HomeMy WebLinkAbout26-6341 - City Council - ResolutionA Resolution
NO.26-6341
WAIVING THE PORTION OF THE CITY'S TAX INCREMENT
REINVESTMENT ZONE POLICY THAT LIMITS LOANS TO FIVE
YEARS; MAKING CERTAIN FINDINGS; AUTHORIZING THE CITY
MANAGER TO EXECUTE A THIRTY (30) YEAR LOAN AGREEMENT
WITH ROYAL CAPITAL GROUP, LLC, OR AN AFFILIATE, FOR TIF-
ELIGIBLE PUBLIC IMPROVEMENTS FOR THE BENEFIT OF THE
EVANS AND ROSEDALE REDEVELOPMENT PROJECT, USING
FUNDS PREVIOUSLY APPROVED BY THE BOARD OF DIRECTORS
OF TAX INCREMENT REINVESTMENT ZONE NUMBER FOUR
("SOUTHSIDE TIF") AND SUBJECT TO ALL OTHER CONDITIONS
SPECIFIED BY THE BOARD; AND AUTHORIZING NECESSARY
RELATED ACTIONS
WHEREAS, the historic Terrell Heights neighborhood and the area in and around the
intersections of Evans Avenue and Rosedale Street are integral to the community of the City of
Fort Worth ("City"), and the City has long sought to redevelop the area in a way that reflects its
storied history and importance to the community; and
WHEREAS, the City, the Fort Worth Housing Finance Corporation ("HFC"), and the Fort
Worth Local Development Corporation ("LDC") have collectively amassed a total of thirty-six
parcels of real property in the area having a fair market value of $4,245,553.00 (the "Land"),
undertaken environmental assessment and certain remediation, and pursued rezoning in an effort
to facilitate revitalization and redevelopment; and
WHEREAS, after a lengthy search for a private entity to serve as lead in redeveloping and
revitalizing the area in a respectful manner that is reflective of its history and takes into account
concerns of the area's community and stakeholders and a Request for Expressions of Interest in
2024, Royal Capital Group, LLC ("RCG") was selected as master developer for the Land and
certain other area in and near the historic Evans & Rosedale Urban Village; and
WHEREAS, RCG plans to build a mixed -use development, including affordable housing
financed through utilization of low-income housing tax credits ("LIHTC") and proceeds of tax-
exempt bonds issued by the Tarrant County Housing Finance Corporation (the "EvRo Project");
and
WHEREAS, the City Council and governing bodies of the corporate entities owning the
Land previously approved sale of the property for the EvRo Project and authorized other actions
in support thereof (M&Cs 24-0934, 25-0421, and 25-1012; LDC Resolution FWLDC-25-08; HFC
Resolutions 2025-04, 2025-20, 2025-21, 2025-22, and 2025-23); and
WHEREAS, in 1997, in accordance with Chapter 311 of the Texas Tax Code (the "Act")
the City created Tax Increment Reinvestment Zone Number Four, City of Fort Worth, Texas
("Southside TIF") to promote development and redevelopment within the zone, with the Land
lying at the zone's eastern edge; and
WHEREAS, in accordance with the Act, a Project and Financing Plan for the Southside
TIF (the "Plan") has been adopted and amended (Ordinance Nos. 13919, 20536-12-2012, and
25837-11-2022) and outlines projects that are eligible under the Act for which funds from the zone
may be allocated; and
WHEREAS, in April 2025, acting in accordance with the adopted Plan, the Board of
Directors of the Southside TIF ("Board") authorized execution of an agreement with RCG, or an
affiliated entity, for an amount not to exceed $7,000,000.00 ("TIF Funds") for reimbursement of
public infrastructure improvements associated with the EvRo Project (Southside TIF Resolution
TIF4-2025-02); and
WHEREAS, according to RCG, due to the nature of the EvRo Project as a LIHTC project,
allocation of the TIF Funds as a reimbursement creates LIHTC-related issues that would limit
private investor and equity capabilities thus jeopardizing the feasibility of the EvRo Project; and
WHEREAS, to resolve the LIHTC-related issues stated above, RGC has requested that,
instead of a reimbursement structure of the TIF Funds pursuant to an agreement between RCG and
the Board, the TIF Funds be provided in the form of a nonrecourse soft subordinate loan agreement
