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Ordinance No. 10,923ORDINANCE NO. 10,923 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING THE RESTATED AND FIRST AMENDED PROJECT PLAN AND REINVESTMENT ZONE FINANCING PLAN FOR REINVESTMENT ZONE NUMBER ONE, CITY OF BAYTOWN; AUTHORIZING THE CITY CLERK TO DISTRIBUTE SUCH PLANS; CONTAINING VARIOUS PROVISIONS RELATED TO THE FOREGOING SUBJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. WHEREAS, the City Council of the City of Baytown passed Ordinance 9197 on August 9, 2001, which created Reinvestment Zone Number One, City of Baytown for the purposes of enhancing the value of all the taxable real property within the boundaries of the Zone, including the San Jacinto Mall area; and WHEREAS, the City Council of the City of Baytown passed Ordinance No. 9275 on November 20, 2001, which enlarged Reinvestment Zone Number One, City of Baytown for the purpose of encouraging residential development within the San Jacinto Mall area; and WHEREAS, the City Council of the City of Baytown passed Ordinance No. 9290 on December 13, 2001, which approved the Project Plan and Reinvestment Zone Financing Plan; and WHEREAS, the City Council of the City of Baytown passed Ordinance No. 9708 on January 22, 2004, which enlarged Reinvestment Zone Number One, City of Baytown for the purpose adding approximately 45 acres adjacent to John Martin Road in order to encourage residential development; and WHEREAS, with Harris County's recent agreement to participate in the Reinvestment Zone Number One, City of Baytown, the removal of mall project costs and addition of the John Martin project, it is necessary to update and amend the Zone Project Plan and Financing Plan (the "Plan"); and WHEREAS, the Plan has been amended to reflect the current and proposed boundaries and projects of the Zone; and WHEREAS, the Redevelopment Authority Board and the Board of Reinvestment Zone Number One, City of Baytown approved the amended Plan; and WHEREAS, Harris County Commissioners Court is schedule to approve the amended Plan on July 22, 2008; and WHEREAS, before the City Council and the Board of Directors of the Zone may implement the amended Plan, the City Council must approve the amended Plan and determine whether the amended Plan is feasible and in conformance with the City's master plans; and WHEREAS, the City Council of the City of Baylown. Texas, has reviewed the amended Plan and finds that such plan is feasible and in conformance with the City's master plan; NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the findings contained in the preamble of this Ordinance are declared to be true and correct and are hereby adopted as part of this Ordinance. Section 2: That the City Council of the City of Baytown hereby approves the Restated and First Amended Project Plan and Reinvestment Zone Financing Plan for Reinvestment Zone Number One, City of Baytown. Said Restated and First Amended Project Plan and Reinvestment Zone Financing Plan for Reinvestment Zone Number One, City of Baytown is attached as Exhibit "A" and incorporated herein by this reference for all intents and purposes. Section 3: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote o^the City Council of the City of Baytown this the 24* day of July, 2008. S'JEPHErTH. DONCARLOS, Mdyor ATTEST: KAYTWIE DARNELL, City Clerk APPROVED AS TO FORM: ACIO RAMIREZ, SR.,Oty Attorney \cobsrvl\Legal\Knren\l;ilcs\City Council\Ordiiuinccs\200H\July 24\Rcinvcsimo!ilZoncOneProjecllJinanccPlan-doc Exhibit "A" AYTOWN! TAX INCREMENT REINVESTMENT ZONE, NUMBER ONE CITYOFBAYTOWN June 12, 2008 RESTATED AND FIRST AMENDED PROJECT PLAN AND REINVESTMENT ZONE FINANCING PLAN RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 1 Hawes Hill Calderon, LLP June 12,2008 TABLE OF CONTENTS Page PROJECT PLAN 4 I. Existing uses and conditions of real property within the area of the proposed Zone II. Proposed changes in zoning ordinance, master plan of the municipality, building codes 7 and other municipal ordinances III. List of estimated non-project cost items 7 REINVESTMENT ZONE FINANCING PLAN I. A detailed list describing the estimated projects of the Zone, including administrative 9 expenses and A statement listing the kind, number and location of all proposed public works or public improvements in the Zone II. The estimated amount of bonded indebtedness