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HomeMy WebLinkAboutOrdinance - 2011-O0008 - Lubbock Business Park Tax Increment Finance Reinvestment Zone Project Plan - 01/13/2011First Reading January 13, 2011 Item No. 6.7 ORDINANCE NO. 2011-00008 Second Reading January 27, 2011 Item No. 5.18 AN ORDINANCE APPROVING THE LUBBOCK BUSINESS PARK TAX INCREMENT FINANCE REINVESTMENT ZONE PROJECT PLAN AND FINANCE PLAN AS ADOPTED BY THE BOARD OF DIRECTORS OF THE LUBBOCK BUSINESS PARK TAX INCREMENT FINANCING REINVESTMENT ZONE NO. 3. WHEREAS, the City Council of the City of Lubbock, desiring to promote the development of the Lubbock Business Park of the City of Lubbock, adopted Ordinance No. 2009-00113, December 16, 2009, establishing the Lubbock Business Park Tax Increment Finance Reinvestment Zone No. 3 and defining its boundaries in accordance with the provisions of the Tax Increment Financing Act, V.T.C.A. Tax Code,, Chapter 311 (the "Act'); and WHEREAS, the Board of Directors of the Lubbock Business Park Tax Increment Financing Reinvestment Zone, in accordance with the Act, has prepared and adopted a Lubbock Business Park Project Plan and a Lubbock Business Park Financing Plan which are hereby recommended to the City Council for approval.; NOW THEREFORE: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1: THAT the facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct. SECTION 2: THAT the City Council of the City of Lubbock makes the following findings regarding the Lubbock Business Park Tax Increment Financing Reinvestment Zone Project Plan and the Lubbock Business Park Tax Increment Financing Reinvestment Zone Finance Plan, as adopted by the Board of Directors of the Lubbock Business Park Tax Increment Financing Reinvestment Zone No. 3: LBP TIF Plan Approval Ordinance Page I I a) That the Lubbock Business Park Tax Increment Financing Reinvestment Zone Finance Plan includes, as required by § 311.011 of the Act, all of the following items: 1) a detailed list describing the estimated project costs of the zone, including administrative expenses; 2) a statement listing the kind, number, and location of all proposed public works or public improvements in the zone; 3) an economic feasibility study; 4) the estimated amount of bonded indebtedness to be incurred; 5) the time when related costs or monetary obligations are to be incurred; 6) a description of the methods of financing all estimated project costs and the expected sources of revenue to finance or pay project costs, including the percentage of tax increment to be derived from the property taxes of each taxing unit that levies taxes on real property in the zone; 7) the current total appraised value of taxable real property in the zone; 8) the estimated captured appraised value of the zone during each year of its existence; and 9) the duration of the zone. b) That the Lubbock Business Park Tax Increment Financing Reinvestment Zone Project Plan includes, as required by § 311.011 of the Act, all of the following items: 1) a map showing existing uses and conditions of real property in the zone and a map showing proposed improvements to and proposed uses of that property; 2) proposed changes of zoning ordinances, the master plan of the municipality, building codes, and other municipal ordinances; 3) a list of estimated nonproject costs; and LBP TIF Plan Approval Ordinance Page 2 4) a statement of a method of relocating persons to be displaced as a result of implementing the plan. c) That the Plan is feasible and conforms to the City of Lubbock Comprehensive Plan. SECTION 3: That the Lubbock Business Park Tax Increment Financing Reinvestment Zone Project Plan and the Lubbock Business Park Tax Increment Financing Reinvestment Zone Finance Plan, as adopted by the Board of Directors of the Lubbock Business Park Tax Increment Financing Reinvestment Zone No. 3 are approved. A copy of each plan is attached hereto and incorporated into this Ordinance as if fully set forth herein. SECTION 4: That if any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. AND IT IS SO ORDERED PASSED by the City Council on first reading on January 13, 2011 PASSED by the City Council on second reading on January 27, 2011 TOM MARTIN, MAYOR ATTEST: Rebec a Garza, City Secretary LBP TIF Plan Approval Ordinance Page 3 APPROVED AS TO CONTENT: -�� Rob Al.l.i &, Assistan City Manager Development Services APPROVED AS TO FORM: Linda L. Chamales Economic Development Attorney LC:/Cityatt/Linda/LBP TIF. Project & Finance Plans December 13, 2010 LBP TIF Plan Approval Ordinance Page 4 Ordinance No. 2011-00008 r IF Increment Reinvestment Zone City of Lubbock, TX Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 The City of Lubbock, Texas established the Lubbock Business Park Tax Increment Reinvestment Zone ("Zone") on December 16, 2009 with Ordinance No. 2009-00113 for the purpose of dedicating