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HomeMy WebLinkAboutIR 10170 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10170 To the Mayor and Members of the City Council August 7, 2018 h�T�i7 Page 1 of 2 �i �i7 Y SUBJECT: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH ELAN rrn f WEST 7t", L.P. IN THE AMOUNT OF $204,085.61 On July 16, 2013 (M&C C-26348) the City Council authorized the execution of a Tax Abatement Agreement (City Secretary Contract No. 44750) with Elan West 7t", L.P. (Company) for the construction of a multi-family development at 2726 Mercedes Ave, Fort Worth, TX 76107; consisting of apartments and townhomes with at least 374 units and a parking garage with at least 498 spaces. Per the Agreement, the Company was required to invest at least $35,000,000 in real property improvements, the greater of 30% or $10,500,000 in hard construction spending with Fort Worth companies, and the greater of 25% or $8,750,000 in hard construction spending with Fort Worth Certified M/WBE companies by December 31 , 2015. The Company committed to maintaining a minimum of eight full-time employees, with a minimum of 20% of all jobs held by Fort Worth residents and at least 10% held by Fort Worth Central City residents. Annually, the Company must invest the greater of 30% or $70,050.00 in supply and service expenditures with Fort Worth companies and the greater of 25% or $58,375 in supply and service expenditures with Fort Worth certified MWBE companies. The Company must also reserve 37 units as affordable housing for adjusted incomes at or below 80% of HUD's income limits for the Fort Worth-Arlington, TX metropolitan area. In addition, eight units on property were required to be fully handicapped accessible with three being fully handicapped accessible units that are also affordable housing units. All of the required construction improvements at the project site have been completed. The Company also acted in good faith to meet all annual commitments for year one of ten as required by the executed agreement. Previously, the City's practice with Tarrant Appraisal District (TAD), which is under contract with the City to prepare the City's tax bills, was to notify TAD of any Abatements that the City was granting for a given tax year, including the property location and the amount of Abatement to be applied. Unbeknownst to the City or Company, TAD now requires any recipient of an Abatement to also file an application with TAD in order for an Abatement to be applied to the applicant's tax bill. Because of this disconnect, Developer did not file such an application for the 2017 tax year. As a result, Company did not receive the Abatement for the 2017 tax year that both the City and Company expected in accordance with the Tax Abatement Agreement. The amount of Abatement that Company should have received for the 2017 tax year is $204,085.61 . In order to effectuate the parties' intent under the Tax Abatement Agreement, staff is recommending that the City and Company enter into a one year Economic Development Agreement under which the City will provide an economic development grant to Company in an amount equal to the amount of the Abatement that both the City and Developer expected to be applied for the 2017 tax year, as authorized by Chapter 380 of the Texas Local Government Code. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10170 To the Mayor and Members of the City Council August 7, 2018 h�T�i7 Page 2 of 2 �i �i7 Y SUBJECT: ECONOMIC DEVELOPMENT PROGRAM AGREEMENT WITH ELAN rrn f WEST 7t", L.P. IN THE AMOUNT OF $204,085.61 Staff will place an M&C for City Council consideration on the August 14, 2018 agenda, recommending approval of a one year Economic Development Program Agreement with Elan West 7th, L.P., allowing for a one-time payment in the amount of $204,085.61. If you have any questions concerning this information, please contact Robert Sturns, Economic Development Director at 817-392-2663 or robert.sturns@fortworthtexas.gov. David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS