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 incremental revenue generated in the Victory Sub-district is dedicated to the West Dallas Sub-district estimated $14.2M • Trinity Groves the catalyst project for the West Dallas Sub-District, a unique restaurant incubator development that will repurpose existing structures on Singleton Boulevard • Potential for $361M in taxable value to be created by new development in next 15 years

Office of Economic Development 15 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: West Dallas Sub-District

Examples of Potential District Wide Improvements • Enhancement of western gateway to the Continental Pedestrian Bridge that provides the La Bajada neighborhood and community access (Continental Plaza). • Transformation of existing electric utility infrastructure into public art gateway into the area in cooperation with Oncor and the Public Art Office of Cultural Affairs. Gateway • Revival of Bataan Center as the social and cultural hub of the neighborhood. The TIF Act allows for increment to fund the costs of providing areas of public assembly in or outside the district. • Singleton Boulevard streetscape improvements Office of Economic Development • Canada Drive improvementsWWW.DALLAS - ECODEV.ORG 16

Sports Arena TIF District: Proposed Taxing Jurisdiction Participation

The City’s current participation rate is 100% • The proposed City participation rate for the extended term of the District and all sub-districts is 90% • 10% of increased property value will flow to the City’s general fund Dallas County’s current participation rate is 0%; originally County participated at 33.3% ending in 2008 • The proposed County participation rate for the extended term of the District varies amongst the sub-districts • 33.3% for 10 years in the Victory Sub-district • 55% for 15 years in the Riverfront Gateway and West Dallas Sub- districts DISD’s current participation rate is 50% for original TIF Improvements Office of Economic Development 17 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Budget Amendment

The district’s NPV budget will increase from $25,498,568 to $94,409,005 The increased budget will: • Reimburse structured parking to free up land used for surface parking for development • Provide a revenue stream to stimulate development of West Dallas Sub-district from increment generated in the Victory Sub- district (10% of increment) • Provide retail incentives to improve occupancy rates in Victory and create new retail opportunities in West Dallas

Office of Economic Development 18 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Budget Amendment

Tier One Improvements: • Construction of a 1,200 to 1,300 space parking garage dedicated to parking for the American Airlines Center parking (Hillwood Garage) • Purchase or lease all or a portion of an existing garage with a maximum of 600 parking spaces to be dedicated to American Airlines Center parking (UST Garage) • Design of the parking garages will be reviewed by the City Design Studio with their recommendations provided to the TIF Board and City Council • DART will review design plans for the Hillwood Garage to ensure its design provides active ground floor space adjacent to the Victory station/plaza • Parking facilities will be owned or leased by the City and managed by Center Operating Company in accordance with Parking Rights Agreements (Development Agreements for garages require Council approval) • Garage reimbursement will be in the form of fixed annual payments over the term of the extension. (See Appendix G) • On June 4, 2012, Economic Development Committee will be briefed on Parking for the Victory Sub-district and potential development agreement Office of Economic Development 19 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed Budget Amendment

Tier Two Improvements: • Technical Study - Prior to Tier Two project funding, the City will require a technical study to be completed by an independent third party providing analysis of parking including operational studies for Tier One and Two facilities, vehicular and pedestrian circulation and retail issues • Additional structured public parking to replace surface parking dedicated to American Airlines Center and parking needed to support non-event needs • Retail Incentives • Improvements to the American Airlines Center The City Design Studio will review all Tier Two Improvement projects Reimbursement Requirements for Tier Two projects: • New increment net of amount needed for Tier One reimbursements must be generated prior to approval of Tier Two projects • Improvements will be funded and constructed by developer with full reimbursement dependent upon increment generated due to new development within the district Office of Economic Development 20 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Tier One & Two Improvements

LegendSports Arena Sub-district Tier One Improvement - Hillwood Garage Tier One Improvement - UST Garage (Existing) Tier Two Improvements - AAC and AT&T Plaza Tier Two Improvement - Expansion of UST Garage Tier Two - Retail Incentives *Note: Tier Two Garage Locations TBD American American Airlines Airlines Center Center

Office of Economic Development 21 WWW.DALLAS- ECODEV.ORG Sports Arena TIF District: Proposed TIF Grant Program

State law permits the City and Sports Arena TIF Board to consider making grants as necessary to implement the district’s project plan Grants may be used as reimbursements to: • Offset costs related to the planning, development and management of parking systems within the Sports Arena TIF District; • Offset financial costs of funding large scale public improvements (by a private entity); • Offset the cost of the provision of affordable housing within the Sports Arena TIF District; • Encourage increased retail occupancy in the Victory Sub-district and a more diverse mix of retailers; • Encourage high density, mixed use redevelopment and retail activity in the Riverfront Gateway and West Dallas Sub-districts; and • Adaptive reuse of existing buildings.