the increase in tax revenue generated within the Zone to provide a portion of the funds for public infrastructure to encourage development in the Lubbock Business Park in the City. The Zone consists of approximately 568 acres and is more fully described in Exhibit A. The Zone was created to encourage development in the Lubbock Business Park that has remaining unimproved areas which would benefit from the proposed public infrastructure improvements. It is expected that the Zone will. exist for thirty (30) years or the date when all project costs are paid, whichever come first. As set forth in Section 311.011 of the Tax Increment Financing Act of the Tax Code, the Project Plan for the Lubbock Business Park Tax Increment Finance Reinvestment Zone,, Lubbock, Texas must and does include the following elements: 1. A map showing existing uses and conditions of real property in the Zone and a map showing proposed improvements to and proposed use of the property. ■ The boundaries of the Zone are shown on the map labeled Exhibit B. ■ Existing land use within the Zone is shown on Exhibit C. Currently, the area is primarily undeveloped. The area contains less than ten percent residential. ■ Public improvements being proposed for the Zone are identified in Exhibit D. ■ Proposed public improvements are listed in Exhibit E. ■ Anticipated Future Land Use within the Zone is shown in Exhibit F. 2. Proposed changes of zoning ordinances, the master plan of the municipality, building codes, and other municipal ordinances. No changes to codes, ordinances, or master plan as a result of the creation of the Zone are expected. If a future change is proposed, it will be made through the standard process and procedures of the City. 3. A list of estimated non -project costs. Non -project costs within the Zone are those development costs not paid for by the Zone. These costs will include, but are not limited to, $188 million, which is comprised of new development. 4. A statement of a method of relocating persons to be displaced as a result of implanting the plan. In the process of developing the Zone, no relocations will be necessary. 2 Ordinance No. 2011-00008 City of Lubbock, TX Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit A Boundary Description BEGINNING at the corner of the intersection of the east right-of-way of Interstate 27 and the south right-of-way of Kent Street, the POINT OF BEGINNING; THENCE, east along the south right-of-way of Kent Street to the northwest corner of a tract of land recorded in Volume 393, Page 505, Deed Records of Lubbock County, Texas; THENCE, south along the west property line, east along the south property line and north along the east property line of a tract of land recorded in Volume 393, Page 505, Deed Records of Lubbock County, Texas to the south right-of-way of Kent Street; THENCE, east along the south right-of-way of Kent Street to the northwest corner of a tract of land described in Volume 1856, Page 255, Deed Records of Lubbock County, Texas; THENCE, south along the west property line, east along the south property line and north along the east property line of a tract of land described in Volume 1856, Page 255, Deed Records of Lubbock County, Texas; THENCE, east along the south right-of-way of Kent Street to the west right-of-way of North Martin Luther King, Jr. Blvd.; THENCE, south along the west right-of-way of North Martin Luther King, Jr. Blvd. to the northeast corner of Lot 1, Lubbock Fire Department Addition, to the City of Lubbock, Lubbock County, Texas; THENCE, west along the north property line and south along the west property line of Lot 1, Lubbock Fire Department Addition, to the City of Lubbock, Lubbock County, Texas to the north right-of-way of East Ursuline Street; THENCE, west along the north right-of-way of East Ursuhne Street to the east right-of-way of North Ash Avenue; THENCE, north along the east right-of-way of North Ash Avenue to its intersection with the east right-of-way of Interstate 27; THENCE, northeasterly and northerly along the east right-of-way of Interstate 27 to the south right-of-way of Kent Street and the POINT OF BEGINNING, containing a total of 586.097 acres. Ordinance No. 2011-00008 City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit B Property Boundary Map LEGEND aurr Buslness Park TIF Boundarylubbock LEDA Developed ParcelFs 0 SW1000 ryas Fae Proposed Boundaries Showing Existing Development Lubbock Business Park TIF 7 Ordinance No. 2011-00008 City of Lubbock, TX Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit C Existing Land Use Map LEGEND '0111 Business Park TIF Boundary LEDA Developed Parcels o e°o 1000 Fbd city of #Ilsbback Sri City of Lubbock, TX Ordinance No. 2011-00008 Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit D Proposed Public Improvement Map r-t ii W7.