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 Good morning. My name is Marty Rivers. I'm the chair of the Economic Development Partnership

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 Board. It is 1117 and we're going to call our meeting to order. Thank our television

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 audience for being patient. We're getting off to a late start. I'm sure there's a lot

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 of people out there that are disappointed we got started late. All eight of them that

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 are watching. So I've got a kind of a long agenda today so we'll get with it. Our first

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 item for consideration is EDP 19-009 to receive a report and hold the discussion and make

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 a recommendation to City Council regarding an ordinance on the expenditure of the fund

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 balance of the general fund account related to the downtown reinvestment grant program.

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 Thank you Mr. Chairman. I'm Caroline Booth, Director of Economic Development with the

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 City of Denton and I have a quick presentation for you about this item which is really housekeeping

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 related to spending down the remaining funds in the general fund for the downtown reinvestment

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 grant program. So excuse me prior to fiscal year 2018-19 the program was funded with mixed

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 beverage, sorry. So before the current fiscal year the program was funded with mixed beverage

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 tax revenue in the general fund. In September 2018 council approved changing the funding

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 source for this grant program from that source to the downtown TIF fund and updated the grant

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 review process so that the expenditures for the program are reviewed by the downtown TIF

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 board. The council at the same time expressed their desire for us to go ahead and spend

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 those funds in the general fund account down to zero and so we need to have an ordinance

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 that gives us a process and a procedure for spending those remaining funds. So this is

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 really very straightforward. The ordinance up for your consideration it just establishes

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 that process. The amount in the fund is a little over $108,000 and the way this is going

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 to go is that those grants will still be subject to final approval by the city council but

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 they will first be reviewed by the downtown task force and then come here to the economic

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 development partnership board. So task force, EDP and then final vote by council. When those

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 funds are spent down to zero the grant approval process will be downtown task force, downtown

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 TIF board and final approval by council. So it's really straightforward but I'm happy

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 to answer any questions that you have. Like I said this is really a housekeeping matter

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 to make sure that we have a stated approval process in place to spend the remaining funds.

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 Kiwi? You may have touched on this but I know that the requirements and the allowed uses

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 for the money have changed when it goes over to the other funding mechanism. Will this

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 ordinance allow those things to be included or is it for the original? We're going to

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 proceed under the prior ordinance. I think really the only difference is that we added

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 asbestos abatement and sprinkler fire suppression systems and so we'll just continue without

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 those things until these funds are spent down. And then start? Yes ma'am then switch it completely

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 over to the new process and new projects that can be included. One of the things we might

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 remind everybody the downtown task force is actually a subcommittee of this board. That's

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 why it's coming up here. It's a downtown economic development task force and we've always had

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 a representative on this board on that task force. Jill Jester is that person right now.

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 So it's an economic development task force related to downtown which is one of our original

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 priorities when the EGP partnership was created. Any other questions for me? So we need to

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 make a recommendation for that. I would entertain a motion. I'll move approval. We got a motion

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 for approval. Does anybody have a second? Second. Second Mr. Eames. Anybody have any

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 further discussion? I did have a question just for the sake of clarification. The $108,000

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 will go to another fund? It stays where it is and is just spent down to zero as the grants

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 are approved through the process. It's not moving anywhere. It's just staying right where

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 it is. So how does that change? What are we changing here? Well when the funding source

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 changed over to the downtown TIF fund we sort of wiped out the process that existed prior

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 to that. So this is a clean up of wiping out that process. Any other discussion? All those

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 in favor say aye. Aye. Any opposed? Motion carries unanimously. And it's a good thing

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 we passed that because we've got a few downtown grants and I would like to call Julie Glover

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 up. She will go over EDP 19, 1, 10, and 8. I don't know how we came up with those numbers

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 but... You've got to be quick to get them in order. We'll look at those individually

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 and then vote on those, make a recommendation. Thank you. So I am Julie Glover, Economic

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 Development Program and Administrator for the city, aka Downtown Person. I passed, distributed

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 these because Marty asked for a little bit of clarification on the scoring process and

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 how this goes. I don't think you've seen one of these in a while because the old process,

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 if it was up to $10,000 and under, the city manager could just sign off on it under the

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 other program. Because of just the way it's working right now and we're kind of in limbo,

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 we decided it'd be best just to go through the entire process no matter the amount on

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 these grants. So just to review that these projects are reviewed with the considerations

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 in mind that they, of course, comply with the building standards, the need for the renovations,

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 the historical accuracy and design, the compatibility and relationship to the other buildings and

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 streetscape and downtown development goals. And the new one is interior code improvement

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 which is asbestos and mold removal and fire suppression. That's the new category. We took

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 out location if you remember right on that because we used to say proximity to the courthouse

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 or to the transit center. Since everything is going to be within the TIF because according

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 to state law, we can only spend the TIF money within the TIF boundaries. The location thing

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 was kind of redundant. And these are on the back of the sheets that I just gave you. So

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 these are some definitions about facade rehabilitation, awnings and signs, just kind of making sure

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 everybody knows. Impact fee reimbursement, utility upgrades. I think the mold and asbestos

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 abatement and the fire suppression is pretty clear what that involves. So this is the scoring

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 sheet that I just gave you. I know it's hard to see up here. That's why I went ahead and

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 passed those out to you. Just how this works is there are these categories and the downtown

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 task force is the first group to look at it. They score these on zero to five. The economic

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 impact which would mean is this building creating more property tax? Is it creating sales tax?

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 That sort of thing. The historic accuracy and design, we did add the design a few years

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 back because we had some new construction that we're applying for this grant, too. Utility

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 upgrades and impact fees that includes improvements to water, sewer, electrical improvements.

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 Increases population sometimes is a little confusing, but that just means are you going

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 to bring more people down here? That is daytime and nighttime. So if you have mixed use with

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 apartments, that, you know, that counts with people being down here after work and if you're

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 a restaurant, you have after hours people coming and going. The interior code improvements

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 is the new category. Then we added this other category because sometimes the project is

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 really good and they don't hit all these benchmarks and gives them a little bit of leeway to award

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 a few extra points for a really good project. So just a little background. We've been doing

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 this program since 2007. And 2012 we did do some changes to the program. We changed the

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 name and a few other things at that point. And I think we adapted the scoring system

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 at that point, too. And then recently the council approved the changes to the program,

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 including the funding change that Caroline just talked about. And right now we just approved

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 the draft ordinance that will go to council on February 26th. So no one touched Amy or

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 Joey because they are sick, but they're here. Julie, can I ask you maybe just a clarification

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 on the score sheets. Each of the task force members scores that on their own and then

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 staff adds those up collectively and see where the average comes out in one of those categories.

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 So staff adds, you know, we're usually doing staff reports or something. Christina and

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 Michelle add them up. They divide it by the number of people who filled them out, and

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 we get an average score that way. And some people grade hard and some people grade easy,

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 so it kind of works out. So 106 North Locust Street. It's hard to believe this was over

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 a year ago. This is the fire that happened on the east side of the square on the day

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 after Christmas, actually the early morning the day after Christmas on December 26th.

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 I don't know who took this picture. I didn't take it, but at this point I heard that the

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 fire department was putting about 4,000 gallons of water a minute into the site. This is right

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 before the fire, obviously, since the mini-mall wall is still there. Joey and Amy Hawkins,

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 who own the business, they do not own the building, they own the business, had remodeled

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 in 2017 before the fire. The new plans include putting in a full kitchen. They have recently

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 closed Royals Bagels, so they made bagels and sweet, you know, cinnamon rolls and all

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 those things up there. So now when Jupiter House reopens, maybe it's something up here

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 that we're allergic to. So when they reopen, they're going to have a full kitchen. I have

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 no idea where they can do their baking. They have some really nice plans for the inside

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 that are going to make it look different, but still kind of feel the same, we think.

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 So their eligible expenses, thank you, are $100,000 on the facade, $20,000 on awnings,

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 $10,000 on signage. Still estimating the impact fees at this time was $10,000. Utility upgrades

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 is $23,247, and we did put the asbestos in here, but even without that, it would still

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 be above the $50,000 mark, which is $23,500. A total of eligible expenses is $186,747.

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 We had at this point, when he first filled it out, the total cost of the project was

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 $500,000, but I think that brings a smirk now. So they're asking for $25,000. So back

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 in October, the downtown task force looked at this and they recommended a $25,000 grant.

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 That was a 9 to 0. The average score on this was 27.3. If you'll see up here in the black

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 part of this sheet, it tells you how that's broken down at 25 to 30. They can recommend

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 up to 25,000, 20 to 24, up to 10,000, 15 to 19, up to 5,000, and under 14 does not warrant

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 a grant. So I'd be happy to answer any questions. Like I said, Joey and Amy are here. If you

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 would like to speak or if you would like to ask some questions.

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 >> Do you guys got some questions? >> On the scoring sheets, are those ever made

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 like listed in the backup, or is it just? >> We haven't in the past. You know, I mean,

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 usually what we do is we just average them. I do have them in all the files. I mean, they're

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 public record. If anybody wants to see them, they don't have anybody's name on them. You

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 know, they're anonymous, so. >> And so the process is these bills that

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 the invoices have already been paid, and so that this is just a reimbursement to the?

