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HomeMy WebLinkAboutOrdinance 24796-04-2021ORDINANCE NO. 24796-04-2021 AN ORDINANCE LEVYING SPECIAL ASSESSMENTS FOR THE COSTS OF CERTAIN IMPROVEMENTS AND SERVICES BENEFITTING CERTAIN ADDITIONAL HOTEL PROPERTIES IN PUBLIC IMPROVEMENT DISTRICT 18 -TOURISM DURING THE REMAINDER OF FISCAL YEAR 2020-2021; SETTING CHARGES AND LIENS AGAINST PROPERTY IN THE DISTRICT AND AGAINST THE OWNERS THEREOF; PROVIDING FOR THE COLLECTION OF THE SPECIAL ASSESSMENTS; PROVIDING FOR DUE DATES, PENALTIES, AND INTEREST; PROVIDING FOR RELIANCE ON ORDINANCE AND RECITALS IN EVENT OF A SUIT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING THAT ORDINANCE IS CUMULATIVE OF ALL NON-CONFLICTING PRIOR ORDINANCES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Chapter 372 of the Texas Local Government Code ("Code") authorizes the creation of a public improvement district consisting of non-contiguous territory in which is located hotels meeting certain criteria, with owners/operators of such hotel properties being subject to assessment to pay for the services and benefits provided by the district; WHEREAS , on August 29, 2017, the City Council adopted Resolution No . 4837-08-2017 , establishing Public Improvement District No. 18 -Tourism ("PID") in accordance with Section 372.0035 and other applicable sections of the Code ; WHEREAS, on August 18 , 2020, the City Council adopted Resolution No. 5246-08-2020 to Expand the PID to include five additional hotel properties pursuant to Section 372.0121 of the Code and other applicable sections of the Code; WHEREAS, on August 25, 2020, the City Council approved the following: (i) fiscal year 2020-2021 budget in the amount of $4,178,453.00, (ii) Seven-Year Service Plan , and (iii) assessment roll (M&C No. 20-0577); WHEREAS, on August 25, 2020, the City Council also adopted Ordinance No. 24370 -0 8- 2020, levying specia l assessments on property located in the PlD for fiscal year 2020-20 21 ("Original Qualifying Hotels"), which assessments were based on the approved budget; WHEREAS , on April 6 , 2021, the City Council conducted a public hearing on the following matters related to the PID: (i) expansion of the PIO to include three additional hotel properties and the advisability of the improvement and services to be provided ("Services"), (ii) an updated and revised fiscal year 2020 -202 l budget and Seven-Year Service Plan, and (iii) the 2020-2021 assessment for the three additional hotel properties (M&C No . 21-0228); WHEREAS, the total revised budgeted cost of the Services for fiscal year 2020-2021 is $2,800,000.00 for all hotel properties within the PlD , including the three additional hotel properties, which is set forth below in more detail: Ordinance No. 24796-04-2021 Page 1 of6 Services Previously Amended Budget for Approved Budget Fiscal Year 2020-2021 for Fiscal Year 2020-2021 Incentives and Sales $1,855,554.00 $1 ,262,000.00 Efforts Marketing and Research $1,443 ,208 .00 $972 ,000 .00 Site Visits and $309 ,259 .00 $81 ,000.00 Familiarization Tours Cultural Enhancements $309 ,259.00 $257 ,000.00 through Marketing and Promotion of the Arts Operations and $206 ,173.00 $173 ,000.00 Administration City Administrative Fee $55,000 .00 $55 ,000.00 Totals $4,178 ,453.00 $2 ,800 ,000.00 WHEREAS , on April 13 , 2021 , the City Council conducted a second public hearing on the above-stated PID matters and took the following actions (M&C Log Name: l 7PID 18 MIDYEARFY21 ): • Adopted a Resolution to further Expand the PID ("Expansion Resolution") to include the three additional hotel properties listed in Exhibit A, which is attached hereto and made a part of this Ordinance for all purposes (such properties hereinafter being referred to as "Hotel Parcels" and the hotels located thereon being referred to as "Qualifying Hotels"), pursuant to Section 372 .0121 and other applicable sections of the Code ; • Adopted a resolution updating and revising the fiscal year 2020-2021 budget, as set forth above , and Seven-Year Service Plan; and • Adopted this Ordinance levying special assessments on the Hotel Parcels for the remaining Fiscal Year 2020-2021. WHEREAS , the Texas Comptroller of Public Accounts has indicated that owners/operators may seek reimbursement in an amount equal to the special assessment from hotel guests, with such reimbursement being a mandatory charge that is subject to state and local hotel tax (Texas Comptroller Opinion Letter 20 l l l l 277L , November 8, 2011 ); WHEREAS, it is proposed that the owners/operators of the Hotel Parcels be assessed at a rate of two percent (2 %) of the consideration received from occupancy of any sleeping room furnished by the Qualifying Hotels, which assessments will be collected in the same manner and in accordance with the same procedures as those established for collection of the City 's hotel occupancy tax , as set forth in Chapter 32 , Article 11 of the City Code; and Ordinance No . 