HomeMy WebLinkAboutIR 8401 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 84ol
TE+ Date: April 12, 2002
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To the Mayor and Members of the City Council
Page 1 of 2
lots SUBJECT: Change of Base Value for Tax Increment Reinvestment Zone
Number Two, City of Fort Worth, Texas (Speedway TIF)
The purpose of this Informal Report is to present a synopsis of events leading to the staffs
conclusion that the base value of the Speedway TIF is actually lower than originally thought. The
net effect of this base value adjustment is that taxing entities participating in the Speedway TIF (the
City, Denton County and Northwest Independent School District) will actually contribute to the l-IF a
larger portion of tax revenue collected on real property within the TIF than originally envisioned.
Brief History
In mid-1995, Texas Motor Speedway, Inc. purchased a 950 acre parcel of land on which the Texas
Motor Speedway would be constructed. At that time, the staff intended to recommend designation
of the entire 950 acre parcel as the Speedway TIF. On this basis, Denton Central Appraisal District
(which was, at that time, the only appraisal district with jurisdiction over the property in question)
provided the City with a letter, dated October 11, 1995, indicating that the taxable appraised value
of the 950 acre parcel was $5,000 per acre, for a total base valuation of$4,750,000.
bsequently, it was discovered that only 568.41 acres of this 950 acre parcel were located within
01,00
corporate limits of the City of Fort Worth. Because state law only allows a municipality to
designate land within its jurisdiction as a TIF, the actual ordinance adopted by the City Council
designating the Speedway TIF covered only the 568.41 acres located in the City. The ordinance
designating the Speedway TIF is Ordinance No. 12323. It was adopted by the City Council on
December 19, 1995.
Denton Central Appraisal District did not provide the City with a revised base value appraisal of the
property actually designated as the Speedway TIF and the City did not adjust the base value
previously supplied by Denton Central Appraisal District based on the reduced acreage actually
designated as the Speedway TIF. Because the property is located in Denton County, Tarrant
Appraisal District accepted the base value provided by Denton Central Appraisal District.
Accordingly, from 1996 until 2000 the base value provided to the City by Tarrant Appraisal District
was the $4,750,000 figure that had been supplied by Denton Central Appraisal District.
In 1999, the Speedway TIF was expanded to include property in the Northwest Independent School
District and the Beechwood Business Park. While reviewing the metes and bounds of the entire
Speedway TIF, Tarrant Appraisal District became aware of the discrepancy between the actual
number of acres comprising the TIF and the number of acres for which the base value had been
established and notified the City of this discrepancy. While the discrepancy was noticed when the
Speedway TIF was expanded in 1999, it affects only the portion of the TIF originally designated.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8401
PA-1 Date: Aprils 12, 2002
To the Mayor and Members of the City Council
Page 2 of 2
SUBJECT: Change of Base Value for Tax Increment Reinvestment Zone
Number Two, City of Fort Worth, Texas (Speedway TIF)
Recommended Course of Action
The City Attorney's Office has advised the City Manager's Office and the Council's Economic
Development Committee that the calculation of the base value of a TIF is established statutorily.
The Texas Tax Code provides that a taxing entity's base value is the taxable appraised value of the
property actually designated as a TIF for the year in which the TIF was created. Therefore, since
only 568.41 acres of land were designated as the TIF originally and Denton Central Appraisal
District has provided a 1995 taxable appraised value of $5,000 per acre, the correct base value of
the original portion of the Speedway TIF is $2,842,050 (568.41 X $5,000). The tax increment
revenue from the City amounts to $27,832.13 for 1997-2000. The Revenue Office is still
determining whether amounts from 1996 are owed. The City Attorney's Office has recommended
that these amounts should be paid to the Speedway TIF fund as soon as practicable.
Gary W. Jackson
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS