition;
Thence northerly crossing said Feliks Gwozdz Place and along the east line of said Lot 2 to
the northerly line of Ingram Street;
Thence easterly along the north line of said Ingram Street to the westerly line of Travis
Exhibit"A" Page 2
Street;
Thence northerly along the west line of said Travis Street to the southerly line of West
Morphy Street;
Thence westerly along the south-line of said West Morphy Street to the northwest corner of
Lot 8,Block D,of said Hendricks Subdivision;
Thence southerly along the west line of said Lot 8 to the north line of an alley which divides
said Block D,Hendricks Subdivision;
Thence westerly along the north line of said alley to the east line of Lipscomb Street;
Thence southerly along the east line of said Lipscomb Street to a point on an easterly
extension of the south line of Lot 12, Block C of Armstrong Subdivision of Fields-Welsh
Addition;,
Thence westerly along said line and along the south line of Lot 12 and Lot 4 of Block C,
said Armstrong Subdivision to the easterly line of Alston Street;
Thence southerly along the east line of said Alston Street to the southerly line of Maddox
Street; ,
( Thence westerly along the southerly line of Maddox Street to the westerly line of College
` Street;
Thence northerly along the west line of said College Street to the northerly line of West
Morphy Street;
Thence easterly along the north line of said West Morphy Street to the westerly line of said
Lipscomb Street;
Thence northerly along the westerly line of said Lipscomb Street to the northeast corner of
Lot 3B,Block A,of Martin&Moodie Subdivision of Fields-Welsh Addition;
Thence westerly to the northwest corner of said Lot 3B;
Thence southerly to the southwest corner of Lot 3B;
Thence westerly along the southerly line of Lot 3A of said Block A, extending to the
westerly line of said Alston Street;
Thence northerly along the westerly line of said Alston Street to the northeast corner of Lot
4,Block 1,Brooks and Bailey Subdivision;
Thence westerly along the northerly line of said Lot 4 extending to the west line of an alley;
Exhibit"A" Page 3
Thence southerly along the west line of said alley to the northerly line of an intersecting
alley;
Thence westerly along the northerly line of said alley to the westerly line of said College
Street;
Thence northerly along the westerly line of said College Street to the northeast corner of Lot
3,Block 2,of said Brooks and Bailey Subdivision;
Thence westerly along the northerly Iine of said Lot 3, Block 2 extending to the westerly
line of an alley;
Thence southerly along said westerly line to the northerly line of an intersecting alley;
Thence westerly along said northerly line to the westerly line of Washington Street;
Thence northerly along said westerly line to the northeast corner of Lot IE of D.S. Ross
Subdivision;
Thence westerly along the northerly line of said Lot 1E extending to the westerly line of an
alley;
Thence southerly along said westerly line to the southeast corner of Lot 1A, said D.S. Ross
Subdivision;
Thence westerly along the southerly line of said Lot 1A extending to the westerly line of
Adams Street;
Thence northerly along said westerly line to the northeast corner of Lot 8D, said D.S. Ross
Addition;
Thence westerly to the northwest corner of said Lot 8D;
Thence southerly along the westerly line of said Lot 8D to the northeast corner of Lot 8C,
said D.S.Ross Addition;
Thence westerly along the northerly line of said Lot 8C extending to the westerly line of
Henderson Street;
Thence southerly along said westerly line to the southeast corner of Lot 4R, Block A,
King's Subdivision of Fields-Welsh Addition;
Thence westerly along the southerly line of Lots 4R and 13R, Block A extending to the
westerly line of Fifth Avenue;
Exhibit"A" Page 4
Thence northerly along said westerly line to the northeast corner of Lot 4, Block B of said
King's Subdivision;
Thence westerly along the northerly line of said Lot 4 and Lot 13 extending to the westerly
line of Lake Street;
Thence southerly along said westerly line to the northeast corner of Lot 5,Block 1,Johnson
Subdivision of Fields-Welsh Addition;
Thence westerly along the northerly line of said Lot 5 to the northeast corner of Lot 28 said
Block 1;
Thence southerly to the southeast corner of said Lot 28;
Thence westerly along the southerly line of said lot 28 extending to the westerly line of
Sixth Avenue;
Thence northerly along said westerly line to the northeast corner of Lot 5, Block 2, of said
Johnson Subdivision;
Thence westerly along the north line of said Lot 5 to the southeast corner of Lot 29, said
