We are now going to open up the City of Denton's Economic Development Partnership Board special
meeting this Wednesday, July 20, 2022. Again, thank you all of the members and all of the
executives and staff, et cetera, for being here today. It's going to be a great day.
We will begin with our items for consideration beginning with item A, MSTDP 22-045, Consider
Approval of the Minutes of May 11, 2022. These were included in the packet that went out
ahead of this meeting and hopefully everyone's had a chance to review. Is there a motion?
No approval. Second.
All right. It's been moved and seconded. Approving the minutes as presented in the packet sent
out earlier on. Is there any discussion before we take a vote? Hearing none, all those approving,
please signify by saying aye. Aye. All those opposed, please signify by saying nay. And
the motion carries. Moving on to item for consideration B, EDP 22-038. Receive a report,
hold a discussion and give staff direction and make a recommendation to city council
regarding an economic development catalyst fund for incentives. Of course, this has been
in the making. We're very excited to have it brought before us once more. And we're
even more excited for our new director of economic development. Would you please introduce
yourself to everyone and talk to us? Absolutely. All right. Good morning, members of the board.
My name is Wayne Emerson. This will be my first public speaking with the folks here
at the city of Denton. So to give you a little bit of background myself, kind of really all
started here in Denton. Went to school at UNT as a history major. At that time, I was
in the Texas National Guard or as a military journalist. My studies were interrupted briefly
my senior year. I ended up doing a deployment to The Rock where I served as my unit's public
affairs officer. After graduation, I went on and became a history teacher, geography
teacher, economics teacher, a little bit of everything in South Irving at Nimitz High
School. And then from there kind of had grown to love economics and geography said, you
know, I'd really love to start doing this kind of stuff. So I went back to school, got
my master's in business administration from the University of Texas in Austin and figured
out that, you know, economic development was something that I could really leverage all
those skills. Got my first job in economic development as the analyst for the Allen EDC.
And then from there went on to become a district manager, redevelopment manager for the city
of Dallas, doing a couple of tip districts, pace financing, those types of things at Dallas.
And then incredible opportunity to return to didn't came up that I couldn't pass. And
so I'm very happy to be here. One of the things that really made this job seem attractive
is knowing that the city had just gone through its adopting its new strategic plan, which
I'll be talking about in here. And then especially the catalyst fund to help make us a bit more
competitive in the market. So that's me. Anybody have any questions or anything about that?
Do you want to share with us why didn't is better than Dallas or when does that happen?
Well, first of all, it's the cold, right? Seriously, that's, that's what makes didn't
didn't is it's the culture. It's, it's the, you know, it's the vibe. It's the students,
the university, they keep us young, I think they keep us moving forward. And that's, that's
what I'm gonna do is we want to all kind of grow up and hopefully, I came back, but let's,
let's keep some of those, those young people here so we can make this a better place. And
I think the catalyst fund is how we're going to do it. All right. Any other questions?
Well, I just want to remind you, we do have universities here. Really good looking people
have been to I'm sure is a big part of why you are here. We're absolutely thrilled you're
here. And we're very excited to talk about possibly funding the catalyst fund that has
been recommended to us through the strategic plan and through the project that was done
by tip strategies. So thank you so much and take it away. Absolutely. All right. So a little
background. It's my understanding that this is probably not the first time some of you
have seen this. I think it's been brought through various boards and approving bodies
and councils, but let's just kind of rewind here. So in February 2021, the city council
adopted the economic development strategic plan, which was the first in 17 years. So
it had been some time. Part of those goals were to kind of modernize and align the economic
development strategies with the values of the community. The plan, basically we went
through for implementation and a 2021 planning session staff work to align our current incentive
tools that we have with the policy. So Eric took that with tax abatements and our three
eighties. And what I'm kind of going to do is tell you how this this new tool, the catalyst
fund is going to align with our strategic plan and why it was recommended. So when tip
came through, they had some of these guiding principles for the for resiliency, future
focus, inclusive growth, entrepreneurial spirit and cultural vitality. And all those
guiding principles that came up with some core goals. So accelerate recovery. So probably
at the time, I think the the real worry was that, hey, we got to get our businesses back
on their feet. We need to get some demand because that's that's primarily the fear out
there. But I think if we kind of look at it today, we're still suffering from COVID. But
it's a completely different problem now, right? Now we're now we need workers we need
we need to help our employers to keep them here. They need employees. So that's that's
changed a little bit. And we're going to it's kind of been a moving target and we're going
to help pivot to help that out. Foster growth. I think this has been traditional economic
development that we're probably all familiar with. That's the main goal. But down here
at the bottom, we have, you know, something that's new that communities are starting to
consider, which is strengthen community inclusion. So to do that, we have to align our economic
our workforce, our community development efforts and make sure that when we grow that we're
being inclusive or not leaving anyone behind. Alright, so the the specific tool that we're
going to talk about today outlined in the strategic plan is the catalyst fund. So the
plan included recommendations related to capacity and resource, right? So in order to do all
the great things we need, we're going to need funding to make that happen. And they
recommended three ways to to kind of seed this fund. The first was using utilities.
When I was in Dallas, this is what we did. We we have a public private, sorry, public
partnership, partner partnership program that we we use our water utilities to fund that.
So that's a strategy that cities have used. And it's a strategy that cities use that don't
have a type A or type B, which I'll talk about a bit more here in a second. This other
recommendation was pretty creative is using our incentive rollbacks. So right now we already
have development agreements with companies, with developers. And so this these dollars
are coming from the general fund. So with the incentive rollback, what we're asking
is taking those dollars that we've already dedicated to past projects and just keeping
those and placing those into a catalyst fund as a recurring deposit into the fund. So why
why do we need a catalyst fund? So these are some of the considerations and reasons.
