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 All right, we have a quorum, so we're going to go ahead and get started and I called to order the City of Denton's Economic Development Partnership Board meeting at Wednesday, September 14th, 2022.

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 We will dive right in for our items of court consideration with Section A, PDP 22-057, consider approval of the minutes of August 10th, 2022.

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 Those are sent out ahead of time via email in a packet with all of the other backup documentation for today's meeting.

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 At this time, the Chair would entertain a motion to approve said minutes as distributed.

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 Second. All right, it has been moved and seconded.

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 At this time, is there any discussion, any proposed edits for the August 10th meeting minutes?

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 Hearing none, I will call the vote. All those in favor, please signify by saying aye. Aye. Those opposed, please signify by saying nay.

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 And the motion carries unanimously. Moving on to Section B, PDP 22-061.

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 Receive a report, hold a discussion, and give staff direction regarding Economic Development Partnership and a renewal of the contract between the City of Denton and the Denton Chamber of Commerce.

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 And I believe, who is presenting on this one, Mr. Emerson?

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 Well, thank you, Jill, members of the partnership, Dan Rosenfield, Director of Strategic Partnerships for the Economic Development Partnership for the Chamber's Army of Economic Development.

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 I'm excited to tell you what we've done over the past year and what we're going to do.

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 So the mission of our partnership expands the city's tax base for the creation of jobs through three mechanisms that be targeted marketing of our industries, strategic partnerships, and stakeholder education.

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 Our work falls within six kind of buckets. Number one, we have market Denton's assets.

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 Two is we connect the public and private sectors. Three, we serve as a broker for new businesses seeking information and data.

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 Three, we navigate prospects, so companies interested in moving, expanding, or relocating to Denton.

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 We also convene industry players, so we bring together different industries leaders across the city. And finally, we support small business.

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 I'm just going to go one by one, explaining what we've done through each of these roles.

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 During Denton assets over the past year, we've attended six marketing events represented with the logos that you see. So we have really strong relationships with the regional chamber, the Fort Worth Chamber,

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 and a lot of the regional real estate organizations where we're spreading the word Denton to our strategic partners.

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 We've had three community presentations. We understand the value of educating people on economic development.

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 It's a lot more of what hits the news. And in order to grow economic development, we have to educate people.

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 And within that, we've reached 150 people, brokers, developers, community leaders, entrepreneurs, and other partners around Metroplex.

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 We've also initially built out marketing collateral. I think it's really important as we're telling the story of Denton that we have good professional imagery

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 and collateral to support our brokers and developers as they're the ones actually selling Denton.

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 So just initially, we've created trade show banners, one-pagers, and we're also finalizing a workforce guide to help educate new companies about different resources that they have access to.

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 In terms of digital marketing, we're partnering with the Golden Shovel Agency, which is really the industry leader in digital marketing for economic development organizations for complete website redesign.

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 And that's really exciting because that'll be the one-stop shop for any company interested in moving, expanding, or relocating to Denton.

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 They can go to this one site, and it's something that the city and the Chamber is working together on so that any company who needs resources and work will be able to go to that site.

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 Over the past year, though, we've had 34,000 website views and 20,000 people all trying to find Aaron Carter's face in there.

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 And 59% of visitors come from direct sources and brand recognition, so people know the partnership and they see us as a source of information and as a resource for grow.

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 And finally, we've committed through a contract with them over $70,000 over the next five years to get top-of-the-line digital and online marketing over the next five years.

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 So we're really trying to tell the story across the country to brokers, site selectors, prospective companies, and people interested in growing their business in Denton.

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 In terms of now getting prospects over the past year, we've had more than 250 leads.

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 We've submitted 54 proposals, so that's different land, buildings, to either the Governor's Office, DOS Regional Chamber, Fort Worth Chamber, or other site selectors.

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 And we've personally engaged 105 companies and brokers.

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 That has led to, in terms of results, over 1.2 million new square feet industrial leases, 256 new business personal property accounts.

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 We count that as basically new businesses, 56 new industrial leases, and we've engaged 100% of all major industrial brokers who are currently working in Denton.

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 We're sharing the city's vision for what kind of companies we want in Denton.

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 We're educating them on different resources and ideally connecting them with different vendors and resources within the city.

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 I think it's really important to show our work and how we fit into the development process of Denton.

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 So this is kind of how it works, not all the time, but some of the time.

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 So initially companies will reach out to the partnership for site selection, different real estate assistance, site visits.

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 We really try to serve as that front porch of Denton for companies initially moving here.

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 The second part is really where Wayne's team comes in, and that's the incentives, grants, development challenges, and managing the tools that we use to sell Denton.

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 So that would be our development districts, our turzes, and anything like that.

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 Number three would be really what Scott's team leads. That's the permitting and planning, so actually getting the development here.

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 And then once we get the CEO, or sorry, once the company gets the CEO, that's where we kind of take back over and we reach out to most of our new businesses,

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 provide them community orientations, connecting with different service providers,

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 ideally connecting with one of our universities or talent pipelines or other ways that they can partner with our colleges.

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 And together, that creates a really high quality experience where companies come to Denton, they relocate here,

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 and they have both full service experience with the city and the chamber.

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 We've also done a great job, I think, over the past year of being that public-private conduit.

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 We've built relationships with the career centers of UNT, TMU, and NCTC.

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 We've identified 15 public-private partnerships.

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 So that would be where we work and they say what other graduates are needed for internships, for graduate placement.

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 And we identify different companies that will place them.

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 We've also secured three Dent employers for the Texas Workforce Commission sector analysis,

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 and we really do service that go-to resource for the pulse of the business community in the city.

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 So Erin and I and Hank, we really get calls across the city for questions if people are needing what the pulse of the business community is,

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 and know the organization in the community is doing that.

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 And then we've done a couple of things as well. We're bringing introductions, training UNT, TMU, and NCTC leadership and businesses.

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 Our partners at the universities, Susan and UNT, has been an incredible resource and our go-to for companies who want to get engaged with UNT,

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 but really don't know how, and we're so glad to have a person like Susan to help.

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 We also really have a relationship with NCTC. I think it's really, really valuable that we have a technical college here.

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 We don't pay into them, but we can still leverage that relationship.

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 So we've identified four things over the past year that we've done to reconnect that relationship.

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 First off, we advocate for a half-million-dollar regional workforce grant that's going to connect Dent employers with graduates of NCTC.

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 We've also worked with three political partnerships with NCTC and local employers.

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 So we've worked with NCTC, and they're in the initial stages of developing a partnership with U.S. Aviation.

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 And we also looked at their advisor boards, and they're really underrepresented with Denton employers.

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 They have a lot of Gainesville Alliance folks, but now we're helping to fill their industry boards with Denton employers,

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 so we have an influence, let's say, over the future of workforce in Denton.

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 We also convened industry players. So over the past year, we've had three events where we really covered topics of economic development.

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 So earlier this year, we had a discussion about the future of real estate.

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 Just a few months ago, I know a lot of you were there, we had the future of work, and we had the presence of UNT,

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 TAU, Dr. Wilson of Denton ISD, and the Chancellor of NCTC talking about how the universities are preparing for the future of Denton's workforce.

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 And over those three events, we've had 300 people covering these critical topics.

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 And I think what's really unique about these events is they really have a region-wide impact.

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 So at these events, we're bringing prospective companies.

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 We're bringing people who may not come to Denton because they're brokers, developers, and don't really work in the city.

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 And we're educating them on why Denton is really important for their tenants.

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 A lot of people don't know, but the Chamber also supports and funds the Small Business Development Center.

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 So our funding partially goes to provide free coaching to small businesses.

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 So over the past year, we've served over 600 clients, generating $27 million of capital into the local economy.

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 And I think it's really important that as we discover what new businesses we need to bring, we have to have the pulse of the business community.

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 So over the past year, we've engaged eight different businesses, small, medium, large, and within the city's four strategic growth areas.

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 We are contractually obligated to raise $125,000, so that's within our scope of work.

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 These do not come from general Chamber membership, so when people just join the Chamber, that's not supporting economic development directly.

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 We have to organize that separately.

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 Ninety-seven companies and public sector entities invest in our partnerships, such as UNT, DW.

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 We have banks. As you can see, we have small businesses like Adams Exterminating Company.

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 And a lot of the investors are here in this room, so thank you for that.

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 Looking at the year ahead, our focus is to really help brand the city.

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 For many years, I don't think we've had a really positive professional image that we can portray to prospective companies, brokers, and developers.

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 So we're going to revamp our digital and video marketing assets.

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 We're refreshing our EDP website, creating a new company toolkit.

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 So new companies have all the resources they need to partner with universities, have their workforce resources, and get connected as possible with the community.

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 We want to organize an industrial roundtable, so I think we do a great job of engaging our small businesses.

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 Our companies west of 35 are a little bit disengaged with the rest of the city.

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 So we want to work with them to identify how we can get them more plugged in with universities and with the rest of the community.

