Neighborhood Empowerment Zone Program

Transcription

1 Neighborhood Empowerment Zone Program Neighborhood Services Department Carmella Kendry, Assistant Director Fort Worth City Council Tuesday, May 9,

2 Overview Review performance of current NEZs Provide recommendations for potential revisions to the NEZ and underlying Tax Abatement Policy Adopt Resolution Electing to Remain Eligible to Participate in Tax Abatement Authorized by Chapter 312 of the Texas Tax Code and Establish a Policy CFW NEZ Tax Abatement Policy will expire on May 19,

3 Purpose of the NEZ Program Texas Local Government Code authorizes a municipality to create a NEZ for the purpose of: Promoting the creation or rehabilitation of affordable housing; and Promoting economic development; or Improving the quality of social services, education, or public safety for the residents of the NEZ. 3

4 20 Existing NEZ Areas 10 4

5 NEZ Basic Incentives Development fee waivers Impact fee waivers Release of City liens Municipal property tax abatement, if approved by City Council Evans & Rosedale NEZ 5

6 $6,000,000,000 NEZ Value Changes: $5,609,901,320 $5,000,000,000 $4,000,000,000 $3,978,395,619 $3,000,000,000 $2,000,000,000 $1,000,000,000 $- 71% Increase in NEZ property values 2009 NEZ Values 2016 NEZ Values 6

7 NEZ Value Changes NEZ Yr. Adopted Sq. Mi Total Value Or Total Value Year Created* Total 2016 Value 2016 Value Per Square Mile 2016 Value/Sq. Mi. as % of Area Inside Loop 820 and Outside NEZ Estimated Property Taxes From 2009 or Year Created to 2016 Stop Six $ 304,351,578 $ 301,822,669 $ 73,615,285 23% $ (21,116) Ridglea/Como ** $ 265,851,971 $ 365,454,079 $ 228,408,799 73% $ 831,678 Evans & Rosedale $ 133,016,422 $ 171,906,734 $ 97,122,449 31% $ 324,734 Magnolia $ 577,805,356 $ 862,894,896 $ 575,263, % $ 2,380,498 Polytechnic/Wesleyan $ 153,609,571 $ 181,321,113 $ 120,880,742 39% $ 231,391 Rolling Hills $ 170,643,984 $ 298,390,074 $ 119,835,371 38% $ 1,066,680 Handley $ 110,096,056 $ 149,546,520 $ 101,044,946 32% $ 329,411 Woodhaven $ 288,614,873 $ 379,372,486 $ 252,914,991 81% $ 757,826 Hemphill/Berry $ 222,347,018 $ 289,163,036 $ 192,775,357 61% $ 557,914 Riverside $ 161,798,273 $ 169,729,132 $ 116,252,830 37% $ 66,223 Berry/University $ 345,391,834 $ 759,073,434 $ 632,561, % $ 3,454,241 Trinity Park $ 127,204,894 $ 190,803,785 $ 353,340, % $ 531,051 Lake Arlington $ 84,266,282 $ 127,456,982 $ 58,199,535 19% $ 360,642 Berryhill/ Mason Heights $ 45,572,323 $ 175,970,656 $ 189,215,759 60% $ 1,088,826 Oakland Corners $ 168,018,726 $ 203,943,923 $ 148,864,177 47% $ 299,975 Northside $ 237,285,976 * $ 280,120,845 $ 146,660,128 47% $ 357,671 28th Street/Meacham $ 219,017,576 * $ 225,476,268 $ 90,190,507 29% $ 53,930 Six Points $ 121,449,123 * $ 146,580,280 $ 180,963,309 58% $ 209,845 Northeast 820/ I $ 160,755,513 * $ 215,430,800 $ 113,384,632 36% $ 456,539 Highland Hills $ 81,298,270 * $ 115,443,608 $ 68,716,433 22% $ 285,114 Value of Area Inside 820 and Outside NEZ 75 $16,765,200,465 $23,535,753,266 $313,810,044 $56,534,116 Estimated Property Taxes are based on valuation change, non-cumulative, at the current property tax rate of.8350/$100. **Ridglea/Como boundary already revised and name changed to Como/Sunset Heights 7

