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01-12-21 TIRZ MINUTESMINUTES TAX INCREMENT REINVESTMENT ZONE (TIRZ) NUMBER TWO, CITY OF SCHERTZ, TEXAS REGULAR MEETING TUESDAY, JANUARY 12, 2021 A regular meeting was held by the Tax Increment Reinvestment Zone (TIRZ) Number Two, City of Schertz, Texas on Tuesday, January 12, 2021 at 4:00 PM, in the Council Chambers at the Hal Baldwin Municipal Complex, 1400 Schertz Parkway, Building #4, Schertz Texas. The following board members, staff and the public were present: Board Members Present Michael Dahle, Chairperson Mark Davis, Board Member Chris Price, Board Member Rick Trefzer, Board Member (arrived during item #3) Gary Inmon, Board Member Clark McChesney, Board Member Jill Whittaker, Board Member Staff Members Present Brian James, Staff Member Cyndi Simmons, Staff Member Public Present Bradley Bechtol CALL TO ORDER The meeting was called to order at 4:03 PM. HEARING OF RESIDENTS None present. DISCUSSION AND/OR ACTION ITEMS 1. Introduction of TIRZ Members The Board members who were present introduced themselves. Brian James noted that Bob Cantu stepped down and Jill Whittaker has filled the vacant position. 2. Approval of the Minutes from October 13, 2020 A motion was made by Chris Price and seconded by Gary Inmon to approve the minutes. The motion passed unanimously. Update on the Status of Development and Amended TIRZ Agreements — Overview of TIRZ and The Crossvine by Chris Price (See attached documents. Note: Page numbers were added to the presentation after the meeting for reference.) • The project originally started in the early 2000's by a developer out of Austin. The development that you see in the (page 2) was the original Sedona Phase which included 1650 lots, no amenities, just a very simple development. TIRZ was adopted in December Page 1 of 4 2006. The original developer had all 1650 lots under contract with various builders. The housing bubble burst in 2007, followed by the financial crisis in 2008. The only builder who closed was Lennar in the Sedona section and ultimately over 2009 -10 with DR, they built 68 homes and did extremely well in a really bad environment. We were introduced to the project because the originally developer needed a bridge loan to cover the sewage plan, so we loaned them the $2.5 million to get that completed. The original developer was hopeful that things would turn, and it quickly became evident that it wasn't going to turn soon. So, in order to protect our investment, we bought the project. When we bought the project, we were sitting on a business plan that wasn't going to work in that environment. The city was upset with the direction of the project and we were trying to figure out where we were going to go next. We spent several months working on a plan and ultimately decided on a master planned community. We put together a team and we were able to put together a master plan and came into the city and presented it as an option to the city and over the next 5 months we worked every Friday from 8 -5 working on the PDD. • Phase One (page 6) had 50 -60 -70 -foot lots and sold out within one year. The average prices were high $300's and David Weekly was around $337,000. The first phase also included an amenity center and trail system. • Phase Two (page 8) was completed within a year and the pricing has pushed up to $329,000 to $388,000. Phase Two also included a new entrance off 1518. • Phase Three (page 10) hasn't been completed and builders are actively building. The average cost is now $415,000. Additional amenities have been added including additional trail system, green belts, bocce ball court, games park, and community garden. • We are now working with the charter school on connectivity to the school and we've linked them with a sidewalk to the school. One of the things we're doing is upsizing the sewer line down 1518 to accommodate the development of the area around Woman Hollering Creek. We are going to build a soccer field and irrigation system. • Pulte is on their second phase of development and will definitely be out of the development by the end of the year. Brian James commented that we are working on the pedestrian connection from this phase to Heritage Oaks Park. It's not that hard to get over the 2 -foot concrete canal, but we are working with the builder and the builder is paying to put in a pedestrian crossing over this canal. • Should be breaking ground in the next few weeks on the Garden Home section — approximately 77 lots (page 14). Each home will be rear -entry and the front of each home will look onto a greenbelt. Councilwoman Whittaker asked if they had a starting price for those homes and Chris Price responded that they haven't given a price, but he guesses that they will be the