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 And finally, complete a marketing collateral built out.

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 I'm not going to go through all of this. I thought I did a pretty good job throughout the rest of the slide, keeping my awards to a minimum.

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 But I think this really synthesizes our four main challenges that the EDP addresses.

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 We connect new businesses, we develop talent pipelines, we identify real estate, and we provide funding to a small business development center.

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 And we really identify that those are the critical challenges that the EDP faces in terms of economic development and how us as a team, the chamber and the city, work together to address those.

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 I think it's really important to emphasize we're a really good team, but together, the partnership is very successful and addresses some critical needs in economic development.

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 And that's it.

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 Thank you. Madam Chair, quickly, I want to -- I'm Erin Carter. I'm the president of the Denton Chamber.

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 And I quickly want to give Dan just a big round of applause, since we already did a round of applause.

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 Dan joined us in February and has done a fantastic job.

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 And also I want to identify Jason Adamson is with us today. He's a member of our board of directors with Clark Adamson and also is a member of our EDP board of advisors.

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 But also we have a great partnership with the city, since Wayne has joined, and Erica, Christina, and Jason in the back, we're very privileged, I would call it, to work so closely together.

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 And we're very thankful for our relationship with David and the entire city team. So we're better when we work together, and it's a great partnership.

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 So thank you, Wayne, for our continued budding relationship. And then, of course, David, thanks for continuing to support our team.

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 Kendall's not here today. She's in the back working on our annual award celebration, but we have a great team.

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 And Lee and Jill, we know that we appreciate your continued support. So, Dan, great job. You've done a great job since starting in February, and we look forward to seeing how you continue to grow in this position.

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 If we entertain any questions, if you have them.

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 So what are the measurables that you set out for the 70K for the marketing? Because that's always difficult, right?

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 So how do you tie those back? Or what kind are you keying in on to see if you get a return on investment?

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 Yeah. So we decided to partner with Golden Shovels because they do this kind of work across the country, so they know what the best economic development organizations are doing.

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 So that would be social media engagements, website visitors. And ideally, we are trying to increase the number of engagements that we have directly with prospective developers.

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 So ideally, if people are coming to the website and they're contacting us and that number next year is higher, then we know that we've done our job.

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 Okay. So will they give you a report or something to that? Did they give you like a regular report? Yeah, it was like an SEO, digital marketing analytics report. We're just building our relationship with them.

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 So it's a great opportunity. It's a new opportunity. So our website needed an extreme repack. So it's a large investment at the upstart, but we're clean sweeping it and starting fresh again.

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 Okay. And then two other, not really questions, but just seeking your insight as you kind of hold the community will be, and I think it's in November-ish. Don't owe me to that.

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 We'll be talking about updating our ordinances when it comes to our unhoused population. And so I would solicit your input to that early and often, probably starting tomorrow.

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 Right. And so you have conversations with David and Sarah to kind of, Hey, here's what we're hearing from our community. Here's what we'd like to see in that. So that it makes it into the work session versus after the fact.

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 Right. So kind of that insight into what you're seeing would be helpful. We'll open a new shelter into this year. So we're trying to pair up new processes with an investment of $14 million to make sure the business community feels like we're taking the right step.

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 So anything you have around that would be great. And then just that, I think it would be neat to, if you've not reached out to the new cold storage, it's getting pretty close to opening.

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 And so I think that would be interesting to make sure they're plugged in. Speaking of things to the West.

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 I've met with a cold storage already invested in our community and great. Great. Thank you for that. Great questions and input. And I think maybe we can push out the current ordinance to this group and maybe even to the chamber membership, just so that everyone has an opportunity to give feedback.

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 So let's help me make sure that we don't let that drop. Others.

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 I just want to say on behalf of this board. Thank you for listening. A big component of what you just presented included education, networking, marketing, economic development.

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 We've spent some time here identifying that as a problem in trying to get our ball to the goal line. As far as people understanding what is economic development, you say that and I think the lay person that's not in these conversations has different ideas of what it means.

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 And so I appreciate mixing on social media that you've been to Kwan as you're reaching out to these groups and educating our citizens, who will be next city council members and others making the decisions as far as economic development.

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 So I want to say, first of all, thank you for listening to us and you've already taken action. I also love that you've been able to this is just so much more information and in years past, we've received in these meetings, as far as what are the identified concerns.

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 How do we get those remedied and what that would look like. I think the way that you've given us a lot of information but hold it down for us is, you can tell a lot of work went into that, and I really appreciate it. And I also want to say on behalf of the board how much we appreciate way Monica everyone at the city, the fact that we can use the resources and the networking capability of the business community, as well as the resources and know how with the city.

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 To accomplish these goals, and that we're really creating unique avenues to try to have the best business community that we can here and it certainly is appreciated the way that everyone comes forward with an open hand.

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 Being a partner together. Yes. Yeah, I was just curious, you know, given what you guys are seeing or hearing on the street and from various resources about our economy, interest rates are going out the roof right now I mean do you see that impacting calls from from, you know, future moves or future reloads or just, you know, we're kind of in the middle of this right now so what are you guys hearing and seeing from your perspective.

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 Yeah. And so we really focus more on like industrial like our main focus is more industrial using.

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 I think for service, understanding that Denton really follows the trends of the Dow created also with Metroplex.

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 In the past few months it definitely has slowed down. But in terms of demand for companies like to move to North Texas and Denton. It hasn't slowed down dramatically.

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 I will just add to that that as economic developers, really when we're in our best it's worth. We're in that counter cyclical, you know, cycles so that's really where we can step up, and that's when we do our best work and times like this but to what Dan saying is that the DFW market has historically

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 outperformed the nation and you know the tougher economic times so I think, relatively speaking, we're still doing well but you know, there's still macro economic factors playing into it but we're still lots of projects.

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 Yeah, I think I think we just haven't seen the tailwind. Yeah, right. You guys are all the leads you're getting or, you know, probably stuff you've been working on the last 30 days you're going to see a tailwind on that. So as a city we're going to have to figure out creative ways because, you know, you go build a $12 million project interest rates matter and that's a small project you know you go build a $40 million project out there interest rates really matter.

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 And all the new calls we're getting in are trailing 30 calls right those meetings were had 3045 days ago, if they're if you're getting a call by now. So, starting now, I think we're going to probably have another 75 point bump in the next two weeks.

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 Those calls are going to change. So we better get ahead of that curve and say as a city, what are we going to do things we have to offer, you know, speed the market right because that saves money. So we got to get creative, as we talk about a partnership with the chamber

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 and the city, and we got to get creative to be more competitive and it's not always money, especially when interest rates rise time becomes as valuable as because that is dollars so just something to think about Tony thanks for bringing that up I think we better start

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 rolling it real quick. Do you think Lee that we have that the value is going to become more important to you and I guess our just cost of land in the area versus Dallas or Fort Worth is that going to give us some much of a competitive edge in the future.

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 Yeah, I think well you know land industrial land and business now come up to the market for what what most other places are maybe not directly Alliance or directly at the FW. But if you go to South Metroplex for a lot of industrial being built those land values

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 kind of level out so we as a city we got to look at utilities, we got to look at speed to market, you know, that's going to be things that brings value to those users, because we don't have the big tax funds to throw money at you.

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 So there is other ways, it's just that takes a lot of movement, you know that that needle doesn't move by one or two phone calls.

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 So has to move. But, but I think what you know land values are going to hold where they need to hold. I don't think construction costs are going to come back. I think they're going to come a little bit just the offset of what interest rates are doing.

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 And I think that's all the movement we're going to see but where rents have been, you know industrial 450 475 to six bucks, you're probably going to see those rents pressing, you know 550 to 850.

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 And I think that's something that we need to look at. And I think that's what we need to look at. And I think that's what we need to look at. And I think that's what we need to look at.

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 And with bankers and with people that are on the ground doing this job every day so we don't necessarily have to be the expert in commercial leasing we can go to someone who is and then have real conversations with people who are interested in debt and that makes us the best fit to do the jobs that we're doing.

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 So, thank you for your partnership and thank you Lee for your partnership as well. Okay, you guys talk a little bit about. There are a lot of changes to the work plan. I've got two questions first of all, how what was that process to for the editing and second, is this work plan, a part of the contract that gets voted on at Council, it seems like that should be something that, as we've come talked about should be able to be a little more flexible as needs come and go.

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 Can you guys talk a little bit about that document for us?

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 Yeah, so, and we have it pulled up here and everyone should have that as an attachment. So the work plan is an attachment to the contract. And if you read in the contract there, it says that we will be meeting monthly to review the progress of the work plan and then we're even going to be meeting quarterly on those

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 those core leads couldn't evolve, you Jill city management if we feel it's necessary to come in and there's a provision within the contract that says that anytime we can change the contents of the work plan with the approval of myself and Aaron signature.

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 So, there's, it's definitely meant to be a working, living, evolving document. And to that, to that point is that the way that we got to its current iteration is Dan and I started, I'd say, I guess, probably a month after I got here, started looking at work plan, started really looking at what is it that we're asking of the chamber to do in this partnership.

