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Home My WebLink AboutOrdinance - 2004-O0131 - Approving Second Amended North Overton District Tax Increment Reinvestment Zone - 11/04/2004Fust Reading November 4, 2004 Second Reading November 18, 2004 Item No. 33 It9mNo. 24 <'-' ORDINANCE NO. 2004-00131 AN ORDINANCE APPROVING IBE SECOND 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 adopted a First Amended Project Plan and a First Amended Finance Plan which was approved by the City Council June 12, 2003, in Ordinance 2003-00062; and WHEREAS, the Board of Directors of the North Overton Tax Increment Financing Reinvestment Zone has adopted a Second Amended Project Plan and a Second Amended Finance Plan and has submitted these plans 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 Second Amended North Overton Tax Increment Financing Reinvestment Zone Project Plan and the Second 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 Second 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. b) That the Second 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 zoning 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 Second Amended Plan is feasible and conforms to the City of Lubbock Comprehensive Plan. SECTION 3: That the Second Amended North Overton Tax Increment Financing Reinvestment Zone Project Plan and the Second Amended North NO TIF Second Amended Project Plan Ordinance Page2 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. AND IT IS SO ORDERED PASSED by the City Council on first reading this 4th day of November , 2004. PASS ED by the City Council on second reading this 18th day of November, 2004. TOM MARTIN, MAYOR PRO TEM ATTEST: ~~d~ Rebecca Garza, City Secretary CONTENT: Craig arme , Managing Director of Planning and Transportation APPROVED AS TO FORM: r---~c c;_.y. /7,-:? ~· .. ~"" ~ C ~ , ~ ~~~.------------Linda L. Chamales Senior Attorney, Office Practice LC: cityatt/Linda/TIF-NO SECO1',.'D AMENDED PLAN APPROVAL ORDINANCE October 20, 2004 NO TIF Second Amended Project Plan Ordinance Page3 Ordinance No. 2004-00131 -------:N-orth 0verton-A:rea Tax Increment Finance Reinvestment Zone LUBBOCK, TEXAS Prepared for City of Lubbock October 2004 Second Amended 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 staff, 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 $51.9 million for public infrastructure improvements will result in future development/redevelopment in the Zone which will increase the taxable value by approximately $317 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 Second Amended Project Plan City of Lubbock Second 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, $333,955 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 Second Amended Project Plan City of Lubbock Second Amended Project Plan Street reconstruction/resurfacing A/E services Reconstruction, curb & gutter Rotaries Rotary amenities A/E services Landscaping • irrigation, lighting, street furniture Glenna Goodacre Boulevard A/E services Replace cum & gutter ROW acquisition Glenna Goodacre Blvd. Amenities A/E services Landscaping -irrigation, lighting, street furniture Landscaping Parkway A/E services Landscaping -irrigation, lighting, street furniture Water/Waste Water Replacement & relocation Electric utility -underground Pioneer Park Improvements Marsha Sharp Frwy. Frontage University Ave. Improvements Replace cum & gutter Incentive Projects Subtotal • Administration Total Phase 1 TIF Cost Phase 2, Years 7 • 30 ~:~·-• ,, .. ,,-_-. .,,;,;:-. ---. $1,252,311 $40,000 $373,074 $350,000 $629,093 $496,810 $653,712 0 0 0 $3,795,000 Public infrastructure -TIF reimbursement as per statute •$900,000 reimbursement to developer as per agreement Funds available after bonds are paid & bond interest Total TIF Cost $5,000,439 $6,252,750 $235,000 $275,000 $1,976,926 * $1,450,000 $950,000 $1,300,000 $920,907 $1,550,000 $2,753,190 $3,250,000 $3,338,538 $3,992,250 $500,000 $500,000 $1,000,000 $1,000,000 $900,000 $900,000 $3,500,000 $3,500,000 $23,970,000 $340,000 $340,000 $21,415,000 $24,310,000 $41,810,000 $66,121,000 Page 3 North Overton Second Amended Project Plan City of Lubbock Exhibit "A" EXISTING LAND USE r-1 North Overton TIF Boundary Existing Land Use October 2004 • Commercial Industrial -Park • Public Use • High Density Residential Medium Density Residential Low Density Residential Vacant land Transportation Communication and Utilities Ordinance No. 2004-00131 Exhibit«A" North Overton Second Amended Project Plan Ordinance No. 2004-00131 Exhibit "B" PROPOSED IMPROVEMENTS AND PROPOSED USES ·-_.,..__ -------rm--~-...... .vrJl4rtaRt~ ~.L.~~~ Overton Park Master Plan I ' '\\, The Lofls on Main "\\ di!IIJls -Sterling Univcnil)' Trails' ,_ Main Street Condominiums' It) \I l \ '.\s IL'> Exhibit "B" North Overton Second Amended Project Plan Ordinance No. 2004-00131 North Overton Area Tax Increment Financing Reinvestment Zone LUBBOCK, TEXAS OCTOBER 2004 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 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 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 Pagel North Overton Area Second Amended Fimncing Plan City of Lubbock 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 $3.795 Million for Projects 1, 2 & 3 and $20.515 Million for remaining projects, for a total of project cost of $24.31 Million. Administrative expense estimates currently total $340,000. 3. Economic Feasibilty Study. • An economic feasibility study has been completed and is included as a part of this Financing Plan. 4. The estimated amount of bonded indebtedness to be incurred. • The debt capacity produced from the estimated tax increment through the 2010 period should yield approximately $24.3M at issuance and an estimated additional $1. 7M from coverage. This should yield a total of approximately $26M 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, it is 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 I 00% of revenues used to fund project costs and bonds issued. For the Financial Plan, it is assumed that all taxing jurisdictions will participate at I 00% 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 $26.9 Million. This amount is the base value for the district in calculating future increments. Page2 North Overton Area Second Amended Fi1U11cing Plan City ofLubbock Financing Plan 8. The estimated appraised valued of the improvements in the Zone during each year of existence. Table 1 YEAR 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 TOTAL • The estimated appraised value of the improvements in the Zone per year is listed in the following table. ANNUAL CAPTURED VALUE ESTIMATED DEMOLITIONS I K - (2,019) (12,395) (2,362) - --- ------- --- - - -- ------- -- 06z776l ESTIMATED ESTIMATED ADJUSTED CAPTURED NEW DEVELOPMENT i K VALUE$K - 12,406 21,632 22,142 126,305 102,144 35,913 13,413 -- --- -- ---------------. 333z955 - 10,387 9,237 19,780 126,305 102,144 35,913 13,413 --------- - ---- ----- -- - - 317:179 Page3 North Overton Area Second Amended Finaicing Plan City of Lubbock Table 2 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 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 CAPTURED CUMULATIVE CAPTURED ANNUAL TAX VALUE, $K VALUE. $K INCREMENT1 $K * --- 10,387 10,387 - 9,237 19,624 96 19,780 39,404 178 126,305 165,709 339 102,144 267,853 1,361 35,913 303,766 2,187 13,413 317,179 2,478 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 . 317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 -317,179 2,586 66:121 * Based on 100% participation and projected tax rates of: City-$ 0.45970; Counly-$0.255870; Hospital-$0.107420; Water District- $0.008300. Based on estimated collected amount of increment (97.34% collection rate) Page4 North Overton Area Second Amended Fimncing Plan City of Lubbock