STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: August 11, 2021
COUNCIL DISTRICT(S): 2, 14
DEPARTMENT: Office of Economic Development
EXECUTIVE: Dr. Eric A. Johnson
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SUBJECT
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Authorize (1) approval of a resolution for the Dallas Downtown Improvement District’s (District) proposed 2022 Service Plan, 2021 Assessment Plan and 2021 Assessment Roll; and (2) a public hearing to be held on August 25, 2021, to receive comments concerning the annual assessment for the District; and, at the close of the public hearing, consider an ordinance levying a special assessment on property in the District for services and improvements to be provided during 2022; fixing charges and liens against the property in the District and against the property owners thereof; providing for the collection of the 2021 assessment; and providing an effective date - Financing: This action has no cost consideration to the City (see Fiscal Information)
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BACKGROUND
This action calls for a public hearing to be held on August 25, 2021 during which any owner of property located within the District may speak for or against the District’s annual Service Plan and assessment, as required by the Public Improvement District Assessment Act (Act) in Chapter 372 of the Texas Local Government Code. After hearing and passing on objections, the City Council may consider an ordinance levying a special assessment on District property.
The Downtown Dallas, Inc., provided City staff with the District’s proposed 2022 Service Plan and 2021 Assessment Plan for review. Staff found the services and improvements to be advisable and recommend approval subject to the public hearing on August 25, 2021.
The proposed assessment values provided herein are preliminary. The final Service Plan presented to City Council on August 25, 2021 will reflect 2021 Dallas Central Appraisal District (DCAD) certified values.
The Public Improvement District Service Plan is outlined in the following way:
(a) Nature of the Services and Improvements. The purpose of the District is to supplement and enhance services provided within the District, but not to replace or supplant existing City services provided within the District. The general nature of the proposed services and improvements to be performed by the District includes safety and cleaning programs, transportation enhancements, park and public space beautification and management, economic planning, promotion of Downtown Dallas, special events, and other related expenses incurred in establishing, administering and operating the District as authorized by the Act.
(b) Estimated Cost of the Services and Improvements. During the next five-year period, the estimated annual cost of the improvements and services provided by the District is expected to begin at approximately $10,276,118.00 in 2022 and reach $15,893,448.00 in 2026. The total estimated net assessments to be collected during the next five-year period is approximately $59,322,476.00. The District shall incur no bonded indebtedness.
(c) Boundaries. The boundaries of the District are located wholly within the city of Dallas, Texas. The boundaries of the District are attached to the resolution as shown in Exhibit A.
(d) Method of Assessment. The assessment shall apportion the costs each year among the property owners on the basis of special benefits accruing to the property. The proposed method of assessment, which may specify included or excluded classes of assessable property, shall be assessed according to the value of the real property and real property improvements as determined by DCAD. The net assessment amount for the 2022 Service Plan year is proposed to be $9,343,118.00. This amount is approximately equal to $0.129 per $100.00 valuation. Once levied, this assessment rate shall not increase during the 2022 Service Plan year. Future annual assessment rates, however, may be increased up to a maximum of $0.15 per $100.00 valuation subject to appropriations set forth in the petition that created the District. Any future increase in the assessment rate would also be subject to a public hearing and approval by the City Council.
The real property of jurisdictions and entities that have obtained an exemption from City of Dallas real property taxes pursuant to the Texas Property Code (except under the provisions of Sections 11.24 and 11.28 of the Property Tax Code) will not be subject to an assessment on that portion of the assessed value of the property exempt from City real property taxes. Property owned by tax-exempt religious organizations will be exempt from assessment as well as railroad rights-of-way and cemeteries. Dallas Area Rapid Transit (DART), and Dallas College are tax-exempt properties; they have agreed to participate in the District voluntarily for the services they are receiving. Payment of assessments by other exempt jurisdictions and entities must be established by contract.
(e) Apportionment of costs between the District and the Municipality as a Whole. The assessment is levied on the real property and real property improvements in the District according to the value of such property. Levying the assessment for the services and improvements based on the appraised value of the property results in the apportionment of the costs on the basis of special benefits accruing to the property. The City of Dallas has agreed to pay assessments against exempt City property in the District.
For FY 2021-22, the City's estimated participation is $965,702.00 which includes $651,479.00 to be paid from the General Fund and $314,223.00 to be paid from the Convention and Event Services Fund (this amount excludes an estimated $470,999.00 assessment for the Convention Center Hotel property to be paid directly by the Omni Hotel). As a contributor, the City of Dallas is represented on Downtown Dallas Inc.’s Board of Directors.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On June 12, 2013, City Council authorized the creation of the Dallas Downtown Improvement District (District) for a period of seven years and designated the Downtown Dallas, Inc., as the management entity for the District by Resolution No. 13-1015.
On September 9, 2015, City Council authorized an ordinance approving and adopting the final 2016 Service Plan, 2015 Assessment Plan and the 2015 Assessment Roll by Resolution No. 15-1695; Ordinance No. 29860.
On September 14, 2016, City Council authorized an ordinance approving and adopting the final 2017 Service Plan, 2016 Assessment Plan and the 2016 Assessment Roll by Resolution No. 16-1496; Ordinance No. 30201.
On September 13, 2017, City Council authorized an ordinance approving and adopting the final 2018 Service Plan, 2017 Assessment Plan and the 2017 Assessment Roll by Resolution No. 17-1482; Ordinance No. 30636.
On September 12, 2018, City Council authorized an ordinance approving and adopting the final 2019 Service Plan, 2018 Assessment Plan and the 2018 Assessment Roll by Resolution No. 18-1304; Ordinance No. 30978.
On September 12, 2018, City Council authorized an amended and restated management contract with Downtown Dallas, Inc., the non-profit corporation designated as the management entity for the Dallas Downtown Improvement District (District) to reflect changes in the process for disbursement of assessment revenue, authorizing the City to disburse assessments to Downtown Dallas, Inc., and to address other amendments to the agreement form by Resolution No. 18-1305.
On September 11, 2019, City Council authorized an ordinance approving and adopting the final 2020 Service Plan, 2019 Assessment Plan and the 2019 Assessment Roll by Resolution No. 19-1433; Ordinance No. 31315.
On May 27, 2020, City Council authorized the renewal of the Dallas Downtown Improvement District (District) for a period of seven-years and designated the Downtown Dallas, Inc., as the management entity for the District by Resolution No. 20-0869.
On September 9, 2020 City Council authorized an ordinance approving and adopting the final 2021 Service Plan, 2020 Assessment Plan and the 2020 Assessment Roll by Resolution No. 20-1357; Ordinance No. 31633.
The Economic Development Committee was briefed by memorandum regarding this matter on August 2, 2021. <http://cityofdallas.legistar.com/gateway.aspx?M=F&ID=995bb7de-dd55-4be7-8b12-a7fc8a3ef946.pdf>
FISCAL INFORMATION
This action has no cost consideration to the City. District assessment collections remitted from the Dallas County Tax Office to the City are deposited in a special revenue fund for disbursement to the District’s management entity on a monthly basis. Based on the District’s proposed 2022 Service Plan budget, fund disbursements for the upcoming year are estimated at $7,906,417.00 which does not include $651,479.00 to be paid from the General Fund, $314,223.00 to be paid from the Convention and Event Services Fund, and $470,999.00 to be paid directly by the Omni Hotel. For District property owners, the proposed assessment amount is approximately equal to $0.129 per $100.00 of appraised value as determined by DCAD (i.e. property owners within the boundaries of the District pay the assessment and the funds are managed by a private, non- profit entity under a management contract with the City).