Block 2;
l Thence northerly to the northeast corner of Lot 30,said Block 2;
Thence westerly along the northerly line of said Lot 30 extending to the westerly line of
Fairmount Street;
Thence northerly along the west line of said Fairmount Street to the southerly line of
Magnolia Street;
Thence westerly_along said southerly line to the westerly line of an alley which divides
Block C of McNulty and Nye Subdivision;
Thence southerly along the westerly line of said alley to the southeast corner of Lot 4,Block
C of said McNulty and Nye Subdivision;
Thence westerly along the southerly line of said Lot 4 extending to the westerly line of
Seventh Avenue;
Thence southerly along said westerly line to the southeast corner of Lot 27,Block B of said
McNulty and Nye Subdivision;
Thence westerly along the southerly line of said Lot 27 extending to the westerly line of an
alley;
Exhibit"A" Page 5
Thence northerly along said westerly line to the southerly line of said Magnolia Street;
Thence westerly along said southerly line to the easterly line of Hurley Street;
Thence southerly along said easterly line to the southerly line of said West Morphy Street;
Thence westerly along said southerly line to the northeast corner of Lot F7, Block F,'of said
McNulty and Nye Subdivision;
Thence southerly along the easterly line of said Lot F7 and F3 and F2 and F4 and extending
to the southerly line of Myrtle Sheet;
Thence easterly to the easterly line of an alley which divides Block 9 of Loyd's Addition
and Block 1 of Stewart's Addition and Block 1 of Fairmount Addition:
Thence southerly along the easterly line of said alley to the southerly Iine of said West Allen
Avenue;
Thence easterly along said southerly line to the northeast corner of Lot 32, Block 10,
Fairmount Addition;
Thence southerly with the westerly line of Hurley Avenue to the southeast corner of Lot 23,
said Block 10;
Thence westerly along the southerly line of said Lot 23 to the easterly line of an alley;
Thence southerly along the easterly line of said alley to the southwest corner of Lot 25,
Block 20,Fairmount Addition and THE POINT OF.BEGINNING.
SAVE&EXCEPT THE FOLLOWING TRACTS OF LAND:
Lot 3B,Block N,•Rosedale Addition(Newkirk Wallerich Building-Ray Boothe);
Lots 5, 6, 7, and 7 feet of Lot 4 Block I, Rosedale Addition (Fresnel Technologies -Linda
Claytor);
Lots 1, 2, 3, 4A, 5B, 6A, & 6B, Block 34, Tucker's Addition (Fire Station #5 - Bob
Higginbotham);
Lots 1, 2, 3, 5, 6, 7, & 8, Block Land 700, Smith, Jones & Daggett Addition (Recreation
Building-Mark Hulme);
Lots A1B and A2,Block 2,Field's-Welch Addition(Parker Commons-Fred Brodsky);
Lots 7R and 8R,Block 3,McLellan Subdivision of Field's-Welch Addition (Mehl Building
-David Motheral);
Lot 1,Block 3,Edward's Heirs Addition(600 Eighth Avenue-Art Brender);
Lots 4B and 5C,Block 17,Jennings South Addition,(201 South Lipscomb-Brent Hull);
Lot 1,Block 7,Evans South Addition,(924 Evans Avenue-Glen Hilton Smith);
Lots 1A, 1B,1C, ID, 2, and 3, Block 3, Martin and Moodie Subdivision of Field's-Welch
Exhibit"A" Page 6
Addition(Modern Drug-Ray Boothe);
and those tracts of land being more particularly described as.follows:
Beginning at the intersection of the northerly line of Terrell Street with the easterly line of
Seventh Street;
X
Thence northerly along the easterly Iine of said Seventy Street to the northwest corner of
Lot 1,Block 2,Grandview Addition;
Thence easterly along the northerly line of Lots 1 through 8, said Block 2 and extending
to the easterly line of West Sixth Avenue;
Thence northerly along the easterly line of said Sixth Avenue to the southerly line of
Pennsylvania Avenue;
Thence easterly along the southerly line of said Pennsylvania Avenue to the westerly
line of said Henderson Street;
Thence along the westerly line of said Henderson Street to the northerly line of said
Terrell Street;
Thence westerly along the northerly line of said Terrell Drive to THE POINT OF
{ BEGINNING(Cook's Children's and Harris Methodist Hospitals);and
Beginning at the intersection of the northerly line of Petersmith Street with the easterly
line of Jennings Avenue;
Thence northerly along the easterly line of said Jennings Avenue to the southerly line of
Broadway Street;
Thence easterly along the southerly_line of said Broadway Street to the westerly line of
Galveston Street;
Thence southerly along the western line of Galveston to the northerly line of Petersmith
Street;
Thence westerly along the northerly line of said Petersmith Street to THE POINT OF
BEGINNING(Broadway Baptist Church and Temple Beth El).