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 And making sure that we're setting Dan and Kendall and the rest of the chamber up for success right because we don't want to put something in the work plan that's unachievable.

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 We want to have high expectations but we also want to set our partnership up for success and that's really kind of how we went there and basically I think Dan took a look at, at the work plan.

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 And I'll let him speak to that but you know, made some changes he said that he said and then I looked at the work plan saw all the things that I really thought we needed in the partnership and made some changes that I think needed to be there and that's essentially kind of how we got to that point.

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 I think the things were specificity and added clear deliverables for so long it was just very vague. And we knew that we wanted the city to manage expectations and we wanted our expectations to manage as well.

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 So it's very clear in the contract, what specific products deliverables, and the engagement level that we're going to have. So you both feel good about the current version that we're voting on today whether we recommend it to counsel, and I think you'll see in there the one piece of flexible language that I think we still need to work on is the appropriate metrics of how we measure like some of this is pretty black and white like, did we do this.

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 Or no. And then there's other pieces that that we've got to kind of really hone in on is metrics and metrics that that matter and not just metrics for metrics sake so that's, that's one piece I think that's going to be our greatest challenge as we kind of move through this two year contract

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 that over hopefully over this first year, we can really identify what what we want to measure, so that we can look a year from now and say hey we we were successful or, hey, these are the areas we need to improve on.

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 That's hard, you got, you know, interest rates with all kinds of things that affect economic development and what we're able to do so should be interesting. I'm sorry, Mr.

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 Yeah, I was gonna add that when Jill and Marty and when we all worked on that originally to get that contract done.

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 There was some intentionally left, where it could be refined in the future so I would just keep that in consideration as your.

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 I wouldn't lock everything down to where this is exact right because, as Jill said is market conditions changes Tony pointed out you know interest rates change your plans going to evolve so I would highly highly recommend as we negotiated that originally,

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 leave yourself some wiggle room, a measurables need to be there because these guys have to be accountable for that so get enough measurables in there to say where everybody can say yes, we met these metrics but leave yourself some room that with those signatures,

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 there was a reason for that, you know the chamber in the city signatures that there could be some movement in that so as you're working through that, maybe not this one but in the future, leave some room because we don't know what's 1224 months down.

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 So one thing we can do to address that is setting benchmarks so we can set our own benchmarks but then we can also benchmarks, ourself with data within the broader market so we can see how we're doing relative to other peer cities other peer groups other states

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 don't lock yourself in sure and that's leave yourself some room to move with the market. That's all. Thank you. Are there any other questions or comments before we entertain a motion to approve this contract or recommend this contract to city council

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 real quickly and I realized I'm back a couple points but we talked about time to market.

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 In the private sector, we have staff that's committed to reducing those lags as much as we can. We know they still happen so when they happen, some of y'all have direct experience with our planning department and the work they do to get over those hurdles but

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 anytime that stuff comes up let us know because like you said we're going to start feeling that pinch more and if we want to keep moving forward we've got to do even better than we already do it at shortening those timelines.

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 So anytime you hear about it, we want to hear about it. I know our planning department wants to hear about it because they can fix the problems.

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 Yes, I just want to comment on Dan being an amazing partner and I feel like you moved in, hit the ground running and you do such a good job and follow up all of that stuff is super important. I do have a question and this is, Jill you always keep me in balance and say in the history and the why we are there.

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 I mean, the model is unique right in terms of economic development. I mean when Erin had to explain it to me six times, I just wonder, is there a better way?

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 Just throwing it out there because if a company is coming to Denton and is interested in Denton and we have the city representative, here's the chamber representative.

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 I don't know, are the experts like is there an organizational model in the future that might be a little more efficient?

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 Our next presentation I will touch upon what some other cities are doing in the state of Texas, but I think based on our current structure, I think this model is the best that we can do and I take that back.

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 The structure is there, we can, I think our partnership can be better and we can refine on that model, but just based on our current, you know, the way that we've done funded economic development, this is kind of how it is, but I will touch on at least one other model out there in probably our next presentation.

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 You want to take it? We're deep in this for the last five years. There's a reason. Yes, there is a reason and we are, when we originally did this, we asked the same question, right?

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 Does the city need it? I'm just going to throw it. Does the city really need it and the chamber really need it? And we've filtered through this in a, I can't tell you how many hours of meetings to go through this.

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 The answer, the real answer is, is that there's certain parameters that the city has to, when they're marketing and doing things, that cities can and can't do.

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 You know, they, how, you know, taking people to dinner or whatever parameters that those need to be and there's certain things that the chamber has parameters to do that are different.

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 And there's certain times people won't come to the city because of, they may not want to disclose who they are or what they are doing at where a chamber, you know, the public records requests and those kinds of things, as people are keeping their businesses confidential.

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 So it's really, really important that we keep some kind of dual role there because some people just want to deal with the city. Some people want to go see what the chamber has to offer and bring in all the other.

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 So we filter that. I'm not saying there's not a better way, but to get to this point, we have, we spent a lot of time over the last four years, five years filtering through that.

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 And we need to always ask the question, is there a better way? So thank you for asking that. But there's more to it. If you ever want to have lunch or something, Jill, I'll happily go and kind of fill you in on the reasons for that.

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 And, you know, the other, another point is, I don't think anyone would argue with me that we have not maybe been at the forefront or the cutting edge of economic development.

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 And so having a partnership that is willing to commit to raising private funds just for economic development, as well as city funds going towards economic development with the chamber, it really shows that.

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 And I think in the years of meetings we've had regarding this partnership is the bottom line is we just want what's best for Denton, no matter who's doing it. And if it's that, if that's just the city doing ED or just the chamber or however it works.

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 I think we all came to the table saying we just want what's what is the best we can do for Denton and considering our circumstances, our current funding mechanisms and missing mechanisms with what everyone's able to bring to the table today.

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 This was a really great opportunity that we all decided city leadership and chamber leadership came together and said, let's make this the best we can right now, 10 years from now, it may not look like this 20 years from now, it may not look like this.

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 We may have a different view of economic development here in Denton, different resources. You never know, but I think this maybe is not the way to say it, but I think we're doing the best with what we've got.

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 And so that's why we're here. Yeah, so I hope I'm not speaking out of turn anyone else can pitch in and tell me I'm wrong. I've been doing this for 30 years from now.

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 And this is not a slide on anybody in this room, or it's just a comment. You know, 90% of our competition has a tremendous amount of resources, whether it's sales tax or whatever, that they fund their economic development. We don't have that.

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 We've, we've tried to get it before. It's just, it's just, it's not a reality here at this point, maybe in the future it will be. But as long as we're not in that position, then you really have to look at it from a different perspective.

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 Our partnership has worked very well given, you know what we have to work with and I commend you guys for continuing to make it work for us. And a partnership like this Richardson for being San Marcos Austin they all have these public partnerships.

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 And I think again it is a great question and great discussion, because again I wasn't in those meetings but the thing I picked up on that Lee touched on is absolutely, man, that there's no truer statement than I am here from the government I'm here to help.

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 Right. I mean it's just a statement I mean the rules, you know, it is brutal. And so that that ability to adjust is fantastic, you know, because otherwise you know you're waiting to get on an agenda and all kinds of can't be, you know, operation clown it's

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 going to be, you know, McDonald's on the street and, you know, emails back, it's just, so it is it is quite the event, just because there's just a different world right private sector and government and how they're used to doing things and makes everybody

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 nervous when we get my rules.

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 Any other discussion before the chair entertains a motion to recommend approval of the contract as presented.

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 All right, I will now entertain said motion.

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 Motion.

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 All right, it's been moved and seconded. All those in favor please signify by saying aye. All those opposed please signify by standing. I'm kidding.

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 All right, the motion carries unanimously we will now move on to section C and I do appreciate all of the conversation that's why we're here to have these conversations.

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 CDP 22 dash 059 receiver important hold the discussion regarding economic development financing tools and statutes I'm very excited about this portion. Take it away. Okay. So this was requested by Lee I think in our last meeting has been requested by Jill, you know, outside the meeting I'm sure it's been requested by various other folks.

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 I'm doing my best here to talk to you about some incentive tools. And this really is meant to be a discussion. So there's, this is not all the tools that we have in our toolkit but these are some ones that I thought I selected because we've either we've used them.

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 Right now or other cities use them or they're just more relevant, or I can see them being relevant in the future. So please, at any point, interrupt me, ask questions. That's what this is all about.

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 Alright, so I think it's best to kind of start with the type A type B corporations. This is how economic development is largely funded in the state of Texas is the state has given local municipalities broad authority to kind of kind of do this, and they use type A and type B corporations.

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 These are funded by sales tax usually it's, you know, half cent sales tax that would go to these corporations.