24796-04-2021 Page 2 of6 WHEREAS, notice of the above-stated public hearings on April 6, 2021 and April 13 , 2021, ("Public Hearings") was published and mailed in accordance with state law , and all persons desiring to be heard were given a full and fair opportunity to be heard at the Public Hearings. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1. The Public Hearings are hereby closed, and any and all protests and objections, whether herein enumerated or not, are hereby overruled. SECTION 2. The City Council, from all evidence before it, including all infonnation provided to it and considered in the Public Hearings , finds that the assessments described herein on Hotel Parcels should be made and levied in a manner that results in imposing the costs of the Services on Qualifying Hotels and Original Qualifying Hotels that are similarly benefitted from the provision of those Services. The apportionment of those costs will be based on the special benefits accruing to the Qualifying Hotels and the Original Qualifying Hotels on account of the Services provided. As a result, those Qualifying Hotels and Original Qualifying Hotels that sell more guest rooms will pay a greater portion of the costs of the Services because those properties will have received a greater benefit from the promotions and marketing comprising the Services. The City Council further finds that this method of assessment is fair and equitable and results in an apportionment of the costs of the Services that complies with applicable law. SECTION 3. In accordance with Section 372.017, Texas Local Government Code , in order to pay the costs of the Services provided during the remaining Fiscal Year 2020-202 I, the City hereby levies a special assessment against owners/operators of the Hotel Parcels in an amount equal to two percent (2%) of the consideration received from the occupancy of any sleeping room furnished by Qualifying Hotels, which assessments will be collected in the same manner and in accordance with the same procedures as those established for collection of the City's hotel occupancy tax , as set forth in Chapter 32, Article II of the City Code. This is effective on the date that the Expansion Resolution is published one time in a newspaper of general circulation in the City, which date will be memorialized and on file with the City Secretary of the City of Port Worth. SECTION 4. The assessments levied hereunder, together with reasonable attorney's fees and cost of collection, if incun-ed , are hereby declared to be and are made a lien upon the Hotel Parcels and Qualifying Hotels, and are a personal liability and charge against the real and true owners of such properties, whether such owners are correctly named herein or not. Such liens shall be and constitute the first enforceable lien and claim against the Hotel Parcels and Qualifying Hotels, superior to all other liens and claims , except state, county, school district and city ad valorem taxes . A copy of this Ordinance No. 24796-04-2021 Page 3 of6 Ordinance may be filed with the County Clerk of each county in which a Hotel Parcel and Qualifying Hotel are located, and when so filed constitute complete and adequate legal notice to the public concerning the liens hereby assessed against the respective parcels of property and the owners thereof. The sums assessed against the Hotel Parcels are due at the same time that hotel occupancy taxes on the Qualifying Hotels located thereon become due , and shall become delinquent if not paid by the applicable deadlines for hotel taxes remittance established by Chapter 32, Article II of the City Code. The entire amount assessed against each Hotel Parcel shall bear penalty and interest, from and after the respective due date at the same rate as prescribed Chapter 32, Article II of the City Code, for hotel tax. SECTION 5. If default shall be made in the payment of any as~essments, collection thereof shall be enforced by suit in any court of competent jurisdiction, and said City shall exercise all of its lawful powers to aid in the enforcement and collection of said assessments. SECTION 6. The total amount assessed against the respective parcels of property and the owners thereof is in accordance with the proceedings of the City hereto and is permitted by applicable law. SECTION 7. Full power to make and levy reassessments and to correct mistakes , errors, invalidities , or irregularities in the assessments are, in accordance with the law in force in this City, vested in the City. SECTION 8. In any suit upon any assessment or reassessment, it shall be sufficient to allege the substance of the provision recited in this Ordinance and that the Recitals hereto are in fact true, and further allegations with reference to the proceedings relating to such assessment and reassessment will not be necessary. SECTION 9. Should any portion, section, or part of a section of this Ordinance be declared invalid, inoperative, or void for any reason by a court of competent jurisdiction, such decision, opinion, or judgment will in no way impair the remaining portions, sections, or parts of sections of this Ordinance , which remain in full force and effect. SECTION 10. This Ordinance is cumulative of all other ordinances and appropriations amending the same except in those instances where the provisions of this Ordinance are in direct conflict with such other ordinances and appropriations , in which instance said conflicting provisions of said prior ordinances and appropriations are hereby expressly repealed. Ordinance No . 