Lakeside Village Town of Flower Mound, Texas

Size: px

Start display at page:

Download "Lakeside Village Town of Flower Mound, Texas"

Lesley Heath
5 years ago
Views:

1 Lakeside Village of Flower Mound, Texas TIRZ Feasibility Analysis December 12, 2018

PROJECT UNDERSTANDING Introduction Hawes Hill and Associates was tasked by the of Flower Mound to look at the financial feasibility of establishing a Tax Increment Reinvestment Zone (TIRZ) for the

This analysis evaluates the feasibility of the development and establishes whether a reinvestment zone is appropriate/feasible in meeting the community s objectives.

The development will include villa homes, high density residential including lofts, office space, restaurants, retail and hotel uses.

The site is currently vacant and lacks the necessary infrastructure to support the proposed development.

The developer would like the TIRZ to fund approximately $20.5 million of public infrastructure improvements, while Lakeside would pay for the other $13.1 million.

Table 1 - Projects Proposed to be Funded by the TIRZ Infrastructure Costs Street Excavation $414,589 Wastewater System $406,302 Storm Drainage Detention $4,713,561 Water Distribution System $728,800

2 PROJECT UNDERSTANDING Introduction Hawes Hill and Associates was tasked by the of Flower Mound to look at the financial feasibility of establishing a Tax Increment Reinvestment Zone (TIRZ) for the proposed Lakeside Village development. This analysis evaluates the feasibility of the development and establishes whether a reinvestment zone is appropriate/feasible in meeting the community s objectives. Lakeside Vill age Development The Lakeside Village development is a mixed use development located south of Lakeside DFW adjacent to Lake Grapevine. The development will include villa homes, high density residential including lofts, office space, restaurants, retail and hotel uses. Amenities will include a naturally formed amphitheater, boardwalk and trails. Upon build out, the development is projected to be valued over $1.5 billion. The site is currently vacant and lacks the necessary infrastructure to support the proposed development. For development of Lakeside Village to occur, approximately $34 million in infrastructure improvements, including public parking garages, are needed. The developer would like the TIRZ to fund approximately $20.5 million of public infrastructure improvements, while Lakeside would pay for the other $13.1 million. Project costs proposed to be funded by the TIRZ are shown in Table 1. Projects to be funded by the developer are shown in Table 2. Table 1 - Projects Proposed to be Funded by the TIRZ Infrastructure Costs Street Excavation $414,589 Wastewater System $406,302 Storm Drainage Detention $4,713,561 Water Distribution System $728,800 Paving $2,734,603 Miscellaneous Items $771,934 Sub Total $9,769,789 Professional Fees $1,465,469 Contingencies $1,465,469 Sub Total Infrastructure $12,700,727 Amenities Landscaping $600,000 Irrigation $300,000 Public Art $400,000 Site Furniture $100,000 Fountain $200,000 Waterfall and other Amenities $750,000 Public Parking Garage $5,500,000 Amenities Sub Total $7,850,000 e nty N LAKESIDE OWNERS ASSN INC 4.01 ac. LAKESIDE DFW LAND LTD ac. LAKESIDE RESIDENCES LP 9 ac. Mountai n Flower Mound SUNSET LEGACY LP ac. SUNSET LEGACY LP ac. SUNSET LEGACY LP 2.03 ac. SUNSET LEGACY LP 1.32 ac. SUNSET LEGACY LP 3.04 ac. Bike Denton County Long Prairie LAKESIDE DFW LAND LTD ac. FAIRWAY VILL AGE OAK DELL WAY SUNSET LEGACY LP ac. TONY DR Pilot Point OAKS ROYAL OAKS DR TIF Zone Flower Mound +/ ac. SUNSET LEGACY LP ac. Long Prairie LAKESIDE PKWY GRIFFIS RD Pavilion LIVE OAK LN Fairway FM 2499 FM 2499 FM 2499 Service Layer Credits: Sources: Esri, HERE, Garmin, Intermap increment P Corp., GEBCO, USGS, FAO, NPS, NRCAN, GeoBase, IGN, Kadaster NL, Ordnance Survey, Esri Japan, METI, Esri China (Hong Kong), swisstopo, OpenStreetMap contributors, and the GIS User Community Source: Esri, DigitalGlobe, GeoEye, Earthstar Geographics, Total $20,550,727. 2