to be incurred 11 III. The time when related costs or monetary obligations are to be incurred 11 IV. A description of the methods of financing all estimated project costs and the expected 11 sources of revenue to finance or pay project costs, including the percentage of tax increment to be derived from the property taxes of each taxing unit that levies taxes on real property in the Zone V. The current total appraised value of taxable real property in the Zone 12 VI. The estimated captured appraised value of the Zone during each year of its existence 12 VII. Duration of the Zone 12 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 2 Hawes Hill Calderon, LLP June 12,2008 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 TABLES PAGE A. B. C. D. E. F. G. San Jacinto Mall In-Line Permanent Historical Occupancy San Jacinto Mall In-Line Permanent Real Estate Tax Value (in Millions) Estimated Non-Project Cost -Residential Development Estimated Project Costs -Residential Development Estimated Project Costs -Commercial Development Estimated Project Costs -John Martin Reconstruction Increment Dedicated to the Zone 5 6 7 9 10 10 12 MAPS A. B. C. D. TIRZ Boundary Map and Map of Existing Uses & Conditions Appendix A Eastpoint -Proposed Land Use Development Map Appendix A Gulf Equities -Proposed Land Use Development Map Appendix A Riverside -Proposed Land Use Development Map Appendix A SCHEDULES A. Residential Build-Out Schedule B. Commercial Build-Out Schedule C. Financial/Bond Schedule Appendix B Appendix B Appendix B RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 4 Hawes Hill Calderon, LLP June 12, 2008 TAX INCREMENT REINVESTMENT ZONE NUMBER ONE, CITY OF BAYTOWN PROJECT PLAN I. Existing uses and conditions of real property within the area of the Zone The Tax Increment Reinvestment Zone Number One, City of Baytown ("Zone") consists of property located within the Baytown city limits ("City") in the general vicinity of the intersection of Interstate 10 and Garth Road. The Zone boundary does not include property located outside the city limits. The area within the boundaries of the Reinvestment Zone includes the San Jacinto Mall, surrounding vacant property and the Eastpoint, Country Club Manor and proposed Riverside subdivisions. The Zone totals 585 acres of land lying in the G. C. Davis and the T. Patching Survey. Existing Conditions: Conclusions in Relation to Chapter 311, Section 005 The area around San Jacinto Mall located within the boundaries of the proposed TIRZ substantially arrests and impairs the sound growth of the City of Baytown, retards the provision of housing accommodations and constitutes an economic and social liability in its current condition. Map A demonstrates that the area suffers from a predominance of: 1. Lack of roadway infrastructure, including major thoroughfares and connections 2. Lack of water, sanitary sewer, and drainage infrastructure 3. Defective or inadequate sidewalk and street layout 4. Faulty lot layout in relation to size, adequacy, accessibility or usefulness 5. The deterioration of site and other improvements 6. Major utility easements which deter the capacity for commercial development expansion 7. Economic disinvestments 8. Poor regional image Also, Map A displays the boundaries of the Zone. It clearly shows the predominately open land that, because of obsolete platting and other factors, substantially arrests and impairs the sound growth of the City. The need is to create a Zone large enough to provide the stimulus necessary to reposition the existing retail center (mall), provide for RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan S Hawes Hill Calderon, LLP June 12, 2008 the reconstruction of John Martin Boulevard, and to encourage new commercial and residential development both within and outside the proposed TIRZ boundaries. San Jadnto Mall In-Line Permanent Historical Occupancy The following graph shows the gradual decline in occupancy rates for small shops located within the San Jacinto Mall. The mall is physically outdated and has a weak tenant mix, with only a small percentage of mall space leased to national brand tenants. A majority of the shops are occupied with small "mom and pop" operations, which pay below-market-rate rents and provide little revenue to the sales tax base. TABLE A SAN JACINTO MALL IN-LINE PERMANENT fflSTORICAL