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 >> So the way this works is it is a reimbursement, and they have not submitted these yet because

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 they don't have a CO yet. Once they get a CO, and then we go through the invoices and

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 kind of match them up, you know, category to category, and make sure everything's been

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 done the way they said it was going to be done, it is a reimbursement at that point.

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 >> But it's actually to the business owners, not the company. I only ask because there

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 are some companies in there that I may have a conflict with, and so I just wanted to make

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 sure that it's going to the? >> In this case, the building is owned by

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 Frank Zangrel. So Mr. Zangrel did some work, and he got some insurance money, but this

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 grant is specifically to the Hawkins, and the check goes to them. They have to pay for

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 everything, and they have to prove that they have already paid for everything and had the

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 work done before the reimbursement check can be issued.

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 >> Thank you. I was just clarifying. I appreciate it.

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 And I maybe have been dreaming this. Did you guys add a level or square footage in there?

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 >> Don't breathe on the microphone. >> Just curious.

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 >> They applauded, Steve. Chill gesture. Yeah, we added a mezzanine level on there, so square

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 footage was, if I was guessing, I think it's probably like 15 by 30, and there's the windows

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 on the top there, so it's just ultimately like a patio or something like that.

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 >> You recessed the front right. >> Yes. When we do open, you all will be amazed

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 with what this looks like. It is pretty interesting. Amy and I did remodel the place, I think it

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 was four months before the fire, so that was like, we thought that was cool, and it's just

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 very funny when you are being forced to live your dream of what you've always envisioned

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 Jupiter House to be like. So now we have a grease trap, and we have a full kitchen, and

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 we have a front patio area. It's kind of like everything that we've ever envisioned that

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 place to be, it is finally happening, and it's been a struggle for a number of reasons

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 last year, the fire, and then closing Royals, too, but even a lot of pretty cool things

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 have happened. A lot of the things that we had at Royals, like some shelving that my

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 dad had welded up, we took down, and we just even hung them up yesterday. They look like

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 they were made for Jupiter House, and they were made six years ago, and all the wood

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 that came from Royals, we chopped it up, and there are all these little wood tiles now,

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 we did this whole herringbone thing, and it's just, things like that are happening over

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 and over again. I just, the fire did not actually get into our building, it was all smoke and

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 water damage, but what we didn't realize is just the effect asbestos has on a building,

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 so ultimately, it was a shell. The fire could have been inside of our building, too, and

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 this grant is, it could be huge for us. We kind of started out upside down, because we

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 still had the debt from the remodel that we did four months before the fire, so, anyway,

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 sorry, I've just had the flu for like five days, 82, so.

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 >> Anybody have any other questions for Mr. Hawkins? All right, thanks.

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 >> Cool, thanks. Thank you.

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 >> Yeah.

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 >> Okay. I'm Jill Jester, and I serve as Chair of the Downtown Task Force, which is a cross-section

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 of those people and community members, as well as business leaders, that are interested

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 in the downtown and have some kind of stake in the downtown area. As you can see here,

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 Amy Hawkins and Joey Hawkins came and gave a much more even detailed, because we have

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 a little more time in the Downtown Task Force being a limited focus group there, of past,

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 present, and future of Jupiter House. As you can see, we did recommend the $25,000. I'd

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 like to note that it is not often that this group does recommend on that side of the amount,

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 because we know there's a finite amount that can be granted in this specific area. Some

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 of what went into that unanimous vote was the increase in foot traffic to the downtown

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 area that they felt Jupiter House had had in the past, and that these renovations would

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 facilitate in the future. The fact that Jupiter House has been a unique place for young and

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 old, white-collar, blue-collar, a lot of community leaders, it's a hub of where they meet up

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 and discuss ideas for the future of Denton, and that it is a unique place, and that that

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 was something worth investing in to have again. As we look at the makeup of the central downtown

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 area of Denton, while there are coffee shops, I don't think we're overrun with coffee shops

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 and with the student population as well as the city buildings as well as county buildings

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 that are all in this area. We thought that it did have a historical significance as well

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 as potential for the future. I just wanted to note on behalf of the Downtown Task Force

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 that this was a unanimous vote. In the amount that it was, that is not often given. It's

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 been a few votes since we've given the, or recommended the max amount for the numbers

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 that are presented. And just to, if anyone has any questions regarding the decision the

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 Downtown Task Force made, that they are welcome to ask myself or Julie. Thank you.

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 - Anybody else? Anybody want to jump out there with a motion?

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 - I'll motion to approve. - I'll second.

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 - Motion and a second. Mr. Baines. Any further discussion?

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 - I just want to make one comment. - Yes.

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 - That I have been following their story along on Facebook and I know that there's a lot

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 of people that, in the community, that support you guys and are ready to see you open.

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 - Open open work. - All right. We got a motion and a second.

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 All those in favor say aye. - Aye.

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 - Any opposed? Motion carries. Thank you. Item number 10.

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 - You want to read it? - No. I think I did all three of them. Let

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 somebody over here says I have to. - Okay. So 115 South Elm, another long ago beloved

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 site of Sweetwater. Just a little map in case you've been living in a cave and don't know

201
00:21:23,680 --> 00:21:29,800
 where Sweetwater is. It's right there at the corner of Walnut and Elm Street. This is how

202
00:21:29,800 --> 00:21:39,760
 it looked prior to the sale a few years ago when it became Agua Dulce for a few years.

203
00:21:39,760 --> 00:21:47,400
 So this is the people outside repainting the snake and the murals on the outside. Unfortunately,

204
00:21:47,400 --> 00:21:50,960
 some of the work had begun before they turned in the grant so you will not see some of this

205
00:21:50,960 --> 00:21:55,880
 exterior work listed as an eligible expense. They needed to turn in the grant prior to

206
00:21:55,880 --> 00:22:00,400
 beginning the work. So just to let you know that. So this is just a little picture now

207
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 of the signage. The side here. And this building did, when the reeds bought the business, they

208
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 received $5,000 for some work they did. And there's a $25,000 cap per building, per address.

209
00:22:18,080 --> 00:22:23,760
 So that meant that the building, when they came forward, was eligible for a max of $20,000.

210
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 As like I say, some of the exterior and facade work was started prior to the application

211
00:22:27,680 --> 00:22:37,760
 process so it was not eligible for the grant. Awnings, $10,815. Signage, $14,105. And utility

212
00:22:37,760 --> 00:22:46,240
 upgrades of $9,348 for a total of $34,268 was eligible. The total cost was $100,000.

213
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 So half of that $34,000 figure, they requested $17,134. They met, task force met on December

214
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 13th and they recommended a grant in the amount of $5,000. That was a big group that day.

215
00:23:02,560 --> 00:23:08,040
 So that was 15 to zero. They did score 16 points. And again, this building previously

216
00:23:08,040 --> 00:23:14,120
 received $5,000. I will tell you that this body has the right to, as long as it's not

217
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 the maximum amount, you have the right to change the amount that you're recommending

218
00:23:18,320 --> 00:23:23,080
 to council. Just wanted to put that in there. Some of the discussion that happened with

219
00:23:23,080 --> 00:23:29,960
 this as far as the score was, it was a restaurant going to a restaurant. There wasn't a lot

220
00:23:29,960 --> 00:23:36,880
 of big changes happening. You know, the reeds had put in some new bathrooms and plumbing

221
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 and some electrical stuff that qualified under the last grant. So that was sort of the general

222
00:23:42,680 --> 00:23:47,760
 discussion during this. If you have some questions about that, we'd be happy to answer it or

223
00:23:47,760 --> 00:23:53,800
 Jill could. Any comments or questions? And Joey is also a partner in that restaurant,

224
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 so he is here on their behalf as well. Go ahead. I'll just kind of second what Julie

225
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 said as far as the conversation that was had in the prior to the vote where you can see

226
00:24:08,360 --> 00:24:13,800
 the average score was 16 out of the available points of, I think, 30 in the downtown task

227
00:24:13,800 --> 00:24:19,020
 force. The problem being some of the amount that they couldn't ask for, just like Julie

228
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 said, had already been done, so some of it was not eligible. They have made significant

229
00:24:23,880 --> 00:24:33,320
 changes. Foot traffic, it seems, has increased since this restaurant has changed format,

230
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 changed a lot of the interior. As you can see, the downtown task force recommended the amount

231
00:24:38,600 --> 00:24:45,440
 of $5,000 versus the full amount that would be eligible. And just like was noted by Ms.

