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Home My WebLink AboutOrdinance - 2003-O0062 - Approving North Overton District Tax Increment Finance Reinvestment Zone Project - 05/22/2003First Reading May 22, 2003 Item No. 50 Second Reading June 12, 2003 Item No. 50 ORDINANCE NO. 2003-00062 AN ORDINANCE APPROVING THE AMENDED NORTH OVERTON DISTRICT TAX INCREMENT FINANCE REINVESTMENT ZONE PROJECT PLAN AND FINANCE PLAN AS ADOPTED BY THE BOARD OF DIRECTORS OF THE NORTH OVERTON TAX INCREMENT FINANCING REINVESTMENT ZONE. WHEREAS, the City Council of the City of Lubbock, upon receipt of a petition requesting creation of a tax increment financing district from the owners of more than 50 per cent of the appraised value of an area within the City of Lubbock bounded by the Marsha Sharp Freeway on the north, University A venue on the west, Broadway on the south and the alley between A venue R and A venue Q on the east, adopted Ordinance No. 2002-029, March 14, 2002, establishing the North Overton District Tax Increment Finance Reinvestment Zone 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 North Overton Tax Increment Financing Reinvestment Zone, in accordance with the Act, prepared and adopted a North Overton Area Project Plan and a North Overton Area Financing Plan, which was approved June 26, 2002, by Ordinance No. 2002-0075; and WHEREAS, due to increased development and changed circumstances, the Board of Directors of the North Overton Tax Increment Financing Reinvestment Zone has determined that the Project Plan and the Finance Plan should be amended; has prepared and adopted a First Amended Project Plan and a First Amended Finance Plan; and has submitted these plans to the City Council for approval; NOW THEREFORE: NO TIF Plan Approval Ordinance Page I 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 First Amended North Overton Tax Increment Financing Reinvestment Zone Project Plan and the First Amended North Overton Tax Increment Financing Reinvestment Zone Finance Plan, as adopted by the Board of Directors of the North Overton Tax Increment Financing Reinvestment Zone: a) That the First Amended North Overton 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 was included in the original project plan; 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. NO TIF Plan Approval Ordinance Page2 b) That the First Amended North Overton 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 zomng ordinances, the master plan of the municipality, building codes, and other municipal ordinances; 3) a list of estimated nonproject costs; and 4) a statement of a method of relocating persons to be displaced as a result of implementing the plan. c) That the amended plan 1s feasible and conforms to the City of Lubbock Comprehensive Plan. SECTION 3: That the First Amended North Overton Tax Increment Financing Reinvestment Zone Project Plan and the First Amended North Overton Tax Increment Financing Reinvestment Zone Finance Plan, as adopted by the Board of Directors of the North Overton Tax Increment Financing Reinvestment Zone 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. NO TIF Plan Approval Ordinance Page 3 AND IT IS SO ORDERED PASS ED by the City Council on first reading this 22nd day of May, 2003. PASSED by the City Council on second reading this 12th day of June, 2003. T.J. PATTERSON, Senior Council Member ATTEST: ~J~ .h. Recca Garza, City Secretary ~ Craig Farmer Managing Director of Planning and Transportation APPROVED AS TO FORM: Linda L. Chamales Supervising Attorney, Office Practice LC:/Cityatt/Linda/TIF.NO-FIRST AMENDED PLAN ADOPTION ORD May 12, 2003 NO TIF Plan Approval Ordinance Page4 Ordinance No. 2003-()()062 North Overton Area Tax Increment Financing Reinvestment Zone LUBBOCK, TEXAS MAY2003 First Amended Financing Plan The Financing Plan provides information on the projected impact that the North Overton Area Tax Increment Finance Reinvestment Zone (Zone) could have on the property described in Exhibit A It will also describe how that impact could be utilized to enhance the area and region through leveraging the resources of each entity that participate in the project. Below is a summary of the Financin& Plan items required by law: 1. The proposed public improvements in the Zone are as follows: • Capital costs, including the actual costs of the acquisition and construction of public works, public improvements, new buildings, structures, and fixtures; the actual costs of the acquisition, demolition, alteration, remodeling, repair, or reconstruction of existing buildings, structures, and fixtures; and the actual costs of the acquisition of land and equipment 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 Zone and project facilities; and Page 1 North Overton Area Financing Plan City of Lubbock, Texas First Amended Financing Plan • 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 cost estimates currently total $2.56M for Projects 1 & 2 and $15.2M for Projects 3-9, for a total of project cost of $17.8 Million. Administrative expense estimates currently total $340,000. Specific cost estimates are included in Table 1 of the Feasibility Analysis. 