Loading...
2006-10-23 TAX INCREMENT REINVESTMENT ZONE NO. 2 BOARD MEETING MINUTESMINUTES OF THE BOARD OF DIRECTORS MEETING TAX INCREMENT REINVESTMENT ZONE NUMBER TWO CITY OF PEARLAND, TEXAS October 23, 2006 A special meeting of the Board of Directors (“Board”) of the Tax Increment Reinvestment Zone Number Two (“Zone”), City of Pearland, Texas, was held in the Council Chambers of City Hall, which is located at 3519 Liberty Drive, Pearland, Texas, on Monday, October 23, 2006, at 4:00 p.m. The meeting was open to the public. Board Members in attendance: Board Members not in attendance: Gary Cook, Vice Chair Nigel Harrison, Chair Mike Pyburn, Secretary Gary Davis Larry Loessin Ron Castillo Jo Knight Donna Coleman Ken Phillips City of Pearland representatives in attendance: Consultants in attendance: Hon. Tom Reid Lynne Humphries - Allen Boone Humphries Bill Eisen Robinson, LLP Claire Manthei Mark McGrath – Null-Lairson James Ross – LJA Engineering & Surveying, Inc. Sue Darcy – Knudson & Associates, LP Charles Knight – Knudson & Associates, LP Neal Rackleff - Locke Liddell & Sapp LLP Developer representatives in attendance: Will Deane - Transwestern 1. Call the meeting to order, take attendance and verify that a quorum is present. The meeting was called to order at 4:00 p.m. and attendance was taken. The following Directors were present: 1. Gary Cook 2. Mike Pyburn 3. Larry Loessin 4. Ron Castillo 5. Donna Coleman 6. Ken Phillips Those present constituted a quorum. Chairman Nigel Harrison and Directors Jo Knight and Gary Davis were not in attendance. 1 2. Discuss and approve minutes of the August 28, 2006 Board meeting. The minutes of August 28, 2006 were presented. Director Coleman moved that the Board approve those minutes without revision. Director Phillips seconded the motion. Following discussion, the Board unanimously approved the motion. 3. Discuss and take necessary action regarding Auditor’s Report on TIRZ Invoices Presented for Payment and approval of outstanding administrative invoices to date. Mark McGrath with Null-Lairson, Auditors for the Zone, reviewed the Report with the Board and confirmed that any invoices that exceed the estimated annual TIRZ administration and management cost of $175,000 will come before the full Board for consideration. He noted that there was $54,572.66 in outstanding administrative invoices to date, which represented a $38,469.43 over the $175,000 annual estimate. Sue Darcy and Charles Knight with Knudson & Associates, L.P., Administrators for the Zone, explained that the overage was due to work related to the various Project Plan Amendments. Lynne Humphries with Allen Boone Humphries Robinson, LLP, Attorneys for the Authority, added that the fees associated with the Plan Amendments were noted in the invoices, which were available for the Board’s review. Mr. McGrath reminded the Board that these Plan amendments include proposals for increasing the annual TIRZ administration and management estimate of costs. Director Castillo moved that the Board approve the Auditor’s Report on the TIRZ invoices and the outstanding administrative invoices to date for payment. Director Phillips seconded the motion. Following discussion, the Board unanimously approved the motion. 4. Discuss and take necessary action regarding approval of Fiscal Year 2007 Annual Budget. Claire Manthei, Finance Director for the City of Pearland, presented the Fiscal Year 2007 Annual Budget to the Board. Specifically, she confirmed that the $1,322,867 in Miscellaneous Services for Fiscal Year 2006 Budget includes the City’s administrative fee. She also noted the developer reimbursements to date and that the Fiscal Year 2007 Adopted Budget included retention of funds sufficient to pay the Zone’s administration. She then reviewed the Fiscal Year 2007 Adopted Budget in detail, noting the $275,000 in annual administrative fees reflected the costs associated with the expanded Zone and potential Community Redevelopment Coalition membership fee. Director Phillips asked if the $2,973,123 for FY 2007 included principal and interest payments, to which Ms. Manthei responded that it did. She added that the remaining $3,435,294 which was available would be transferred to the Development Authority of Pearland per the Tri-Party Agreement. She confirmed for Director Pyburn that the Alvin Independent School District (“AISD”) funds were net of the 75 percent rebate to AISD. Director Phillips moved that the Board adopt the Fiscal Year 2007 Annual Budget. Director Castillo seconded the motion. Following discussion, the Board unanimously approved the motion. 