Number one is to meet our strategic objectives. Flexibility, the catalyst. So when you're
looking at certain tools, you can only use them, you know, tax evade, you know, might
not necessarily be for every project. If we have a catalyst fund, we can be flexible.
This what we're going to kind of ask here is it's going to take time to get to where
we need to go. So it's not going to build itself in, you know, one day or one one session.
And then the level of resources needed to carry this out is not going to be static.
And I'm going to kind of paint a little picture for you. And actually, at your table there,
you've got you can kind of see how the flow of funds will kind of come in. What's more
we're recommending. And then obviously we just need like this will just be one tool.
We'll still have other economic development tools to work with. And so currently we have
an investment fund. And the idea is basically we're going to take our current investment
funds and transition into this catalyst fund. Okay, so what are we going to do with this?
Okay, so prior staff and the consultants got together and they determined we look at all
these various strategic initiatives, goals that we're going to need about seven to nine
million to kind of hit on all of these. So you can kind of see business recruitment,
which is, you know, it's pretty standard economic development business retention.
I think it's very important because just like in any business, it costs you a lot more to
gain a new customer than the cost of keeping what you already have.
Traditional Fedrock economic development infrastructure utilities, job based grants.
This is how we encourage employers to come here. Innovation and entrepreneurship is important
because small businesses, startups, we always look for the big companies, but you know,
small business is the backbone of American jobs. I think something like 80% of all people
actually work for small business. Access for historically underutilized businesses.
This is important that we're making sure that part of our inclusive development goals.
Green incentives. This is just important just I think for our positioning, our marketing,
how we want to position the city of Denton. Class A office space.
I think Class A is kind of a real marker to where we want to go.
And to get there, oftentimes the market, you know, we need to help it along.
And this catalyst fund is going to be crucial if we hope to get Class A office development.
Because once we get the Class A office, then we're going to be able to bring in those corporations
with those much higher paying jobs. And then of course, affordable housing and housing redevelopment.
I think one of our strengths right now is that we are an affordable place to live.
And as we grow, we want to ensure that that maintains.
All right, the catalyst fund. So I had mentioned Type A and Type B.
I would say most cities in Texas utilize either a Type A or Type B program to fund economic development.
So these Type A and Type B are funded from sales tax, right?
So essentially, Type A and B, there's some small differences, but basically they're very similar.
And what we did is when we started, and TIP had done this, but I wanted to dig a little deeper,
is we started to look at all the cities in Texas and we wanted to see, A, how they were funded,
Type A or Type B, but how much they were funding. So you can just kind of take a look at here.
And I'm sure we can recognize most of these names, kind of the big boys in the area.
Over here, we have more of our geographical competitors at top.
Down here at the bottom, these are cities that are funding about four million, which, spoiler alert,
that's kind of what we're going to be asking and recommending.
So you can see the type of cities that we have here.
But I'm going to kind of break this down and have you look at it a little bit more in this next slide.
So when we're looking at the cities and how much they're investing in economic development,
I thought it was very important to look at it on a per capita basis, based on our population,
because this is ultimately what we're investing in is ourselves, we're investing in our residents.
And I think this slide is, you know, kind of brings us into focus.
So Roanoke, you know, interesting.
I guess they are really just a main street and they bring everyone into their main street,
but they're collecting over $1,204 per resident and putting that back into their community.
But Frisco's, Allen's, Coppell's, you know, they're north of $300 per resident.
Lewisville, Denton County, you know, they're investing about $92 per resident.
And then if we get into some of the cities that are investing about $4 million total in economic development,
we can see some of these names here, Buda, Cleburne.
And then right here, this is what we're asking, what we're recommending to go to council just to get this catalyst fund started.
It's about $27 per resident.
So, all right.
So if we get these funds, are we going to be able to use them?
So what we did is we took a look at this is a snapshot of the projects that are a pipeline.
Not all these projects are going to happen, but these are the types of projects that they've come to the city.
They said we have interest in investing into the city.
Here are, you know, here's the investment we're going to make.
And then staff, what we did is, you know, looking at typical what these requests would look like.
We came up with some estimates.
So this first one is recruitment or new development.
So this is any business or development that's not currently within the city.
That's about $273 million in investment and about $4 million in incentives to make that happen.
Can we clarify capital investment being what the companies would be investing to increase the property tax value, to increase the value period.
So that's their investment versus what we're saying we could also help invest to incentivize them.
Just wanted to make that clear.
And then bottom, this would be redevelopment.
So this is development on existing sites that's going to result in some added value.
And to your point, Jill, is one thing you might notice.
It's not working there, but you'll notice that there's actually probably less capital investment in the redevelopment.
But you can see that the incentives are actually more.
And typically the reason why we have this is because redevelopment is already in a prime location.
So you're going to have higher land values.
And then there's just higher associated costs with redeveloping than you would have on a greenfield site.
So that's kind of where we're moving and we're looking at redevelopment.
That's just something to be aware of that it does cost more to redevelop.
And that's usually why it requires more in city involvement is to kind of help bridge that gap.
So if we look at this snapshot today, we're looking at about $411 million in private investment.
And to make that happen, we need close to about $17 million.
And all these projects would probably take anywhere between three to five years before we see them break ground and open.
So that's kind of the timeframe if these were to move forward.
Okay. So this is kind of my philosophy and how I would like to use these funds and manage them is when we're looking at a but for.
I always do what's called a financial gap analysis.
So what this means is if someone comes to us and they say, hey, I just want I want to invest in your city.
How much money can you give me? That's really not how I like to do it.
The question is, is, well, how much do you actually need to make this project happen?
So in order if we're going to take these funds and we're going to stretch them as far, we got to make sure that we're not leaving money on the table necessarily.