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 So the first type is type A. So these, the revenue can fund manufacturing and industrial facilities, and really the key component that is what they call primary jobs, jobs that are in industries that that go outside of the region so really like a restaurant worker for instance they're

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 really only servicing things within the region but if you're thinking like a Peterbilt right, whose product is going outside the region that would be a pretty good example of something that type A could manufacture.

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 Then you have research and development facilities which don't necessarily have to have primary jobs, corporate headquarters and other primary job projects.

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 Then you have type B. So type B can fund everything that type A can but it can also fund what's more considered like community development projects. And in fact, type A is usually called an economic development corporation, whereas a type B is referred to as a community

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 development corporation. And so this can be done for entertainment facilities, parks, open space, and affordable housing. So good example of you know type B would be your sports stadiums that we hear about you know this race for like Cowboy Stadium, Stadium in Arlington, all these can be funded with type B.

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 The other major difference between a type B and a type A is that a type B requires a public hearing for all incentive agreements and to pursue a project, and the public usually has 60 days to object to going into an agreement.

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 So this goes back to when we talk about speed to market. Most, I would say most corporations if you look in the smaller towns are probably CDCs, but as you get into the more competitive cities or you're usually going to see the type A because the speed to market is going to be very important in that regard.

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 Yes. Before we move on with each type. Can you tell us where we are here in Denton, just in case someone doesn't know and then what it would, what would need to happen in order for any of these incentive mechanisms to be used here in Denton. Is that all right?

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 Sure, I'll do my best. So we are not a type A or B corporation, we do not do this and what you see usually is that the reason why a city would not be a type A or B corporation is because they've decided to dedicate their sales tax on their use.

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 And most of the time that is to a transit authority, so which is what we have done here in Denton is to the DCTA. Other cities that are not type A or B corporations, city of Dallas, city of Fort Worth, Irving, Richardson, Austin, Houston, you know, just your typical cities that have decided to invest their sales tax dollars into transit.

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 And then we're not really a type, but we have various economic development tools that we're allowed to use, which I can, I can move on after that. But is there any other, but this is not one of our tools as well. This is not. Yes, I'm sorry.

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 And it would take a vote of the citizens, correct? Correct. And are we currently maxed out with the transportation contribution? So that is something that would have to end in order for Denton to use any sales tax for type A or type B. Is that correct?

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 Just want to make sure everyone is on the same page as far as where we are. I don't know what our sales tax dollars are being used for. I don't know if it's maxed out in the transit. Is it okay?

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 We're totally maxed out on everything we have available in this space is going towards transit right now. Okay. And it would be a, leave aside, it'd be a vote to change it. And I don't know that there's support for that. Regardless of what, how many people are riding the train and how many people ride the bus and all that kind of stuff, I don't think that there's support for not being a part of DCTA with that funding right now that might change in the future.

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 But, I mean, from the very beginning of when we made that choice, it was difficult to convey to your average citizen how economic development dollars are spent because we're not building a cowboy stadium. There's not one big thing that we can say vote for this versus that. It's vote for economic development and the many, many rewards that we'll bring in the future or vote for mass transit, which is good for other reasons. So probably not likely that we're going to have that.

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 We're going to shift that in time soon. Follow me for more political.

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 I think it's helpful as we go through these to say, what do we, you know, for those that are maybe newer to Denton, where are we?

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 Sure. All right. So the main tool that we have to our disposal is Chapter 380. So Chapter 380 is pretty broad discretion of how we can use economic development. It's a very short, you know, statute that's in there. And so it's pretty vague and it gives us a lot of authority.

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 So here's some key elements that we could that we can use Chapter 380 with is we could use that for loans or grant of city funds projects.

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 We can give property owners, they can get a reimbursement on their sales and use tax, their ad valorem property tax, their hotel and occupancy tax. We can use it for cash and expansion and development of job based grants.

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 And this is basically coming to city council. We have the proposed catalyst fund on September 27th. And so this is kind of important because we have cash. We've dedicated cash to set aside that we could use for cash for job based grants and possibly using it for revolving loan fund.

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 So prior all of our or most of our Chapter 380 grants have been strictly reimbursement, right? So the project has to create those tax dollars and then those get reimbursed back.

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 Whereas with the proposed catalyst funds, we have a cash fund sitting there that we could immediately inject a cash or investment into that project to get it off the ground.

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 Just one comment. If I was presenting this to somebody other than people who understand, I would probably not lead with loan or grant city funds because that's not what we normally do in the city.

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 Matter of fact, I don't know if hardly any times we've done that. Like you mentioned in your display there is that most of ours are reimbursions on our 380 agreements. So it's based on success, right?

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 I think that is one of the biggest misconceptions of 380 agreements within our city today because the first thing people see is loan or grant of city funds, right?

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 And that is can be done within a 380 agreement, right? But most of everyone that I've known of that's been done in the city were reimbursements.

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 So maybe if we're ever given this to the, you know, and there is there's always I could be could be wrong here and Scott, you can correct me on, but even any kind of loan or grant does have has to have some sort of performance metrics to it.

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 It does. It does. This is not what we've normally been able to get approved through this council or and then a recommendation to our city council.

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 But I think that again, when people see in our city and they go, man, the city's giving out loans and giving out these grants, our city just doesn't do that a lot.

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 Correct. If ever it's all based on the developer putting the cash up, put that infrastructure in or whatever, then it's reimbursed through the tax.

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 And that's the number one misconception of what people when they come talk to me or call me about about that.

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 So maybe if we're given this presentation outside of this group, we may say this is how our city in the past has done it. But these are options are available.

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 Yes. And any and I just will emphasize that even loans and grants are performance based as well.

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 So it's perception. And it's perception of people you in it every day. Right. You understand the details. So it's a little bit of mindset. I hear what you're saying.

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 And you're right by the state law and the statute. Every bit of that is right. Any other questions or comments?

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 You said you want to interact. No, no, no. That's right. It's good. All right. Tax abatement. So this is this is a little different in the sense that a tax abatement would allows instead of the reimbursement of the taxes is in essence, this this negates the tax from ever getting collected in the first place.

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 So this can only be used for new and expanded businesses. So we can't have a business that's been existing or a property that's been existing and say, oh, hey, can I go ahead and get my tax abated?

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 So it's got to be for new new projects or expansions of projects. There's always a minimum capital investment required to get that done. And then it's limited to a term of 10 years. So we cannot do a tax abatement on a project for 20 years.

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 I would say that tax abatements are probably best for, you know, it says minimum capital investment, but really what it works best for is large, large capital investments is when you'd want to use the tax abatement just because, you know, we're kind of limited.

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 If we were to go into like a cash grant situation or even the reimbursement on the 380, it's probably best for the larger investments. Yes.

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 Next question. So is that, pardon my ignorance, I don't know, is a tear down rebuild, is that new? Or would that be considered a new investment? Yeah, that would be considered new investment. It should say like, you know, something like a building on the square here, right? The property owner comes to us and says, you know, all my taxes are just keep going up and can I just get an abatement? And they're not putting in any new investment.

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 But yeah, someone wants to come in, they want to tear a building down and put in a new investment, then yes, that would qualify as an investment. If it's existing, it would be based on the incremental above the base. So like Tetra Pak, for example, they had a base value when they got an expansion and then you give an abatement for that increase.

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 That's the base. Is that, what is that base? Is that value? At what point in time is that set? It's set when the project is approved and it's set in the contract, the base year.

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 So if you have an existing building, whatever the tax base is on that building is set, then the addition is what the abatement is on. So whatever the added value of just the addition. And another thing to point out that I think again is how people see this, right?

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 So as a developer, I come to the city and say I want a tax abatement on the project, right? I'm going to put up a 300,000 square foot building and we get a tax abatement. What on a triple net lease on a tax abatement, so all those things, taxes, insurances, that stuff is charged back to the tenant, right?

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 So that the developer doesn't necessarily get those savings. Those savings pass through as triple net charges to the actual tenant. So again, when we're presenting these things, that gets in a lot of detail.

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 But when somebody that doesn't know anything about tax abatements, they go, oh, that developer's not paying those taxes on that building. Well, the developer really didn't pay on the tenants, pay those through triple nets.

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 So these savings are actually an incentive to get tenants because it brings down their annual cost on their triple nets. So it's just something that again, when these guys have to answer the question, you gave those developers a tax abatement on that building.

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 Yes, you did. But really who's getting the benefit of that is the tenant, the business that goes in the city. So I think diving in those details of one step deeper saying, yeah, the developer's getting it so it helps him get tenants.

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 But the real person that benefits is the actual business that goes in as long as it's a triple net lease, which all those industrial buildings are. So it's putting one more step of spin to passing down where those savings are going.

271
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 Yeah, excellent point. Do these pass very much? Yeah.

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 Well, we got a tax abatement on those first buildings that were built on Western Boulevard. We got city and county because they were the first ones we were trying to get that thing kicked off and it worked.

273
00:51:16,000 --> 00:51:26,000
 And again, I mentioned that before. We need to celebrate those things because you look at what's out there now, you know, the first buildings to get something started to prove rent rates.