8 Fee Waivers and Tax Abatements NEZ Adopted Total of All Fees Waived Value of Improvements Requesting Tax Abatement Taxes Abated Total Incentives Stop Six 2001 $ 637,430 $ 40,141,793 $ 343,212 $ 980,642 Ridglea/Como ** 2002 $ 439,990 $ 383,231,474 $ 3,276,629 $ 3,716,619 Evans & Rosedale 2002 $ 398,785 $ 4,270,564 $ 36,513 $ 435,298 Hemphill/Berry 2002 $ 435,522 $ 9,595,048 $ 82,038 $ 517,560 Magnolia Village 2002 $ 1,685,642 $ 17,818,311 $ 152,347 $ 1,837,989 Polytechnic/Wesleyan 2002 $ 237,097 $ 2,074,177 $ 17,734 $ 254,831 Rolling Hills 2003 $ 467,429 $ 29,936,546 $ 255,957 $ 723,386 Woodhaven 2003 $ 73,431 $ 29,831,102 $ 255,056 $ 328,487 Handley 2003 $ 75,827 $ 152,308 $ 1,302 $ 77,129 Riverside 2003 $ 89,513 $ 8,759,835 $ 74,897 $ 164,410 Berry/University 2004 $ 751,836 $ 273,748,663 $ 2,340,551 $ 3,092,387 Trinity Park 2004 $ 520,242 $ 5,488,684 $ 46,928 $ 567,170 Lake Arlington 2004 $ 122,379 $ 24,627,423 $ 210,564 $ 332,943 Berryhill/ Mason Heights 2005 $ 522,195 $ - $ - $ 522,195 Oakland Corners 2007 $ 70,501 $ 2,495,267 $ 21,350 $ 91,851 Northside 2010 $ 48,135 $ 937,018 $ 8,012 $ 56, th St/Meacham 2010 $ 185,957 $ - $ - $ 185,957 Six Points 2011 $ 295,558 $ 720,138 $ 6,157 $ 301,715 Northeast 820/I $ 26,198 $ 266,642 $ 2,280 $ 28,478 Highland Hills 2015 $ 25,378 $ - $ - $ 25,378 Totals -- $ 7,109,045 $ 834,094,993 $ 7,131,527 $ 14,215,194 ** Boundary has changed and NEZ renamed to Como/Sunset Heights 8

9 Other Financial Incentives in NEZ Areas: Enhanced Community Facilities Agreements Project ECFA Funding NEZ Area Date Approved TCU/Berry Street $305,000 Berry/University 4/17/2006 Enchanted Bay $117,642 Lake Arlington 4/17/2006 Renaissance Square $199,120 Berryhill/Mason Heights 3/24/2009 Evans/Rosedale $880,348 Evans and Rosedale 1/25/ E. Lancaster $26,278 Evans and Rosedale 2/22/2012 Criterion (2925 Race, LLC) Development Total $2,528,488 $1,000,000 Six Points 8/13/2016 9

10 Urban Village Streetscape Projects Within a NEZ Completed Projects NEZ Grants and Local Match Completion Date Polytechnic/Wesleyan Polytechnic/ Wesleyan $1,875,000 Green sheet forthcoming Hemphill/Berry Hemphill/ Berry $1,005,571 Green sheet forthcoming Ridglea Ridglea/Como (new name Como/ Sunset Heights) $505,000 Apr-17 Magnolia Magnolia $1,860,915 Nov-15 Historic Handley Handley $499,920 Mar-15 West Rosedale Retrofit Magnolia Green Streetscape* Magnolia $375,000 Feb-15 Berry/Riverside Rolling Hills $843,693 Apr-14 Near East Side Evans & Rosedale $850,601 Mar-14 West Berry Streetscape (Berry/University Urban Village) Berry/University $6,641,092 May-13 Evans & Rosedale Evans & Rosedale $2,035, South Main Street Magnolia $8,664,458 Six Points Phase 1 Six Points $1,791,842 Six Points Phase 2 Six Points $4,048,533 Total Funding $30,997,518 10

11 Major Conclusions/Findings The majority of NEZ areas are still lagging in performance and continued support is needed Several NEZ areas are performing beyond expectations Trinity Park, Berry/University and Magnolia Village have property values greater than 100% of total valuations outside the NEZ area and inside the Loop 820 Several NEZ areas are performing well Boundary adjustments might be needed to sharpen the focus on the most challenged areas (e.g., Ridglea/Como boundary adjustment) 11