high $200's to high $300's. • A site just on the other side of the garden homes under contract to a multi - family developer (page 15). The site plan is not what it will ultimately look like. The units will 2- story product with each having a garage and will be $150,000 per door. They are currently working on financing now and hope to start construction next year. • Brian James commented that this is the first big tax - paying development that should really increase the numbers of revenue for the TIRZ. • The Town Center (page 16) is going to be on the other side of Lower Seguin Road. They are working on drainage engineering issues and TxDOT on the right -of -way acquisitions for the expansion of 1518. It's going to be difficult to get commercial space in there until the 1518 expansion is completed (which may be as long as 2027). Brian James Page 2 of 4 commented that they have mentioned some activity should begin on the expansion in late 2022. • Will be expanding across Woman Hollering Creek (page 18). This section will also have an amenity center and will have four phases. There will be a lap pool and splash pad. One big difference with this section and the previous section is the size of the lots which will be 45 -55 -65 -foot lots. One of the issues is affordability and one way to keep the price from escalating is to build on smaller lots. Because of the expense of creating this PDD, they're adding this 57 -acre parcel and will be a continuation of the development and will add 213 lots. • Brian James commented that Ware- Seguin Road is an odd alignment — where the road comes down and curves and there's a connection that is in. City Staff is working with the developer on how to re -work the alignment so that it functions well long into the future and gives everybody access. There's a gap between where their property stops and where Ware- Seguin Road comes in to where it makes sense to tie in. We're trying to work through that to deal with the problem on the front end that we know we're going to have at some point. • Page 20 reflects the TIRZ modifications adding additional properties was approved by the TIRZ Board, City Council, and SARA and we'll be going to Bexar County at their first Commissioner Court meeting in February. • When this TIRZ was originally underwritten, they were looking to generate a little over $400 million in taxable value. Under the revised development as modified, we're looking at generating more like $930 -$950 million taxable value so, it's working. • Brian James commented that with the rework we're getting something that is unique, not just in Schertz, but in the area as well. • Brian James also commented that the 1518 expansion presents challenges and City Staff is appreciative of the efforts of their engineering firm (Jessie Malone and Claudia) to facilitate conversations with CPS Energy, TxDOT and the City to make everything to fit, including drainage and CPS utilities. A meeting was held last week, and we think we have things worked out which is positive. • Gary Inmon asked what the plans are right now for the expansion of 1518 from 78 to 110. Brian James responded that they don't have quite enough funding to go all the way from 78 to 110. They're hoping in this next round to get $8 -10 million to be able to do the whole thing at one time which would be ideal. It's more likely that they will do the intersections. There will be four lane cross section with median, hike and bike trails both sides, similar to what they're doing on 1103. Their hope is to get more funding this year to do the whole thing before beginning in 2022. • Councilwoman Whittaker asked if the expansion would affect the big trees. Chris Price responded that unfortunately we will lose several of those trees. Both entrances will be reimagined to hopefully keep more of the trees. • Councilwoman Whittaker asked about builders for this new section of development. Chris Price responded that Weekley and Felder and they are currently in negotiations with a third builder and hope to make the announcement within the next couple of weeks. Chris also advised that these will be 45 -55 -65 -foot lots and one advantage we have is that the houses will have 5 -foot side setbacks where other housing communities have a 10- foot setback. You'll be able to get a pretty substantial size home on the lot. Councilwoman Whittaker asked if they would offer smaller floorplans. Chris Price Page 3 of 4 responded that the homes on the other side of the creek will have the same feel and same materials so that it will be a continuation. 