274
00:51:26,000 --> 00:51:30,000
 It worked, you know, so I don't think we celebrate those things.

275
00:51:30,000 --> 00:51:35,000
 And it makes us more competitive with competitors like Alliance.

276
00:51:35,000 --> 00:51:54,000
 And you mentioned the county. That's a good point is the county's general position and it's like this in other counties in the state is that county typically will not lead on these types of things is they want to see that the city is the one kind of leading being the partner.

277
00:51:54,000 --> 00:52:07,000
 So on the abatement is if a property owner were to come or developer were to come to the county say, hey, can I get an abatement on this? And this actually happened recently with a company that wanted to come.

278
00:52:07,000 --> 00:52:20,000
 They came to us and asked and said, hey, we want to be in Denton. And then they were trying to play us against the county and the county said, no, you know, we only we're not trying to compete against our city partners.

279
00:52:20,000 --> 00:52:24,000
 So that's that's a good point about having county participation in there.

280
00:52:24,000 --> 00:52:36,000
 And I think over the last, you know, three, four years, that partnership between the city and the county or working or maybe five or six years has really grown compared to what it used to be.

281
00:52:36,000 --> 00:52:38,000
 That's something we should really be proud of.

282
00:52:38,000 --> 00:52:42,000
 The county didn't have staff people dedicated to economic development previously.

283
00:52:42,000 --> 00:52:51,000
 And they do now they have five to six years. Correct. Big difference. Okay. Public improvement districts.

284
00:52:51,000 --> 00:52:58,000
 You want to you want to get because Erica has been vigorously updating our PID policy.

285
00:52:58,000 --> 00:53:03,000
 So I'm going to turn it over to here and she can phone a friend.

286
00:53:03,000 --> 00:53:09,000
 Erica Sullivan, Economic Development Program Administrator, and I'll be doing the presentation on public improvement districts.

287
00:53:09,000 --> 00:53:23,000
 We'll begin with PIDs. So PIDs are basically most of our development districts allow for an economic development tool in a defined area for infrastructure improvements, sometimes services as well.

288
00:53:23,000 --> 00:53:38,000
 In the case of the PID, the allowed uses are for all sorts of improvements, as well as mass transportation, affordable housing, district administration of the PID itself and supplemental services.

289
00:53:38,000 --> 00:53:43,000
 Some of those supplemental services might be solid waste collection, public safety in a defined area.

290
00:53:43,000 --> 00:53:50,000
 And it requires a petition to be submitted by the governing body and adoption of the service and assessment plan and assessments are typically paid annually.

291
00:53:50,000 --> 00:54:03,000
 They can also be paid in aggregate by property owners and the government body has the discretion to create the PID and levy the assessments and the city can adopt its own criteria and terms for PIDs beyond what is in the statute.

292
00:54:03,000 --> 00:54:09,000
 Our last updated policy was 2018, but we're also working on an economic development manual.

293
00:54:09,000 --> 00:54:17,000
 And so we have a draft policy that will be coming forward in the future. And this is governed by Chapter 372 of the local government code.

294
00:54:17,000 --> 00:54:26,000
 We have one PID in the city of Denton. It's Razor Ranch. It's on the south side of Razor Ranch town center in improvement area one.

295
00:54:26,000 --> 00:54:39,000
 The next development district. So when you think about PIDs, the way I like to describe them, these are sort of like HOAs for developments.

296
00:54:39,000 --> 00:54:45,000
 And one, there's really two types of PIDs. There's a capital improvement PID.

297
00:54:45,000 --> 00:55:00,000
 And this would be for improvements that are above standard public improvements. And then there's also what we call a service supplemental services PID.

298
00:55:00,000 --> 00:55:05,000
 And this is what you would see if you go to downtown Dallas, right? They have downtown Dallas.

299
00:55:05,000 --> 00:55:17,000
 If you go to Sundance Square and Fort Worth is that these are areas that require enhanced services, whether that's additional cleaning, if that's additional police presence.

300
00:55:17,000 --> 00:55:30,000
 These are things that developers or property owners, if they're saying, hey, we need enhanced services, whether that's actual infrastructure improvements or if that's services from the city.

301
00:55:30,000 --> 00:55:38,000
 This is a way that we can fund that. And that's and this is sort of a voluntary additional assessment or tax that they can enter into.

302
00:55:38,000 --> 00:55:46,000
 So that's I want to kind of make that point. So it's an additional tax on top of what the city and county is getting an additional assessment.

303
00:55:46,000 --> 00:55:52,000
 And it requires there's two different types, but I'll just go ahead and be conservative.

304
00:55:52,000 --> 00:56:02,000
 But I think it only requires 51 percent of property owners to pass that. So it would require an election and 51 percent of the property owners.

305
00:56:02,000 --> 00:56:11,000
 And then there's I think there's something like or 60 percent of the total property value of the owner.

306
00:56:11,000 --> 00:56:22,000
 So like if there's two properties and one's worth 100 million, one's worth a million, that one hundred million dollar property will sort of overrule the smaller properties.

307
00:56:22,000 --> 00:56:31,000
 And most of the time you see these, it's a one property owner. So, for example, over 300 acres, that property owner and then the city administers the PID.

308
00:56:31,000 --> 00:56:35,000
 That's the difference between the mud and the PID. The PID, the city would administer the refunds back.

309
00:56:35,000 --> 00:56:45,000
 But again, the developer still has to spend those dollars up front for the roads, water, and then it's paid back over time through the additional tax that's on just that piece of property.

310
00:56:45,000 --> 00:56:49,000
 And the improvements are done to our specs. That's right. We have a little bit more control.

311
00:56:49,000 --> 00:56:58,000
 And it's a demonstrable public benefit. So you have to demonstrate that you're getting a public benefit above and beyond in our policies.

312
00:56:58,000 --> 00:57:06,000
 What would that be above and beyond? It's what we would normally do, because you have to think of some of the disadvantages.

313
00:57:06,000 --> 00:57:18,000
 So if this community is paying an additional tax, when you go for a bond election, what's the likelihood that they may consider that and they may be less likely to go ahead and vote for that.

314
00:57:18,000 --> 00:57:26,000
 So some of these things, like he was talking about, when we have some of these different districts, we have to invite our different partners in and our different departments in.

315
00:57:26,000 --> 00:57:32,000
 So do we need more fire? Do we need another library? Does a school need to build out there? Those type of things.

316
00:57:32,000 --> 00:57:36,000
 And so public benefits above and beyond what's required.

317
00:57:36,000 --> 00:57:45,000
 One good example is like the bearing of power lines. I've seen in PIDs, you know, you'll go into an area and you're like, wow, it's really beautiful here.

318
00:57:45,000 --> 00:57:58,000
 What is it? It's like because it could be because they have a PID because they've used the PID to bury those power lines. So that's above, you know, nonstandard improvement, right?

319
00:57:58,000 --> 00:58:02,000
 That was the word I was looking for earlier.

320
00:58:02,000 --> 00:58:09,000
 Moving on to our next district, it's our tax increment reinvestment zones. And this is governed under Chapter 311 of the tax code.

321
00:58:09,000 --> 00:58:21,000
 Basically, what this does is it dedicates future tax revenue, the incremental tax revenue or a portion thereof in a defined area to projects to support that defined area in that reinvestment zone.

322
00:58:21,000 --> 00:58:27,000
 And it can be initiated by petition or directly by a local government. Ours have been initiated directly. We have two TURs here.

323
00:58:27,000 --> 00:58:33,000
 They capture portions of sales or property tax. Our TURs capture real property tax.

324
00:58:33,000 --> 00:58:47,000
 And they're used to fund development or large infrastructure projects used for maintenance and smaller projects. These can also be used for some of the same things as PIDs for maintenance for salt waste collection in a defined area, for example.

325
00:58:47,000 --> 00:59:01,000
 TURs have their own governing body. We have two TURs boards. This board serves as the West Park TURs board with the addition of the county representative since the county participates and our developer representative that we have a reimbursement grant with.

326
00:59:01,000 --> 00:59:10,000
 And then it requires adoption of project and finance plans and they must be used in accordance with the chapter of the tax code 311 and our adopted project plan.

327
00:59:10,000 --> 00:59:18,000
 And then the city can adopt its own criteria for creating TURs, which we have a draft policy in place.

328
00:59:18,000 --> 00:59:22,000
 We will be bringing that also forward to you all in the near future.

329
00:59:22,000 --> 00:59:37,000
 Like I said, we have two. We have our downtown TURs in the downtown core and then we have our West Park TURs in our industrial area and the city participates in our downtown core and both the city and county participate in our West Park TURs at a rate of 40%.

330
00:59:37,000 --> 00:59:54,000
 And then when you're talking about tax increment financing, it's easier if you look at a visual representation. So you have the base year set up and then from that, as the valuation increases over time, that increment goes into your tax increment fund on an annual basis to then support projects in the zone.