232
00:24:45,440 --> 00:24:51,920
 Glover, that was because a lot of what we look at is is this going to increase who comes

233
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 downtown and spends money downtown and is it a good investment? But of course, this

234
00:24:57,160 --> 00:25:03,520
 body, this is just a recommendation from the downtown task force to this body, so we are

235
00:25:03,520 --> 00:25:08,600
 certainly, you know, there's certainly never any sour grapes as far as not taking up our

236
00:25:08,600 --> 00:25:14,880
 recommendations. This is just the recommendation of the, it looks like unanimous 15 downtown

237
00:25:14,880 --> 00:25:19,520
 task force members that were available that day. So if anyone has any questions regarding

238
00:25:19,520 --> 00:25:29,880
 why that was the amount or from the task force, please feel free to ask any questions. Any

239
00:25:29,880 --> 00:25:39,000
 other comments or questions? I did have one question. How many partners are there in this

240
00:25:39,000 --> 00:25:47,040
 endeavor? Joey? Excuse me, Mr. Hawkins. This is the only other presentation. You're right.

241
00:25:47,040 --> 00:25:52,760
 Let's see. There's Steph and Ron Ranke. There's Jimmy and Karen Meredith. And then there's

242
00:25:52,760 --> 00:25:59,440
 Amy and myself. Okay. Very good. Yeah. No, it's been good to bring Jimmy and Karen Meredith

243
00:25:59,440 --> 00:26:09,760
 back into the spotlight there. Thank you. Anything else? Anybody else? Did you hire

244
00:26:09,760 --> 00:26:17,520
 any local artists to do the work on the outside? Yes. Oh, shoot. Warrant. Yeah. Yes. Awesome.

245
00:26:17,520 --> 00:26:21,720
 Thank you. But that was, that was my mistake. I was kind of learning this process. I should

246
00:26:21,720 --> 00:26:27,680
 have filled out the paperwork before I gave him the paintbrush. So, but it turns out beautiful.

247
00:26:27,680 --> 00:26:37,800
 Yeah. Thank you. Yeah. I would entertain any motions at this time. I just have a question

248
00:26:37,800 --> 00:26:46,400
 because I know some of the owners pretty well. Is that a conflict or? Matt, did you hear

249
00:26:46,400 --> 00:26:52,200
 her comment? No. Yeah, a couple of them. Any business relationship? No business relationship,

250
00:26:52,200 --> 00:26:59,760
 just good friendships. Legal conflict. Not a legal conflict. I just need to make sure

251
00:26:59,760 --> 00:27:05,440
 I have an orientation. She needs to be on the mic. So no legal conflict. I don't have,

252
00:27:05,440 --> 00:27:11,760
 I just know them very well. I'm just letting you all know that. Thank you. That's it. Mr.

253
00:27:11,760 --> 00:27:17,080
 Hawkins, having served on council, I think that most of us are familiar with Mr. And

254
00:27:17,080 --> 00:27:22,680
 Mrs. Hawkins. I think it's a very valid question. And my thought is so long as that you're not

255
00:27:22,680 --> 00:27:28,680
 part of either of these business endeavors nor represented businesses that they, we should,

256
00:27:28,680 --> 00:27:33,320
 anyone that's familiar with the, any of the partners personally should be fine to use

257
00:27:33,320 --> 00:27:38,160
 their best discretion in whatever personal relationship might cloud their decision. Is

258
00:27:38,160 --> 00:27:47,240
 that right? Okay. Thank you. Oh, I know them so well. I was going to vote no. Just kidding.

259
00:27:47,240 --> 00:27:59,200
 You need to recuse. I will say that Sweetwater is a much used venue for community events

260
00:27:59,200 --> 00:28:03,960
 in that back room, especially that they have, there are many, many, many community events

261
00:28:03,960 --> 00:28:12,560
 that need just that size that is used. So it is a benefit to the community. We didn't

262
00:28:12,560 --> 00:28:22,000
 even mention squash enchiladas, did we? So that's a benefit to me. We need a motion.

263
00:28:22,000 --> 00:28:29,040
 I move that we approve the and take the recommendation of the downtown task force that $5,000 be

264
00:28:29,040 --> 00:28:36,160
 granted out of this fund for the renovations and per the application of the partners at

265
00:28:36,160 --> 00:28:43,860
 Sweetwater. Second. We have a motion and a second. Any further discussion? All those

266
00:28:43,860 --> 00:28:52,200
 in favor say aye. Aye. Any opposed? Motion carries. Thank you. And next we have item

267
00:28:52,200 --> 00:29:01,760
 19008. Okay, so this is 119 West Hickory, the loophole. I think back in the 80s this

268
00:29:01,760 --> 00:29:05,800
 was one of the very first renovations that kind of started. It wasn't the loophole at

269
00:29:05,800 --> 00:29:09,600
 the time. It was Ellington's. But I think this was one of the first nice kind of not

270
00:29:09,600 --> 00:29:14,720
 fast food restaurants that happened in downtown. We did find some historic photos here. It

271
00:29:14,720 --> 00:29:20,720
 was La Mode, a ladies clothing store in the 40s and 50s. And they're just in the collegiate

272
00:29:20,720 --> 00:29:28,760
 shop prior to that. I will tell you this building has a local designated marker on it, a historic

273
00:29:28,760 --> 00:29:35,160
 marker on it. So the Historic Landmark Commission has also approved this prior to going forward

274
00:29:35,160 --> 00:29:41,200
 to the task force. This is just some dry and we do have Cliff here who's their contractor.

275
00:29:41,200 --> 00:29:45,840
 So he's here to answer questions if you have it. I believe the sign is up at this point.

276
00:29:45,840 --> 00:29:51,800
 One of the main concerns here is since the smoking ordinance is passed and a lot of these

277
00:29:51,800 --> 00:29:56,320
 buildings are just flush with the sidewalk and don't have an opportunity for a patio

278
00:29:56,320 --> 00:30:02,240
 situation like Sweetwater and some of the others do, they are also are going to recess

279
00:30:02,240 --> 00:30:07,640
 the opening. On the interior there is a brick wall, an original brick wall back there that

280
00:30:07,640 --> 00:30:13,080
 when they recess it, that original brick wall will be visible from the street. They will

281
00:30:13,080 --> 00:30:18,880
 have accordion doors that go across this front so it can be closed and inclement weather.

282
00:30:18,880 --> 00:30:23,320
 This signage I can say is already up. They were trying to do a little something like

283
00:30:23,320 --> 00:30:30,200
 to kind of mimic the Morrison sign, the signage. It's a little Moulin Rouge too if you're

284
00:30:30,200 --> 00:30:36,040
 familiar with that maybe. This is just an interior sketch showing how that patio area

285
00:30:36,040 --> 00:30:42,680
 in the front would work. And this line across here would be those accordion doors that are

286
00:30:42,680 --> 00:30:49,480
 here that could open or close depending on the weather. Just a sketch here showing how

287
00:30:49,480 --> 00:30:57,640
 that might look with the doors closed and again with the doors open. Just a couple of

288
00:30:57,640 --> 00:31:01,560
 different angles here. Of course the architects never put the other buildings in around it,

289
00:31:01,560 --> 00:31:06,720
 they just do blank walls. So on this one, and I will tell you that your numbers that

290
00:31:06,720 --> 00:31:12,440
 you have in your backup are different than this slide, so these are updated. The facade

291
00:31:12,440 --> 00:31:18,760
 of eligible expenses is $49,000. The awnings are $3,500. The signs are $1,100. Again, the

292
00:31:18,760 --> 00:31:23,800
 impact fees are an estimate at this point, $5,000. Utility upgrades $8,000 for a total

293
00:31:23,800 --> 00:31:31,600
 of $64,500 of eligible expenses. And the total cost of the project has been updated as well.

294
00:31:31,600 --> 00:31:40,000
 Is that right? It's more than $64,500. Right. So I would add this total was just they'd

295
00:31:40,000 --> 00:31:44,440
 added up the numbers this way and didn't take into consideration the entire project so it's

296
00:31:44,440 --> 00:31:53,880
 more than that. So they did request $25,000. The task force met on October 10th and recommended

297
00:31:53,880 --> 00:32:00,720
 a grant in the amount of $5,000, passed 9-0. Their average score on this was 15.9. A lot

298
00:32:00,720 --> 00:32:06,560
 of the same discussion happened on this building as happened on Sweetwater that it was a restaurant,

299
00:32:06,560 --> 00:32:13,560
 it's remaining a restaurant. The facade had not been updated in a very long time. I want

300
00:32:13,560 --> 00:32:19,280
 to say maybe the early 90s was the last time that it had been done. This building also,

301
00:32:19,280 --> 00:32:27,000
 I believe, had some fire damage from a fire back in the 1930s. And it does, like I say,

302
00:32:27,000 --> 00:32:32,040
 it does have a landmark designation that was given to it, ironically, with the slip, the

303
00:32:32,040 --> 00:32:36,640
 inappropriate slip cover on it back in the 80s. But HLC did look at this and approve

304
00:32:36,640 --> 00:32:48,600
 all the changes to this. What was the HLC's vote? Do you know on that or did they have

305
00:32:48,600 --> 00:32:56,840
 any comments? Just another question. Did this building switch owners or is it the same owner

306
00:32:56,840 --> 00:33:00,580
 that's just doing everything? It's the same owner that has had it for probably a decade

307
00:33:00,580 --> 00:33:06,880
 or so, am I saying right? Is that right? 23 years. So he bought it from the original,

308
00:33:06,880 --> 00:33:11,200
 when it was Ellington's, it became the loophole after that. And then I think Anita Bruno and

309
00:33:11,200 --> 00:33:17,040
 her husband had it at that point and then they sold it to Charlie. Just on a personal

310
00:33:17,040 --> 00:33:23,080
 note, Ellington's is where I met my in-laws for the first time. A lot of the stark things

311
00:33:23,080 --> 00:33:30,760
 that went on in that building. I believe the HLC vote was unanimous, but I don't know it

312
00:33:30,760 --> 00:33:38,240
 off the top of my head. I apologize. Okay. I did have a question. Joan? So I was looking

313
00:33:38,240 --> 00:33:44,720
 at the packet and it said eligible expenses, but I was looking for the total renovation.

