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1998-12-21 CITY COUNCIL PUBLIC HEARING MEETING MINUTES35 MINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON DECEMBER 21,1998 AT 6:30 P.M., IN THE COUNCIL CHAMBERS, CITY HALL, 3619 LIBERTY DRIVE, PEARLAND, TEXAS. The meeting was called to order with the following present: Mayor Tom Reid Councilmember Richard Tetens Councilmember William Berger Councilmember Helen Beckman Councilmember Klaus Seeger City Manager Glen Erwin City Attorney Damn Coker City Secretary Young Lowing Absent: Mayor Pro -Tem Larry Wilkins. Others in attendance: Sr. Project Manager Alan Mueller; City Engineer John Hargrove; Planning and Development Director Dennis Smith; Parks and Recreation Director Ed Hersh; Public Works Director Jerry Burns; Assistant Police Chief Chris Doyle. 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, stated that this a public hearing that is required by state law, prior to the creation of a TIRZ (Tax Increment Reinvestment Zone). This is the second public hearing, because the notice for the first public hearing was not published properly. The notice has been published again for this public hearing. Mr. Mueller explained what a TIRZ is an acronym for Tax Increment Reinvestment Zone; it is a financing method for public improvements that is authorized by state law. There are two types of TIRZ. One can be initiated by the a city the other initiated by a petition of the land owners. This particular TIRZ has been requested by petition of the land owners. In a TIRZ, the base property value is the assessed valuation of the property on January 1, of the year of creation. The value is based on the market value and does not include any Page 1 of 6 12/21 3G exemptions that may have been granted. The base values go to the taxing entities. Then any new incremental value, over the base value that is created by development, is termed the incremental value. The taxes that are generated on the incremental value can either be in part or total flow into the special TIRZ fund. The monies in the TIRZ fund are used to build public improvements or to reimburse developers for qualified public --- improvements that have been built by the developer. The reimbursement must conform with the project and financing plan, which is approved by Council. If bonds are issued through a TIRZ, they are issued as TIRZ revenue bonds, which means that they are paid solely from the TIRZ revenues. With this particular TIRZ, there is one caveat in regard to the proposal on the initial $15,000,000. The bonds are issued by the City and are similar to revenue bonds, and are only payable from the TIRZ revenues, and not the general obligations of the City. Further, in this process, the specific obligations that are required from the City and Developer is detailed in a Development or a Development/Financial Agreement, that will come later in the process. The TIRZ is a tool that could help implement the Comprehensive Plan, and is authorized by state law. The taxes on the base values, continue to flow to the taxing entities, the entities do not lose any taxes that they are currently generating. During the life of the zone, it is projected that the City's increment tax money going into the zone would be approximately $107,000,000 and $64,000,000 would flow back to the City for City services. The creation of the TIRZ at this point does leave the project open, and the creation of the zone does not obligate the City. The obligation will be done later through the Development Agreements. Mr. Mueller also stated that the City would not want to create a TIRZ if it was determined that the property would be developed in the same or a similar manner without the TIRZ, or if is determined that the development of the property is not in the best interest of the City. Mr. Mueller in closing explained the creation of the TIRZ Board and the remaining procedures that are needed to complete the TIRZ. CITIZEN COMMENTS Carrington Weems, 919 Kirby Drive, addressed Council and stated that he is in favor of the Shadow Creek Ranch (TIRZ) Project. He said that his interest is in about 1700 acres which is about half of the total property. Mr. Weems stated that even if Shadow Creek does not materialize, he hopes the City still establishes this property as a TIRZ. This is one of the ways that the property could be properly developed. He also said he had been contacted by some developers and they said that he has beautiful property, but it is too, far from the schools. Mr. Weems said that this is a strong firm from Las Vegas and they will have the financial capability to proceed with only with the creation of the TIRZ, and then the infrastructure could be solved. Then they could build the schools, the infrastructure, and whatever else is needed to