Table 2 - Infrastructure to be Funded by the Developer Lakeside

$7,500,000 Parking Garage Landscaping/Park $500,000 Clubhouse

$1,240,000 Amphitheater $500,000 Restaurant Common Area $1,000,000

3 Table 2 - Infrastructure to be Funded by the Developer Lakeside Village Development Project Cost Parking Garage (Restaurant) $7,500,000 Parking Garage Landscaping/Park $500,000 Clubhouse $1,000,000 Community Garden $500,000 Infrastructure (Overage) $1,240,000 Amphitheater $500,000 Restaurant Common Area $1,000,000 Boardwalk & Landscaping $650,000 Sunset Point Improvements $250,000 Total $13,140,000 3

4 In evaluating the financial feasibility of the development two scenarios were generated, one that assumes complete build out of the site and the other that assumes partial build out. Value and revenues were estimated over a 20 year time frame. In addition to the two scenarios, three options were identified under Scenario A that differ based on levels of participation by the taxing entities. Scenario A - Complete Build Out: Build Out and Value Assumptions: The number of units, square footage and values used as part of this analysis were provided by the developer Assumes complete build-out of the site as shown in Table 3 Total value upon build out is estimated to be $1.5 billion Includes the following uses: 875 Residential Units Three hotels, 395 hotel rooms 480,000 square feet of commercial development Natural growth of property value upon build out is established as three percent Assumes residential units will be owner occupied Exemptions: 2.5% homestead exemption for the, and assumes 5% of residential units will have a senior exemption for the and County Table 3 Project Number Project LAKESIDE VILLAGE VALUE & REVENUES Residential (No. of Units) Hotel (Rooms) Commercial (SF) Scenario A - Complete Build Out Year of Completion (Jan 1) 3 8 Villa Homes adj. to Lakeside Tower 8 $8,800, Villa Homes 29 $40,600, Villa Homes 11 $15,400, Residential and Retail 16 12,000 $15,000, Restaurants $18,000, Luxury Residential Tower 240 $275,000, Villa Homes 23 $32,200, Residential and Retail 2 8,000 $6,000, Hotel - Community Lawn 150 $75,000, Retail in Fine Arts 8,000 $3,600, Restaurants $24,000, East Hotel 120 $38,400, Luxury Residential Tower 241 $286,000, Retail in Office Tower 10,000 $4,500, Office Tower 300,000 $135,000, Luxury Residential Tower 230 $276,000, East Office Building 100,000 $35,000, Boutique Condo/Hotel $225,000,

5 Table 4 - Value and Revenue, Lakeside Village, Complete Build Out, Option 1 Projected Value Projected Revenue County Total TIRZ Cumulative TIRZ County TIRZ Tax Coll Tax Revenues Revenues Total Projected Total Projected Participation County Participation Year Year Rate Available for Available for Tax (50%) Tax Rate (50%) Projects Projects Year $ 47,980,000 $ 49,307, $ 103, $ 56,536 $ 159,746 $ 159, $ 362,595,000 $ 372,065, $ 779, $ 426,610 $ 1,206,588 $ 1,366, $ 474,805,000 $ 485,202, $ 1,021, $ 556,333 $ 1,577,686 $ 2,944, $ 502,405,000 $ 512,802, $ 1,080, $ 587,979 $ 1,668,703 $ 4,612, $ 818,450,000 $ 836,600, $ 1,760, $ 959,246 $ 2,719,813 $ 7,332, $ 818,450,000 $ 836,600, $ 1,760, $ 959,246 $ 2,719,813 $ 10,052, $ 957,950,000 $ 976,100, $ 2,060, $ 1,119,196 $ 3,179,843 $ 13,232, $ 1,225,850,000 $ 1,251,500, $ 2,636, $ 1,434,970 $ 4,071,896 $ 17,304, $ 1,260,850,000 $ 1,286,500, $ 2,712, $ 1,475,101 $ 4,187,315 $ 21,491, $ 1,481,725,000 $ 1,511,312, $ 3,187, $ 1,732,871 $ 4,920,210 $ 26,411, $ 1,526,308,000 $ 1,556,717, $ 3,283, $ 1,784,932 $ 5,068,173 $ 31,479, $ 1,572,228,490 $ 1,603,484, $ 3,382, $ 1,838,555 $ 5,220,576 $ 36,700, $ 1,619,526,595 $ 1,651,654, $ 3,483, $ 1,893,787 $ 5,377,551 $ 42,077, $ 1,668,243,643 $ 1,701,270, $ 3,588, $ 1,950,676 $ 5,539,235 $ 47,617, $ 1,718,422,202 $ 1,752,373, $ 3,696, $ 2,009,272 $ 5,705,770 $ 53,322, $ 1,770,106,118 $ 1,805,010, $ 3,807, $ 2,069,625 $ 5,877,300 $ 59,200, $ 1,823,340,551 $ 1,859,226, $ 3,922, $ 2,131,789 $ 6,053,977 $ 65,254, $ 1,878,172,018 $ 1,915,069, $ 4,040, $ 2,195,818 $ 6,235,954 $ 71,490,150 $ 46,307,607 $ 25,182,543 $ 71,490,150 Scenario A - Complete Build Out Option 1 Revenue Assumptions: will participate at 50% of its tax rate County will participate at 50% of its tax rate Assumes a 98% collection rate Highlights: Total value upon build out is estimated to be $1.5 billion Taxable value is projected to equal over $1.8 billion by the Year 2038 Cumulative revenues over the life of the Zone are projected to equal $71.5 million Cumulative revenues are projected to equal $46.3 million Cumulative County revenues are projected to equal $25.2 million Over the life of the TIRZ, the would retain $46.3 million of revenues not pledged to the Zone, while the County would retain $25.2 million 5