Right. We're giving more money on the table than is necessary.
So in order to do this, we need a financial gap analysis to do this.
I'd like for us to contract from the outside underwriter folks that are in the banking business that do this daily when they make private investments.
And we would do the same thing with our underwriting to ensure that this investment is actually needed.
And then we'd also do a project feasibility. Is this project feasible?
If we invest in it, is it is it going to work? Are we going to see our investment go into a black hole and then it closes and we lost those dollars?
So back to gaps, there are really kind of three types of gaps that we're looking for.
The first would be lack of capital. Typically, we see this with small businesses, startups.
They have an idea, they have a good business and they're wanting to break it on their own, but they just don't have the equity.
And when the bank comes to them, they have certain loan to value requirements.
And essentially you end up with an equity gap. So that would be one type of gap.
Second would be cost of capital. The project is cash flows. The project could be successful, but it just does not.
It can't support the debt service that banks are looking for.
So sometimes it needs just a little a little extra push in there to help to help support the project so that we're meeting our debt service payments with enough cushion.
And then lastly is return on equity. So in this in this instance, hey, it's a good project. It meets all of our banking requirements.
It's just that it's going to be really hard to get an equity investor on board.
Maybe not right now, but you know, in the future they might be able to get that in the stock market or they might the equity might say, hey, why would I invest in Denton?
I could go to Frisco. I could go to Plano. I could go to Dallas and I could get a much higher return on my equity.
So that's that's the third type of gap that we would look at.
So in addition, I'm all about leverage. I love leverage when I'm using my funds. I want to make sure that if I'm investing into something that everyone else is on board and we're all investing together.
So the first piece that I would look at is that sponsor or their private equity. Do they have skin in the game?
And then we want to make sure that the private debt markets, whether it's local banks or national banks, are they invested, right? Because I also want to use their underwriting and their view of the project of it being successful so that I know I'm investing in a safe investment.
Mezzanine funds, PACE financing, Grow America, these are these are various funds that we could use to help close that gap as well so that we're not the one completely filling that gap.
There's some other sources of funding. Federal tax credits, historical tax credits, new market tax credits, LIHTC, state and other local incentives.
Same thing. We have TURS here, right? That's another tool. If I can use the Calis Fund and I can use TURS funds to help close that gap.
Tax abatements, states dollars, Texas Enterprise Funds, Skills Development Fund. So anything we can do to really kind of leverage those investments.
And then I really started looking at funding options, grants, I think we're all familiar with. But I think in terms of sustainability, I think it would be smart for us to start looking at loans.
Because in this sense, we're going back to some of those types of gaps. Sure, we could give a grant and that will fill the gap.
But there's also maybe opportunities that really all they need to meet those debt service requirements is just a low interest loan, right?
And then when the project is successful, they can return that money back to us and we can reinvest that back into our community.
So other things to think about when we're looking at why we should participate is we always want to look at the public benefit.
And so the easiest thing to do is look at the fiscal impact. So these are the tax revenues that we would collect from it.
That could be direct, that could be indirect. But I don't know if y'all have done this in the past, but one thing, we can kind of be insular and we can only look at how it affects us.
But we might want to look how it affects all the taxing entities because our residents are paying taxes into the debt and ISD and they're paying it to the county.
So if we're bringing private investment, they can bring dollars into the school district and into the county.
There are going to be beneficiaries of that investment on those other taxing entities as well.
Economic impact. So these are direct and indirect private investment and spending that would happen as a result of the project.
Jobs, right? We want to make sure that we're going for target industries and we're looking for the higher wages.
We don't want to necessarily be investing in companies that are not investing in our residents.
Environmental sustainability, inclusive development and historical and cultural or other considerations we need to make just besides the fiscal and economic impacts.
These are things that we identified in the strategic plan that are important to us and maybe the private sector doesn't usually value because they have a bottom line.
We have a double bottom, right? We want to give back into the community.
All right. So here's some funding options and David, did you want to speak about the funding options?
Sure. I want to speak to some of the funding options to kind of set a timeline.
Next week, next Tuesday, we have a work session with city council to go over a lot of what the presentation has been so far on the catalyst fund.
Have any input from obviously from the board and incorporate that in the presentation and then really get into how can we fund the catalyst fund.
We got to this point last year with council. Council was very supportive of the fund itself.
We couldn't quite get to a point where we were ready to decide on the funding options, but at the strategic planning meeting right after that, council said, bring this back.
We're still we want to consider options and move forward. So I'll go through these at a high level and some of this will be getting out a little bit before council because a lot of these are council discussions we just haven't had yet.
But if you look, we'll go down the list. If you look at the first two and Wayne touched on on the first one, the incentive roll off, these first two are fairly straightforward and easy.
I think they'll be support on the incentive roll off. When we look at that, we already in the general fund itself have over four million dollars that we have budgeted for three agreements.
Other agreements to the policy that have already come for those are existing agreements that we have.
If we don't move it over to the fund, what will happen with those is when they expire, it just goes into the general fund.
And unless you come up with new agreements, that four million becomes three million becomes two million and goes down. What we're saying is we've already dedicated this four million roughly to incentive agreements.
Let's just move that entire four million over to the catalyst fund and you fund and it's not going to report the funds right away.
But as those agreements go away, instead of just going to the general fund bottom line, they go back into the catalyst fund and can be used for that purpose.
It doesn't have to get out of the general fund. We just continue that transfer in the same amount.
That's the first step, which makes a lot of sense for us to to move forward with it.
But again, it doesn't give us that immediate seed money that we would need up front.
One time water and wastewater contribution, we budgeted a million dollars in both our water and wastewater fund for infrastructure investments, opportunities.