Office of Economic Development 22 WWW.DALLAS- ECODEV.ORG Proposal Meets Adopted City TIF Extension Guidelines

Meets guidelines for a “new era” TIF and falls within the FMPC cap requirement. (See Appendix C for more information on State Law and FMPC) State Law FMPC Tax Base Definition Real Property Real Property + BPP TIFs and Other TIFs and Other Reinvestment Zones Reinvestment Reinvestment Included Zones Zones Reinvestment Exclusions None Zones Contributing 100% of Revenue¹ Cap Level 25%² 10% Current Ratio³ 8.62% 6.89%

¹Cityplace Area TIF District contributes 100% of its revenue to the General Fund, as it ceased increment collection in 2009 and does not count against the FMPC Cap. ²State Law was recently amended to increase the State's Cap Level from 15% Office of Economic Development to 25%. 23 WWW.DALLAS- ECODEV.ORG ³Current Ratios include the proposed amendments to the Sports Arena TIF District. Proposal Meets Adopted City TIF Extension Guidelines (Continued)

Changing market conditions within the District: • Property values within district have declined steadily over the last 3+ years • Surface parking lot detracts from the creation of a cohesive neighborhood • Public investment in Margaret Hunt Hill Bridge and proposed investment in Continental Pedestrian Bridge provides gateway connection of Victory to West Dallas • Assembly of land in the West Dallas area and creation of the West Dallas MMD • Planned private development would not occur without resolution of parking issues Attract substantial redevelopment project with a private investment of $100M or more over the first 5 years of the extension period (See Appendix E): • Approximately $197M in private investment over the first 5 years. The first 3 development projects are listed below: • Mill Creek Apartments (Victory Sub-district) – approximately 378 residential units ≈$33M • Office Tower (Victory Sub-district) – approximately 400,000 sf in size ≈$69M • Trinity Groves (West Dallas Sub-district) – approximately ≈$17M Office of Economic Development 24 WWW.DALLAS- ECODEV.ORG

Proposal Meets Adopted City TIF Extension Guidelines (Continued)

Generate satisfactory TIF increment to meet specific infrastructure and development needs (See Appendices H thru J) • Currently the TIF District generates enough increment to fund Tier One improvements within the Victory Sub-district • Tier Two improvements will require completion of anticipated new development within the Victory Sub-district and increased district value to generate increment above current collection • West Dallas Sub-district will receive 10% of increment generated in the Victory Sub-district as an immediate cash flow for infrastructure and development needs Reduce the City’s TIF contribution to allow greater general fund cash flow City’s participation rate reduced from 100% to 90%, increasing funding to the general fund in 2013 and reducing the City’s payback period once the district terminates Office of Economic Development 25 WWW.DALLAS- ECODEV.ORG Proposal Meets Adopted City TIF Extension Guidelines (Continued)

Participation by other taxing entities • Dallas County is anticipated to participate in the extended term at a rate of: • 33.3% Victory Sub-District (Original participation rate was 33.3% and ended 2008) • 55% Riverfront Gateway and West Dallas Sub-Districts • DISD – 50% until original TIF improvements have been reimbursed

Extension limit • 10 years for the Victory Sub-district (original Sports Arena TIF District area) • New Riverfront Gateway and West Dallas Sub-district have 30 year terms

Office of Economic Development 26 WWW.DALLAS- ECODEV.ORG Term Extension and Plan Amendments Benefits - Connectivity

Strengthens the urban core by improving connectivity to Downtown/West End, the Design District, Uptown, and West Dallas. Capitalizes on the confluence of the Katy Trail, Trinity Strand Trail, DART and access to Trinity amenities and the Continental Bridge.