12 Current NEZ Designation Criteria At least 75% of the area must be CDBG eligible OR at least 50% within the Central City No more than 6,000 people OR no larger than 1.5 square miles at the time of designation Amended Criteria for NEZ Designation Change language to require only 75% CDBG eligibility Population and square miles to remain the same 12

13 NEZ Areas with 75% CDBG Eligibility 10 13

14 NEZ Area Termination Terminate NEZs whose property value is 100% or greater per square mile than the property values of the area located inside Loop 820 and outside the NEZ Trinity Park NEZ 2009 Property Valuation: $127,204, Property Valuation: $190,803,785 Berry/University NEZ 2009 Property Valuation: $345,391, Property Valuation: $759,073,434 Magnolia Village NEZ 2009 Property Valuation: $577,805, Property Valuation: $862,894,896 Property Value of NEZ 113% > per Sq. Mi. Property Value of NEZ 202% > per Sq. Mi. Property Value of NEZ 183% > per Sq. Mi. 14

15 NEZ Area Boundary Adjustments Evaluate NEZs whose property value is 50% or greater per square mile than the property values of the area located inside Loop 820 and outside the NEZ New Internal Controls: Any boundary changes will be justified based on the following data: Review of property valuations every 5 years Analysis of construction permits issued 15

16 Possible NEZ Boundary Adjustments Berryhill/Mason Heights NEZ 2009 Property Valuation: $45,572, Property Valuation: $175,970,656 Property Value of NEZ 60% > per Sq. Mi. Six Points NEZ 2011 Property Valuation: 121,449, Property Valuation: $180,963,309 Property Value of NEZ 58% > per Sq. Mi. Woodhaven NEZ 2009 Property Valuation: $288,614, Property Valuation: $379,372,486 Property Value of NEZ 81% > per Sq. Mi. Hemphill/Berry NEZ 2009 Property Valuation: $222,347, Property Valuation: $289,163,036 Property Value of NEZ 61% > per Sq. Mi. 16

17 Closer Alignment with Economic Development Policy NEZ Tax Abatement Policy should be more closely aligned with our adopted Economic Development Incentives Policy Tax abatement applications for multifamily, mixed use, commercial and industrial development will be reviewed by staff prior to submission to the City Council Projects must provide evidence of: Result in development with no net additional cost to the City while producing a positive economic impact to the tax paying citizens of Fort Worth Promotion of quality, affordable housing and/or mixed income development Advancement of high quality development or redevelopment opportunities on nearby or adjacent properties in a manner that supports the establishment of a cohesive, distinctive and walkable district or neighborhood Effectively leverage private investment 17

18 Recommended Changes to NEZ Tax Abatement Policy Criteria for Tax Abatements But for Test The development would not happen solely through private investment in the "reasonably foreseeable future (e.g., the lifespan of the NEZ Area) The induced development will yield a net increase in market value for the site compared to the likely development that would occur without the tax abatement Factors include: Jobs created Private investment leveraged Blight elimination Affordable housing units or mixed use 18

19 Recommended Changes to NEZ Tax Abatement Policy (cont d.) Timeframe for Tax Abatements Eliminate 10 year Tax Abatements All Tax Abatements 5 years max Remove option to include personal property in Tax Abatement Berryhill/Mason Heights NEZ 19

20 NEZ: Housekeeping Revisions NEZ Tax Abatement Policy and Basic Incentives NEZ Policy Statement NEZ Administrative Procedures Change Housing and Economic Development Department references to Neighborhood Services Department Clarify language on abatements in a Tax Increment Reinvestment Zone (TIF) Revise language where necessary to clarify and condense policy 20

21 Potential Outcomes Preserve the City s ability to support revitalization in challenged neighborhoods Align revitalization and economic development incentives policies Increase accountability from developers to match project with overall revitalization goals Accelerate realization of increased tax revenues to the City 21

22 Next Steps May 16: M&C brought to Council for approval Resolution to Renew with changes, the NEZ Tax Abatement Policy and Basic Incentives, NEZ Policy Statement and NEZ Administrative Procedures After May 16 - Process Improvements and M&C s Review Boundary Revisions for NEZ Areas over 50% value and Bring M&C s to Council after Summer Recess (June for Berryhill/Mason Heights) Bring M&C to Council after Summer Recess to Eliminate Magnolia Village, Berry/University and Trinity Park after 60 day public notice Initiate a Lean Six Sigma study to look at improving the application process during Summer

23 Questions? Comments? 23