We don't use that very often. It could be a developer comes in and there's a line replacement that's needed or something like that.
That's been budgeted for years, but just not used very often.
So not to use those funds, but to say we already have two million set aside in the coming year.
Let's just transfer two million as a one time water and wastewater out to the fund to help seed it as well.
And part of the reason we'll go into the next the next line of why we would say water and wastewater can contribute because the core scientific funds are is the piece that wasn't in the conversation as we talked last time.
A lot of the conversation last year was just based on should we either increase our return on investment, which you see here, or dedicate a portion of our return on investment straight to the catalyst fund.
So I'll get a little background on what is it return on investment return investment is being one of the benefits of being a full service city is we have all of our we have water, wastewater, electric in house.
As as is common with utilities that are run municipally throughout the throughout the state.
We have a return on investment where they pay a percentage of those revenues back to the general fund because they're publicly owned.
So, you know, DMV right now it's a 6% ROI that goes from DMV revenues back to the general fund for water wastewater that's three and a half percent.
Core scientific is the large data center which I'm sure most of you are aware of to varying degrees that came into the city that is in kind of cryptocurrency world, and it has a almost doubles our electric usage for the entire city that is going to bring significant amounts of revenue, not only to DMV.
But to ultimately to general government through the ROI of 6% but also through a franchise fee which are utilities pay of 5% so that 5% and 6% are revenues that would go through DMV straight over to the general fund.
In the conversations we're going to be having with council. We are very hesitant at this point to say we want all that revenue $10 million roughly right now as we're projecting forward especially as we're just starting out there's just in phase one to rely on operating expenses for that money
right now to say we're going to ship 10 million over to the general fund have police salaries fighters, relying on that money. Just because first, we want to see it to full fruition before we get comfortable with that but second, I wouldn't want our general fund to be so relied on any one company
I don't want to rely on one industry one company to that degree. So our thought process as we go into the general to the budget conversations with council is, let's look at this money as we're predicting for the next year and think about all those one time costs that we could do with it.
Relying on operating costs. If we get to that point with council and councils buy in on saying, yeah, we're comfortable with saying we want to look at one time cost, and it does up to $10 million that we want to project in the next year based on the revenue forecast from the data center.
We feel like about $4 million of that 10 million, dedicating to help seed the catalyst fund would make a lot of sense, especially as we're talking about green initiatives and things like that, that are involved in the strategic plan as well so that's going to be our recommendation to council
as we at least start the conversations next week, and you saw it on that the handout that you have on the next slide. I'm saying let's do an incentive roll off. Let's do a one time contribution from water and wastewater, because technically the core scientific is coming from D&E, let's do this $2 million we already have budgeted from water and wastewater, and then $4 million from core scientific, the other options are more recurring, and there is a benefit to having recurring obviously that is more reliable because the core scientific the money is not there we're not going to transfer it all on the first day.
In the next fiscal year we're going to transfer it as we actually get the revenues in the other options of actually increasing our water wastewater ROI dedicating a set percentage of ROI, or saying we want to dedicate a percentage of the property tax that goes directly over would be more reliable sources for the catalyst fund would be more recurring sources for the catalyst funds.
Right now with where we are with the general fund and trying to get our general fund budget together. We're just not comfortable making that recommendation, looking at the city as a whole because we have a lot of constraints we have a lot of new positions, a lot of supplementals that we need for the general fund so thought process
would be we do this one time transfer start to see it, see how the catalyst fund goes and then we can continue to make those decisions as we move forward. So that's a lot of information at a very high level and again, just starting those conversations with counsel, but that's our thought process.
When you see the next slide in the handout of what that would look like to see the next slide. So, here's what that kind of looks like looks like in practice I touch on the incentive roll off, so you see that's not an immediate impact.
Those numbers are basically incentives coming up and they're no longer active. Now, even in FY 23 and 24, there will be a dollar amount there because not all of our incentives hit their goals. So each year there is a savings from those some of that will roll for that's
assuming they had all of their goals in each year, but that instead of roll up does start to be to give you more funding in the latter part of that forecast, or you can see in core scientific and we have some plug numbers in the future years and those would be other discussions
about these one time infusions from the data center revenue would help us to build the fund. As you move forward, and you can see that $2 million that we would take from water and wastewater as well.
So, really, look at the first year 4 million is essentially coming from DME who do core scientific and their percentages, and the 2 million from water and wastewater so that's what he touched on earlier utilities paying into this.
That's where you get the utility revenue, and then the top line really, you know, is $4 million from the general fund that's going toward that as well so you have both pieces as we move forward.
So that's, that's it on the presentation and where we are right now as we go forward to counsel and the funding options.
customer on that last slide. Can you help me understand the annual contribution line in the out years.
Is that dashes or hyphens, and then like for instance, 3132, you know, not having 72000 and then the total on the bottom. Where's the additional cumulative. Yeah, that's really confused by annual and then I'm not understanding that one.
I was trying to say the same thing to me but what it is is what's available if we don't really commit it because so if you started 2490 plus 190 is 280 plus 331 is 611.
So what it is is the money that would be there, and it goes uncommitted each year it would start to fund balance. Yeah, that's what you're trying to figure out and not a contribution, which ends the net last year with adding which comes in new money, right, I guess you're assuming that we don't commit it in the year is what the total would become.
Thank you for doing the math. I was trying to figure out. It took me a while to figure that out.
So essentially what this is summing up is this stream of funding here right so these are the roll off right and so, so annually so these we got our one time payments.
Come to six to and then as we come here we're building that year and then this is building the the roll off so that by the time we get to 3132 we've got 4 million annual contribution going into the fund.