6 Table 5 - Value and Revenue, Lakeside Village, Complete Build Out, Option 2 Projected Value Projected Revenue County Total TIRZ Cumulative TIRZ County TIRZ Tax Coll Tax Revenues Revenues Total Projected Total Projected Participation County Participation Year Year Rate Available for Available for Tax (75%) Tax Rate (50%) Projects Projects Year $ 47,980,000 $ 49,307, $ 154, $ 56,536 $ 211,351 $ 211, $ 362,595,000 $ 372,065, $ 1,169, $ 426,610 $ 1,596,577 $ 1,807, $ 474,805,000 $ 485,202, $ 1,532, $ 556,333 $ 2,088,363 $ 3,896, $ 502,405,000 $ 512,802, $ 1,621, $ 587,979 $ 2,209,064 $ 6,105, $ 818,450,000 $ 836,600, $ 2,640, $ 959,246 $ 3,600,097 $ 9,705, $ 818,450,000 $ 836,600, $ 2,640, $ 959,246 $ 3,600,097 $ 13,305, $ 957,950,000 $ 976,100, $ 3,090, $ 1,119,196 $ 4,210,166 $ 17,515, $ 1,225,850,000 $ 1,251,500, $ 3,955, $ 1,434,970 $ 5,390,359 $ 22,906, $ 1,260,850,000 $ 1,286,500, $ 4,068, $ 1,475,101 $ 5,543,423 $ 28,449, $ 1,481,725,000 $ 1,511,312, $ 4,781, $ 1,732,871 $ 6,513,879 $ 34,963, $ 1,526,308,000 $ 1,556,717, $ 4,924, $ 1,784,932 $ 6,709,794 $ 41,673, $ 1,572,228,490 $ 1,603,484, $ 5,073, $ 1,838,555 $ 6,911,587 $ 48,584, $ 1,619,526,595 $ 1,651,654, $ 5,225, $ 1,893,787 $ 7,119,433 $ 55,704, $ 1,668,243,643 $ 1,701,270, $ 5,382, $ 1,950,676 $ 7,333,515 $ 63,037, $ 1,718,422,202 $ 1,752,373, $ 5,544, $ 2,009,272 $ 7,554,019 $ 70,591, $ 1,770,106,118 $ 1,805,010, $ 5,711, $ 2,069,625 $ 7,781,138 $ 78,372, $ 1,823,340,551 $ 1,859,226, $ 5,883, $ 2,131,789 $ 8,015,071 $ 86,387, $ 1,878,172,018 $ 1,915,069, $ 6,060, $ 2,195,818 $ 8,256,022 $ 94,643,953 $ 69,461,410 $ 25,182,543 $ 94,643,953 Scenario A - Complete Build Out Option 2 Revenue Assumptions: will participate at 75% of its tax rate County will participate at 50% of its tax rate Assumes a 98% collection rate Highlights: Total value upon build out is estimated to be $1.5 billion Taxable value is projected to equal over $1.8 billion by the Year 2038 Cumulative revenues over the life of the Zone are projected to equal $94.7 million Cumulative revenues are projected to equal $69.5 million Cumulative County revenues are projected to equal $25.2 million Over the life of the TIRZ, the would retain $23.2 million of revenues not pledged to the Zone, while the County would retain $25.2 million 6

