Interrupt the presentation for questions if that's
something that would help the discussion along the way so
Don't hesitate to raise your hand and the chair will
recognize you and we can move through it that way. So
Let's go ahead and get started
With everybody's favorite thing state laws and statutes, so
we're just we're just jumping right into the fun stuff
But it is important in this case to begin at the beginning
With the recognition that the power to enter into these
types of agreements whether they're tax
Abatements or chapter 380 rebates or special assessments
through public improvement districts
That's granted to the city by the state and I just want you
guys to see this brief chart
About the tax type that is in question the program that is
used and then the statute there
Under which the regulations fall
I'm gonna define a couple things for you starting with the
tax abatement
That's an agreement that exempts from taxation all or part
of the value of a taxpayer's
Real or business personal property for up to ten years
So that's under chapter 312 and that specifies that in
order to authorize
Tax abatements a city must adopt a tax abatement policy
every two years. So that's why we're starting this
conversation now
Because our two years are up in April of 2018
So everybody clear on tax abatement. That's a reduction to
a taxpayer's bill in
Whole or in part before they read before they even have to
pay it. So it's just taken off the top
Carolina would you?
Mind reminding some of us an example of those that here in
Denton maybe for all three of these
Sure, that's a great. That's a great point. Um, so since mr
. Fikes is here in the room
We can use Peter built as an example
they have
Done some expansion to their plants and have requested tax
abatements related to those expansions and been granted
them
So that is tax abatements can be done on new construction
like brand new construction or on expansion projects
But Peter built is an example of that
type of project that's received a tax abatement
So when we're looking at what best practices and economic
development are
related to incentives
They dictate that a policy should address all of the
incentive tools that a city plans to use
Which is why our incentive policy also includes chapter 380
agreements
So chapter 380 agreements give cities really broad
discretion to make loans or grants of public funds to
promote business
development in
Denton our chapter 380 agreements have historically taken
the form of tax rebates in
Which a taxpayer pays their full tax bill
But then is refunded all of the portion all or a portion of
the taxes that they paid for a certain number of years
So unlike tax abatements, there is not a 10-year limit on
chapter 380 rebates if you
Were so inclined to go and look at the statute that talks
about chapter 380s
It is a very short little paragraph and it is very broad
So cities use it in different ways, but as I said typically
here in Denton our chapter
380s are in the form of rebates
so an example of an entity that's
received chapter 380 is
O'Reilly Hospitality Management the Convention Center their
incentive agreement is structured as a chapter 380 rebate
any questions about
chapter 380s
Okay, and then finally something that we haven't talked
very much about recently with this board our public
improvement districts and
Those are districts that offer a means for improving
infrastructure to promote economic growth within a certain
defined area
and a city is authorized to
Levy and collect special assessments or fees special
assessment just means fee on properties within that type of
area and
The city of Denton does have one kid right now and it's the
razor ranch kid and we're going to talk more about that
When we come to the section about
Pids later on in the presentation
Okay, so as you know from looking at the backup
we have
policies and guidelines that outline the use of tax abat
ements chapter 380s and Pids the
Tax abatement and incentive policy was first approved by
the City Council in 1989 and it's most recently
Been approved in April 2016 as I mentioned
So we're due in April 2018 in 2016
It was reauthorized with no significant changes
I think one of the only changes we had was updating a map
that's included in it
so this is going to be the first time in several years that
there's been a discussion and real re-examination and
proposed changes to that policy
the public improvement district guidelines were first
approved in 2007 at the request of the
Developer of Hunter Ranch, which is a large master planned
Community or I mean it is not in existence, but it is a
master plan community to the south
Along I-35, but that was the impetus for the council
adopting a public improvement district
Guideline and it was amended in April 2014
At the request of red development the developer of razor
ranch to add the option of revenue bond sales for
Construction financing when it was first adopted it only
had two options for financing and then this amendment in
April 2014 added the third option
For clarification back at the top the city didn't policy so
This will be in 2018 the first update since 1989. No, I'm
sorry if I wasn't clear about that
The the last
Content update was in 2014
I mean there were some additions and changes made in 2014.
They just there weren't any made in 2016
So yeah, we have to approve it every two years. So it's
been updated every two years. No significant changes last
time
So the economic development partnership board plays a key
role under both of these documents
Because it is the first entity to review
Incentive or pit applications and make a recommendation on
those applications to council
The EDP board is also tasked with reviewing and
recommending the city's incentive policies to the council
for approval. That's
That's a responsibility that's outlined in the EDP boards
enabling ordinance
So since the incentive policy must be reapproved in 2018 as
I've said
We're bringing staffs recommended changes to the policy to
you today for your review and discussion
further
our understanding is that City Council members are
wanting to have a work session about the current PID
guidelines because there has been an uptick in
Developers contacting council members to ask about the
establishment of pins
And so it's a good time to just go ahead and bring these
two things up together and talk about them and review them
As
We in the economic development department develop our
detailed work plan for the year
the first thing that we do as a department is ensure that
our projects and activities align with the city's strategic
direction and
I'm sure that many of you are aware that when the City
Council adopts its annual budget each September
It also adopts the annual strategic plan and the strategic
plan is organized around
five key focus areas or KFAs
Which are long-term defined priorities for the city
the third KFA in the strategic plan is
Economic development and has been for a number of years and
one of the commitments under that strategic plan KFA is to
develop
targeted policies and incentives that boost economic growth
This fiscal year my department also crafted a departmental
level strategic plan
to complement the city's overall plan and to add some
details under those really broad KFAs and
Our plan is organized under four goals
The first of those is business development and one of the
objectives that we have under the goal of business
Development is to revise the city's incentive policy and
application. So again, that's
yet another reason why we're here today talking to you
about it because it is a strategic goal of the city and of
the department and
Finally as we're examining our projects and activities
We want to compare them to the city's core values and make
sure that we're aligned with those core values of integrity
fiscal responsibility
transparency and
outstanding customer service
So in the case of review and revisions to the incentive and
PID policies and guidelines
We not only have clear ties to the city and departmental
strategic plans and core values
Particularly those of fiscal responsibility and
transparency
But we have an obligation under state law and a mandate
under best practices in the field of economic development
So that's all the background and now we are going to
delve into the policy for tax abatement and incentives I
Want to make sure that you all have an understanding of
what our review and revision process at the staff level
entailed as
part of the policy review and revision process we reflected
on lessons learned from prior incentive agreements
from recent initiation of a number of incentives as well as
the recent termination of
Several incentives and our ongoing incentive administration
, which is one of our department's responsibilities
Just so you guys know we have 17 active incentives right
now. So there's a significant amount of administration that
we do
We also reviewed incentive policies from other cities
including Frisco Garland Flower Mound, Louisville and Plano
We've also incorporated total impact 2.0 into the
application process
And total impact as some of you may remember is the city's
fiscal and economic impact analysis
Software that has been customized specifically to our
particular situation as a full-service city and allows us
to perform a true
cost-benefit analysis on a proposed project that's
requesting incentives and
Finally, we discussed our proposed policy changes with our
colleagues in the finance and legal departments as well as
the city manager's office and then
incorporated their comments
So we're gonna start with the formatting changes
We want to make some revisions to improve the organization
clarity and readability of the document
We propose expanding the general provisions section to
define our economic development goals and target industries
And then we further propose expanding the definitions
section and bringing all the existing incentive programs
We have an incentive program under a separate ordinance
That's called the ED investment fund as well as another one
called the based aircraft incentive
We want to roll those all under this policy so that all of
that information and guidelines are in one place
At this point in time, we're not proposing any changes to
those other policies the ED investment fund or the based
aircraft
incentive policy
Can you tell me where the funds come from that are
administered through the ED investment fund and the based
aircraft incentive?
I'm just I'm not as familiar with those and right that's a
great question. No
They the easy why we would or not would not put them under
this right?
We'll do the easy one first the base aircraft incentive. It
's facilitated as a chapter 380 agreement
So they're the funds for that are they come in from the
taxpayer and then they would be refunded the ED investment
fund
That is funded through mixed beverage sales tax, correct?
Yes, mix beverage sales tax is a certain amount is set
aside
It's like a hundred and fifty thousand dollars a year. So I
'm looking at Erica
150 thousand dollars a year is set aside into that specific
fund
so it's really just it's kind of a house cleaning measure
so that
When someone looks at our policy, they don't have to go
look at three different policies
They see it all in one place and the point being it's all
taxpayer. So that's right
Yes, ma'am, that's really more of a comment than a question
on this a readability is a big one
For me understanding what it is that we're being asked for
and when we talk about the umbrella policy everything
Being under one umbrella. I'm wondering if it's possible if
we can create a scorecard an
actual scorecard with all of the the items or criteria on
one side and if
that that
business that's asked for the incentive
Is a yes or no on those criteria's mm-hmm just something
physical and simple for us to see
That might be a tool that we could develop
To help the EDP board and the council in their analysis
I mean, is that what you're talking about instead of
incorporating something into the policy itself?
Because we're gonna kind of get to something along those
lines that we're proposing as it changed to take something
out
But I like that idea of something real simple and
straightforward
Kind of does it hit this or not? Yeah. Yeah, and the other
thing too is that
Our total impact
Analysis software produces a one-page summary as well as
like a ten-page sort of
Mediary report and then a 30 page really significantly long
and involved report so that you could lay out
This is a project. This is this is what it looks like under
total impact
You know how many jobs it will create how many?
New housing units it would generate with this level of
investment
How long the payback period would be if we offered them an
incentive? So it's kind of a one-page infographic
style
piece of information
That is very helpful for looking at
Projects next to each other even okay, so but I appreciate
the suggestion. I made a note and we'll discuss that
Jim's got a question
Would that be an element in the approval process or
Would that kick a business completely out as far as being
qualified?