Office of Economic Development 27 WWW.DALLAS- ECODEV.ORG Term Extension and Plan Amendments Benefits – Property Value

Reverses declining property values Creates a more sustainable neighborhood, by providing better designed residential, retail and office opportunities Projects ready to start construction, subject to plan amendments

Office of Economic Development 28 WWW.DALLAS- ECODEV.ORG Term Extension and Plan Amendments Benefits – New Development

New private construction within the Victory Sub-district commences immediately but will not occur without modifications The tax base for the City is estimated to increase by $464M as a result of new development projects in the Victory Sub-district, stimulating tax base growth in the West Dallas and Riverfront Gateway Sub-districts Anticipated new tax revenue beginning in 2029 for the Victory Sub-district will recover deferred general fund revenue in 2 years (See Appendix F)

G.F. Revenue Forgone as a result of extension 2013-2028 $38,919,265

G.F. Revenue During Term Extension 2013-2028 (10% of new value) $16,422,926 Difference $22,496,339 # of Years to Payback Forgone Revenue 2

Office of Economic Development 29 WWW.DALLAS- ECODEV.ORG General Fund Contributions TIF Expiration

General Fund Contributions – Victory Sub-district • If the TIF District’s Term is not extended the general fund will receive an average $2.4 million annually from 2013 to 2028 (See Appendix F) • Under this scenario, property values within the district may continue to decline and ultimately flatten at a lower level. • Without a resolution of parking issues, new development will not occur • High retail vacancies are likely to continue • Integral connections to neighboring communities in Design District, West Dallas, Uptown and Downtown’s West End would be limited by surface parking Office of Economic Development 30 WWW.DALLAS- ECODEV.ORG General Fund Contributions TIF Term Extension

General Fund Contributions – Victory Park Sub-district • If the TIF District’s term is extended and development occurs as projected as a result of the additional capacity of TIF funding, the general fund will receive an average $1 million annually from 2013 to 2028 - 10% of increment to General Fund beginning in 2013 (See Appendix F) • Under this scenario, the General Fund would receive less money initially • The City’s tax base will grow by $464M as a result of new private development alone within the district • Victory Park area will develop more residential and office space and facilitate higher rates of occupancy for vacant retail space • Most importantly, when the extended term expires, the amount of funds flowing to the General Fund will be approximately $16.4 million starting in 2029 • It will take the City approximately 2 years after the expiration of the extended term to recoup the amount of general fund dollars foregone between years 2013 and 2028 as a result of extending the term of the TIF Office of Economic Development 31 WWW.DALLAS- ECODEV.ORG Term Expiration vs. Term Extension

Office of Economic Development 32 WWW.DALLAS- ECODEV.ORG Term Extension and Plan Amendments Benefits – West Dallas Area/Trinity River

Supports new development and funds basic infrastructure needs in West Dallas area, by dedicating a fixed percentage (10%) of incremental revenues generated in Victory to West Dallas Facilitates implementation of Grow South Strategy for West Dallas area Leverages public investment in Margaret Hunt Hill Bridge and Continental Pedestrian Bridge

Office of Economic Development 33 WWW.DALLAS- ECODEV.ORG Summary Benefits to the City

Creates linkages to growing neighborhoods and strengthens urban core

Supports new development in in West Dallas ( $14M from Victory Sub- district) and leverages additional funding

Involves City Design Studio and independent consultants on the front end to address parking, retail, pedestrian and traffic circulation issues within Victory Sub-district

Opens 20+ acres for new development, producing an estimated $464M of new investment in Victory Sub-district ($12M average annual ad valorem tax revenue by 2028)

Provides an estimated average general fund payment of $1M for 15 years

Meets TIF Extension Guidelines and is well within FMPC and State Law Requirements Office of Economic Development 34 WWW.DALLAS- ECODEV.ORG

Recommendations & Next Steps

Recommendations • On May 9, 2012, Call a Public Hearing to be held on May 23, 2012, to consider term extension and plan amendments • Hold a Public Hearing on May 23, 2012, to receive citizen comments on the various proposed amendments to the Sports Arena TIF District and Project and Reinvestment Zone Financing Plans • At the close of the Public Hearing, Consider approval of the proposed amendments to the Sports Arena TIF District and Project and Reinvestment Zone Financing Plans Next Steps • On June 4, 2012 Economic Development Committee Meeting briefing on Parking and Hillwood Garage Project • On June 13, 2012, City Council consideration of a development agreement for Hillwood Garage • August 2012, UST Garage Development Agreement Office of Economic Development 35 WWW.DALLAS- ECODEV.ORG APPENDIX

Office of Economic Development 36 WWW.DALLAS- ECODEV.ORG Appendix A: Brimer Bill

Brimer Bill – passed June 1997

• Authorizes City funding mechanism for arenas, coliseums, stadiums as well as other civic facilities • City issues revenue bonds for its share of project costs • City can own, construct and operate facility or contract with teams directly • Ad valorem tax exemption on 30-year team leasehold is allowed and construction materials are exempt from sales taxes • Bill allows six types of taxes and establishes maximum levels that can be used for each • State Comptroller must certify any taxes will have no negative effect on State revenues • Bill does not require any team rent or any investment by the teams.