7 Table 6 - Value and Revenue, Lakeside Village, Complete Build Out, Option 3 Projected Value Projected Revenue County Total TIRZ Cumulative TIRZ TIRZ Tax Coll Tax Revenues Revenues Total Projected Total Projected Participation County Participation Year Year Rate Available for Available for Tax (75%) Tax Rate (75%) Projects Projects Year $ 47,980,000 $ 49,307, $ 154, $ 84,804 $ 239,619 $ 239, $ 362,595,000 $ 372,065, $ 1,169, $ 639,915 $ 1,809,882 $ 2,049, $ 474,805,000 $ 485,202, $ 1,532, $ 834,500 $ 2,366,529 $ 4,416, $ 502,405,000 $ 512,802, $ 1,621, $ 881,969 $ 2,503,054 $ 6,919, $ 818,450,000 $ 836,600, $ 2,640, $ 1,438,868 $ 4,079,720 $ 10,998, $ 818,450,000 $ 836,600, $ 2,640, $ 1,438,868 $ 4,079,720 $ 15,078, $ 957,950,000 $ 976,100, $ 3,090, $ 1,678,794 $ 4,769,764 $ 19,848, $ 1,225,850,000 $ 1,251,500, $ 3,955, $ 2,152,455 $ 6,107,844 $ 25,956, $ 1,260,850,000 $ 1,286,500, $ 4,068, $ 2,212,651 $ 6,280,973 $ 32,237, $ 1,481,725,000 $ 1,511,312, $ 4,781, $ 2,599,306 $ 7,380,314 $ 39,617, $ 1,526,308,000 $ 1,556,717, $ 4,924, $ 2,677,398 $ 7,602,260 $ 47,219, $ 1,572,228,490 $ 1,603,484, $ 5,073, $ 2,757,833 $ 7,830,864 $ 55,050, $ 1,619,526,595 $ 1,651,654, $ 5,225, $ 2,840,681 $ 8,066,327 $ 63,116, $ 1,668,243,643 $ 1,701,270, $ 5,382, $ 2,926,014 $ 8,308,853 $ 71,425, $ 1,718,422,202 $ 1,752,373, $ 5,544, $ 3,013,908 $ 8,558,655 $ 79,984, $ 1,770,106,118 $ 1,805,010, $ 5,711, $ 3,104,438 $ 8,815,951 $ 88,800, $ 1,823,340,551 $ 1,859,226, $ 5,883, $ 3,197,684 $ 9,080,966 $ 97,881, $ 1,878,172,018 $ 1,915,069, $ 6,060, $ 3,293,727 $ 9,353,931 $ 107,235,225 $ 69,461,410 $ 37,773,815 $ 107,235,225 Scenario A - Complete Build Out Option 3 Revenue Assumptions: will participate at 75% of its tax rate County will participate at 75% of its tax rate Assumes a 98% collection rate Highlights: Total value upon build out is estimated to be $1.5 billion Taxable value is projected to equal over $1.8 billion by the Year 2038 Cumulative revenues over the life of the Zone are projected to equal $107.3 million Cumulative revenues are projected to equal $69.5 million Cumulative County revenues are projected to equal $37.8 million Over the life of the TIRZ, the would retain $23.2 million of revenues not pledged to the Zone, while the County would retain $12.6 million 7

8 Scenario B - Partial Build Out: Build Out and Value Assumptions: The number of units, square footage and values used as part of this analysis were provided by the developer Assumes partial build-out of the site as shown in Table 7 Total value upon build out is estimated to be $977.5 million Includes the following uses: 570 Residential Units Two hotels, 270 hotel rooms 380,000 square feet of commercial space Natural growth of property value upon build out is established as three percent Assumes residential units will be owner occupied Exemptions: 2.5% homestead exemption for the, and assumes 5% of residential units will have a senior exemption for the and County Revenue Assumptions: will participate at 75% of its tax rate County will participate at 75% of its tax rate Assumes a 98% collection rate Table 7 Project Number Project LAKESIDE VILLAGE VALUE & REVENUES Residential (No. of Units) Hotel (Rooms) Commercial (SF) Year of Completion (Jan 1) 3 8 Villa Homes adj. to Lakeside Tower 8 $8,800, Villa Homes 29 $40,600, Villa Homes 11 $15,400, Residential and Retail 16 12,000 $15,000, Restaurants $18,000, Luxury Residential Tower 240 $275,000, Villa Homes 23 $32,200, Residential and Retail 2 8,000 $6,000, Hotel - Community Lawn 150 $75,000, Retail in Fine Arts 8,000 $3,600, Restaurants $24,000, East Hotel 120 $38,400, Luxury Residential Tower 241 $286,000, Retail in Office Tower 10,000 $4,500, Office Tower 300,000 $135,000, Total $977,500,000 Scenario B - Partial Build Out 8

