Public-Private Partnerships –  Techniques That Work   WILLIAM S. DAHLSTROM, AICP, JD JACKSON WALKER, LLP SCOTT POLIKOV, AI...
 
Economic Development can be nerve racking.
THE TOOLBOX Chapter 380 Type A/ Type B TIF/ TIRZ PID Bonds/ CO’s Tax Abatement Nonmonetary Incentives
<ul><li>The “Deal” </li></ul><ul><li>Available Programs </li></ul><ul><li>Process </li></ul><ul><li>Municipality’s limitat...
Municipality’s record Consultants Other taxing jurisdictions Financial Impact Incentive “Package” Effect of other regulati...
<ul><ul><li>“ establish and provide for the administration of  one or more programs , including programs for making loans ...
<ul><li>380 Considerations </li></ul><ul><ul><li>“ Program” </li></ul></ul><ul><ul><li>Promote state or local economic  de...
<ul><ul><li>Process </li></ul></ul><ul><ul><li>Reinvestment Zone </li></ul></ul><ul><ul><li>Findings </li></ul></ul><ul><u...
<ul><ul><li>Differences Purposes </li></ul></ul><ul><ul><li>Creation </li></ul></ul><ul><ul><li>Taxing Authority </li></ul...
TAX INCREMENT FINANCING Tax Increment Financing is a funding tool used to attract development or redevelopment to areas th...
TAX INCREMENT FINANCING Courtesy City of San Antonio
TAX INCREMENT FINANCING Tax Increment Financing is traditionally  used to finance new and/or enhanced public improvements ...
TAX INCREMENT FINANCING <ul><li>Property owners pay taxes at the normal rate; there is no “extra charge” of any kind. </li...
TAX INCREMENT FINANCING Other taxing units -- City, County, School District, College District, Hospital District, etc. may...
TAX INCREMENT FINANCING <ul><li>In addition to public infrastructure, eligible TIF project costs can include the following...
TAX INCREMENT FINANCING <ul><li>Projects can be funded: </li></ul><ul><ul><li>as funds accumulate </li></ul></ul><ul><ul><...
TAX INCREMENT FINANCING What’s New?
<ul><li>Municipal TIF districts no longer need be contiguous </li></ul><ul><li>TIF Districts can now extend beyond the cit...
<ul><ul><li>Process </li></ul></ul><ul><ul><li>“ Projects” </li></ul></ul><ul><ul><li>Taxing jurisdictions </li></ul></ul>...
<ul><li>CO may be used to fund the design and construction a public works type project (e.g. building and land for fire st...
<ul><li>City could have developer/agent get property under contract and assign the contract to the city.  </li></ul><ul><l...
<ul><li>City created. </li></ul><ul><li>Includes Type A & B projects, convention facility, civic center, civic center hote...
<ul><li>Every expenditure of local hotel tax revenue must: must directly enhance and promote tourism and the convention an...
HOTEL OCCUPANCY TAX <ul><li>Funding establishment, improvement or maintenance of a convention center, civic center, or vis...
HOTEL OCCUPANCY TAX <ul><li>Funding transportation systems for tourists owned and operated by the city, or financed in par...
<ul><li>City/County initiated after property owner petition (owners of 50% of taxable real property or 50% of the owners o...
<ul><li>Funding for design, construction, installation, maintenance of public facilities and infrastructure  streetscape a...
<ul><li>Cons: </li></ul><ul><li>Additional tax </li></ul><ul><li>limited to public improvements </li></ul><ul><li>PID bond...
<ul><li>NONMONETARY INCENTIVES </li></ul><ul><ul><li>Density bonuses </li></ul></ul><ul><ul><li>Modified Design Standards ...
<ul><ul><li>SECTION 212.171, et seq, TEXAS LOCAL GOVERNMENT CODE </li></ul></ul><ul><ul><li>Extraterritorial jurisdiction ...
<ul><li>Preannexation Development Agreement Requirements </li></ul><ul><ul><ul><li>be in writing; </li></ul></ul></ul><ul>...
 
 
     
 
Montgomery Farm History: Artistic Heritage
 
 
 
 
 
 
 
WATTERS CREEK AT MONTGOMERY FARM
 
 
 
 
Taking advantage of regional markets
 
Leveraging the transportation network
 
Working with the City to fund and design a major anchor Boulevard Verano Plan by  Gateway Planning Group and Pate Engineer...
Verano’s projected $2 Billion tax base supports  $265 Million 30-Year TIF, providing Infrastructure finance for Austin-San...
 
