HomeMy WebLinkAboutResolution - 2002-R0286 - Contract Agreement For Public Improvements - Mccanton Woods, Ltd. - 07/11/2002Resolution No. 2002-RO286
July 11, 2002
Item No. 45
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock an Agreement between the City of Lubbock,
McCanton Woods, Ltd., and Lubbock Student Housing, L.P. regarding the funding of public
improvements in Phase One of the Project Plan for the North Overton Tax Increment Finance
Reinvestment Zone, and any other related documents. Said Agreement is attached hereto and
incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of
the Council.
Passed by the City Council this 11th day of _ July 2002.
T. J. PATTE ON, SENIOR COUNCILMEMBER
ATTEST:
co -Q La""� — -)� , —
Rebebca Garza, City Secretary
APPROVED AS TO CONTENT:
n
Craig Farmer, Director of ping v �� -"'
APPROVED AS TO FORM:
Linda L. Chamales
Supervising Attorney — Office Practice
LLC:lc Ccdocs/Dev Agnt.Res
July 1, 2002
Resolution No. 2002-RO286
July 11, 2002
Item No. 45
DEVELOPER PARTICIPATION AGREEMENT BETWEEN THE
CITY OF LUBBOCK, MC CANTON WOODS, LTD.
AND LUBBOCK STUDENT HOUSING, L.P.
STATE OF TEXAS §
COUNTY OF LUBBOCK §
This agreement is between the City of Lubbock, a Texas municipal corporation
(hereinafter called "City"), McCanton Woods, Ltd. (hereinafter called "Developer"), and
Lubbock Student Housing, L.P. (hereinafter called "Builder").
WHEREAS, the City recognizes the importance of its continued role in local
economic development; and
WHEREAS, the City, 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 the area, adopted Ordinance No. 2002-029, March 14, 2002, establishing the
North Overton Tax Increment Financing Reinvestment Zone in accordance with the
provisions of the Tax Increment Financing Act, V.T.C.A. Tax Code, Chapter 311 (the
"Act"); and
WHEREAS, in accordance with the Act, the Board of Directors of the North
Overton Tax Increment Financing Reinvestment Zone has prepared a Project Plan (the
"Project Plan") and a Financing Plan (the "Financing Plan"), and the City, in accordance
with the Act and after making all findings required by the Act, has adopted or will adopt,
an ordinance approving the plans; and
WHEREAS, the Act authorizes the expenditure of funds derived within a
reinvestment zone, whether from bond proceeds or other funds, for the payment of
expenditures made and monetary obligations incurred by a municipality consistent with
the project plan of the reinvestment zone, which expenditures and monetary obligations
constitute project costs, as defined in the Act ("Project Costs"); and
WHEREAS, Developer has acquired certain real property situated within the
North Overton Tax Increment Financing Reinvestment Zone (the "TIF District") and
intends to develop the property as the Centre at Overton (the "Project") in accordance
with the map which is attached and marked "Exhibit A"; and
WHEREAS, Builder has purchased from Developer certain real property within
the Project located between 8th and Main Streets and between V and W Avenues, to
develop as student apartments substantially in accordance with the design which is
attached and marked "Exhibit B"; and
Developer Agreement- City / McCanton Woods / Lubbock Student Housing
WHEREAS, The City, after due and careful consideration, has concluded that the
redevelopment of the Project as a portion of the TIF District as provided herein and in the
Project Plan will further the growth of the City, facilitate the redevelopment of the entire
TIF District, improve the environment of the City, increase the assessed valuation of the
real estate situated within the City, foster increased economic activity within the City,
increase employment opportunities within the City, upgrade public infrastructure within
the TIF District, and otherwise be in the best interests of the City by furthering the health,
safety, and welfare of its residents and taxpayers, and that entering into this Agreement is
necessary and convenient to implement the Plans and achieve their purposes; and
WHEREAS, the City is desirous of having Developer and Builder undertake the
Project in order to serve the needs of the City and in order to produce increased tax
revenues for the various taxing units authorized to levy taxes on real property within the
TIF District and the City and, in order to stimulate and induce the redevelopment of the
TIF District, the City has agreed to participate by dedicating and pledging the use of
revenue in the Tax Increment Fund to finance certain Project Costs, all in accordance
with the terms and provisions of the Act, with the guidelines set up by the City to be
followed in City/Developer participation agreements, and with the terms of this particular
Agreement; and
WHEREAS, the Developer and Builder desire to have the City participate and
the City agrees to participate in the construction of Public Improvements such as street
reconstruction, street lighting, landscaping, street furniture, sidewalks, and water/waste
water replacement and relocation;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein, the Parties agree as follows:
ARTICLE I.
RECITALS AND EXHIBITS PART OF AGREEMENT
1.1 The representations, covenants and recitations set forth in the foregoing
recitals are material to this Agreement and are hereby incorporated into
and made a part of this Agreement as though they were fully set forth in
this Article I. Exhibits A, B, C, and D, E, and F attached hereto are
incorporated into this Agreement as if fully set forth herein.
ARTICLE R.
DEVELOPMENT PLAN — NORTH OVERTON
2.1 Developer has acquired certain real property situated within the North
Overton Tax Increment Financing Reinvestment Zone and intends to
develop the property known as the Centre at Overton (the "Project") in
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 2
accordance with the map which is attached and marked "Exhibit A," and
in accordance with the Project and Finance Plans adopted by the Board of
Directors of the North Overton Tax Increment Financing Reinvestment
Zone which are also attached and marked "Exhibit C"
ARTICLE III.
CITY PARTICIPATION
3.1 In accordance with Bond Issue One in Phase I of the Project Plan
recommended by the Board of Directors of the North Overton District Tax
Increment Finance Reinvestment Zone and approved by the City Council
of the City of Lubbock, and in accordance with the City of Lubbock
Redevelopment Policies and Tax Increment Finance Policies, the City
agrees to dedicate and pledge the use of revenue in the Tax Increment
Fund to directly participate in the cost of the Public Improvements as
shown in the attached "Exhibit D," entitled "The Centre at Overton,"
Direct City Participation and TIF Funding, Phase One, Bond Issue One.
3.2 This Agreement shall authorize funding only for Bond Issue One in Phase
One of the Project. Participation shall be based on actual construction
costs verified by the City upon application and certification by Developer.
In the event that the actual costs of the individual Direct City Participation
items are less than the amounts shown in Exhibit D, then the City will
utilize the "savings" (in its sole discretion) to increase any other individual
Direct City Participation element, if needed to provide sufficient funding
for the Direct City Participation in other project element or elements. City
also reserves the right to reallocate the "savings" for projects in a
subsequent phase of the Project. Direct City Participation in Phase One,
Bond Issue One, shall be limited to the total amount approved by the City
Council for Phase One, Bond Issue One, of the Project Plan.
3.3 The City shall review the Builder's and the Developer's cost estimates in
order to deter undue loading of costs, collusion or fraud prior to approval
of payment of the Direct City Participation. The City may, at its
discretion, pay any increases in the actual cost of a public improvement
over its estimated cost, provided funds are available. However, in no case
shall it ever be liable for any amount above and beyond a total of $918,
260, the agreed payment of the City's share of the public improvements
contained herein.
3.4 The City anticipates issuing debt to reimburse the Developer and Builder
for project costs authorized pursuant to this Article. The reimbursement
will be paid from the proceeds of debt issued by the City when TIF
revenues from taxable improvements will provide 1.25 times coverage
calculation of the maximum annual debt service payments on the debt.
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 3
3.5 City agrees to make available to the Builder for inspection all of its books
and records related to the Public Improvements constructed for the Project
and to allow Builder access to the Public Improvement site during the
construction for the purpose of periodic inspection of the construction
work.
3.6 City shall provide the Builder copies of contracts denoting costs for
engineering services directly related to the final engineering for
development of Public Improvement construction plans and specifications.
Only engineering costs directly related to Public Improvement final
engineering shall be eligible for cost reimbursement.
3.7 For those Public Improvements in the Project constructed by City in which
there is Direct Builder Participation greater than 30% City agrees to
submit the Public Improvements to competitive sealed bids and agrees to
award the contract to construct the Public Improvements to the lowest
responsible bidder.