24796-04-2021 Page 4 of6 SECTION 11. This Ordinance takes effect and is in full force and effect from and after the date of its passage. AND IT IS SO ORDAINED. APPROVED AS TO FORM AND LEGALITY: Tyler F. Wallach, Assistant City Attorney M&C: 21-0273 Adopted: April 13, 2021 ATTEST: Mary J. Kayser, City Secretary Ordinance No. 24796-04 -2021 Page 5 of6 EXHIBIT "A" QUALIFYING HOTELS AND HOTEL PARCELS Account Name Address Home2 Suites -Cultural District 3000 and 3012 W Lancaster A venue Hotel Drover 200 Mule Alley Drive Residence Inn Waterside -Fort Worth 5825 Arborlawn Drive Southwest City, State, Zip RMS Fort Worth, TX 114 76107 Fort Worth, TX 200 76164 Fort Worth , TX 119 76109 Ordinance No. 24796-04-2021 Page 6 of6 City of Fort Worth, Texas Mayor and Council Communication DATE: 04/13/21 LOG NAME: 17PID18 MIDYEARFY21 SUBJECT M&C FILE NUMBER: M&C 21-0273 (ALL) Conduct Public Benefit Hearing Concerning the Following Matters Related to Fort Worth Public Improvement District No . 18-Tourism (Tourism PID): (1) Expansion of the Tourism PID to Include Three Additional Hotels , (2) the Updated and Revised Fiscal Year 2020-2021 Budget and Seven-Year Service Plan , and (3) the 2020-2021 Assessment for the Additional Hotel Properties ; Adopt Attached Resolution Correcting the Sufficiency Percentages Associated with the Prior Tourism PID Expansion Petition and Authorizing and Expanding the Tourism PID to Include Three Additional Hotel Properties ; Approve Attached Revised 2020-2021 Assessment Roll ; Adopt Attached Ordinance Levying Special Assessments on the Additional Hotel Properties for Fiscal Year 2020-2021 ; Adopt Attached Resolution Updating and Revising the Tourism PID's Fiscal Year 2020-2021 Budget and Seven-Year Service Plan ; and Adopt Attached Appropriation Ordinance (PUBLIC HEARING -a . Report of City Staff: Crystal Hinojosa ; b . Public Comment; c. Council Action: Close Public Hearing and Act on M&C) RECOMMENDATION: It is recommended that the City Council : 1. Conduct Public Benefit Hearing Concerning the following matters related to Fort Worth Public Improvement District No . 18-Tourism (Tourism PID): (1) Expansion of the Tourism PID to include three additional hotel properties , (2) the updated and revised Fiscal Year 2020- 2021 Budget and Seven-Year Service Plan, and (3) the 2020-2021 Assessment for the additional hotels ; 2 . Adopt the attached Resolution : (i) correcting the sufficiency percentages associated with the prior Tourism PID Expansion Petition ; (ii) making certain findings concerning the nature and advisability of special improvements and services to be provided for the benefit of the additional hotels to be included in the Tourism PID , the estimated costs of such improvements and services, the method of assessment, the boundaries of the Tourism PID , and the apportionment of costs between the Tourism PID and the City , as a whole; and (iii) authorizing and expanding the Tourism PID to include three additional hotel properties ; 3. Direct the City Secretary to publish notice of the expansion of the Tourism PID as required by Chapter 372 of the Texas Local Government Code ; 4. Approve the attached revised 2020-2021 Assessment Roll ; 5 . Adopt the attached ordinance levying special assessments on the additional hotel properties for Fiscal Year 2020-2021, with such assessments to be effective on the date that the Resolution to Expand the Tourism PID is published one time in a newspaper of general circulation in the City ; 6. Adopt the attached resolution updating and revising the Tourism PID's Fiscal Year 2020-2021 Budget and Seven-Year Service plan ; and 7. Adopt the attached appropriation ordinance decreasing appropriations in the amount of $1 ,378.453.00 for Fiscal Year 2020-2021 in the Fort Worth Public Improvement District 18 -Tourism Fund. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to conduct a second public hearing concerning the expansion of the Fort Worth Public Improvement District 18 -Tourism (Tourism PID) to include three additional hotel properties, the updated and revised fiscal year 2020-2021 budget and seven-year service plan, and the 2020-2021 assessment for the additional hotel properties , along with certain actions related thereto . The City Council conducted the first public hearing on April 6, 2021, finding that the Petition to Expand the Tourism PID met the requirements set forth in Chapter 372 of the Texas Local Government Code ("Code"), approving the filling of the revised 2020-2021 assessment roll, and setting this public hearing for April 13 , 2021. On August 29 , 2017 , the City Council adopted Resolution No. 4837-08-2017 , establishing the Tourism PID ("Establishing Resolution"). On August 18, 2020 , the City Council adopted a Resolution No. 5264-08-2020 to expand the boundaries of the Tourism PID to include five (5) additional hotels (Mayor and Council Communication (M&C) 20-0551) ("Expansion Resolution "). EXPANSION OF THE TOURISM PIO Boundaries: The current boundaries of the Tourism PID consist of noncontiguous areas authorized under Section 372.0035 of the Code consisting solely of hotel properties with 100 or more rooms ordinarily used for sleeping within the City of Fort Worth . A list of the hotels that are included within the boundaries of the Tourism PID is included in the Original and Expansion Resolutions and attached hereto. Section 372 .0121 of the Code allows the City Council to include additional properties in the Tourism PID if (i) the property is a hotel and (ii) the property could have been included in the Tourism PID without violating Section 372.005 (b-1) of the Code when the Tourism PID was created regardless of whether the record owners of the property signed the original petition. With regard to the second element, the Code requires the petition to be signed by the (1) record owners of taxable real property liable for assessment that constitute more than 60.00% of the appraised value and (2) more than 60% of (i) all record owners liable for assessment or (ii) area of all taxable property liable for assessment within the Tou rism PIO . If the add ition of the new properties results in these numbers dropping at or below the 60.00% threshold , then the properties may not be added . The additional properties to be included in the Tourism PIO meet both of the above-stated elements , therefore they, may be considered by the City Council fo r inclusion into the Tourism PID. First, the following three properties to be included in the Tourism PIO are all hotels: 1. Home2 Su ites-Cultural District, 3000 & 3012 W Lancaster Ave , Fort Worth , TX 76107 2 . Hotel Drover, 200 Mule Alley Drive, Fort Worth, TX 76164 3 . Residence Inn Waterside-Fort Worth Southwest, 5825 Arborlawn Drive , Fort Worth , TX 76109 With regard to the second element, the City Council found that the previous two petitions (original and expanded) complied with Section 372.005 (b-1) of the Code because they had met the necessary percentage thresholds . In the process of calculating the updates and revised percentages for 2020 ex pansion , staff discovered that Hyatt Place TCU , 2500 W . Berry Street, had signed the 2020 Expansion Petition to be included in the Tourism PIO but was inadvertently counted as not having signed . When factoring in the signed petiti on for the Hyatt Pla ce TCU , the petition sufficiency percentages for the 2020 Expansion Petition increased and should have been as follows : (1) 74 .9 % of the appraised value of taxable real property liable for assessment, (2) 61.1 % of record owners of taxable real property liable for assessment, and (3) 65 .7% of the area of all taxable real property liable for assessment. This w ill be corrected in the attached resolution . The property owners , or their duly authorized representatives , for all three new hotel properties have signed a petition requesting inclusion within the Tourism PID. This results in an increase to 75.7% of the appraised value of taxable real property liable for assessment, 63 .2% for the area of all taxable real property liable for assessment, and 66.9 % of record owners liable for assessment. Because the percentages are still above the 60.00% threshold , the properties meet the second element. NOTE : Crossland Economy Stud ios -Fossil Creek located at 3804 Tanacross Drive , a hotel property that was a part of the original petition recently converted to permanent supportive housing in September of 2020 and is no longer considered a hotel by use and will no longer be paying into the Tourism PIO . Removal of this hotel does not affect the percentages that were in place at the time of the original petition . Nature of the Improvements: The goals of the Tourism PID focus on increasing the economic impact and enhancing competitiveness in conventions , meetings , leisure and sports tourism and increasing tourism-related economic activity at all times , including du ri ng economic downturns and as inventory grows . The Tou rism PID projects include incentives and sales efforts, convention and sports marketing and promotion , site visits and familiarization tours , community arts grants , convention services , event fund ing application , operations , research , and administration , all of which benefit the hotels within the Tourism PIO . Method of Assessment and Apportionment of Costs : The assessment rate w ill be an amount equal to 2 .00% of