314
00:33:44,720 --> 00:33:52,360
 Is it included here? No, that's what I just said. They added up the eligible expenses,

315
00:33:52,360 --> 00:33:59,320
 not the total project cost. Do you have an idea, Clint, of what the total project cost

316
00:33:59,320 --> 00:34:10,360
 might be? Thanks for having me up. I was just over there this morning meeting with Charlie.

317
00:34:10,360 --> 00:34:18,680
 They're always updating things. Nothing to do with construction really, but they spent

318
00:34:18,680 --> 00:34:24,360
 so much more money. I'm going to say he's probably going to be about 150,000 there.

319
00:34:24,360 --> 00:34:32,580
 And the main reason why, and I'm just finding this out too, is because they want to kind

320
00:34:32,580 --> 00:34:38,240
 of change the demeanor of the loophole. So in the front part of the morning, because

321
00:34:38,240 --> 00:34:42,600
 they have great food, they want to peel to the families. And then after nine o'clock

322
00:34:42,600 --> 00:34:47,880
 at night, then they want to peel back to the bar scene, the nightclub scene. And so they're

323
00:34:47,880 --> 00:34:52,960
 making it more user-friendly and hopefully get more foot traffic in in the front part

324
00:34:52,960 --> 00:34:57,840
 of the day, early morning part of the day. So they kind of said, "I don't know what the

325
00:34:57,840 --> 00:35:01,680
 heck with that budget. We're going to spend this and do this." And it's just mostly interior

326
00:35:01,680 --> 00:35:13,840
 stuff. It's not construction. That's very impressive. The designer is great. The questions I had

327
00:35:13,840 --> 00:35:20,560
 is, because we've talked about it on the last project, you have to have your application

328
00:35:20,560 --> 00:35:25,240
 in before you start work, because you guys have the new sign up already. So work is going

329
00:35:25,240 --> 00:35:29,920
 on there, but they had the application in prior to that. So all those expenses are eligible.

330
00:35:29,920 --> 00:35:34,920
 I actually think they turned this in in the summer last year, maybe May, because we had

331
00:35:34,920 --> 00:35:39,040
 talked to them and made sure everything, they got the papers in before they started.

332
00:35:39,040 --> 00:35:45,680
 So can you help me again with the design and what the intention is of the front patio?

333
00:35:45,680 --> 00:35:50,640
 And as far as our smoking ordinance, isn't there, you have to be a certain amount of

334
00:35:50,640 --> 00:35:54,920
 feet away from the entrance? And does that meet the requirements of the intention of

335
00:35:54,920 --> 00:35:59,720
 the ordinance?

336
00:35:59,720 --> 00:36:09,000
 Yeah, again, so there's a lot of smokers and they hang out outside now. But the intent

337
00:36:09,000 --> 00:36:16,720
 with Charlie and Lynn, the owners of this, is to have a non-smoking patio. Now, you know,

338
00:36:16,720 --> 00:36:20,720
 people hang it out in front of smoke and they have the little place to put the butts when

339
00:36:20,720 --> 00:36:26,760
 they're done. But it's going to be a non-smoking establishment throughout. And they have their

340
00:36:26,760 --> 00:36:31,360
 folks out there go clean up the cigarette butts during the day and night. But again,

341
00:36:31,360 --> 00:36:32,360
 they're going for non-smoking.

342
00:36:32,360 --> 00:36:36,760
 Okay. Okay. Thank you. I misunderstood the intention of it. I appreciate it.

343
00:36:36,760 --> 00:36:41,280
 The main thing was just to get the patio and bring about that, because it was original

344
00:36:41,280 --> 00:36:47,120
 patio when it was limoed, right? And so bring back that era. And we got down to the Trazzo

345
00:36:47,120 --> 00:36:51,440
 and some of it's just terrible. So we're going to have to recoat that and we'll visit

346
00:36:51,440 --> 00:36:56,720
 that with Roman, that HLC fellow again. But as far as everything else goes, it's kind

347
00:36:56,720 --> 00:37:00,640
 of on point, bringing back the historic accuracy of that building.

348
00:37:00,640 --> 00:37:03,560
 Okay. Thank you.

349
00:37:03,560 --> 00:37:08,280
 Any more questions or comments?

350
00:37:08,280 --> 00:37:15,960
 But just to kind of reiterate, as far as what Ms. Glover said, it was a lot of the similar

351
00:37:15,960 --> 00:37:22,920
 conversation as far as new investment and bringing new people or bringing more people

352
00:37:22,920 --> 00:37:29,400
 to the downtown area that this, you know, a lot of a lot of us grew up going to Ellington's.

353
00:37:29,400 --> 00:37:34,940
 It is a historical landmark that it was the changes were recommended by the historical

354
00:37:34,940 --> 00:37:41,560
 landmark commission here, but that, you know, it is a restaurant to a restaurant. However,

355
00:37:41,560 --> 00:37:49,080
 they are expanding their capabilities of seating and the fact that they are allowing the view

356
00:37:49,080 --> 00:37:53,880
 into the historical broke from the outside. So all of that was considered in the decision

357
00:37:53,880 --> 00:38:03,200
 that the task force recommendation was made at $5,000.

358
00:38:03,200 --> 00:38:11,760
 Thank you. Any more comments or questions or emotions? So they want to go out there.

359
00:38:11,760 --> 00:38:26,200
 Did most of the points come from the historic? Or I guess, no, that's just five points. Okay.

360
00:38:26,200 --> 00:38:36,800
 I think they scored in all the categories, but I don't, I mean, I can start including

361
00:38:36,800 --> 00:38:43,240
 this if you're curious to see each one, but like I said, there's no names on it. I like

362
00:38:43,240 --> 00:38:51,960
 anonymous better. It looks like just glancing at a few here that it was a score of mainly

363
00:38:51,960 --> 00:39:01,000
 three or under on the historic accuracy and design. There was a lot of discussion about

364
00:39:01,000 --> 00:39:06,280
 the historic accuracy because we do have some folks on there who are prior HLC people. But

365
00:39:06,280 --> 00:39:12,240
 I did tell them, if you decide to make recommendations to change the design, then they're going to

366
00:39:12,240 --> 00:39:17,040
 have to go back to the historic landmark commission again and run those back through them. And

367
00:39:17,040 --> 00:39:21,440
 so I think some of the people I've got, the first one on top has a one on historic accuracy,

368
00:39:21,440 --> 00:39:28,320
 but some of them did do threes to fives. Well, it's not just historical accuracy. It's that

369
00:39:28,320 --> 00:39:31,680
 and or is it blend in with what's down there already? The design elements. Something wouldn't

370
00:39:31,680 --> 00:39:36,200
 be completely weird, whatever that would be. You don't want a mirrored building in the

371
00:39:36,200 --> 00:39:42,160
 middle of all that. So it's not. I just wanted to make sure that we weren't losing points

372
00:39:42,160 --> 00:39:48,200
 there because of historic accuracy. If the design quality is very good. I was just curious

373
00:39:48,200 --> 00:39:52,320
 to make sure that those points weren't lost somewhere. It's kind of all over the board.

374
00:39:52,320 --> 00:39:57,000
 Like I said, some people, I could probably tell you who scored what by looking at the

375
00:39:57,000 --> 00:40:02,960
 scores. But some of them score very harder than others. I'll put it that way. Some of

376
00:40:02,960 --> 00:40:07,280
 them are some people are traditionally have a very low score for everything. And some

377
00:40:07,280 --> 00:40:12,000
 people score higher for everything. But like I said, that average score was almost 16 points.

378
00:40:12,000 --> 00:40:17,640
 But you have to get up to 20 to be in the next year. Yeah. And you have to get at least

379
00:40:17,640 --> 00:40:26,920
 14 before any money can be recommended. Yes, I move approval of the recommendation. Second

380
00:40:26,920 --> 00:40:36,160
 to have a motion and a second. Any further discussion? All those in favor say aye. Aye.

381
00:40:36,160 --> 00:40:42,040
 Any opposed? Motion carries unanimously. Thank you. Thanks for going through all that. Thanks

382
00:40:42,040 --> 00:40:45,960
 for going through the process since June. I know that's been a long, long time coming.