Well, the incentive roll off is recurring. Right. So basically after you get past those one times. It's just showing the recurring kind of building up because I think it looks kind of funny on this on this sheet when you do it because say 2029 we showed 574 as the incentive roll off, but assuming let's assume you didn't do any other agreements you would really have the 1.73 from your incentive roll off.
Cumulative of the previous years. Okay. It's so much money they're putting in new each year. Right. So it's not a fun balance which kind of looks like. Yeah, yeah, in theory, right. We're not going to use all of our incentives right so the fund balance should actually be building and we'd actually have more available annually as long as we're not because we're not going to expend all those of all those funds that first year so the balance is actually going to be a little higher but you know I agree that.
This is where you know it could the balance could get a little thin right because if we've we've made some investments here and then we're only got this much coming in you know annually to help build a fund up that I think there's a more better way we can say maybe just we'll just think about how I'm understanding it now you're telling me that you're explaining it for me but I don't want that to be a hurdle.
Question. So, um, first of all, good job I think it's a great presentation and I think this is tremendously needed in Denton so I hope you get the support you need from council.
I'm curious maybe from the historical perspective.
Why are you recommending these two or at least three versus what many cities do as a percentage of taxes, for me, well, do you think you'll get support for more likely to get support for these.
So the four A four B would take a election by the voters to get those and right now, right now we have, you have one cent that goes straight to the general fund for every city, basically and then you have another cent that can be allocated in different ways right now we have since it goes to general fund there
goes the general fund and then a half percent percent that goes to general fund and a half percent that goes to DCTA. So we would, to do any change we'd have to have an election. And this is where I think that we talked about the order a few times, we could do it all at once or not, but it would have to rescind either was likely right the general fund, half percent, and then both to have that half percent to go to sell the sex it was just, it would be a more intricate process to get there, versus these other options or options that we can take.
Just in the next budget year. Does one get you a better longer term outcome, I mean obviously percentage of taxes.
I mean, you can make an argument easily for property taxes growing from an economic development investment but does that get you more in the long run if you go more intricate or do you feel like early ones will help build the culture of support around it, you know what I'm saying.
If we were looking at the cows in isolation. I think you would say a percentage of property tax or some recurring source where we say we're going to, because property tax is different than sales tax property tax is something you could just come up with an informal policy or formal policy,
where you're going to dedicate it where you can rely on a revenue source, that would be the, that would be the best source of revenue for this fund most reliable. We have those larger conversations with counsel on how to look at the general fund and everything else.
So, knowing that we have in this unique situation where we have a large amount of money coming in projected that we just aren't quite comfortable putting the operating costs that we have for one time costs.
That seems like a good opportunity for us. And if I could piggyback another reason why cities prefer to use the sales tax, because you can look at Roanoke as the example where they, they're comfortable using sales taxes a lot of times that causes and being
in my residence where it's property tax is where you can, you know, there's some strategies Frisco that's what they do with their mall and everything right there for counting on that regional draw to help funds from their economic development efforts.
Yes. So, thank you. I guess one of the things I'd like to ask is, can David can you send the last conversation. Can we find that meeting, so that this board understands when it goes to counsel where we were we got bogged down for those, those those pain points.
And then two.
I think what would be helpful if you, Wayne maybe before then could send out, and it may be bigger than a one page of it, but those that did not track along.
Sherman was able to land who was that they landed they maintained.
Yeah, the silicon wafer. So they already had. Right, and they're trying to maintain it. And if you didn't look at all the intricacies that went into them just keeping what they had.
I mean Ohio was trying to, Ohio and offered the world. I mean it was unbelievable so I just think that that background information for this group and for counsel is helpful to understand.
I mean when you talk about competitive that that doesn't capture it. I mean it is absolutely a blood sport. And to your point it's all hands on deck I mean Texas got involved.
The county got involved, and they barely kept what they had. So I think just from that that historical look at it, and kind of what the markets doing now is really important.
And then, lastly, I just, do we, do we, does this, do we anticipate getting above the $27 ever or is it right.
I would love for that to go up but I'm what I think what I'm trying to show here is that this is the ask right for this one time general fund is say what we're asking relative to that blood sport to that competition is probably one of the lowest in the state so absolutely
I would love to come back and ask for more but I think also, what we need to do is to make sure that we're showing that if we get these funds. We're going to make those investments. Okay, we're going to invest them into the community and we're going to, you know, hopefully
build some trust, show our results and then we can come back and absolutely I mean, as long as I'm here. I like to come back and have that number. I'd like to see it at least at the 94 with our, you know, Louisville being our, you know, our county competitor, I think we can do just as well as Louisville one day.
But yes, yeah, no, I mean, because I mean, those, I mean, thank you for the comparison groups but I mean, when we're locked in with Buddha, Cleveland League City.
And we're, we're a lot below them. That's not good. I mean, that's just, that's less than great.
So, thank you for that. Yeah, absolutely. Yep. I agree and I think the fact show. I think we all know anyone that's been on this, you know, border been listening to economic development conversation and Denton knows we are woefully behind.
And, you know, looking at even projected timeline with what we're asking for, you know, how long until we become really competitive. We still have a ways to go. However, what it sounds to me like is, we're trying to take baby steps.
This is just not something that's had a good understanding from a segment of our community or leaders and so I think it's important and I really think the comparables speak for themselves.
It's, it's not fuzzy. It's not moral I mean it's just, this is where we are and trying to attract the best jobs for our citizens and trying to attract more sales tax to try to provide the services that are woefully necessary in our city so I totally agree with what
you're saying. I think we're trying to get a foot in the door and my hope is into the point, you know, my hope is that this can continue to change as people see and understand the math and understand incentives and understand, not just incentives but
everything that encompasses economic development, and can see what fruit it can bring to our city which, I mean, we need the money, you know, so that's my take on it, Mr Ramsey, did you have a question or comment.