the cons ideration received from the occupancy of any sleeping room furnished by a hotel located within the Tourism PID , with such assessment to be collected in the same manner and in accordance with the same procedures as those established for the collection of the City's Hotel Occupancy Tax , as set forth in Chapter 32, Article II of the City Code , as amended. The entire costs of each improvement and service w ill be paid from the above-stated assessments and no City funds will be used to pay any portion of such costs unless such funding is approved by the City Council on a case-by-case basis . Estimated Costs of the Improvements and Services: The total estimated costs for the proposed services and improvements for the life of the Tourism PID (approximately seven years) will be $29,555 ,000 .00, which includes an estimated cost of $2,800,000 .00 for the Fiscal Year 2020-2021 Mid-Year Budget Adjustment. The updated and revised budget and seven-year service plan is set forth in more detail below and attached . The final version will be subject to approval by the City Council. The estimated costs of the proposed improvements and services to be provided in subsequent years will be subject to future annual budget and service and assessment plans adopted by the City Council in accordance with the Code. The actual costs of improvements and services will be determined in accordance with the approved budget and service plan to be adopted by City Council and will be paid from Tourism PID assessments . Advisability : Staff recommends that the C ity Council find that these improvements and services are advisable because they will promote the interests of the City and confer a special benefit on the assessed propert ies w ithin the expanded boundary of the Tourism PID. Staff recommendation : Staff recommends that City Council adopt the attached re solution correcting the sufficiency percentages associated with the prior Tourism PID petitions and authorizing and expanding the Tourism PIO to include the above-state three additional hotel properties . Tourism PID Mid-Year Adjustments The Tourism PID is funded through a 2% assessment on the consideration received from occupancy of any sleeping room furnished by a hotel in the Tourism PID . Due to the steep drop in hotel occupancy rates as a result of the COVID-19 situation , Tourism PID assessment revenue is now projected to be 33% less than originally budgeted . Consequently, staff has proactively worked with the Fort Worth Tourism Public Improvement District Corporation (FWTPIDC) and the Fort Worth Convention and Visitors Bureau (CVB), which are the contracted Tourism PID managers, to conduct a mid-year review of the Tourism PID's FY 2020-2021 budget. City staff, FWTPIDC, and CVB have identified the need to decrease the Tourism PIO assessment revenue by 33 % or $1 ,378,453 .00 to account for the decline in funding as a result of COVID-19 . The budget also takes into account the three new hotels . The budgeted expenses show a reduction in each category line item for the current fiscal year service plan (see table below). Revenue adjustments : Line Items Previously Recommended Amended to be Approved FY21 Adjusted Budget Item PIO $4, 178,453.00 Assessments Totals $4 ,178,453 .00 Expenditures adjustments: Line items to be Adjusted Cultural Enhancements through Marketing and promotion of the Arts Operations & dministration City Admin istrative Fee Totals Previously Approved FY21 Budget Item 1,855 ,554 .00 $309 ,259.00 $206 ,173.00 $55 ,000.00 4 ,178,453.00 Mid-Year FY21 Budget Adjustment Item ($1,378,453 .00) $2 ,800 ,000 .00 ($1 ,378 ,453 .00) $2 ,800,000.00 Recommended Amended Mid-Year FY21 Budget Adjustment Item ($471,208.00) $972,000.00 .00 ($52,259 .00) $257 ,000 .00 ($33 ,173.00 $173 ,000 .00 $0.00 $55 ,000 .00 ($1,378,453 .00) 2,800,000 .00 Staff supports FWTPIDC's and CVB 's recommended mid-year budget adjustments. Upon approval of the above recommendations , the total budgeted expenses for FY 2020-2021 will be $2 ,800 ,000.00 . This mid-year budget adjustment will increase the unaudited , unassigned fund balance by a total of $1 ,378,453.00. The revised Budget and seven -year service plan will take effect upon approval by City Council. The proposed changes to the Tourism PID 's FY 2020-2021 budget complies with the City's reserve requirements . The Tourism PIO properties are located in ALL COUNCIL DISTRICTS. A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity . FISCAL INFORMATION/ CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinance , funds will be available in the current operating budget, as appropriated, in the FWPID #18 -Tourism Fund . Prior to any expenditure being incurred, the Econom ic Development Department has the responsibility to validate the availability of funds . Submitted for City Manager's Office by: Jay Chapa 5804 Originating Business Unit Head: Robert Sturns 2663 Additional Information Contact: Crystal Hinojosa 7808 Expedited