3. Economic Feasibilty Study. • An economic feasibility study was completed at the time of the establishment of the TIF and was included as a part of the original Financing Plan. 4. The estimated amount of bonded indebtedness to be incurred. • The debt capacity produced from the estimated tax increment through the 2011 period should yield approximately $18. IM at issuance and an estimated additional $1.7M from coverage. This should yield a total of approximately $19.8M in funding capacity over this time period. 5. The time when related costs or monetary obligations are to be incurred. • Monetary obligations will be incurred with each bond issue; however, 1t 1s expected that development agreements will be in place, which would provide sufficient tax increment to pay debt coverage for each bond issuance. 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 will be financed using bond issues with payment provided by tax increment funds received. 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 Financial Plan, it is assumed that all taxing jurisdictions will participate at 100% of their incremental taxable value. 7. The current total appraised value of taxable real property in the Zone. • The appraised value of the taxable real property in the Zone that the Lubbock Central Appraisal District certified in July 2002 was $26.9 Million. This amount is the base value for the district in calculating future increments. Page2 North Overton Area Financing Plan City of Lubbock, Texas First Amended Financing Plan 8. The estimated appraised valued of the improvements in the Zone during each year of existence. Table 1 YEAR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026. 2027 2028 2029 2030 2031 2032 TOTAL • The estimated appraised value of the improvements in the Zone per year is listed in the following table. ANNUAL CAPTURED VALUE ESTIMATED ESTIMATED DEMOLITIONS$ K NEW DEVELOPMENT$ K (3,703) 8,807 (4,003) 13,349 (5,883) 41,470 (1,588) 75,957 (1,599) 44,578 -25,474 -14,159 -11,721 ---------------------------------------------- (161776! 2351515 ESTIMATED ADJUSTED CAPTURED VALUE$K 5,104 9,346 35,587 74,369 42,979 25,474 14,159 11,721 --- ---- ------- --------- 2181739 Page3 North Overton Area Financing Plan City of Lubbock, Texas Table 2 ~ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 TOTAL First Amended Financing Plan • The estimated annual incremental funds available from development and redevelopment in the Zone are listed in the following table. ANNUAL INCREMENTAL FUNDS AVAILABLE ESTIMATED ESTIMATED ESTIMATED ADJUSTED CAPIURED CUMULATIVE CAPIVREJJ ANNUAL TAX VALUE. SK VALUE, $K JNCREMENTI SK* 5,104 5,104 - 9,346 14,450 - 35,587 50,037 44 74,369 124,406 125 42,979 167,385 434 25,474 192,859 1,080 14,159 207,018 1,453 11,721 218,739 1,674 -218,739 1,797 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 -218,739 1,899 481385 * Based on 100"/4 participation and tax rates of: City-$ 0.57000; County-$0.19170; Hotpital-$0.0979B; Water District---$0.00BJ0. Based on full amount of incremetll (100% collection rate) Page4 North Overton Area Financing Plan City ofLubbock, Texas Ordinance No. 2003-00062 PROJECTPLA .. . ..... ...... ... . . .. ........ ... N North Overton Area Tax Increment Finance Reinvestment Zone LUBBOCK, TEXAS Prepared for City of Lubbock MAY2003 First Amended Project Plan I PROJECT PLAN The North Overton Area was established in 1907 and over the next 20 years developed as a middle-class neighborhood, with home ownership predominating. Following World War II, the growth of Texas Tech stimulated a need for student housing. This need was provided by many non-conforming apartments, converted garages, and subdivided houses, reducing home ownership considerably. Continued growth of Tech encouraged development of apartment buildings, further destroying the stability of the area. By the 1980's, the City of Lubbock recognized the need to "explore methods of stabilizing property values while allowing the area to develop to its fullest potential" and appointed the Overton North Study Committee. This Committee formulated strategies to address the area's problems and potential. Among the strategies was the possibility of utilizing Tax Increment Financing. The City also retained RTKL in 1989 to prepare a Redevelopment Plan for Downtown Lubbock, which included the North Overton area. RTKL's plan identified many of the same issues as the Study Committee and more particularly indicated, "the City must develop creative public/private joint development opportunities and provide public improvements as incentives for development". Through a series of economic and real estate factors, nothing materialized from the two studies during the 1990's, and the situation in North Overton continued to stagnate. However, at this time, a local developer has come forward with a plan to redevelop about 90% of the North Overton area and has petitioned the City to establish a Tax Increment Financing (TIF) District to provide the necessary public funds to enter into a public- private partnership. City staf( working with the developer, has prepared a list of public infrastructure projects, which will stimulate and enhance the redevelopment of North Overton. It is expected that the North Overton Area Tax Increment Financing Reinvestment Zone planned expenditure of approximately $27 million for public infrastructure improvements will result in future development/redevelopment in the Zone which will increase the taxable value by approximately $218. 