I think it's a great way to get it funded in the beginning to get it started but I don't think this plan has any sustainability to it. As far as long term by just rolling those over, we really need to make sure this right and they're presented or present
they're not wrong, but presented like Councilman Davis said, I think this is not, when you look at this representative of what the funds are really going to be long term so I think we need to make sure this is where you can tell what that is. So, I think we got to open the
door, we've had a hard time cracking this door open for years. So I think this is a good way to crack the door. Let's put a wedge in it, and then let it be known and hey this isn't sustainable, right, we're going to have to continue to come up with plans to be sustainable
like Mayor said, you know, we're a third of the almost the lowest one, so it's like, you know, going to a baseball game and having a glove but without a bat. And so, but it's a step right we're getting the door cracked open, I think we have to figure out how to make this
happen. One thing I would point out and maybe count on you to discuss, you know, we've been having all of our property tax evaluations around Denton, you know, we spend a week, week with those guys, and our property tax valuations have gone through the roof so obviously
that's going to mean more income to the city.
And I know it's the cost to run a city's gone up just like a cost to run any business has gone up. But there's probably some additional funds that maybe we could talk about with just values going up in 24 months, you know what property value 24 months ago to what
they are today. That's a lot of revenue. If we can get it counted through our, but that's another subject.
If we can know what those funds are for you to budget. But, hopefully, we can get that figured out and but I think there could be dollars there long term that we could pay attention to that should be brought up and discussed what's happening
with all with the extra funds that are coming in through property.
Maybe those are some discussions that could be had. Obviously, your expenses in the city are going through the roof, and every turn just like everybody else, but just something to think about.
And I don't know how long our DCTA contract is I know that's a real sore subject, but I don't know what that contract looks like either long term.
Perpetual so far.
Questions or comments.
Just to just to pick up on when you left just as a, as a, just you to understand that appraisal component for those that are wondering, and this is just housing so it's a little off target but but kind of online with with appraisals and kind of funds
coming in. The latest didn't County Habitat for Humanity just turned over the keys to their 106 home last week. It appraised at $320,000. That's an overage that's about 1600 square feet.
So, it is.
Is it on the square. No.
I asked her specifically it went up basically from the 105th home to 106 round numbers a year, went up $100,000 and it's in the lower it's in Southeast at the lowest, the lock cost 80 K.
And that same lot anywhere else probably cost you 160 so I mean, they are being very responsible with my it just that those appraisals, I mean, business, everything.
It's just so that we track through the title company what our average closing is, you know, throughout by monthly basis, and it's grown considerably, the average closing amount now the number of closings have dropped over the last few months, considerably, but the average closing amount over the last 20 months.
It's substantial substantial I don't know if that can be sustained.
Long term, but for the short term, hopefully we are getting some additional funds for all of the needs.
Any other questions or comments.
Yes, Councilmember, I think, I think it would be helpful for this group to either, either today doesn't have to be today, or in communicating with city council to articulate what is why these funds are necessary like Joe said there's a, a lack of understanding
exactly how the funds could be used. There's kind of a little bit of a failure of imagination of how the city could make use of the funds and what benefit that brings the, like you said, it's a simple story in the world to say we invest in certain things and you're going to have higher tax revenues later on.
But it's it's difficult for some members of council I think to make that that lead that intuitively from. Yeah, sure that sounds good on paper. What does that mean for the city and why is that.
Why shouldn't we be putting that core scientific money into something else why shouldn't we be buying more fire trucks with it.
It's gonna of course make the pointer stop and make the point about the reason we can't rely on that money why you can't depend on that for buying the fire trucks and bands hours and that kind of stuff.
But in concrete example, maybe that's not a good term, but maybe hypotheticals, you know something about some illustrations might be helpful. If there are things that y'all have seen in other communities that you know or projects you've been involved in and you've seen in other communities.
This is how they spent their money and look at this wonderful thing. You take names off of it, you take brands off of it that makes some some hypotheticals that the council could really wrap their head around.
I think that failure of imagination is where we've where we've missed the vote before is just they're going to have folks in their ear that tell them these are corporate handouts this is money that goes to businesses that we don't necessarily need.
But now we've got a strategy. Now we've got these identified sectors. We've got targeted places we can spend the money. What do those kind of firms need? What do those kind of firms need to be in debt? What do we need to do? What do they need to grow those firms in debt?
And that explaining it for the council in that way might be helpful and this group might be a good source of some of those examples.
So we have some software, some models called Impact Data Source and so let me bounce back to this.
It's a public benefit. So we have a model that can do this kind of physical impact, right? So we can do things that would just show you direct and indirect tax revenues directly to the city on a catalyst project or to all the taxing entities.
And then I believe we have a model that could do some economic impact. So investment within the private sector kind of show you, hey, what would this project look like?
And then, of course, these other things, these would be like more of our double bottom lines, but we can certainly put some hypotheticals, some examples together to kind of show how if we were to invest in certain projects, what that would look like fiscally.
Councilman Davis, I think we have the number one example right here in the city that nobody's going back and looking at and going, we won and that's Western Boulevard.
I mean, you look at the city went out and built part of the road, just a piece. They ran a water line, got power out there, not the fully developed condition of any of it.
We did and it's an incentive on the first buildings that were built out there, you know, as a joke. And then we, it was our buildings in the beginning and we were able to prove rents and prove market.
And then you look at what the city originally invest in the water line and the road and the power.
Then if we measure that to the value of the tours that came back through the original tours, it wasn't on our part.
I think if we measure the return from when that started, I think it was probably 10 years ago to what the tax value is and the inventory guy.
I think we've done the perfect project out there right here under our nose and we've not celebrated it at all.
