STRATEGIC PRIORITY: Economic Development
AGENDA DATE: December 13, 2023
COUNCIL DISTRICT(S): 2
DEPARTMENT: Office of Economic Development
EXECUTIVE: Majed Al-Ghafry
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SUBJECT
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Authorize an amendment to the tax increment financing (“TIF”) development and Chapter 380 Grant Agreement with Island Rock Holdings, LLC (“Developer”) previously authorized by Resolution No. 22-1463 to allow the Director of the Office of Economic Development to approve an assignment of the construction of the public infrastructure component of the Longhorn Ballroom Redevelopment Project and the remaining unexpended portion of the TIF Subsidy (net of costs incurred by Developer for the engineering design of the public infrastructure component) to the City’s Department of Public Works and/or Department of Transportation for bidding and construction - Financing: No cost consideration to the City
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BACKGROUND
On September 28, 2022, the City Council authorized a TIF development and Chapter 380 Grant Agreement (“Agreement”) with Developer for a City Subsidy in a total amount not to exceed $4,150,000.00, by Resolution No. 22-1463 for the Longhorn Ballroom Redevelopment Project (“Project”).
The City Subsidy is comprised of a TIF Subsidy in an amount not to exceed $2,100,000.00 (payable from future TOD TIF District Funds) and a Chapter 380 economic development grant (Grant) in an amount not to exceed $2,050,000.00 ($250,000.00 payable from Equity Revitalization Capital Fund and $1,800,000.00 payable from 2012 General Obligation Bond Fund).
The scope of the Project includes four (4) components:
(1) Various interior improvements to the approximately 30,052 square foot existing Longhorn Ballroom building (“Building #1”), including structural; mechanical; electrical; plumbing; lighting; heating, ventilation and air-conditioning (HVAC); fire alarm/sprinkler; security system; finish-out;
(2) Various exterior and interior improvements to the approximately 20,351 square feet existing mixed-use commercial building (“Building #2”), including structural; mechanical; electrical; plumbing; lighting; heating, ventilation and air-conditioning (HVAC); fire alarm/sprinkler; finish-out; façade restoration;
(3) Site improvements to include the courtyard/parking lot and creation of a new approximately 2-acre outdoor “backyard” event space, including grading, paving, parking, irrigation, landscape, hardscape, retaining wall, fencing, gates, lighting); and
(4) Public infrastructure improvements and streetscape improvements along the Project’s Corinth Street frontage and at the intersection of Corinth Street and Riverfront Boulevard.
To date, the Developer has completed Project component #1 (renovation of the Longhorn Ballroom known as “Building #1”). The Developer is also in the process of completing Project component #2 (renovation of the adjacent building known as “Building #2”) as well as Project component #3 (site improvements).
Specifically, regarding Project component #4 (public infrastructure and streetscape improvements), as the Developer’s engineering design of the public infrastructure and streetscape improvements has progressed in recent months, the Developer has coordinated extensively with staff from the City’s Department of Public Works and the Department of Transportation. This coordination has resulted in the City determining the need for a broader scope of public infrastructure improvements in the area (above and beyond what the Developer was originally planning). As a result, the City’s Department of Public Works and Department of Transportation are now proposing a collaborative arrangement with the Developer for the engineering design and construction of the broader scope of public infrastructure improvements.
With this collaborative arrangement, staff is recommending that the Developer perform the engineering design work for the broader scope of public infrastructure and streetscape improvements and then provide the design to the City’s Department of Public Works and the Department of Transportation. The broader scope is anticipated to include but is not limited to back-of-curb streetscape (lighting; sidewalk; landscaping) along the Corinth Street frontage; new curb and “transition lane” along Corinth Street frontage; intersection geometry adjustments (some new curb/gutter/pavement/ADA improvements) and a new traffic signal at the Corinth Street and Riverfront Boulevard intersection. Upon receiving the engineering design from the Developer, the City will then bid/construct the broader scope of public infrastructure and streetscape improvements.
The Developer will be reimbursed for the engineering design work (estimated to range from $400,000.00 to $450,000.00) from the $2.1 million TIF Subsidy previously authorized with the Agreement, and the remaining unexpended portion of the TIF Subsidy (approximately $1.7 million) will be assigned to the City’s Department of Public Works and/or Department of Transportation for the bidding and construction of the public infrastructure improvements.
To facilitate this collaborative arrangement between the City and the Developer, an amendment to the Agreement is now needed to allow the Director of the Office of Economic Development to approve an assignment of the construction of Project component #4 and the remaining unexpended portion of the TIF Subsidy (net of costs incurred by Developer for the engineering design of Project component #4) to the City’s Department of Public Works and/or Department of Transportation.
ESTIMATED SCHEDULE OF PROJECT
Began Construction October 2022
Complete Construction June 2026
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On December 10, 2008, the City Council held a public hearing and authorized the establishment of Tax Increment Financing Reinvestment Zone Number Seventeen, the TOD TIF District, by Resolution No. 08-3392; Ordinance No. 27432, as amended.
On April 14, 2010, the City Council authorized the Project Plan and Reinvestment Zone Financing Plan for the TOD TIF District by Resolution No. 10-0915; Ordinance No. 27854, as amended.
On September 28, 2022, the City Council authorized a TIF development agreement and all other necessary documents with Island Rock Holdings, LLC and/or its affiliates in an amount not to exceed $2,100,000.00, payable from future TOD TIF District funds ("TIF Subsidy") and a Chapter 380 economic development grant agreement with Island Rock Holdings, LLC and/ or its affiliates in an amount not to exceed $2,050,000.00 ($250,000.00 payable from Equity Revitalization Capital Fund and $1,800,000.00 payable from 2012 General Obligation Bond Fund) in accordance with the City’s Public/Private Partnership Program ("380 Grant"), in consideration of the Longhorn Ballroom Redevelopment Project ("Project") on property currently addressed as 200 Corinth Street and 2202-2222 Riverfront Boulevard in Tax Increment Financing Reinvestment Zone Number Seventeen (TOD TIF District).
On October 30, 2023, the TOD TIF District Board of Directors reviewed this matter and unanimously recommended City Council approval.
The Economic Development Committee was briefed by memorandum regarding this matter on November 6, 2023. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=12417911&GUID=818F8F37-1E64-4DFE-B7C6-DCE5C1233D83>
FISCAL INFORMATION
No cost consideration to the City.
OWNER/DEVELOPER
Island Rock Holdings, LLC
Edwin Cabaniss, Managing Member
MAP
Attached