7 Million over the Zone's 30-year life. As set forth in Section 311.011 of the Tax Increment Financing Act of the Tax Code, the Project Plan for the North Overton Area 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 uses of the property. Following is a map showing uses of real property in the North Overton Area TIF Reinvestment Zone and a map indicating potential locations of proposed public improvements in the zone. Page 1 North Overton Area Project Plan City of Lubbock First Amended Project Plan 2. Proposed changes of zoning ordinances, the master plan of the municipality, building codes, and other municipal ordinances. No changes anticipated at this time except to zoning ordinances. Zoning ordinances will be modified to provide architectural guidelines and special zoning considerations to provide for redevelopment of the North Overton area as a pedestrian-oriented, neo-traditional development. 3. A list of estimated non-project costs. Non-project costs within the Zone area are those development costs not paid for by the Zone. These costs will include, but are not limited to, $171 Million of new development. 4. A statement of a method of relocating persons to be displaced as a result of implementing the plan. In the process of developing and redeveloping the Zone, it is not contemplated there will be any involuntary relocations. However, it may be necessary to relocate individuals and businesses through voluntary buyout. In the event that this is required, the City or private developer will follow the procedures that would be used in the development or construction of other public or private improvements outside the Zone. Page 2 North Overton Area Project Plan City of Lubbock First Amended Project Plan NORTH OVERTON PROJECT PLAN, (5-08-03) TIF Expense, Phase 1 Project 1&2 Cost Project 3-Remaining Proiects Cost ToW Cost Street Reconstruction/Resurfacing AIE Services $ 991,757 $4,760,970 Reconstruction, curb & gutter Round-abouts Round-About Amenities A/E services Landscaping, concrete, irrigation Pedestrian lighting & street furniture. Eighth Street Boulevard (University to Ave. X) Replace curb & gutter glh Street Boulevard Amenities AIE services $ 40,000 $ 70,218 $ 175,000 Landscaping & street furniture irrigation, concrete, street lighting Landscaping in the Parkway AIE services Landscaping, concrete, irrigation, Pedestrian lighting & street furniture WateriWaste Water Replacement vs. Relocation Electric Utility-Underground Removal & relocation Pioneer Parle Improvements Marsha Sharp Frwy. Frontage University Ave.Blvd. Total Bond Issues (1-5) $17,760,000 • Administration TOTAL PHASE 1 TIF COST PHASE 2-YEARS 7 -30 $ 375,859 $ 446,000 $ 461,784 -0- -0- -0- Public Infrastructure -TIF Reimbursements eligible under the statute TOT AL TIF COST • LCAD collection fee is deducted before payment $ 120,000 $ 306,282 $ 850,000 $1,122,000 $2,599,000 $3,041,130 $ 500,000 $1,000,000 $ 900,000 $2,560,618 $5,752,727 $ 160,000 $ 376,500 $1,025,000 $1,497,859 $3,045,000 $3,502,914 $ 500,000 $1,000,000 $ 900,000 $15,19'J,382 $ 340,000 $18,100,000 $ 9,418,000 $27,178.000 Page 3 North Overton Area Project Plan City of Lubbock Ordinance No. 2003-00062 II===;=:~~ ~~~ a=;::::;::::;::~= ;:::!::::;~::::;::::;::!:: 111 l 1111 E3 ............ __...... .............. ~ .......................................................... ~""""""' 1116l1lll 11 I 11 ~~~l:::;::!:~~:=::;::::::::::=::=:::::1: I I I II 11 Ill Ill ____........~~ 1--1---l~"'-l--'---I--J.......,._.i...4--l--J,il~ I 111 II I 11 I I '----m:-1~___. ~~=.==I t:;::;~:::.t=::::::::: :=::::::::::::=;:::;::::;:::;::::=::a I 111 1111111 ::.=:=.I ::;::::;:::==;~ ..-----.................................................................. 11111 111 l 111 ~~___. North Overton TIF Project Plan Proposed Projects May2003 I II I I I I I I I II~~~ 111 I 111111 II ~ ~ I I I I I I II I I I~~~ I 11 I I I I I I I ~~....L.....t North Overton TIF Project Plan Existing Land Use May 2003 Ordinance No. 2003-00062 D TIF Boundary J!II Existing Land Uses -commercial R&tall -COmmerciaJ SeNice -Warehouse -commercial Wholesale -Mano.tacturing -Industrial Non-Manufacturing -Part<s -PubllcU$e -Apartments I Single Family -DupleX 11111 Transpollaticn & Utility I Vacant Land