After months of the Flower Mound Town Council discussing a possible tax increment reinvestment zone (TIRZ) for the Lakeside Village mixed-use development, Mayor Steve Dixon said Friday the town staff needs a final answer on the council's intent to pursue it.
That answer was no.
During the council's annual strategic planning session the majority of the council said they aren't interested in creating the TIRZ.
Realty Capital, who is leading the 35-acre, $1.5 billion project, located west of FM 2499 and south of the Lakeside DFW development, had requested a TIRZ as a way to kick start development at Lakeside Village.
Plans called for the town and Tarrant County to contribute money to the TIRZ. Developers would pay for the project's infrastructure up front, and TIRZ money generated from the project would later be used as reimbursement.
Developers said approximately $33.6 million in infrastructure and amenities are needed, and Realty Capital had asked for the TIRZ to fund $20.5 million of it.
Andrea Roy, the town’s economic development director, said the town was proposing to contribute 75 percent into the TIRZ. With a 75 percent contribution level by the town and 50 percent by the county, the town would put $68 million into the TIRZ, and the county would put in $24 million, providing the TIRZ fund with $92 million.
Roy said previously with a 75 percent contribution the town would retain 25 percent of the project's added value, plus the zone's base value and 100 percent of the sales tax generated.
Roy said it’s anticipated at complete build-out the project would generate $139.2 million in cumulative ad valorem tax revenue by 2038 for the town and county. Of that, the town would get $90.2 million, and the county would get $49 million.
Roy said the TIRZ revenue could range from $71 million to $107 million based on various build-out scenarios, adding that either one would cover the $20.5 million ultimately reimbursing the developer.
But some council members said this was a risky move and said they viewed this as giving money to the developer.
“I cannot in good conscience underwrite a developer's investment in Flower Mound,” said Councilman Jim Pierson. “And to me that's what a TIRZ does. We're providing them with cash, money, however you want to phrase it. A developer should come in here and be wholly sold on our community and willing to make the investment to get the return for their investors. They should not be coming in here and asking us to underwrite part of that.”
Dixon and Roy disputed Pierson's claim that the town would be underwriting anything.
“We made it clear to the developer that the town is not going to take on any liability for the project,” Roy said. “If they were to move forward, reimbursement to the developer would happen as the added value is there. We have no desire to front money to the developer. Everything would be reimbursable. Not until they're developing and putting incremental value on the ground would we start reimbursing them for what they've done.”
Pierson said, “But it's out of our anticipated revenue from the taxes.”
Mayor Pro Tem Sandeep Sharma agreed.
“No matter what, up front, through the process or in the end, it is the taxpayers' money that would otherwise come to the town that will go to a private developer,” Sharma said.
Pierson also said he isn't convinced in the revenue projections that have been provided.
“We're dealing with guesses here,” Pierson said.
Councilman Claudio Forest supported the TIRZ.
“Looking at a $25 million investment to possibly expedite somewhere in the $100 million (dollars), to me it makes sense in helping move this project forward faster and getting it done before there is some downturn in the economy,” Forest said. “Will the developer move forward? They probably will. They have a unique piece of property. But they'll move forward at a much slower pace than what we'd like to see.”
Councilman Jim Engel said he agreed that a TIRZ could generate tax money quicker, but he said he is concerned accelerating the project may not happen, pointing to the Lakeside Tower that has been under construction for three years and isn't done yet.
Flower Mound contracted with a consulting firm Hawes and Associates at a cost of $20,000 to perform a feasibility study of the TIRZ district. It also contracted with the consultant create the documentation for the zone. Roy said the documentation has been complete, so the town was waiting for council direction before proceeding.
After Pierson and Ben Bumgarner were elected to the council in May, Realty Capital representatives requested a delay on a council item to create a TIRZ district so they could meet with the new councilmen, who had publicly opposed a TIRZ. But those meetings never took place.
Town Manager Jimmy Stathatos said an official vote on the matter may be required at a later meeting.