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Ordinance 27670-05-2025
ORDINANCE NO, 27670-05-2025 AN ORDINANCE NOMINATING THE REAL PROPERTY AT 2601 SPIRIT DRIVE, FORT WORTH, TEXAS, FOR DESIGNATION AS A QUALIFIED MEDIA PRODUCTION LOCATION PURSUANT TO CHAPTER 485A, TEXAS GOVERNMENT CODE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. 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 two- year exemptions 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 improvements 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 nominate to the Office of the Governor a location within its jurisdiction for designation as a qualified media production location, provided that the location is situated in a media production development zone that has been recognized by the City and under other conditions outlined in the Act, as more specifically set forth in this Ordinance; and WHEREAS, in accordance with the Act, the City Council has adopted Ordinance No. 27374-12- 2024 recognizing and designating the area within the municipal, or corporate, boundaries, of the City of Fort Worth as a media production development zone known as "Media Production Development Zone Number One'; and WHEREAS, the real property at 2601 Spirit Drive, Fort Worth, is located within the boundaries of Media Production Development Zone Number One; and WHEREAS, the City Council wishes to encourage the development of media production businesses in the City by nominating the real property at 2601 Spirit Drive, Fort Worth, as a qualified media production location in accordance with the Act. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: Section 1. FINDINGS. Considering all information known to it, the City Council hereby makes the following Findings of fact: A. The real property at 2601 Spirit Drive, Fort Worth, Texas (the "Location"), is located within the boundaries of Media Production Development Zone Number One, recognized and designated pursuant to Ordinance No. 27374-12-2024. A specific legal description of the Location, and a corresponding site plan, is attached hereto as Exhibit "A", which is made a part of this Ordinance for all purposes. Ordinance nominating the real property at 2601 Spirit Dr., Fort Worth, Texas, for designation as a Qualified Media Production Location pursuant to Chapter 485A, Texas Government Code Page 1 of a B. The Location is owned by Alliance Center East No. 2 Ltd. (the "Requestor") who intends to renovate the Location exclusively to convert that space solely for use as one or more media production facilities. The Location will accommodate both large-scale Elm productions and long-term television tenants, offering state-of-the-art infrastructure and services for the media industry and cater to a wide range of production needs, from feature films to television series. The Location features over 224,000 square feet, including two (2) 80,000-plus square feet of sound stages. These stages can also be subdivided into smaller stages, providing flexible configurations for productions of various sizes, The Requestor has submitted written requests to the City that the City Council nominate the Location for designation as a qualified media production location. In addition to the soundstages, the facility will offer mill workspaces for set construction, office spaces for production teams, storage facilities, and dedicated wardrobe areas to support every aspect of production. Therefore, the proposed redevelopment and use of the Location meet the criteria of Section 485A.102 of the Act. C. The Requestor has supplied the City with an economic impact analysis of the proposed project prepared by TXP, Tnc., an independent economic analysis and public policy consulting firm founded in 1987 in Austin, Texas. This economic impact analysis is attached hereto as Exhibit "B" and made a part of this Ordinance for all purposes (the "Economic Impact Analysis"). D. The Requestor anticipates that the renovation project proposed for the Location will cost approximately $6.5 million in order to redevelop the Location for use as media production facilities. A specific description and depiction of the project is set forth in the attached Economic Impact Analysis. E. By nominating the Location for designation as a qualified media production location. the City Council understands 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 the Location for use as media production facilities. The Requestor estimates that the amount of tax-exempt renovation materials and equipment costs attributable to the space at the Location will be $6,099,887. Accordingly, the City anticipates that the local sales tax exemptions generated for qualified persons, as that term is defined in Section 485A.201 of the Act, resulting from designation of the Location as a qualified media production location will amount to approximately $60,999, in the aggregate. In return, according to the Economic Impact Analysis, this project over the next five years is anticipated to (i) generate at least 82 new full-time jobs, and (ii) produce an additional $14.2 million in regional economic activity; an additional $4.6 million in labor income; an additional $1,034,502 in tax revenue for the State of Texas, and an additional $182,909 in tax revenue for the City. F. As a result of the 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 creation resulting therefrom, the City Council wishes to nominate the Location for designation as a qualified media production location and hereby finds that designation as such by the Office of the Governor is in the best interest of the City and the State of Texas. G. Taking into consideration all of the foregoing, the City Council finds that the Location meets all requirements of the Act for designation as a qualified media production location. Ordinance nominating the real property at 2601 Spirit Or., Fort Worth, Texas, for designation as a qualified Media Production Location pursuant to Chapter 485A, Texas Government Code Page 2 of 3 Section 2. NOMINATION OF LOCATION FOR DESIGNATION AS A QUALIFIED MEDIA PRODUCTION LOCATION. On the basis of the findings set forth in Section 1, and otherwise in accordance with the Act, the City Council hereby nominates 2601 Spirit Drive, Fort Worth, Texas, for designation as a qualified media production location. Section 3. DESIGNATION OF CITY REPRESENTATIVE. In accordance with Title 13, Part 8, Section 123.4(d)(1)(D), Texas Administrative Code, the City Council designates Kevin Gunn, Acting Director of the City's Economic Development Department, or his designee, to execute and submit an Application for Exemption (as specified in Section 485A.106 of tic Act) to the Music, Film, Television, and Multimedia Office within dre Office of the Governor requesting designation of the Location as a qualified media production location under the Act and to serve as the City's representative to the Texas Film Commission in connection with this project. Section 4. 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.jurisdietion, the remaining portions, sections or parts of sections of this Ordinance shall be and remain in full force and effect and shall not in any way be impaired or affected by such decision, opinion or judgment, Section 5. IMMEDIATE EFFECT. This Ordinance shall take effect and be in full force and effect from and after its adoption. APPROVED AS TO FORM AND LEGALITY: Laserre C'. Ca-a"r Larry Collister, Senior Assistant City Attorney ADOPTED AND EFFECTIVE: 05-20-2025 M&C: 25-0463 Ordinance nominating the real property at 26015pirit Dr., Fort Worth, Texas, for designation as a qualified Media Production Location pursuant to Chapter 485A, Texas Government Code r1`11— ATTEST: A Jannette Goodall, City Secretary C a� J iL.� • -- 1 lF a�S F- 9Va XoOooaoao°o r Page 3 of 3 Exhibit A REQUIREDATTACHMENT., Project location site plan REQUIRED ATTACHMENT.- Project facility floor plan Exact location of proposed Project's site (address or intersection) 2601 Spirit Dr City, State, zip Fort Worth, TX, 76177 County Tarrant Will the Requestor company own the facility? Is this facility to he located in an area that has adequate workforce, infrastructure, facilities, or resources to support moving image projects? Provide an overview of the facility and characteristics of the lease or construction, ❑✓ Yes ❑ No ❑✓ Yes ❑ No The f-illty at 2601 Spirit Dr, Fort Worth, T% 7617?. rs currently dos,gnad as a warehouse. spans 224,616 square fit and will woven tin, esishnii —h.