-6 ; � LUrwM Mt 40un'ae � L/l iM LOT�f • IWrR wr1! ! LANE& Wr y �. •Nw Ld1 of ; I&TAS Ij fare aortas r I LAY Mi LAW im On WE Iarm Let y .d ad r1 Lsm Wye i r 1�1'� .e, •i wra LotU i wr a arHr•N - �.arr•� {fif`i fnTi! idft• LaTq!/ r LM. 'LOT i UNi! LW11 © Loll voww ;• LOT It Lit if Lw 10 f i F Ll AN Sift 11� WIN TEMc =r m n I PRWECT SCENNPI¢ r—F e CT - 1 Er L� s T7i=11 l• City of Lubbock, TX Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit E Public Infrastructure Projects Ordinance No. 2011-00008 Projects Estimated Cost Estimates below includes streets, water, wastewater, landscaping and irrigation Phase I (2013) 113 feet - back of curb to back of curb - 1,502 feet at $1,737 per foot $ 2,608,974 Professional services 500,000 Subtotal Phase I 3,108,974 Phase II (2018) 113 feet - back of curb to back of curb - 3,190 feet at 52,114 per foot 6,743,660 43 feet - back of curb to back of curb - 1,100 feet at $797 per foot 876,700 Professional services 1,400,000 Subtotal Phase II 9,020,360 Phase III (2023) 113 feet - back of curb to back of curb - 4,672 feet at $2,572 per foot 12,016,384 Professional services 2,200,000 Subtotal Phase II 14,216,384 Phase IV (2028) 113 feet - back of curb to back of curb - 3,544 feet at $3,129 per foot 11,089,176 43 feet - back of curb to back of curb - 2,580 feet at 31,180 per foot 3,044,400 Professional services 2,600,000 Subtotal Phase 11 16,733,576 Total Public Infrastructure Project Cost 43,079,294 Administrative Cost (5 percent) 2,153,965 Total Project Plan $ 45,233,259 Professional services includes basic engineering services, construction phase services, survey and testing services. * Includes inflation of 4 percent per year from 2009 cost 7 Ordinance No. 2011-00008 �I City of Lubbock, TX Project Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit F Future Land Use Map t�rr at i W. so LOT as LOr 0 SLOT 27 Lor as t I 7 M 8 Ordinance No. 2011-00008 Finance Plan Tax ncre en Reinvestment Zone City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 The Financing Plan provides information on the projected revenues generated by private development on the property described in Exhibit A and shown in Exhibit B, and the projected impact of the investment on the values of the Lubbock Business Park Tax Increment Financing Reinvestment Zone (Zone). The Financing Plan also includes information on the projected cost of the public improvements in the Zone and describes how the increment revenue is utilized to enhance the area and region through the contribution of each entity participating in the project. Below is a summary of the Financing Plan items required by law. 1. The proposed public improvements in the Zone are as follows: • Capital costs, including the actual costs of the construction of public works, public improvements, structures, and fixtures; and the actual costs of the acquisition of land and the clearing and grading of land; • Financing costs, including all interest paid to holders of evidences of indebtedness or other obligations issued to pay for project costs and any premium paid over the principal amount of the obligations because of the redemption of the obligations before maturity; • Any real property assembly costs; • Professional service costs, including those incurred for architectural, planning, engineering, and legal advice and services; • Any relocation costs; • Organizational costs, including costs of conducting environmental impact studies or other studies, the cost of publicizing the creation of the Zone, and the cost of implementing the project plan for the Zone; • Interest before and during construction and for one year after completion of construction, whether or not capitalized; • The amount of any contributions made by the municipality from general revenue for the implementation of the project plan; • Imputed administrative costs, including reasonable charges for the time spent by employees of the municipality in connection with the implementation of a project plan; • The cost of operating the Reinvestment Zone and project facilities; and 2 City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 • Payments made at the discretion of the governing body of the municipality that the municipality finds necessary or convenient to the creation of the Zone or to the implementation of the project plans for the Zone. 2. Estimated Project Cost of Zone, including administrative expenses. Project costs are estimated at approximately $45.2 million dollars. Specific cost estimates are included in Exhibit C. 3. Economic Feasibility Study. An economic feasibility study has been completed and is included as Exhibit D. 4. The estimated amount of bonded indebtedness to be incurred. The Lubbock Business Park Zone does not anticipate bonded indebtedness at this time, but as the plan progresses, bonds could be sold in the future. 