economic development committee september 17, 2012 · economic development committee september 17,...

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Davis Street Market Project (Davis Garden TIF District)

Economic Development Committee

September 17, 2012


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Purpose

Review the Davis Street Market project proposal for TIF funding in the Davis Garden TIF District.

Obtain Economic Development Committee approval for consideration of the project by City Council on September 26, 2012.


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Davis Garden TIF District Overview: Background

The Davis Garden TIF District was created June 13, 2007.

The TIF District contains commercial property along Davis Street, several large vacant parcels where aging apartment complexes were demolished and the 200 acre Canyon area, located between I-30 and Fort Worth Avenue west of Westmoreland Road.


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Davis Garden TIF District Overview: Background (continued)

The District expires on December 31, 2039 or when approximately $286.8 million has been collected. TIF funding is used to offset the infrastructure and other development costs in an effort to encourage redevelopment of the area.

Both the Davis Street corridor and the Canyon area provide great potential for redevelopment.


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Sub-District A –The Canyon

Sub-District B –Davis Garden

Davis Garden TIF District Boundary Map


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Davis Garden TIF District Overview: Budget

Davis Garden TIF District Projected Increment Revenues to Retire TIF Fund Obligations Category TIF Budget Allocated Balance

Infrastructure Improvements $94,266,832 $8,082,206 $86,184,626

Environmental Remediation/Demolition $9,635,310 $3,313,246 $6,322,064

Affordable Housing $32,330,314 $4,671,197 $27,659,117

Historic Façade Restoration $5,495,954 $86,535 $5,409,419

District Wide Improvements - Parks, Open Space, Trails, Trolley/Streetcar $12,329,769 $3,088,145 $9,241,624

The Canyon in Oak Cliff Improvements $128,875,756 $69,808,000 $59,067,756

Administration and Implementation $3,832,657 $354,438 $3,478,219

Total Project Costs $286,766,592 $89,403,767 $197,362,825

** All values are estimated expenditures based on Annual TIF Project Costs and Debt Service schedules. These values depend on timing of projects and will fluctuate. An interest rate of 5% is used throughout the TIF term.


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Davis Street Market Project

Project Location • The site consists of

1.69 acres located off of West Davis Street between North Vernon Avenue and North Van Buren Avenue.

• Located approximately ½ mile west of the Bishop Arts District.


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Davis Street Market Project (continued)

Project Description

• The project will consist of one 5-story mixed-use building that will consist of 68,000 – 96,000 square feet of retail and office space, approximately 150 residential units totaling 150,000 square feet and 345 structured parking spaces for all uses.

• The estimated private investment for the project is $32,700,000.

• The recommended TIF subsidy for the project is $4,000,000.

• 20% of the project’s apartment units will meet affordable housing requirements.

• On-site amenities for the project include a leasing office, business center, fitness center, rooftop pool and public plaza.


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Davis Street Market Project – Renderings


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Davis Street Market Project – Renderings (continued)


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Davis Street Market Project – Funding Sources & Uses

Funding Sources and Uses • Owner/Developer (Private Equity) – Equity • New Market Tax Credit Equity – Equity • Debt from Senior/Mezzanine Lenders – Construction Loan

Funding Source Amount Use Owner/Developer (Private Equity) $3,850,000 Equity

New Market Tax Credit Equity $4,000,000 Equity

Debt from Senior/Mezzanine Lenders $25,850,000 Construction Loan

Total $33,700,000


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Davis Street Market Project – Summary

* Developer fee reflects the administration fee that is required to administer the project’s tax credits over a 10 year period

Total square footage required A) Residential Units B) Residential Rental Space C) Commercial (office and/or retail) space

N/A Approximately 150

150,000 square feet 68,000 square feet

Developer fee 3.75% Required private investment – site acquisition and hard costs of construction $20,000,000

Total project costs including site acquisition, hard costs of construction and all soft costs. $33,700,000

TIF Reimbursement Funding $4,000,000 % TI F funds to total project cost 11.87% Return on Costs with TIF funds 5.69%

Return on Costs without TIF funds or other public assistance 5.01%

Deadline to finalize acquisition of properties February 15, 2013 Deadline to complete environmental remediation activities May 31, 2013 Deadline to complete and receive a Certificate of Occupancy December 31, 2014 Deadline to complete public infrastructure improvements December 31, 2014


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Previous Actions

On May 18, 2012, the City Design Studio reviewed the conceptual Site Plan and Renderings for the Davis Street Market project. The urban design comments from the project’s design review are provided in Appendix 3 (please refer to pages 20-24).

On June 4, 2012, the Davis Garden TIF Board of Directors reviewed and approved TIF funding for the Davis Street Market project in an amount not to exceed $4,000,000.


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Recommendations

The following actions are recommended:

• Approval of a Development Agreement with Davis Street Market, LP for a $4M TIF reimbursement for the Davis Street Market project.


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Appendices


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District Development Goals

• Encourage needed horizontal improvements and site preparation in the District – 6 sites comprising 1,503 units have been demolished and cleared for future redevelopment.

• Utilize TIF funding to encourage the needed redevelopment of the large area (approximately 200 acres) located southwest of the intersection of Interstate Highway 30 and North Westmoreland Road.

– SLF’s The Canyon project was approved by City Council on June 8, 2011. The project‘s build out could potentially create up to $700 million in private investment for the area.

