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HomeMy WebLinkAbout2002/07/09-Minutes-HEDC City of Fort Worth City Council Economic & Community Development Committee Highlights of the Meeting Held July 9, 2002 Committee Members Present: Jeff Wentworth, Wendy Davis, Frank Moss, Clyde Picht Council Members and City Staff Present: Chuck Silcox, Mike Barber, Bette Chapman, Bea Cura, Deidra Emerson, Sarah Fullenwider, Cynthia Garcia, John Garfield, Pat Hale, Vida Hariri, Tom Higgins, James Keyes, Christine Maguire, Penny McCook, Elizee Michel, Sandy Oliver, Reid Rector, Cynthia Sanchez, Kirk Slaughter, Robert Sturns, Peter Vaky, Jerome Walker, Ardina Washington, Barbara Wilson Call to Order: Chairman Jeff Wentworth called the meeting to order at 1:13 p.m. Approval of Minutes from the Meeting held on June 11,2002: Committee Member Clyde Picht moved to approve the minutes. Committee Member Wendy Davis seconded the motion, which passed unanimously. Status Report on the Cultural District and Will Rogers Memorial Center Master Plan: Public Events Director Kirk Slaughter presented the report. He said that work is continuing on Phase H of the Gendy redevelopment between Burnett Tandy and Lancaster. He added that it had been discovered that some utilities were closer to the surface than had been anticipated, and this is being redesigned to accommodate the building of the street. Mr. Slaughter said that despite the slight delay this has created, the project is moving forward on schedule. Aft cussion and Consideration of Changing the Boundaries of the Alliance Foreign Trade Zone 0196): m Harris, senior vice president of Hillwood Properties, presented the request (presentation attached). He explained the importance of the Zone and said that the current boundaries of the Zone encompass about 9600 acres. This acreage includes the majority of the property commonly known as Alliance Texas, the property on which Texas Motor Speedway is located, and the property north of Alliance called Hunter Ranch. Mr. Harris further explained that the proposed boundary changes would take land that will likely never be utilized for FTZ purposes and would replace it with land that could require the FTZ designation in the future. Mr. Harris said that Alliance Corridor, Inc., as grantee and administrator of the Alliance Foreign Trade Zone, would submit a proposal to change the boundaries of the Zone to the Foreign Trade Zone Board in Washington. He asked for a letter of support from the Council to be submitted in conjunction with the proposal. Both Ms. Davis and Committee Member Frank Moss expressed concern about the amount of Fort Worth land being removed from the Zone. Ms. Davis said she would like for Hillwood Properties and the Committee to work together to include more Fort Worth areas in the next boundary change. Mr. Wentworth said that he was concerned that the removal of Fort Worth land from the Zone would make Fort Worth less competitive. He then asked Mr. Harris to return at a later meeting with more detail on the Fort Worth acreage that was being removed from the Zone versus the Fort Worth acreage that would be placed in the Zone. He also asked Mr. Harris to give the Committee an indication of how many acres of undeveloped Trade Zone land would remain in the City of Fort Worth. @-. Hams said he would work on creating a balanced solution and report again at the next meeting. . Discussion and Consideration of a Resolution to Receive Funding for the Magnolia Green Project from the North Central Texas Council of Governments Joint Venture Grant: Community Development Manager Christine Maguire made the presentation (attached). She briefed the Committee on the overall concept of the Magnolia Green project and the procedures by which the City and developer would secure the Transportation/Land Use Joint Venture Grant through the Texas Department of Transportation. She explained that Magnolia Green is a mixed-use development project to be located at the juncture of Rosedale and phill Streets. The development includes 110 units of residential space, 18,700 square feet of retail space, and ,500 square feet of office space. Ms. Maguire further explained that the key first step to secure the joint venture grant is the passage of a Council resolution attesting to the developers' pledge to comply with the prerequisites of the grant. Ms. Maguire then outlined the prerequisites and explained to the Committee how the developers will be meeting these prerequisites. Mr. Picht asked if there was a designated developer for the project. Ms. Maguire said that Pennsylvania Avenue Ltd. Partnership has contracted with Jim Eagle and Tom Purvis to oversee the project. Mr. Picht then asked for an explanation of the appropriate project assistance that the City is required to provide. Ms. Maguire explained that either she or other staff would work with the developer to help shepherd the project through the various City department processes. Mr. Picht asked if the developer planned to ask for tax abatement on the property. Ms. Maguire said that there was no indication that the developer would do so. The developer's representative, Mr. Jim Eagle, said that since the