No, it's just to emphasize that these are the targeted
industries and and that there there is some additional
weight
But I I don't think that anybody would want to just
discount a potential project because it wasn't a target
industry
It's just to call out the ones that are particularly
desirable as determined by this board and by the council
Okay, so we have on our incentive application we do have a
list of criteria of
Not quite a scorecard, but kind of a scorecard that they
check a box on it says I'm doing this this this and this so
That maybe could be expanded
Within that because we have some
Targeted not industries, but things we want to make sure
that they meet on the application
We don't have an application. I don't know if everybody
seen the application in here
Um, I think that we include and I think we include a copy
of the application with people's orientation materials
But it could have been it could be a while and the other
thing too is we've actually we've revised the incentive
application
just on an administrative level to make sure that we're
capturing all the information that we need to do our total
impact analysis and
Capturing the information that our utilities need to help
us gauge the kind of impact a project would have
So we've tweaked that on an administrative level. I mean it
doesn't have anything to do with policy
So we just changed it to capture what we needed with our
new analysis
But if everybody would like to see a copy of that we can
email it out after the meeting
The ED investment fund how long have we had that I
Think this is the third year third fiscal year. We've had
it and that is
Correct me if I'm wrong money that we've set aside so that
if a big project comes up and we need to
I'm trying to think what the project what it came up with a
few years ago, but
Help pay for something that were able to
Provide an incentive. We've got cash to be able to do that
when we're competing with
Other cities a lot of those people have a 4a or 4b sales
tax this thing where they have money set aside that they
can buy
a piece of land or help it in infrastructure and
Okay
So that's money that the council that we recommended the
council agreed to set aside so that we can
Build that up to be able to maybe offset some costs as
somebody's coming in there
That would have to come through here and it have to go to
City Council before any of that money was spent
And the aircraft and Cindy was a new policy that we've only
had a couple of years
As well that for specifically for the airport. We've had a
couple of folks that came out
With some projects out there that we wanted to make sure
that was
Something we can do out there
right and just to reiterate
any
incentive agreements that would be entered into using ED
investment fund funds or a
based aircraft incentive would go through the exact same
process that any other chapter 380 agreement or
tax abatement would would go through and would be governed
by the same kind of contracts with thresholds and
Verification and all of that stuff, but Marty makes a good
point
The ED investment fund is intended to put us on a better
competitive footing with other communities that have
For a or type a type B sales taxes and there are some
higher level
very clearly defined requirements that
Go along with the project's eligibility to be considered
under the ED investment fund
It's a minimum capital investment of 15 million dollars
instead of five million dollars like under the regular
policy
We've defined what a higher paying job is or skills
Skills based jobs, so they have to meet two out of three
criteria
That are clearly defined to be eligible and we have not
used the ED investment fund to date
So just a little bit more background for y'all
Any more questions? Thanks good
Okay, so on to the proposed content changes
We are and this just gets right into what we're we're
talking about here but um
We want to put forward the proposed change to limit
Chapter 380 tax rebate agreements to terms of 10 years or
less
To make those consistent with the limitation on the term of
tax abatements
There are a couple different reasons behind our suggestion
for this
One of which is beyond a term of 10 years. It becomes
difficult to do an analysis on
The accuracy of an analysis on a project
Significantly declines outside of the time frame of 10
years
I just heard what you said sign on the door. I'm gonna have
to get a basket and take up everybody's phone
All right, we'll use it to buy cookies for the next
Disrupted the meeting
Okay getting back on track because we don't want to be here
until 2 o'clock
So the first proposed content change that we have as I said
is limiting chapter 380 tax rebate agreements to terms of
10 years
Or less to be consistent with the limitation on the term of
tax abatements
We also propose excluding retail projects
Some questions on that
We have 17 that we're working on and I can't remember the
details on all those
So how many did we have that were longer than 10 years?
Or do we have in place?
there are
two
That are 25 year terms
That I can think of right now
If you're gonna if you're gonna add to it you got gonna
have to come up here and talk into the microphone
My
Name's Erica Solomon which we all know but for the public
the analysts so I actually administer the incentive
agreements
So we would have four
That would be our sales tax agreements. So it'd be Golden
Triangle razor ranch tent and crossing in Unicorn Lake
Those are all longer than 10 are they all 25 years Erica,
okay, so
Okay between 15 and 25 years you had mentioned excuse me
Erica
mentioned Golden Triangle razor ranch
Bossing and what was the fourth?
Thank you very much
So none of those projects would have qualified under this
No, they would have they would have qualified but they
would have been limited to a 10-year term
Jill thank you. So my question is
First of all is
If we make this change does it limit
council from approving outside those guidelines or can they
make a variation and
secondly
If every single time we go through a vote and they're all
looked at on a case-by-case basis as we all know
Why would we limit ourselves outside of?
the laws of Texas to what we can't can't do I can see
discouraging it because of
the issues that come up with over 10 years, but
Just so mark that off the list doesn't I don't know why
this is an adjustment to
kind of
The guidelines there just aren't any in our own policy that
being said
the policy as it is written allows the council to
have discretion to go outside of
what's stated in the policy and we're not proposing a
change to that because we understand that
We want to have clear guidelines so that companies know
what to expect and kind of what the norm is
However, there can be situations that we cannot anticipate
When the council would want to have the flexibility to go
beyond that so I don't think it's reasonable to
Remove that language that would allow the council to make
the kind of decision that it needs to make in an
extraordinary circumstance
to do something different and to boil it down the
Limiting that would be because of the difficulty in
administering
After a 10-year mark is that the reason that that's limit
that's one of the issues and it's not difficulty in
administration
It's difficulty in judging what the real value of a project
is outside of the time frame or in a time frame beyond 10
years
Somebody's gonna be here administering something if we
enter into an agreement with an entity
It has to be administered for the life of the agreement
So the the administration is not the problem
I
think that
There's also there's also an issue with you know
The issue of foregoing revenue for an extended amount of
time. I mean frankly that is an issue
So these are the things that as we talk through these
things as we look at what our challenges have been as we
Talk to other staff members
These are the issues that come up over and over again. So
we're bringing these to you for your discussion
Jim
But a unicorn lake and raise your range with the build-out
is over a longer period of time
Is there some way we can put a provision in there so that
you do it in phases?
Like we did Russia range we did the North side
I think there needs to be something there to give you a
little flexibility
To not force somebody to think they've got to get it all
done in 10 years. Although that that would be the goal
Some of these bigger projects might not be feasible
Okay, thank you
Anybody else have any comments or questions I guess
Just to make sure everybody's on the same page on 380
agreement. We use Denton Crossing as an example
they collect sales tax revenue from from Best Buy when they
sell a computer and
We agree up front to give them some of that money back over
a certain period of time
That can be 50% goes back years one through five that it's
40% and then it's 20% or whatever
So the years and how much money they get reimbursed or are
both part of that equation. And so while we are
giving money back over time 15 to 25 years down the road
that may be
10% or 20% or whatever the deal is so it's not just a year
's thing. It's a
when somebody comes and asks for a
Rebate its years and how much are we giving them over time?
And when we have these discussions
We usually have several scenarios to talk about they want
100% for 100 years and we want
You know 20% for three years
And so we kind of come up with something that works out
there. So I
Don't mind 10 years being a goal if we had that as a stop
then the ones that we have right wrong or different wouldn
't have
Gotten a great wouldn't have gotten an incentive or what
they have may or may not have happened
Raise a ranch wouldn't have worked on 10 years
Well, and that's that's why it's important to retain the
flexibility for the council to make
The decision that they deem appropriate
Outside of the 10-year time frame, but I guess I don't know
Outside of we're trying to line it up with the tax abat
ement policy, which I don't even know if that's relevant
In my world I have to look at rules and regulations and how
often we make exceptions to those and if you're making
exceptions to
Them all the time then you need to look at whether that's a
reasonable rule
Regulation and if I look at our current five
Chapter 380 agreements, they're all over this. So what are
we really getting ourselves into we're asking the council
We put ten years in there and we make a recommendation for
15 and council
Next week or ten years from now says what's our rule?
I don't want to make an exception because what does that
look like?
To the council people and putting
Words in your mouth. I guess they don't want to make the
exception because it's outside the policy and people are
mad because we're
outside the policy I
Don't know that's really reasonable
I don't know if this is a comment or a question or what?
But the city of Denton has changed over the last ten years
Significantly and as we're proposing
content changes
Does this really?
Capture what we want to do over the next ten years. I mean
the city and
Surroundings have changed significantly. So is this really
going to meet our need?
For the years to come. I don't know the answer. I'm just
asking a question
Well first the other part of this all these are retail
projects on the next item is to exclude retail projects. I
don't
It's a question of whether we get into the details of that
one a little bit
We're looking at more retail projects because we have so
many going towards that is probably a really good question.
I guess I'm
From the you know first time really taking a chance to talk
about this. I'm
Opposed to having ten years out there and I think that
makes it harder for us to get things done
Understand we've got some flexibility
But when you look at the ones that are on the books were
all
15 to 25 years. Why would we?