3.8 City agrees to complete the repairs to the 2200 block of Main Street prior
to September 30, 2002, the paving of Avenue V and Avenue W on or
before May 15, 2003, and the repairs/reconstruction of Main Street
between W and University prior to September 30, 2003. Said
repairs/reconstruction of Main Street shall be limited under this
Agreement to funds available in Phase One, Bond Issue One of the Project
Plan.
3.9 The City agrees to arrange for the design and construction of sidewalks
including grates, landscaping, irrigation, etc. As described in Section 5.2,
completion of sidewalk on the 2200 block of Main Street between V and
W will be on or before November 1, 2002, and the remaining sidewalks
will be completed by May 15, 2003.
ARTICLE IV.
DEVELOPER OBLIGATIONS
4.1 In accordance with the map in Exhibit A and in accordance with Bond
Issue One, Phase One of the Project Plan recommended by the Board of
Directors of the North Overton Tax Increment Financing Reinvestment
Zone and approved by the City Council of the City of Lubbock, the
Developer agrees to implement the Project which includes completion of
land acquisition, aggregation, platting, demolition (with the exception of
one overhead electric line on the East side of Avenue W) between 8th and
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 4
Main Street and between V and W Avenues prior to closing on sale of
property to The Dinerstein Companies.
4.2 In accordance with the map in Exhibit A and in accordance with Bond
Issue One in Phase One of the Project Plan recommended by the Board of
Directors of the North Overton Tax Increment Financing Reinvestment
Zone and approved by the City Council of the City of Lubbock, the
Developer agrees to construct and/or participate in the actual cost of
construction of the Public Improvements and in the percentages as shown
in the attached "Exhibit E." Developer shall be responsible for the
demolition, construction of new curbs and gutters, and replacement of any
bricks removed, on both sides of the 2200 block of Main Street between
Avenue W and Avenue V. City, Developer, and Builder agree that time is
of the essence and Developer agrees that curbs and gutters on both sides of
the 2200 block of Main Street between Avenue W and Avenue V will be
complete on or before September 30, 2002. Developer also agrees to
begin construction of curb and gutters on Avenue V and Avenue W on or
before January 15, 2003, and complete curb and gutters on Avenue V and
Avenue W on or before April 1, 2003. Failure to complete curbs and
gutters will not prohibit the issuance to Builders of Certificates of
Occupancy for the property set forth on Exhibit B.
4.3 Developer agrees to make available to the City for inspection all of its
books and records related to the public improvements constructed for the
project and to allow the City access to the Project during construction for
the purpose of periodic inspection of the construction work.
4.4 Developer shall provide City copies of contracts denoting costs for
engineering services directly related to the final engineering for
development of construction plans and specifications. Only engineering
services directly related to final engineering shall be eligible for project
cost reimbursement.
4.5 For those Public Improvements in the Project constructed by Developer in
which there is Direct City Participation greater than thirty per cent,
Developer agrees to submit the Public Improvements to competitive
sealed bids and agrees to award the contract to construct the Public
Improvements to the lowest responsible bidder in accordance with state
law and city ordinances regarding public bids. On those items where there
is Direct City Participation, City reserves the right to do the construction
of the public improvement with contribution from Developer if it is more
economical for the City to build than for Developer to do the construction.
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 5
ARTICLE V
BUILDER OBLIGATIONS
5.1 In accordance with the plans in Exhibit B, as approved or amended by the
Planning and Zoning Commission, and in accordance with Bond Issue
One in Phase One of the Project Plan recommended by the Board of
Directors of the North Overton Tax Increment Financing Reinvestment
Zone and approved by the City Council of the City of Lubbock, the
Builder agrees to construct and complete student apartments in the Project
to be located between 8th and Main Streets and between V and W Avenues
before December 30, 2003.
5.2 In accordance with the plans in Exhibit B and in accordance with Bond
Issue One, Phase One of the Project Plan recommended by the Board of
Directors of the North Overton Tax Increment Financing Reinvestment
Zone and approved by the City Council of the City of Lubbock, the
Builder agrees to participate in the cost of construction of the Public
Improvements as shown in the attached "Exhibit F." The City agrees
arrange for the design and construction of sidewalks including grates,
landscaping, irrigation, etc. Participation by Builder shall be payable 30
days after approval and acceptance of said Public Improvement. Direct
Builder Participation in Bond Issue One portion in Phase One of the
Public Improvements shall be limited to $33,284.00. Builder and City
agree that time is of the essence and that completion of sidewalk on the
2200 block of Main Street between V and W will be on or before
November 1, 2002, and that the remaining sidewalks will be completed by
May 15, 2003. Failure to complete the sidewalks will not prohibit the
issuance to Builder of Certificates of Occupancy for the property set forth
on Exhibit B.
5.3 Builder agrees to make available to the City for inspection all of its books
and records related to the Public Improvements constructed for the Project
and to allow the City access to the Public Improvement site during
construction for the purpose of periodic inspection of the construction
work.
5.4 Builder shall provide City copies of contracts denoting costs for
engineering services directly related to the final engineering for
development of Public Improvement construction plans and specifications.
Only engineering services directly related to Public Improvement final
engineering shall be eligible for project cost reimbursement.
5.5 For those Public Improvements in the Project to be paid in part by the
Builder, City agrees to submit the Public Improvements to competitive
sealed bids and agrees to award the contract to construct the Public
Developer Agreement — City / McCanton woods / Lubbock Student Housing
Improvements to the lowest responsible bidder. On those items where
there is Direct City Participation, City reserves the right to do the
construction of the public improvement with contribution from Builder.
5.6 Builder acknowledges that City will be issuing debt backed by revenue in
the Tax Increment Fund to fund the public improvements referenced in
this Agreement, and Builder therefore agrees that the student housing
project located between 81" and Main Streets and between V and W
Avenues shall not be sold or transferred to any entity that does not pay
property taxes for this property for a period of five (5) years from the date
of this Agreement. If, during the five-year period, the property is sold to
an entity that does not pay property taxes, Builder agrees to pay $150,000
into the Tax Increment Fund.
ARTICLE VI
FORCE MAJEURE
6.1 It is expressly understood and agreed by the parties to this Agreement that
if the substantial completion of the construction of any improvements
contemplated hereunder is delayed by reason of war, civil commotion, acts
of God, inclement weather, governmental restrictions, regulations, or
interferences, delays caused by the franchise utilities or their contractors,
fire or other casualty, court injunction, necessary condemnation
proceedings, acts of the other party, its affiliates/related entities and/or
their contractors, or any circumstances which are reasonably beyond the
control of the party obligated or permitted under the terms of this
Agreement to do or perform the same, regardless of whether any such
circumstance is similar to any of those enumerated or not, the party so
obligated shall be excused from performing during such period of delay,
so that the time period applicable to the design or construction
requirement shall be extended for a period of time equal to the period the
party was delayed.
ARTICLE VII.
TERM
7.1 The term of this agreement shall begin on the date of execution and end
upon the earlier of (a) the complete performance of all obligations and
conditions precedent by parties to this Agreement; or (b) the expiration of
the term of the North Overton Tax Increment Financing Reinvestment
Zone; provided however, that the obligations of City to apply increment
which has accrued during the term of the North Overton Tax Increment
Financing Reinvestment Zone but which is not collected until subsequent
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 7
to the expiration of the term toward unreimbursed Project Costs pursuant
to this Agreement shall survive.
ARTICLE VIII.
INSURANCE
8.1 Developer agrees to obtain or cause its Contractors and/or subcontractors
to obtain comprehensive liability insurance satisfactory to the City
(including workers' compensation or a self-insurance plan in lieu thereof)
which names the City and the Board of Directors for the North Overton
Tax Increment Finance District as additional insureds, due to any damage,
injury, or death attributed to the Developer or its Contractors or
subcontractors while completing the Public Improvements in which there
is Direct City Participation.