9 Table 8- Value and Revenue, Lakeside Village, Partial Build Out Projected Value Projected Revenue County Total TIRZ Cumulative TIRZ County TIRZ Tax Coll Tax Revenues Revenues Total Projected Total Projected Participation County Participation Year Year Rate Available for Available for Tax (75%) Tax Rate (75%) Projects Projects Year $ 47,980,000 $ 49,307, $ 154, $ 84,804 $ 239,619 $ 239, $ 362,545,000 $ 372,040, $ 1,169, $ 639,872 $ 1,809,677 $ 2,049, $ 474,755,000 $ 485,177, $ 1,531, $ 834,457 $ 2,366,325 $ 4,415, $ 502,355,000 $ 512,777, $ 1,620, $ 881,926 $ 2,502,850 $ 6,918, $ 818,400,000 $ 836,575, $ 2,640, $ 1,438,825 $ 4,079,516 $ 10,997, $ 818,400,000 $ 836,575, $ 2,640, $ 1,438,825 $ 4,079,516 $ 15,077, $ 957,900,000 $ 976,075, $ 3,090, $ 1,678,751 $ 4,769,559 $ 19,847, $ 986,722,500 $ 1,005,400, $ 3,183, $ 1,729,187 $ 4,912,996 $ 24,760, $ 1,016,409,675 $ 1,035,604, $ 3,279, $ 1,781,137 $ 5,060,735 $ 29,820, $ 1,046,987,465 $ 1,066,715, $ 3,378, $ 1,834,644 $ 5,212,906 $ 35,033, $ 1,078,482,589 $ 1,098,759, $ 3,479, $ 1,889,757 $ 5,369,643 $ 40,403, $ 1,110,922,567 $ 1,131,765, $ 3,584, $ 1,946,523 $ 5,531,082 $ 45,934, $ 1,144,335,744 $ 1,165,761, $ 3,692, $ 2,004,993 $ 5,697,363 $ 51,631, $ 1,178,751,316 $ 1,200,776, $ 3,803, $ 2,065,216 $ 5,868,634 $ 57,500, $ 1,214,199,356 $ 1,236,842, $ 3,917, $ 2,127,246 $ 6,045,042 $ 63,545, $ 1,250,710,836 $ 1,273,990, $ 4,035, $ 2,191,137 $ 6,226,743 $ 69,772, $ 1,288,317,661 $ 1,312,253, $ 4,156, $ 2,256,944 $ 6,413,895 $ 76,186, $ 1,327,052,691 $ 1,351,663, $ 4,281, $ 2,324,726 $ 6,606,661 $ 82,792,761 $ 53,643,790 $ 29,148,971 $ 82,792,761 Scenario B - Partial Build Out: Highlights: Total value upon build out is estimated to be $977.5 million Taxable value is projected to equal over $1.3 billion by the Year 2038 Cumulative revenues over the life of the Zone are projected to equal $82.8 million Cumulative revenues are projected to equal $53.7 million Cumulative County revenues are projected to equal $29.1 million Over the life of the TIRZ the would retain $17.9 million of revenues not pledged to the Zone, while the County would retain $9.7 million 9

10 SUMMARY Table 9 - Summary Scenario A - Complete Build Out Option 1 Option 2 Option 3 County Total County Total County Total Total Revenues Generated ( ) $92,615,213 $50,365,086 $142,980,299 $92,615,213 $50,365,086 $142,980,299 $92,615,213 $50,365,086 $142,980,299 Revenue Dedicated to TIRZ $46,307,607 $25,182,543 $71,490,150 $69,461,410 $25,182,543 $94,643,953 $69,461,410 $37,773,815 $107,235,225 Revenue Retained by Jurisdiction $46,307,607 $25,182,543 $71,490,150 $23,153,803 $25,182,543 $48,336,346 $23,153,803 $12,591,272 $35,745,075 Participation Rate 50% 50% 75% 50% 75% 75% Table 10 - Summary Scenario B - Partial Build Out County Total Total Revenues Generated ( ) $71,525,053 $38,865,294 $110,390,348 Revenue Dedicated to TIRZ $53,643,790 $29,148,971 $82,792,761 Revenue Retained by Jurisdiction $17,881,263 $9,716,324 $27,597,587 Participation Rate 75% 75% 10

11 FEASIBILITY & APPROACH Feasibilit y and Approach Based on values and revenue projections for both scenarios as outlined in the previous tables, revenues generated, even in the partial build out scenario, are sufficient to cover the cost of the proposed infrastructure improvements. Given the feasibility of the project, utilizing a tool like the TIRZ is a viable option for funding public infrastructure improvements associated with the Lakeside Village development. The recommended approach for funding public infrastructure improvements for this development would be through the creation of a new TIRZ, that encompasses the boundaries of the development, and then fund public infrastructure improvements through incremental revenues generated by the development. Under this approach, the developer would advance funds for project costs and be reimbursed from available tax increment revenues generated from the Zone as provided in an agreement between the Developer, and the TIRZ. The could issue bonds at the time when the increment from the development is adequate to do so, in order to reimburse the developer at a quicker rate and/or fund additional public infrastructure projects. This approach allows reimbursement for infrastructure improvements to be tied to incremental revenues generated by the Lakeside Village development, and the issuance of bonds to occur at such time that adequate revenues are available to issue bonds and fund debt service payments. 11