— in:. o sla—uthe-art productiai facility atN sound5la ge, This red—1 pri a ms to provide versatile spaces equipped wllh modern amenities to attar mode to both large-si film productions and long-term We visor tenants. Key Ghamutenstios of the Consbuchon: Size and Layout: Trio fadllty oftsrt, aver 224.Mn Square feet of Iota] Space, featuring fll open fhal plans that ale Ideal for multiple uses, InGudrng souna5tages o, ..i Soundsinges: The faility is planned to Indude rwe 80,000,, equate foot soundstages, which ran be suLdisided Into smaller ]ages. This modular design provides timUlity to acoommodate various types of prodcctl s, from "'llscala profechs to large-sW In films a television series, allowing simultanus eoor combined arse for 2 Wrger pruducuons. I.eepndetage5 will bee equipped win high-grade soundproofing Getting Height: Nigh -Isnga w,thm the builtling suppdd large set Wnstrvcliens, overhead lighting ngs, and ether praducli—pecir, equipment, which Is crucial far media prod—t- flue ties. D urable Structure.. The Steel -lame Wei Mlon ensures du ra bl lily, rid st,,Nth, su tenon gheavyA,ty operaWns such as set building and the, nstellaWn of special !zed eq uipmen l requi red for film and television pon ion. Loading Dooks and Logistics: The facility includes multiple loading docks pmviding ¢Mount logistics tar loading and unibill equipment, sal materials, and pn-0ucbon supplies, This also suploons largesualo areho—' operations If -oded- Parking and Outdeor SpaceAmple pad;ing space and outdoor ,,as lo—ide roam far equipment [rucks, trailers. and Pi ponduclion or storage needs. making it highly adoplabte for large prodoctinns. utilities and lefrastiuclure, The facility r5 equipped wdh modem ulibhes 5ud, as Al s,r5lems, eleclnoty, and high-speed Intemet, support rig bath production operations and othar induamel rises, orl and Suppon Str_k, In add nion to the production areas, the faciluy Inclutles dediceled offoa spa— for admmisaretive tasks, production ocond-tion. and Crew preparations. Identify all Project characteristics that apply. ❑ Consolidation ❑ Construct New Facility ❑ Expand Existing Facility ❑ Expand from Outside of Texas ❑ Expansion within Texas ❑ Lease Facility FLI New Business/Start-up ❑ Purchase New Facility ❑ Relocation from Outside Texas Renovate Existing Facility 0 Other: FLEX SPACE G 20170728 S Ul 7 sExaj gwmUoi a*10 gads - o-j $uippq u- - C e I I I S i o 9 I I I Y777 ff � a ') I y I I I u Y} I I � �Q • SR! I�� 9 j y� I I II T-a fv A I SI i •+ra I I L_ ..^ A.- �"J"; i ... Exhibit B BENEFIT TO THE STATE REQUIRED ATTACHMENT.• Independent Economic Impact Analysis -prepared by a person/firm independent of Requestor who is considered an expert with specialized knowledge, skill, experience, training or education in econamics and state/local taxation Independent Economic Impact Analysis prepared by: Travis James - TXP Analysis of proposed Project/activities to take place at the location must be conducted by a third -party entity not related to the Requestor, and must include the following: A summary of the analysis highlighting the following data items (do not attach additional documentation aside from economic impact analysis). Estimate of the revenue generated to the state and local governmental body by the Project Estimate of any secondary economic benefits to be generated by the Project Estimate of state taxes to be exempted See the Attached Full Report: 1. Applying the percentage of state tax revenue to GDP (3.75 percent) against economic activity attributable to the ACE 2 project and construction, the state is projected to receive $1.0 million in new tax revenue over the next rive years. Applying the percentage of city general fund tax revenue4 to county wages (1.38 percent) against new economic activity attributable to ACE 2, the City of Fort Worth is projected to receive $0.2 million in new tax revenue over the next five years. 2. The ACE 2 project spending ripples through the Dallas -Fort Worth MSA economy, this spending increases regional economic activity by $14.2 million, labor income by $4.6 million, and employment by 82.6 jobs. 3. If the entire ACE 2 production site expansion project is exempt from sales tax, the company saves $381,243 in state sales tax @ 6.25% and $60,999 in City of Fort Worth sales tax @ 1.00%. The Fort Worth sales tax calculation assumes all inputs to the site expansion project are taxable and bought from vendors within the city limits. If ACE 2 purchases goods from vendors outside the area, then the forgone sales tax revenue figure would be lower. BENEFIT TO THE COMMUNITY Provide an economic impact estimate of the designation of the location as a Qualified Media Production Location on the revenues of the entities nominating the location, considering the financial incentives and benefits contemplated. See the Attached Full Report: The designation of the ACE 2 project location as a qualified Media Production Location is expected to create a substantial economic impact, benefiting the entities nominating the location through a series of Financial incentives and economic benefits. Economic Impact Estimate: AGE 2 Project 1. Total Output Increase: The overall economic activity is projected to grew by $14.2 million. This includes direct spending on construction as well as the ripple effects across sectors such as real estate, finance, retail trade, and professional services. 