Brandenburg explained the item and introduced Dan Clark from LedgeStone Group. Clark updated Council on the Summit at Rivery Park project. Clark spoke about the vision of the project. He said the 32 acres will be a key area in establishing the gateway to allow for community development, park improvement, and other enhancements. He added the project will serve as a stimulus for the economic growth of this region. He noted the project is a public/private development and he added the investments will be for public improvements, park enhancements and a regional conference performing arts center. He announced that the Williamson County Historical Museum will be serving to assist LedgeStone in bringing the local heritage to this project. He added the Museum will also be housing exhibits at the conference center. He spoke about the risks to the community and to the taxpayers. He said they have to meet objective performance criterion before any money goes at risk and he added this is a very fair type of deal. He noted they have to deliver at proven milestones with proven measure before there can be any money put at risk.
Clark said they are pleased with their PUD and the process went well with City staff. He spoke about the two zones included in the project and noted a full-service hotel, performing arts center, restaurants and office space. He added the parking structures will be positioned to facilitate flow throughout the development. He noted they will be working on park enhancements as well. He said, right now, they are revisiting their conceptual design. He noted they have new ideas about the conference center and the problems are mostly cost-related. He said they intend to have feedback sessions with the community. He said they are working on the financing and investment and added they continue to work on marketing.
Clark spoke about the challenges of the economic environment. He said Central Texas has been saved some from of the national economic impact, but the national impact does have an affect on a large development like the Summit. He noted, however, there is a substantial interest in this region. He said the material costs have increased substantially, especially steel. He noted they are going to be innovative in trying to reduce the cost of that material while still keeping the flavor of the project. Clark showed Council the initial proposed rendering and described the various features of the development. He spoke about the proposed park enhancements and said the project will connect nicely with San Gabriel Park. Clark said the total development of economic output on the site would be around $152 million. He noted that would be the equivalent of 1,935 full time employees for one year to do the development. He said the total expenditures over the life of the development is $322 million, which includes all of the ancillary revenues. Clark detailed the ongoing operations of the development. He said 2,800 estimated permanent jobs and more than $200 million of annual output would be there by the time the project is done. He showed Council an artistic rendering for the design of the project.
Brandenburg said the City has been working on this project since last June and added that does not include staff meetings the City has had. He gave Council a timeline of past meetings and reviewed the history of the project. He went over the structure of the incentive, saying the City and County will allocate 100% of the tax increment through 2031. He noted the TIRZ will enter into an agreement with the developer to reimburse eligible costs for up to $25 million. He said the two types of payments are TIRZ debt at $11.5 million and the annual TIRZ payments estimated at $13 million. He noted the TIRZ will contract with the developer for park maintenance. He said the assumptions in the later financing model are the current tax rates of the City and County, but noted the tax rates may go up over the life of the TIRZ. He added both the City and County must each participate at 100%. He added the valuations in the model were based upon the developer estimates. He listed various improvements that will be debt funded. He said the conference center itself will be cash funded. He referred Council to the projected cost of improvements and debt payments shown on their spreadsheet. He told Council the next step is to consider the resolution of intent which will trigger the process. He said, in two weeks, the developer will be requesting County participation of 100% of their part of the project. He said, by approving the resolution of intent, the TIRZ Board will be appointed by the City Council. He listed the various duties of the TIRZ Board. Brandenburg opened the room to questions.
Oliver said, in the resolution, it talks about a price cap of $25 million. He asked what the $25 million maximum is applied to. Brandenburg said it would be applied to the project costs they have identified including park improvements, the park road relocation, the onsite landscaping, and the utility drainage infrastructure. Oliver said and Brandenburg agreed the $20 million which goes toward the conference center is included in that amount. Yantis said the amount is 100% of the increment which puts the City at about $25 million. He added the cap is $25 million so, if the City hits that amount earlier than 2031, the City will be done with its contributions. McMichael said if the development costs rise, then the bonds will be paid back faster. She added the length of the TIRZ will then go down.
Sattler referred to Ordinance 2007-91, Exhibit F and said the total on that document comes out to a little over $40 million. He added there is a lot of discrepancy between that document and Exhibit C of the document Council is supposed to approve. He asked for help reconciling the numbers between the two documents. Clark said, unfortunately, the numbers can not be reconciled because the assumptions that were included in the earlier document would not qualify for the resolution Council is looking to approve. He noted they had to go back and remodel this new resolution based upon a stand alone conference center with nothing referring to the adjacent parking structure. He said they took out site improvements that would not qualify under a TIRZ. He said the discrepancy between the two documents is to clarify that it can only be for those site improvements. Sattler asked and Clark said the total cost of the project will not be known until there is a formal bid and they have a completed design. Yantis clarified and said, no matter the cost, the City is capping its contributions at $25 million. Sattler asked Yantis said, if the County does not approve this proposal, Council will have to sit back down and decide how they can make this happen.