Ten years
Well, there are a significant number of them that are less
than that. I mean we've had some that have been three years
I mean I can think of several that have been three years
recently
So but those are the I mean razor-edge a big deal didn't
crossing was a big deal at the time
No one tried them all those are I
Just don't want to I just want us to be able to have
options and I don't want to make those options exceptions
my personal opinion
Carolina
Does that limit this board from being able to say that we
recommend
Additional I mean in my opinion it doesn't
It would I mean the flexibility could would be there at the
board level and the council level
For the sake of being a devil's advocate we could set it at
25 years and we could make them recommend less than that
Or you could send it John Baines or you could set it at 10
and say that at the discretion of council they could
Expand it right and that's already built into the policy. I
'm and we
We would retain that language in my opinion is that
language could stay it should stay in there to allow for
that
Jim
Have a different start date for different places approve it
all at one time
And first the first phase would be ten years and then when
the second phase kicked off then that would be the start
date for that one
And there could be thresholds
Associated with the first phase that would have to be met
in order to initiate second phase
John Baines so Jim what you're saying is that it would
basically come back to some review board of some sort after
the
Yeah, that's that's what razor ranch is doing now
They have a threshold they have to meet to get an extension
and then they have their final threshold
Jill jester and I think that that's something that we you
could word
I mean if if that's the ends up being the recommendation
that although it's a you know up to by law 25 years
potential that it is the recommendation or that it is
strongly recommended that
It be divided up into phases no more than 10 years or
something like that if that's the way we choose to go
Okay, all of these projects are
Different and a case by case. So when we come when we have
somebody doing that again, they all want all the money in
the world for
Forever and there's also a dollar limit on all these so
It's all
negotiation
Economic Development Department comes to us with a
recommendation and we have a talk about like we're doing
here about each each project and then make
a recommendation to City Council
So, I guess
Do we need to all say raise our hand and say we're okay
with this right now or
I think that's up to you how you want to do that. I mean,
we're all making we're all making notes as we're talking
But if you want to specify by each point what the board's
consensus is that's definitely one way to go
No, we need to
Vote on that or not or we're just providing comments and
feedback right now. It's it's really comments and feedback
There's not action to be taken. So
Yeah, just we're taking the direction as you're giving it
John Baines
Just a little clarification here on the 15 million. So with
these particular
Okay, one thing Jill you you said something that I want to
clarify not that this would ever come up but just because
Under the state statute that governs chapter 380s. There is
literally no time limit on how long the incentive can be
It could be a hundred years long. So 25 is just where some
of our agreements have landed
Because that was that was what was deemed necessary to make
the deal work for both sides
Thank you for that clarification. I appreciate that. You're
welcome
Okay, can we move on to the retail project bullet? Okay
So we're proposing to exclude retail projects except those
that address a gap or leakage in the Denton market
So a gap means we don't have it and we want it. It's not
here
And so if you have a gap you have leakage of people going
to where that retail is
If it's not in Denton, they're going to another community
to shop there
and so we want to be able to close those gaps and
Keep that leakage from happening in our market
I have two examples of that. So
Say Nebraska Furniture Mart wanted to open a second North
Texas location
Of course, we would want to talk to them about their
project and that would be retail that would address a gap
the example on the other side of that is
Kroger how many Kroger's do we have three two and a half?
How many are we about to have?
We're gonna have we're gonna have another one and they came
very aggressively wanting to be incentivized
We have already Kroger's we don't need to incentivize
another Kroger
So that's the kind of thing that we want to we just want to
head that off at the pass
Because that that's not a constructive use of anybody's
time and while we want to help them and support them and
answer their questions
We don't need to have a conversation about incentivizing
Somebody to build another Kroger depends on the cheese
selection
Give us your cheese list and we can we can add that
Keely has a question
But just to address what we're talking about now so gap or
leakage I assume
Identifying those will set priorities and will that be this
economic
Department that does that or is that like a study that we?
Well, we put an RFP up in the high
I mean is that who pays for that if we want to if we want
to get that information right now
We have to get it ourselves at the staff level because we
don't have I mean you can spend quite a bit of money to get
A very sophisticated analysis of what leakage you have in
your community
But frankly, we don't have the budget to pay for those
kinds of studies
So it's you know, we can we can do it if we need to and we
understand
Basically where our leakage is so and so the next question
is I have underlined didn't market
What exactly when you say didn't market does that mean are
we defining that by zip code by an area by drive time?
I'm defining denton market as
The areas in which we capture sales tax because that's
really our key. Yeah, we should be city of Denton
That I can rephrase that
Yeah, but it's where we capture the sales tax
Okay, did you have Keely did you have another question on
the next point on the next point? Okay
Okay, so let me let me finish with a couple of some bullets
there. Um
We are suggesting that the project must generate at least
15 million dollars in annual taxable sales to be considered
and we did some
comps on that
like what
The kinds of sales that Academy is generating as well as
looking at what some other cities policies
specified as far as a minimum amount of annual sales to be
generated and then we also proposed capping a
sales tax rebate at 50% of sales tax receipts and
again, it's because we're
Comparing what other cities policies have we're looking at
Cases that we have on the ground right now and what's
reasonable and trying to kind of put forward some
parameters around
What what we're willing to enter into as a starting point
But again, the flexibility would remain to do something
different if the situation
These sub bullets of the exclude retail projects the last
two
Yeah, it's just further detail about how we would structure
it and if that's the case
Do you need to reference a gap for leakage and they didn't
market? I mean as long as they're hitting those two
thresholds
Do you care?
Well, you know, I guess if we got mega giant Kroger and it
was generating 20 million dollars in annual taxable sales
We still wouldn't want to incentivize the fourth Kroger
necessarily
so I
Would I think I think that this I?
Mean my inclination is to leave that language
In but again, this is an opportunity for y'all's feedback.
So do you think it's redundant? Is that your I just don't
know that it's necessary
I'm sorry
Both of those a gap and 15 million dollars in annual sales
So
We would consider retail projects that address the gap or
leakage. So it's the exclude word that
Just I was thinking as a matter of fact instead of exclude
maybe target retail projects that blah blah blah
Just so that because when the public is gonna read this and
think about moving here
I just same thing with kind of the 10-year we just even
though they're guidelines
We don't want them to not approach us. Okay, you're all
right
Yeah, so my thought is along those same lines they exclude
jumps out at me because it seems a little restrictive and
Gap or leakage is a little ambiguous because it's
Who ultimately decides I mean I understand your department
makes a recommendation
But a gap or leakage to you may not be to me, you know, so
I think if there is some I
Think it I think it's even I mean
Unfortunately, it's a little ambiguous. I'd go way of
ambiguous because I just don't think there's a way to
detail it, you know
correctly, so if I if I say, you know
Those that you know retail projects will be considered on a
You know application basis or apply, you know that sort of
thing with those other two
Sub points that it needs to be this is a suggested
threshold 50%
you know, but I think because I think you can get into
Understanding that the purpose and trying to get their
rightwards guidelines and understand that and fold that
into my thinking but it's just
It's difficult. I
Take the perspective of people that are gonna be anti
anything we do right?
So if I'm on council and I got someone it's like hey, I don
't want to do any of it
Then I don't know that
The thresholds are gonna help right? So then you kind of
move to the to the center of that discussion those that may
be
Malibu, okay. Well, what would let's have that conversation
, you know, so that sort of thing
So I throw out the extremes look at the middle and I don't
know that that language
helps me
Communicate to those that are asking asking questions. Okay
, just my thought
so the gap or leakage could mean we don't have a
business in our city that sells that
product and everybody's going to
Dallas or whatever whatever that whatever that would be
And probably a good example of how this comes into play at
least on the retail side is when razor ranch came and there
were talks
of you know Dillard's moving well, we don't want to
Incent we the ED board at the time the city didn't want to
incent them to
Move Dillard's across town because they're already here.
And so we actually excluded any existing stores
they so that we exclude that I don't even know where that D
illard's whole thing is but
If Dillard's I know where it is now, but where they were
moving to razor ranch or not
There's been a lot of back and forth
if
They did move as an example
We they were not going to get any incentive for the sales
on that store because we didn't think that's fair
So this to me is a similar thing. We're full of with retail
If something comes that we we don't have or missing a
market and everybody's driving
To somewhere else to get that then we've got an out but it
's got to be a really big project
Then we're limiting that so
Basically, you've got two markets you're at yeah, you're
adding
You're not cannibalizing one to get the other one. So would
you incentivize that one?
Like that's a
Board question that comes here we talk about it
Keeley
so I
Think changing the exclude to target is is okay is good. I
'm okay with gapper leakage
I mean as a city council person and improving incentives
that is one thing if we're missing I'm all for you know,
approving the incentive and I think
Those are market terms. Those are terms that people
understand that are in the retail business
So I don't have an issue with those and we can as I was
talking earlier about expanding our definitions section
we could we could find a working definition of gap and
leakage and include those in the definition section if that
would help address the issue that some people have and
So on the must generate 15 million. Is that a projected
amount over a certain time?
I mean and who does that projection? I just want to clarify
on
That's something that we would do the projection with my
office would do the projection with in conjunction with the
applicant themselves, I mean they would have to
They would have to provide us documentation that comparable
stores would produce at or over that amount
And then they would be held to that in their agreement as a
threshold
When they ask for rebate they ask for an amount based on
the projections and so either ten years without amount
comes and if they
Over project and don't get there then they don't get the
money if the time comes up
So they have to be realistic when they're doing that right?
If they do they won't get it right because we do we do we
have the mechanism for third-party verification
in the case of sales tax and in the case of ad valorem
taxes because
The central appraisal district handles ad valorem taxes and
the comptroller's office provides information about sales
tax
So it's a very straightforward
verification mechanism
That we have in these cases
My next question is about the sales tax rebates right now
I mean you said it will be capped is there not they're not
a cap right now. It's it's agreement by agreement
It has been the way that has been approached
I just I never worked retail so I don't recognize gap and
leak is so I would like those definitions
and then also I think
Really I struggle with I mean
Retail right I mean everything
Technically could fall under retail
I mean if you if you word it right or if you it's just no
no different than that
I look forward I look back on the conversation we had about
tech businesses tech enabled
There's not much that won't fit under that category now and
so for me again
If we're going to have broad terms, which I I could be
wrong, but I see that as a broad term retail
I just I'm ignorant to the definition and if someone were
to come to me and say this business or that
And it and it's close. I don't know a defining line to say
no that is not retail
Yes, that is retail and so if there's a clear line that I'm
missing I'd love you to articulate that to me
But if there if those are blurred lines
I don't know that a regulation that straddles the line is
or is left up interpretation of just
That person's experience is great and that could just be an
ignorance on my part
But I just look at that conversation we had about people
feeling misled about technology tech enabled and trying to
You know we need to pin it down and say here's the clear
line
And if you cross it then you're out and if you decide you
're in so I'm hearing that you would be more comfortable if
we
Included a definition of what what our definition of retail
is
Versus a service well yes, I'd like a definition and an
example of what's out you know because I think that's where
we get in trouble
It's like okay. Why read this definition again, and I go to
this all the time if we can we had a
National argument about the definition of is is so I don't
you know there's no there's no level of
wording that think that is will be exhaustive enough for
some right so but if there's an example of
Because I'll give you a great example of leakage, and that
's main event that that that type business
And I consider that retail and I know we had that in the
works in Andy B's
But assuming that's not in the works
I would give half of everything to get that here because we
're losing that money every day
You know and so I don't know if anyone else would agree
that an entertainment complex like that is
Retail you know, but I see it as that you know so that's
where kind of it kind of gets to where we
There's examples of what's in what's out by suggestion
obviously everything is flexible. Okay? Thank you
well, we'll we'll take that under consideration and
See what we can do to get closer to a place where you're
comfortable with it
Alright
Next bullet point
Do we want to do this bullet point and then yes, mr.. Chair
break for lunch, okay?