I mean, for the vision of the city, just erode late, but it's a wonderful success.
And we're not, I think for our EDC that long ago, our city council from that long ago, you know, I don't know exactly when that started, but it's a win.
And we're not and we need to celebrate those wins and go back and analyze that. You guys may have done that already, but it's been a win, correct?
Speaking to Winko, Winko decided to take on all of phase one improvements in our tax increment reinvestment zone, the West Park terms. So we've reimbursed them.
That's the only time we've used the utility fund we talked about here where you have 1 million for water and 1 million for wastewater.
We reimbursed them 1.8 million for that project and that was awarded in 2015.
We do have like a net revenue report that gives you the return on investment and that particular project's included.
We haven't looked at it for all of West Park. Yeah. I mean, if you look at it from Airport Road to 380 and what the incentives and what the spend, I think we've done a great job.
And I think that's the perfect example of what our city can do. And I mean, that's just an industrial.
I mean, there's been stuff done downtown that there's been. So we have a lot of projects right here that we could use and say, look, this filled up. This is great.
So I would start right here with projects in our city that have success and we've done three or four of those.
And so I'd be happy to visit with anybody that asks questions and from downtown projects to industrial and just help just have a conversation.
It's just lunch or coffee and how that goes through.
Yes, I have a question. So a couple of thoughts taking a page out of like an Austin page, but would there ever be a chance for this committee to request a hearing with the council members and say, maybe it's something you don't understand the implications or we'd like to share implications.
I don't know if that's something that they would ever entertain.
So one thought, I mean, and I think many of you know, like, I work, I'm working a lot on our new campus opening in Frisco.
And so I was part of the committee that helped move to Frisco and what the incentives were, you know, required and the engagement from the state and, you know, all of that.
I mean, I'm happy if there's ever a role the university can play in helping share these examples.
And then another question is, I guess how much this is just my misinformation, but how much is the city council not wanting not understanding, but maybe not wanting.
I mean, when I went to that 24 division, I saw a lot of folks saying, keep deaf and small. Right. I mean, if they're just direct opposition to growth, or is it just a lack of understanding because I think those are two different.
I think that you're going to get yes, 10 people are going to get 10 different answers, but I think that the double bottom ones are the most important to some city council members.
I think others are going to see the.
The benefit of the single bottom ones, and I'm just kind of using Wayne slide to break it down.
Some folks are going to be very motivated by they're going to understand intuitively understand, you know, more money in spend a little to get a little to get more.
They're going to understand shifting the tax base off of residents and on to more commercial.
Others are not going to be motivated by that at all. They're going to be more concerned about growing existing small businesses, maintaining existing small businesses.
Keep that in all that kind of stuff. We can have both like there's not you don't have to knock down downtown to build good industrial and good infrastructure for good logistics, all that kind of stuff.
You can do both. It's just a matter of helping them understand the mechanics of doing both.
The, again, there's seven of us. Yes, seven of us. You need seven different answers, and sometimes you get contradictory answers. Sometimes you get I want to keep getting exactly how it is.
OK, so we got to pay the firefighters to keep here, you know, and the growth happens and you can't stop the growth.
And how do you make the debt and culture apply to everybody who wants to be here? You want people to be here, but that means growth.
So I think a variety of examples, you know, kind of a diversified examples, a downtown example would be helpful.
You know, how do you how do you do something that enhances the historical and cultural viability and vitality of downtown?
There's an example for this fund there. Something something that helps them hit each of those different set of different places.
Did I answer both your question? And then I don't know what here. Is there any way for us to help better?
You asked the question, like, how can this board, you know, sit down with council members, maybe it's individual lunches, coffees, if there's a hearing, I don't know.
What's the best way to assist in moving this forward?
Well, one, moving forward. So this board has to make a decision to recommend this board to council or not.
Two, I think it would be helpful to build some personal connections, even just drop in an email to council, you know, with the board, the board considered this.
This is something we talked about. This is the expertise that I, as a member of the board, brought to the table and why I personally supported it.
I just want you to know I'm here for questions and let you know how this affects my industry or affects industries I work with, affects firms that I work with.
Knowing that they have that kind of resource because the council does, does reach out and make use of those kind of resources to help us understand.
I can't think of one of us that is in an industry quite like the ones that all we are in. So as lay people, it's really helpful to have that lifeline.
That phone friend, I guess.
The other thing, too, you mentioned a hearing. There may be a time, and I kind of need to defer to staff on this, but there may be a time where a joint meeting could be appropriate.
We're a big group already. Council is another seven. It's difficult to do, but we do joint meetings with, like we're going to have one with P&Z, DISD.
There may be a time where that's appropriate. I don't know. We've done a couple heavy lifts already with the investment, the strategy and those kind of things.
Maybe something like that could work out. I think right now the personal contact is probably the best. Just reaching out. Here's why I support it. Here's what there is that's good for Denton in it. I'd love to talk with you more about it.
And the timing of that would be after next Thursday?
Next Tuesday. I think that would be the key. Let's see how the work session goes on Tuesday. I would just make one other point to the earlier conversation. When we talk about the divergent views on council and the different philosophies, I think what you saw in the presentation is we kept tying back to the strategic plan.
The strategic plan took us on a lot of the things Council Member Davis said on the different priorities. It had unanimous support on council. Even as we went forward with the Incident and 380 policies, we're tying the strategic plan with the goals. That's why we want to tie everything to the strategic plan because we feel like that document navigated a lot of the conversations we're having to get those goals.
So the more we can tie it to that, the examples are great. You will kind of think through that. Obviously you need your help with those. But the more we can tie it to the strategic plan that has the support from the council and the community, it is going to be important.