383
00:40:45,960 --> 00:40:54,840
 It looks good. All right, our next item is EDP 19002 to receive a report, roll discussion

384
00:40:54,840 --> 00:40:59,720
 and give staff direction regarding the 2017 Economic Development Incentivized Projects

385
00:40:59,720 --> 00:41:07,240
 Net Revenue Report for the City of Denton. I will say before Erica gets started, that's

386
00:41:07,240 --> 00:41:12,320
 the best report, most entering report I've seen that I've been involved in this process.

387
00:41:12,320 --> 00:41:17,200
 It's some really good numbers. We hadn't had a chance to take a look at the prior projects,

388
00:41:17,200 --> 00:41:24,960
 the incentives that were given, and where we stand through 2017. It's pretty interesting

389
00:41:24,960 --> 00:41:51,720
 reading and I would highly recommend everybody get familiar with that. Did somebody check

390
00:41:51,720 --> 00:42:06,080
 your math? I actually did, our finance department did. David Gaines. My name is Erica Sullivan,

391
00:42:06,080 --> 00:42:10,840
 I'm the economic development analyst for the city and I'm going to be talking to you today

392
00:42:10,840 --> 00:42:15,760
 about our net revenue report, previously called the return on investment report and this will

393
00:42:15,760 --> 00:42:21,520
 be a high level overview and we'll move rather quickly. So I'll start by providing the background,

394
00:42:21,520 --> 00:42:31,040
 the structure, what makes up the report, and then quickly summarize the 2017 results. Incentives

395
00:42:31,040 --> 00:42:35,180
 are an important tool that we use to attract and retain investment here in the City of

396
00:42:35,180 --> 00:42:41,240
 Denton. This report measures the fiscal impact of these incentives, evaluates how effective

397
00:42:41,240 --> 00:42:46,920
 these are, this public investment, and will guide our future policy decisions. Like most

398
00:42:46,920 --> 00:42:51,200
 of you know, we do not have type A, type B here in the City of Denton, so we have to

399
00:42:51,200 --> 00:42:57,960
 be a little bit more creative, so we rely on performance tax-based incentives. So preparing

400
00:42:57,960 --> 00:43:07,400
 this cost benefit also helps educate and creates transparency. Here we have the background of

401
00:43:07,400 --> 00:43:12,440
 how it has evolved over time, so the policy was initially established in '89 to attract

402
00:43:12,440 --> 00:43:17,800
 new business and encourage expansions. The intent was to establish public-private partnerships

403
00:43:17,800 --> 00:43:24,380
 that would create a diversified tax base. In 2009, the initial return on investment

404
00:43:24,380 --> 00:43:30,280
 report was created and that's what it was labeled at that time. State and DCTA sales

405
00:43:30,280 --> 00:43:37,680
 tax were added in 2010. In 2013, it was expanded to include the ad valorem revenue for Denton

406
00:43:37,680 --> 00:43:41,680
 County, which includes both the incentives the county partnered with and the incentives

407
00:43:41,680 --> 00:43:47,600
 the county did not partner with. And then the report comprised all the taxing entities

408
00:43:47,600 --> 00:43:54,440
 with the inclusion of the ISD back in 2015. What's not represented here is in 2016, we

409
00:43:54,440 --> 00:44:00,360
 did a complete redesign, both myself and Christina Davis, and the report can now be distributed.

410
00:44:00,360 --> 00:44:06,280
 It's about a 30-page report that most people would not want to digest, except for me, maybe.

411
00:44:06,280 --> 00:44:10,840
 So it can now be distributed depending on audience. So we have a single one-page summary,

412
00:44:10,840 --> 00:44:14,960
 we have the meat of the report, and then the entire report with the project descriptions

413
00:44:14,960 --> 00:44:22,600
 of all the businesses and with the methodology. So now it can reach, I think, a broader audience.

414
00:44:22,600 --> 00:44:28,200
 The structure of the report essentially captures nine points for every incentive presented

415
00:44:28,200 --> 00:44:34,280
 here. So we have the date and the term of the agreement, the cumulative property valuation,

416
00:44:34,280 --> 00:44:42,440
 and that creates the property tax generated, and then sales tax generated if it's applicable.

417
00:44:42,440 --> 00:44:47,160
 And then the cost-benefit percentage and the ratio of return. I'm going to talk about those

418
00:44:47,160 --> 00:44:52,240
 in more detail on the next slide. And then the new jobs created by the project. So we

419
00:44:52,240 --> 00:44:58,560
 track all of these for 10 years for more apples-to-apples comparison as best we can because all of our

420
00:44:58,560 --> 00:45:03,960
 incentives are unique. But, for example, so if you have an incentive that has a term of

421
00:45:03,960 --> 00:45:09,920
 six years, we subtract the incentive for those six years and then continue monitoring their

422
00:45:09,920 --> 00:45:15,120
 investment and what they generate for the remaining four. If a business is here longer

423
00:45:15,120 --> 00:45:20,840
 than that, we still keep it at 10 years, so it goes both ways. And then, finally, expansion

424
00:45:20,840 --> 00:45:28,240
 projects are based on new value only, so we subtract the base year. And we'd be remiss

425
00:45:28,240 --> 00:45:36,080
 without mentioning jobs as well. So here's a summary basically of our methodology that

426
00:45:36,080 --> 00:45:45,360
 we have from the net revenue and cost-benefit. Net revenue is simply the revenue property

427
00:45:45,360 --> 00:45:51,280
 only and/or sales tax if applicable less the incentive. And the report carries the calculations

428
00:45:51,280 --> 00:45:57,520
 a step further. The cost-benefit percentage is the net revenue above divided by the incentive

429
00:45:57,520 --> 00:46:02,180
 times 100 to get the percent. And the rate of return provides the revenue of the taxes

430
00:46:02,180 --> 00:46:06,440
 generated relative to the cost of the incentive as a ratio. So the ratio of return is the

431
00:46:06,440 --> 00:46:13,440
 net revenue property only and/or sales tax generated minus incentive divided by the incentive.

432
00:46:13,440 --> 00:46:20,000
 So the easiest way to put the ratio of return in '17, the example is 3.3. So another way

433
00:46:20,000 --> 00:46:25,800
 of putting it is the city received three times the revenue of the incentive foregone. It's

434
00:46:25,800 --> 00:46:31,220
 also important to note the report only gathers sales tax for the sales tax entities. It also

435
00:46:31,220 --> 00:46:41,840
 captures evaluation. And this would be for our floor developments. And also Christina

436
00:46:41,840 --> 00:46:46,660
 Davis created these infographics. So at a very quick look you can see the summary of

437
00:46:46,660 --> 00:46:53,520
 all that goes into the report. The city awarded a total of 28 incentives. 18 are represented

438
00:46:53,520 --> 00:46:59,080
 in the report and 17. Some were not initiated and then others were terminated so they weren't

439
00:46:59,080 --> 00:47:05,400
 included. The slide illustrates benefits to the city only. The city has invested 16.5

440
00:47:05,400 --> 00:47:10,280
 million in tax-related incentives since the inception in '99. And the return is benefited

441
00:47:10,280 --> 00:47:13,880
 from a net increase in property and sales tax revenues on the far right you'll see

442
00:47:13,880 --> 00:47:21,600
 of 62.4 million. So the cost benefit for incentives awarded is 327%, you see with the money bag

443
00:47:21,600 --> 00:47:28,480
 in the middle there, and have been a total of 7,536 jobs created or retained by the incentivized

444
00:47:28,480 --> 00:47:35,440
 projects. Now you see this in table form. We just went over the city that's in that

445
00:47:35,440 --> 00:47:39,520
 first column there. And you'll see on the far left the total of all incentives. So we

446
00:47:39,520 --> 00:47:44,600
 have the valuation which is cumulative, the property tax, sales tax, the cumulative of

447
00:47:44,600 --> 00:47:50,440
 those two together, less the incentive, and then the net, cost benefit, and the ratio

448
00:47:50,440 --> 00:47:56,880
 of return. Denton County, since we covered in the infographics the city, has participated

449
00:47:56,880 --> 00:48:02,200
 in six Denton incentives to promote development in our community, and they invested a total

450
00:48:02,200 --> 00:48:08,980
 of 1.1 million in tax-related incentives, and they have benefited from a net increase

451
00:48:08,980 --> 00:48:15,840
 of 6.5 million since inception. The cost benefit for all the incentives, both joint and city,

452
00:48:15,840 --> 00:48:25,600
 is 615%. If you look on the far right, Denton ISD participated in two of our tax abatements.

453
00:48:25,600 --> 00:48:30,560
 Texas school districts were not able to participate in tax abatements as it was repealed from

454
00:48:30,560 --> 00:48:34,600
 the Texas legislature, but they were early on, so they were two that they participated

455
00:48:34,600 --> 00:48:43,240
 in, United Copper and Sally. DISD has invested 622,000 in tax-related incentives and has

456
00:48:43,240 --> 00:48:49,400
 benefited from a net increase of 50.5 million since inception. The return investment from

457
00:48:49,400 --> 00:48:55,880
 the tax abatements alone was over 5,000, and the cost benefit from all the incentives is

458
00:48:55,880 --> 00:49:02,080
 over 8,000. But school finance is pretty complicated, so I would be remiss if I didn't mention that

459
00:49:02,080 --> 00:49:06,800
 the different federal, state, and local funding sources and how they're separated. This report

460
00:49:06,800 --> 00:49:11,800
 includes both the maintenance operation and the interest in sinking. So the interest in

461
00:49:11,800 --> 00:49:20,820
 sinking is the only portion of the tax rate that's not affected by funding from the state.