12 APPENDIX Appendix A - Build Out Values Appendix B- Build Out Schedule - Residential Appendix B - Build Out Schedule - Commercial Appendix C - Exemptions and Values 12

13 APPENDIX A - BUILD OUT VALUES Table 11 - Build Out Values Lakeside Village Building Projects Assumptions Project Number Use - Details Quantity (Units, Rooms, Villas, SF) Value per Quantity 1 East Office Building 100,000 SF $ 350 $ 35,000,000 2 East Hotel 120 Rooms $ 320,000 $ 38,400,000 3 Villa Homes adj. to Lakeside Tower 8 Villas $ 1,100,000 $ 8,800,000 4 Villa Homes 11 Villas $ 1,400,000 $ 15,400,000 5 Villa Homes 29 Villas $ 1,400,000 $ 40,600,000 6 Villa Homes 23 Villas $ 1,400,000 $ 32,200,000 12,000 SF $ 450 Residential and Retail 7 16 Units $ 1,200,000 8,000 SF $ 450 Residential and Retail 8 2 Units $ 400 $ $ 15,000,000 6,000,000 9 Office Tower 300,000 SF $ 450 $ 135,000, Retail in Office Tower 10,000 SF $ 450 $ 4,500, Hotel - Community Lawn 150 Rooms $ 500,000 $ 75,000, Retail in Fine Arts 8,000 SF $ 450 $ 3,600, Restaurants 3 Restaurants $ 6,000,000 $ 18,000, Restaurants 4 Restaurants $ 6,000,000 $ 24,000, Boutique Condo/Hotel 75 Units $ 2,000, Rooms $ 600,000 $ 225,000, Luxury Residential Tower 230 Units $ 1,200,000 $ 276,000, Luxury Residential Tower 241 Units $ 1,100,000 $ 286,000, Luxury Residential Tower 240 Units $ 1,000,000 $ 275,000,000 Total $ 1,513,500,000 Lakeside Village Buildout Timeline and Current Lakeside DFW average retail rent is $26 NNN. Projecting $30-$35 NNN for Lakeside Village retail. Class A office buildings in top DFW suburban mixed-use prjoects are currently selling at $450/SF + Current Lakeside DFW average retail rent is $26 NNN. Projecting $30-$35 NNN for Lakeside Village retail. Four star hotel. Current Lakeside DFW average retail rent is $26 NNN. Projecting $30-$35 NNN for Lakeside Village retail. Projecting $45-$50 NNN. Preeminent project of Lakeside Village. Exclusive luxury condos and four to five star hotel. Lakeside Tower current average unit selling price is $1.6 MM: the average unit size in these buildings will be slightly smaller than Lakeside Tower. Date 1/1/2018 1/1/2019 1/1/2020 1/1/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 1/1/2026 1/1/2027 Project Number Lakeside Village New Buildings 1 East Office Building $ 35,000,000 2 East Hotel $ 38,400,000 $ 38,400,000 $ 38,400, Villa Homes adj. to Lakeside Tower $ 8,800,000 $ 8,800,000 $ 8,800,000 $ 8,800,000 $ 8,800,000 $ 8,800,000 $ 8,800, Villa Homes $ 15,400,000 $ 15,400,000 $ 15,400,000 $ 15,400,000 $ 15,400,000 $ 15,400, Villa Homes $ 40,600,000 $ 40,600,000 $ 40,600,000 $ 40,600,000 $ 40,600,000 $ 40,600,000 $ 40,600, Villa Homes $ 32,200,000 $ 32,200,000 $ 32,200,000 $ 32,200,000 $ 32,200,000 7 Residential and Retail $ 15,000,000 $ 15,000,000 $ 15,000,000 $ 15,000,000 $ 15,000,000 $ 15,000,000 8 Residential and Retail $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 $ 6,000,000 9 Office Tower $ 135,000,000 $ 135,000,000 $ 135,000, Retail in Office Tower $ 4,500,000 $ 4,500,000 $ 4,500, Hotel - Community Lawn $ 75,000,000 $ 75,000,000 $ 75,000,000 $ 75,000,000 $ 75,000, Retail in Fine Arts $ 3,600,000 $ 3,600,000 $ 3,600,000 $ 3,600, Restaurants $ 18,000,000 $ 18,000,000 $ 18,000,000 $ 18,000,000 $ 18,000,000 $ 18,000, Restaurants $ 24,000,000 $ 24,000,000 $ 24,000,000 $ 24,000,000 $ 24,000, Boutique Condo/Hotel $ 225,000, Luxury Residential Tower $ 276,000,000 $ 276,000,000 $ 276,000, Luxury Residential Tower $ 286,000,000 $ 286,000,000 $ 286,000,000 $ 286,000,000 $ 286,000, Luxury Residential Tower $ 275,000,000 $ 275,000,000 $ 275,000,000 $ 275,000,000 $ 275,000,000 $ 275,000,000 Total $ - $ - $ - $ 44,634,579 $ 368,034,579 $ 791,234,579 $ 794,834,579 $ 1,248,734,579 $ 1,248,734,579 $ 1,508,734,579 Comments Currently selling townhomes attached to Lakeside Tower for $1.15 MM (similar size). The current Lakeside Tower average unit selling price is $1.6 MM. Table 11 identifies units, square footage, values and timing for each phase of the development as provided by the Developer. These build out values were used in developing the revenue schedules included in this report, however the actual timing of build out was modified to account for any delays in the project. Below are values per building square foot for other retail, mixed use and office developments in the Dallas Fort Worth area. Retail - $220-$310/SF Mixed Use - $280-$350/SF Office (Class A) - $250-$350/SF Notes: 1. The table assumes that infrastructure construction commences in Q2 of 2019 and the first building projects commence in Q Property values assume 0% inflation for the entire ten-year period. 3. This chart assumes that land base year value ($4,765,421) has been subtracted from each year's valuation to provide incremental valuations. 13