• Create additional taxable value attributed to new private projects in the Davis Garden TIF District and appreciation totaling approximately $1.7 billion

– The total appraised value of property in the District has increased by $2,325,832 since its creation.

• Attract new private development by replacing approximately 2,100 residential units with a more sustainable mix of for-sale and rental units; add approximately 6,600 residential units to increase the area’s population density; and redevelop approximately 1,908,300 square feet of commercial and retail space.

– 6 sites have been prepared for redevelopment activities, including the Cliffwood Assembly where Wood Partners is currently constructing approximately 207 apartment units.

– Upon completion the Wood Partners’, Taylor Farms (160 units) and Hillside West (130 units) projects will provide approximately 500 new rental units.

Appendix 1: Davis Garden TIF District Development Goals


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• Diversify housing options by increasing homeownership opportunities while maintaining an affordable housing component of 20% of all new units built.

– GFD Opportunity I, LLC’s Taylor Farms project was approved by Council on November 9, 2009. 146 of the project’s 160 units will be affordable housing units.

– GFD Opportunity II, LLC’s Hillside West project was approved by City Council on April 28, 2010. Each of the project’s 130 units will be affordable housing units.

– 176 of the approximate 500 new rental units in the District will be affordable housing units.

• Maintain the stability of local schools while redevelopment activities occur within the area’s neighborhoods by encouraging strong communication between the Dallas Independent School District and area developers

– Staff is working closely with neighborhood schools to coordinate redevelopment activities with school needs.

• Diversify commercial and retail uses in the District by restoring historic commercial buildings and finding redevelopment options for commercial structures that are architecturally less significant.

– The Settles and Kemp Garages on West Davis Street are properties with historic significance that have been converted for commercial use since the District’s creation.

– The Kessler Theater renovation project was approved by Council on November 9, 2009. – New tenants in renovated buildings include Bolsa, the Kessler Entertainment Group, Bags n Things,

Southern Maid Donuts and Lucky Dog Books.

Appendix 1: Davis Garden TIF District Development Goals (continued)


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• Encourage the redevelopment of properties along the Davis Street, Fort Worth Avenue, and Hampton Road corridors for new residential and commercial uses that feature enhanced urban design standards which are complementary to the historic and conservation districts in the immediate area.

– Redeveloped properties along the Davis Street corridor include the Settles and Kemp Garages, Kessler Theater and Wood Partners’ multi-family housing development.

• Improve recreational opportunities and connections to City trails and open space within the District while providing better connections to County trails and other recreational amenities in the area.

– The Twelve Hills Nature Center’s Urban Prairie Trailhead improvements have been completed.

• Generate approximately $103.7 million (2008 dollars) in increment over 32 years of collections.

– To date $231,137 in tax increment has been generated for the District. Increment collections began with the 2009 tax year.

Appendix 1: Davis Garden TIF District Development Goals (continued)


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Appendix 2: Davis Garden TIF Increment Chart


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Appendix 3: Davis Street Market – Design Review

Urban Design Comments

1. Provide parallel parking and sidewalk improvements on Fouraker Street – as proposed, reverse-angle parking will disrupt the single family neighborhood across the street with glare from headlights. Parallel parking with street curb extensions and trees in a planting strip on both sides of the street provides a more appropriate character for this local neighborhood street.

2. Prioritize pedestrians at driveways – pedestrian oriented areas of our City require thoughtful

design. Sidewalk areas should be carefully designed to provide an interesting, comfortable, and safe walking environment. De-emphasizing the auto entry opening by setting it back and raising the level of the driveway to the adjacent sidewalk prioritizes the pedestrian rather than the car.

3. Design strong building relationship to street - the first two building levels are the primary

contributors to the areas along streets to which the public has open access. The vertical face of a building, a building’s mass, how that mass is broken-up, ground level entries and storefront windows, the use of quality materials and architectural details should be used to promote pedestrian activity and enjoyment of the street. Second level windows should read as recessed windows and not storefront windows to fit within the context of this area


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Appendix 3: Davis Street Market – Design Review

Urban Design Comments

4. Create neighborhood complementary building elements – the covered public sidewalk on the north facade is not necessary to protect from the sun and should be eliminated in favor of bringing the building face out to the street. Individual entries to residential units and windows should engage the street here. A low raised porch or front garden is encouraged to define usable space as a transition from public to private space.

5. Adjust building scale and visual expression on Fouraker Street facade - to create a more

harmonious area between the building and the vehicular and/or parking lanes on Fouraker Street, stepping-back the face of the building beginning on the third level would relate better with the scale of the existing one story homes across the street. This setback can accommodate patio space for the third level residential units.

6. Make the building’s corners active - careful consideration of the driveway location on N.

Vernon Avenue should be considered to free-up space for the design of this corner to allow for leasable space and an important contributor to the areas along streets to which the public has open access.


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Appendix 3: Davis Street Market – Design Review (continued)


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Appendix 4: Davis Street Market, LP

Rick P. Garza is the sole member of the Davis Street Market, LP

• Rick P. Garza – founding principal and owner of RPGA Design Group, Inc. Architects. He also owns and manages numerous other entities related to his real estate development, rehabilitation and management endeavors. The Davis Street Market is the second development project that he will oversee. His initial project is Live Oak Crossing, a 53 acre multi-use development that is under construction approximately 71 miles south of San Antonio, Texas.

economic development committee september 17, 2012 · economic development committee september 17,...

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