4. Report on Tax Increment Collections Amount and Expenses (See attached document) Brian James reports that there's only been a slight modification to the report you received the end of September. At our last meeting we approved the $600,000 payment to the developer and the developer requested that we hold it and not send that payment now. We've collected a bit more interest on it and if you look at it in terms of the balance, we're basically sitting on about $66,000. We have about $5,000 that the County may ask for, so we have about $60,000 pending. The other big thing is that the developer's current outstanding disbursement of $14.5 million. There's a bunch in improvements that they made that the City has already approved — we're just waiting to the collect money and as we get it, we'll start paying. At the next meeting, we should have additional reimbursements that the Board has approved. The Engineering Department have been working on to get them all done and get them approved in mass. We anticipate at the next meeting the Engineering Department will be here to recommend approval of additional expenditures for what's already been built, and we'll get those added. Chris Price also noted that they are trying to get caught up on their reimbursement requests and we should be seeing another request soon. Brian James also advised that there is a lot of paperwork that goes with that and one of people that was working on it passed away a few years ago and it is a big task. Engineering wants to do a thorough review to get caught up. The developer is waiting for the agreements that were just approved to be executed and then we'll do the payment. They indicated they will withhold the payment on the Fire Station of their obligation and pay them the difference and that payment goes to the City. As a reminder, Bexar County takes a little bit of a cut every year. The other disbursement to the City was legal fees to set -up the TIRZ and neither the City nor SARA take a cut now. 5. Brian James indicated we are going to try to get the two County members appointed in February so hopefully when we come back in April, we will issue new sets of documents and approve some eligible expenditures. We will try to meet quarterly. We may have two or three meetings once the agreements are executed and may even try to meet virtually for some of the fairly short, easy meetings. ADJOURNMENT Meeting adjourned at 4:35 PM. Michael Dahle, Chair Page 4 of 4 MINUTES TAX INCREMENT REINVESTMENT ZONE (TIRZ) NUMBER TWO, CITY OF SCHERTZ, TEXAS REGULAR MEETING TUESDAY, SEPTEMBER 14, 2021 A special meeting was held by the Tax Increment Reinvestment Zone (TIRZ) Number Two, City of Schertz, Texas on Tuesday, September 14, 2021 at 5:00 PM, in the Council Chambers at the Hal Baldwin Municipal Complex, 1400 Schertz Parkway, Building #4, Schertz Texas. The following board members, staff and the public were present: Board Members Present Michael Dahle, Chairperson Mark Davis, Board Member Chris Price, Board Member Gary Inmon, Board Member Clark McChesney, Board Member (Virtual) Jill Whittaker, Board Member Staff Members Present Brian James, Staff Member Public Present Brad Pittenger CALL TO ORDER The meeting was called to order at 5:01 PM. HEARING OF RESIDENTS None present. DISCUSSION AND /OR ACTION ITEMS 1. Approval of the Minutes from July 13, 2021 No action was taken as there was not a meeting held on July 13, 2021. 2. Authorize Expenditures Eligible for Reimbursement Brian James explained that the Developer was seeking Board approval of expenditures. The are improvements and other expenditures associated with the Crossvine that are eligible for reimbursement per the Development Agreement. Previously, the Board has approved expenditures of $16,516,825.00. The City's Engineering Department has reviewed the backup material provided by the applicant and is supportive of approving the additional $18,750,639.52 in expenditures. This would bring the total approval to $35,267,464.52. Motion to approve the additional eligible expenditures of $18,750,639.52 was made by Mark Davis, seconded by Chris Price. Vote to approve was unanimous. 3. Authorize Additional Reimbursement Brian James explained that the City has paid the Developer the last approved payment of $600,00.00 with the developer telling the City to retain $500,000.00 of that to meet their Page 1 of 2 obligation under the Development Agreement to go towards the City providing fire protection. The fund has just over $700,000 in it, however the Developer is only requesting to be paid $25,000.00 now based on the agreement they have to monetize the TIRZ by assigning revenue they receive. Motion to approve the additional payment of $25,00.00 was made by Mark Davis, seconded by Jill Whittaker. Vote to approve was unanimous. 