solve the problem about the distance to schools. Page 2 of 6 12/21 37 Kathryn Bish, 4903 Cloverfield Drive, addressed Council and stated that she does not understand the TIRZ as far as the taxing and all that is involved. She said that she lives at Silverlake and she wants to promote the aspect of a master planned community. Sharon Marshal, 4838 Elmont Court, addressed Council and stated that she also lives at Silverlake, and that she concurs with the previous speaker. She said that she moved to Pearland for the concept of it being a master planned community. Bob Sheldon, 3010 Green Tee, addressed Council and stated that he wanted to urge everyone to go forward with the TIRZ, for many of the reasons that have already been expressed. He also stated that as a taxpayer he feels it will benefit him, as well as the City of Pearland. He also moved to Pearland because of the wave of the future being a master planned community. Charles McMurrey, 5209 Spring Branch Drive, addressed Council and stated that he had concerns regarding the proposed TIRZ property base values being frozen. The City does not offer a homeowner's exemption. He also stated that the citizens do not have enough information about this project. Therefore, they do not know what to recommend to the elected officials. Mr. McMurrey asked that Council consider tabling this at the Council Meeting. Mary Kay Maxwell, 2605 Revere Drive, addressed Council and stated that she is the ,— daughter of one of the owners of the land that is part of the TIRZ. She said that her father has not sold his property, and that she had concerns that assessments would be taken toward them because they are part of the TIRZ. Dick Tyson, Alvin, addressed Council and stated that the School Board in Alvin is meeting tomorrow to discuss this item. He said he does have some knowledge of the property, `rand he feels that the City has had good decision makers which are the basis for a good city. He further addressed the City of Alvin and School District and their needs, stating that Alvin has not been kept informed regarding this matter. Tom Sullivan, 6930 Westlea, addressed Council and stated that he hates to be against what everybody else is for. Mr. Sullivan said that they were recently annexed and still does not have city water or sewage. He also had concerns regarding flooding when we have a heavy rain. He also said that the City needs to handle other problems before taking on such a large project. Joseph Zvanut, 2905 Yorkshire, addressed Council and stated that he and most citizens do not know anything about the TIRZ. He also addressed several sections of the plan, which he said he has not completely reviewed. Mr. Zvanut asked the Council to consider putting the project up for a referendum vote. In closing he said the City should take care Page 3 of 6 12/21 38 of what they already have, and if sounds too good to be true, it probably is. Jeff Anderson, 4911 Remington Court, addressed and stated that he is the Vice President and General Manager of Monarch Development of Texas, and said that they like to build in a Master Planned Communities, that are looking for quality growth. Mr. Anderson said that he sees this as an opportunity and supports the creation of the TIRZ, with hopes he has the opportunity to build in the TIRZ. Renee West, 2401 Country Club, handed a packet to each Councilmember. Ms. West gave an overview of the packet; and said that nobody really knows a lot about a TIRZ or what the effect is on a municipality. Ms. West asked the Council to approve the TIRZ in 1999 and not now. Al Brendy, 2303 Potomac, addressed Council and stated that they are not developing in Pearland at this time. He said that property like Carrington Weems is what they need. Because of the distance to the schools, he was not able to build on that property. He gave an overview of various other areas that they are developing, and creating the TIRZ, they would be able to be affordable and competitive in Pearland. Mr. Brendy stated that the Collins Brothers are "high quality and top notch" and are probably number two in Nevada, In closing he stated his hopes that Council approves this. Mary Jo Huey, 4009 Bluebird, addressed Council and stated that they were annexed last year and they do not have city water and sewer. She said she was CEO of Houston Kidney Center since 1996, and they expanded their facility. You do no expand until you are really to take the patients, i.e., residents that you already have. In her opinion the City has not taken care of the current expansion, and after that is done, then you are allowed to grow. Gary Cook, Representative with the Shadow Creek Ranch Project, addressed Council and said that they are available to answer any questions that Council may have. Paul Marcaccio, 6304 Palm Court, addressed Council and stated that he moved to Pearland in 1993, and he owns about 12 acres on Harkey and is concerned that he has moved into something he cannot control. He asked the Council to take care of Pearland first and not approve this endeavor. COUNCIL/STAFF DISCUSSION Councilmember Seeger asked why the base year values changed? Patti Joiner Knudson, Knudson and Associate, informed Council that state law requires that the base year values be established in the year that the zone is created. When they Page 4 of 6 12/21 started working r- received all the $6,200,000. 