M&C Review


COUNCIL ACTION:  Approved on 8/14/2018 

DATE: 8/14/2018 REFERENCE NO.: **C-28790 LOG NAME: 17ED_ELANW7TH_EDPA
CODE: C TYPE: CONSENT PUBLIC HEARING: NO
SUBJECT:  

Authorize Execution of One-Year Economic Development Program Agreement with Elan West 7th, LP in Connection with a Multi-Family Development in the Vicinity of Carroll Street and Merrimac Street (COUNCIL DISTRICT 9)


RECOMMENDATION:

It is recommended that the City Council authorize the City Manager to execute a one-year Economic Development Program Agreement with Elan West 7th, LP allowing for a one-time economic development grant in the amount of $204,085.61 in connection with the construction of a multi-family development in the vicinity of Carroll Street and Merrimac Street.

 
DISCUSSION:

On July 16, 2013, (M&C C-26348) the City Council authorized the execution of a 10-year Tax Abatement Agreement (City Secretary Contract No. 44750) with Greystar GPII, LLC. or an affiliate (Elan West 7th, LP) (Company) for the construction of a multi-family development in the vicinity of Carroll Street and Merrimac Street, consisting of apartments and townhomes with at least 374 units and a parking garage with at least 498 spaces.

Per the Agreement, the Company was required to invest at least $35,000,000.00 in real property improvements, the greater of 30% or $10,500,000.00 in hard construction spending with Fort Worth companies, and the greater of 25% or $8,750,000.00 in hard construction spending with Fort Worth Certified M/WBE companies by December 31, 2015. The Company committed to maintaining a minimum of eight full-time employees, with a minimum of 20% of all jobs held by Fort Worth residents and at least 10% held by Fort Worth Central City residents. Annually, the Company must invest the greater of 30% or $70,050.00 in supply and service expenditures with Fort Worth companies and the greater of 25% or $58,375 in supply and service expenditures with Fort Worth certified M/WBE companies.  Under the Agreement, the Company must also reserve 37 units as affordable housing for adjusted incomes at or below 80% of HUD's income limits for the Fort Worth-Arlington, TX metropolitan area.  In addition, eight units on property are required to be fully handicapped accessible with three being fully handicapped accessible units that are also affordable housing units.

All of the required construction improvements at the project site have been completed.  The Company also acted in good faith to meet all annual commitments under the Agreement.  Previously, the City's practice with Tarrant Appraisal District (TAD), which is under contract with the City to prepare the City's tax bills, was to notify TAD of any tax abatements that the City was granting for a given tax year, including the property location and the amount of abatement to be applied.  Unbeknownst to the City or Company, TAD requires any recipient of an abatement to also file an application with TAD in order for an abatement to be applied to the applicant's tax bill.  Because of this disconnect, Company did not file such an application for the 2017 tax year.  As a result, Company did not receive the tax abatement for the 2017 tax year that both the City and Company expected in accordance with the Agreement.  The amount of abatement that Company should have received for the 2017 tax year is $204,085.61.

In order to effectuate the parties' intent under the Tax Abatement Agreement, staff is recommending that the City and Company enter into a one year Economic Development Agreement under which the City will provide an economic development grant to Company in an amount equal to the amount of the Abatement that both the City and Developer expected to be applied for the 2017 tax year, as authorized by Chapter 380 of the Texas Local Government Code.  For 2018 and all remaining years in which Company is due an abatement, Company will submit the proper application to TAD, and the Tax Abatement Agreement will govern.

This project is located in COUNCIL DISTRICT 9.

 
FISCAL INFORMATION/CERTIFICATION:

The Director of Finance certifies that approval of this Agreement will require a one-time payment of $204,085.61 from the Fiscal Year 2018 Budget. While funds for this payment were not specifically budgeted, savings from other incentive payments exist in sufficient amounts to offset any costs associated with this agreement.  

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Submitted for City Manager's Office by:
Susan Alanis (8180)
Originating Department Head:
Robert Sturns (2663)
Additional Information Contact:
Tracy Williams (2627)

 
 
ATTACHMENTS
  180713_Form1295.pdf