 
 
 
 
 
 
 
 
www.jw.com www.gatewayplanning.com
Public-Private Partnerships –  Techniques That Work   WILLIAM S. DAHLSTROM JACKSON WALKER, LLP SCOTT POLIKOV GATEWAY PLANN...
 
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  • MMDs are special districts that are self governed, but are approved by the host municipality. Through their fundraising powers they can provide infrastructure and other services within the district according to a district-approved service plan. MMDs can be created, (Ch 375 Local Government Code), through the Texas Commission on Environmental Quality (TCEQ) or by the State Legislature. The MMD does not replace existing city services, but provides supplemental services. They can be disolved by the City Council, property owner petition, or by a vote of its board. The exact powers of the MMD will be determined by the Dallas City Council on a case-by-case basis. Potential funding sources for MMDs include tax exempt bonds, special assessments, property taxes and impact fees. Permitted services include, among others: economic development, health and sanitation, public safety, traffic control, recreation, landscaping, lighting, signs, streets, walkways, drainage and parking facilities.
  • Public Art, Public Places Interpreting the Spirit of Place Continuous Arts Program from 1982 to 2002 Site specific instillations influenced by the landscape and landforms A legacy for future generations
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  • Public Private Partnerships

    1. 1. Public-Private Partnerships – Techniques That Work WILLIAM S. DAHLSTROM, AICP, JD JACKSON WALKER, LLP SCOTT POLIKOV, AICP, JD GATEWAY PLANNING GROUP FOCUS NORTH TEXAS PLANNING SYMPOSIUM January 28, 2011
    2. 3. Economic Development can be nerve racking.
    3. 4. THE TOOLBOX Chapter 380 Type A/ Type B TIF/ TIRZ PID Bonds/ CO’s Tax Abatement Nonmonetary Incentives
    4. 5. <ul><li>The “Deal” </li></ul><ul><li>Available Programs </li></ul><ul><li>Process </li></ul><ul><li>Municipality’s limitations </li></ul><ul><li>Municipality’s Policies </li></ul><ul><ul><li>Official Program </li></ul></ul><ul><ul><li>Comprehensive Plan </li></ul></ul><ul><ul><li>Development Standards </li></ul></ul>General Considerations
    5. 6. Municipality’s record Consultants Other taxing jurisdictions Financial Impact Incentive “Package” Effect of other regulations Authorization/ legal and enforceable General Considerations
    6. 7. <ul><ul><li>“ establish and provide for the administration of one or more programs , including programs for making loans and grants of public money and providing personnel and services of the municipality, to promote state or local economic development and to stimulate business and commercial activity in the municipality”. TEX. LOC. GOVT CODE §380.001 (a) (Vernon’s 2010). [emphasis added] </li></ul></ul>CHAPTER 380 GRANTS
    7. 8. <ul><li>380 Considerations </li></ul><ul><ul><li>“ Program” </li></ul></ul><ul><ul><li>Promote state or local economic development and to stimulate business and commercial activity </li></ul></ul><ul><ul><li>Business terms </li></ul></ul><ul><ul><li>Limitations or conditions of city </li></ul></ul>CHAPTER 380 GRANTS
    8. 9. <ul><ul><li>Process </li></ul></ul><ul><ul><li>Reinvestment Zone </li></ul></ul><ul><ul><li>Findings </li></ul></ul><ul><ul><li>Notice </li></ul></ul>TAX ABATEMENT
    9. 10. <ul><ul><li>Differences Purposes </li></ul></ul><ul><ul><li>Creation </li></ul></ul><ul><ul><li>Taxing Authority </li></ul></ul>ECONOMIC DEVELOPMENT CORPORATIONS- Type A/ Type B
    10. 11. TAX INCREMENT FINANCING Tax Increment Financing is a funding tool used to attract development or redevelopment to areas that are currently not benefiting from private-sector investment or will otherwise be underdeveloped. Texas law allows cities to use tax increment financing in Tax Increment Reinvestment Zones (TIRZ), also called “TIF Districts”.
    11. 12. TAX INCREMENT FINANCING Courtesy City of San Antonio
    12. 13. TAX INCREMENT FINANCING Tax Increment Financing is traditionally used to finance new and/or enhanced public improvements and infrastructure. These improvements and infrastructure, in turn, attract additional private investment in surrounding areas.