Office of Economic Development 37 WWW.DALLAS- ECODEV.ORG Appendix B: Amended and Restated Parking Rights Agreement (City Agreement)

Key Provisions of the Agreement • Initial Use: COC constructs the lots. Hillwood pays the cost of remediation and acquiring tracts. • Minimum Parking Requirement: 3,000 spaces. At least 841 of those spaces must be within 400 feet from the Arena. • Pre-Development Control of Parking Tracts: On the date the Arena opened for events, COC operates all parking. If a Parking Tract is developed, then the developer shall operate the parking (structured or surface) on that tract. COC indemnifies City and Hillwood for damages from use in connection with the Arena. • Pre-Development Parking Revenues: COC gets all revenues during Arena events, unless the Parking Tract is developed—then revenues are allocated as provided in the parking agreement. • Development Tracts: Hillwood may displace surface parking if it replaces the existing parking with reasonably comparable surface or structured parking. Replacement spaces may be provided on a Development Tract if Hillwood and owner of the Development Tract (i.e. could sell to a Third Party Developer) Office of Economic Development agree. 38 WWW.DALLAS- ECODEV.ORG

Appendix B: Amended and Restated Parking Rights Agreement (City Agreement)

Key Provisions of the Agreement (Continued) • However, as long as the surface space or structured spaces remaining are greater than the Minimum Parking Requirements, there is no need to replace displaced spaces. • Operation and Revenues for Development Parcels (owned by Third Party Developers): • If the Development Parcel is used to meet the Minimum Parking Requirements: COC provides all parking attendants for Arena Events and retains all revenues from Arena Events. • If the Development Parcel is NOT used to meet the Minimum Parking Requirements: COC has no right to control the parking beyond the Minimum Parking Requirements. • Revenue is allocated by separate written agreement between the Owner of the Development Parcel and COC, to ensure that the additional parking provided by the Owner does not adversely affect revenues from the Minimum Parking Requirements spaces. The Third Party Developer is free to set its own rates, but Office of Economic Development 39 WWW.DALLAS- ECODEV.ORG Appendix B: Amended and Restated Parking Rights Agreement (City Agreement)

Key Provisions of the Agreement (Continued) the rates cannot undercut COC’s Minimum Parking Requirements rates. Parking Spaces on any Development Tract may not be used for Arena Event parking unless COC consents and parties agree to revenue sharing to encourage the Third Party Developer to provide additional Event parking. Note: If the parties cannot agree on a revenue sharing agreement the Third Party Developer cannot use the Development Tract for Arena Event parking. Dual-use Parking Structures: The City Agreement allows for the use of dual-use parking structures for Arena Event parking. However spaces in such a structure may only be counted for the Minimum Parking Requirement if they are generally available for Arena parking (i.e. not reserved parking for some other use) and subject to the following space reductions: 70% of first five decks; 50% of the parking spaces on the 6th and 7th decks; 25% of the spaces on the 8th, 9th and 10th deck, unless otherwise approved by COC and the City. No building permit or certificate of occupancy may be issued for certain tracts (those tracts that are used to satisfy the Minimum Parking Requirement) including Parking Lot C until all parking spaces displaced by any development requiring such building permit or certificate of occupancy have been relocated onto those certain Parking Tracts listed in the parking agreement. Office of Economic Development 40 WWW.DALLAS- ECODEV.ORG

Appendix B: Easement and Parking Rights Agreement (Lender Agreement)

Key Provisions of Agreement • Hillwood granted a non-exclusive easement to COC and its lender on the Parking Tracts for the purpose of constructing and operating no fewer than 3,000 parking spaces that comply with the Minimum Parking Requirement. • Any portion of the Parking Tracts may be released from the easement provided that the remaining Parking Tracts will continue to satisfy the 3,000 space requirement. However, the easement is part of the security for COC's loan to construct the Arena and real property may only be released from the easement after obtaining the consent of both COC and its lender. Parking may be satisfied with either surface parking spaces or structured garages. • The Lender Parking Agreement outlines the procedures for determining which portions of the Parking Tracts will be used for Arena Event parking and the procedure for releasing unused portions from the easement under the Lender Parking Agreement. However, there are a number of provisions that deal with the operational requirements of the parking lots, including the following:

Office of Economic Development 41 WWW.DALLAS- ECODEV.ORG Appendix B: Easement and Parking Rights Agreement (Lender Agreement)

Key Provisions of Agreement (Continued) • Operation of Parking Tracts: COC operates all surface Parking Tracts not designated as Development or a Third Party Parcels. • Revenues: COC receives all revenues for parking for Arena Events, including revenues on property owned by Third Party Developers ("Third Party Parcels"), to the extent that it has not received revenues for full occupancy of the 2,000-car structured garage and the 3,000 Minimum Parking Requirement. Revenues in excess of the Minimum Parking Requirements belong to the respective owners of the Parking Tracts. For all parking spaces on “Third Party Parcels,” COC is permitted to operate the portion of the parking used to satisfy the Minimum Parking Requirements during Arena events and retain revenues from parking for Arena Events up to the Minimum Parking Requirements. • Parking Standards – Exhibit C: The Lender Agreement includes detailed Parking Standards in Exhibit C of the Lender Parking Agreement, which strictly limit the number of spaces that may be counted towards the 3,000 space requirement in dual-use structures. Exhibit C also sets forth the minimum requirements for access and design of both parking lots and structures.

Office of Economic Development 42 WWW.DALLAS- ECODEV.ORG Appendix C: Announced Development Projects KDC Office Building

Legend Land Currently Used for Parking Land Currently Developable

American Airlines Center

Mill Creek AmericanApartments Airlines Center

Camden Office of Economic Development 43 ApartmentsWWW.DALLAS - ECODEV.ORG Appendix D: FMPC vs State Law

City’s Financial Management Performance Criteria (FMPC) 10% cap on TIF districts as a percentage of City tax base (both real and business personal property) also includes tax abatements (TA RZs) that are classified as reinvestment zones under the FMPC and State definitions. Based on 2011 certified TIF/TA RZ tax base information, we are currently at 6.89% and are not anticipated to hit the 10% cap within the next 5 years. Given recent economic conditions and the variation in real estate markets, it is difficult to predict tax values over time. Beyond the next 5 years, if the FMPC cap is reached the consequence would be the inability to create new TIF districts (existing ones remain), unless Council amends the FMPC to raise the cap, not withstanding the State limit of 25% (on real property tax base). State limit on TIFs and TA RZs, as a percentage of the City’s real property tax base was amended in the last legislature and is 25% (increased from 15%). For 2012, the TIF/TA RZ based on the State limit definition is only at 8.62% and is not projected to even come close to a 25% limit. Office of Economic Development 44 WWW.DALLAS- ECODEV.ORG Appendix E: Anticipated Development Projects

Projects in Bold Italics occur within the first 5 years of the Extended Term of the District

Office of Economic Development 45 WWW.DALLAS- ECODEV.ORG Appendix F: District Value Comparison Victory Sub-District

Office of Economic Development 46 WWW.DALLAS- ECODEV.ORG Appendix G: Tier One Garages Reimbursement

Office of Economic Development 47 WWW.DALLAS- ECODEV.ORG Appendix H: Victory Sub-district Increment Chart

Office of Economic Development 48 WWW.DALLAS- ECODEV.ORG Appendix I: Riverfront Gateway TIF Increment Chart

Office of Economic Development 49 WWW.DALLAS- ECODEV.ORG Appendix J: West Dallas Sub-district TIF Increment Chart

Office of Economic Development 50 WWW.DALLAS- ECODEV.ORG

2012 Bond Program: Economic Development Priorities

Economic Development Committee April 30, 2012

Office of Economic Development | dallas-ecodev.org Purpose • Reaffirm a strategic approach for allocating certain 2012 Bond Program dollars to enhance economic development in the city • Review results from past bond programs on economic development activities • Propose targeted investments of certain bond proceeds that will promote diversified growth of our tax base and development of priority areas

2 dallas-ecodev.org Background • Recognizing economic development in southern Dallas as a major priority, the City began earmarking certain funding from its general obligation bond program funding directly to economic development initiatives with the 1998 and 2003 Bond Programs. • In light of significant suburban growth impacting Dallas’ competitive position regionally, in 2005- 06, the City articulated its commitment to a thoughtful and coordinated long-term development strategy by adopting the forwardDallas! land use plan and a new economic development plan, Strategic Engagement.