Ddcember 15, 1997
Exhibit"A" Page 7
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BRYAN AVENUE REOEVELOM ENT IS
BRYAN AVENUE pp po BRYAN AVENUE
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 6/26/2018 - Ordinance Nos. 23293-06-2018 & 23294-06-
2018
DATE: Tuesday, June 26, 2018 REFERENCE NO.: G-19325
LOG NAME: 1717ED MPDZ01
SUBJECT:
Adopt Ordinance Designating the Area Within the Boundaries of Tax Increment Reinvestment Zone
Number Four, City of Fort Worth Texas (Southside TIF) as Media Production Development Zone Number
One, and Adopt Ordinance Nominating the Real Property at 305 South Main Street, Suites 100-110, for
Designation as a Qualified Media Production Location Within that Zone (COUNCIL DISTRICT 9).
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached ordinance designating the area comprising the Southside TIF as Media Production
Development Zone Number One, City of Fort Worth, Texas; and
2. Adopt the attached ordinance nominating the real property at 305 South Main Street, Suites 100-110,
for designation by the Office of the Governor as a Qualified Media Production Location within that Zone.
DISCUSSION:
Section 485A of the Texas Government Code enacts the Media Production Development Zone Act (the
Act), administered by the Texas Film Commission. The Media Production Development Zone (MPDZ) is
designed to encourage the development of permanent moving image production sites to help strengthen
the Texas economy. This incentive program not only supports growth of the media industry, but also
brings about tangible investment in assets that strengthen the local tax base. It also provides an
opportunity to continue implementation of the City of Fort Worth Economic Development Strategic Plan's
goal to become a hub for creative businesses.
MPDZ allows for a two year sales and use tax exemption for the construction, maintenance, expansion,
improvement, or renovation of a media production facility at a Qualified Media Production Location in a
designated Media Production Development Zone.
The City of Fort Worth and the area within the Southside TIF will meet the criteria for recognition as a
MPDZ under the Act so long as a Qualified Media Production Location is designated within that area. The
exact boundaries of the proposed zone are described in Exhibit A of the attached ordinance designating
the Zone.
Under the Act, the governing body of a municipality, by ordinance, may nominate a location as a Qualified
Media Production Location if the location is situated in a MPDZ.
To be designated a Qualified Media Production Location, a location must be land or other real property
that is in a MPDZ and will:
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(1) be used exclusively to build or construct one or more media production facilities;
(2) if the real property is a building or other facility, be renovated solely for the purpose of being converted
into one or more media production facilities; or
(3) if the real property consists solely of one or more media production facilities, be improved or renovated
for that purpose or will be expanded into one or more additional media production facilities.
The building improvements located at 305 South Main Street, Suites 100-110, will qualify for designation
as a Qualified Media Production Location on the basis of the following proposed renovation and uses:
Two media-related projects (Requestors) are proposed at this location. Renovation is anticipated to begin
in the third quarter of 2018, and will take approximately six months to complete.
1. Red Productions, LLC, a full service film and production company headquartered in Fort Worth will
relocate and be the lead tenant occupying approximately 7,600 square feet in Suite 100 of the building. It
is expected that approximately $1,110,853.00 will be expended for building renovation materials,
machinery, and equipment. Those items will be exempted from sales tax on account of designation of the
location as a Qualified Media Production Location. Red Productions, LLC, anticipates adding five jobs at
an average annual wage of$48,000.00 over the next two years.
The space provides:
a. edit bays, office space, and conference rooms for producers, production managers and editors
b. open co-working space for media related and creative companies.
The value of the proposed exemption-on City of Fort Worth $.02 sales taxes on eligible tax exempt items
will be approximately $22,217.00.
2. KCPFII Bryan, LLC, a partnership between Red Productions, LLC, and Craig Kelly, a real estate
developer, will create "Backlot Studios" in Suite 110, a fully functional studio space for rent for film
production, photography shoots, and scoring by different media professionals. It is expected that
approximately $1,184,328.00 will be expended on building renovation materials, machinery and
equipment. The value of the proposed exemption on City of Fort Worth $.02 sales taxes on eligible tax
exempt items will be approximately $23,686.56.
Other locations within the proposed Zone can be designated as Qualified Media Production Locations by
the State and receive the same sales tax exemptions, but only if nominated by the City Council. There is a
limitation of three Locations allowed at any one time in a Zone.
Other areas in Fort Worth can be designated as MPDZ in the future, to the extent approved by the City
Council and permitted under the Act.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that the estimated loss in sales tax revenue to the City is anticipated to be
$45,904.00. This reduction in revenue will be built into the City's financial plan.
FUND IDENTIFIERS (FIDs):
TO
Fund Department ccoun Project JProgram ctivity Budget Reference # moun
ID ID Year Chartfield 2
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CERTIFICATIONS:
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Robert Sturns (2663)
Additional Information Contact: Robert Sturns (2663)
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