14 Table 12 - Build Out - Residential APPENDIX B - BUILD OUT SCHEDULE - RESIDENTIAL LAKESIDE VILLAGE Flower Mound, Texas Residential Buildout Schedule (In Thousands) Residential Project Values 8 Villa Homes adj. to Lakeside Tower (3) 8 $ 8, Villa Homes (4) 11 $ 15, Villa Homes (5) 29 $ 40, Villa Homes (6) 23 $ 32,200 Residential (7) 16 $ 9,600 Residential (8) 2 $ 2,400 Luxury Residential Tower (16,17,18) 230 $ 275, $ 286, $ 276,000 Total Home Sales Total Captured Value $49,400 $300,000 $34,600 $0 $286,000 $0 $0 $276,000 Cumulative Captured Value $49,400 $349,400 $384,000 $384,000 $670,000 $670,000 $670,000 $946, Residential Project Values 8 Villa Homes adj. to Lakeside Tower (3) 11 Villa Homes (4) 29 Villa Homes (5) 23 Villa Homes (6) Residential (7) Residential (8) Luxury Residential Tower (16,17,18) Boutique Condo Hotel (13) 75 $ 150,000 Total Home Sales 75 Total Captured Value $0 $150,000 $0 $0 $0 $0 $0 $0 $ Cumulative Captured Value $0 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 Note: 1. Captured value is presented in thousands of dollars. 14

15 APPENDIX B - BUILD OUT SCHEDULE - COMMERCIAL Table 13 - Build Out - Commercial LAKESIDE VILLAGE Flower Mound, Texas Commercial Buildout Schedule (In Thousands) Commercial Project Values East Office Building (1) East Hotel (2) $ 38,400 Retail (7) 12.0 $ 5,400 Retail (8) 8 $ 3,600 Office Tower (9) $ 135,000 Retail in Office Tower (10) $ 4,500 Hotel Community Lawn (11) $ 75,000 Retail in Fine Arts (12) $ 3,600 3 Restaurants (13) $ 18,000 4 Restaurants (14) $ 24,000 Boutique Condo/Hotel (15) Total Captured Value $0 $23,400 $78,600 $0 $27,600 $0 $38,400 $0 $0 $0 $139,500 $0 $0 Cumulative Captured Value $0 $23,400 $102,000 $129,600 $168,000 $168,000 $307,500 $307, Commercial Project Values East Office Building (1) $ 35,000 East Hotel (2) Retail (7) Retail (8) Office Tower (9) Retail in Office Tower (10) Hotel Community Lawn (11) Retail in Fine Arts (12) 3 Restaurants (13) 4 Restaurants (14) Boutique Condo/Hotel (15) $ 75,000 Total Captured Value $35,000 $75,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cumulative Captured Value $35,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 15

