M&C Review


COUNCIL ACTION:  Approved on 6/26/2018 

DATE: 6/26/2018 REFERENCE NO.: C-28763 LOG NAME: 19NEZJEFFERSONOAKHURST
CODE: C TYPE: NON-CONSENT PUBLIC HEARING: NO
SUBJECT:  

Authorize Execution of a Five-Year Tax Abatement Agreement with Legacy Scenic, LP, and Assignment After Closing to Jefferson Oakhurst Scenic, LLC,  to Construct a 398 Residential Unit Complex Located on Oakhurst Scenic Drive Between East Belknap Street and Akers Avenue in the Six Points Neighborhood Empowerment Zone and Permit Certain Payments to the Fort Worth Housing Finance Corporation to Satisfy Affordable Housing Requirements (COUNCIL DISTRICT 9)


RECOMMENDATION:

It is recommended that the City Council authorize the execution of a five-year Tax Abatement Agreement with Legacy Scenic, LP, and assignment after closing to Jefferson Oakhurst Scenic, LLC, to construct a 398 residential unit complex located on Oakhurst Scenic Drive Between East Belknap Street and Akers Avenue in the Six Points Neighborhood Empowerment Zone, in accordance with the Neighborhood Empowerment Zone Tax Abatement Policy and Basic Incentives and permit certain payments to the Fort Worth Housing Finance Corporation to satisfy affordable housing requirements.

 
DISCUSSION:

Legacy Scenic, LP (Property Owner), is the owner of property located at Abstract 958, Tracts 32, 32A, 32B, 33, 34, 35B, 37, 37A, 37C, 41D, 57A, 57B & 57C, John Little Survey, Lots 3 and 4, Block 1 and Lots 3-8, 9 & 10, 11 & 12, 13 & 14, 15 & 16, 19 & 20, 21 & 22 and 23 & 24, Block 2, Cliff Addition, Lots 7 & 8, 9, 10, 13 & 14, Block 1, Akers & Aikman Addition and Lot A, McGinnis Tract Subdivision, to the City of Fort Worth, Tarrant County, Texas.  The property is located within the Six Points Neighborhood Empowerment Zone (NEZ).

The Property Owner plans to sell the property to Jefferson Oakhurst Scenic, LLC  who will invest an estimated amount of $47,570,680.00 to construct a 398 residential unit complex (Project).  The Neighborhood Services Department reviewed the application and certified that the Project met the eligibility criteria to receive a Municipal Property Tax Abatement.  The NEZ Tax Abatement Policy and Basic Incentives includes a five-year municipal property tax abatement on the increased value of improvements to the qualified owner of any new construction or rehabilitation within the NEZ.

A multi-family project located in a NEZ must satisfy one of the following for a five-year tax abatement:

At least 10 percent of the total units constructed or rehabilitated shall be affordable (as defined by the U.S. Department of Housing and Urban Development) and set aside to persons with incomes at or below 80 percent of area median income based on family size and at least another 10 percent of the total units constructed or rehabilitated shall be affordable (as defined by the U.S. Department of Housing and Urban Development) and set aside to persons with incomes at or below 60 percent of area median income based on family size; or

If specifically permitted by the City Council, in its sole discretion and as specified in the Tax Abatement Agreement, pay the Fort Worth Housing Finance Corporation an annual sum equal to $200.00 for each rental residential unit located on the property which is subject to the tax abatement.  The Fort Worth Housing Finance Corporation is a housing finance corporation created pursuant to authorization by the City Council of the City of Fort Worth in accordance with Chapter 394, Texas Local Government Code, to assist in the financing of the costs of residential development and ownership for citizens of decent, safe and sanitary housing at affordable prices.

The developer is requesting the option to pay the Fort Worth Housing Finance Corporation the annual sum in lieu of setting aside the affordable units and Staff recommends approval of this request.

Upon execution of the Agreement, the total assessed value of the improvements used for calculating municipal property tax will be frozen for a period of five years starting January 2021 at the estimated pre-improvement value, as defined by the Tarrant Appraisal District (TAD) in 2018, after demolition of any existing buildings so the pre-improvement value for tax abatement purposes will be $0.00.

The Municipal Property Tax Abatement on the improved value of the Project after construction is estimated in the amount of $382,944.00 per year for a total in the estimated amount of $1,914,720.00 over the five-year period.  However, this estimate may differ from the actual tax abatement value, which will be calculated based on the Tarrant Appraisal District appraised value of the property.

The Tax Abatement Agreement may be assigned to an affiliate of Jefferson Oakhurst Scenic, LLC, without the consent of the City Council.  If the property is sold to a new owner, other than an affiliate, the Agreement may be assigned only with City Council approval and provided that the new owner meets all of the eligibility criteria as stated in the NEZ Tax Abatement Policy and Basic Incentives.

This property is located in COUNCIL DISTRICT 9.

 
FISCAL INFORMATION/CERTIFICATION:

The Director of Finance certifies that upon approval of the above recommendations an estimated $1,914,720.00 in property taxes will be abated over the five year period from 2021-2026.  This amount will be included in the City's five year financial forecast.  

TO
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount

FROM
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount

Submitted for City Manager's Office by:
Fernando Costa (6122)
Originating Department Head:
Aubrey Thagard (8187)
Additional Information Contact:
Sarah Odle (7316)

 
 
ATTACHMENTS
  11. Form 1295 Certificate 100369811 - Legacy Scenic.pdf
  12. Form 1295 Certificate 100369104 (1) - JPI.pdf
  6. Oakhurst Colored Site Plan.pdf
  JPI_Oakhurst_v1 picture.pdf
  Oakhurst Scenic Map for Council.pdf