Okay, so our final proposal
Under this slide for content changes is to remove the
existing capital investment based framework and the
additional factors
While at the same time retaining the five million dollars
minimum value of investment
in business personal property
Or or real property. I'm sorry not real property, but
structures to be considered for a tax incentive and
the reasoning behind that
Is there are several reasons behind that the first one
being that?
removing the existing framework for length and percentage
of the incentive allows for more flexibility to
Determine a potential incentive based on the projects
actual merits and how it fares
under our total impact cost benefit analysis
There's been some concern expressed that the existing
framework and additional factors
lead people to believe or businesses to believe that an
applicant is
Entitled to an incentive of a certain length or certain
percentage if they make a certain level of capital
investment
so
We think that this move would allow us to really look at
projects based on their own merits instead of
Just kind of saying oh well if you make this type of
investment the chart says you get this
And and I do think that we have run into run into
People who have come to us and said well, I'm doing this
type of project. It's I'm gonna invest this much money
So I'll be getting I'll be getting my incentive at X level
So I think it sets up some expectations that are not
necessarily reasonable in all cases
So please discuss
Yeah, I just want to make and thought I would show page 3
of 18. So this is the framework
We're discussing correct and are these the factors those
are the recommending right?
So what Jill has is additional factors in a big list there
And make it building things like yes
And those are things that have sort of they've evolved and
been added over time to address
particular needs or priorities and the list has become
extensive the other thing with those additional factors is
applicants can check them and use them as
You know use them to bolster their argument that their
percentage of incentive should be higher
however
We have not in the past
Had a mechanism to hold them to actually doing any of those
things
Some of that can be addressed in contracts some of is very
hard to verify
So it's an interesting situation that's that's created
because those things those additional factors are
beneficial
I mean, it's it's making a commitment to you know support
local nonprofits or didn't schools or public art
I mean, I don't think anyone would argue that those are not
necessarily valid or good intentions, but the question is
How do we hold the company to actually fulfilling what they
say they're gonna do and how do we verify it?
If we try to hold them to it the community involvement was
one that I
lobbied for many years ago
And really I've said this several times Peter built is my
willingness to ask for anybody that comes here and asked
for an incentive
Because of how what they do for the community
We have some examples of companies that received incentives
and all the numbers work out great and they get here
And then they don't return phone calls don't do anything
that I don't join the chamber. They're not involved in
anything
It's nice to have the numbers but part of what makes us a
great place to live is
Having all the people out doing all the things that we're
all out doing
So, you know with that being said how do you measure that
How much money you gave to United Way how many people were
involved in the
5k runs or whatever the deal is so I can see where that's
hard to keep up with
And if so, what's the point right?
It could just be a report that
That we have to give us
It would be hard and I look at it as a what have you what
are you doing?
And what can we expect there was somebody that flat-out
told me because I asked a question
We're gonna do United Way campaigns and they don't do
anything
So if somebody is not doing it or if they're not
Doing enough. How do you take the incentive away or if they
're not doing that? I mean, I think that's the hard part
Yes, they may report that we did this this and this but was
that enough?
Or no, it's just subjective. It's a nice idea
Basis for the decision if there's no
Follow through right or because they do that's all they do
do they qualify for X percent
John Baines, are we discussing additional factors? Is that
what we yes. Yes, sir. All right
So with that being the case do we need to add some ampl
ification or some
You know some more texture to that
to that phrase so people are
Well, we're talking about removing all of them removing it.
Yeah
right, and so in an application there is a way for people
to
If they feel like they want to include that kind of
information about their community involvement, that's that
's great. And you know, we can
We can say this is a community that values
involvement in
X and Y and support of X and Y and wants to see companies
undertake green initiatives
So if you would like to add any of that information to your
application, that's good color commentary to have
But that's not necessarily something we would
You get five additional percentage points because you were
going to do this
Jill Jester right now there is a number tied to it if you
meet
For each of these not to exceed I think I think something
like you can pick three
Then you get an additional or they can consider granting an
additional five percent abatement
so I think as far as I think it's possible to include some
of these and say these things are
What make you attractive to us?
But as far as tagging elements that you can check off a box
and expect to check off these numbers in return
If we have no way to confirm
That then they should not get a specific monetary amount
increase tied to that element
I think is where we're going. However, I think miss Simmons
here is saying but these are things that we are wanting to
attract and would give
special attention to because they're meeting some of these
factors, so
Is there a way to do both?
And as I said, you know we we allow
space and when we discuss
Filling out incentive applications with companies. That's
something that I know I personally communicate
Look, this is the kind of community we are and if you are
the kind of company that aligns with these things
I encourage you to mention it in the
extra section of your application
Just for our consideration but not tied to a guarantee of
any additional percentage
So I just
Discovered that this is where and I don't know correct me
if I'm wrong. Is this the only place where percentage?
For using renewable energy or anything like that is in the
contract and that is awesome
That's what you're projecting you want to take out as well.
It's one of the additional factors
so that in our incentive policy a
business who comes in and does all these things wouldn't
going forward be considered for
It wouldn't be applied to their criteria to get the
incentive is that it wouldn't be directly tied to an
additional
Percentage or an increased percentage of an incentive
It could still be taken under consideration
But you know renewables are one of those few additional
factors that would be
Easier than others to apply an actual measurable parameter
to right
You will install X number of solar panels on your building
and you either do it or you don't or you know
you will participate in
DME's green sense program. I'm just I know that's really at
the residential level
But you know and that could be verified but there are so
many other things on that list that can't be verified
Well, I would like to keep the conversation open for those
because they can be measured and we can go back and see if
Because those are certain things that companies do and I
would like to make sure that
Those are the ones that we're attracting to our community.
So right now if you look down that list, it's
And that's what's on the application. You can check I'm
doing these three things and that automatically gives you
Percentage you get 15% tax rebate because I checked three
things that say 5%
And so not that these things still aren't important to us.
That's why they're in there
But we're just you're saying we don't want to tie them to
it because you do this it could be that you're a renewable
energy
Company and that's that you're doing that and we can still
give you a big thing
I'd like to figure out a way to keep these as part of
the conversation other than staff telling you here's what
we think it is but have it involved in the application or
Here's some guidelines for things that
That will help your application but not tie the percentage
directly. Yeah
and I think that that could be a good middle ground and we
actually have
Internally had some discussions about how we could condense
that list a little bit without you know, kind of losing the
the general
Idea that we want to encourage green energy community
involvement, etc, etc. So
Maybe it's a condensed list
You can check the boxes then we expect a little bit of an
explanation, but it's not tied directly to a percentage
increase
The application is part of their narrative
John
In keeping the conversation going let's say you take all of
these items and
The companies that come forth and say hey, we want to do
some of these things
Can we not ask them to tell us how they're going to?
to monitor these and provide us with
Instances of their
Performance
So rather than us being the police
Let them police themselves and say this is what we're gonna
do and then we hold them to what they say they're gonna do
I take your point it is
And we can try to do that
but again, it's
We need to have something that's verifiable by a third
party
that's the ideal standard for any kind of threshold in a
contract and
We want to believe that everybody would be honest about
what they're doing and not inflate their participation
Everyone's honest other not right
You live in a really nice world
I
Understand what you're saying, but you know, unfortunately
in the cold hard world of contracts and you know having to
Having to agree on how something is verified independently.
That's a little bit difficult and we do have
We we do have verification forms with some of our most
recent contracts that people have to fill out
But those are things that we can then turn around and go to
a third party and verify
But they do have to sign it these certificates of
compliance
But we still want to be able to verify it independently
possible. We've had people
Check the box for community involvement. They want a 5%
part of that incentive and they have an annual bike rally
They have a what an annual bike rally is their community
involvement, which is nice
But compared to a lot of the people in this room and things
that you're doing in the community is then old water
Your land
couple of other things here that I think really important
to is the
Statement where they would hire Denton residents and their
jobs and hire local contractors and subcontractors
That's important
My opinion is I don't want to remove these from the process
Maybe we don't tie the 5% of doing that stuff and how do we
mean we can verify if they hired somebody or not
But I think it needs to be part of the process. Here's what
we hold as important to our community
If you want an incentive the more of these things that you
're doing and you can put in your application to prove to us
that
You're doing and plan to do and how you're gonna do it the
better your chance of getting incentive is
Maybe just special emphasis on
Anything else on this bullet point
All right, we're gonna take a short break and
Reconvene here in a few minutes
so
Conversation to go over proposed content changes and we'll
let Caroline pick it back up
Okay, I hope everybody has been fortified by lunch
Please feel free if you need to get drink refills or cake
just help yourselves
We are gonna move into a discussion about the addition of
minimum thresholds
for valuation to our
incentive policy
So minimum thresholds are intended to encourage submission
of accurate information
about investment and job creation data in the incentive
applications because those
Applications and the information they contain they serve as
the basis for the threshold
So we're asking the company to give us their best
projections about what their investment and job creation
numbers are gonna be and then we're going
To use that information that they provide to establish
minimum thresholds in the agreement
for new development projects
We propose and again this kind of comes back to our third
party verification that we do through the central appraisal
district for new development
projects we're proposing that the valuation by
DCAD needs to be at least 80% of the eligible investment
that the applicant submitted in their application
The reason why
we don't
Propose that it be a hundred percent of what they submitted
in their application
Is that as you all are aware these projects can take
between 12 and 24 months to complete and there are a lot of
things that
Can happen in that time that are outside of a businesses
control things with the economy or industry specific
changes that might affect
Their plans and they're still moving forward. They're still
making the investment. They're still going to create the
jobs
But it might not hit that exact number that they put
forward in their application
So for new development and for jobs we're wanting
To hold them to 80% of what they submit an application now
for expansion or redevelopment
projects we have learned recently
That there can be a significant discrepancy in
The investment amount that a business makes in that
expansion or redevelopment and the way that the value is
Is calculated by DCAD?