2. Labor Income Growth: Regional labor income is expected to increase by $4.6 million. This encompasses wages, salaries, and benefits paid to workers, contributing to greater household spending and stability within the local economy. 3, Employment Boast The project will support approximately 82.6 jobs across various sectors. Cif these, 36.3 will be in construction, with additional roles generated in health care, retail, real estate, professional services, and other supporting industries. 4. Sector -Specific Benefits, Construction: Receives the highest share of activity with $6.17 million In output and $2.31 million in earnings, supporting 36.3 jobs_ Real Estate d Leasing, Adds $1.1 million in output and 7.5 jobs, reflecting increased demand for space and leasing services. Finance 8 Insurance, Generates $775,000 in economic activity, supporting 3.8 jobs. Professional Services: Accounts for $539,000 in output, emphasizing the importance of technical and consulting services, and supporting 3.0 jabs. The designation not only bolsters revenues for the nominating entities but also stimulates broader regional economic development. The anticipated growth in economic activity, employment, and labor income signifies a positive trajectory for both immediate financial returns and long-term sectoral benefits. 20170728 April 7, 2025 Mr. Josh Crook Alliance Center East No. 2, LTD 1920 Hillhurst Ave 4194 Los Angeles, California 90027 Mr. Crook, Thank you for the opportunity to provide consulting services to Texas Studios. The attached memo highlights TXP's findings related to the economic and tax impact of Texas Studios' proposed ACE 2 soundstage and production hub 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, TXP has 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 1s' Street, Suite 105 Austin, Texas 78704 (512) 328-8300 phone (512) 462-1240 fax . www.txp.com ACE 2 Soundsta.ge and Production Hub Project Summary • Texas Studios is transforming its expansive 200,000+square foot facility into a premier soundstage and production hub in Fort Worth, Texas. • The project is named Alliance Center East No. 2, LTD (ACE 2) in Fort Worth, Texas. • This development will accommodate both large-scale film productions and long-term television tenants, offering state-of-the-art infrastructure and services for the media industry. The site will cater to a wide range of production needs, from feature films to television series. • The facility features over 224,000 square feet, including two 80,000+ square foot sound stages. These stages can also be subdivided into smaller stages, providing flexible configurations for productions of various sizes. • In addition to the soundstages, the facility will offer mill workspaces for set construction, office spaces for production teams, storage facilities, and dedicated wardrobe areas. • ACE 2 will focus on attracting both short-term film productions and long-term television series, providing dedicated soundstage space with full soundproofing, lighting grids, and special effects capabilities. • The ACE 2 project includes an estimated $6.5 million in total costs. • Because the project is nonresidential, a significant portion of the project costs could be subject to state and local sales tax. • ACE 2 proposed renovation will take approximately 6 months to complete. • To be conservative, TXP has assumed all construction inputs are purchased from City of Fort Worth vendors. This assumption and the corresponding sales tax loss represent the maximum in forgone City sales tax revenue. Table 1: ACE 2 Proiect Cost Component Cost Estimate' Construction Hard Cost* $6,099,987 Building Permit Allowance (.5%( $30,499 General Liabdity (.85%) $52,108 Builder's Risk •(.15516) $9,274 Contracto, Contingency (2%) $123,835 Contractor Fee (3.5%) $221,046 Total �Es¢imate $6,536,650 3,u:jme: AflianCe Center East Ne. 2, LTD "These costs exclude sales tax Table 2: ACE 2 Business Activity by Year 2026 2027 2028 2029 2030 Year 1 Year 2 Year 3 Year 4 Year 5 Annual Revenue $3,369,240 $3,S37a7©2 $3.,714,587 $3,900,316 $4,095„332 wuroe: Ainance c.errter It a54 NO, 1, L I U Page 2 1310 South 111 Street, Suite 