8.2 Builder agrees to obtain or cause its Contractors and/or subcontractors to
obtain comprehensive liability insurance satisfactory to the City (including
workers' compensation) which names the City and the Board of Directors
for the North Overton Tax Increment Finance District as additional
insureds, due to any damage, injury, or death attributed to the Builder or
its Contractors or subcontractors while completing the Public
Improvements in which there is Direct City Participation.
ARTICLE VIX.
INDEMNITY
9.1 Developer agrees to defend, indemnify and hold City, its officers, agents
and employees, harmless against any and all claims, lawsuits, judgments,
costs and expenses for personal injury (including death), property
damage or other harm for which recovery of damages is sought that may
arise out of or be occasioned by Developer's breach of any of the terms
or provisions of this Agreement, or by any negligent act or omission of
Developer, its officers, agents, associates, employees or subcontractors,
in the performance of this Agreement; except that the indemnity provided
for in this paragraph shall not apply to any liability resulting from the
sole negligence of City, its officers, agents, employees or separate
contractors, and in the event of joint and concurrent negligence of both
Developer and City, responsibility, if any, shall be apportioned
comparatively in accordance with the laws of the State of Texas, without,
however, waiving any governmental immunity available to City under
Texas law and without waiving any defenses of the parties under Texas
law. The provisions of this paragraph are solely for the benefit of the
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 8
parties hereto and not intended to create or grant any rights, contractual
or otherwise to any other person or entity.
9.2 Builder agrees to defend, indemnify and hold City, its officers, agents
and employees, harmless against any and all claims, lawsuits, judgments,
costs and expenses for personal injury (including death), property
damage or other harm for which recovery of damages is sought that may
arise out of or be occasioned by Builder's breach of any of the terms or
provisions of this Agreement, or by any negligent act or omission of
Builder, its officers, agents, associates, employees or subcontractors, in
the performance of this Agreement; except that the indemnity provided
for in this paragraph shall not apply to any liability resulting from the
sole negligence of City, its officers, agents, employees or separate
contractors, and in the event of joint and concurrent negligence of both
Builder and City, responsibility, if any, shall be apportioned
comparatively in accordance with the laws of the State of Texas, without,
however, waiving any governmental immunity available to City under
Texas law and without waiving any defenses of the parties under Texas
law. The provisions of this paragraph are solely for the benefit of the
parties hereto and not intended to create or grant any rights, contractual
or otherwise to any other person or entity.
ARTICLE X.
AUTHORITY TO BIND
10.1 The City represents and warrants to Developer and Builder that the City
has full constitutional and lawful right, power, and authority, under
currently applicable law to execute and deliver and perform the terms and
obligations of this Agreement, and all necessary City proceedings,
findings and actions. Accordingly, this Agreement constitutes the legal
valid and binding obligation of the City, is enforceable in accordance with
its terms and provisions and does not require the consent of any other
governmental authority.
10.2 Developer hereby represents and warrants to the City that Developer has
full lawful right, power and authority to execute and deliver and perform
the terms and obligations of this Agreement and all of the foregoing have
been or will be duly and validly authorized an approved by all necessary
actions of Developer. Concurrently with Developer's execution of this
Agreement, Developer has delivered to the City copies of the resolutions
or other corporate actions authorizing the execution of this Agreement and
evidencing the authority of the persons signing this Agreement on behalf
of Developer to do so. Accordingly, this Agreement constitutes the legal,
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 9
valid and binding obligation of Developer, and is enforceable in
accordance with its terms and provisions.
10.3 Builder hereby represents and warrants to the City that Builder has full
lawful right, power and authority to execute and deliver and perform the
terms and obligations of this Agreement and all of the foregoing have been
or will be duly and validly authorized an approved by all necessary actions
of Builder. Concurrently with Builder's execution of this Agreement,
Builder has delivered- to the City copies of the resolutions or other
corporate actions authorizing the execution of this Agreement and
evidencing the authority of the persons signing this Agreement on behalf
of Builder to do so. Accordingly, this Agreement constitutes the legal,
valid and binding obligation of Builder, and is enforceable in accordance
with its terms and provisions.
ARTICLE XI.
DEFAULT
11.1 A default shall exist if any party fails to perform or observe any material
covenant contained in this Agreement, or if the representation provided for
in Section IX is not true or correct. A party shall immediately notify the
defaulting party in writing upon becoming aware of any change in the
existence of any condition or event that would constitute a default by the
defaulting party, or with the giving of notice or passage of time, or both
would constitute a default by defaulting party under this Agreement. Such
notice shall specify the nature and the period of existence thereof and what
action if any, the notifying party requires with respect to curing the
default.
11.2 If a default shall occur and continue, after thirty (30) days written notice to
cure default, City may, at its option terminate this Agreement or pursue
any and all remedies it may be entitled to in accordance with Texas law,
without the necessity of further notice to or demand upon Developer or
Builder.
ARTICLE XII.
FEDERAL FUNDING
12.1 The City represents and warrants to Developer and Builder that no federal
funds or federally assisted project activities as administered by or under
the control of the City are involved in this project at this time. City further
agrees that it does not have any intention or plans to participate in the
future in any federally assisted project activities in the North Overton Tax
Increment Finance Reinvestment Zone.
Developer Agreement — City / NlcCantou Woods r Lubbock Student Housing 10
12.2 Developer represents and warrants to City that Developer has no federal
funds involved in this project at this time. Developer further agrees that it
will not in the future participate in any federally assisted project activities
in the North Overton Tax Increment Finance Zone.
12.3 Builder represents and warrants to City that Builder has no federal funds
involved in this project at this time. Builder further agrees that it will not
in the future participate in any federally assisted project activities located
in the North Overton Tax Increment Finance Reinvestment Zone.
ARTICLE XIII.
NOTICES
13.1 Any notice required by this Agreement shall be deemed to be properly
served if deposited in the U.S. mails by certified letter, return receipt
requested, addressed to the recipient at the recipient's address shown
below, subject to the right of either part to designate a different address by
notice given in the manner just described.
13.2 If intended for City notice shall be sent to:
Director of Planning
City of Lubbock
P.O. Box 2000
1625 13th Street
Lubbock, Texas 79457
13.3 If intended for Developer, notice shall be sent to:
Delbert McDougal
McCanton Woods, Ltd.
Lubbock, Texas
13.4 If intended for Builder, notice shall be sent to:
Lubbock Student Housing, L.P.
The Dinerstein Companies
6363 Woodway, Suite 1000
Houston, Texas 77057
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 11
ARTICLE XIV.
VENUE AND GOVERNING LAW
14.1 This Agreement is performable in Lubbock County, Texas, and venue for
any action arising out of this Agreement shall be exclusively in Lubbock
County.
14.2 This Agreement shall be governed and construed in accordance with the
laws of the State of Texas.
ARTICLE XV.
ATTORNEY FEES
15.1 Developer and City expressly agree that in the event of any litigation
arising between the parties to this Agreement that each party shall be
solely responsible for payment of its attorneys and that in no event shall
either party be responsible for the other part's attorney fees regardless of
the outcome of the litigation.
15.2 Builder and City expressly agree that in the event of any litigation arising
between the parties to this Agreement that each party shall be solely
responsible for payment of its attorneys and that in no event shall either
party be responsible for the other party's attorney fees regardless of the
outcome of the litigation.
ARTICLE XVI.
LEGAL CONSTRUCTION
16.1 In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision thereof and this
Agreement shall be considered as if the invalid, illegal or unenforceable
provision had never been contained in this Agreement.
ARTICLE XVII.
COUNTERPARTS
17.1 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and constitute one and the same
instrument.
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 12
ARTICLE XVIII.
SUCCESSORS AND ASSIGNS
18.1 The terms and conditions of this Agreement are binding upon the
successors and assigns of all parties hereto. Provided, however, this
Agreement shall not be assigned by Developer or Builder without prior
City Council approval, which approval shall not be unreasonably
withheld.
ARTICLE XIX.
ENTIRE AGREEMENT
19.1 This Agreement embodies the complete agreement of the parties hereto as
it relates to the Public Improvements in Bond Issue One, Phase One of the
Project, superseding all oral or written previous and contemporary
agreements between the parties and relating to matters in this Agreement,
and except as otherwise provided herein cannot be modified without
written agreement of the parties to be attached to and made a part of this
Agreement.
