Sports Arena TIF District – Term Extension Plan Amendments
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Sports Arena TIF District – Term Extension Plan Amendments Economic Development Committee April 30, 2012 Office of Economic Development 1 WWW.DALLAS- ECODEV.ORG Purpose Provide background and update on the Sports Arena TIF District Review Term Extension of Sports Arena TIF District Review Various Plan Amendments for the District Provide brief overview of upcoming TIF Projects Obtain Economic Development Committee’s Approval for Consideration by City Council for the Following: • Call a Public Hearing on May 9, 2012 • Conduct a Public Hearing on May 23, 2012 • Approve Proposed Term Extension and Plan Amendments Office of Economic Development 2 WWW.DALLAS- ECODEV.ORG Victory Park History/Timeline 1993 - 1998 October June 1995 January 1998 1998 March 1993 April 1996 Council briefing Stars Announce Study of potential Ross Perot Sports Arena sites commissioned on Sports Arena Move to Dallas Jr. buys the TIF District by Council Terms Mavericks created 1993 1994 1995 1996 1997 1998 February 1996 June 1994 Tom Hicks buys June 1997 January 1998 Council approves the Stars Brimer Bill passes, Arena negotiation of a City funding proposition new sports mechanism for passed by arena arenas (Appendix A) Dallas voters Office of Economic Development 3 WWW.DALLAS- ECODEV.ORG Victory Park History/Timeline April 2009 US Treuhand (German 1999 - 2009 2004 – 2006 real estate fund) assumes August 1999 January 2000 Perot Plans for Victory Park ownership of Victory Hicks sells sells controlling take shape; The W Park properties south interest in interest in Mavericks Hotel and Residences, to Mark Cuban of Olive Street Victory to Perot The Terrace completed 1999 2000 2001 2004 2008 2009 May 1999 July 2001 2007- 2008 April 2009 August 1999 Sports arena American Airlines The Vista, Victory Secured Hillwood retains naming Center opens; TIF Plaza Buildings, control of Victory financial rights sold to infrastructure Cirque, One Park properties participation in American improvements Victory Park north of Olive TIF district from completed Street Airlines DISD, Dallas completed Office of Economic Development County, DCHD 4 WWW.DALLAS- ECODEV.ORG Victory Park Agreements Three agreements that govern the Arena Area • Arena Master Agreement – Between the City of Dallas and Arena Group (Center Operation Company and Hillwood Development) • The agreement set the terms and conditions for the finance, development by the Arena Group, for the use and benefit of the community and sports venue project (American Airlines Center) • Amended and Restated Parking Rights Agreement – Between Center Operating Company and Anland Companies (Hillwood Development) • Easement and Parking Rights Agreement – Between the Sports Arena’s Lender (The Bank of New York) and Anland Companies • These two agreements control the parking requirements for the arena • The Lender agreement was required as a condition of financing the arena's construction • See Appendix B for more information on the parking rights agreements Office of Economic Development 5 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Background Created in 1998 with a budget NPV of $25,498,568 ($46,961,785 total dollars) Initial term 20 years Estimated final project payment August 2012 Originally created to reimburse costs of roadway improvements/other public improvements for the development of American Airlines Center Taxing Jurisdiction Participation Rates and Estimated Contribution (in estimated total dollars) • City – 100% $24,564,000 • County – 33.3% until 2008 $885,346 • DISD – 50% $20,487,526 • Hospital District – 33.3% until 2008 $1,024,913 Office of Economic Development 6 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Development Projects *All photos courtesy of Hillwood Development The Terrace W Hotel TIF Related Projects Calendar Approx. TIF Project Location Year Status Units/ SF 3 Value Investment Complete 840,000 sf American Airlines entertainment 5 Center 2500 Victory Ave 2001 Complete space $184,175,010 $0 Center Operating Company 2427 N. Houston St 2001 Complete Parking Garage $3,816,450 $0 One Victory Park 145 condos W Dallas Victory 251 hotel rooms Hotel & Residences 2440 Victory Park Ln 2006 Complete 42,500 sf retail $116,853,066 $0 97 condos The Terrace 2323 N. Houston St 2006 Complete 24,000 sf retail $19,180,309 $0 Victory Plaza & Buildings 127 apartments The Vista 2345 N. Houston St 2007 Complete 28,000 sf retail $17,040,000 $0 Victory Plaza 65,000 retail Buildings 3030 & 3090 Olive St 2007 Complete 155,000 office $26,976,920 $0 252 apartments Cirque 2500 N Houston St 2008 Complete 11,000 sf retail $43,014,700 $0 9,000 sf retail One Victory Park 2323 Victory Ave 2008 Complete 430,000 office $69,862,280 $0 The House by 150 condos Starck & Yoo 2200 Victory Ave 2009 Complete 30,000 sf retail $62,048,106 $0 TIF Infrastructure 2001 Complete $43.6M 771 homes 251 hotel rooms 209,500 sf retail Subtotal 585,000 sf office $542,966,841 $43.6M 840,000 sf The Vista entertainment parking garage Office of Economic Development 7 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Current Status Issues • Parking obligations related to the American Airlines Center ties up 20 acres of developable land, which represents 92% of total developable land in the district • Since inception, District value increased 2000% over 1998 base year value (See Graph on Page 28) • Since 2008, value of District has declined an average 11% annually ( $169 million) • Retail and For-Sale Condo markets are stagnant, multi-family rental occupancy is high and office has stabilized • Most announcements of new multi-family and office projects contingent upon parking solutions (See Appendix C) • No improvement in ground floor retail is anticipated until marketplace is reassessed, circulation addressed and critical mass of daytime and night time population achieved Office of Economic Development 8 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Amendments Term Extension Boundary Adjustments TIF District Budget Increase Decrease City Participation Rate and Establish Other Taxing Jurisdiction Participation Rates Creation of Economic Development TIF Grant Program Office of Economic Development 9 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Term Extension City Council established 20 year term from 1998 to 2018 Proposed term extension is for Victory Sub-district is 10 years, expiring December 31, 2028 30 year terms will be established for the Riverfront Gateway and West Dallas Sub-districts (December 31, 2012 to December 31, 2042) Benefits of Extension • Allows additional tax increment funding to address parking, retail and internal circulation issues, as well as public improvements within Victory Sub-district • Supports new development in West Dallas area, by dedicating a fixed percentage (10%) of incremental revenues generated in Victory to West Dallas • Encourages needed linkages to growing neighborhoods in Design District, Uptown, West End and new development in West Dallas • Generates an estimated $1.2 billion increase in overall property value of the Victory Sub- district during extension 2012 to 2028 (See Appendix F) • New development • 5% annual sub-district appreciation Office of Economic Development 10 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Boundary Amendment Creation of Sub-districts Victory Sub-District – the original boundary of the TIF will be expanded to add 4.5 acres of property likely to be developed (outlined in yellow) Riverfront Gateway Sub-District – approximately 33 acres in size; provides a connection and serves as a gateway between West Dallas and the east side of the Trinity River (outlined in blue) West Dallas Sub-district – approximately 89 acres in size; comprised of properties largely under single ownership and poised for Office of Economic Development redevelopment (outlined in green) 11 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Victory Sub-District Anticipated Private Development • Development will mostly occur on ± 20 acres of surface parking in the sub-district • Approximately $464M in new taxable value will be created by new development projects within the Victory Sub-district Office of Economic Development 12 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District Riverfront Gateway Sub-District Riverfront Gateway Sub-district • Area is a mixture of commercial and retail structures • The area provides a natural connection of Victory Area to the Trinity River and West Dallas • Redevelopment activity within this Sub-district is not expected to begin immediately and will benefit from redevelopment/development activity in the Victory and West Dallas Sub-districts • It is envisioned this area will become a gateway for the east and west sides of the Trinity River across the Margaret Hunt Hill Bridge and Continental Pedestrian Bridge Office of Economic Development 13 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: West Dallas Sub-District Current land uses range from small retail shops to vacant manufacturing and warehousing space New development/redevelopment is not feasible without public assistance due to a lack of basic infrastructure and existing market comparables Amended Sports Arena TIF District plan seeks to capitalize on new investment in Margaret Hunt Hill Bridge and Continental Pedestrian Bridge to reverse past trends Single ownership group has amassed a large holding of properties within the district and created a MMD Office of Economic Development 14 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: West Dallas Sub-District Anticipated Private Development • 10% of