105 Austin, Texas 78704 (512) 328-8300 phone (512) 462-1240 fax www.txp.corn Table 3: ACE 2 Construction Costs Component Cost Estimate 01 -Warehouse West Concrete Slab 30,000.00 Misc. Metal 59,250.00 Rough Carpentry 2,600.00 Insulation 25.5,00().00 Roofing 17,500.00 Sealants & Caiullking 64,015.56 Doors, Frarnes & IHardw•are 15,000.00 Dirywa!I I 668,680.00 Painting 20,800.00 Mist. Specialties 134,735.00 Fire Protection 30,000.00 Plurrbing 47,600.00 H VAC 532, 875..00 Electrical 1,131,879, 52 Fire Alarm 56,154.00 01 - Warehouse West Totals $3,066,089.08 02 -Warehouse East Concrete Slab 30,000.00 Misc. Metal 19,230.00 Insulation 2'S5,000-00 Roofing 17,500-00 Sealants & Caulking 64,015.56 Drywall 184,220.00 Painting 20,800.00 Misc. Specialties _ 14-6,890.00 Fire Protection 10,500.00 Plumbing 47,600.00 HVAC 532,875.00 Electrical 1,131,879.52 Fire Alarm 56,154.00 Plumbing 47,600.00 HVAC 532,875.00 Ed ectrica I 1,131,879.52 Fire Alarm 56,154.00 02 - Warehouse East Totals $2,516,684.08 03 -T.I. Warehouse RR's Totals $150,000.00 04 - General Requirements Totals $65,351.60 05 - General Conditions Totals $301,761.88 Totals $6,099,886.64 .source: nuiwaop construction services Page 3 1310 South 111 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 beeligible far 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. ' http://gov.texas.gou/film/programs/mpdza Page 4 1310 South I" Street, Suite 105 Austin, Texas 78704 (512) 328-8300 phone (512) 462-1240 fax www.txp.com ........................... I ............. I ................ 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 orfinal 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 -Arlington, TX Metropolitan Statistical Area RIMS II multipliers (2017 U.S. Benchmark 1-0 data and 2022 Regional Data), Page 5 1310 South 1" Street, Suite 105 ) Austin, Texas 78704 1 (512) 328-8300 phone i (512) 462-1240 fax I www.txp.com w Table 4: Final Demand Multilpliers:7 -Construction Output Value-Add•e•d Earning Employment 2.3309 1.2864 0.7480 13.5.371 Source: RMiS 11 Table 5: Direct Effect Multipliers: 7 - Construction Earnings Empinyment 1.9985 2,3020 Source: RAMS 11 Table 6: Final Demand Multipliers: 7- Construction Sector Output Value -Added_ Earnings Employment Agriculture, forestry, fishing, hunting 0.0004 0.0002 0.0001 0.0030 Mining 0.0140 0.0080 0.0034 0.0305 utfflties D 0178 0,0112 0.0029 0.0206 Constructi-on 1.0118 0.5387 0.3787 5.9498 Durable goods manufacturing D.1522 0.0632 0.0329 0.4757 Nondurable goods manufacturing 0.0868 0.0286 0.0141 0.1821 Wholesale trade 0,1165 0.0567 0,0268 0.2808 Retail trade 0,1308 0.0329 0.0395 1.1516 Transportation and warehousing 0,0659 0.0345 0.0:195 0.4111 Information 0.0500 0.0278 0.0091 0.1049 Finance and insurance 0.1272 0.0684 0.0320 0.6236 Real estate and rental and leasing 0.1802 0.1242 0.0291 1.2370 Professional, sciientific, tech. services 0.0884 0.0586 0-0429 0.4913 Management of companies 0.0313 0.0204 3.0143 0.13'50 Administrative and waste services 0.0499 0,0286 0.0203W Educational services 0.0132 0.0091 0.0061 Health care and social assistance 0.0915 0.0569 0,0407 Arts, entertainment, and recreation 0.0111 0,0067 0.0043 Accommodation 0.0097 0.0060 0.0026 Food services and drinking places 0.0384 0.0207 0.0121 Other services 0,0431 0.0239 0.0157 Households Total Impact 0.0000 is D.0008 1.2862 0.0008 r Page 6 1310 South 1 G' Street, Suite 105 Austin, Texas 787.04 1 (512) 328-8300 phone (512) 462-1240 fax vn,wv.txp.com Using the RIMS it model, ACE 2's activity most closely matches 512100- Motion picture and video industries Table 7: Final Demand Multipliers.: 512100 - Motion_ picture and Video Industries Output Valve -Added Earning. Employment 1.7210 10677 0.4326 12.2757 Source: RIP✓($ II Table 8:: Direct Effect Multipliers: 512100 - Motion picture and Video Industries Earnings Employment 1.9324 1.57.50 Source: RIMS ll Table 9: Final Dpmand MultinliPry 9;191nn-Mntinn niptii- -1 Virlon InAnctrlloc Sector Output Value -Added Earnings Employment l Agriculture, forestry, fishing, ihunting 3.0002 0.0001 0.0000 0.0015 Mining 0.0021 0.0013 0.0006 0.0035 Utilities 0.0095 0.0060 0.0015 0,0107 Construction 0.0076 0.0039 0.003.3 0.0550 Durable goods manufacturing 0.0125 0.0050 0..0027 0.0372 Nondurable goods manufacturing 0.0309 0.0112 0.0054 0.0882 Wholesale trade 0.0310 0.0178 3.0071 0.0747 Retain trade 0:0467 0.029-6 0.0141 0.3986 Transportation and warehousing 0.0286 0.0154 0.0088 0.2301 Information 1.0728 C.6780 0.2391 7.6707 Finance and insurance 0,0992 