EXECUTED in triplicate and effective as of the 1 ith day of July , 2002.
CITY OF LUBBOCK
T.J. Patterson, Senior Councilmember
ATTEST:
Rebecca Garza, City Secretary67
McCANTON WOODS, LTD
dbjwAge
McD EQUIPMEN LEASIN , L.C.,
General Partner
By: Delbert G. McDougal, Sole Manager
APPROVED AS TO FORM:
Attorney for McCanton Woods, Ltd.
Developer Agreement — City / McCanton Woods / Lubbock Student Housin 13
APPROVE TO C TENT:
Craig Farmer, Director of Planning
APPROVED AS TO FORM:
LUBBOCK NT HOUSING,L.P.
C DEVELOPERS — LUBBOCK, INC.
Managing Partner of DC Student
Apartments — Lubbock, L.P.
Managing General Partner of
LUBBOCK STUDENT HOUSING, LY
By: Tom Caltaquione, Chief Operating Officer
Linda Chamales, Supervising Attorney
APPROVED AS TO
L.P.
bock Student
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 14
Resolution No. 2002-R0286
EXHIBIT A
THE CENTRE AT OVERTON MAP
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 15
MAP IN FILE
SEE
RESOLUTION
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Resolution No. 2002-RO286
DINERSTEIN STUDENT APARTMENT PLANS
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 16
I
Resolution No. 2002—RO286
EXHIBIT B
DINERSTEIN STUDENT APARTMENT PLANS
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Resolution No. 2002-R0286
EXHIBIT C
NORTH OVERTON TAX INCREMENT FINANCING
REINVESTMENT ZONE
PROJECT PLAN AND FINANCE PLAN
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 1
Resolution No. 2002-RO286
PROJECT PLAN
North Overton Area
Tax Increment Finance Reinvestment Zone
LUBBOCK
., TEXAS
Prepared for
City of Lubbock
JUNE 2002
PROJECT PLAN
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 $22 million for public
infrastructure improvements will result in future development/redevelopment in the Zone
which will increase the taxable value by approximately $159 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.
2. Proposed changes of zoning ordinances, the master plan of the
municipality, building codes, and other municipal ordinances.
Page 1
North Overton Area Project Plan
City of Lubbock
Project Plan
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
Project Plan
Table 1
NORTH OVERTON PROJECT PLAN
Cost, $
Cast, $
PROJECT
BOND ISSUE 1 BOND ISSUE 2-5
TOTAL
2002
2003-2006
TIF COST, S
PHASE I—First 6 Years
Marsha Sharp Frwy Frontage
0
1,000,000
1,000,000
o Improve 8 Intersections + Frontage
o Landscaping & street lighting
University Avenue Boulevard
0
900,000
900.000
o Signalize 3 Intersections
0 Landscape Median
o Replace Street Lighting
Pioneer Park Improvements
0
500,000.
500,000
Eighth Street Boulevard
o Reconstruction
690,000
690,000
o Landscapingp
490,000
490,000
o Street lighting
Main Street Reconstruction
0 Repairs/Replacement
443,100
580,000
1023,100
0 Remove/Palletize Brick
0
576,900
576,900
o Replace curb & gutter
0
0 Intersection Imprm
0
0 Street lighting
Storm Sewer
- 0
118,000
118,000
Landscaping, Sidewalks, Street Furniture, etc.
144,410
835,590
980,000
Street lighting
26,250
473,750
500,000
Commons, Land Acquisition
420,000
420,000
Commons, Development
250,000
250,000
Street Reconstruction/Resurfacing
0 Removelreplace curb & gutter
0
1,121,000
1,121,000
o Bituminous Paving on remaining Streets
189,000
1,800,000
1,989,000
Alley Paving
0
0
0
Water Line Replacement
75,500
2,504,500
2,580,000
Wastewater Line Replacement
40,000
1,500,000
1,540,000
TOTAL BOND ISSUES (1-5)
918,260
13,759,740
14,678,000
Administration
90,000
150,000
240,000
TOTAL PHASE I TIF COST
1,008,260
13,909,740
14,918,000
PHASE II —Years 7-30
Public Infrastructure
0
7,000,000
7,000,000
TOTAL TIF COST
1,008,260
20,909,740
21,918,000
Page 3
North Overton Area Project Plan
City of Lubbock
1
Resolution No. 2002-RO286
FINANCING PLAN
North Overton Area
Tax Increment Financing Reinvestment Zone
LUBBOCK, TEXAS
FINANCING PLAN
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
Page i
North Overton Area Financing Plan
City of Lubbock, Texas
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 costs are estimated at approximately $15 M for Phase I, $7M for Phase II,
a total of $22 Million. Specific cost estimates are included in Table 1 of the
Feasibility Analysis.
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.
• It is anticipated at this time there could be five (5) bond issues during the 2003-
2007 time frame which would yield approximately $12M at issuance and an
estimated additional $3M from coverage yielding a total of about $15M.
S. 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 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 current appraised value of the taxable real property in the Zone is estimated at
$24.4 Million. This value may be revised somewhat when 2002 values are
certified by the Lubbock Central Appraisal District.
Page 2
North Overton Area Financing Plan
City of Lubbock, Texas
Financing Plan
8. The estimated appraised valued of the improvements in the Zone during each year
of existence.
• The estimated appraised value of the improvements in the Zone per year is listed
in the following table.
Table 1 I ANNUAL CAPTURED VALUE
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
DEMOLITIONS $ K
(3,703)
(4,003)
(5,883)
(1,588)
(1,599)
(16,765)
NEW DEVELOPMENTS K
14,873
31,630
70,831
24,549
24,549
4,680
171,112
ADJUSTED CAPTURED
VAL UE $ K
11,170
27,627
64,948
22,961
22,961
4,680
154,347
Page 3
North Overton Area Financing Plan
City -of Lubbock, Texas
Financing Plan
• The estimated annual incremental funds available from development and
redevelopment in the Zone are listed in the following table.
Table 1 ANNUAL INCREMENTAL FUNDS AVAILABLE
YEAR
ADJUSTED CAPTURED
CUMULATIVE CAPTURED
ANNUAL TAX
VA UE, $K
VA UE, $K
INCREMENT, $K
2002
-
-
-
2003
11,170
11,170
-
2004
27,627
38,797
97
2005
64,948
103,745
337
2006
22,961
126,706
900
2007
22,961
149,667
1,100
2008
4,680
154,347
1,299
2009
-
154,347
1,340
2010
-
154,347
1,340
2011
-
154,347
1,340
2012
-
154,347
1,340
2013
-
154,347
1,340
2014
-
154,347
1,340
2015
-
154,347
1,340
2016
-
154,347
1,340
2017
-
154,347
1,340
2018
-
154,347
1,340
2019
-
154,347
1,340
2020
-
154,347
1,340
2021
-
154,347
1,340
2022
-
154,347
1,340
2023
-
154,347
1,340
2024
-
154,347
1,340
2025
-
154,347
1,340
2026
-
154,347
1,340
2027
-
154,347
1,340
2028
-
154,347
1,340
2029
-
154,347
1,340
2030
-
154,347
1,340
2031
-
154,347
1,340
2032
-
154,347
1,340
TOTAL
35,893
* Based on 100% participation and tar rates of
City-$ 0.57000; County -$0.19170; Hospital -$0.09798; Water District -$0.00830.