    13. 14. TAX INCREMENT FINANCING <ul><li>Property owners pay taxes at the normal rate; there is no “extra charge” of any kind. </li></ul><ul><li>Funding is accomplished by pledging tax revenues that will be realized from increases in property value due in large part from improvements in the District. </li></ul>
    14. 15. TAX INCREMENT FINANCING Other taxing units -- City, County, School District, College District, Hospital District, etc. may also participate by pledging all or a portion of their tax increment.
    15. 16. TAX INCREMENT FINANCING <ul><li>In addition to public infrastructure, eligible TIF project costs can include the following items not tied to public property or public easements: </li></ul><ul><ul><ul><ul><ul><li>Historic preservation </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Demolition </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Environmental remediation </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Economic development grants </li></ul></ul></ul></ul></ul>
    16. 17. TAX INCREMENT FINANCING <ul><li>Projects can be funded: </li></ul><ul><ul><li>as funds accumulate </li></ul></ul><ul><ul><li>by developer advance and reimbursement </li></ul></ul><ul><ul><li>by the issuance of bonds or notes backed </li></ul></ul><ul><ul><li>by the pledge of increment. </li></ul></ul>
    17. 18. TAX INCREMENT FINANCING What’s New?
    18. 19. <ul><li>Municipal TIF districts no longer need be contiguous </li></ul><ul><li>TIF Districts can now extend beyond the city limits </li></ul><ul><li>Calculation of Increment can be based on taxes assessed or collected </li></ul><ul><li>Cities may now offer tax exemptions in a TIF </li></ul>TAX INCREMENT FINANCING
    19. 20. <ul><ul><li>Process </li></ul></ul><ul><ul><li>“ Projects” </li></ul></ul><ul><ul><li>Taxing jurisdictions </li></ul></ul><ul><ul><li>Level of participation </li></ul></ul><ul><ul><li>Special conditions/policies </li></ul></ul>TAX INCREMENT FINANCING
    20. 21. <ul><li>CO may be used to fund the design and construction a public works type project (e.g. building and land for fire station, police station or for other public purpose). </li></ul><ul><li>CO may not be used for economic development purposes. </li></ul><ul><li>CO may not be used for purchase of land/improvements for subsequent resale to the private sector for development or redevelopment. </li></ul><ul><li>However CO may be used to finance the demolition of substandard structures and the underlying land. </li></ul>CERTIFICATES OF OBLIGATION
    21. 22. <ul><li>City could have developer/agent get property under contract and assign the contract to the city. </li></ul><ul><li>City may take down dangerous structures (apartment complexes that are unsafe, dangerous, uninhabitable vacant, crime a foot) and issue certificates of obligation for the acquisition of the site and demolition of the structure. </li></ul><ul><li>No specific time period for which a City must own the land or improvements acquired through a CO. </li></ul>CERTIFICATES OF OBLIGATION
    22. 23. <ul><li>City created. </li></ul><ul><li>Includes Type A & B projects, convention facility, civic center, civic center hotel, auditorium, parking structures. </li></ul><ul><li>Superior to sales tax corporation – projects are broader than Type A and Type B projects, not subject to the Type A and B restrictions, can be imposed on all or portion of the city. </li></ul>MUNICIPAL MANAGEMENT DISTRICTS
    23. 24. <ul><li>Every expenditure of local hotel tax revenue must: must directly enhance and promote tourism and the convention and hotel industry. </li></ul><ul><li>Expenditure must be likely to attract visitors from outside the city into the city or its vicinity and must have some impact on convention and hotel activity. </li></ul><ul><li>Second, every expenditure must fall within one of the statutory categories. </li></ul>HOTEL OCCUPANCY TAX