0.0552 0.0242 0.4357 Real estate and rental and leasing 0.1219 0.0842 0.0198 0.8633 Professional, scientific, tech. services 0.0575 0.0394 0.0277 0.3460 Managementofcomlpanies 0.0136 0,0.088 0.0062 0.0.585 Administrative and waste services 0.0355 0.0208 0.0146 0.3491 Educational Services 0.0382 0.0055 0.0038 0.0993 Health care and 50ciall assistance 0.0.529 0.0329 0.0235 0.3832 Arts, en'tertaiinment, and recreation 0.0354 0.0215 0.0111 0.5838 Accommodation 0.0062 0.0039 0.0017 0.0416 Food services and drinking places 0.0236 0,0128 0,0076 0.2837 Other services 0.0251 0:0137 0.0093 0.2311 Households 0.0000 0,0005 0.00051 0.0301 Total Impact 1,7210 1.0675 1 ...'e.: ttHvj3 Id Page 7 1310 South ill Street, Suite 105 I Austin, Texas 78704 1 (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 project, TXP focused on the ratio of government tax collections to gross domestic product (GDP) and wages. Three 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 US. Census Bureau State Government Tax Collections' (STC) report; and 3) 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 reverie are included. Over the past five years, the state tax revenue as a percent of state GDP was 3.75 percent. Table 10; State of Texas Tax Revenue as a (Percent of State GDP (Millions of chained 2017 dol(arsl 2019 2020 2021 2022 2023 Tax Revenue ($M) - - $63„330 $G1,013 $65,377 $82,260 $86,776 GDP (.$M) $1,806,736 $1,773,657 $1,879,101 I $1,952,709 $2,097,090 Tax Rev as Spa GDP 3.51% 3.44°% 3.4890 4.21% 4.14% 3OLWCE'; 'W.s. blur�8u o't Economic AnalVsis„ I xw„ uric. Over the past five years, City of Fort Worth general fund tax revenue as a percentage of total Tarrant County wages was 1.38 percent. Table :11: City of Fnrt Worth Gonpral Nind Tax Rpvpnnp a❑ a Parrpnf of Tarranf r —inter Wn—c FY2019 FY2020 FY2021 FY2022 FY2023 Tax .Revenue ($M) $736.7 $756,6 $812.9 $887.6 $936.0 County Wages ($M) 553,286 $54,077 $58,536 $64„793 $69,,340 Tax Rev as % Wages 1.38% 1.40% 1,39% 1.37% 1.35% wu r ce: O LY a u r0 r1 aw prtn; V . �, bureau or wo•o•r matisurs; i ar, m c. https://www.censis.gov/programs-surveys/stc/data/tables,htmi a https://www-fortworthtexas.gc)v/departments/the-fwlab/budget Page 8 1310 South 151 Street, Suite 105 Austin, Texas 79704 (512) 328-8300 phone (512) 462-1240 fax www.txp.cem Construction Economic Impact of the ACE 2 Project The following table depicts how the ACE 2 project spending ripples through the Dallas -Fort Worth MSA economy. This spending increases regional economic activity by $14.2 million, labor Income by $4.6 million, and employment by 82.6 jobs. This table illustrates how the ACE 2 project encourages and promotes regional economic growth in other sectors of the economy. The input into the model was $6.1 million in construction spending (see tables 3). Table 12: Total Economic ,Imnart of ACT 7 Prniart rnnctmrtinn Snonrtino Sector Output Value Add Earnings Employment Agriculture, forestry, fishing, hunting $2,440 $1,220 $610 0.0 Mincing $85,398 $48,799 $20,740 01 Utilities $108,578 $68,319 $17,690 0.1 Construction $6,171,,865 $3,286,009 $2,310,027 36.3 Durable goods manufacturing $932,,063 $385,51.3 $200,696 2.9 Nondurable goods manufacturing $529,470 $174,457 $86,008 1.1 Wholesale trade 571-0,637 $4136,862 $163,477 1.7 Retadl trade $797,865 $505,681 $240,946 7.0 Transportation and warehousing $401,983 $211,056 $118,948 2.5 Information $304,994 $169,577 $55,509 0.6 Finance and insurance $775,906 $417,232 $195,196 3.8 Real estate and rental and leasing $1,099,200 $757,606 $177,507 7.5 Professional, scientific, tech. services $539,230 $357,453 $261,685 3.0 Management of companies $190,926 $124,438 $87,228 0.8 Admindstrative and waste services $304,384 $174,457 $123,829 2.8 Educational services $80,519 $55,309 $37,209 1.0 Health came and social assistance $558,140 $347,084 5248,265 4.2 Arts, entertainment, and recreation $67,709 $40,869 $26,230 1.0 Accommodation $S%169 $36,599 $15,860 0.4 Food services and drinking places $2341236 .