Page 4
North Overton Area Financing Plan
City. of Lubbock, Texas
Feasibility Analysis Resolution No. 2002-80286
TAX INCREMENT
FEASIBILITY
ANALYSIS
North Overton Area
Tax Increment Financing Reinvestment Zone
LUBBOCK, TEXAS
Prepared for
City of Lubbock
JUNE 2002
Y
Preliminary Draft - FA
Page I
Index
Forward
Section I:
Section II:
Section III:
Section IV:
Section V:
Feasibility Analysis
INDEX
History
Current Situation
Future Plans
Tax Increment Analysis
Tables
Table 1:
North Overton Project Plan
Table 2:
Private Development Projects
Table 3:
Annual Captured Value
Table 4:
Annual Incremental Funds Available
Table 5:
Annual Incremental Funds Contributed
Table 6:
Income Without TIF
Table 7:
BPP Inventory Estimate, $ K
Table 8:
Income With TIF
PAGE
2
3
4
8
9
11
13
13
14
15
16
17
18
19
20
Preliminary Draft - FA
Page 2
Feasibility Analysis Resolution No. 2002-RO286
FOREWORD
Schrader & Cline, LLC was asked to prepare a Feasibility Analysis using tax increment
financing to encourage redevelopment of the North Overton Area Tax Increment Financing
Reinvestment Zone in the City of Lubbock, Texas. This area of the City needs public
infrastructure projects that will provide a stimulus for redevelopment and enhancement of the
area.
Section I summarizes the history of the North Overton area.
Section II reviews the current situation.
Section III details future plans, and
Section IV details the tax increment analysis
Section V shows 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
and redevelopment projected for the TIF 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 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 & Cline, LLC
Addison, Texas
June 2002
Preliminary Draft - FA
Page 3
Feasibility Analysis
Section I: HISTORY
The North Overton area of the City of Lubbock was established in 1907 on a tract of land just
west of the existing "town site". It thus became the first major real estate operation in town.
Lots being offered by Dr. M. C. Overton sold at a steady pace, but a good portion of the land was
sold in large tracts. The first houses were built in 1907, and Broadway, the main street of the
addtion, became a fashionable street on which many prominent Lubbock residents built homes.
By the 1920's, the Overton Addition became an integrated part of Lubbock through paving
projects and the annexation of all its land to the City. This development was enhanced by the
establishment of Texas Technological College along the western boundary of the neighborhood
in 1925. As a result, part of Overton developed as a neighborhood serving the new student
population; boarding houses dotted the area and a variety of businesses catering to the college
trade developed along College Avenue.
The neighborhood by the late 1920's and early 1930's was generally middle class, with home
ownership predominating. To this day, many of the North Overton homes still standing were
built in the 20 -year period before 1940. Many of these were FHA homes.
The post-war attendance boom at Texas Tech created a shortage of student housing. Although
non -conforming apartments were not legal under the city zoning ordinances, there was a tacit
agreement between homeowners and the City that allowed the conversion and leasing of
apartments without permits or conformity to city building codes. This decision created many of
the substandard units that plague the North Overton neighborhood today. Rental property
became an important part of the Overton scene as an increasing number of owners moved to
south and southwest Lubbock. Owners converted garages into apartments, subdivided houses,
and the population of the neighborhood began to rise.
By 1960, the increasing enrollment at Texas Tech encouraged a rash of apartment buildings.
This influx of rental housing eliminated much single-family housing, caused traffic congestion,
Preliminary Draft - FA
Page 4
Feasibility Analysis
and introduced a transient population that destroyed the stability of the area. Speculation became
an important part of the real estate market in North Overton, where whole blocks of houses were
bought up in anticipation of massive profits from apartment complexes. In addition, spot zoning
began to destroy the stability of the neighborhood as the threat of encroaching high-density
apartments frightened older residents into selling out.
By the 1980's, the Lubbock City Council recognized that the passage of time, market trends, and
land use changes had created severe pressures on North Overton, and felt there was an urgent
need to analyze the problems and potential of the area. As a result, the council appointed the
Overton North Study Committee on November 11, 1982. The Committee established as its
mission:
"To explore methods of stabilizing property values in North Overton while allowing the
area to develop to its fullest potential, with a focus on improving living conditions and
the quality of life.
In general, the Committee noted that:
o North Overton has changed from a fairly stable single-family residential
neighborhood to a high-density, renter -occupied, deteriorating area;
o Out of town ownership and/or management of housing has increased, further diluting
the pride of ownership in the area;
o Generally vacancy rates have increased;
o Apartment complexes—most built before the 1975 zoning ordinance placed new
parking and landscaping requirements on apartments—are scattered across the
neighborhood, often isolating single-family residences and increasing congestion;
o Weeds, abandoned vehicles, and trash, especially on vacant lots and in alleys are
common in North Overton;
o Whether due to rental occupancy of single-family housing or increasing apartment
development, the decrease in ownership leads to a lack of pride in the neighborhood;
and
o Crime statistics in the North Overton neighborhood are high.
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Page 5
Feasibility Analysis
After examining the various trends in North Overton, the Study Committee formulated strategies
to address the area's problems and potential. The strategies would:
o Allow street closures to pool land for large development projects, or to promote
pedestrian access to redevelopment areas;
o, Encourage development of pedestrian oriented services for North Overton residents;
o Promote North Overton as a place for Tech students to live;
o Consider alternative financing programs for revitalization projects—possibilities: Tax
Increment Financing, Tax Abatement, Urban Development Action Grants, Industrial
Revenue Bonds;
o Encourage well-planned housing development, particularly that utilizing large tracts
of land;
o Encourage emphasis on home ownership; and
o Encourage lending policies to facilitate home ownership.
Unfortunately, the admirable goals of the Overton North Study Committee have not been
implemented for a variety of reasons.
First, there was a severe downturn in the real estate market during the mid-to-late
1980's.
Second, no developer stepped forward with a plan to consolidate the myriad of
small residential lots into developable tracts.
Third, there were limited public/private partnership opportunities.
In March 1989, RTKL, a land use planning firm retained by the City of Lubbock, issued a
Redevelopment Plan for Downtown Lubbock that included the North Overton area. The RTKL
report identified many of the same issues as the 1982 Study Committee. Some of RTKL's
comments about the North Overton area were:
o North Overton is one of those duplex and multi -family areas going through a
churning process that produced urban blight. It is becoming a high -crime area
desperately in need of stabilizing redevelopment.
Preliminary Draft - FA
Page 6
Feasibility Analysis
o A university the size of Tech typically generates the development of a "campus
town", or a significant number of college -oriented retail businesses located within
walking distance of the campus. However, a campus town is missing in Lubbock;
retailers that used to be located across from the Tech campus have since moved to
outlying areas.
o Where North Overton once supplied many of the residential units for Texas Tech
students, many of those students have since moved to newer complexes in suburban
Lubbock.
o . North Overton is experiencing a critical level of deterioration. One of the
contributing factors appears to be the extent to which "spot zoning" of apartment
complexes was allowed in a single-family neighborhood.
o Once apartments were developed, single-family homes were purchased as rental units
by absentee landlords;
o With no new multi -family housing starts, and the continued aging of existing garden
apartments, there could be a need for student housing in the -North Overton area in the
next few years; and
o Redevelopment of the North Overton area will depend on enough land assembly for a
critical mass of housing to provide an incentive for residential builders to start a range
of housing programs over several years of continual development. The City should
establish new zoning standards that permit a wide range of housing types within
North Overton.
o The community must recognize the importance of private investment and the needs of
the development industry. The City must develop creative public/private joint
development opportunities and provide public improvements as incentives for
development.
Through the 1990's, the situation in North Overton continued to stagnate.
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Feasibility Analysis
Section II: CURRENT SITUATION
At this time, the North Overton neighborhood continues to be an atea in distress.
o Population is declining, vacancies are high (32.6% compared to 7.8% for City);
o Owners occupy only 7.3 % of the properties compared to 51.5% in the City;
o Crime is high; and
o Many properties are in poor condition, abandoned vehicles and weeds are prevalent,
and there is little to attract anyone to this neighborhood other than extremely low
values and rents.
However, in spite of this (or possibly because of all this) a local developer has come forward
with the express purpose of purchasing and redeveloping about 90% of the North Overton area.
Currently the developer owns approximately 80% of the property he intends to develop. The
developer has submitted a petition to the City of Lubbock requesting that the City establish a Tax
Increment Finance (TIF) Reinvestment Zone to provide the necessary public funds for entering
into a public/private partnership. This public/private partnership will provide for a significantly
enhanced redevelopment of the North Overton area by using public funds for upgraded
intersections, additional landscaping, improved street lighting, park improvements, and street and
utility replacement/reconstruction. In order to ensure this higher quality redevelopment project,
the City has retained J. D. Wilson and Associates to provide design concepts for a pedestrian
oriented district and the City also has prepared redevelopment guidelines and TIF participation
guidelines.
