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CITY COUNCIL AGENDA COMMUNICATION |
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| | | | | | | | SUBJECT: | Approve the Recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors Relating to Payment to Watters Creek Owner, LLC, from the TIF Fund in the Amount of $745,798.24 from the City Tax Increment, $125,269.23 from the County Tax Increment, and a Payment to the City from the TIF Fund in the Amount of $15,000 for Administrative Support. |
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| | | | | | | | STAFF RESOURCE: | Eric Ellwanger, Assistant City Manager
Steven Glickman, Controller
Chris Landrum, Budget Manager |
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| | | | | | | | PREVIOUS COUNCIL ACTION: | On
December 13, 2005, the City Council held a public hearing and passed
Ordinance No. 2471-12-05 that created Reinvestment Zone No. 1 (Garden
District).
On November 27, 2007, the City Council approved the Final Project and Financing Plan for Reinvestment Zone No. 1.
On an annual basis, the City Council considers a recommendation from the
TIF Board of Directors to approve TIF funds allocated based on the
Development Agreement. |
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| | | | | | | | BOARD / COMMISSION ACTION: | On May 1, 2018, the TIF No. 1 Board recommended that the City Council
approve a TIF payment in the amount of $871,067.47 to Watters Creek
Owner, LLC, and $15,000 to the City for City administrative support. |
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| | | | | | | | ACTION PROPOSED: | Approve the Recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors Relating to Payment to Watters Creek Owner, LLC, from the TIF Fund in the Amount of $745,798.24 from the City Tax Increment, $125,269.23 from the County Tax Increment, and a Payment to the City from the TIF Fund in the Amount of $15,000 for Administrative Support. |
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| | | | | | | | BACKGROUND
On September 1, 2005, the City received a TIF petition from Emerson
Partners, Inc. for the redevelopment of the Montgomery Farm Garden
District area through the use of Tax Increment Financing (TIF). The
overall Tax Increment Financing Reinvestment Zone encompasses
approximately 113 acres at the southwest corner of Bethany Drive and US
75.
The City created the TIF Zone at the December 13, 2005 City Council
meeting. In 2007, the City, Montgomery Farms Garden District Ltd., and
Coventry II DDR/Trademark Montgomery Farms (Trademark) entered into an
Amended and Restated Development Agreement (Agreement) that addressed
issues related to the inclusion of Trademark in the TIF development.
In 2013, the City entered into a Supplemental Agreement to the Amended
and Restated Development Agreement with Watters Creek Owner, LLC (WCO)
successor to Trademark. In the Supplemental Agreement, the term was
extended by five (5) years and the percentage of reimbursement was
decreased from 50% to 45% for years 11-12 and from 45% to 40% for years
13 through the end of the term for property tax. Sales tax receipts
commencing on January 1, 2016 are reduced to 45% and will be further
reduced on January 1, 2018 to 40%. The FY2014 reimbursement was still
at the 50% rate pursuant to the Supplemental Agreement.
In January 2015, the TIF No. 1 Board approved the Second Supplemental
Agreement that was concerned with additional terms and conditions
related to Watters Creek Owner's obligations with respect to the
construction and payment for the Montgomery Boulevard extension and the
Watters Branch bridge. The Second Supplemental Agreement indicates in
Section 2.4 that upon occupancy of Building V, the percentage of
reimbursement will be adjusted to 50% for both the property and sales
tax. Building V received a temporary Certificate of Occupancy on March 1,
2016.
Attachment 1 reflects the current status of the TIF Fund with proposed
deductions for the City's $15,000 administration cost and the proposed
developer reimbursement of $871,067.47 to Watters Creek Owner, LLC.
Attachment 2 reflects the proposed developer reimbursement being
appropriated between the City and County participation. The County
participation is initially restricted to the priority projects such as
the ramp reversal and traffic signalization. Therefore, the proposed
$871,067 payment to Watters Creek Owner, LLC is allocated as
$745,798 towards parking spaces and $125,269 towards Montgomery Boulevard and Bridge.
A proposed payment to the City in the amount of $15,000.00 is for the City's administrative costs.
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| | | | | | | | BUDGETARY IMPACT
The TIF Fund has adequate funds available for the payments and will
result in $50,000 remaining as a fund balance pursuant to the Amended
and Restated Development Agreement.
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| | | | | | | | STAFF RECOMMENDATION
Staff recommends that the City Council approve the recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors relating to payment to Watters Creek Owner, LLC, from the TIF Fund in the amount of $745,798.24 from the City tax increment, $125,269.23 from the County tax increment, and a payment to the City from the TIF Fund in the amount of $15,000 for administrative support.
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| | | | | | | | MOTION
I make a motion to approve the recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors relating to payment to Watters Creek Owner, LLC, from the TIF Fund in the amount of $745,798.24 from the City tax increment, $125,269.23 from the County tax increment, and a payment to the City from the TIF Fund in the amount of $15,000 for administrative support.
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