$126,268 $73,809 2.8 Other services $262,905 $145,787 595,768 2.4 Households $0 .54.880 $4,880 0.3 Total impact $14,217,616 $7,845,674 r source: i Av, mc. Page 9 1310 South 1s' Street, Suite 105 1 Austin, Texas 78704 {512) 328-2300 phone (512) 462-1240 fax www.txp.com Economic Impact of ACE 2 Annual Operations The following table illustrates how normal business activity at ACE 2 ripples through the Dallas -Fort Worth M5A economy. Table 13: Total Economic Impact of Ace 2 Annual Operations tDirprt + Indirprt + IndurPdl Year Output GDP/ Value Add Earnings Employment Year 1 $5,937,612 $3,56b,004 $1,576,467 44.7 Year $6,234,492 $3,744,304 $1,655,291 46.9 j Year $6,546,217 $3,931,519 51,738,055 49.3 Year $6,87-1,528 $4,128,095 $1,824,9.58 51.7 Year 5 $7,217,204 $4,334,500 $1,916,206 54.3 aauirce: ixe.Vic, State of Texas Tax impact of ACE 2 Applying the percentage of state tax revenue to GDP (3.75 percent) against economic activity attributable to the ACE 2' project and construction, the state is projected to receive $1.0 million in new tax revenue over the next five years. Table 14: State of Texas Estimated Tax Revenue Impact of ACE 2 Construction & Annual Operations Phase Annua! State GDP Annual Tax Impact (3.75% ratio) Construction $7,845,674 $294,604 Year 1 $3,566,004 $133,90.3 Year 2 $3,744,304 $140,598 Year 3 $3,931,,519 $147,628 Yea r4 $4,128,095 $155,4)09 Year 5 $4,334,900 New State Tax Revenue $162,,760 $1,034,502 .Source: I X P, IInc. Page 10 1310 South 1"Street, Suite 105 1 Austin, Texas 78704 (512) 328-8300 phone (512) 462-1240 fax vPAw,txp.com City of Fort Worth Tax Impact of Impact of ACE 2 Applying the percentage of city general fund tax revenue to county wages (1.38 percent) against new economic activity attributable to ACE 2, the City of Fort Worth is projected to receive $0.2 million in new tax revenue over the next five years. Talbl6t' IS, City of Fort Worth Estimated Tax Revenue Impact of ACE 2 Construction & Annual Operations Phase ACE 2 Wages Impact Annual Tax Impact (1.40% ratio) Construction $4,562.105 $62,868 2024 $1,576,467 $21,724 2025 $1,555,291 $22,812 2026 $1, 738,055 $23,9.5Il 2027 $1,E24,954 $25,149 2028 $1,916, 206 $26,406 New City Tax Revenue r aource: ii xN, inc. Summary of Findings If the entire ACE 2 production site expansion project is exempt from sales tax, the company saves $381,243 in state sales tax @ 6.25%and $60,999 In City of Fort Worth sales tax @ 1.00%. The Fort Worth sales tax calculation assumes all .inputs to the site expansion project are taxable and bought from vendors within the city limits. If ACE 2 purchases goods from vendors outside the area, then the forgone sales tax revenue figure would be lower. Over the next 5 years, ACE 2 is projected to generate a positive return on investment for the community. Note, the economic impact does not include spending by companies who rent ACE 2. Table 16: Estimated Return on Ivestment fnrthp ACF 7 prniart State of Texas City of Fort Worth Sales Tax Exerr ilon Construction -$381, 243 -$60,999 5 Year Tax Impact $1,034,502 $182,909 Net Return $653,259 $121,910 lource: -1 XP, Inc. ° Property, sales, util ity tra nsfer, and other tax revenue Page 11 1310 South 111 Street, Suite 105 Austin, Texas 78704 {512j 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 Cents 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 12 1310 South 111 Street, Suite 105 1 Austin, Texas 78704 1 (512) 32M300 phone 1 (512) 462-1240 fax 1 www.txp.com Ili 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 ali 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 he realized. The information and expressions of opinion contained herein are subjectto change without notice, and shall not, under arty circumstances, create any implications that there has been no change or updates. Page 13 1310 South 151 Street, Suite 105 1 Austin, Texas 78704 1 (512) 328-8300 phone 1 (512) 462-1240 fax I www.txp.ccm City of Fort Worth, Texas Mayor and Council Communication DATE: 05120125 MN C FILE NUMBER: M&C 25-0463 LOG NAME: 17NOMINATION FOR 2601 SPIRIT DR. FOR MEDIA PRODUCTION LOCATION SUBJECT (CD 10) Adopt an Ordinance Nominating the Real Property Located at 2601 Spirit Drive for Designation by the Office of the Governor as a Qualified Media Production Location within Media Production Development Zone Number One RECOMMENDATION, It is recommended that the City Council adopt the attached ordinance nominating the real property located at 2601 Spirit Drive for designation by the Office of the Governor as a Oualified Media Production Location within Media Production Development Zone Number One. DISCUSSION: Chapter 485A, Texas Government Code, enacts the Media Production Development Zone Act (the Act) which is 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. On December 10, 2024, City Council adopted Ordinance No. 27374-12-2024, recognizing and designating the area within the municipal, or corporate, boundaries, of the City of Fort Worth as a media production development zone, known as "Media Production Development