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1998-12-07 CITY COUNCIL PUBLIC HEARING MEETING MINUTESMINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON DECEMBER T, 9998 AT 6:30 P.M., IN THE COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. The meeting was called to order with the following present: Mayor Councilmember Councilmember Councilmember Councilmember City Attorney City Secretary Tom Reid Richard Tetens William Berger Helen Beckman Klaus Seeger Darrin Coker Young Lorfing Absent: Mayor Pro -Tem Larry Wilkins and Interim City Manager Glen Erwin. Others in attendance: Sr. Project Manager Alan Mueller; City Engineer John Hargrove; Utility Accounts Supervisor Missy Miller. PURPOSE OF HEARING - CREATION OF TAX INCREMENT REINVESTMENT ZONE NUMBER TWO, CITY OF PEARLAND, TEXAS To consider the creation of ('TIRZ") Tax Increment Reinvestment Zone Number Two (Shadow Creek Ranch) in accordance with Chapter 311 of the Texas Tax Code. STAFF REVIEW OF PROPOSED TAX INCREMENT REINVESTMENT ZONE NUMBER TWO Sr. Project Manager, Alan Mueller, gave a summary of the creation of (TIRZ) Tax Increment Reinvestment Zone: On December 14, 1998 there will be the second reading on the annexation of the proposed (TIRZ) Tax Increment Reinvestment Zone property into the City of Pearland. The (TIRZ) Tax Increment Reinvestment Zone creation will be done by ordinance on December 14, there will be a (PID) Public Improvement District creation public hearing prior to the meeting on the 14th , and the consideration of the (PID) Public Improvement District on the agenda. We have already had the (PUD) Plan Unit Development Page 1 of 4 12/7 02 Ordinance adopting the "use" component of all of this. The (TIRZ) Tax Increment Reinvestment Zone and the (PID) Public Improvement District is the "financial" component. The Development Agreement is an agreement between the City and Shadow Creek Limited which would lay out the roles and responsibilities of the various parties. The Construction Management Agreement would further define construction issues. The interlocal participation agreements establish at least on the City side, the levels by which the other entities will participate. Mr. Mueller covered the projected participation percentages that each of the entities would contribute. The City would participate for years one through three with 100% of the new increment taxes; years' four through eight with 64% of the new increment taxes going into the fund and for years nine through the end of the zone, 36% would go into the zone fund. Brazoria and Ft. Bend Counties would participate for the first ten years with 100% of their taxes going into the fund; years eleven through twenty, 75% and year twenty one through the end the zone, 50% would go into the zone fund. Brazoria Drainage District No. 4 would participate at a 50% across the board. All of those are still subject to finalizing. These numbers do not include the school districts participating. Another issue that would be included in the Development Agreement would be the proposal that has been discussed, for the $15,000,000 "jump start" financing which would be backed by the capitalized interest and the letter of credit. The City debt must be refunded by the TIRZ (Tax Increment Reinvestment Zone) before new TIRZ debt is issued. The TIRZ will fund overall major improvements; such as the roadways and drainage facilities that need to be constructed. The (PID) Public Improvement District would a financing mechanism for the smaller neighborhood improvements and would be built on a smaller scale. Based on the projections, the Developer will expend approximately $141,000,000 of the non - reimbursable funds. The City of Pearland would have a local match of approximately $2,258,000 for the Economic Development Assistance Grant which is being used to build the water line, and is included in the current budget that will be supported by impact fees. Future water and wastewater improvements are estimated to be approximately $24,360,881 and park improvements estimated $4,830,804. Patti Joiner Knudson of Knudson and Associates presented the projection of debt service fund cash flow and the projection of the Developer advances and reimbursements. Gary Cook, 1077 Westhmer, addressed Council stating that this would be a showcase development on the Shadow Creek property. In this development they will end up with more than 460 acres of parks and open space, 22 miles of hiking and biking trails, and nice wide thoroughfares that are heavily landscaped. This is a well -conceived; plan thought out and developed in a timely manner. The increase in commercial base tax income with just the sales and franchise tax generated from this property, will be in excess of $3,000,000 a year to the City. The property tax income currently generates about $15,000 a year because of the agriculture exemptions. Immediately, the taxes increase to about $44,000 to $45,000 dollars a year. By the year 2005 taxes increase to Page 2 of 4 12/7 0.1 $238,000, and in 2011, taxes increase to $850,000 and more than $1,300,000 at the end of the zone. Mr. Cook listed various public facilities that would be provided through the zone. It is important to get underway as soon as possible. If it is carried over to next year, it would result in a step base year value for the zone. The property value is the base year that the zone is created and right now that is $6,000,000. If it is done next year that would result in a deficiency for the zone, because the base is higher. In closing Mr. Cook stated that if the zone is created this year Alvin Independent School District is left in the best position to take advantage of any grandfathering because of any legislative changes in relationship to their funding. CITIZEN COMMENTS Joe Zvanut, 2905 Yorkshire, addressed Council stated that this is all this is about is about money. Mr. Zvanut addressed various sections of the prospectus. In closing he stated that this looks like Clover field all over again. Dr. Glen Garrison, 1902 Meadow Creek, addressed Council and stated that he is speaking on behalf of himself and nothing to do with the school district. He said it is an exciting time to be in Pearland. Mr. Garrison also addressed several sections of the prospectus, and quoted figures that he has calculated regarding the amount the City would be receiving from the project, and is concerned with what it is going to cost the citizens that now live in Pearland. Jeff Brennan, 16930 CR127, addressed Council and stated that he is also speaking on his own behalf and not the Drainage District, addressing several of his concerns regarding this project. Renee West, 2401 Country Club, addressed Council with concerns regarding the project. She said if things go bad it will affect the citizen's tax rate. She further stated that as a developer she only put 350 lots on the ground this year. Ms. West is also concerned that Shadow Creek may have a competitive edge with the (TIRZ) Tax Increment Reinvestment Zone that she does not. She asked if Council would give the local developers the same consideration that are for the people from Las Vegas. Nathan Zagfelt, 12802 Sun Brook, addressed Council and stated that he also owns land in Pearland. He is concerned about the flooding because the project is upstream on Clear Creek. He further stated every time that there is a heavy rain he gets flooded and he is concerned about that. Jim Deshaser, 2203 Cedar, addressed Council and wanted some clarification on regarding the (PID) Planned Improvement Development; who will pay the assessment and what will the square foot assessment be? He also stated that all properties under the Page 3 of 4 12/7 M same central appraisal district are valued the same. COUNCIUSTAFF DISCUSSION Councilmember Berger had concerns why the base year would be about five times higher if done next year. Gary Cook, stated that because the base year value is based on market value. Recently they have been through the acquisition of about a third of the property and the other two thirds are in escrow. When they are done, the market value will be raised to about $30,000,000 verus the current value of about $6,000,000. There was additional discussion regarding the project among the Council, Staff and Mr. Cook. The Council, Staff, and Representatives of Shadow Creek Ranch Development tried to address all of the concerns that the Citizens had brought before Council at this hearing. In closing, City Attorney Darrin Coker stated, that the staff will appreciate any comments that Council may have regarding this matter. Sr. Project Manager Alan Mueller also stated that they want to deliver a product that Council is happy with. City Attorney Coker said that telephone calls or memos would be fine. Mayor Reid stated that he feels that it is the highest and best use of the property, and he thinks it will work for us if we work carefully. ADJOURNMENT Meeting was adjourned at 8:35 p.m. Minutes approved as submitted and/or corrected this the 11TH d of JANUARY, A.D., W11,10 -A n�:' J <!J Tom eid Mayor Page 4 of 4 12/7