OCCUPANCY RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 San Jacinto Mall In-Line Permanent Real Estate Tax Value (in Millions) Property value trends declined approximately 73% from $45.5 million in 1991 to $12.1 million in 2001. In the mid 1990's, a strong economy fueled by population and employment growth, stimulated market demand for commercial and residential properties in the Houston area, temporarily reversing an overall downward valuation trend. Since that time, however, the area within the TIRZ has not fared well. The most recent tax appraisal data for 2001 show a stark difference between metropolitan Houston and the TIRZ area. This trend can be expected to persist as the physical plant continues to age and will not benefit from an infusion of public infrastructure or significant private investment. TABLE B SAN JACINTO MALL IN-LINE PERMANENT REAL ESTATE TAX VALUE (In Millions) k 40 45.5M 45.5M 39.9M 37.5M 37.5M 1991 1992 2000 2001 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 8 Hawes Hill Calderon, LLP June 12,2008 In order to arrest the continuing decline in value in the San Jacinto Mall area, the TIRZ was formed to provide a mechanism and incentive to redevelop the mall. Since TIRZ's inception it has become clear that the best way to promote reinvestment in the mall it to encourage new residential, commercial development, and major thoroughfare development in the area. The Amended and Update Project Plan primary function has been shifted to supporting new residential and commercial development and in the area in order to create a demand and synergy for private mall reinvestment and to provide for the reconstruction of John Martin Road. II. Proposed changes in zoning ordinances, the master plan of the MUNICIPALITY, BUILDING CODES AND OTHER MUNICIPAL ORDINANCES All construction will be done in conformance with existing rules and regulations of the City of Baytown. There are no proposed changes to any city ordinance, master plan or building codes. IV. List of estimated non-project costs The list of estimated non-project costs referenced below reflects costs that developers will make toward the total development plan. These costs are listed as non-project costs because they are costs not to be borne by the Zone. These costs reflect the investment and commitment that has been made and that will continue to be made by developers over the thirty (30) year life of the Zone. In general, the Zone will reimburse 70% of public water, sanitary sewer, and storm sewer facilities, with 30% of these costs being borne by the developer (non-project costs), and 100% for Detention and off site facilities. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawcs Hill Calderon, LLP June 12,2008 Internal residential street and commercial road paving costs are borne at 100% by the developer. Table C Estimated Non-Project Costs: Residential Development A. Eastpoint Sections 2 and 3 TOTAL B. Country Club Manor Sections 1 through 4 $ 1,216,239 Project Item: 1 Water Distribution 2 Sanitary Sewer 3 Storm Sewer 4 Detention 5 Interior Paving Cost Estimate: $ 275,613 $ 445,074 $ 740,252 $ 1,000,000 $ 1,440,000 Non-Proiect % 30% 30% 30% 0% 100% Non-Proiect Cost $ 82,684 $ 133,522 $ 222,076 $ 0 $ 1,440,000 TOTAL $ 1,878,282 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 10 C. Riverside Sections 1 through 5 TOTAL $ 2,632,925 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 11 Hawes Hill Calderon, LLP June 12,2008 REINVESTMENT ZONE FINANCING PLAN I. A DETAILED LIST DESCRIBING THE ESTIMATED PROJECT COSTS OF THE ZONE, INCLUDING ADMINISTRATIVE EXPENSES AND STATEMENT LISTING KIND, NUMBER AND LOCATION OF ALL PROPOSED PUBLIC WORKS OR PUBLIC IMPROVEMENTS IN THE ZONE Estimated Project Costs The following lists the estimated infrastructure project costs for the Zone. It is expected that developers will advance funds for the public infrastructure improvements and will be reimbursed as provided in separate agreements and other documentation between the developer, the Redevelopment Authority and the Zone. It is anticipated that the infrastructure improvements will incur financing costs associated with the projects. Line item amounts may be adjusted with approval of the Zone Board of Directors. Table D Estimated Project Costs: Residential Development A. Eastpoint Sections 2 and 3 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 12 C. Riverside Sections 1 through 5 Table E Estimated Project Costs: Commercial Development ♦includes drainage, utilities, contingency & engineering Table F Estimated Project Costs: John Martin Reconstruction* *Harris County participation is capped at $15,022,674. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 13 Hawes Hill Calderon, LLP June 12,2008 II. The estimated amount of bonded indebtedness to be incurred The estimated amount of bonded indebtedness that may be incurred by the Zone, including both principal and interest, is approximately $39,652,076 million. III. The time when related costs or monetary obligations are to be INCURRED The time when related costs or monetary obligations are to be incurred is a function of the availability of Zone revenues. Schedule C shows the time when Zone funds are expected to be available to pay project costs. IV. A DESCRIPTION OF THE METHODS OF FINANCING ALL ESTIMATED PROJECT COSTS AND THE EXPECTED SOURCES OF REVENUE TO FINANCE OR PAY PROJECT COSTS, INCLUDING THE PERCENTAGE OF TAX INCREMENT TO BE DERIVED FROM THE PROPERTY TAXES OF EACH TAXING UNIT THAT LEVIES TAXES ON REAL PROPERTY IN THE ZONE Description of the Methods of Financing In accordance with Chapter 311.015 of the Tax Increment Financing Act, the City may issue tax increment bonds or notes, the proceeds of which may be used to pay project costs on behalf of the Zone. Upon creation of the proposed redevelopment authority, the authority may be authorized to incur debt and issue debt or obligations to satisfy developer reimbursements for eligible project costs. If such bonds are issued, bond proceeds shall be used to provide for the project-related costs outlined in this plan. When appropriate, developers will advance project-related costs and be reimbursed through the issuance of bonds, notes or other obligations. Sources of Tax Increment Revenue: The purpose of the Zone is to provide the necessary public improvements to support commercial development/redevelopment and residential development. Schedules A, B, and C show the build-out projection and the annual captured appraised value for the Eastpoint, Country Club Manor, and Riverside subdivisions and commercial property, and the new improvements and increases in value of the redeveloped properties within the San Jacinto Mall area. Schedule D shows the projected assessed valuations during the development/build-out period and Schedule E depicts the Zone revenue schedule with each taxing unit's participation for all areas within the Zone. Increased property values depicted in schedules are a reflection of the potential residential and commercial vacant land development, as well as the redevelopment potential of San Jacinto Mall. Value increases related to the San Jacinto Mall RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 14 Hawes Hill Calderon, LLP June 12, 2008 revitalization are based on a preliminary plan currently being developed by the mall ownership. TABLE G INCREMENT DEDICATED TO THE ZONE Taxing Unit Tax Rate Dedicated City of Baytown $0.73703/$ 100 Harris County* $0.29429/$ 100 *Harris County participation limited to John Martin Road Improvements V. The current total appraised value of taxable real property in the Zone The base value for the original zone is $50,418,710. The base value for the Annexed Area in 2004 is $7,710. In 2007 Harris County began participation in the TIRZ with the following base values established in 2005, $74,414,142 for the Original Area and $795,755 for the Annexed Area. VI. The estimated captured appraised value of the Zone during each YEAR OF ITS EXISTENCE The estimated captured appraised value of the Zone during each year of its existence is shown in Schedule C. VII. Duration of the Zone The duration is 30 years. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan IS Hawcs Hill Calderon, LLP June 12,2008 APPENDIX A MAPS RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 16 Hawes Hill Calderon, LLP June 12,2008 City of Baytown TIRZ No Potential TIRZ Annex Highway / Tollway Road Centerline Aerial Imagery, HGAC GDC 2006 HawesHitlCalderon UP. June 2008 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 17 Hawes Hill Calderon, LLP June 12,2008 Proposed Fire Station I'AUfcWAV INVUKTMUNTVTUXAX. [Nil. 5SWAtfT.ii Dinvii,Sum: 111] P&O V*> Company RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 18 RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 19 GENERAL PLAN 123.507 ACRES OF LAND SITUATE DIN THE G.C. & 5.F. RAILWAY CCftFANY SURVEY NO. 2. ABSTRACT NO. 1017 HARRIS COUNTY. TEXAS jume sjbi RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 20 Hawes Hill Calderon, LLP June 12,2008 APPENDIX B SCHEDULES RESTATED & FIRST AMENDED Reinvestment Zone Project PInn & Reinvestment Zone Financing Plan 21 Hawcs Hill Calderon, LLP June 12,2008 °a \U: If |J |i| s 3 o g si u en 82 in o Home Constnictlon Home Construction Home Construction Horns Construction Captured Value (K) Captured Value (K) Captured Value <K| Captured Value (K) Home Constnictlon Captured Value (K) Home Construction Captured Value <K) Home Construction Captured Value (K) Home Construction Captured Value (K) Home Construction Captured Value (K) Home Construction Captured Value (K) Home Construction Captured Value (K) Eg Si 5 o a m III Hi 5" O S jn 1 3 SCHEDULE A (continued) Residential Project Vain TAX INCREMENT REINVESTMENT ZONE NO. ONE, CITY OF BAYTOWN Compilation of Developers Residential Buildout Schedule (In Thousands) 2013 loiT 2015 2016 2017 2018 * 2019 2020 2021 2022 2023 Legna Gulf Equities Realty Town Homes Patio Homes Wong Annexation Single Family Properties Eastpolnt Section Two Section Three Section Four 18 36 5 5.400 S 9,453 S 1.760 S 4.650 S 9,453 S 1.760 S 2.160 $ 9.453 S 1,760 18 S 2.160 S 9,453 S 1.760 25 65 $ 3.000 $ 8.905 $ 1.760 11 $ 1.760 1-760 341 Sa|« 116 111 98 101 11 11 1165 Total Captured Vali $16,613 $15,863 $13,373 JJ&373 $59,222 $13,665 $1,760 $1,760 $0 $76,407 _$0 $0 Cumulative Captured Value $16,613 $32,476 $45,849 $72,887 $74,647 $76,407 *76,407 $76,407 Note: 1. Captured value is presented in thousands of dollars. 2. Projected value of home construction is in 2000 dollars excluding inflation. 3. Home construction «n a calendar year results in captured appraised value in the following tax year. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan &. Reinvestment Zone Financing Plan 23 Hawes Hill Calderon, LLP June 12,2008 SCHEDULE B Bial Pr stVa TAX INCREMENT REINVESTMENT ZONE NO. ONE, CITY OF BAYTOWN Compilation of Developers Commercial Buitdout Schedule (In Thousands) loof 2003 2004 20ST 2006 I 2007 io&T 2009 2010 201' Subtotal Guff Equities Roalty Multi-Family Commercial Office Retail Condominium Offices Restaurant Drug Store Medical Office Office /Warehouse Hotel San Jacinto Mall Wong Annexation Commercial Eastpoint Commercial Apartments Apartments (220 Units) -$1,114 $1,391 $4,413 $ 5.624 -$2,157 $4,758 $ 5,200 27,250 220 3,200 15,000 128 900 27,250 $ 4,088 $ 15,400 Total Captured Vali -$1,114 $1,391 $4,413 $5.624 ■$2,167 $4,768 $12,914 $6,200 $19,488 "$37lO2 $5,116 $42,717 ib'vo Captured Valu -$1,114 .$277 $4,690 $10.313 $8,ise .$12,914 Note: 1. Captured value is presented in thousands of dollars. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 24 HawesHillCalderon,LLP June 12,2008 SCHEDULE B (continued) Commercial Project Values TAX INCREMENT REINVESTMENT ZONE NO. ONE, CITY OF BAYTOWN Compilation of Developers Commercial Buitdout Schedule (In Thousands) 2012 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL Gulf Equities Realty Mutti-Family Commercial Office Retail Condominium Offices Restaurant Drug Store Medical Office Office / Warehouse San Jacinto Mall Wong Annexation Commercial Eastpolnt Commercial Apartments Apartments (220 Units) 16,500 990 83,000 $ 4,980 240 20,000 $ 4.800 $ 1.200 109,000 $ 6,540 240 101,000 8,000 $ 4.800 $ 6,060 $ 640 67,000 7,000 80,000 $ 4,020 $ 560 $ 8,000 260 82,000 60,000 $ 5.200 $ 4,920 $ 1.200 140,000 5,500 60.000 $ 8,400 $ 440 $ 1,200 104.000 60,000 $ 6,240 $ 1.200 27,250 $ 4,088 27.250 $ 4.088 27,250 $ 4.088 27,250 $ 4,088 27,250 $ 4,088 27,250 $ 4,088 Total Captured Value $5,078 $9,068 $10,088 $10,628 ' $16,668 $11,320 "$10,040 $7,440 $138,632 Cumulative Captured Value $47,795 $56,862 $66,950 $77,577 $93,165 $109,832 $121,152 $131,192 $138.632 Note: 1. Captured value is presented in thousands of doHars. RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan 25 Hawes Hill Calderon, LLP June 12,2008 TAX INCREMENT REINVESTMENT ZONE NO. ONE, CITY OF BAYTOWN Financial and Bond Schedule Schedule C RESTATED & FIRST AMENDED Reinvestment Zone Project Plan & Reinvestment Zone Financing Plan Hawes Hill Calderon, LLP June 12,2008 26