462
00:49:20,820 --> 00:49:26,240
 You have the entire 30-plus page report in your packet. It's also available on the website,

463
00:49:26,240 --> 00:49:28,840
 and I'd be happy to entertain any questions.

464
00:49:28,840 --> 00:49:37,480
 Eric, on the jobs numbers, do you call Peter Bildt and say how many jobs you have? I mean,

465
00:49:37,480 --> 00:49:40,360
 we know what they started with at whatever year, and are we getting that out there?

466
00:49:40,360 --> 00:49:45,160
 We start with what they provide in the application. There's several updates that are done periodically.

467
00:49:45,160 --> 00:49:50,420
 The Chamber actually calls and does that. They do our annual updates. Karen can speak

468
00:49:50,420 --> 00:49:56,320
 to that personally. But also, sometimes I get updates and request updates. We included

469
00:49:56,320 --> 00:50:02,520
 some temporary positions for construction in there as well, and that I have to ask for

470
00:50:02,520 --> 00:50:04,920
 the developers for that, like at Razor Ranch.

471
00:50:04,920 --> 00:50:08,320
 If I have a question, please.

472
00:50:08,320 --> 00:50:15,440
 When these companies are asking for these tax abatements, there's usually an inclusion

473
00:50:15,440 --> 00:50:21,320
 for employment and other considerations. And I remember I had kind of raised this question

474
00:50:21,320 --> 00:50:26,840
 previously about who audits those numbers. You know, if a company says this is what we're

475
00:50:26,840 --> 00:50:33,400
 going to do, who goes back and makes sure that there's actual follow-through on what

476
00:50:33,400 --> 00:50:40,040
 was proposed. Can you talk about the procedure a little bit and how that results in this

477
00:50:40,040 --> 00:50:41,040
 report?

478
00:50:41,040 --> 00:50:46,280
 Sure. Since I administer the incentives, I can talk about compliance in general.

479
00:50:46,280 --> 00:50:51,400
 We do have a certificate of compliance that we've instituted. We haven't had it historically

480
00:50:51,400 --> 00:50:56,080
 for all the incentives, but we have for a lot of our incentives. So that requires them

481
00:50:56,080 --> 00:51:00,720
 to verify certain things, to sign the form, obviously, and to provide certain documentation

482
00:51:00,720 --> 00:51:09,760
 from the central appraisal or their tax bills. So we do that. We also have now instituted

483
00:51:09,760 --> 00:51:17,680
 a federal IRS form that they already supply to the IRS that provides the labor information.

484
00:51:17,680 --> 00:51:23,960
 So we keep improving over time, our process we've refined over time. We just now recently

485
00:51:23,960 --> 00:51:30,120
 have internal auditors. We've had external auditors in the past.

486
00:51:30,120 --> 00:51:32,080
 To assist with that process?

487
00:51:32,080 --> 00:51:33,080
 Yes.

488
00:51:33,080 --> 00:51:34,080
 Okay.

489
00:51:34,080 --> 00:51:37,880
 I'm just going to add something if you don't mind.

490
00:51:37,880 --> 00:51:38,880
 Sure.

491
00:51:38,880 --> 00:51:39,880
 Go ahead.

492
00:51:39,880 --> 00:51:46,200
 Good question about compliance and Erica and partners with our finance staff on some of

493
00:51:46,200 --> 00:51:52,320
 that as well, so that we make sure that we're really getting what we need, verifying it.

494
00:51:52,320 --> 00:51:57,840
 And I'm sure that most folks in the group recall that we have had to terminate three

495
00:51:57,840 --> 00:52:04,840
 incentive agreements in recent years for noncompliance. So we don't want to have to do that, but we

496
00:52:04,840 --> 00:52:10,440
 take it very seriously. And if they're not meeting the requirements under the contract

497
00:52:10,440 --> 00:52:15,560
 and we're not able to verify that, then we do have to terminate the agreements.

498
00:52:15,560 --> 00:52:16,560
 Thank you very much.

499
00:52:16,560 --> 00:52:17,560
 Kaylee?

500
00:52:17,560 --> 00:52:24,400
 Just a couple of questions. I see that the incentive term for Denton Crossing is expiring

501
00:52:24,400 --> 00:52:31,120
 this year, 2019. What month does that fall under? I mean, is that just kind of more towards

502
00:52:31,120 --> 00:52:32,120
 the end of the year?

503
00:52:32,120 --> 00:52:33,120
 I believe it's in August.

504
00:52:33,120 --> 00:52:41,240
 In August? And so then from that point on, what we're seeing here in the sales tax, the

505
00:52:41,240 --> 00:52:46,680
 less the sales tax, that $6 million will come straight back to the city rather than going

506
00:52:46,680 --> 00:52:47,680
 to them.

507
00:52:47,680 --> 00:52:48,680
 That's correct.

508
00:52:48,680 --> 00:52:49,680
 That's really good.

509
00:52:49,680 --> 00:52:51,680
 Does finance know that?

510
00:52:51,680 --> 00:52:55,320
 Yes, I prepare five-year forecasts.

511
00:52:55,320 --> 00:52:56,320
 It's already spent.

512
00:52:56,320 --> 00:53:02,140
 Actually, I'm the staff liaison. I work very closely with finance. It's like my second

513
00:53:02,140 --> 00:53:08,880
 extension of my arm, really. But I prepare five-year forecasts that demonstrate when

514
00:53:08,880 --> 00:53:13,600
 they're going to fall off, all the incentives, and what we anticipate the payment to be.

515
00:53:13,600 --> 00:53:20,320
 Yeah, so I have a question about Sally, because the incentive there, I think, was for -- part

516
00:53:20,320 --> 00:53:25,680
 of it was for the building that we just heard about, that is -- can you kind of explain

517
00:53:25,680 --> 00:53:29,560
 what happens in that situation with an incentive?

518
00:53:29,560 --> 00:53:35,400
 Sally that's included here is an old Sally agreement. The other one hadn't initiated

519
00:53:35,400 --> 00:53:41,560
 -- it was supposed to -- it just initiated this year, tax year '18. In that case, they

520
00:53:41,560 --> 00:53:46,760
 get their first year's payment, because they were there as of January 1st of January '18,

521
00:53:46,760 --> 00:53:52,000
 but we are in the process of terminating that incentive, because they are no longer operating

522
00:53:52,000 --> 00:53:56,520
 on the premises. And that's part of our contract and the compliance. They have to continually

523
00:53:56,520 --> 00:54:00,040
 operate in the same manner in which they applied under.

524
00:54:00,040 --> 00:54:06,160
 So just to be clear, the Sally project that is on here is for their headquarters building

525
00:54:06,160 --> 00:54:12,080
 on Colorado, and it has completed. So, yes, and you'll be getting information in your

526
00:54:12,080 --> 00:54:18,560
 council packet about how we are going to proceed with the current situation and the termination.

527
00:54:18,560 --> 00:54:21,280
 The new incentive to clarify is for their morse property.

528
00:54:21,280 --> 00:54:26,280
 Right. Yeah, okay. Thank you. I just wanted to kind of put that out there, because I saw

529
00:54:26,280 --> 00:54:33,400
 it in the -- Was that information on the termination of that project come to this board before it

530
00:54:33,400 --> 00:54:39,560
 goes to city council? The council doesn't vote on it. It just happens.

531
00:54:39,560 --> 00:54:45,780
 But if you want me to send out the same paragraph that will be in their Friday packet, I'm glad

532
00:54:45,780 --> 00:54:50,200
 to email it to the board. We make the recommendation that goes to city

533
00:54:50,200 --> 00:54:54,200
 council. They approve it. We ought to be apprised of anything that's changing any of those things.

534
00:54:54,200 --> 00:54:57,960
 I think I sent those out to y'all when we had to terminate the other three. So I'll

535
00:54:57,960 --> 00:55:06,760
 make sure to do it this time, too. Any other questions or comments on the report?

536
00:55:06,760 --> 00:55:14,640
 So for you new folks, it's a really good history lesson on incentives and where we're at.

537
00:55:14,640 --> 00:55:20,360
 And also keep in mind, this is through 2017, so it's taking a while to get all this data

538
00:55:20,360 --> 00:55:27,240
 gathered. But it's a good place to start and figure out what's happened in the past and

539
00:55:27,240 --> 00:55:32,640
 get caught up pretty quickly. Mr. Chairman, do you mind if we give Erica

540
00:55:32,640 --> 00:55:39,640
 and her staff a round of applause on this? That would be great.

