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HomeMy WebLinkAbout1997/11/11-Minutes-HEDC Highlights of the Wednesday, November 11, 1997 Economic Development Committee Meeting I. Standing Items None H. New Business A. Discussion of 2% Increase in the Hotel/Motel Tax Mr. Boswell explained that the City is now allowed to increase the Hotel/Motel Tax from 7% to 9% because of legislation passed earlier in the year by the State. He explained that the increase in revenues resulting from an increase must be used for Convention Center improvements. He explained that the increase in revenues could support $18 million in bonds. This amount plus the $19 million in the C.I.P. program for Convention Center improvements would allow for nearly 100% completion of phase I and II of the Convention Center rehabilitation. Mr. Wentworth asked whether the new rate would take effect on Jan. 1, 1998. Mr. Boswell explained that the new rate would take effect on 1/1/98. He asked for the Committee's recommendation to bring the issue to the full Council. The Committee unanimously agreed that an M&C proposing the change in the tax be prepared and presented to the full City Council. B. Discussion on Historic Exemptions within Tax Increment Finance Districts David Yett explained that the Downtown TIF Board meeting to discuss this issue had been postponed. Several alternatives to deal with the issue of providing an incentive for the reconstruction of historically significant properties have been researched. He explained that the alternatives could serve as a basis in setting up a policy for similar future situations. Mrs. Hirt asked whether the policy would apply to all TIFs since similar issues exist in the proposed southside TIF. Mr. Groomer explained that the Planning Department had been completed a survey to identify all properties that could conceivably be considered historically significant and that the issue could arise in many situations. Mr. Wentworth suggested that whatever policy is adopted on the Downtown TIF should apply to all other TIFs. Mr. Yett stated that the idea was to have the TIF Board discuss this issue and provide a recommendation that would be presented to the Economic Development Committee. C. Update on Workforce Development Board Richard Sapp provided an overview of the new process by which state and federal training funds will be distributed in Fort Worth and Tarrant County. He explained that the City would no longer be a direct recipient of those funds, but must instead bid to the Workforce Development Board to be a provider/contractor for training services. He explained that the City has options concerning its role in employment training. These options are: ➢ No longer be involved in the business of workforce training. ➢ Stand alone as a bidder against other service providers in the area. ➢ Co-bid with other public/private entities on RFPs as developed by the Workforce Board. Mr. Sapp explained that the recommendation would be to become a co-bidder with other entities. He explained that this would allow the City to ensure that quality service continue to be delivered to City of Fort Worth residents. Any co-bid would have the City doing the training activities within Fort Worth. The co-bidder would provide the training activities outside the City. Ideally the co-bidder would be the County since it already provides those services to residents of the County outside the City of Fort Worth. In this scenario, the City would win the bid then sub-contract the service outside of the City. Mr. Wentworth asked whether the County had been approached regarding this recommendation. Ramon Guajardo stated that he had talked to the County Administrator about the situation and was looking to the Committee to provide some guidance on whether staff should continue down this road. He also asked for some guidance on whether the City should continue to have an active role in workforce training. Mr. McCloud stated that he thought the City should continue to be the lead in this area especially because of the need for training in certain areas of the City and because of the high concentration of people in poverty that are located in Fort Worth. Mrs. Hirt asked whether the proposal meant that the City would be bidding only for the amount of funds needed to continue the current programs or whether the City would bidding for all training funds available from the Board. i Mr. Sapp said that the RFP from the Board is yet to be developed so the exact structure of the bid is still unknown. He stated that his preference would be to have the amount of funds flow to the City at the level that it currently does. Mr. Guajardo stated that the thought was to encourage the co-bid with the County in order to take advantage of the infrastructures available within both organizations. He stated that staff would like to bring this issue to the full Council in two or three weeks with more information but would like to have the Committee's approval to begin negotiations with the County. The Committee agreed and directed staff to begin negotiations. D. Status of Creation of the Southside TIF District Mike Groomer stated that to date the staff has gone forward to make sure that the Southside TIF can be created by the City Council by the end of the calendar year if it chooses to do so. Mr. Groomer explained that as the process has moved forward, staff analysis has raised several issues concerning the make-up of the TIF District. Tom Higgins stated that the following issues have been discussed with Fort Worth South, Inc. regarding the TIF District. ➢ The proposed TIF District includes a large amount of tax-exempt property that does not add to the potential increment needed to generate revenues for the TIF. ➢ Growth of the