4. Discussion on the Status of the TIRZ Agreements Brian James noted the amended TIRZ Agreements were approved by Bexar County on August 10, 2021. The Bexar County Commissioners Court had not appointed two new members as anticipated, but it was hoped that would occur in the near future. Discussion of Development Assignment of Revenues Chris Price explained why the Developer was trying to assign the revenue they receive. He explained some of the benefits of this method of financing the Development over traditional bank financing which is what they have done previously. Brad Pittenger with the Developer He noted it is not speculative but is based on development that has occurred to date. ADJOURNMENT Meeting adjourned at 5:14 PM. Michael Dahle, Chair Page 2 of 2 MINUTES TAX INCREMENT REINVESTMENT ZONE (TIRZ) NUMBER TWO, CITY OF SCHERTZ, TEXAS REGULAR MEETING TUESDAY, APRIL 13, 2021 A regular meeting was held by the Tax Increment Reinvestment Zone (TIRZ) Number Two, City of Schertz, Texas on Tuesday, April 13, 2021 at 4:00 PM, in the Council Chambers at the Hal Baldwin Municipal Complex, 1400 Schertz Parkway, Building #4, Schertz Texas. The following board members, staff and the public were present: Board Members Present Michael Dahle, Chairperson Mark Davis, Board Member Chris Price, Board Member Rick Trefzer, Board Member Gary Inmon, Board Member Clark McChesney, Board Member Jill Whittaker, Board Member Staff Members Present Brian James, Staff Member Public Present None CALL TO ORDER The meeting was called to order at 4:03 PM. HEARING OF RESIDENTS None present. DISCUSSION AND /OR ACTION ITEMS 1. Approval of the Minutes from January 12, 2021 A motion was made by Clark McChesney and seconded by Rick Trefzer to approve the minutes. The motion passed unanimously. 2. Update on the Status of Development Chris Price indicated that repairs were being made to Module 1 Unit 3 and that the infrastructure would be transferring to the city in a few weeks. The garden home section started construction a few weeks ago and it is ahead of schedule and that they want to deliver the lots in August. The current builders are David Weekly and Scott Felder. Pulte is exiting the project as they have changed their business model and want to be in a different price point. Additionally, they are using a construction technology, a sort of prefab system, so it is hard for them to meet the guidelines. Chris Price noted that Perry homes is coming in. The next phase, Module 3 Unit 1 - preliminary plat is in with city. They are negotiating with builders but it is likely going to be a continuation of Scott Felder and Weekly. Page 1 of 2 Chris Price noted that they are working on a PDD amendment for the newly acquired area further south. He added that sales are doing very well, with prices in the low $300,000s and some near $600,000. The multi - family parcel is under contract and working through the usual issues. Brian James indicated that there are a number of items pending with staff such as a zoning case and a plat down in the southern part of the development. Also, with southern area that council recently rezoned, staff is working with the developer to get access to Ware Seguin Road proper, so there may be an agreement coming to council on that in the future. Chris Price mentioned they reached agreement to buy the outparcel wrapped by the 58 acres. Update on the Amended TIRZ Agreements Both the City and SARA have approved the agreements, so we are just waiting on Bexar County to get it on the agenda. Chris price mentioned it had been reviewed by all county depts except the county attorney. Brian mentioned a few things are being held up pending approval — the developer asked the City to not pay the last approved payment. He noted the developer was wanting to assign revenues in order to adjust their lending. 4. Report on Tax Increment Collections Amount and Expenses (See attached document) The city got some initial data from the appraisal district. It looked like it had fewer homes than we believed to have been built. The Developer and City are reviewing it and doing some research to determine the number of lots with structures on them to correct that, if there is a problem. The discrepancy is almost 100 homes. Jill Whitaker asked whether the developer was in conversations to acquire the sliver of land at Lower Seguin Road and FM 1518. The owner had indicated to her that his land was going to be acquired but it was unclear by whom or how. Chris Price indicated they have been talking for years but there is a difference in expectations and so he wasn't sure if they would ever acquire it. More discussion occurred on the appraisal district report. Clark McChesney asked what tripped it to show up on the tax role. Brian James indicated he was under the impression that it had to do with the Certificate of Occupancy. ADJOURNMENT Meeting adjourned at 4:20 PM. Michael Dahle, Chair Page 2 of 2