Brainard asked and Yantis said, in terms of the public/private mixture, the City will own the improvements in parkland, the public infrastructure, and the road to the park. He said the only thing the City will not own is the conference center and any of the on site public spaces. Brainard said and Yantis agreed the hotel and office buildings are all privately owned. Ross asked and Rundell said this project will not have a negative impact to the City's bond rating. Speaker, Gary Kimble, said nothing is guaranteed, but this is a "best efforts" financing proposal and the City would only recommend the issuance of TIRZ debt. He added, if the assessed value is certified by the appraisal district, there will have to be several years of revenue collections before there will be a marketable bond. He noted, the City will only issue debt if they see that revenues for the project are at least 150% of the projected debt payments. He added it would have a substantial built-in financial cushion. Rundell said the City tried to make the estimate as conservative as possible. Kimble said the City will never issue bonds ahead of growth. Rundell noted they will be issuing bonds in three sequences in accordance with the buildout. She said they are going to structure the debt so that everything will be paid off by 2031. Ross asked and Rundell said the City is comfortable with the numbers.
Sattler asked if the proposed performing arts center and ampitheater come into competition with the existing performing arts center and the ampitheater being proposed at San Gabriel Park. Clark said the feedback has been that it would be much to the advantage of the project if there was the ability to have staging and performing arts at the Summit. He said he has not looked at whether that would compete with other projects. He said the project is mostly about the conference center and the economic role, but it is good to have flexibility within that space. Brainard asked about the construction timeline. Clark said, once they know their entitlements, they will start to go after financing which will take 6-9 months. He said, by March 2009, the financing package will be completed and construction should start between on March 1st but no later than June 30, 2009. He added there will be a three to four year build out depending on what happens within the zones. He said he sees the hotel and conference center done within a 24 month cycle. He said they should be done with the hotel, conference center, and most of the office buildings by the end of 2011.
Brainard asked and Yantis said the City councilmembers can not serve on the TIRZ Board, but the City designates the majority of the Board members. Yantis added there will be representation from the City, the County, and the State Legislature. Garver asked and Yantis confirmed the City has three other TIRZ Boards with Councilmembers. Yantis said this particular TIRZ is set up differently under the statute because it was a petition by the property owner. Brainard referred to section three of Ordinance 2007-91. Yantis reviewed the section and said he will have to see whether or not Council members can be included on the TIRZ Board. Ross asked and Yantis said a traffic impact analysis was done when the Rivery was initially developed. He said the analysis anticipated types of uses based on zoning categories that were put in place and added staff feels very confident that the improvements the City has put in will be adequate to handle the traffic. Ross asked and Clark said, if there is maximum turnout, there would be 3,000 to 4,000 people in that area of which 1,000 of those people will be housed in the adjacent area.
Berryman said and Clark agreed the Summit will probably run out of money before they run out of projects. Clark said the estimated expenditures will exceed 32 million dollars and that is why they would like to add revenue generating segments such as the performing arts center and the ampitheater. Berryman said and Rundell agreed this will not affect our bond rating because the money is going toward public improvements and parkland. Rundell said they have put a tremendous amount of caution in place and the project will be very conservatively managed. Berryman said the new performance arts center will not compete with but will expand the City's ability to service the Arts community. She noted the timing of this project is crucial. She said the City is in a lull in terms of development right now and added this project would be a huge asset to the City. Brainard commended both the developer and the staff for working so well together. Clark said LedgeStone has appreciated working with the City staff. He added there has been good input on this project and he wants to commend everyone who has helped this project come to light. Mayor asked how this project will affect the proposed Gateway project. Yantis said this project has brought more interest to properties in the area and, if this development happens, it will have a stimulating impact on the redevelopment of the Gateway area. Ross thanked Clark and Brandenburg and said he thinks this is a great way to do business with the private sector.
Motion by Brainard, second by Oliver to approve the resolution.
Sattler said he would like to see the resolution cleaned up. He referred to section two on page two related to Zone A, Zone B, and City Property. He said there are duplications in that section. He added the construction listed on the construction schedule does not match. He said on 2. A. 1., Zone A, concerning road relocation, that is supposed to be the last part of the construction schedule. He said, referring to 2. A. 3. on the City Property (Rivery Park), section iii (relocation of the Park's public access road), it seems like the same road will be constructed at two different times. He said he would like to get some clean up on the resolution as it was proposed so that it matches the schedule that is being proposed in the exhibits. He noted he would like to see identification for Exhibit A. He added, in one of the documents, the ampitheater is on the left side and, on the other, it is on the right side. He said he would like to see some consistency. Yantis referred to the discrepancy concerning the park road construction. He said the park road will move locations according to projects being built in that area. He added, the construction may not happen in sequence but, at all times, there will be access to the park. He noted they can clean that up in the contract. Sattler said, if you look at 2. B. ,C., D., and E., A. occurs last and C. occurs first. Sattler said he just did not want to cut off access to the park. Yantis said, after both the City and the County approve this project, the TIRZ Board will enter into a development agreement that will have more specific details. Sattler mentioned, on Exhibit B, he would like to see Zone A and Zone B marked. He added he would also like to see City property marked. Mayor asked and Sattler said he would like for the above corrections to be a friendly amendment to the original motion. Brandenburg asked and Carls said there is still a lot of work ahead of us. She added this resolution just launches the process and tells the County what the City is doing.
Vote on the motion and friendly amendment: (Approved 5-0) (Sansing, Eason absent)
Mayor said this has to be one of the most exciting projects the City has been allowed to participate in. He said the Council commends Dan Clark and his people and he commends staff for their work.
4:59pm recessed
5:15pm resumed