The redevelopment being proposed through use of this public/private partnership follows many
of the strategies noted in the 1982 Overton North Steering Committee report and the 1989
Redevelopment Plan for Downtown Lubbock prepared by RTKL. Plans call for street closures
to allow for larger development projects, student housing will be provided, there will be a variety
of well-planned housing projects, retail to support the neighborhood and the Tech student
population; and the entire development will be pedestrian oriented. Enhancing and upgrading
this private redevelopment will be pubic projects financed by TIF funds.
Preliminary Draft - FA
Page 8
Feasibility Analysis
Section III: FUTURE PLANS
As part of the public/private partnership which will be used to stimulate, enhance and support
redevelopment of the North Overton area, a list of public infrastructure projects has been
developed by City staff as shown in Table 1. These infrastructure projects are designed to
replace 70 -year old utilities, provide new street lighting and signalization, upgrade Pioneer Park,
and provide for enhanced landscaping, wider sidewalks, and street furniture. Funding for these
public projects will be financed by TIF funds generated by private redevelopment projects.
Private development projects planned for the North Overton area as part of a public/private
partnership and shown in Table 2, include the following:
TYPE SQ. FT. UNITS
Office 112,000
Retail 277,000
Residential
Multi -Family 928
Single-Family/Garden/Town Homes 333
Retail development in North Overton will be supported by both Tech students and the
neighborhood residents. Based on estimated student buying power of $125 per month per
student, Tech students alone could support between 150,000 and 187,000 square feet of retail
development assuming $200 to $250 worth of annual sales per square foot. In addition to Tech
students, the surrounding neighborhood will utilize the retail development and the retail support
area will be further expanded with the completion of Marsha Sharp Freeway frontage roads
expected in 2008.
No new office space has been built in the Overton area or even in the nearby Central Business
District for several years. The small 112,000 square foot office building being planned for the
North Overton area should fill up rapidly, most likely with tenants from older office buildings
near by.
Preliminary Draft - FA
Page 9
Feasibility Analysis
Prior to the redevelopment planned by this proposed public/private partnership, there were about
3,200 residential units in the North Overton area. However, only about 2,200 were occupied—
by approximately 5,000 residents. With this redevelopment, there are only 1,261 units planned,
about 75% of which are multi -family, with the remainder a mix of single-family, town house,
and garden houses. This is a much lower density than the development which previously
existed, and we have no doubt this reduced number of units will be absorbed quickly. In
addition, about 25% of the multi -family units are being planned for Tech students. If this
development for students is successful (and it should be), the number of multi -family units for
students may be increased to 50%.
It is anticipated that build -out of this public/private partnership will occur over a seven year
period and will provide an increase in real property value of approximately $171 million. This
increase will be offset however, by a loss in value from demolition of existing improvements of
approximately $17 million. All of this results in a net real property value increase of overt $154
million. Detail of this forecast is shown in Table 3. In addition to the increase in real property
values, it is also anticipated that business personal property and inventory values will be
increased by about $8 million as shown in Table 7.
Preliminary Draft - FA
Page 10
Feasibility Analysis
Section IV: TAX INCREMENT ANALYSIS
This section documents the detailed analysis and inputs used to generate the tax increment
revenue estimates. Tax increment financing involves:
• Designating an eligible redevelopment area as a tax increment reinvestment zone;
• Soliciting participation of the taxing jurisdictions;
• Setting the assessment base at the level of the most recent assessment; and
• Diverting tax revenues generated by the increase in assessed value to a tax increment
fund for funding public improvements.
Thus, future tax increment revenues depend on four elements:
• The timing and value of new development and redevelopment;
• Appreciation of existing land and improvements;
• The value of any existing improvements demolished to make way for new
development; and
• Future tax rates and the percentage of participation of each taxing jurisdiction.
This analysis will include only tax increment above the base from redevelopment in the Zone.
We have not included any tax increment from increases in value of existing development. Table
2 indicates the projected assessed value and timing of the redevelopment planned for the North
Overton area within the Zone.
Assessment policies in Lubbock County set building assessments at 100% of fair market value,
roughly equal to construction costs for new construction. Assessed values are established as of
January 1 of the tax year. Thus, new development in 2002 goes on the tax rolls for the Tax Year
2003. Taxes generated against values in one tax year are due and collected at the beginning of
the following tax year. Thus, for this analysis, tax increment is available beginning in tax year
2004. Table 3 uses the New Development values shown in Table 2 and deducts the loss of value
as a result of demolition of existing improvements to generate an Adjusted Captured Value.
Table 4 used the Adjusted Captured Value as shown in Table 3, and tax rates for each of the
Preliminary Draft - FA
Page 1 l
Feasibility Analysis
taxing jurisdictions, to develop the Annual Tax Increment. Table 5 takes the same Annual Tax
Increment and shows the inclement provided by each taxing jurisdiction.
During the proposed 30 -year life to the North Overton Area TIF Reinvestment Zone, the tax
increment fund would collect a total of $35,893,000. This tax increment will provide sufficient
funds to pay for all the public infrastructure projects listed in Table 1, even if the TIF Board and
City elect to finance these projects by issuing bonds.
Finally, Table 6 projects the tax income to all taxing jurisdictions without the North Overton
Area TIF Reinvestment Zone. This table indicates that all participating taxing jurisdictions are
projected to receive a combined total of $8,217,471 during the 30 -year life of the TIF. Table 8
projects the tax income to all taking jurisdictions with the North Overton Area TIF Reinvestment
Zone which includes tax. income from Business Personal Property and Inventory as shown in
Table 7. In this case, all participating taxing jurisdictions are projected to receive a combined
total of $8,878,000 during the 30 -year life of the TIF. As indicated by these tables, the income to
all taxing jurisdictions during the life of the Zone is more with the Zone than it is without, even
though the jurisdictions are also providing a combined $35,893,000 to the TIF Fund to pay for
the proposed public infrastructure projects.
Preliminary Draft - FA
Page 12
Feasibility Analysis
Section V: TABLES
Table 1
NORTH OVERTON PROJECT PLAN
Cost, $
Cost, $
PROJECT
BOND ISSUE 1 BOND ISSUE 2-5
TOTAL
2002
2003-2006
TIF COST, $
PHASE I—First 6 Years
Marsha Sharp Frwy Frontage
0
1,000,000
1,000,000
o Improve 8 Intersections + Frontage
o Landscaping & street lighting
University Avenue Boulevard
0
900,000
900.000
o Signalize 3 Intersections
o Landscape Median
o Replace Street Lighting
Pioneer Park Improvements
0
500,000
500,000
Eighth Street Boulevard
0 Reconstruction
690,000
690,000
o Landscaping
0
490,000
490,000
o Street lighting
Main Street Reconstruction
0 Repairs/Replacement
443,100
580,000
1,023,100
0 Remove/Palletize Brick
0
576,900
576,900
0 Replace curb & gutter
0
0 Intersection Imprm
0
0 Street lighting
Storm Sewer
0
118,000
118,000
Landscaping, Sidewalks, Street Furniture, etc.