It's often significantly lower than what the actual
investment amount is
And we have had to in fact
Terminate several incentives that were given for expansion
or redevelopment
Projects because the threshold that was put forward in the
contract was not met and our opinion is that we were
putting we were setting it too high
so
Here under the this bullet about expansion and redevelop
ment
We're proposing that the threshold for those kinds of
expansion or redevelopment
Projects be 50% of the eligible investment that was
submitted in the incentive application
to account for the fact that
The company is making the investment they're doing what
they say that they're gonna do
But DCAD does not value those types of projects the same
way that it values a new development
Yes, that's a very good point
Very very good point
Those and that has happened in a couple of other situations
that that we've had and and we have had some interesting
conversations with
accounting departments our financial folks from some of
these companies
Where we have this conversation about well
your
Recourse is to go and protest your valuation
But you'd be protesting it to be higher and that's sort of
a strange conversation to have
But at that point it becomes a business decision for the
company
Do they want their valuation higher so that they pay more
taxes so that they get their incentive or is it actually
better?
On the whole for them to take the lower valuation and fore
go the incentives or tax burden would be lower. So
These are things that we reflect on as we go through the
administration process and have these experiences. So
We wanted to put that out there for y'all's discussion and
and just so that we can talk about it
Everybody loves this idea
Right, so I mean this is I've covered everything that's on
the slide so
So I have the question about the jobs created and
Just help me understand. Why is it 80% and not a hundred
percent of jobs create?
I mean that comes what they say they're going to do then
why aren't we holding right that comes back to the fact
that
The lag time between when an incentive application is
submitted and when a project actually opens it could be it
could be up to 24 months
And operational things or environmental factors that are
outside of the company's control could change in that ens
uing time
and there
We've just discovered that we need to have a little bit of
flexibility for the companies
Because it's
it's a really bad situation when a company is is doing
everything that they say that they're going to do and
They're making the investment but factors that are outside
of their control change the situation on the ground
and
You know having to terminate an incentive is not where
anybody wants to end up, right?
and
It could alter
It could alter the decisions that a company makes in the
future and it's not that we don't want them to do what they
say
They're gonna do. Of course we do
but as we all know
Things happen that are outside of anyone's control
that nobody would have wanted to have happen and
So that's just trying to account for this
So 80% is the floor
Right, right that that would be if you dropped below 80% of
what you said the number you said you were gonna hire in
your incentive application
that would be
cause for
non-receipt of the incentive
Okay, and so
Since this is all new to me earlier. I heard you say the
word clawback and so
On this part of it, how do we how do we check and at what
point do we check?
Is it every year that we we check that? Yes before there's
a payment made or whatever their payment
Schedule is but just let's say it's annually
We verify every year all of the thresholds no matter what
they related to if it's related to jobs or if it's related
to
the evaluation or a certain number of sales certain amount
of sales tax
We verify that every time before a payment is made
Jim
And they finished it in 2007
Personal
Right
Somehow I think figure out
Put it on hold for a year
Have a mechanism that allows you to move forward at a lower
percentage
Instead of termination some kind of there's a
evidence of good faith to
Some of our agreements are structured that way where if you
miss your threshold in a certain year
You don't receive your incentive for that year, but it you
have a chance to try again in subsequent years
Some other of them are set up where you miss you miss a
year and that agreement is terminated
From that point forward you could have an application that
Is a new development and jobs are going to be created and
we're making a decision based on both of those things and
if they
added 50 million dollars in new development to the tax
rolls, but they missed their employment by
79% or we're really going to take away their incentive and
I guess just kind of getting back to your comments does
As we're writing contracts does it have to be?
all or none or that reduces instead of you getting
proportional reduction
$20,000 a year and an incentive back that now $15,000 or
skip I mean
because I
They're all different. They're all big everything can
happen and I don't like the idea
Maybe that there's certain circumstances where it does if
you don't do this then you don't get get the money and
You can reapply or can we amend because we have there's
nothing prevents us from amending somebody's
Incentive agreement, that's correct. We have had the
experience where we've run into time constraints where we
these are these little things that are strange
circumstances, but
Disputes of
DCAD valuation ARB reviews
We inevitably have a handful of companies with incentives
that
Go for ARB reviews every year
So we can't verify if they met their threshold until the AR
B review is complete
and then it's getting to the end of the calendar year and
we have to
You know, we are advised by our legal department that we
have to you know
Take action on the contract if there's gonna be an
amendment it has to happen before the end of the calendar
year
Well, what happens at the end of the calendar years?
Everybody stops having meetings. We can't get anything done
. So I
Understand exactly what you're saying about amendments and
that is an option
but like practically that can roll out in a strange way
because of the review process that the company is
undergoing the DCAD and
That kind of thing. So just something else to think about
the two that we just had to
Terminate because they're
Nothing to prevent them to come back and ask for an
incentive. That's less or whatever
There's nothing to prevent them from coming back again
Well, I was just gonna add that we do have extensions
because council approved certain extensions when
Right, so the business has an ability to come and say well
we're about to meet this or we have it
But we will right so if can you extend this out a little
bit further?
That's that's true
but in the example that I just mentioned where there's that
kind of calendar constraint between their ARB review and
and
the end of the fiscal year
They have the ability to come and do that. But sometimes we
run out of meeting, you know, they're
The the body that would have to make the decision is is not
available
Unfortunately, you know that that can be a circumstance
that we run into
But it could be a dissatisfier for how they spread the word
somebody else if I come to them I
Just I
Don't like the idea of if they've missed it by a certain
percent if they say they're gonna employ so many people and
they are
off by
10% or 5% or whatever
That may be different if it's 10,000 people you're gonna
employ you don't employ you only employ 9,000 or 190
That's not gonna have a huge impact talking about different
kind of numbers
But I hate this yanking it
From folks is that gets pretty tough. I was
Happy to see the last couple of deals that happened with
yeah, I
Understand this gives a threshold
And it is you know, it's it's stated upfront it and
There are other people who feel very strongly that if they
don't do exactly what they said
They were gonna do in the application
They shouldn't get anything and we shouldn't waiver from
what the application states
So there are definitely a range of opinions on these things
and you know
Oftentimes what our role is is to seek it's to seek
something in the middle that you know
Maybe everybody doesn't get everything they want but we
come to a reasonable compromise
Jill
Jill gesture I've got two questions first. Is there a
current minimum?
Are we going from zero to this or is there one and this is
there there is not one in the policy? Okay
One has been inserted at the request of council members in
the Sally Beauty
expansion incentive at the 80% is is that was the first
instance of that
threshold arising
Second question. Can you for some of us tell us what an ARB
review is?
it
I'm not gonna call Erica up here, but I can't I don't know
what ARB stands for but it's the protest
What'd you say appraisal review board? So it's the protest
of your valuation for tax perks. Thank you appraisal review
board
Thank you
Thank you, so this what this is doing correct me if I'm
wrong is gives us some wiggle room
If they don't meet that 100%
Decad value or employment or improvement that gives it so
we don't have to pull it
If they fall a little short
Yes, that's for this
Is intended to be more favorable so we don't have to we can
continue with the
That's correct, you know we want
If if we think a project is significant enough that this
board makes a recommendation to the council and the council
approves it
I think everybody's intention is that they would be
successful in achieving
Their thresholds to get their incentive and I see this as a
way to help us
Get our expectations all aligned and know, you know what
what needs to be done to to keep things moving forward
Anybody else
Okay
think this is our last slide on
proposed content changes and this one is I
Feel like this is a positive addition
so
as we look at
The economy as it is now where it's heading in the future
The ability to only incentivize businesses that generate
significant ad valorem or sales taxes
puts us at a disadvantage when we're competing for
businesses that create high-paying and knowledge-based jobs
and
desirable sectors like technology
So what we're proposing here is the addition of a jobs
based incentive option for businesses that
Do not meet either the five million dollar
Minimum value of structures and business personal property
or that 15 million dollars in annual taxable sales that we
talked about earlier
but that create
What would be defined under the policy as knowledge-based
high-skilled jobs that meet a certain wage criteria?
So we wanted to put that out there
There are so many communities that have this kind of option
and it does allow us to
Address recruitment in certain desirable fields that we're
just not able to incentivize certain types of businesses
Without this kind of an option
Jill
So my question is, you know why we have the criteria in the
first place the minimum
Value and the minimum in annual taxable sales
Is it because of the cost effectiveness of the
administration of it?
That's kind of what I assumed as to why we say, okay, it's
not gonna be really worth what the city has to spend in
compliance and the studies and everything else so long so
Am I along the right lines and if so so
What we've
What we have come to understand is that
The five million dollar minimum capital investment is
The investment that allows a business to cover its cost of
service
for city services
And at the same time it helps supplement cost of service
for other other businesses and residential
Units so it it pays for itself at that point in time
That's an analysis that was done
through our utility department
Many moons ago and it has held up over time
So that's where that initial threshold came from for the
five million dollars the 15 million dollars in annual tax
able sales
That's something that we're proposing for this revision
based on our review of other communities policies and
comparable
Projects that are on the ground here in Denton does that
answer your question?