    24. 25. HOTEL OCCUPANCY TAX <ul><li>Funding establishment, improvement or maintenance of a convention center, civic center, or visitor information center. </li></ul><ul><li>City uses hotel tax to pay annual rent for use of hotel conference space as a “convention center” and long term rent commitment funds the hotel developer’s cost of construction of the conference space. </li></ul><ul><li>Allen did this with Hilton Garden Inn to get a conference facility in the City. </li></ul><ul><li>After the Hilton other hotels have come. </li></ul>
    25. 26. HOTEL OCCUPANCY TAX <ul><li>Funding transportation systems for tourists owned and operated by the city, or financed in part by the city. </li></ul><ul><li>City may use hotel tax to cover the costs for transporting tourists from hotels in and near the city to: commercial center of the city; convention center in the city; other hotels in or near the city; and tourist attractions in or near the city. </li></ul><ul><li>City could support retail through local transportation of customers among the retail and hotel spots. </li></ul>
    26. 27. <ul><li>City/County initiated after property owner petition (owners of 50% of taxable real property or 50% of the owners of the proposed area). </li></ul><ul><li>After notice and public hearing governing body levies and collects assessments against property within defined contiguous area for certain public improvements. </li></ul><ul><li>Not property tax but collected like tax and lien subordinate to tax lien – may be deducted like tax. </li></ul><ul><li>Not favorable since an additional tax </li></ul>PUBLIC IMPROVEMENT DISTRICT (“PID”)
    27. 28. <ul><li>Funding for design, construction, installation, maintenance of public facilities and infrastructure streetscape and other public amenities. </li></ul><ul><li>Maintain common areas in developments. </li></ul>PUBLIC IMPROVEMENT DISTRICT (“PID”)
    28. 29. <ul><li>Cons: </li></ul><ul><li>Additional tax </li></ul><ul><li>limited to public improvements </li></ul><ul><li>PID bonds not marketable – city/county issues the debt </li></ul><ul><li>Statutory notice and public hearing procedure with annual assessments </li></ul><ul><li>Pros: </li></ul><ul><li>Collected like property taxes </li></ul><ul><li>Deductible if based on value </li></ul>PUBLIC IMPROVEMENT DISTRICT (“PID”)
    29. 30. <ul><li>NONMONETARY INCENTIVES </li></ul><ul><ul><li>Density bonuses </li></ul></ul><ul><ul><li>Modified Design Standards </li></ul></ul><ul><ul><ul><li>Reduction in lot size, </li></ul></ul></ul><ul><ul><ul><li>Relaxation of setbacks </li></ul></ul></ul><ul><ul><ul><li>Modified street standards </li></ul></ul></ul><ul><ul><li>Expedited permit and incentive approvals </li></ul></ul><ul><ul><li>Fee rebates or waivers where permitted under law </li></ul></ul>
    30. 31. <ul><ul><li>SECTION 212.171, et seq, TEXAS LOCAL GOVERNMENT CODE </li></ul></ul><ul><ul><li>Extraterritorial jurisdiction </li></ul></ul><ul><ul><ul><li>Control </li></ul></ul></ul><ul><ul><ul><li>Development rights </li></ul></ul></ul>PREANNEXATION DEVELOPMENT AGREEMENTS
    31. 32. <ul><li>Preannexation Development Agreement Requirements </li></ul><ul><ul><ul><li>be in writing; </li></ul></ul></ul><ul><ul><ul><li>contain an adequate legal description of the land; </li></ul></ul></ul><ul><ul><ul><li>be approved by the governing body of the municipality and the landowner; and </li></ul></ul></ul><ul><ul><ul><li>be recorded in the real property records of each county in which any part of the land that is subject to the agreement is located. Id. at §212.172 (c) </li></ul></ul></ul>PREANNEXATION DEVELOPMENT AGREEMENTS
    32. 35.      
    33. 37. Montgomery Farm History: Artistic Heritage
    34. 45. WATTERS CREEK AT MONTGOMERY FARM
    35. 50. Taking advantage of regional markets
    36. 52. Leveraging the transportation network
    37. 54. Working with the City to fund and design a major anchor Boulevard Verano Plan by Gateway Planning Group and Pate Engineering Campus Plan courtesy of Marmon Mok/Sasaki
    38. 55. Verano’s projected $2 Billion tax base supports $265 Million 30-Year TIF, providing Infrastructure finance for Austin-San Antonio Rail
    39. 65. www.jw.com www.gatewayplanning.com
    40. 66. Public-Private Partnerships – Techniques That Work WILLIAM S. DAHLSTROM JACKSON WALKER, LLP SCOTT POLIKOV GATEWAY PLANNING GROUP FOCUS NORTH TEXAS PLANNING SYMPOSIUM January 28, 2011

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