5. The time when related costs or monetary obligations are to be incurred. The details regarding the phasing and type of improvement costs anticipated is included in Exhibit C. 6. A description of the methods of financing all estimated project costs and the expected sources of revenue to finance or pay project costs including the percentage of tax increment to be derived from the property taxes of each taxing unit on real property in the Zone. Project costs are financed using tax increment funds received at the present time. Debt could be issued in the future. The revenue sources will be the real property taxes captured by the Zone, which will account for 100% of revenues used to fund project costs and bonds issued. For the Financing Plan, all taxing jurisdictions, excluding the school district, are expected to participate at 100% of their incremental taxable value. 7. The current total appraised value of taxable real property in the Zone. The current appraised value of the taxable real property in the Zone using the 2010 values provided by the Lubbock Central Appraisal District is $2,498,920. 8. The estimated appraised value of the improvements in the Zone during each year of its existence. The estimated appraised value of the improvements in the Zone per year is listed in Table 1. City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Table 1 Total Estimated Assessed Value Total Adjusted Assessed Tax Annual Inerease* Taxable Value Year ($ millions) ($ millions) 2009 $ 0.4 0.4 2010 2.1 2.5 2011 16.0 18.5 2012 2.0 20.5 2013 3.3 23.8 2014 5.7 29.5 2015 8.3 37.8 2016 10.1 47.8 2017 11.9 59.7 2018 12.0 71.7 2019 10.3 82.0 2020 6.5 88.5 2021 5.9 94.4 2022 5.4 99.9 2023 5.5 105.4 2024 62 111.6 2025 6.9 118.5 2026 7.7 126.3 2027 8.4 134.6 2028 8.4 143.0 2029 7.9 150.9 2030 6.8 157.7 2031 6.9 164.6 2032 6.9 171.5 2033 7.0 178.5 2034 7.7 186.2 2035 8.4 194.6 2036 6.5 201.1 2037 4.5 205.5 2038 3.1 208.7 * Value of development increased by 0.5 percent annually • The estimated annual incremental funds available from future development in the Zone are listed in Table 2. 4 City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Year Estimated Taxable Value $ millions) Table 2 Annual Incremental Funds Available Annual Tax Estimated Annual Increment ($ thousands) Base Value Captured Value City County Hospital District Water District ($ millions) $ millions $0.456170 $0.329460 $0.120810 $0.007850 Total $0.904638 2009 $ 0.4 0.4 - 2010 2.5 0.4 2.1 9.5 6.9 2.5 0.2 19.1 2011 18.5 0.4 18.0 82.3 59.4 21.8 1.4 165.0 2012 20.5 0.4 20.1 91.5 66.1 24.2 1_.6 183.4 2013 23.8 0.4 23.4 106.6 77.0 28.2 1.8 213.7 2014 29.5 OA 29.1 132.6 95.8 35.1 2.3 265.8 2015 37.8 0.4 37.4 170.4 123.1 45.1 2.9 341.5 2016 47.8 0.4 47.4 216.3 156.2 57.3 3.7 433.5 2017 59.7 0.4 59.3 270.4 195.3 71.6 4.7 542.0 2018 71.7 0.4 71.3 325.1 234.8 86.1 5.6 651.6 2019 82.0 0.4 81.6 372.1 268.8 98.6 6.4 745.9 2020 88.5 0.4 88.1 401.7 290.1 106.4 6.9 805.2 2021 94.4 0.4 94.0 428.8 309.7 113.6 7.4 859.4 2022 99.9 0.4 99.5 453.7 327.6 120.1 7.8 909.3 2023 105.4 0.4 105.0 478.9 345.9 126.8 8.2 959.9 2024 111.6 0.4 111.2 507.2 366.3 134.3 8.7 1,016.7 2025 118.5 0.4 118.1 538.9 389.2 142.7 9.3 1,080.0 2026 126.3 0.4 125.8 574.0 414.6 152.0 9.9 1,150.6 2027 134.6 0.4 134.2 612.4 442.3 162.2 10.5 1,227.3 2028 143.0 0.4 142.6 650.7 469.9 172.3 11.2 1,304.1 2029 150.9 0.4 150.5 686.6 495.9 181.8 11.8 1,376.1 2030 157.7 0.4 157.3 717.4 518.1 190.0 12.3 1,437.9 2031 164.6 0.4 164.1 748.8 540.8 198.3 12.9 1,500.7 2032 171.5 0.4 171.1 780.3 563.6 206.7 13.4 1,564.0 2033 178.5 0.4 178.1 812.3 586.6 215.1 14.0 1,628.0 2034 186.2 0.4 185.8 847.4 612.0 224.4 14.6 1,698.5 2035 194.6 OA 194.2 886.0 639.9 234.6 15.2 1,775.7 2036 201.1 0.4 200.7 915.4 661.2 242.4 15.8 1,834.8 2037 205.5 OA 205.1 935.7 675.8 247.8 16.1 1,875.5 2038 208.7 0.4 208.2 950.0 686.1 251.6 16.3 1,904.0 Total $ 14,703.1 10,619.0 3,893.9 253.0 29,469.1 bBased on projected tax rates of: City--$0.45617; County--$0.32946; Hospital--$0.12081; and Water District--$0.00785 9. The duration of the zone: The duration of the Zone is thirty (30) years with termination of the Zone in 2038. 6, City of Lubbock, TX Ordinance No. 2011-00008 Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit A Boundary Description BEGINNING at the corner of the intersection of the east right-of-way of Interstate 27 and the south right-of-way of Kent Street, the POINT OF BEGINNING; THENCE, east along the south right-of-way of Kent Street to the northwest corner of a tract of land recorded in Volume 393, Page 505, Deed Records of Lubbock County, Texas; THENCE, south along the west property line, east along the south property line and north along the east property line of a tract of land recorded in Volume 393, Page 505, Deed Records of Lubbock County, Texas to the south right-of-way of Kent Street; THENCE, east along the south right-of-way of Kent Street to the northwest corner of a tract of land described in Volume 