331
00:59:54,000 --> 01:00:06,000
 So one of the things that you can sell with tax increment reinvestment zones is that if council changes, if staff changes over time, you still have that fund dedicated to support projects within that zone for the entire period.

332
01:00:06,000 --> 01:00:08,000
 Can you go back to that?

333
01:00:08,000 --> 01:00:27,000
 And I think this is important as we talk about baseline and we look at a TURs or a TIP district is it's kind of, I think, these have been around, they were started in California and then I think they really kind of got going in Texas like in the mid 90s with all economic development.

334
01:00:27,000 --> 01:00:54,000
 But one of the things that's very important is that without that tax increment, there is no dollars in the fund. And it's very important when we use this tool that I think you want to make sure that we're making investments that we're making those investments to grow, you know, and projects that will grow that increment so that it's sustainable and so that it continues to grow.

335
01:00:54,000 --> 01:01:11,000
 So really needing a catalyst project to make the TURs successful. Coming from Dallas, they were, you know, one of the leaders and it was lessons they learned is kind of by accident is they threw a bunch of, you know, TIP districts across the city.

336
01:01:11,000 --> 01:01:30,000
 And, you know, some of them skyrocketed and the other ones stayed flat and nothing ever happened. And then kind of the lessons they learned was, well, we need to make sure that we have a project in tow when we're creating these TIP districts, otherwise they won't perform.

337
01:01:30,000 --> 01:01:45,000
 Yeah, in our downtown TURs you have aging infrastructure and then a number of the projects and the project plan go to support that as well as economic development projects. In the West Park TURs you have Greenfield so you're lacking infrastructure.

338
01:01:45,000 --> 01:01:48,000
 And both of them have performed very well.

339
01:01:48,000 --> 01:01:59,000
 The next district is a municipal management district again in a defined area. The key elements of municipal management districts is a separate political subdivision. That's what makes this one unique.

340
01:01:59,000 --> 01:02:12,000
 They can collect property taxes or an assessment from property owners. They're created to supplement the services of the municipality and they're used for different infrastructure as well as recreational facilities.

341
01:02:12,000 --> 01:02:23,000
 And they can levy at ad law on property tax. And then cities can retain some control through a consent ordinance requirement, the development agreements that we approve, and board appointments.

342
01:02:23,000 --> 01:02:40,000
 So this is governed under Chapter 375 of the local government code as well as special legislation codified into the Texas special districts local laws code. We don't have a policy for this but you have to go through the legislature in order to create one so this would probably be the last policy we create one.

343
01:02:40,000 --> 01:02:42,000
 We don't have one, do we? No.

344
01:02:42,000 --> 01:02:45,000
 And how is it created?

345
01:02:45,000 --> 01:02:47,000
 Hunter Cole.

346
01:02:47,000 --> 01:02:53,000
 Yes, we have Cole, Hunter Ranch is our example of our municipal management district.

347
01:02:53,000 --> 01:02:56,000
 And again, hot political takes.

348
01:02:56,000 --> 01:03:11,000
 I think the reason why we saw that one come to fruition is thousands of hours, thousands of attorney hours spent on the city side and on the private side of Stratford and Hillwood.

349
01:03:11,000 --> 01:03:26,000
 And it was a question of scope. 6,000 plus acres. If somebody came along, in fact, fellows have asked from time to time, individual council members, how do you feel about an NMD for my less than 100 acre project?

350
01:03:26,000 --> 01:03:40,000
 And it's like that's not even close to what we were talking about. It was a quadrant of the city being master planned and being able to have the plus for the city is having a seat at that table, having kind of the keys in your hand of how that project is going to

351
01:03:40,000 --> 01:03:46,000
 affect that big, big portion of your city and how your city is going to grow.

352
01:03:46,000 --> 01:03:53,000
 It's really a very different animal than, you know, say a turd or a pit or something like that.

353
01:03:53,000 --> 01:04:07,000
 It's almost like a mud inside your city limits. And for that reason, a city is very, very involved in the creation and is a very tightly, it should be a very tightly negotiated deal.

354
01:04:07,000 --> 01:04:12,000
 It is maybe the most complex deal the city didn't work in the last 10, 20 years.

355
01:04:12,000 --> 01:04:17,000
 So it's something that city council has to approve. City council has to approve after the legislature has approved.

356
01:04:17,000 --> 01:04:28,000
 So first you have to have kind of this idea of general consent that, you know, your city, because the legislature doesn't want to pass something, even on the local calendar, that the city is not going to get behind.

357
01:04:28,000 --> 01:04:44,000
 So the legislature creates the ability to do it and then the, or authorizes it, and then the local government and the entities that are part of the agreement, create it through agreement and local ordinance.

358
01:04:44,000 --> 01:04:49,000
 Another advantage is the debt issued on these does not affect the city's law and rating as well.

359
01:04:49,000 --> 01:04:55,000
 Right. It's a totally separate political entity nested inside your city.

360
01:04:55,000 --> 01:05:04,000
 Again, like all of these that were being presented, it has particular uses, things that projects that it's well suited for, projects that it's not so well suited for.

361
01:05:04,000 --> 01:05:19,000
 For me, as a policymaker, it was a question of scope. And given the city, that seat at the table, the master plan, beyond just zoning and that kind of stuff, the master plan, that enormous development along with the developers.

362
01:05:19,000 --> 01:05:21,000
 How do they end?

363
01:05:21,000 --> 01:05:34,000
 So they exhaust their need. They borrow the money, they spend it on the infrastructure, and then they pay their debt. And so they can continue issuing debt.

364
01:05:34,000 --> 01:05:36,000
 It can be perpetual?

365
01:05:36,000 --> 01:05:50,000
 I suppose it could. And when you're talking about, I mean, for most of us sitting here, if those are 40-year build-outs and Hunter Cole, then it might as well be perpetual. It would be something that will be with us for most of the time that we're involved in public service.

366
01:05:50,000 --> 01:05:59,000
 But they have their own political entity. They've got their own boards, they've got their own appointments, they've got their own rules.

367
01:05:59,000 --> 01:06:06,000
 You've probably heard some of the horror stories of the ones that meet down in some other city and nobody knows when they're meeting and they make all the decisions.

368
01:06:06,000 --> 01:06:16,000
 Ours, for instance, they have to meet when they hit a certain threshold of residence, they have to meet here. And they have to livestream their meetings, just like your city council does, all that kind of stuff.

369
01:06:16,000 --> 01:06:25,000
 So there's traps for the unwary. They're very involved, but they can be a useful tool for a big project.

370
01:06:25,000 --> 01:06:28,000
 Thank you.

371
01:06:28,000 --> 01:06:32,000
 I thought you meant the policy, but no, we don't have the policy.

372
01:06:32,000 --> 01:06:38,000
 Now we'll go on to municipal utility districts, which is similar to the last district that we were talking about.

373
01:06:38,000 --> 01:06:44,000
 They can levy taxes. It's like another political subdivision, but we have less control here.

374
01:06:44,000 --> 01:06:51,000
 They can issue bonds, charge services, condemn property, enforce restrictive covenants, and make regulations to accomplish their goals.

375
01:06:51,000 --> 01:07:00,000
 They engage with the supply of water, conservation, irrigation, drainage, fire, fighting, solid waste collection, and disposal, as well as wastewater treatment and recreational facilities.

376
01:07:00,000 --> 01:07:09,000
 These are usually in our ETJ. They are governed by Chapter 54 of the Water Code, as well as the Texas Commission on Environmental Quality Administrative Code.

377
01:07:09,000 --> 01:07:16,000
 Chapter 42 of the Local Government Code, special legislation codified into the special districts local law code.

378
01:07:16,000 --> 01:07:30,000
 We do have a interim MUD policy in place. It was adopted in 2020. Development Services Department, they're actually taking the lead on this one for our comprehensive manual for economic development districts.

379
01:07:30,000 --> 01:07:36,000
 And they are going back to council, I believe, this month, right? So that one's moving forward.

380
01:07:36,000 --> 01:07:45,000
 There's about 10 in our, in Denton County, we have consented to about four of them here recently. Do you have something else to add?

381
01:07:45,000 --> 01:07:46,000
 I don't want to cut you off.

382
01:07:46,000 --> 01:07:47,000
 No, that's fine.

383
01:07:47,000 --> 01:07:54,000
 A little short soapbox for me and a lot of people that probably already know what I'm about to say, but I'll say it anyway.

384
01:07:54,000 --> 01:08:05,000
 There is not much the city can do to prevent or regulate MUDs. And there's not necessarily, I use the word prevent very carefully because it doesn't,

385
01:08:05,000 --> 01:08:12,000
 not to say that we necessarily want to have some policy of not allowing MUDs or not having MUDs, but they're in the ETJ.

386
01:08:12,000 --> 01:08:20,000
 But the way the regulations and legislation are currently, the city can, if we can't serve those communities,

387
01:08:20,000 --> 01:08:31,000
 if we can't run water and sewer to these communities that are being built in Chrome or Sanger or their ETJs, then they go to the state and they get approval.