3 dallas-ecodev.org Background (continued) • With the 2006 bond program (Prop. 8), the City allocated $33 million to economic development and housing programs in southern Dallas and transit-oriented-development opportunities throughout the city. • In addition to specific economic development funding, the city allocated over $100 million to Needs Inventory projects within several targeted geographies throughout the city to enhance and maintain certain high value commercial and residential neighborhoods such as Downtown, IIPOD, Oak Cliff, the Asian Trade District, Lake Highlands and others.

4 dallas-ecodev.org Maintaining a Strategic Approach • The City’s estimated 2012 bond program capacity is approximately $600 million. • Its essential that economic development projects continue to be focused. • Prioritizing economic development and housing projects for the program include the following considerations: – Synchronization with Needs Inventory – Geographic areas of priority – Development opportunities – Potential of private sector leverage – Return on costs

5 dallas-ecodev.org Results From Prior Investments: 1998 Bond Program Program Bond Private Funds Investments South Dallas $ 16.6M $500M+ Business Parks

Southern Dallas Business Park Private Leverage: – Mountain Creek Business Park: $200M+ – International Inland Port of Dallas (IIPOD): $61M+ – Pinnacle Park: $300M+

6 dallas-ecodev.org Economic Development: 2003 Bond Program

Program Bond Private Funds Investment

Southern Dallas $6.0M $110 M+ Infrastructure

• Southern Dallas Private Project Leverage: – Beckleymeade (Home Depot Phase I): $12M+ – Dilbeck Court: $6M+ – Sierra Vista Shopping Center: $13M+ – Cockrell Hill @ La Reunion Retail: $63M+ – Pinnacle Park: $16M+

7 dallas-ecodev.org Housing: 2003 Bond Program

Program Bond Private Funds Investment

Southern Dallas $6.63M $150M Infrastructure

Southern Dallas Infrastructure results from this spending: – Bexar Street Corridor: Bond monies of $3.6M are helping to catalyze and support new mixed-use development – Concentration in Neighborhood Investment Program (NIP) target areas • 1,985 lots referred for lawsuits • 1,248 lawsuits filed to date • 898 lots acquired to date • 59 lots pending sale to developers • 312 lots sold to developers • 115 homes built and sold affordable

8 dallas-ecodev.org Economic Development: 2006 Bond Program

Program Bond Private Funds Investment

Commercial, $16.5M $40M+ to date Industrial & TOD $250M+ planned

• Potential Project Leverage : – Home Depot Danieldale Distribution Center: $20M+ – Wal-Mart Anchored Shopping Center (Loop 12/I-35): $20M+ – Bishop Arts District land acquisition and design ($100M+ projects anticipated) – Telephone Road Construction accessing 300 industrial acres ($150M+ projects anticipated)

9 dallas-ecodev.org Housing: 2006 Bond Program

Program Bond Estimated Funds Private Investment Prop 8 & $18.8 M $94 M Neighborhood Investment Program (NIP) • Bexar Street Corridor: $5.4M for new mixed-use development • Spring Avenue, Lancaster Road and Bexar Street Corridors: $13.4M for new housing and commercial redevelopment in areas facing extreme disinvestment • Prop. 8 funding has provided opportunities for community building, new housing and mixed use development in strategically targeted areas. Project highlights include over 600 multifamily, single family, townhome and senior units at: Veteran’s Place, Townhomes at Bexar Street Village, The Bottoms neighborhood, Jubilee Park, DHA’s Turner Courts, Spring Avenue Corridor, Fiji Compton and Frazier/Scyene TODs.

10 dallas-ecodev.org Summary Impact of 1998 to 2006 Eco Dev and Housing Programs

• 20-year estimates from completed and ongoing projects from 2000 to 2019 – Total economic impact $18.8 billion ($940 million average annually) – Fiscal Impact $403.7 million ($200 million after city service costs) – Total citywide job impact of 13,787 (8,110 direct jobs and 5,677 induced/indirect jobs) – $668 million in annual payroll – 6,700 new residents – Private direct investment of $1.68 billion (real and business personal property) – On average, the City’s bond program investments for economic development and housing leverage an estimated $28 of private investment for each $1 of bond funding

11 dallas-ecodev.org Priorities • Suggested approach: – Priority Areas that best promote long-term economic development – Special emphasis on projects that capitalize on partnership opportunities sustaining and enhancing the city’s economic health and future • Focusing public investments in common geographic areas of opportunity and on true catalyst projects will: – Leverage private investments both in and around the strategic areas – Have a greater ripple effect than spreading public investment thinly over a larger area