And to piggyback off that, we'll keep using the term "incentive." I think sometimes the thought is, well, it's an incentive just to have a company come here, but development and companies may come here. What the incentive is, is we want to make sure we're getting the types of investment that the council, that the community wants.
And so that's why the incentive is key. If we don't have the incentive, then maybe we get the kind of development that it doesn't want because development, we're growing and development will happen. And the incentive helps pull in the direction that the community wants.
So that kind of ties into all that, especially on the double bottom line. It's like we can make that happen if we want to. I think it's important to say, you know, you can't stop growth.
This is the United States of America and people can buy property and come here. What economic development is doing is trying to attract the best, the best for what we have determined we want in our community.
And there are parameters as far as what we're looking at and who should be receiving that and who we want to attract. And so it's really just getting to pick versus just seeing what happens.
We have discussed also some training on the different types of incentives. What is a, what is a city saying here's money and then what pays for itself as it goes. If we could get something put together, because you know council members change, this board changes, and it takes a lot.
I'm in this business every day, and I still don't have a full understanding of every detail. I have a 10,000 foot model, but I think that would be helpful. Some quick guides to say these are pay along the way incentives done by performance.
These things are things given, you know, as a direct cash incentives, just some kind of quick guide that people can refer to so they understand the difference because if you're not in this every day, it's a hard thing to understand.
How that's working.
Well, at this point we do have the choice to make a recommendation in support of the staff's recommendation to take to council.
So at this time, do we have a motion.
Make the motion.
All right, it's been moved and seconded that we make a recommendation to city council regarding the economic development catalyst fund for incentives and adopting the recommendation of the staff has presented today.
All right, unless there's any other discussion we'll take a vote.
All those in favor please signify by saying aye.
All those opposed, please signify by saying nay.
Any extensions, and the motion carries. Thank you for the very good discussion.
And thank you Wayne for the great presentation. I think facts.
Numbers comparables are just what they are and I think are incredibly helpful to tell the story of where is versus where we would like to be.
It's a really easy way to get introduced.
I would not have made it to this meeting.
All right, we'll move on for items for consideration. See, and that's EDP 22 dash 048 staff reports.
And are you doing the respective activity report? Good morning Dan Rosenfield partnerships for the economic development. I just want to commend Wayne, Eric and Jason.
As we are out marketing and attracting new business, it's really important to have the tools like catalysts.
So I want to commend the hard work and especially Wayne, getting right down to it and putting forth a really great program.
In the past month, we've had 27 new leads of different companies looking at 18 active projects are currently moving through the pipeline.
And then in the past month, we've also had 15 investor and business engagement business in terms of our marketing efforts.
So we're doing a full redesign of the EDP website, which will help tell the EDP story and revamping all of our print and digital marketing cloud.
So hopefully as we're out meeting with businesses, as the cities meeting with businesses, we can have a really good positive image and consistent professional image that we're sharing.
We're also working with several different community organizations to help tell the economic development story.
Around the Metroplex brokerage and development community, so people know about Denton and we're helping to engage different developers, brokers and companies about what Denton has to offer.
And then in terms of workforce development, some of the things that we're doing, we've already met with the NCTC, TWU and UNT career centers in the past month, improving that relationship and identifying how we can pipeline from UNT, TWU and NCTC graduates to helping us stay local.
So working on several different initiatives with all three universities.
So, yeah, thanks.
Thank you. Any questions? Thank you very much.
Oh, one quick little brag.
Steve, Medical City Denton had their endovascular surgical suite open in the past two weeks.
Yeah, four million dollar investment, so I appreciate you.
That all goes visit?
Yeah.
Sign up for your test today.
I think I know what vascular means, I don't know what endo means, so.
Congratulations.
Yeah, thank you.
Moving to staff reports to 2022 EDP board member appointment process memo.
Lots of words for what comes next.
Yeah, so, so, as you guys know, this, this board consists of 12 members, three ex officio.
So we have the various makeup of the board.
So in June of twenty, twenty two, one position was vacated.
So that was Tina Albert over with Peterville.
And then Steve is, you know, he is turning out.
And then I believe also Jimmy Meja is not your correct with the Denton Hispanic Chamber of Commerce.
It's also going to be completing his third consecutive term.
So that leaves three positions that are going to be open.
So there needs to be a nominating committee.
So it's two city council members, one chamber member last year was the mayor.
That's Council member Vicki bird and chamber member Morgan Rivers for the chamber of serving as the nominating committee.
And then, so we have various members up for reappointment to, and those are highlighted in the back up as well.
This item is going to be going to Council August 16th, rather than the second, you can fit it on that agenda.
So it's the next agenda.
Okay. Well, thank you very much. That's headed our way.
Anything else before we adjourn this meeting? Oh, I did one thing.
So Dan was pretty enough to kind of give the platoons, but I also want to introduce who started the exact same day as I did there in the back is Jason Westmoreland.
So he's a new member of our staff. So he and I are going to kind of tied at the hip since we have the same start date here at the city of Denton.
So what is your position? I'm the new economic development analyst.
Great. Great. And where are you coming from?
I've been in Denton. Well, I've actually lived in Aubrey most of my life and I've had family in Denton since I've been a kid.
So I've been in Denton for, I guess, twenty five, twenty six years. So I graduated at UNT as well.
So where did you work out for? I worked at actually my first banking job was at North Star Bank, you know, just just like literally across the road.
And then I moved to Guarantee Bank and then that's where I came from here. Great.
We're glad to have you. I look forward to getting to know you. Thanks for your help.
Any other announcements or questions before we adjourn this meeting?
All right. Well, at this time, this meeting of the Economic Development Partnership Board, Wednesday, July 20th, 2022, special called meeting is hereby adjourned.
Thank you once again, everyone, for the discussion and caring about your community.