1856, Page 255, Deed Records of Lubbock County, Texas; THENCE, south along the west property line, east along the south property line and north along the east property line of a tract of land described in Volume 1856, Page 255, Deed Records of Lubbock County, Texas; THENCE, east along the south right-of-way of Kent Street to the west right-of-way of North Martin Luther King, Jr. Blvd.; THENCE, south along the west right-of-way of North Martin Luther King, Jr. Blvd. to the northeast corner of Lot 1, Lubbock Fire Department Addition, to the City of Lubbock, Lubbock County, Texas; THENCE, west along the north property line and south along the west property line of Lot 1, Lubbock Fire Department Addition, to the City of Lubbock, Lubbock County, Texas to the north right-of-way of East Ursuline Street; THENCE, west along the north right-of-way of East Ursuline Street to the east right-of-way of North Ash Avenue; THENCE, north along the east right-of-way of North Ash Avenue to its intersection with the east right-of-way of Interstate 27; THENCE, northeasterly and northerly along the east right-of-way of Interstate 27 to the south right-of-way of Kent Street and the POINT OF BEGINNING, containing a total of 586.097 acres. 0 RM i'lit Mg. ilk Ordinance No. 2011-00008 City of Lubbock, TX Finance Plan Lubbock Business Park Tax Increment Reinvestment Zone 3 Exhibit C Public Infrastructure Projects Projects Estimated Cost Estimates below includes streets, water, wastewater, landscaping and irrigation Phase I (2013) 113 feet - back of curb to back of curb - 1,502 feet at $1,737 per foot $ 2,608,974 Professional services 500,000 Subtotal Phase I 3,108,974 Phase It (2018) 113 feet - back of curb to back of curb - 3,190 feet at $2,114 per foot 6,743,660 43 feet - back of curb to back of curb - 1,100 feet at $797 per foot 876,700 Professional services 1,400,000 Subtotal Phase 11 9,020,360 Phase III (2023) 113 feet - back of curb to back of curb - 4,672 feet at $2,572 per foot 12,016,384 Professional services 2,200,000 Subtotal Phase 11 14,216,384 Phase IV (2028) 113 feet - back of curb to back of curb - 3,544 feet at $3,129 per foot 11,089,176 43 feet - back of curb to back of curb - 2,580 feet at $1,180 per foot 3,044,400 Professional services 2,600,000 Subtotal Phase II 16,733,576 Total Public Infrastructure Project Cost 43,079,294 Administrative Cost (5 percent) 2,153,965 Total Project Plan $ 45,233,259 Professional services includes basic engineering services, construction phase services, survey and testing services. * Includes inflation of 4 percent per year from 2009 cost 8 Exhibit D Ordinance No. 2011-00009 Resolution No. 2009-RO449 City of Lubbock, Texas LUBBOCK ECONOMIC DEVELOPMENT ALLIANCE FEASIBLITY ANALYSIS (PRELIMINARY) LEDA BUSINESS PARR Tax Increment Reinvestment Zone No. 3 Lubbock, Texas a SCHRADER George R. Schrader Larry D. Cline 4800 Broadway, Ste A Addison, TX 75001 972-661-1983 schc[04wbellmet Exhibit D INDEX Index Forward Section is Section II: Section III: Cih of mbliock (.uhhuek Fall uniic Dee clnl3rocnt %11611ce 'Cap Increment IZciu%"tnlcnl lntte \u. i Fimance flan E\hihil U: Fca,,ihiiilj lnah.i: Page 2 3 HISTORY/CURRENT SITUATION 4 TAX INCREMENT ANALYSIS 6 TABLES I 10 II 11 III !2 IV 13 Exhibit D Cit-A, of Lubbock Luhhock Cconomic De%elopawttt Alliauec 'Tux Increment Reiinve�;tmcnt Zone No. Z Finance Nan Exhibit D: Feasibilin Atiah,,k FORWARD Schrader & Cline, LLC was asked to prepare a Feasibility Analysis using tax increment financing to encourage development of the LEDA Business Park Tax Increment Reinvestment Zone No. 3 in the City of Lubbock, Texas. The Business Park needs public infrastructure projects that will provide access to a majority of the undeveloped lots to allow development of new facilities. Section I summarizes the history of the LEDA Business Park and discusses the current situation. Section Q details the tax increment analysis. Section III contains tables. The following projections of development and tax revenues are subject to change. As underlying conditions in the national and regional economy change, the pace and value of new development projected for the TIP area may shift. Future property tax rates are particularly difficult to predict given their dependence on changes in the tax base, the mix of taxes levied and the various jurisdictions' overall fiscal and budgetary policies. Thus, the projected tax increments are subject to change. The analysis of future tax increment funds is dependent on a series of projections, assumptions, and other inputs; the report should be reviewed in its totality. Neither this report nor its conclusions may be referred to or included in any prospectus or part of any offering made in connection with private syndication of equity, sale of bonds, sale of securities or sale of participation interests to the public without express written approval