388
01:08:31,000 --> 01:08:41,000
 If we can't reach an agreement to provide services, usually because it's too expensive, it's going to cost them too much, then they go to the state and it's pretty, not exactly a rubber stamp, but it's going to happen.

389
01:08:41,000 --> 01:08:56,000
 There will, so there's very little that the city can do. And the downside from the city perspective is we mentioned earlier that there are certain of these tools that we can require them to build roads to city spec, that water and sewer are built to city spec.

390
01:08:56,000 --> 01:09:03,000
 And they're following all of our criteria manuals and it's a negotiated thing. With the MUDs, we don't have that control.

391
01:09:03,000 --> 01:09:12,000
 And so we end up with, you know, Harris County, Travis County, some of these other places that you see lots of subdivisions that look like they're in a city.

392
01:09:12,000 --> 01:09:20,000
 They think they're in a city. They're not in a city. They get police and fire through contractual agreements or through the sheriff's office or through the county.

393
01:09:20,000 --> 01:09:29,000
 And when they get tired of not actually being in a city and having access to city services, they come knocking on the council member's doors and say, "Why am I not in the city? I want to be annexed."

394
01:09:29,000 --> 01:09:38,000
 Which sounds like a good proposition for tax base until you look at how much residential development costs us just to serve.

395
01:09:38,000 --> 01:09:47,000
 And then we start talking about replacing the roads in 20 years because they're in bad shape and they weren't built to spec. Fixing a water main that wasn't built to spec.

396
01:09:47,000 --> 01:09:56,000
 So these are an item of concern for me. I think it probably should be an item of concern for anybody who's looking at how we grow our tax base.

397
01:09:56,000 --> 01:10:07,000
 And what they say to me is we have to focus on our commercial development and good quality additions to the tax base on the commercial side.

398
01:10:07,000 --> 01:10:17,000
 Because these are going to keep coming and they're one day going to be a part of the city. And we have to balance that out and overbalance with commercial to anticipate that.

399
01:10:17,000 --> 01:10:23,000
 Can I add to that? Because you were exactly right. I'm sorry.

400
01:10:23,000 --> 01:10:27,000
 I was nodding like, "Yes, please lead current with what I said."

401
01:10:27,000 --> 01:10:40,000
 Yes, I believe that does show. If you run the numbers on residential development, it doesn't pay the bills for the schools and all that. It's industrial, big development is what really drops the bar.

402
01:10:40,000 --> 01:10:54,000
 But what cities do a lot, I've got four months right now somewhere in the state in process. So they're all TCEQ because the legislative session doesn't start until next year.

403
01:10:54,000 --> 01:11:02,000
 But what cities do the worst on these is they think if they just don't do anything, people will go away. We don't, right?

404
01:11:02,000 --> 01:11:10,000
 We go through the process. So we know the process. So I've got two cities right now that just, we're in their ETJ, they just won't talk to us.

405
01:11:10,000 --> 01:11:15,000
 They just decide they're just going to hope we go away. No, they're going to get the cram down.

406
01:11:15,000 --> 01:11:28,000
 And for what I'll say on the city's side, most developers are willing to build to certain specs. And these can be very good tools if you have a city that's willing to work and a responsible developer.

407
01:11:28,000 --> 01:11:39,000
 But with the new ETJ laws, there's a lot of things that can happen. But cities have to be able to work with developers. They're going to get them. There's no stopping them.

408
01:11:39,000 --> 01:11:51,000
 But every developer that I know, including myself, would much rather work with the city and put one of these together than just go out and go through the waiting period in the cram down.

409
01:11:51,000 --> 01:11:56,000
 So there is a lot of liability because they have their own board and the city doesn't have a seat.

410
01:11:56,000 --> 01:12:09,000
 Something we've offered on some of ours is to put a city appointed person on our boards and do something, maybe even a county. So there's lots of ways. These are very useful tools.

411
01:12:09,000 --> 01:12:21,000
 But to agree with Jesse, if not handled properly, they can be a big problem. But if handled properly, it can really expand nice services outside of where the city can expand services.

412
01:12:21,000 --> 01:12:31,000
 But there can be really good. So I'm glad we're taking a look at that and trying to understand because we're going to get them, whether we want them or not.

413
01:12:31,000 --> 01:12:42,000
 How do we find out the keys to the best negotiations? And if I were in the city's shoes doing those, I would go talk to developers that not necessarily, or maybe the ones are good.

414
01:12:42,000 --> 01:12:46,000
 Talk to us about how we get this partnership set up where it is long term beneficial.

415
01:12:46,000 --> 01:12:54,000
 What can you do financially and not do financially? Because we have a lot of use of what we can do through MUDs on reimbursements over time.

416
01:12:54,000 --> 01:13:05,000
 So I would really spend some time with developers and say, be honest with us. What can we get out of this? And guys that don't have MUDs going right now within the city.

417
01:13:05,000 --> 01:13:12,000
 So interesting. I know there's a couple of really good projects that have MUDs going. I don't know if they're building the city specs or not.

418
01:13:12,000 --> 01:13:17,000
 Some are, some aren't. Okay. There's good ones and there's other ones. Okay.

419
01:13:17,000 --> 01:13:34,000
 As well as the policy that they're looking at updating development services, taking the lead. We've also met inter-department legal and way to myself with various departments to try to proactively look at all the MUDs and what we can do and plan for.

420
01:13:34,000 --> 01:13:42,000
 The worst thing is to say nothing. That is the absolute worst thing that you can call.

421
01:13:42,000 --> 01:13:52,000
 Okay. So we've covered a lot of ground and we've talked as we've gone through this, but this is a matrix that kind of summarizes some of the key elements, the advantages and disadvantages.

422
01:13:52,000 --> 01:14:05,000
 So you'll see the, on the first row, you have the key elements of the PID used to finance public infrastructure in this specific area. Most of them are set up that way. TURS is a mechanism to dedicate future tax revenue in a particular area.

423
01:14:05,000 --> 01:14:22,000
 The MUD is ability to provide certain services and finance public infrastructure and then the MUD used frequently in the ETJ that we discussed. You'll see that under the second one, additional levy tax only TURS doesn't have that additional levy.

424
01:14:22,000 --> 01:14:32,000
 The city's role for the first two, the city has more authority for the second two consent and even less on the MUD. Very limited. And then advantages, you'll see some of those there for a PID.

425
01:14:32,000 --> 01:14:43,000
 They can control over various elements and can set their own guidelines for how and when use PIDs. With TURS, we again have a lot of flexibility in allowing uses and no additional tax or assessment.

426
01:14:43,000 --> 01:14:54,000
 And then also like I've talked about is the commitment of those funds to that particular area for a long term, despite if things change over time with staff and councils.

427
01:14:54,000 --> 01:15:04,000
 And then municipal management districts, lots of flexibility in allowed uses in the MUD. Some flexibility helps development occur when services infrastructure are limited.

428
01:15:04,000 --> 01:15:18,000
 And hopefully with the new policy, we can get them to conform more with our infrastructure so that we're compatible. Disadvantages, additional levy paid for a PID, additional owners may not see the additional value.

429
01:15:18,000 --> 01:15:31,000
 With the TURS, revenues are restricted to a defined area. And the project is limited to a specific amount of time as well. Additional taxes may be paid by property owners who may not see the additional value in the MMD.

430
01:15:31,000 --> 01:15:44,000
 Again, and then the limited control in the ETJ would be the last four months. And as growth occurs, confusion may occur over time as well.

431
01:15:44,000 --> 01:15:51,000
 Okay, thank you, Erica. And I'll try to go through these last ones pretty quickly because I know we're running short on time.

432
01:15:51,000 --> 01:16:01,000
 So this hotel occupancy tax, this is technically it's part of the 380, but I wanted to kind of pull this out separately just to kind of talk about it.

433
01:16:01,000 --> 01:16:14,000
 So in order to use hot taxes as an economic development tool, if you will, the key word is it has to put heads in beds, right?

434
01:16:14,000 --> 01:16:30,000
 And so these are the areas that we could potentially rebate hot taxes back to. Convention and visitor centers, which we have one, Discover Denton, they receive a good portion of our hot taxes.

435
01:16:30,000 --> 01:16:43,000
 Promotion of the arts, which historic restoration and preservation, sporting events, tourist transportation system, and signage directing tourists to sites and attractions.

436
01:16:43,000 --> 01:16:53,000
 But, you know, there's different ways that we could kind of use that, particularly working with a new hotel project in particular.

437
01:16:53,000 --> 01:16:56,000
 Any questions on that?

438
01:16:56,000 --> 01:17:03,000
 Tax report tax exemption. So this is kind of unique in that the state, this is more of an opt out instead of an opt in.

439
01:17:03,000 --> 01:17:11,000
 So basically all taxing jurisdictions such as the city, county, and school district automatically have this.