12 dallas-ecodev.org Priority #1: Economic Development and Housing Program Needs

• Southern Dallas/TOD Initiative: – Deal Funding: $30-50 Million – Funding to secure commercial, industrial, retail, mixed-use, and residential development in Southern Dallas and Transit-Oriented-Development including infrastructure, land acquisition and other financing support

13 dallas-ecodev.org Priority #2: Strategic Investment •Target bond program investments to critical street and flood Needs Inventory projects within priority focus areas and opportunities that stimulate private investment •Priority geographies within the city include: • Transit-Oriented Development (DART • Downtown & Cedars Light Rail Stations) • Fair Park & Green Line • Asian Trade District • Education Corridor (UNTD/Paul • LBJ Corridor Quinn) • North Oak Cliff (Pinnacle, Bishop, • International Inland Port of Dallas Jefferson) • Lancaster Corridor • Stemmons Frwy & Medical District • West Dallas • Vickery Meadows • Redbird & Dallas Executive

Note: Priority areas from City Strategic Plan and Grow South 14 dallas-ecodev.org Summary • Maintain a consistent investment strategy in our targeted areas to address Dallas’ economic development needs given the competitive nature of regional and global marketplaces. • OED and Housing propose $30-50 million in funding for programs leveraging private investment and supporting commercial, mixed-use, residential development in Southern Dallas and TOD areas.

15 dallas-ecodev.org

DCA 112-004

Proposed Development Code Amendment to Subdivision Regulations

Division 51A-8.500, Subdivision Layout and Design

City Council Economic Development Committee April 30, 2012

Department of Sustainable Development and Construction

Background

• Representatives from Dallas Independent School District requested that the City consider a code amendment to address a provision in the subdivision regulations that platted lots must conform in width, depth and area to the pattern already established in the adjacent areas.

City Council Economic Development Committee – April 16, 2012 2

Background

• Currently Section 51A-8.503 of the Development Code has the following standard for lots under the requirements for subdivision layout and design: – Lot size. The area of each platted lot must comply with the minimum regulations for the zoning district in which the lot is located. Lots must conform in width, depth and area to the pattern already established in the adjacent areas, having due regard to the character of the area, its particular suitability for development, and taking into consideration the natural topography of the ground, drainage, wastewater facilities, and the proposed layout of streets.

City Council Economic Development Committee – April 16, 2012 3

Issues • There are certain governmental related uses that are appropriate to locate in most zoning district classifications. Frequently these uses require greater lot areas than surrounding lots, particularly when located in single family residential zoning districts. These uses include parks, recreation centers, libraries, public schools, fire stations, and utilities such as water storage facilities and pump stations.

City Council Economic Development Committee – April 16, 2012 4

Issues • As a result of capital programs the city has platted several libraries, fire stations and recreation centers in the past several years that were in areas with smaller lots intended for residential uses. • Similarly, area school districts have had to plat to accommodate both new schools and school expansions in areas with smaller lots intended for residential uses. • Typically these plats have been approved but the current wording does not recognize the unique service these uses provide that are complimentary to and consistent with the lots in the surrounding area.

City Council Economic Development Committee – April 16, 2012 5

Issues • “forwardDallas!” includes several references to the importance of amenities such as schools and parks to serve neighborhoods. • The purpose statements in the Development Code for single family zoning districts, such as the R-7.5(A) district, include language such as: – “This district is intended to be composed of single family dwellings together with public and private schools, churches, and public parks essential to create basic neighborhood units.”

City Council Economic Development Committee – April 16, 2012 6

Proposal • Amend wording to allow for different consideration of property owned by a governmental entity intended for public use that is permitted in residential districts. • Amend wording to give due consideration to present zoning of the property and appropriate lot configuration for permitted uses.

City Council Economic Development Committee – April 16, 2012 7

Initial Proposal “(a) Lot size. The area of each platted lot must comply with the minimum regulations for the zoning district in which the lot is located. Except for property owned by a governmental agency and intended to be used for a public purpose such as a fire station, library, park, school or utility use; [L]ots must conform in width, depth, and area to the pattern already established in the adjacent areas, having due regard to the character of the area, its particular suitability for development, its zoning and taking into consideration the natural topography of the ground, drainage, wastewater facilities, and the proposed layout of streets.”

City Council Economic Development Committee – April 16, 2012 8

CPC Recommendation

(a) Lot size and pattern.

(1) The width, depth, and area of each platted lot must comply with the minimum regulations for the zoning district in which the lot is located.