5. Discuss and take necessary action regarding approval and adoption of proposed Second Amendment to the Project and Financing Plan to include additional public improvements (Transwestern Project), and recommend adoption to City Council, 2 and recommend City Council submit Plan Amendment to participating jurisdictions for review. Bill Eisen, City Manager for the City of Pearland, reported that the process related to the Second Amendment to the Project and Financing Plan had been accelerated due in part to Fort Bend County’s request that they be provided with the effect that the proposed 10-acre annexation would have on the life of the Zone. Mr. Eisen confirmed that Alvin Community College had asked that an opt-out clause be included in the proposed participation agreement with the TIRZ, to which the City could not agree, so there is no ACC participation in either the original Zone or the expanded Zone. Sue Darcy noted that the value of the Transwestern property at build-out is estimated to be $162,000,000, and is in addition to the projected build-out value of the original Zone. She added that an additional $19,000,000 in tax increment revenue is expected to be generated by the Transwestern development over the life of the Zone. Ms. Darcy noted the proposed amendment includes approximately $11,700,000 worth of project costs, a portion of which ($2.8 million) will fund the Broadway/FM 518 improvements. Mr. Eisen confirmed that plans for Broadway, between Kirby Drive and Highway 288, include widening the road to three lanes in each direction, plus turn lanes. Ms. Humphries confirmed that the interest rate on the developer-advanced project costs would be same as that of the Master Developer Reimbursement Agreement, 6.5 percent. Mr. Eisen added that estimates demonstrate Shadow Creek Ranch Development Co. could be paid off by 2011, and Transwestern could be paid off by 2016. Director Phillips noted that the cost of the pipeline relocations is split between the Zone and Transwestern 50/50. Director Jo Knight arrived at 4:34 p.m. In response to a question from Director Loessin, Mr. Eisen and Will Dean with Transwestern confirmed that the costs would be split 50/50 up to $700,000, after which Transwestern would pick up any overage. Director Castillo moved that the Board approve and adopt the Second Amendment to the Project and Financing Plan, and recommend adoption to City Council, and recommend City Council submit the Plan Amendment to participating jurisdictions for review. Director Pyburn seconded the motion. Following discussion, the Board unanimously approved the motion. 6. Discuss and take necessary action regarding approval and adoption of proposed Third Amendment to the Project and Financing Plan to annex public right-of-way for the expansion of Broadway between Kirby Drive and Kingsley Drive, and recommend adoption to City Council, and recommend City Council submit Plan Amendment to participating jurisdictions for review. Bill Eisen reviewed the reasons for drafting a Third Amendment to the Project and Financing Plan to annex public right-of-way for the expansion of Broadway between Kirby Drive and Kingsley Drive. Sue Darcy reviewed with the Board the exhibit illustrating the location of the proposed improvements. In response to question form Director Loessin, Mr. Eisen noted that as a result of the inclusion of the proposed project costs, the life of the Zone might be extended by just a few months. He also added that the project would likely be funded by a coalition of developers. He confirmed that the City’s Major Thoroughfare Plan shows this segment of 3 Broadway being widened to six lanes, but the TIRZ-planned four lane widening should suffice for the foreseeable future. Director Cook added that the planned median would provide right-of- way that could be paved at a later date. Director Castillo moved that the Board approve and adopt the proposed Third Amendment to the Project and Financing Plan to annex public right-of- way for the expansion of Broadway between Kirby Drive and Kingsley Drive, and recommend adoption to City Council, and recommend City Council submit this Plan Amendment to the participating jurisdictions for review. Director Pyburn seconded the motion. Following discussion, the Board unanimously approved the motion. 7. Discuss and take necessary action regarding approval of Maintenance and Use Agreement for TIRZ Improvements and Detention Facilities by and between Shadow Creek Ranch Town Center Property Owners Association, Shadow Creek Retail, L.P., Brazoria County Municipal Utility District No. 35 and the City of Pearland, Texas. Ms. Humphries explained that the Maintenance and Use Agreement for TIRZ Improvements and Detention Facilities by and between Shadow Creek Ranch Town Center Property Owners Association, Shadow Creek Retail, L.P., Brazoria County Municipal Utility District No. 35 and the City of Pearland, Texas required no Board action. She said it was presented for informational purposes only. The Board took no action on the Agreement. 