So with having this variation and I'm not I'm not against
it. I'm just
questioning
The math as to you know, how small of a
Group we would consider
Making a variation here if they don't meet these
Minimums because of the types of jobs. I feel like I'm not
Number of jobs, right there it could be a minimum I
Don't think this this to me is not about number of jobs
It's about quality of jobs like there would be there would
be tied to you know
There we would want to see these types of jobs pay above
the Denton County median wage or
you know a certain percentage above the city of Denton's
median wage or
You know, we would need to we would need to define that if
this is this is not this is not the end of the conversation
this is the beginning of the conversation and under the
Edie investment fund we already define
High wage and knowledge-based jobs. So the the precedent
exists just under a different capacity
This would not require them to meet other factors, too.
Okay
This is exactly this is for tech. I mean really the best
example of this is technology companies
Okay, you know I'm speaking with a couple of homegrown
technology companies
That are on the cusp of expanding that are legitimate
companies
They've been through two and three rounds of venture
capital funding and they're ready to hire new engineers at
$75,000 a year salaries. Do we want the ability to
encourage that when we're encouraging other types of
investment? I
Think we do want that and I think if we don't have that
ability it puts us at a competitive disadvantage to other
communities
I would agree with what you just said
So we have here didn't County medium and then just then in
your conversation you said or city of Denton
Do we know which one is higher wage and why are we focusing
?
I mean, are we focused on on the higher wage is that didn't
County or it didn't County media
That would be a higher wage without knowing the figure off
the top of my head
It's gonna be higher at the county level. So that's why
that's
Go back to the number of jobs
The type of company you just described could be for people
And it takes a minimal amount of investment for them to
have a company like that
You know in most cases
And they could get an incentive for one year and then
decide well, we're gonna pick up
far amount
I struggle with that a little bit
because I think we're more in the business of trying to
fund something that
Is bigger?
It's gonna provide more jobs. Maybe they're not the highest
paying jobs, but
it's
200 jobs not
I think there's room for both types of things for sure
because
Quantity and sort of scale is definitely important
I
Think that we can address
contractually the concerns about
Being incentivized here and staying here
But I hear I hear the concern because if you have a large
capital investment in a plant or a facility
Much harder to just pick up and leave. I understand that
concern certainly
John Baines, so in the instance of jobs
There may need to be a minimum
You know, so
Like Jim was saying you don't want to incentivize someone
with two or three jobs that can move so easily
You know
Well, if you had a if you didn't you get everybody that has
four employees could imply
For an incentive and then the nightmare to keep up with I
have eight
It's gonna at least be nine
With the number you may be looking for is payroll
So you maybe you have to have a hundred employees if your
salary is here and if your salaries up here or less
employee
I mean there may be some kind of deal there. I like having
Something that is not tied to capital investments, but we
need to come to an agreement on
What that could be and what you know how to run those traps
?
Again anything
Somebody came and we want to do that. It's all coming here
to talk about out loud and we have to
Work through all those issues of what the likelihood of
them leaving and what kind of traps we can put in place if
they did
Okay, well we'll we have to have a minimum we'll work on
some refinements to this particular point
Are you saying a minimum if you're gonna have
Less than this many employees you have to pay them at least
this much per year. That's my thought is because if
If you're bringing
Ten people with making million dollars to that company do
you get that incentive or if you bring in a hundred people
that they make?
minimum wage that still may be maybe hundreds not the right
number but that there still may be a
You know if you're at the same time if it's a high number
of people was probably a capital investment
That's what I was just gonna say
Yeah, this is really impact. This is really intended to
address the space that is not addressed at all at this
point
I mean, that's what our thought was if they're able to be
incentivized based on sales tax or capital investment
We would not be we might consider
We might consider the fact that they were adding jobs as a
part of their overall package
But they wouldn't sort of get the jobs incentive and a
capital based incentive to that. That was not our intention
here
Just to follow up on that and one of the things as a
council member I hear is that you know
There's just not enough high paying jobs here and then if
this addresses that in some way we can find a way to
Do that. I think that we should we should explore those
options
I mean, it's also a way people say people are leaving the
universities, you know, how do we retain our students?
I mean this may be you know way that we can do that
Yeah, and then you heard me talk about the strategic plan
earlier one of our longer term strategic initiatives is to
Raise the percentage of jobs in Denton that pay $75,000 a
year or above
I mean that that's a long term further down the road, you
know 2020 kind of initiative
But you know this speaks to that
I guess before we move on if
Staff or council or the combination come up with that we
want to do that. That's coming back here to talk about
the way that I think this should go is we're on the agenda
next week for a work session and
I'd like to bring the feedback from that work session back
to this group and that you know
We can't sort of do that endlessly, but I think this is a
big enough discussion that
Bringing it back one more time to this group is reasonable
That sound okay. Yeah
I mean if we're gonna come up with a minimum number of
employees or a payroll or whatever do I'd like to this
group?
Bill will say we're all on board with that here. Then here
's why and make that recommendation to council. Okay
Okay
So quickly here. This is a very simplified overview of the
incentive application and approval process
I just wanted to put this on here because not everybody in
this room right now has been through one of these yet
So
We're starting up here with the application is received by
our department
we vet its viability based on our policy and
the application itself
It that could either go forward or not if we're not able to
bring it forward for policy reasons
We always offer the business other assistance and we don't
just say no, we can't help you by
So we would be working with them in other capacities at
that point if it does move forward
We would run it through our total impact system
brief legal finance and city manager's office about the
application and the project and
then we would bring it to this body for its review and
Recommendation to counsel or not at which point it would
stop the process
but again, we would be offering other kinds of assistance
if
This board does recommend it it would go to council for
review and vote and please remember in in the midst of all
this
There's a lot of back-and-forth
negotiations refinements
And it could go through these
steps back and forth a few different times
Then if the council does approve it the incentive is
administered
By economic development for the term of the incentive. So
does anyone have any questions about the basic steps that
Okay, you guys are being really patient I know this is a
lot today this presentation part of the presentation is a
lot shorter
But Jill said she has a lot of questions
All right, so we're going to talk about kids
As I said earlier our council members and economic
development staff have been receiving an increased number
of
Inquiries regarding kids a lot of them are regarding
residential kids as opposed to specifically mixed-use
or commercial kids
Only one public improvement district has actually been
established in the city of Denton today
That's the razor ranch kid number one is its official name
and that was set up in March of 2014
The reimbursement agreement for that kid was approved by
council in March 2016
However, the service and assessment plan that's required
Under state law as part of a kid has not yet been submitted
by the developer. So
we're kind of
At a holding point until they produce that plan because we
cannot move forward with having it approved by council
Which is the next step?
Until they produce the plan
Do we know why that's happening
I mean is it is there a time limit on that and is there an
issue that they're trying to work out there has to be
An approval of a service and assessment plan within five
years of the establishment of the PID
Okay
As my understanding of the state law as to why it hasn't
been done yet. I don't know the answer to that
So is this the last year? It's 2019. It would have to be
done by March of 2019
Next year. Okay
So again we have gone through a review and revision process
of the existing PID guidelines
Kind of looking back over the types of requests that we've
received
Did a review of policies from comparable communities
including Dallas Fort Worth
Grand Prairie Kyle and Sealy and then we discussed our
proposals and you know issues that we've
Encountered ourselves in economic development with the
finance legal and city management departments
So you all had a chance to look through the existing PID
guidelines
Very first thing that jumped out at me is as we say they
have to submit an application, but we don't have an
application
Which is a little odd and seems like a good first step to
develop an actual application to make sure that we're
collecting all the information
that we need
then
We felt like it was important and we saw in some of the
other communities
PID guidelines that they have these interdepartmental task
forces that are pulled together to review applications
Now we're already
working together
On most everything that we do very closely with legal and
finance
But we think it would be important to pull in development
services in this case because the existing PID guidelines
talk about
You know providing
You know products in the case of housing in particular that
go above and beyond what's required by
the development codes and so we we think it would be
beneficial to pull in some high level high level staff from
development services to be a part of that task force to
review the applications to make sure that
What the developers proposing?