property was in the Southside TIF, it was usually considered more advantageous to work with that entity rather than seeking tax abatement. Mr. Moss asked if the project would not automatically qualify for a five-year tax abatement since it was located in a Neighborhood Empowerment Zone. Ms. Maguire said that it would not be automatic since it was located in a TIF. She said that under these conditions, tax abatement would be at Council's discretion, and that such a proposal would have to come back before the Committee and then be approved by the City Council. Ms. Davis pointed out that since the project was located in a NEZ, it would qualify for other NEZ incentives, such as fee waivers. However, she added that she did not believe that there would be a request for tax abatement because the 0 elopers were working with the Southside TIF to provide infrastructure funding to assist with the project. Mr. Picht then asked if it were possible for tax abatement to be granted in conjunction with TIF participation. Assistant City Attorney Peter Vaky said that the City could grant tax abatement in a TIF if the tax abatement agreement is first approved by the TIF board and by the other taxing entities that are participating in the TIF. Ms. Maguire emphasized that the City had already received one million dollars of federal support for the project. Mr. Wentworth asked for an explanation of the total project cost of$1.5 million. Ms. Maguire said that this included $1.2 million dollars of federal funds plus a local match of$308,000 in land dedication for a park. She added that any cost overruns would be at the developer's cost. Ms. Davis moved to forward the resolution to the full Council for their consideration. Mr. Moss seconded the motion, which carried. Discussion and Consideration of a Tax Abatement Agreement with J. Kline LLC for Multi-family Housing in the Como/Ridglea Neighborhood Empowerment Zone: Jerome Walker, Director of Housing, made the presentation (attached). He said that staff was seeking additional guidance from the Committee regarding the proposed tax abatement agreement with J. Kline LLC. Mr. Walker reviewed the project, a 252-unit apartment complex in the Como/Ridglea NEZ that includes a 20% set aside of 50 units for families with income of 80% Area Median Income or below. Mr. Walker then reviewed the jftposal that had been approved by the Committee on May 29, which offered a nine-year abatement term with 100% tement in years 1-5 and a step down from 80% to 20% in years 6-9. Mr. Walker said that because the developer had then expressed concern about his ability to meet the MWBE requirements in that proposal, he was given the choice of having either the original proposal or a second developer-submitted proposal presented to the Council. The second option would allow the developer to receive the five-year automatic abatement if they comply with the minimum investment and the 20% affordable unit set-aside requirements, without having to adhere to all the terms of the nine-year abatement agreement. This would apply if the developer did not meet the construction requirements of the original proposal. It was expected that construction would take about two years. Wentworth asked if the 100% abatement in the first 5 years was not automatic under the NEZ. Mr. Walker said it was, as long as the set aside and capital investment requirements were met. Ms. Davis said that she had understood when the proposal was previously approved that years 1-5 already had the automatic abatement, and that only years 6-9 were dependent on the developer complying with the terms of the agreement. She said that it was her understanding when the Committee approved the original proposal that the developer's complying with the provisions of years 6-9 had no impact on the automatic abatement of years 1-5. Assistant City Attorney Cynthia Garcia said that the current NEZ policy contains two separate sections concerning tax abatement, one section pertaining to years 1-5 and the other to years 6-10. If application is made for 5 years, there is an automatic abatement for multi-family housing with the 20% set aside. If application is made for up to 10 years, there are three requirements under the current policy: the 20% set aside, an agreed-upon percentage of construction with Fort Worth companies, and an agreed-upon percentage of business with MWBE companies. These requirements apply to every year of the abatement. Both Ms. Davis and Mr. Wentworth expressed concern that this policy created a disincentive because a developer could lose the abatement in years 1-5 if he/she could not meet the requirements in years 6-9. Ms. Davis added that she preferred that the abatements receive the automatic 100% for years 1-5, and that abatement for years 6-9 be based on enhanced requirements governed under the same terms used for other tax abatements. Mr. Wentworth concurred. Mr. Picht disagreed, saying that he did not think the current policy created a disincentive, since developers now have the option of the guaranteed five-year abatement or taking the additional abatement and complying with the terms of the agreement. . Walker then presented the optional