(2) Lots in a planned development district must be platted in accordance with the conceptual plan or development plan of that district. Lots to be developed pursuant to a specific use permit must be platted in accordance with the site plan of that specific use permit.

City Council Economic Development Committee – April 16, 2012 9

CPC Recommendation (cont)

(3) Lots must conform in width, depth, and area to the pattern already established in the adjacent areas, except that this paragraph does not apply to:

(A) Property owned by a governmental agency and intended to be used for a public purpose or building such as a fire station, library, park, school, or utility.

(B) Property owned by a public utility and intended to be used for utility services.

City Council Economic Development Committee – April 16, 2012 10

CPC Recommendation (cont)

(4) Platting must have [having] due regard for the area’s existing structures, existing uses, zoning, and [to the] character. [of the area,]

(5) Platting must take [its particular suitability for development , and taking] into consideration the property’s suitability for development, [natural] topography [of the ground], drainage, [wastewater facilities], and [the] proposed layout of streets.”

City Council Economic Development Committee – April 16, 2012 11

Sunset Pump Station

City Council Economic Development Committee – April 16, 2012 12

Cowart Elementary School

City Council Economic Development Committee – April 16, 2012 13

Salazar Elementary School

City Council Economic Development Committee – April 16, 2012 14

Lee Elementary School

City Council Economic Development Committee – April 16, 2012 15

City Council Economic Development Committee – April 16, 2012 16

Next Steps • Schedule for City Council Consideration on May 9, 2012

City Council Economic Development Committee – April 16, 2012 17

3-2-12

ORDINANCE NO. ______

An ordinance amending Chapter 51A, “Dallas Development Code: Ordinance No. 19455, as amended,” of the Dallas City Code by amending Section 51A-8.503; providing that the width and depth of platted lots must comply with the minimum regulations for the zoning district; providing that lots in a planned development district must be platted in accordance with the conceptual plan or development plan of that district; providing that lots subject to a specific use permit must be platted in accordance with the site plan of that specific use permit; providing certain exceptions to the requirement that lots conform in width, depth, and area to the pattern already established in the adjacent areas; providing that platting must have due regard for the area’s existing structures, existing uses, and zoning; providing a penalty not to exceed $2,000; providing a saving clause; providing a severability clause; and providing an effective date.

WHEREAS, the city plan commission and the city council, in accordance with the

Charter of the City of Dallas, the state law, and the ordinances of the City of Dallas, have given the required notices and have held the required public hearings regarding this amendment to the

Dallas City Code; Now, Therefore,

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF DALLAS:

SECTION 1. That Subsection (a), “Lot Size,” of Section 51A-8.503, “Lots,” of Division

51A-8.500, “Subdivision Layout and Design,” of Article VIII, “Plat Regulations,” of Chapter

51A, “Dallas Development Code: Ordinance No. 19455, as amended,” of the Dallas City Code is amended to read as follows:

DCA 112-xxx (Amend §51A-8.503 regarding lot size) - Page 1 DRAFT (As recommended by CPC) “(a) Lot size and pattern.

(1) The width, depth, and area of each platted lot must comply with the minimum regulations for the zoning district in which the lot is located.

(3) Lots must conform in width, depth, and area to the pattern already established in the adjacent areas, except that this paragraph does not apply to:

(A) Property owned by a governmental agency and intended to be used for a public purpose or building such as a fire station, library, park, school, or utility.

(B) Property owned by a public utility and intended to be used for utility services.

(4) Platting must have [having] due regard for the area’s existing structures, existing uses, zoning, and [to the] character. [of the area,]

SECTION 2. That a person violating a provision of this ordinance, upon conviction, is punishable by a fine not to exceed $2,000. SECTION 3. That Chapter 51A of the Dallas City Code shall remain in full force and effect, save and except as amended by this ordinance. SECTION 4. That the terms and provisions of this ordinance are severable and are governed by Section 1-4 of Chapter 1 of the Dallas City Code, as amended.

DCA 112-xxx (Amend §51A-8.503 regarding lot size) - Page 2 DRAFT (As recommended by CPC) SECTION 5. That this ordinance shall take effect immediately from and after its passage and publication in accordance with the provisions of the Charter of the City of Dallas, and it is accordingly so ordained.

APPROVED AS TO FORM:

THOMAS P. PERKINS, JR., City Attorney

By______Assistant City Attorney

Passed______

DCA 112-xxx (Amend §51A-8.503 regarding lot size) - Page 3 DRAFT (As recommended by CPC)