SCHRADER i CLINE, LLC Schrader & Cline, LLC Addison. Texas October 2009 3 Exhibit D City of Lubbock Lubbock Economic Development alliance T3X Increment Reinvestment Zone No. 3 Finance Plan Exhibit D. Feasibility :Xnah,sis SECTION I: HISTORY/CURRENT SITUATION HISTORY Lubbock Economic Development Alliance (LEDA) was formed in 2004 to assist the City of Lubbock in retaining and expanding existing jobs and businesses, and in attracting new business development to the City. LEDA and Market Lubbock, Inc. are funded by a 1J'80 City sales tax and $0.03 / $100 valuation ad valorem tax, respectively. Although LEDA has been successful in the retention of jobs and the recruitment of new industry, a designated business park, with "shovel -ready" lots, does provide LEDA with an additional recruitment tool. The creation of a business park occurred on January 31, 2006 when LEDA purchased 568 acres of land just minutes from the Lubbock Preston Smith International Airport and adjacent to Interstate 27. In March 2006, the property was rezoned from R-1 (Single Family) and M-1 (Light Manufacturing) to IDP (Industrial Park), Following rezoning, LEDA began development of streets and utilities for approximately 5 of the 51 potential lots in the Lubbock Business Park. To date, $20.3 million has been committed for public infrastructure supporting these lots, including 9,559 linear feet of streets, water lines, wastewater lines, lighting and drainage. The Financing structure for these public improvement projects has consisted of the following: Cash reserves $9,789,885 Gateway Funds from the City of Lubbock 3,260,115 LEDA's 5- year note with nine local banks (matures in July 2014) 7,250.000 $20, 3 00,000 4 Exhibit D - City of Lubbock Lubbock Economic Development ;alliance Tax Increment Reinvestment Zone No. 3 Finance Plan Exhibit D: Feasibility Analysis Marketing efforts have already shown success writh completion of the 211.000 square foot O'Reilly Distribution Center on 25 acres and the 71,000 square foot WesTx. Packaging facility on 22 acres. However, the remaining 521 acres remain vacant and undeveloped, CURRENT SITUATION 1Aarketing of the Lubbock Business Park is continuing and has resulted in the commitment of two additional developments which should be completed in 2010 and go on the tax roll in 2011. These two new developments, a potential third new development (expected to go on the tax roll in 2012), and the two existing developments noted above, will occupy the majority of the "shovel -ready" lots in the Lubbock Business Park. With the anticipated completion of Lubbock Business Park Boulevard east to MLK Boulevard in December 2009, an additional 10 lots will become available. For the future, development of the Business Park will depend upon construction of additional streets and utilities for creation of "shovel -ready" lots. Additional public infrastructure construction expected over the next 20 years will require an 45:2. expenditure of an estimated SM million. Funding above the current li8¢ sales tax received by LEDA and the $0.03 / $100 valuation of ad valorem tax received by Market Lubbock, Inc. is required to further develop the Business Park. The City of Lubbock and LEDA are proposing the use of tax increment financing to aid in funding the necessary public infrastructure. 5 Exhibit D City of Lubbock Lubbock Economic Development Affiance Tax Increment Reinvestment Zone No. 3 Finance Plan Exhibit D: Feasibility analysis SECTION 11: TAX INCREMENT ANALYSIS This section documents the detailed analysis and inputs used to generate the tax increment and business personal property revenue estimates. Tar Increment Financing involves: Designating an eligible redevelopment area as a Tax Increment Financing (TIF) Reinvestment Zone; • Soliciting participation of other taxing jurisdictions; • Setting the assessment base at the level of the assessment as of January 1 of the year in which the TIF Reinvestment Zone is created; and o Placing tax revenues generated by the increase in assessed real property value in a tax increment fund for funding public improvements. Future tax increment revenues in this analysis depend on two elements: + The timing and added real property value of new development; and a Future tax rates and the percentage of participation of each taxing jurisdiction. The Lubbock Central Appraisal District is the entity responsible for assessment, billing, and collection of ad valorem taxes for the City of Lubbock. In this analysis, a very conservative philosophy of future valuation has been incorporated. assessed values are established as of January 1 of the tax year_ Thus, development completed during the year 2009 goes on the tax rolls for the Tax Year 2010. In this analysis, a conservative 1 % % per year value increase on improvements has been included. It is assumed that all taxing jurisdictions, except Lubbock lJ Exhibit D City of Lubbock Lubbock Economic Development Alliance Tax Increment Reinvestment Zone No. 3 Finance Plan Exhibit D: Feasibility Analysis Independent School District, will participate in the Reinvestment Zone at 100% of its real property tax rate. It is also assumed that tax rates will remain constant through the life of the TIF. All taxes on existing real and business personal property as of January 1. 