440
01:17:11,000 --> 01:17:24,000
 And basically what that is, is any items that are going to leave the state within 175 days are exempt from property taxes on that.

441
01:17:24,000 --> 01:17:37,000
 Okay. One particular thing that helps us in economic development is we can layer any of our incentives with other programs, other taxing entities to leverage our dollars.

442
01:17:37,000 --> 01:17:46,000
 So one thing that could be of great help to us in our downtown is the historic preservation tax incentive program.

443
01:17:46,000 --> 01:17:55,000
 And then within our new strategic plan or news of 2020, we have a charge to help with affordable housing.

444
01:17:55,000 --> 01:18:01,000
 So an excellent tool for that is the low income housing tax credit program.

445
01:18:01,000 --> 01:18:09,000
 And then we also have new market tax credit programs, which is basically new businesses and low income communities.

446
01:18:09,000 --> 01:18:17,000
 So a lot of times these tax credit programs help those projects, but there's still a financial gap that exists.

447
01:18:17,000 --> 01:18:26,000
 And then that's where we in economic development can come in and fill that last little gap that's remaining.

448
01:18:26,000 --> 01:18:36,000
 Okay. Mezzanine financing. This is once again, this is a source of outside capital that we can leverage our dollars with.

449
01:18:36,000 --> 01:18:45,000
 So one particular entity is what's called a CDFI. So these are private institutions. These are banks.

450
01:18:45,000 --> 01:18:53,000
 And what they do is they typically lend to projects that are underserved by the traditional banking sector.

451
01:18:53,000 --> 01:19:04,000
 And oftentimes they are funded by the traditional banking sector because they can provide CRA credit and they can typically offer a much lower.

452
01:19:04,000 --> 01:19:12,000
 I'm sorry. So they're wrong. Yeah, they hire higher interest rate than the traditional banking sector.

453
01:19:12,000 --> 01:19:21,000
 But usually you will see the CDF working in concert with the traditional lenders to kind of fill that that gap themselves.

454
01:19:21,000 --> 01:19:26,000
 So, I mean, there's a couple of projects I worked on in Dallas where they came to us for help.

455
01:19:26,000 --> 01:19:33,000
 We were able to hook them up with a CDFI and no dollars even had to come out of the city's pocket.

456
01:19:33,000 --> 01:19:40,000
 And in fact, Texas, I believe it's called the Texas Mezzanine Fund. It's the most successful it's based in Dallas.

457
01:19:40,000 --> 01:19:46,000
 It's the most successful one of the most successful CDFIs in the country.

458
01:19:46,000 --> 01:19:54,000
 Another form of mezzanine financing that I did in Dallas, I was the what's called the PACE program.

459
01:19:54,000 --> 01:20:02,000
 It's the property says clean energy financing. I was not too thrilled when they told me that I was going to be managing this this program.

460
01:20:02,000 --> 01:20:09,000
 But as I got into it, it's super complex. But as I got it, as I started doing it, I really love it.

461
01:20:09,000 --> 01:20:16,000
 I think it's an amazing tool, especially as we move forward in our charge for being more sustainable.

462
01:20:16,000 --> 01:20:25,000
 This is a fantastic program and the way that incentivize property owners to make clean energy investments.

463
01:20:25,000 --> 01:20:35,000
 The main problem we have with these investments is, hey, I'll just take an HVAC system or new windows.

464
01:20:35,000 --> 01:20:44,000
 This is stuff you can do on your own house. You know you're leaking energy, you know you need new windows, you know you need an HVAC system.

465
01:20:44,000 --> 01:20:53,000
 But the cost to put that in, you're not going to see a payback on your lower energy bills for sometimes maybe eight years.

466
01:20:53,000 --> 01:20:58,000
 So what do you do? You just defer that that maintenance, right? And it continues to get deferred.

467
01:20:58,000 --> 01:21:07,000
 What the PACE program allows you to do is to voluntarily put a tax assessment equal to your debt service on your property.

468
01:21:07,000 --> 01:21:13,000
 And then you can extend that for the life, the useful life of the improvements.

469
01:21:13,000 --> 01:21:20,000
 So like most cases for commercial is going to be 25 years. And so the project cash flows immediately.

470
01:21:20,000 --> 01:21:24,000
 And it's 100 percent financed. So there's no down payment.

471
01:21:24,000 --> 01:21:35,000
 So it's a great incentive for property owners to get to add instant value to their property in actual equipment and in cash flow savings.

472
01:21:35,000 --> 01:21:41,000
 And currently, the program we have here in Denton is run by the county.

473
01:21:41,000 --> 01:21:48,000
 And as far as I know, this has only been used once in the city of Denton. And really, it just needs to be marketed.

474
01:21:48,000 --> 01:21:53,000
 It's very complex. It's hard for property owners to wrap their head around it.

475
01:21:53,000 --> 01:22:00,000
 I've said it enough times when I'm with them that over the year and a half I was doing it, I finally got my pitch.

476
01:22:00,000 --> 01:22:09,000
 And what's interesting is what I noticed in Dallas, it was the big, sophisticated developers that were doing it because they were the ones who understand it.

477
01:22:09,000 --> 01:22:18,000
 When you're trying to explain it to some of the smaller developers, they just didn't understand it and they passed. But it's a great program.

478
01:22:18,000 --> 01:22:25,000
 I think we'll move forward with it. All right. Any more questions?

479
01:22:25,000 --> 01:22:33,000
 Thanks. Just two things. I'd love to add at some point in the future, incentives to the airport, right?

480
01:22:33,000 --> 01:22:39,000
 Because if you keep your plane here, there's taxes that come from that. There's value that comes from that.

481
01:22:39,000 --> 01:22:45,000
 So I'd love to see what, if anything, like McKinney's doing around that space, if there's opportunities to increase profile there.

482
01:22:45,000 --> 01:22:51,000
 And I would ask, and this is not directly you, this may be more of the economic development.

483
01:22:51,000 --> 01:22:58,000
 But I think from a looking forward standpoint, again, in that airport area, we'll have that.

484
01:22:58,000 --> 01:23:03,000
 It's not a big piece of property. It's a small piece of property where the outdoor gun range is. It's going to require remediation.

485
01:23:03,000 --> 01:23:10,000
 So we need to start talking partnership as we're going to move from that space. It is on the corner of a very busy area.

486
01:23:10,000 --> 01:23:19,000
 So I think it has value. I just would like to see us start having those conversations to try to defray that cost and put something,

487
01:23:19,000 --> 01:23:26,000
 have an active role in what goes there on that corner leading into the airport. So what it's worth. I don't know about that.

488
01:23:26,000 --> 01:23:29,000
 Is there already a plan on moving that outdoor gun range?

489
01:23:29,000 --> 01:23:35,000
 Yeah, we're almost done. So we'll be done at the end of the year with a new space. They're on vintage next to the substation.

490
01:23:35,000 --> 01:23:42,000
 There are some state programs to clean those things up. I can ask. I'm sure the city has all that information.

491
01:23:42,000 --> 01:23:45,000
 But there's some state funding programs for things like that.

492
01:23:45,000 --> 01:23:48,000
 Sure. Good.

493
01:23:48,000 --> 01:23:59,000
 And I have I recently met with Scott Gray, the new head of the airport over there.

494
01:23:59,000 --> 01:24:10,000
 We met just I guess it was last week and kind of talked more about using the airport as an asset, an economic development asset.

495
01:24:10,000 --> 01:24:22,000
 And so we kind of got some ideas and he did tell me that there's going to be a master plan coming through the airport and kind of talking about ways that we can we can leverage that asset a bit better.

496
01:24:22,000 --> 01:24:37,000
 And a plug for you and T. I mean, their food service department's outstanding and you have Peterbilt, Tetra Pak, Target, you know the names, without a restaurant to be found.

497
01:24:37,000 --> 01:24:48,000
 You know, so why not invest in you and T and put a building there and let's, you know, get another Eagles landing can part two. Yeah.

498
01:24:48,000 --> 01:24:57,000
 So for what it's worth. Yep, absolutely. We've also had a recent reorg where the airport is now with economic development reporting to David Gates.

499
01:24:57,000 --> 01:25:05,000
 Oh, good. Kind of makes a little bit more use. And we have a base aircraft written into our policy that we can bring back to see you all.

500
01:25:05,000 --> 01:25:09,000
 Okay, yeah, if you would please. All right.

501
01:25:09,000 --> 01:25:20,000
 Well, if that is it, I think the last item is in our packet. If you want to have a look at all of the new leads that are being followed up on.

502
01:25:20,000 --> 01:25:31,000
 You were running over so I think we are going to go ahead and adjourn and I just want to thank everyone for being here being a part and contributing and let's move. Thanks for adjourn.

503
01:25:31,000 --> 01:25:40,000
 You also have the tools of all the statutes and lead to the statutes if you're so inclined that the summary of all.

504
01:25:40,000 --> 01:25:42,000
 Thank you. Great job.