144,410
835,590
980,000
Street lighting
26,250
473,750
500,000
Commons, Land Acquisition
420,000
420,000
Commons, Development
250,000
250,000
Street Reconstruction/Resurfacing
o Removelreplace curb & gutter
0
1,121,000
1,121,000
0 Bituminous Paving on remaining Streets
189,000
1,800,000
1,989,000
Alley Paving
0
0
0
Water Line Replacement
75,500
2,504,500
2,580,000
Wastewater Line Replacement
40,000
1,500,000
1,540,000
TOTAL BOND ISSUES (1-5)
918,260
13,759,740
14,678,000
Administration
90,000
150,000
240,000
TOTAL PHASE I TIF COST
1,008,260
13,909,740
14,918,000
PHASE II —Years 7-30
Public Infrastructure 0 7,000,000 7,000,000
TOTAL TIF COST 1.008,260 20,909,740 21,918,000
Preliminary Draft - FA
Page 13
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Feasibility Analysis
Table 3
ANNUAL CAPTURED VALUE
ADJUSTED CAPTURED
YEAR
DEMOLITIONS $ K NEW DEVELOPMENT $ K
VALUE $ K
2002
_ -
-
2003
(3,703) 14,873
11,170
2004
(4,003) 31,630
27,627
2005
(5,883) 70,831
64,948
2006
(1,588) 24,549
22,961
2007
(1,599) 24,549
22,961
2008
- 4,680
4,680
2009
- -
-
2010
- -
-
2011
- -
-
2012
- -
-
2013
- -
-
2014
- -
-
2015
- -
-
2016
- -
-
2017
- -
-
2018
- -
-
2019
- -
-
2020
- -
-
2021
- -
-
2022
- -
-
2023
- -
-
2024
- -
-
2025
- -
-
2026
- -
-
2027
- -
-
2028
- -
-
2029
- -
-
2030
- -
-
2031
- -
-
2032
- -
-
TOTAL1( 6,765) 171,112 154,347
Preliminary Draft - FA
Page 15
Feasibility Analysis
Table 4
ANNUAL INCREMENTAL FUNDS AVAILABLE
YEAR
ADJUSTED CAPTURED
CUMULATIVE CAPTURED
ANNUAL TAX
VAL UE, $K
VALUE, $K
INCREMENT, $K
2002
-
-
-
2003
11,170
11,170
-
2004
27,627
38,797
97
2005
64,948
103,745
337
2006
22,961
126,706
900
2007
22,961
149,667
1,100
2008
4,680
154,347
1,299
2009
-
154,347
1,340
2010
-
154,347
1,340
2011
-
154,347
1,340
2012
-
154,347
1,340
2013
-
154,347
1,340
2014
-
154,347
1,340
2015
-
154,347
1,340
2016
-
154,347
1,340
2017
-
154,347
1,340
2018
-
154,347
1,340
2019
-
154,347
1,340
2020
-
154,347
1,340
2021
-
154,347
1,340
2022
-
154,347
1,340
2023
-
154,347
1,340
2024
-
154,347
1,340
2025
-
154,347
1,340
2026
-
154,347
1,340
2027
-
154,347
1,340
2028
-
154,347
1,340
2029
-
154,347
1,340
2030
-
154,347
1,340
2031
-
154,347
1,340
2032
-
154,347
1,340
TOTAL
35,893
* Based on 100% participation and tax rates of.•
City-$ 0.57000; County -$0.19170; Hospital -$0.09798; Water District -$0.00830
Preliminary Draft - FA
Page 16
Feasibility Analysis
Table 5 1 ANNUAL INCREMENTAL FUNDS CONTRIBUTED
Preliminary Draft - FA
Page 17
V
ANNUAL TAX INCREMENT $ K
(By Taxing Jurisdiction)
WATER
YEAR
CITY
COUNTY
HOSPITAL DISTRICT
TOTAL
2002
-
-
-
-
-
2003
-
-
-
-
-
2004
63
21
11
2
97
2005
221
75
38
3
337
2006
591
198
102
9
900
2007
722
243
124
11
1,100
2008
853
287
147
12
1,299
2009
880
296
152
12
1,340
2010
880
296
152
12
1,340
2011
880
296
152
12
1,340
2012
880
296
152
12
1,340
2013
880
296
152
12
1,340
2014
880
296
152
12
1,340
2015
880
296
152
12
1,340
2016
880
296
152
12
1,340
2017
880
296
152
12
1,340
2018
880
296
152
12
1,340
2019
880
296
1.52
12
1,340
2020
880
296
152
12
1,340
2021
880
296
152
12
1,340
2022
880
296
152
12
1,340
2023
880
296
152
12
1,340
2024
880
296
152
12
1,340
2025
880
296
152
12
1,340
2026
880
296
152
12
1,340
2027
880
296
152
12
1,340
2028
880
296
152
12
1,340
2029
880
296
152
12
1,340
2030
880
296
152
12
1,340
2031
880
296
152
12
1,340
2032
880
296
152
12
1,340
TOTAL
23,570
7,928
4,070
325
35,893
Preliminary Draft - FA
Page 17
Feasibility Analysis
Table 6
INCOME WITHOUT TIF
Income to
Jurisdiction
Without TIF
**.I$
REAL
PROPERTY
BUSINESS
PP & INV
TOTAL
�-
WATER
YEAR
VALUE. $ K
VALUE, $ K
VALUE $ K
CITY
COUNTY
HOSPITAL
DISTRICT
2002
24,419 *
2,580 *
26,999
-
-
-
-
2003
24,419
2,580
26,999
i
153,984
51,757
26,454
2,241
2004
24,419
2,580
26,999 i
153,894
51,757
26,454
2,241
2005
24,419
2,580
26,999
153,894
51,757
26,454
2,241
2006
24,663
2,606
27,269 j
153,894
51,757
26,454
2,241
2007
24,910
2,632
27,542
155,433
52,275
26,718
2,263
2008
25,159
2,658
27,817
156,987
52,798
26,986
2,286
2009
25,662
2,711
28,373
158,557
53,325
27,255
2,309
2010
26,175
2,765
28,940
i
161,726
54,391
27,800
2,355
2011
26,699
2,821
29,520 I
164,958
55,478
28,355
2,402
2012
27,233
2,877
30,110
168,264
56,590
28,924
2,450
2013
27,778
2,935
30,713
171,627
57,721
29,502
2,499
2014
28,056
2,964
31,020
175,064
58,877
30,093
2,549
2015
28,336
2,994
31,330
176,814
59,465
30,393
2,575
2016
28,620
3,024
31,644
j 178,581
60,060
30,697
2,600
2017
28,906
3,054
31,960
180,371
60,662
31,005
2,626
2018
29,195
3,085
32,280
182,172
61,267
31,314
2,653
2019
29,487
3,116
32,603
183,996
61,881
31,628
2,679
2020
29,782
3,147
32,929
185,837
62,500
31,944
2,706
2021
30,080
3,178
33,258
j 187,695
63,125
32,264
2,733
2022
30,381
3,210
33,591
! 189,571
63,756
32,586
2,760
2023
30,685
3,242
33,927
191,469
64,394
32,912
2,788
2024
30,991
3,274
34,265
193,384
65,038
33,242
2,816
2025
31,301
3,307
34,608
195,311
65,686
33,573
2,844
2026
31,614
3,340
34,954
197,266
66,344
33,909
2,872
2027
31,931
3,374
35,305
199,238
z
67,007
34,248
2,901
2028
32,250
3,407
35,657
j 201,239
I
67,680
34,592
2,930
2029
32,572
3,441
36,013
203,245
68,354
34,937
2,960
2030
32,898
3,476
36,374
205,274
69,037
35,286
2,989
2031
33,227
3,510
36,737
I 207,332
69,729
35,639
3,019
2032
-
-
-
' 209,401
a
70,425
35,995
3,049
TOTAL
I 5,396,388
1,814,893
927,613
78,577
* Estimated Future Growth:
2002 -2005 0% Year
2006-2008 1% Year
2009-2013 2% Year (After Marsha Sharp Freeway frontage road completion)
2014-2021 1% Year
* *Based on tax rates of. City---$ 0.57000; County -$0.19170; Hospital -$0.09798; Water District -$0.00830.