2009 are estimated at $9,386,000 over 30 years. All tares on new business personal property, estimated at $18,5 million over 30 years, will continue to flow to each participating jurisdiction. The January 2009 taxable value of real property within the TIF boundary is $15,019,915. This amount serves as the initial tax base for the TIF. Taxes on this amount of base real property tax value wilt continue to flow to each taxing jurisdiction during the duration of the T , The forecast of new development follows: • The real property and business personal property values and timing of the two newly committed developments and the one pending development, as described in the Current Situation Section„ are included. This is based on the most recent information from the respective owners. No tax abatement is assumed for two of the three developments because the two developments do not meet tax abatement criteria or did not request this incentive during negotiations. • Buildout of the approximately 40 remaining Lubbock Business Park lots is assumed to begin after the two new and one pending developments are completed. This is projected to occur evenly over a 20-year period. • The remaining buildout is assumed to contain: o 20 projects 50,000 square feet. and 7 Exhibit D ,- City of Lubbock Lubbock Economic Development Alliance Tax Increment Reinvestment Zone No. 3 Finance Plan Exhibit D: Feasibility Analysis a 20 projects 100,000 square feet. a The . alue of the remaining buildout (after the initial three projects) is assumed to be $70/SF, exclusive of business personal property. a Five-year declining scale tax abatements, with decreases of 20°'o per year, are assumed for each project after the initial two projects. a Business Personal Property (BPP) value for the initial three projects is based on information from the potential tenant. BPP value for developments in the remaining buildout period (beyond the initial three projects) is assumed to be $30/SF. a TIF Fund income is based on a 30-year life of the TIF with each participating taxing jurisdiction contributing 100% of its real property tax rate for 30 years. a Tax rates used in the analysis are assumed to remain constant at the following levels; Jurisdiction $ / $100 Valuation City Fil E.Vr-M County 0,329458 Hospital District 0.120840 Water Conservation District 0,007940 Total 0.904638 The forecast of new development value generated in the Lubbock Business Park during the next 23 years, as shown in Table 1, is a total of S246.3 million. Income to the TIF Fund based on the new development values, as shown in Table 1I, is a total of S42.8 million. Business Personal Property income from new development that will Flow to the participating taxing jurisdictions, as shown in Table 11I, totals S 18.5 million. 8 r" Exhibit D City of Lubbock Lubbock Economic Development Alliance Tax Increment ReinvEstment Zone No. 3 Finance Plan Exhibit D: Feasibility Anvlysis In summary, income provided by each taring jurisdiction to the TIF Fund and income received by each participating taring jurisdiction during the fife of the TIF follows: INCOME SOURCE IN THOUSANDS Existing I Real & BPP New BPP TIF Jurisdiction FLND 1 Value Value Total City $21,109 4,138 9,149 13,297 County 15,579 3,0$4 6,753 9,807 Hospital 5,714 1,120 2,477 3,597 Water Dist. 375 74 162 236 TOTAL S42 777 J 8,386 18,541 26,927 The public infrastructure projects and administrative costs required to allow full development of the Lubbock Business Park are shown in the Project Plan Table IV and total $45.2 million. As shown previously, the TEF Fund income of S42.8 million is about 95% of the required Project Plan costs. The Project Plan costs, as noted in Table IV, include estimated cost increases of 4.0% per year over a 20-year period. With the 5% shortfall of TIF Funds and the assumption of a 30-year term for the TIF, additional funds beyond the TIF are required to complete and fund the estimated costs of this Project Plan. z Exhibit D LEGEND NDBTH Business Park TIF Boundary u soo Joao �1ubbcioty cof k LEDA Developed Parcels t F X A S Feet - Proposed Boundaries Showing Existing Development Lubbock Business Park TIF Exhibit D pf ";1 •.• - ti 5.. .1_ tiJE•r--' p?✓' ter:; } i 751:.. - - T- LOT 4i LOT 45 LOT 46 LOT 47 LOT 48 LOT 49 LOT 66 LOT M LOT 32 @ s B - ICA A.. --- h LOT 78 LOT 31 LOT 30 L4T'94' f LOT 32 LOT 28 WBBOCK f' ---- - J'' N Oo ouil: 'q .,'.FOR SlO LOT 27 LOT 96 LOT 43isk •4`rNE y•,... Z LOT 42 2 W LOT41 ��•�r- J Z LOT 40 YUCCA LANE LOT 21 - LOT 26 LOT 20 ,I7 r O'RBILLY. i I RHOIONAL':. ilyi6TijC_� i DI6TRIBI7f P4 . ' P•ACKAOINO ,11 �. 