agreement (Option 1) that had been proposed by the developer. This option calls for a 100% abatement for years 1-5, and a step down abatement in years 6-10, assuming that all the requirements are met. Mr. Walker explained that failure to meet the minimum investment in the first five years would result in default of the abatement, and failure to meet the set-aside requirement would result in loss of the abatement for each year not in compliance. In years 6-9, a pro-rata reduction for non-compliance is proposed. For example, Mr. Walker said, under the construction to Fort Worth businesses requirement, if only 50% of the goal is achieved, then there is a reduction of 50% in the abatement basis from 20% to 10%. In addition, Mr. Walker explained, the jobs requirement, yearly inspection requirement and landscaping/management plan requirement would be audited each year. Failure to comply at any time in years 1-5 would result in a corresponding reduction in the abatement in years 6-10. Mr. Walker said that this created an incentive to meet all of the requirements in the first five years and not be penalized in those areas until years 6-9. (See the attached presentation for a discussion of Option 2.) Mr. Moss asked about the yearly inspection requirement, saying he thought that was one of the requirements for any abatement. Mr. Walker said that at the last Committee meeting, the Committee had asked that the yearly inspection requirement be included in all future abatement agreements, but it was not a requirement under current policy. Mr. Wentworth asked for an explanation of the variable percentages shown in Option 1. Ms Davis said that it was her understanding that the essential difference between Option 1 and Option 2 is that Option 1 provides the developer the ability to earn some of the abatement even if he/she is unable to comply with all of it, while under Option 2, no abatement is granted if the developer does not meet the whole percentage. Mr. Walker concurred and added that staff feels Option 1 rewards the developer for attempting to meet construction goals, while recognizing their efforts to Albeileve in the other areas without risking the total abatement. Mr. Wentworth said he preferred Option 1 and asked the Committee members which option they preferred. Ms. Davis and Mr. Moss said they also preferred Option 1. Mr. Picht preferred Option 2. Discussion and Consideration of Amendments to the Neighborhood Empowerment Zone Basic Incentives: Assistant City Attorney Cynthia Garcia explained the current policies and the three proposed amendments: (1) The current policy states that 100% abatement may be granted for up to ten years. The amendment gives the City Council the option to negotiate any percentage from 1-100% when application is made for the ten-year abatement. (2) The current set-aside policy says that 20% of the units must be affordable to persons who earn 80% of Area Median Income. The amendment requires that the units must not only have affordable rents but must also be occupied by persons with low to moderate income. (3) The current policy requires (a) 5 units or a capital investment of $200,000, (b) the 20% set aside, (c) an agreed-upon percentage of Fort Worth companies for construction, and (d) an agreed-upon percentage of business with MWBE companies. The amendment retains the 5 units or capital investment of$200,000, and the 20% set aside, but gives Council authority to place more conditions in the agreement . Ms. Garcia then explained that under the current NEZ policy for commercial/industrial and mixed-use projects, the current tax abatement policy applies if abatement is requested for up to ten years. Mr. Wentworth said he felt it was the Committee's pleasure that the automatic 100% abatement in years 1-5 be retained as long as the developer complied with the existing NEZ policy, and that if abatement was requested for years 6-10, this would be negotiated according to the current tax abatement policy. Discussion and Consideration of Waiving Permit Fees for the Immanuel's Nursing Center to be located at 4515 Village Creek Road, owned and operated by Unlimited Faith II, LLC: Business Development Coordinator Ardina Washington presented the request for a permit fee waiver (presentation attached.) She said that Unlimited Faith 11, LLC is requesting the waiver of approximately $8,025.91 in fees for a 0 200 square foot nursing care center they plan to build. She asked the Committee to recommend the request to the ry, Council for consideration. Mr. Moss moved to recommend the request to Council. Ms. Davis seconded the motion. Mr. Wentworth, Mr. Moss and Ms Davis voted in favor of the motion. Mr. Picht was opposed. Status Report on the Redevelopment Plan for the Montgomery Wards Warehouse Proiect and Discussion and Consideration of Submitting an Application for a 108 Loan to the Department of Housing and Urban Development (HUD): Due to time constraints, this item was deferred to a later meeting. Executive Session: There was no Executive Session. Requests for Future Agenda Items: There were no requests for future agenda items. Adiourn• The meeting was adjourned at 2:45 p.m. Approved: ff Wentworth, Chairman