Does indeed exceed
the existing code requirement
To address the issue that we're in right now where we don't
have a service and assessment plan
But we have a reimbursement agreement
We think it is reasonable to require that the service and
assessment plan be developed and submitted prior to the
establishment of the PID itself
That's just I think that's putting things in the correct
order
As just a reasonable step
We also recommend requiring a developer funded and city
administered fiscal impact analysis prior to the
establishment of a PID
to provide some
Independent verification and this says city administered
but that means that we would select a third party to
perform
this fiscal impact analysis because these are very complex
instruments and
You know, there are lots of moving parts and pieces
So we would we would want to turn to a qualified
Consulting firm to do that kind of analysis and then
finally
We think it might be reasonable to add a home value
threshold
Because again, we kind of talk about going above and beyond
but we don't really define what that means and you know as
As we all are aware, you know
We do have a lack of some higher end housing in our
community and you know
A PID is a mechanism that you would use to try to encourage
that type of higher end development
So perhaps tying a threshold to the median home value of
the city of Denton or the median home value of Denton
County
Again, the county median home value is higher
The city median right now according to the last ACS is
254,000 the county median is
251,000 so there are just a couple of data points that can
be looked at for the establishment of a minimum threshold
and those are I believe
Those are all of the changes that we wanted to bring to you
And as time goes on that's just going to continue to drag
the median down
And then the infrastructure that the city's required to
participate with going forward after it's built out
Puts a burden unnecessary burden on the city as well as
school district
so I
Think we need to look at something that better defines than
just the median of the city of Denton or the median of the
county
We need to define what are we really looking for in those
developments
If I could take a step back
the reason this was this happened this policy came about in
2007 is because
That was the time where a bunch of the larger residential
developments were coming this direction
The economy crashed and all that stuff nothing happened. So
nothing's happened. Apparently it's coming back again. So
we put this policy in place
Back then with really the idea that we as an ED board at
that time weren't real excited about
incentivizing
residential housing developments
And if we were going to do anything like that
There would have to be something that was extraordinarily
above and beyond anything we would have in here not just
because you get her home
So I don't know how you get from A to B as most of them you
see now have pools and
That's a normal type
Situation but it needs to be
If we have a lack of high-end housing whatever that
definition is, I mean low-end housing to me is
You know starter home to me still $100,000, but it's
actually like 220
So, I don't know where we come up with that value, but and
I think it has to be a value not a
Size of home or size of law or those kind of things and and
that value will change over time
So we've got to peg it to something that is
that
And I've been my opinion significantly higher than that. I
don't think we want to incent
my opinion
Normal housing projects there's they're gonna come one way
or another and they're
not
Creating jobs and
Have a warm taxes. They're creating kids going to school
I mean they're creating uses of all the things that we're
having to pay for so yeah
residential developments
Residential developments do not cover their own cost of
service period in our community at all
so just
One thing that I want to make sure that is clear is the way
the way that these work with I mean
PIDs work with either commercial or residential
developments is
that the property owner is assessed a fee and
there are
rules about excuse me
The fees being disclosed and the fees are sensibly used to
you know, make nicer things amenities in a residential
development or commercial development
But over time what happens as homes are sold and new
residents come in that thread of
I'm paying for additional amenities in my community via
this assessment on my house that thread gets lost
And so people just see additional fees that they have to
pay but they don't really
Connected and it can become it can become a real source of
frustration for residents in these communities
Over time really kind of like Jim was saying, you know
these these they start somewhere
They end up somewhere else in a lot of different senses
So it's just another interesting thing to think about is is
that is setting that up to exist over time. So
Anybody have any other questions or comments
My question is about the fiscal impact analysis and how
that would be different from running it through the total
impact 2.0
Software is that not something similar? No, that's that
program is for
tax related incentives and PIDs are
PIDs are
They're they're done by fee assessments
So I misspoke earlier. We're not giving incentives. We're
allowing a bid to be
brought in well and and
People people would say that PIDs are incentive tools. They
're just a different type of incentive tool. I mean
basically when
during the last
financial crisis
Developers stopped being able to get bank loans for these
huge large-scale
Development projects especially for residential and so they
turn to
cities as as a different financing mechanism
through the sale of bonds PID bonds
To help get their developments to a higher level. So it's
the different it's a different type of resource for a
developer
But yeah total impact doesn't apply
to PIDs
I just wanted to add a little bit of color for that on the
PIDs. So it is different than the total impact 2.0
In PIDs as Caroline said they're very complicated
instruments. And so you're faced with a situation with a
developer coming in saying
We would like to do this development
Whatever type and character that they're talking about
But we're short by 50 million dollars or a hundred million
dollars for all this infrastructure that's needed
We need a detailed analysis an independent third-party
analysis that says really what are the financials of this
development?
What's how much money are you making on each one of these
lots?
What's your profit margin?
How much is really needed from a PID versus how much can be
financed through the development?
And to truly have an independent view of that because
otherwise you really don't know what you what you really
need to issue
And how much really needs to be assessed how much of this
is for profit for the developer versus?
What's really needed there the other thing is you're trying
to understand
What's the value of the enhanced amenities? We're talking
about home values as an example
that's kind of one of those it's probably easier to put
your finger on but
Really these all the PID assessments have to be paid in
that development to have higher level amenities
So that could be parks. It could be trails. It could be
What you're talking about pools and those kinds of things
like that. What's the cost of those?
How do we know that cost is accurate and that you really
know what you're getting for the PID?
So that's the kind of work we're looking at and as we've
had these developments come through you're kind of you're
struggling to understand
Really what those details are without looking at it?
So hopefully that helps provide a little color
I did want to mention one other thing about the home values
is I think as we we've looked at this
There's an average across the city or across the county,
but that's all kinds of product
It's some of its old some of us knew as we've seen new home
developments come in and new homes being built
The average value is much higher that we're getting without
any kind of incentive or any kind of
PID or development incentive
So it really I think the starting place should be the
market values that you're getting on an average that are
coming in and what?
Above that would you want to get?
And what would that number look like and maybe there's a
way to look at that as percentage terms
Rather than a fixed number because this policy can be put
in place and it may be a few years before you ever come
back to it
Is is landtown within the ETJ of the city of Denton? Yes,
sir
It is it is a it's a mud a municipal utility district.
There's actually several of those and that development
So it doesn't have a pin. It's a little bit different
financing mechanism
And actually have a tax rate, which is basically a dollar
It's a full 1% of the value of those properties that are
paid back for that mud. I used to do lids
WC IDs
In my former life water control and improvement districts
Levy improvement districts, so I'm familiar with the
complexity of financing, but they were tied to the Texas
Water Rights Commission and
They had authority over the the water rights and then
allowing these subdivisions to have taxation
so all the rights would then stay with the city of Denton
rather than
Yeah, I'm not sure on that particular piece
PIDs but pids are different than that. They're not tied to
the water rights. Okay, just about infrastructure
So sorry to get you off track
information
Question more of a statement just a generalization and kind
of
basic hit it's
The city allowing a developer to charge the person who buys
the home an extra tax really so there
It's an extra fee or it's an extra tax
For that person in that area as opposed to the person who
may be on the other side of the street
So right, okay
Yeah, that's what it is and
You know some people coming into these master plan
communities
They feel there's value in that and that's worth whatever
it might be a five hundred to a thousand dollar fee on an
annual basis
They think that's worth it because of the level of
amenities that they're getting
Justified in some way, but if they don't then they're
obviously gonna be dissatisfied
But it's different than an HOA fee. It is right it is and
so you can have a PID assessment and an HOA
on top of it and
In many cases they do have both so you might have the HOA
Doing some common area maintenance or pool maintenance or
those kinds of facilities
And then the PIP would be other things
It's kind of a one-time
Typically used to issue bonds as as Caroline's mentioned so
you finance some improvements or infrastructure and then
pay that off over time
But the bonds are issued by the city
What thank you Brian one follow-up though, I don't I don't
know that that character
Characterization is exactly accurate in most instances.
They're they're removed from other neighborhoods, right?
I mean, it's not you're not right next there. They're not
coming to North Lakes and saying hey
We're gonna put be right next to a neighborhood is
Traditionally, I mean so you I think 380 Savannah
That's right at one point in time was out by itself
Then there's that other the other neighborhood subsequent
to that
So I don't is is there an instance that I'm missing where
it's
Right next to a development because I don't think that
comparison is accurate if you're talking
Hey, my neighbor just across
What is that what give me that's I'm saying there's not any
indented right now well even outside of it
I don't know that that because they're the primary argument
is the infrastructure
So if you're saying the infrastructure is right across the
street, but I need
Help bankroll in the infrastructure. That's not gonna hold
water
I'll give you an example is one that we've talked about
with a council in the past is coal ranch
It's out on the southwest side of the city really undevelop
ed part of the city right now
So for right now there would really be no one across the
street that would be an issue
But over time 10 20 30 years is that area develops you
could have another development next to it
They could have different costs and different amenities
But typically they're pretty large self-contained master
plan communities
But you could have something across the street. That's not
Yeah, and I'm not aware of one right now that exactly and I
know am I and so yeah
You're telling me there's a premium for being the first one
sure I mean that that is that's
Par for the courses I understand you don't have to be the
first one there you can wait it out and then move
Later and not pay that or that's my thing
I just wanted to make that distinction that it's not I've
not I'm not aware of one which right across the street and
Two people initially are paying different rates down the
road. You're absolutely correct happen. Yes, so Brian. Yes,
sir
Tell us why the city cares or there's we have pids or not
The city's issuing bonds. I mean there's the risk is right
with that
So I guess I think that's probably what we're all
struggling with. I think there is some rest to the city
There's certainly a reputational risk of
City's names on the bonds and if they were to default there
's some administrative things that we could talk about later
and we have to handle with that but
another aspect of that is
Maybe touched on this is there is a political element to
this of
Someone's paying whatever it might be a thousand dollars in
taxes and in this development you might be paying two
thousand dollars
Because you have the PID
Is there going to be a push by that community not approved
bond packages to prove packages for schools?
Are they going to have a different set of?
Really kind of thoughts about how they want to approach
government and some of the things that are there
Is that politically are you creating a different group that
's going to really struggle to approve things in the future?
I think that's a concern. I don't know if that would happen
or not
But I can tell you talking to some people I know who live
in different developments. Sometimes they don't they really
can't distinguish
What's what who's who's paying what fee or what tax or what
assessment or what mud or whatever?
It's just one number to them and they kind of attribute it
all just to the government
So I think that's an issue we need to think about going
forward
I think the discussions that we had recently with the
council over the last couple of years
They were really concerned about doing it for primarily a
single-family residential development and coal ranch
without really understanding
What that true amenity was going to be that they felt like
was a higher level
I think their thought was at the time that they were really
saw these as more like commercial tools
And that was the feedback I got at that point a commercial
You could even have a bit of business improve in district
the commercial you could pay for things like their own
street cleanup and
trash collection some stuff like that the right
Businesses are are paying for and I think that even though
razor ranch does have a potentially a small component of it
It is residential most of that's a commercial development.
So that's kind of the differences
They saw but we've gotten a lot of interest recently on p
eds
most of them are single-family housing developments very
large developments and we're kind of looking for some
policy direction from this board and
Council how you want to approach it?
They are complicated
Hope that adds a little I hope I didn't make it more more
confusing
I like the idea of having a multiple of the current new
home market value
I
Like the idea of having a value threshold instead of the
average value making that
The average new home value whatever the definition is and
having a multiple, you know
It's got to be one and a quarter one and a half times that
They're bringing enough amenities in but it's a big enough
impact that you want to do that versus just somebody
Return it to market rate as what?