11 LOT 4 LOT 17 LOT 16 LOT 19 LOT sa LOT le LOT16 LOT !4 ., =� • � � 4 f LOTS LOT 10 J LOT T I �' -. a _ %' LOT 11 LOT 1R LOT 13 W. foe F il� :•' is ,, 1 � : �'�r. ";: I ;. 3�i-�d.ij - '!.. �' '�. _ ti, .1� � 1 rram�,, ,'+���" • i 7 R• ' ;y 14 l...r}L•'rrc„!!! - ; . , 1 r ; • t ' . • } . '?'4..i�F!{. Ii &.- it .:il• 41-•+ �7„ �•:7 4i -�-� ''ti, �•.. i', •_. •rr r.i� .M� l+ •+• 1'L i.i., +r .. - •.. i Fi PROPOSE® MASTEk PLAN FOR city of .: "lubb o ck LUBBOCK BUSINESS PARK T k X A 5 Exhibit D City, of Lubbock, TX Lubbock Economic Development Alliance Tax Increment Finance Reinvestment Zone No-3 Feasibility Analysis - Development Value Table I till lah3io"l) Fear Value 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Total 15.0 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.3 10.5 10.5 10.5 10.5 10.5 10,5 5 246,3 _Exhibit D Mir -.ram rl-o xvvN •n� macr�PMi� ors r T ry N r ` 0 7 .'^., O O CS O 0 0 0— — ----- N N N N N N nl nl N M NR • a --+.D^ aov+N-Nrna,ovR ao �v,�nr-^m.evn�r � w �-aar+�o riv •Gx7n.Gani i ar•.M1-.c � rri = _da_ y M1N N b O S D — �• � — •+ ^ + N N rl F! N n 4 ■ ]N rimer ox^ 7 v •D IG ^ nl n P . . . . . . i . . . . . . nt Y •G qO — — N N — r rn aq - n 1rl M1 m O N p b . . i . . . nv! m ^1!v�M1on O N'T.O N N F3 N n n4o r In ( uoO ri +r DM1 ^ — — N nl N -r� nao-r�vi M10ogN v ar P N 10 40 ^ ^ — ^ ^ N F! F! N ry N 99O P!•r � O N v •D (� P n In ry . . I -.•�In4o-..1v�t` moN q ara+-e-l.nr > . a nj R V 40 _ � — N N N rl ni N Pi f•'I n n —Mv, q n rr'JRo ryv.DM1a—nlnrc 0 •D a0 —z = =^ N N F! N N -7.1rn sq-n .. rORgN v"Rr:(' nrnra- P Q aD m 7 — — — ^ rl N N �l Fl N... n rn 2 M ri 7 ^ n lr+ 40 — n N r ep O rj Y aD r P— n rn r P^ R . . — .+� N �p — .+. VI r JO O N R •D M1 P -+ n rn M1 P— R L N rl N ri ri 2 n 2 NI rw Q T R n V'f m— n rr. r x C7 N p ,D M1 T^ H N r a— Y• C f fiA — M u-. �e — r rn r m O F! T a M1 P— n •n .� ?— p ,n m 5 7�� rn T N 7 J P t! O M1 T !• 1 a/1 �o � n .G 7 N u! ]� - 7 b^ ^ — •^ — — — — — — ^ — — ^ ^ -� � — N N ry N rf N FI a4 O — n �/') .D m O rt �". •n r P— •'� a/1 P� T — r a/. �O O r! 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N O C, 0 0 0 rlOOONN NN N rl N NNN N N C N r! rl r Exhibit D r- City of Lubbock, TX Lubbock Economic Development Alliance Tar Increment Finance Reinvestment Zone No. 3 Feasibility Analysis Business Personal Property (BPP) - Income to Taxing Jurisdictions tin thous-mbI TABLE III BPP Cumulative BPP Year Value Value Income" Hospital Water District 20N S - - - - - - 2010 - - - - - - 2011 5,700 5,700 - - - - 2012 15,000 20,700 25 19 7 0 2013 4,500 25,200 92 68 25 2 2014 4,500 29,700 112 83 30 2 2015 4,500 34,200 133 98 36 2 2016 4,500 38,700 153 1.13 41 3 2017 4,500 43,200 173 128 47 3 2018 4,500 47,700 193 142 52 3 2019 4,500 52,200 213 157 58 4 2020 4,500 56,700 233 172 63 4 2021 4,500 61,200 253 187 69 5 2022 4,500 65,7D0 273 202 74 5 2023 4,500 70,200 293 2I6 79 5 2024 4,500 74,700 313 231 85 6 2025 4,300 79,200 333 246 90 6 2026 4,500 83,700 354 261 96 6 2027 4,500 88,200 374 276 101 7 2028 4,500 92,700 394 291 107 7 2029 4,500 97,200 414 305 112 7 2030 4,500 101,700 434 320 117 8 2031 4,500 106,2D0 454 335 123 8 2032 4,500 110,700 474 350 128 8 2033 110,700 494 365 134 9 2034 110,700 494 365 134 9 2035 110,700 494 365 134 9 2036 110,700 494 365 134 9 2037 110,700 494 365 134 9 2038 110,700 494 365 134 9 2039 - 494 365 134 9 Total S 110,700 110,700 9,149 Based on S30: SF in 2013 and beyond. *' Based on tax rates per S 100 valuation, as foIIows: City S 0.446400 County 0.329458 Hospital 0,120840 Water District 0.007940 6,753 2,477 162 Exhibit. D �- City of Lubbock, TX Lubbock Economic Development Alliance Tar Increment Finance Reinvestment Zone No. 3 Feasibility Analysis Project Plan - Public infrastructure Projects TABLE Iv Estimated Project Cost, SDI Streets (includes water, sewer, landscaping and irrigation) Phasc 12013 113 ft. back of curb to back of curb $ 2.6 (1,502 ft. @ S1,737/ft) Professional Services (includes basic 0.5 engineering services, construction phase services, survey and testing services) Subtotal 3.1 phase 11 18 113 ft. back of curb to back of curb 63 (3,190 ft. a $2, l 14 / ft) 43 ft. back of curb to back of curb 0.9 G.100 ft. @ $797 / ft) Professional Services 1.4 Subtotal 9.0 PhweI(2023 113 ft. back of curb to back of curb 12.0 (4,672 ft. @ $2.5721 ft) Professional Services 2.2 Subtotal 14.2 P(2028 113 ft. back of curb to back of curb 11.1 (3,544 ft. @ S3,129 / ft) 43 ft. back of curb to back of curb 3.0 (2,580 ft. @ $1,180/ ft) Professional Services _ 2.6 Subtotal 16.7 Total Public Infrastructure _ 43.0 Administration (5%) 2.2 Total Project Plan $ 45 2 ' Includes cost increases of 4% per year from present day costs. 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