tax-exempt entities within the TIF has been very strong and has contributed to the reduction in taxable value in the TIF since 1991. ➢ Over $26 million of taxable property within the TIF is owned by these tax- exempt entities. If the property is converted to a tax-exempt use, then further taxable value will be lost. ➢ There is no identified substantial investor that would help change the trend of declining taxable values within the proposed district. ➢ The large number of historic properties with the TIF creates a need to develop a policy on how to deal with those properties. ➢ Once the TIF is created, the use of other incentives, like tax abatements or historic exemptions are no longer available. ➢ The inclusion of properties east of Interstate 35 in the TIF and the lack of a development schedule for that area. Mr. Higgins then introduced Don Scott of Fort Worth South, Inc. who presented alternative boundaries in an effort to deal with some of the issues outlined. Mr. Scott explained that boundaries had been modified to exclude much of the value in tax-exempt property. He also explained that five historic building were carved out of �. the TIF in an effort to minimize that concern and that possibly more could be removed. Mr. Wentworth asked why the area east of I35 was included. Mr. Scott stated that it was an effort to keep in step with the Medical District Plan and that they thought that I35 should not be a barrier separating the area. Mr. Wentworth stated that he was concerned that the inclusion of the area may create some expectations of growth that may not be met. These expectations could especially occur if development is achieved further west in the area of the hospitals. He stated that I35 is in fact a physical barrier and that in his opinion, any growth in the area would probably occur west of I35. Mr. McCloud stated that he was concerned that development priorities for the TIF are on the west side of I35. He said that he would like to see development occur east to west since that area in the most need of new development. He asked whether any developers or investors have been interested in the area. Mr. Scott stated that there are developers interested in the whole area. Only one has shown interest in the area east of I35. He stated that the biggest fear for any investor is the amount of risk involved. Mrs. Hirt stated that the boundary of the proposed TIF appears to be consistent with Hospital District boundary. She stated that she is concerned that the TIF is being looked at differently than the Medical District Plan and that they should be consistent since a lot of work and study was done on the plan. She asked for some explanation on why the area was included in the Medical District Plan. Mr. Wentworth stated that he believes that the difference has to do with passage of time. He stated that there are other initiatives underway in the southeast side that would tie in better with the area in question. He said that much thought must be put into including that area. Reba Henry stated that the area was included in an attempt have some overlap in the economic development initiatives in the area. She introduced Joan Kline who stated that the area was key in having the destinies of the converging initiatives be tied together. She stated that these types of questions had come up before and had been addressed. Don Scott stated that thought had been put into using TIF funds to help the schools located in the TIF. One school in particular is area identified and providing an upgrade in the infrastructure around the school would go a long way in encouraging development in the area. Mr. Wentworth asked what the other taxing jurisdictions concerns were. Mr. Scott stated that he has had discussions with representatives of the other jurisdictions and that they are generally positive about the initiative. Lisa McMillan from the economic development office of the County was present and stated that she was concerned that process was being rushed in order to have the TIF created this year. She asked why the creation of the TIF could not be delayed to next year. Mr. Scott stated that the delay could mean a loss in incremental revenue to the TIF if taxable values increase from the 1997 valuations. He stated that values have continued to decrease but that he believes that the bottom has been reached and that the values will turn. He stated that some issues regarding representation on the TIF Board that the School District would like to have addressed would need to involve discussions between the City and School District. Mrs. Hirt asked about the concern in the growth of tax-exempt property. Mr. Scott stated that he believes that the growth of the large tax-exempt entities will no longer occur. He stated that the growth should be in taxable medical related activities like office buildings for doctors. The committee asked what the next step was. Mr. Higgins stated that the next step is to go forward with the formal presentations to the other taxing jurisdictions in order to allow them the opportunity to participate in the TIF District. He stated that the presentations are to inform the other taxing jurisdictions about the TIF and that each presentation must occur prior to the scheduled November 25th City Council public hearing on the creation of the TIF. He said that presentations with all taxing jurisdictions are scheduled. He asked that the Committee select a councilmember to serve as the representative. The committee chose to make the whole committee eligible to be the representative since some of the presentations pose scheduling conflicts. They also directed staff to go forward with the current schedule that will allow the Council to create the TIF by the end of the year if they choose.