Preliminary Draft - FA
Page 18
Feasibility Analysis
Table 7
BPP & INVENTORY ESTIMATE, $ K
YEAR
OFFICE
RETAIL
MULTI -FAMILY
TOTAL
INV
BPP
2002
-
-
-
-
-
2003
-
-
-
20
20
2004
-
-
-
35
35
2005
-
3,375
675
65
4,115
2006
-
6,750
1,350
60
8,160
2007
394
6,750
1,080
55
8,279
2008
1,182
6,750
864
50
8,846
2009
1,575
6,750
691
45
9,061
2010
1,260
6,750
553
40
8,603
2011
1;008
6,750
553
35
8,346
2012
806
6,750
553
30
8,139
2013
645
6,750
553
30
7,978
2014
516
6,750
553
30
7,849
2015
516
6,750
553
30
7,849
2016
516
6,750
553
30
7,849
2017
516
6,750
553
30
7,849
2018
516
6,750
553
30
7,849
2019
516
6,750
553
30
7,849
2020
516
6,750
553
30
7,840
2021
516
6,750
553
30
7,849
2022
516
6,750
553
30
7,849
2023
516
6,750
553
30
7,849
2024
516
6,750
553
30
7,849
2025
516
6,750
553
30
7,849
2026
516
6,750
553
30
7,849
2027
516
6,750
553
30
7,849
2028
516
6,750
553
30
7,849
2029
516
6,750
553
30
7,849
2030
516
6,750
553
30
7,849
2031
516
6,750
553
30
7,849
Assumptions:
Office: One-fourth space occupied
in 2007, an
additional one-half occupied in 2008, final one-fourth occupied in
2009. BPP in office space valued at $14/sq. ft.
Following full occupancy
value, BPP depreciated
at 20% per year
for 5 years.
Assume turnover to new tenants will keep BPP values at
that level for remainder of TIF
life.
Retail: Assume one-half occupied in
2005, fully occupied in 2006.
Inventory valued at $25/sq. ft.,
BPP valued at
$5/sq. ft.
Inventory values remain
constant over the TIF life. BPP depreciated at 20% per year for 4 years.
Assume turnover to new tenants will
keep BPP values at that level for remainder of TIF life.
Multi -Family: Assume four developments with BPP values of $20,000
each. One occupied in 2003 one in 2004,
and two in
2005. BPP depreciated at $5,000/year
until 2012, then will remain constant as furniture and equipment
are replaced with new.
Preliminary Draft - FA
Page 19
Feasibility Analysis
Table 8
INCOME WITH TIF
Income
t0 ,Jurisdiction
With TIF
BASE REAL
BPP & INV
ADDED
BPP & INV CUM VALUE
w
WATER
YEAR
VALUE. $K
VALUE,$K
$KK
CITY
COUNTY
HOSPITAL
DISTRICT
2002
26,999
-
26,999 j
-
-
-
-
2003
26,999
20
27,019
153,894
51,757
26,454
2,241
2004
26,999
35
27,034 j
154,008
51,795
26,473
2,243
2005
26,999
4,115
31,114 i
154,094
51,824
26,488
2,244
2006
26,999
8,160
35,159 i
177,350
59,646
30,485
2,582
2007
26,999
8,279
35,278 j
200,406
67,400
34,449
2,918
2008
26,999
8,846
35,845
201,085
67,628
34,565
2,928
2009
26,999
9,061
36,060 j
204,317
68,715
35,121
2,975
2010
26,999
8,603
35,602 j
205,542
69,127
35,332
2,993
2011
26,999
8,346
35,345 i
202,931
68,249
34,883
2,955
2012
26,999
8,139
35,138 I
201,467
67,756
34,631
2,934
2013
26,999
7,978
34,977 I
200,287
67,360
34,428
2,916
2014
26,999
7,849
34,848
199,369
67,050
34,270
2,903
2015
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2016
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2017
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2018
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2019
26,999
7,849
34,848
1 198,634
66,804
34144
2,892
2020
26,999
7,849
34,848
j 198,634
66,804
34,144
2,892
2021
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2022
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2023
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2024
26,999
7,849
34,848
198,634
66,804
34144
2,892
2025
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2026
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2027
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2028
26,999
7,849
34,848
198,634
66,804
34,144
.2,892
2029
26,999
7,849
34,848
198,634
66,804
34144
2,892
2030
26,999
7,849
34,848
198,634
66,804
34,144
2,892
2031
26,999
7,849
34,848
; 198,634
66,804
34,144
2,892
2032
-
-
-
198,634
66,804
34,144
2,892
TOTAL
5,830,162
1,960,779
1,002,171
84,888
"Based on tax rates of• City-$ 0.57000; County -$0.19170; Hospital -$0.09798; Water District -$0.00830.
Preliminary Draft - FA
Page 20
Resolution No. 2002-RO286
EXHIBIT D
"THE CENTRE AT OVERTON"
DIRECT CITY PARTICIPATION AND TIF FUNDING
PHASE ONE, BOND ISSUE ONE
Project % Participation Cost Estimate
Eighth Street Boulevard (Ave. V to University)
Replace S curb & gutter 0%
Main Street Reconstruction (Ave. V to University)
Repairs 100% $200,000***
Intersection improvements 100% $173,901***
Replace curb & gutter 0%
Street Amenities
Landscaping & street furniture 100% $105,600
(88 tree wells with 3" cal. Tree,
cast iron grate, irrigation, pro -rated
street furniture ($1200/well)
Sidewalks 100% above the required $31,933
Four -foot minimum walk
Street Lighting 100% $25,000
Street Reconstruction/resurfacing (Ave V & W)
Replace curb & gutter 0%
Bituminous Paving
on existing street 100% $180,000
Water/Waste Water Replacement & Relocation
Off site 100% replacement $110,000
0% above replacement
On site 0%
Other Underground Utilities 0%
Contingency $ 91,826
Total $918,260
*** Any cost overruns in excess of the available Contingency funds shall be taken from
the Main Street portion of the project, reducing the amount available for Main Street.
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 18
Resolution No. 2002-RO286
EXHIBIT E
"THE CENTRE AT OVERTON"
DEVELOPER PARTICIPATION
PHASE ONE, BOND ISSUE ONE
Project % Participation Cost Estimate
Eighth Street Boulevard (Ave. V to University)
Replace S curb & gutter 100% $ 7,400
Main Street Reconstruction (Ave V to Ave W)
Reconstruction 0%
Replace curb & gutter 100% $ 43,340
Street Amenities
Landscaping & street furniture 0%
Sidewalks 0%
Street Lighting 0%
Street Reconstruction/resurfacing (Ave V & W)
Replace curb & gutter 100% $ 42,900
Bituminous Paving
on existing street 0%
Water/Waste Water Replacement & Relocation
On site 0%
Off site 0%
Other Underground Utilities 100%
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 19
EXHIBIT F
"THE CENTRE AT OVERTON"
BUILDER PARTICIPATION
PHASE ONE, BOND ISSUE ONE
Project % Participation
Main Street Reconstruction
Reconstruction
0%
Street Amenities
Landscaping & street furniture 0%
Sidewalks 100% of required four -foot
0% above minimum walk
Street Lighting 0%
Street Reconstruction/resurfacing
Bituminous Paving
on remaining street 0%
Water/Waste Water Replacement & Relocation
Off site
On site
0%
100%
Resolution No. 2002-RO286
Cost Estimate
$ 33,284
Developer Agreement — City / McCanton Woods / Lubbock Student Housing 20
MAP IN FILE
SEE
RESOLUTION
# 6,� 6 e 6�� - P6 (f �
ARTICLE XVIII.
SUCCESSORS AND ASSIGNS
18.1 The terms and conditions of this Agreement are binding upon the
successors and assigns of all parties hereto. Provided, however, this
Agreement shall not be assigned by Developer or Builder without prior
City Council approval, which approval shall not be unreasonably
withheld.
ARTICLE XIX.
ENTIRE AGREEMENT
19.1 This Agreement embodies the complete agreement of the parties hereto as
it relates to the Public Improvements in Bond Issue One, Phase One of the
Project, superseding all oral or written previous and contemporary
agreements between the parties and relating to matters in this Agreement,
and except as otherwise provided herein cannot be modified without
written agreement of the parties to be attached to and made a part of this
Agreement.
EXECUTED in triplicate and effective as of the 11th day of July , 2002.
CITY OF LUBBOCK
T.J. Patterson,, Senior Councilmember
ATTEST:
Rebecca Garza, City Secretary
McCANTON WOODS, LTD.
McD EQUIPMEN LEASIN , L.C.,
General Partner
By: Delbert G. McDougal, Sole Manager
APPROVED AS TO FORM:
Attorney for McCanton Woods, Ltd.
Developer Agreement — City / McCanton Woods / Lubbock Student Housin 13