8. Discuss and take necessary action regarding approval and adoption of Resolution Approving Amendment No. 1 to Tax Increment Participation Agreement by and between the City of Pearland, Texas, Brazoria County and Reinvestment Zone Number 2, City of Pearland, Texas. Ms. Humphries explained that this Amendment No. 1 to the Tax Increment Participation Agreement by and between the City of Pearland, Texas, Brazoria County and Reinvestment Zone Number 2, City of Pearland, Texas (a.k.a Interlocal Agreement) outlines the terms of Brazoria County’s participation in Plan Amendments Nos. 1, 2 & 3. She noted that it has been approved by Commissioners Court, but will not be effective until signed by Commissioners Stanley and Harris. She did say that the Amendment would be presented to City Council tonight for consideration. In response to a question, Mark McGrath stated that the land costs for the additional projects were based on a settlement statement, and the land has not yet been purchased. Mr. Eisen added that the land cost may be less, but it will not exceed the budgeted $6,000,000. Director Phillips moved that the Board approval and adoption of Resolution Approving Amendment No. 1 to Tax Increment Participation Agreement by and between the City of Pearland, Texas, Brazoria County and Reinvestment Zone Number 2, City of Pearland, Texas. 4 9. Discuss and take necessary action regarding approval and adoption of Resolution Approving Amendment No. 1 to Tax Increment Participation Agreement by and between the City of Pearland, Texas, Fort Bend County and Reinvestment Zone Number 2, City of Pearland, Texas. Ms. Humphries reviewed the Amendment with the Board. Director Castillo moved that the Board approve and adopt the Resolution Approving Amendment No. 1 to Tax Increment Participation Agreement by and between the City of Pearland, Texas, Fort Bend County and Reinvestment Zone Number 2, City of Pearland, Texas. Director Phillips seconded the motion. Following discussion, the Board unanimously approved the motion. 10. Discuss and take necessary action regarding approval and adoption of Developer Reimbursement Agreement by and between the City of Pearland, Texas, Shadow Creek Retail, L.P. (Transwestern) and Reinvestment Zone Number 2, City of Pearland, Texas. Ms. Humphries reviewed the Agreement with the Board, and noted minor revisions. She added that the City requested the Board also consider approving the initial Letter Financing Agreement (“LFA”) under this Developer Reimbursement Agreement in the amount of $9,949,618 for the Phase 1 public improvements, which constitute the bulk of the improvements to be constructed by Transwestern. Neal Rackleff with Locke, Liddell, Sapp further explained that the public improvements in the LFA include all major roads, water and sewer lines, drainage, detention, pipeline relocation, and associated engineering costs. The LFA does not include overhead utilities and associated engineering costs. Director Phillips moved to approve and adopt the Developer Reimbursement Agreement by and between the City of Pearland, Texas, Shadow Creek Retail, L.P. (Transwestern) and Reinvestment Zone Number 2, City of Pearland, Texas, inclusive of the initial Letter Financing Agreement (“LFA”) under this Developer Reimbursement Agreement in the amount of $9,949,618 for the Phase 1 public improvements. Director Knight seconded the motion. Following discussion, the Board unanimously approved the motion. 11. Discuss and take necessary action regarding approval of the Auditor’s Report on Developer Reimbursement No. 7 and make recommendation to City for Reimbursement. Mark McGrath reviewed the Report with the Board and confirmed that the projects contained in Letter Financing Agreement Number 04-07-003 were completed within the budget stated in the LFA. Mr. McGrath noted that, per the Development Agreement with Shadow Creek Ranch Development Company, Ltd., the interest rate on these Developer Advances has been calculated at 6.5 percent. Director Pyburn moved that the Board approve the Auditor’s Report on Developer Reimbursement No. 7 and recommend to the City that the projects contained therein be reimbursed. Director Castillo seconded the motion. Following discussion, the Board unanimously approved the motion, with Director Cook abstaining. 5 12. New Business. No new business was brought before the Board. 13. Any other matters which may properly come before the Board. There were no other matters brought before the Board. 14. Adjournment. There being no further business, Director Castillo moved that meeting be adjourned. Director Pyburn seconded the motion. Following discussion, the meeting was adjourned at 5:18 p.m. Approved: ____________________ Nigel Harrison Chairman Tax Increment Reinvestment Zone Number Two City of Pearland, Texas 6