39 on this, they used the purchase price of the property, and once they tax account and value information the properties has a base value of Councilmember Berger asked how will the land that has not been purchased yet be handled. Gary Cook, Representative with the Shadow Creek Ranch Project, stated that the property that has not been purchased by Shadow Creek Ranch will not cost the owner anything to be in the TIRZ, it only enhances their value for future uses. There is no assessment for participation in the zone. Councilmember Berger stated that if the Council approves a TIRZ, it will not be able to take a life of its own until a project plan and development agreement are approved by the Council. He further stated that many TIRZ are dissolved in this stage, because a governing body at a later time cannot agree on a development agreement. He also stated that he feels this TIRZ will fully support itself financially without any assistance from the City in the form of a tax increase or issuing new debt outside of its own area. Councilmember Berger said that the Council is very concerned about the current projects and will address those issues. He also stated that local developers and builders will be able to participate in this Master Planned Community if they want to, it is not just outside builders coming in. He said that his final point is that other taxing entities will be participating the TIRZ not just the City of Pearland. Mayor Reid stated when we were not familiar with tax abatement it seemed like we were giving money away. Now that we have done that and we are familiar and understand it we are more comfortable with it, and it does work. It is a "win win" situation. Then along comes a TIRZ and we are back to ground zero on understanding. Now, it is another process to get familiar with and then we may view it a little bit different. This could be a great thing for us and we want to find out for sure. Councilmember Beckman stated that she concurs with Councilmember Berger. In addition to that she appreciates the comments from the people in West Lea. She said she wanted to applaud the staff they have been working hard to solve the water problems in West Lea, we are trying to get a Certificate of Convenience and Necessity. Shadow Creek Ranch gives the City an opportunity to establish zones before the development occurs. Since Collins Brothers is such a large firm, they are able to do something that the small developers cannot do. Councilmember Beckman also stated that it is a "win win" situation. Councilmember Tetens stated that he does not have anything to add. Councilmember Beckman has put it rather eloquently. He said that it is a good thing for the City of Page 5 of 6 12/21 MJ Pearland and will not take anything away from what we already have, its just going to add to it. Mayor Reid stated that we are not spending City tax dollars out of our budget on any of the water, sewer, or infrastructure out west of 288, with the minor exception of the wastewater treatment. Councilmember Seeger asked for more detail on the $15,000,000 jump start program. Gary Cook Representative with the Shadow Creek Ranch Project, stated that it is a way to get the project started because the zone does not have any values at the start, only after the homes and other properties are developed. Then the values go up and increment taxes are available to support the bonds. The idea of $15,000,000 was an amount discussed with the City from day one, on how to get the project off of the ground. Councilmember Berger stated that he wants the public to understand, because this is a confusing issue. The $15,000,000 that is being discussed tonight does not have anything to do with TIRZ issue tonight. The money is part of the development agreement that was mentioned earlier. It may or may not get approved. Mayor Reid stated that approving the TIRZ only will give permission to move forward with what needs to be done. Mayor Reid asked if Council or staff had any other comments. Being none, Mayor Reid adjourned the Public Hearing. ADJOURNMENT Meeting was adjourned at 8:00 p.m. Minutes approved as submitted and/or corrected this the 11TH day of JANUARY, A.D., 1999. 54a om Reid Mayor Page 6 of 6 12/21