16 APPENDIX C - EXEMPTIONS & VALUES Table 14 - Value & Exemptions Tax Incremental Residential Cumulative Residential Assessed Homestead Exemption (2.5%) No of Homes Eligible (5%) Exemption (100,000) County Exemption ($50,000) Projected Residential County Projected Residential Commercial Incremental Cumulative Commercial Incremental Total Projected County Total Projected Year $ 49,400,000 $ 49,400, (1,235,000) 1.85 $ (185,000) $ (92,500) $ 47,980,000 $ 49,307,500 $ 47,980,000 $ 49,307, $ 300,000,000 $ 349,400, (8,735,000) 14.7 $ (1,470,000) $ (735,000) $ 339,195,000 $ 348,665,000 $ 23,400,000 $ 23,400,000 $ 362,595,000 $ 372,065, $ 34,600,000 $ 384,000, (9,600,000) $ (1,595,000) $ (797,500) $ 372,805,000 $ 383,202,500 $ 78,600,000 $ 102,000,000 $ 474,805,000 $ 485,202, $ 384,000, (9,600,000) $ (1,595,000) $ (797,500) $ 372,805,000 $ 383,202,500 $ 27,600,000 $ 129,600,000 $ 502,405,000 $ 512,802, $ 286,000,000 $ 670,000, (16,750,000) 28 $ (2,800,000) $ (1,400,000) $ 650,450,000 $ 668,600,000 $ 38,400,000 $ 168,000,000 $ 818,450,000 $ 836,600, $ 670,000, (16,750,000) 28 $ (2,800,000) $ (1,400,000) $ 650,450,000 $ 668,600,000 $ 168,000,000 $ 818,450,000 $ 836,600, $ 670,000, (16,750,000) 28 $ (2,800,000) $ (1,400,000) $ 650,450,000 $ 668,600,000 $ 139,500,000 $ 307,500,000 $ 957,950,000 $ 976,100, $ 276,000,000 $ 946,000, (23,650,000) 40 $ (4,000,000) $ (2,000,000) $ 918,350,000 $ 944,000,000 $ 307,500,000 $ 1,225,850,000 $ 1,251,500, $ 946,000, (23,650,000) 40 $ (4,000,000) $ (2,000,000) $ 918,350,000 $ 944,000,000 $ 35,000,000 $ 342,500,000 $ 1,260,850,000 $ 1,286,500, $ 150,000,000 $ 1,096,000, (27,400,000) $ (4,375,000) $ (2,187,500) $ 1,064,225,000 $ 1,093,812,500 $ 75,000,000 $ 417,500,000 $ 1,481,725,000 $ 1,511,312, $ 1,128,880, (28,222,000) $ (4,375,000) $ (2,187,500) $ 1,096,283,000 $ 1,126,692,500 $ 430,025,000 $ 1,526,308,000 $ 1,556,717, $ 1,162,746, (29,068,660) $ (4,375,000) $ (2,187,500) $ 1,129,302,740 $ 1,160,558,900 $ 442,925,750 $ 1,572,228,490 $ 1,603,484, $ 1,197,628, (29,940,720) $ (4,375,000) $ (2,187,500) $ 1,163,313,072 $ 1,195,441,292 $ 456,213,523 $ 1,619,526,595 $ 1,651,654, $ 1,233,557, (30,838,941) $ (4,375,000) $ (2,187,500) $ 1,198,343,714 $ 1,231,370,156 $ 469,899,928 $ 1,668,243,643 $ 1,701,270, $ 1,270,564, (31,764,110) $ (4,375,000) $ (2,187,500) $ 1,234,425,276 $ 1,268,376,885 $ 483,996,926 $ 1,718,422,202 $ 1,752,373, $ 1,308,681, (32,717,033) $ (4,375,000) $ (2,187,500) $ 1,271,589,284 $ 1,306,493,817 $ 498,516,834 $ 1,770,106,118 $ 1,805,010, $ 1,347,941, (33,698,544) $ (4,375,000) $ (2,187,500) $ 1,309,868,213 $ 1,345,754,257 $ 513,472,339 $ 1,823,340,551 $ 1,859,226, $ 1,388,380, (34,709,500) $ (4,375,000) $ (2,187,500) $ 1,349,295,509 $ 1,386,192,509 $ 528,876,509 $ 1,878,172,018 $ 1,915,069, Year TIRZ, termination December 31, 2038 Assumes residential units will be owner occupied Assumes 2.5% homestead exemption for the Assumes 3% annual growth rate upon build out No of Homes Added Cum. No. of Homes Added Senior Exemptions Residential Commercial 16

Solano Local Agency Formation Commission 675 Texas St. Ste Fairfield, California (707) FAX: (707)

Solano Local Agency Formation Commission 675 Texas St. Ste. 6700 Fairfield, California 94533 (707) 439-3897 FAX: (707) 438-1788 Staff Report DATE: May 8, 2017 TO: FROM: SUBJECT: Local Agency Formation