with a term of thirty (30) years and a simple interest rate equal to the long-term applicable federal
rate ("LT AFR") at closing but with all interest and principal payments subject to available cash
flow (following payments of outstanding developer fee payments and any required replenishment
of the EvRo Project's operating reserve) ("TIF Loan"); and
WHEREAS, the authorization for the Southside TIF expires at the end of 2032, making
the City an appropriate counterparty for the TIF Loan; and
WHEREAS, pursuant to Section 311.008(b)(3), the City Council finds that entering into
the TIF Loan is necessary to implementing the Southside TIF project plan and will facilitate the
development of the EvRo Project within the Southside TIF; and
WHEREAS, under the TIF Loan, RCG will be subject to all of the same conditions
regarding expenditure and construction as would have been required pursuant to a Southside TIF
reimbursement agreement as approved by the Board;
WHEREAS, using the TIF Loan structure will not impact the timing or total amount of
funds for the EvRo Project being provided by the Southside TIF; and
WHEREAS, the City's policy for tax increment reinvestment zones, as readopted by M&C
24-0220 and amended by Resolution 6126-08-2025 ("TIF Policy"), allows for funding from a
zone to be provided in the form of a loan subject to: (i) the amount being lent may not exceed fifty
percent of the fund balance of zone in question; and (ii) the term of the loan may not exceed five
years; and
WHEREAS, the proposed TIF Loan would comply with the TIF Policy with regard to
percent of fund balance but a waiver would be required from City Council to allow for a term of
greater than five years; and
WHEREAS, in light of the importance of the EvRo Project to the historic Southside area
of the City and the City as a whole and because the TIF Loan aligns with the approval of the use
of the TIF Funds by the Board, a waiver of that the limitation on term of the loan is justified.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FORT WORTH, TEXAS THAT:
1. The provision in the "City of Fort Worth Policy, Guidelines and Procedures for Tax
Increment Reinvestment Zones (September 2025)" that limits a loan of tax increment reinvestment
zone funds to a term of no greater than five (5) years is hereby waived solely for purposes of
authorizing the specific loan described herein; and
2. The City Council of the City of Fort Worth finds it to be necessary or convenient
in order to implement the Southside TIF's approved Plan and achieve its purposes for the City to
enter into the TIF Loan agreement with RCG, or an affiliate, as described herein, utilizing funds
previously authorized by the Board of Directors of the Southside TIF; and
3. The City Manager, or his designee, is hereby authorized to execute the TIF Loan
agreement with RCG, or an affiliate, subject to all terms and conditions required by the Texas Tax
Code, the Southside TIF Project and Financing Plan, and the Board and to include the following
terms and conditions — (i) a loan repayment term of thirty (30) years, (ii) simple interest at a rate
equal to the LT AFR at closing, (iii) all interest and principal payments being subject to available
cash flow (following payments of outstanding developer fee payments and any required
replenishment of the EvRo Project's operating reserve and with outstanding interest payments
given priority for payment in the event there is available cash flow), and (iv) collaterally assignable
to the construction lender with prior consent of the City; and
4. The City Manager, or his designee, is hereby authorized to execute any other
documentation deemed advisable, necessary, desirable, or required to implement the financing
contemplated herein to further the completion of the EvRo Project; and
5. This resolution shall be effective from and after its passage by the City Council.
Adopted this June 23, 2026.
ATTEST:
By:
Jannette S. Goodall, City Secretary
w- kt
a T
O�O�°000 0 ,0 ���
0
j: ° °0�A
°
s o=�
P.
�p °°o -�
aa 000 a