541
00:55:39,640 --> 00:55:49,240
 Thank you. All right. Item 19003, receive a report, hold discussion and give staff direction

542
00:55:49,240 --> 00:55:54,080
 regarding the development of the coal ranch and hunter ranch master plan communities in

543
00:55:54,080 --> 00:56:18,880
 southwest Denton. I know some of you have probably been following

544
00:56:18,880 --> 00:56:25,160
 the discussion about the coal and hunter ranch master plan communities. This is an informational

545
00:56:25,160 --> 00:56:31,280
 item for this board. Just going to run through some of the overall basics of the project

546
00:56:31,280 --> 00:56:35,680
 and then I'm happy to answer questions if you have them.

547
00:56:35,680 --> 00:56:40,280
 So we'll start out here, and I know this is a little bit difficult to see, maybe easier

548
00:56:40,280 --> 00:56:48,920
 to look at it in your backup packet. But this is a depiction of coal ranch on the north

549
00:56:48,920 --> 00:56:55,280
 here to this boundary and hunter ranch on the south here to this boundary. And to orient

550
00:56:55,280 --> 00:57:04,440
 you a little bit, this is Robeson Ranch right here. And then up here is the Denton Enterprise

551
00:57:04,440 --> 00:57:12,920
 Airport and this shows the future path of loop 288. And then this is obviously I-35W

552
00:57:12,920 --> 00:57:22,240
 here. So the owners of hunter ranch actually have property on both the west and east sides

553
00:57:22,240 --> 00:57:27,200
 of 35W. Does anybody have any questions about where we are and what we're talking about

554
00:57:27,200 --> 00:57:37,280
 on the map? Again, some of you may remember that in recent years, coal ranch has approached

555
00:57:37,280 --> 00:57:42,880
 the city council about establishing a public improvement district or a PID to finance the

556
00:57:42,880 --> 00:57:49,600
 required public infrastructure for the development. In the past, council has declined to establish

557
00:57:49,600 --> 00:57:54,920
 a PID primarily because of concerns about the debt that would be issued and included

558
00:57:54,920 --> 00:58:02,860
 on the city's financials, among other issues. The current iteration of the project is coal

559
00:58:02,860 --> 00:58:08,080
 and hunter ranch, both of which represent about 3,000 acres in that southwest quadrant

560
00:58:08,080 --> 00:58:13,400
 of Denton. They're both zoned as master plan communities. They've come together to propose

561
00:58:13,400 --> 00:58:20,240
 a coordinated 6,000 acre community with a municipal management district over the property

562
00:58:20,240 --> 00:58:26,480
 instead of a public improvement district or another type of district.

563
00:58:26,480 --> 00:58:32,200
 Summary of the project, as I mentioned, it's about 6,000 acres in total. They're estimating

564
00:58:32,200 --> 00:58:41,040
 982 million in total project costs for infrastructure and amenities, 485 of which would be reimbursable

565
00:58:41,040 --> 00:58:47,520
 through the MMD. And I want to also note that these are preliminary numbers that were provided

566
00:58:47,520 --> 00:58:54,120
 by the developer. The city's financial advisors have not reviewed and verified these yet.

567
00:58:54,120 --> 00:58:59,800
 I will tell you more about when that's going to happen a little bit later on in the presentation.

568
00:58:59,800 --> 00:59:05,880
 The project is estimated to have a 40 year build out. They're talking about almost 16,000

569
00:59:05,880 --> 00:59:13,320
 single family units, a little over 5,000 units of multifamily, about 420 commercial acres

570
00:59:13,320 --> 00:59:20,960
 and 101 industrial acres in the project.

571
00:59:20,960 --> 00:59:26,880
 The developers gave us some broad outlines for the revised master plan that they plan

572
00:59:26,880 --> 00:59:34,360
 to develop. Each of the communities that they have in other places, including in North Texas

573
00:59:34,360 --> 00:59:40,200
 around the Austin area, they tell us that they try to develop with character and amenities

574
00:59:40,200 --> 00:59:45,720
 that are unique to the area and the communities. They do that through a process of stakeholder

575
00:59:45,720 --> 00:59:51,760
 input. They want to preserve the natural open spaces and include a lot of hike and bike

576
00:59:51,760 --> 00:59:57,400
 trail connectivity throughout the property. They're proposing diverse neighborhoods with

577
00:59:57,400 --> 01:00:02,720
 a range of high quality housing types and prices. They want to have activity focused

578
01:00:02,720 --> 01:00:09,320
 programming, which is a big feature of a lot of the newer master plan communities that

579
01:00:09,320 --> 01:00:14,720
 are being developed now. Six elementary schools, two middle schools and one high school are

580
01:00:14,720 --> 01:00:22,160
 planned for the property. Then there will also be retail and commercial centers.

581
01:00:22,160 --> 01:00:27,280
 What a municipal management district does is enable the developers to recapture a part

582
01:00:27,280 --> 01:00:34,400
 of the cost of the required public infrastructure. The developer would pay to put in all of the

583
01:00:34,400 --> 01:00:40,400
 infrastructure and then be reimbursed for those costs through the bonds that would be

584
01:00:40,400 --> 01:00:47,440
 issued by the MMD itself. An MMD is a political subdivision separate from the city that can

585
01:00:47,440 --> 01:00:52,400
 collect property taxes from property owners within the districts under limitations that

586
01:00:52,400 --> 01:01:00,920
 are set by the city itself. Reimbursement only occurs after the developer paid for and

587
01:01:00,920 --> 01:01:05,860
 built the improvements and created the assessed value from homes, commercial and industrial

588
01:01:05,860 --> 01:01:13,680
 buildings at a ratio of 10 to 1 before the bond can be issued. They have to create ten

589
01:01:13,680 --> 01:01:19,120
 times the value of the amount of bond that's being issued. Again, the revenue from the

590
01:01:19,120 --> 01:01:23,280
 property taxes collected from the property owners within the district is what's used

591
01:01:23,280 --> 01:01:32,640
 to pay back the debt issued by the MMD. This is just a basic tax rate comparison of

592
01:01:32,640 --> 01:01:39,560
 some of the other communities, some of the other master plan communities that have municipal

593
01:01:39,560 --> 01:01:44,680
 management districts or special districts. In the immediate area mostly, and you can

594
01:01:44,680 --> 01:01:50,880
 see some familiar names on that list there, but I do want to point out that Colon Hunter

595
01:01:50,880 --> 01:01:59,120
 Ranch is this column right here. The number that we've been talking about as the maximum

596
01:01:59,120 --> 01:02:07,380
 tax rate that the MMD would assess is 55 cents per hundred in valuation. That puts the total

597
01:02:07,380 --> 01:02:17,440
 tax rate for that development at $2.93 approximately per hundred dollars in valuation. You can

598
01:02:17,440 --> 01:02:22,920
 see that there are a couple of others that would have higher total tax stacks, some that

599
01:02:22,920 --> 01:02:31,160
 are very close, and then a couple down here that are significantly less than that. There

600
01:02:31,160 --> 01:02:39,360
 are several documents that are required to create the MMD. We did have a vote with the

601
01:02:39,360 --> 01:02:47,080
 council last night to approve this resolution of support, which has to go to the Texas legislature

602
01:02:47,080 --> 01:02:55,200
 as part of the legislative process because we have to have legislation signed into law

603
01:02:55,200 --> 01:03:01,140
 to allow the MMD to be established. Without that, it cannot be established. Last night,

604
01:03:01,140 --> 01:03:08,920
 a separate resolution of support was passed for both Cole and Hunter Ranch. That will

605
01:03:08,920 --> 01:03:17,640
 then begin working its way through the legislative process. Assuming that that does get signed

606
01:03:17,640 --> 01:03:23,440
 by the governor's office, there are three documents that have to be established or passed

607
01:03:23,440 --> 01:03:28,480
 by the council then. First, the city consent ordinance, then the MMD operating agreement,

608
01:03:28,480 --> 01:03:33,400
 which is between the city and the MMD itself, and then finally the developer agreement,

609
01:03:33,400 --> 01:03:40,520
 which is between the city and the developers of the property. All of those documents provide

610
01:03:40,520 --> 01:03:46,360
 limitations and parameters around different aspects of the project, and they all will

611
01:03:46,360 --> 01:03:52,440
 be voted on together if we get to that point. If one of them doesn't make it through the

612
01:03:52,440 --> 01:03:57,440
 process, none of them make it through the process and the district is not established.

613
01:03:57,440 --> 01:04:05,480
 There are a lot of opportunities for feedback from the community, from the city council

614
01:04:05,480 --> 01:04:09,680
 as this project goes forward, and I think that's something that's very important for

615
01:04:09,680 --> 01:04:15,880
 everybody to realize is that what happened last night just enables us to continue through

616
01:04:15,880 --> 01:04:21,320
 the discussion and the vetting of whether or not this is the right project for Dutton,

617
01:04:21,320 --> 01:04:28,080
 and there are many steps in the process before it reaches its completion. So what I just

618
01:04:28,080 --> 01:04:34,920
 said about the council having many opportunities to set expectations and give that direction.

619
01:04:34,920 --> 01:04:43,240
 So we moved through bullet number one here. We'll be moving into bullets number two and

620
01:04:43,240 --> 01:04:50,520
 three over the months, taking the time that we need to get it done. So this is a little

621
01:04:50,520 --> 01:04:55,400
 outdated because we did have that meeting last night. The developers requested the resolutions,

622
01:04:55,400 --> 01:05:00,200
 the council passed them. The other thing that the council approved last night is the city's

623
01:05:00,200 --> 01:05:07,760
 ability to enter into an escrow agreement that will be funded by the developer, $25,000

624
01:05:07,760 --> 01:05:15,400
 apiece for a total of $50,000 that will allow the city to hire a consultant to conduct an

625
01:05:15,400 --> 01:05:20,920
 independent fiscal analysis, an independent legal analysis. We're talking about bringing

626
01:05:20,920 --> 01:05:27,200
 in professional administrators of municipal management districts to review the project

627
01:05:27,200 --> 01:05:33,840
 to get a full and complete view of the costs and the benefits to the city of Dutton for

628
01:05:33,840 --> 01:05:44,640
 this project over time. And that is where it stands today. City staff is working to

629
01:05:44,640 --> 01:05:51,280
 find the escrow agent, get that fund going and continue moving through the process. So

630
01:05:51,280 --> 01:05:55,480
 I'm happy to answer any questions about that. I know it's a lot of information at kind of

631
01:05:55,480 --> 01:06:00,960
 a high level. There's plenty more of it in your backup, but I'm glad to take questions

632
01:06:00,960 --> 01:06:07,560
 if you all have them. >> So are this is informational purposes

633
01:06:07,560 --> 01:06:12,480
 only? >> Correct. This doesn't require a recommendation

634
01:06:12,480 --> 01:06:17,000
 from this board. >> Any comments or questions?

635
01:06:17,000 --> 01:06:27,040
 >> I have three. Is that within my allotment? >> That's your limit.

636
01:06:27,040 --> 01:06:33,400
 >> Firstly, thank you for the presentation. And just from my own perspective, as I'm driving

637
01:06:33,400 --> 01:06:37,480
 towards Fort Worth, it's going to be the area to the left?

638
01:06:37,480 --> 01:06:43,040
 >> To the right. >> Okay. It's on the same side as Robeson?

639
01:06:43,040 --> 01:06:46,060
 >> Yes, sir. >> Okay. Perspective. Thank you.

640
01:06:46,060 --> 01:06:52,040
 >> I'm sorry. I'll amend that a little bit. It's mostly to the west. But here I'll go

641
01:06:52,040 --> 01:07:01,400
 back to the map. Some of the commercial is on the east side. So here's 35. And here's

642
01:07:01,400 --> 01:07:09,080
 the west side. Here's Robeson. And then here is some of the commercial land on the other

643
01:07:09,080 --> 01:07:14,560
 side of 35. >> And is that currently city limits or ETJ?

644
01:07:14,560 --> 01:07:21,840
 >> All of this is within the city limits. >> Okay. And I guess I'm not much of a roamer.

645
01:07:21,840 --> 01:07:29,320
 I don't roam out in the raw land. So I wasn't aware that you had enough land there for six

646
01:07:29,320 --> 01:07:33,800
 elementary schools, two middle schools, and one high school all in that area.

647
01:07:33,800 --> 01:07:37,520
 >> Yes, sir. >> That's quite a build out. Yeah. Okay. I

648
01:07:37,520 --> 01:07:43,200
 think I had one more question. >> You only got permission for three.

649
01:07:43,200 --> 01:07:51,480
 >> Was that three? Thank you. Jill. >> I have a couple of just curiosity questions

650
01:07:51,480 --> 01:07:57,680
 really. And you may or may not have the answers. First, there's no obligation for our representative

651
01:07:57,680 --> 01:08:02,160
 or senator to present this legislation. Is that correct? Or is there an obligation for

652
01:08:02,160 --> 01:08:06,920
 one of them to take it up? Because it will have to be sponsored by?

653
01:08:06,920 --> 01:08:13,800
 >> Right. The word obligation is I think is what's tripping me up a little bit. So Representative

654
01:08:13,800 --> 01:08:19,640
 Stuckey is going to introduce the bill. I don't think he has to. But he has agreed to

655
01:08:19,640 --> 01:08:24,320
 do so. >> Okay. The second question is as far as

656
01:08:24,320 --> 01:08:29,520
 the schools in these communities, I would assume that DISD would still have to purchase

657
01:08:29,520 --> 01:08:39,520
 that property from the developers. >> DISD has purchased one school site. Purchase

658
01:08:39,520 --> 01:08:45,120
 or donation is a negotiating point that has not been worked out yet.

659
01:08:45,120 --> 01:08:51,680
 >> Okay. Again, just kind of curious. Don't mean to get in the weeds. Thank you.

660
01:08:51,680 --> 01:09:00,120
 >> I noticed the taxing graph that you had on the comparable communities that the Canyon

661
01:09:00,120 --> 01:09:04,680
 Falls, which is if you haven't driven through there, is really nice. I'm curious if the

662
01:09:04,680 --> 01:09:11,400
 part that's in Flyer Mound is not as nice as the part that's in the ETJ because I guess

663
01:09:11,400 --> 01:09:16,360
 Flyer Mound did not agree to do that in the part that's within their city limits.

664
01:09:16,360 --> 01:09:30,560
 >> Right. I can't speak to the quality differences. >> That's a big development. I will say and

665
01:09:30,560 --> 01:09:37,800
 I meant to bring up to think we're looking at maybe having a joint city council and economic

666
01:09:37,800 --> 01:09:41,500
 development board meeting down the road. I think I proposed that to council yesterday

667
01:09:41,500 --> 01:09:47,320
 and hopefully that will work out. But housing is a -- it's a big life cycle. Housing is

668
01:09:47,320 --> 01:09:51,520
 a part of the equation whether we need to do this or not. But it's when you bring people

669
01:09:51,520 --> 01:10:00,520
 here and they bring employees and of all wage type earners, housing is a big deal. A lot

670
01:10:00,520 --> 01:10:05,400
 of people come here and live in Flyer Mound or Argyle and places like that and need housing

671
01:10:05,400 --> 01:10:11,680
 and they need affordable housing too. So it's part of our equation. We're not doing anything

672
01:10:11,680 --> 01:10:15,720
 today. But it's a big part of it. It needs to be on our radar.

673
01:10:15,720 --> 01:10:20,640
 >> I will just add to the joint meeting. I did request that at the end of the meeting

674
01:10:20,640 --> 01:10:25,200
 for council recommendations. So I hope that will be coming soon.

675
01:10:25,200 --> 01:10:30,680
 >> We're working on scheduling that now. >> Thank you. Any comments or questions?

676
01:10:30,680 --> 01:10:43,600
 All right. Thank you. All right. Moving right along. Our next item is to consider our minutes

677
01:10:43,600 --> 01:10:54,360
 from our November 14th, 2018 meeting. That's item 19-004. Any questions, comments, motions?

678
01:10:54,360 --> 01:11:04,120
 >> I'll make a -- on page 128, just to clarify, it's correct in the header as far as the chairperson

679
01:11:04,120 --> 01:11:10,080
 and vice chairperson. But Briggs nominated John Baines to continue as vice chairperson

680
01:11:10,080 --> 01:11:15,200
 at this time. >> Okay. So is that a motion --

681
01:11:15,200 --> 01:11:25,040
 >> I move that we accept the minutes as presented with the exception of adding the word vice

682
01:11:25,040 --> 01:11:31,440
 to A -- section 1A. >> Somebody like to second that?

683
01:11:31,440 --> 01:11:37,240
 >> I'll second. >> We have a motion and a second.

684
01:11:37,240 --> 01:11:41,000
 Any more discussion? All those in favor say aye.

685
01:11:41,000 --> 01:11:49,680
 Any opposed? The minutes are approved. And as much as I would love to have our staff

686
01:11:49,680 --> 01:11:53,880
 report today, is there anything that you guys additionally need to tell us that's not in

687
01:11:53,880 --> 01:11:58,880
 the report that we couldn't go find ourselves given that we're behind schedule?

688
01:11:58,880 --> 01:12:06,840
 >> I hope that everyone is aware that the city council approved the incentive for Tyson

689
01:12:06,840 --> 01:12:15,280
 Foods -- was that last week, I think? And all signs point to that project moving forward

690
01:12:15,280 --> 01:12:23,020
 positively and we'll keep you updated on that as more information becomes available.

691
01:12:23,020 --> 01:12:27,880
 >> Anybody opposed to skipping the staff reports? We can move on.

692
01:12:27,880 --> 01:12:34,120
 I don't want to discount all the work you all do to do that, but it's out there for our

693
01:12:34,120 --> 01:12:40,280
 public review and we'll catch up on that. So if that's okay, we will skip item number

694
01:12:40,280 --> 01:12:47,320
 five and I'll take a motion to adjourn. >> I'll move.

695
01:12:47,320 --> 01:12:51,280
 >> Second. >> All right.

696
01:12:51,280 --> 01:12:52,480
 We have --