Yeah, no I am I
Think there has to be a I don't know what it is and now how
yield to you know
Your expertise what other communities are doing but some
sort of component that gives back to the community
So for example in Austin, there's they required, you know
low and moderate income housing to be a component of a
percentage of
one thing that jumps in my mind is a freeze of the
HOA fees to have that manageable not skyrocket on those
individuals, but some kind of component that says
If we do make a decision to go down this road with you know
, then there needs to be some kind of value add
to those that are purchasing the house and then to in the
community and then I guess a third part of that would be
I like I would like to see what the residents are
what
Documentation is presented. So I don't know if there's a
way to
Standardize that because what my concern is in other
neighborhoods. It's it's hey
The realtor didn't tell us we're gonna be part of this HOA
the opt-out period has passed or or hey that the PID
paperwork wasn't clear didn't say and so
Before you close on the house you have to get all that
information that we
It's all it's regulated by the federal government. Well,
yes
Control certain HOOA parameters because that's something
that
Is over and above what the city can do?
Well better said
I'm
Unable to see it right now. I'm assuming they bury it some
degree
But if a resident comes to me and says hey, I wasn't told
and I if they're borrowing money
I promise you 100% they're not closing alone without
knowing that information. They might not pay attention to
it
But still I don't get a chance where you see it every day
right I don't and so I don't have it and it happened
I'm sitting in HOA meeting like hey, I didn't I didn't know
and the realtor didn't disclose that
I'm just signing away or whatever and so it would be
finished beneficial for me as a representative to say well
the document
Would look like this and it's traditionally here, you know,
so it could be just an
Educational session for me to sit down and say hey, here's
how the documents organized traditionally
Here's what they are, you know
Because if you're talking about a subpoena a citation this
Saturday other like another legal document that I'm 100%
with you
And I know how those flow but I just I'm ignorant to that
and that question has come up words
What did they get the document? I don't know. I mean did
the realtor do his job or her job?
I don't know
But if I knew hey here's the form look like and it has to
be presented to you then it just makes it easy conversation
For me and I may be alone in that but that's just
conversations I've had
John Baines as a person who's had to do the auditing of
several of these entities the
Being a pain in the weave, you know
More often than not
More often than not people do not read the documents as
they do as they should
Yeah, I know for me if people are gonna do alone or
anything
I say give me the documents a couple of days ahead of time
so I can read
Because I'm not gonna just go in there and just say just
sign this page, you know, this is what it says
I don't like that
So a lot of this happens though because this is the
procedure that happens in a lot of these institutions
So but like you say people need to make sure that they
understand what they're signing on for it be it PID
HOA, etc. Etc. Yes
Please disregard prior comment audience at home. Thank you
You have enough feedback from us and I think so
So to just keep moving
You guys have this in your backup
This is the same kind of diagram about what the PID
application process would look like if we made these
particular
suggested changes
and
Next steps for both the incentive policy and the PID
Guidelines we're going to incorporate the feedback that y'
all have given us today and we're gonna have a work session
With council next week to share with them
all of this
great feedback and get their direction and then as I said
earlier
Will incorporate council's direction come back to EDP board
and then eventually it will go to council for their final
approval as
individual consideration items, I
Don't see on next steps come back to the DDP board. I just
added that I
Think when we come up with a direct minimum number of jobs
or whatever
I think we need to know what that is. I think you have a
sense of what we want to do and
Council may be 100% in agreement or not, but I'd like to
think we left some things undefined that we'd like to be
able to recommend
We did and we'll we'll get that stuff incorporated make
some suggestions so that y'all have something to react to
At the next meeting and we'll make sure to get you your
backup plenty of time ahead of time
and I just want to take a second to
Reiterate that anytime you get back up and you've got
questions ahead of time
I understand there are definitely some things that you
would want to bring up in the course of the meeting
With the group for discussion, but you're also always
welcome to ask us for clarification in advance
If if that can help you get more comfortable with the
material you can still ask the question in the meeting, too
But we're here to help be a resource
Not just during the meeting but outside of it, too
Yeah, okay, I think we already did that part
May I make a suggestion in interest of time?
I think y'all have probably heard me talk enough and Adam
has a report to give but
Are you comfortable with taking it out of order to let him
come and give his report now?
Or do you want to just stick with what's on the agenda?
I am comfortable with leaving this along as fast as we can
So I will I will offer to forego making my verbal report
And I'll just send an email to the group with some detail
about our activity
I know that Jim had specifically requested last time that
we
Produce a report about all of the RFPs that we responded to
in the last fiscal year that was included in your backup
I'm glad to answer any questions about that, but I don't
feel like in the interest of time. I need to go over it
but
Glad to answer any questions offline
I think it'd be nice to maybe have that we have that back
up we have questions when you add it to the agenda next
time also
Sure, sure
Okay
He's anybody
Have any questions or we have all the backup on the reports
. We have all the information. Do you want to hear more?
Or you want to look at and have questions? I would like to
if you have an update on the downtown fire
I would like to hear that
Yes, Julie is here to do that update and I just want to
thank all of you again for your great review and comments
and feedback
It was a great discussion. So thank you. So we're done with
our work session. We need to start our regular meeting
with EDP 18 - 002
We're going to forego any
comments on staff reports except for number four
update on the downtown fire
Well, believe it or not. It has only been two weeks
yesterday since that fire
It feels like about two months to me and to other people I
'm sure and even though it looks like nothing is happening
There's a lot of stuff going on in the background. So
Things we have done since the day of the fire
Compiled a list of businesses and contact information for
the fire department and police departments
we gave the folks that were affected with the fire and in
the line of smoke, etc a
List of city businesses and I'm sorry services that they
may find helpful
Like if you need a dumpster call don't call the main number
call this person. Here's her name
Here's her direct line tell her who you are and she's gonna
move you to the front of the line and expedite that service
for you
We've put in an application with the National Trust for
Historic Preservation for an emergency grant
For 108 North Locust, which is the mini mall
we've also put in one for preservation Texas very small
grant that would cover some engineering cost for them and
As of yesterday, we started working on one for Jupiter
House as well
To look at the wall there that has maybe some issues
I sent a bunch of information to the Texas Main Street
Architect and they have provided some information back to
us
about other cities that have had fires and how they dealt
with it and
Here's some ideas that when as you go to redevelop this
property, here's some ideas that the owners might be able
to use
You know the courthouse took on a lot of smoke and soot
through their HVAC system and the fact the wind was blowing
that way
That day so they have spent a couple of weeks cleaning up.
They were back in their offices yesterday
the museum will be closed for several months as they have
to
Take every artifact out of its box unwrap it clean it if
necessary
rewrap it in new bubble wrap put it back in a new box and
Then update their system where they know where everything
is
We've been I've been in contact everybody's been in contact
with them through emails
Text phone calls if you saw me run out a couple of times.
That's what it was. It was Joey calling about something
We still have downtown mini mall Jupiter House Lottie dot
and shop the barn remain closed
There we need a structural engineer to go look the firewall
s held which was amazing and wonderful
But some damage may have been done to those walls that need
to be fixed before those businesses can can reopen
We do have a partial closure of Austin Street and the fence
goes out into Lucas Street taking up those parking spaces
We know that fence is an issue and we're working to resolve
that as quickly as possible. But until we can get
until the wills can get a structural engineer and
Get their plans to over to development services at which
time their permit will be forthwith
We've got to have some plans before we can move that fence
back secure the walls and move the fence back at this time
If anything were to happen and either of those walls
decided to come down
Hopefully that fence would contain it and protect people
passing by so that's that's why that's still there
That's pretty much it unless you have questions
Okay, we have a question
I do have a question because I've heard structural engineer
like for the past two weeks from the very beginning
So is that the who who is that whose responsibility is that
is it the city structural engine?
Is it the because each individual from what I gather is
there the difficulty that it's having is that there's
different?
Insurances there's a tenant and then there's the building
owner
Is it the the insurance adjuster who's sending the
structural engineer out and that what we're waiting for or?
In the case of the wills and I have not spoken to their
insurance people. I've just been in direct contact with
them
I understood they needed three different bids from three
companies and there are private companies that links
construction looked at that
I know a couple of others did as well
But I think it's up to them to get the bids and then take
it to the insurance company and say here's our bids and
make a
Decision but it's not the city's obligate
It is not our obligation and the fencing that is up right
now was covered by their
Their insurance and serve appropriate that fence up the day
of the fire once they got it under control and they are
paying for that
I just want to make sure that as the city we are doing and
and I think on like Jupiter house
Well both buildings on each side. There's a tenant. There's
a building owner
I've talked to Frank Zangrel several times about Jupiter
house and Joey. I
Think that Frank is the one taking the lead on that because
I believe Joey has like content insurance
But Frank has the building insurance. So yeah, there's some
there's a few complex things
But it's just gonna take a little time before we can work
through it
Are we any closer to knowing the cause of the fire?
Is that still invest and until we can get those front and
back facades kind of shored up and we're trying to do
everything
We can to save the historic facade on the front side until
we can get those shored up
It's really not safe to let anybody in there including the
firemen
So once that happens the fire department will go back in
and make see if they can make an assessment
I've been told that we may not know because it was a long
hot fire, you know
And then the cleanup crews can come in after that after the
firemen look at it
See if they can find a cause make sure everything safe for
the cleanup crews to come in
And so who does that?
The initial step with the walls the shoring up of the walls
That will be the whoever the company is that the wills hire
to do that. They'll draw some plans up. I
imagined it's gonna be like scaffolding and then they'll be
a
Almost like a box like you see in some bigger cities when
they're doing stuff
So the pedestrians can walk under it and be protected in
case anything were to fall from the you know from the
construction
Thank you
Thanks, Julie
Appreciate the update
All right last item
On the business agenda is our considered the minutes of our
December 13th
2017 meeting item EDP 1803
Distributed advance and attached to the back of your packet
. I'll love to take a motion
Prior to today's meeting of the December 13th 2017 meeting
We have a motion by Jill and the second by Carol Anne any
further discussion
All those in favor say aye. Aye any opposed?
Minutes are approved unanimously and we are adjourned.
Thank you for being here today