Zone Number One." MPDZs allow 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 MPDZ. Under the Act, the governing body cf 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 as a Qualified Media Production Location, a location must be land or other real properly that is in a MPDZ and will, (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 2601 Spirit Drive, will qualify for designation as a Oualified Media Production Location on the basis of the fallowing proposed renovation and uses: • One or more media -related project(s) is proposed at this location. Construction and/or renovation began in the first quarter of 2025 and will take approximately six months to complete. • Alliance Center East No, 2, Ltd. (Requester) is located at 2601 Spirit Drive and is transforming its expansive 200,000+ square foot facility into a premier soundstage and production hub. This development will accommodate both large-scale fiilrn productions and long-temt television tenants, offering slate -of -the -art infrastructure and services for the media industry, The site will cater to a wide range of production needs, from feature films to television series. Site Details: The facility features over 224,000 square feet, including two (2) 80,00,0-plus square feet of sound stages. These stages can be subdivided into smaller stages, providing flexible configurations for productions of various sizes. In addition to the sound stages, the facility will offer mill workspaces for set oonstruction, office spaces for production teams, storage facilities, and dedicated wardrobe areas to support every aspect of a production. Scope of Planned Operations: The facility will be a comprehensive production center, designed to handle a variety of media projects. Alliance Center East No. 2, L.W. will focus on attracting both short-term film productions and long-term television series, providing dedicated soundstage space with full soundproofing, lighting grids, and special effects capabilities. The facility will create a complete ecosystem for pre -production, Pinning, and post -production. Long-term teievision tenants will benefit from stable, equipped stages for extended productions, while large-scale film productions will have access to vast rasounces for creating !high -quality content. Types of Jobs: The development will generate a wide range of job opportunities, including: • Immediate Construction Jobs: During the retrofitting and construction phase, local construction crews will be hired to modify the existing warehouse into a fully equipped soundstage facility. These jobs will involve soundproofing, electrical work, Heating, Ventilation, and Air Conditioning installation, stage building, and interior design. • Administrative Roles: Facility manager, leasing agent, and some office staff will oversee daily operations, client management, and production schedules for tenants and short-term projects. • Support Staff: Security personnel, maintenance teams, and logistics staff will ensure the smooth day -today operations of the facility, managing safety, infrastructure, and logistics. • Full Production Crews: Once operational, Alliance Center East No. 2, Ltd. will host full production crews working on location, including directors, camera operators, set builders, costume designers, production assistants, etc. By focusing on both short-term film projects and long-term television productions, Alliance Center East No. 2, Ltd. will create a thriving production environment while boosting the local economy through job creation and sustained business operations. Up to three locations at any one time may be nominated by the City Council and designated by the State as Qualified Media Production Locations within an MPDZ and receive the same sales tax exemptions. The City Council adopted Ordinance No. 27375-12-2024 on December 10, 2024, nominating the property at 2701 Spirit Nve as a Qualified Media Production Location. Upon adoption of the attached ordinance, 2601 Spirit Drive will be the second property nominated. This M8C does not request approval ofa. contract with a business entity. A Form 1295 is not required because: This M8C does not request approval of a contract with a business entity. FISCAL INFORMATION The Director of Finance certifies that approval of this recommendation will have no material effect on City funds. Submitted for City Manager's Office i Jesioa MoEachern 5804 Originating Business Kevin Gunn 2015 Addiional Information Contact: Ori Fernandez 2606 Expedited