6 - Dallas · TIF Board, City Design Studio and ECO Director will review and approve design of...

Memorandum ZUI2HAY30 PM 2:5\

CITY OF DALLAS

DATE June 1, 2012

TO Members of the Economic Development Committee: Ann Margolin, (Vice-Chair), Monica Alonzo, Sheffie Kadane, Jerry Allen

SUBJECT Economic Development Committee Monday, June 4,2012, 9:00 -10:30 a.m. 1500 Marilla Street, City Hall, Room 6ES, Dallas, Texas 75201

AGENDA

1. Approval of May 21, 2012 Minutes of the Economic Development Committee

2. Sports Arena TIF District: Next Steps Tier One Garage and District Study

3. Retention & Expansion of Reel FX Headquarters in Deep Ellum

4. Upcoming agenda items for June 2012 • Cummins Southern Plains, LLC

Karl Zavitkovsky, Director Office of Economic Development (Estimated time 20 minutes)

Karl Zavitkovsky, Director Office of Economic Development (Estimated time 20 minutes)

• Authorize a development agreement with US Real Estate, LP • Autho~ize a R a.' p. r.operty Tax Abatement and an Economic Development Grant with

Prologis

I",~~ Tennell Atkins, Chair -.. Economic Development Committee

C: The Honorable Mayor and Members of the City Council Mary K. Suhm, City Manager Rosa Rios, City Secretary Tom Perkins, City Attorney Judge C. Victor Lander, Administrative Judge Municipal Court Craig Kinton, City Auditor AC. Gonzalez, First Assistant City Manager

Dalla. - ToqethH . . " .. do " belfer

Ryan S. Evans, Assistant City Manager Forest Turner, Assistant City Manager Jill A Jordan, PE., Assistant City Manager Joey Zapata, Assistant City Manager Jeanne Chipperfield, CFO, OFS Karl Zavitkovsky, Director, OED J. Hammond Perot, Assistant Director, OED Stephanie Pegues-Cooper, Asst. to the CMO

Office of Economic Development WWW.DALLAS- ECODEV.ORG

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Sports Arena TIF District – Next Steps Tier One Garage and District Study

Economic Development Committee June 4, 2012


Purpose

Provide background on agreements that govern parking for the American Airlines Center (See Appendix A)

Review Tier One Improvement: North Parking Garage

Review District Technical Study

Obtain Economic Development Committee’s Approval for Consideration by City Council of the Following: • Development Agreement for the North Parking Garage • Development Agreement for District wide Technical Study

Discuss Potential Future Parking Improvements Contracts 2


Originally created in 1998 to reimburse costs of roadway improvements/other public improvements for the development of American Airlines Center Amended May 2012 to:

• Increase district boundary • Create sub-districts

• Victory Sub-district (yellow) • Riverfront Gateway Sub-district

(green) • West Dallas Sub-district (blue)

Extend Victory Sub-district term from 2018 to 2028

• Establish Riverfront Gateway and West Dallas Sub-districts terms 2012 to 2042

Sports Arena TIF District Background

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Sports Arena TIF District Background (Continued)

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• Increase TIF Budget - $25.5M NPV ($47M total dollars) to $94.4M NPV ($274M total dollars)

• Decrease City Participation rate to 90% and establish County rates

• Establish a TIF Grant Program Two Applications for TIF reimbursement have been submitted and reviewed by the Sports Arena TIF District (May 24, 2012)

• North Parking Garage – Anland GP, L.P. (Hillwood)

• TIF Grant for Planning Activities (District Study – Victory Park UST


Sports Arena TIF – Victory Sub-District Current Status

Issues • City Zoning and Arena Agreements (See Appendix A) require a total of 5,000

parking spaces to be available at all times for AAC event parking • Platinum Garage provides 2,000 spaces • Surface parking lots provide 3,000 spaces

• Surface parking lots meeting parking obligations tie up 20 acres of developable land (See Appendix B), which represents 92% of total developable land in the district

• Since 2008, value of District has declined an average 11% annually ( $169 million)

• Sub-district needs to shift from surface parking lots to structured parking to meet parking obligations

• Development of existing surface parking lots would generate an additional $464M of private investment in the sub-district (See Appendix C)

• Majority of announcements of new multi-family and office projects contingent upon parking solutions

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Sports Arena TIF – Victory Sub-District Sub-District Budget

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The Victory Sub-district TIF Budget is tiered Tier One Improvements (parking garages) are designed to facilitate additional private development within the district and generate TIF funds for Tier Two Improvements Tier One Improvements initiate the shift from surface parking to structured parking by providing reimbursement for

• North Parking Garage (Hillwood) – New Construction • South Parking Garage (Victory Park UST)– Existing Garage to be purchased or

leased by the City (The committee will be briefed on this garage in August) Tier Two improvements include additional north and south parking garages and district wide improvements such as infrastructure, open space, and special studies Prior to Tier Two project funding, a district wide technical study must be completed by an independent third party providing analysis of parking including operational studies for Tier One and Two facilities, vehicular and pedestrian circulation and retail issues


Sports Arena TIF – Victory Sub-District North Parking Garage

Project Location and Description • Construction of a parking garage at

northwest corner of Victory Avenue and Olive Street by Hillwood

• The North Parking Garage: • Provides a minimum of 1,200 parking

spaces (max. 1,300) located no more than 800 ft from AAC

• Frees approximately 7 acres of land north of the AAC for redevelopment

• Camden Apartment Project • 225 Unit Apartment Project

• Will be a single use garage, dedicated to AAC event parking only

• Counts toward 3,000 parking space requirement

• Will be owned by City, including land

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Sports Arena TIF – Victory Sub-district North Parking Garage Design

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Victory Plaza & Buildings

Design of North Parking Garage is critical due to its location • Lot is difficult to develop due to the West Access Road for the AAC • Adjacent to Victory DART Station and DART Plaza • Adjacent to AAC (meets minimum distance requirement)

City Design Studio has provided design objectives for the garage (See Appendix D) • Incorporate active retail space opportunities along the sides adjacent to DART Plaza and AAC • Strong Entry Feature • Supergraphic/Billboard or External Screening Opportunities on garage • Pedestrian Level Interest at ground floor of garage

Final design of garage will address and incorporate Design Studio’s objectives DART will review design plans for garage to ensure its design provides active ground floor space adjacent to the Victory station and plaza TIF Board, City Design Studio and ECO Director will review and approve design of North Parking Garage


Sports Arena TIF – Victory Sub-district: North Parking Garage – TIF Reimbursement

Market conditions do not support construction of a new garage in the district without public subsidy Amended TIF budget has allocated funds in Tier One Improvements for reimbursement of construction costs for North Parking Garage in an amount not to exceed $33,271,841 Amount includes interest at 5% and an Economic Development TIF Grant of $1,478,886

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Budget Line Item Amount Tier One Improvements

North Parking $21,800,000 Maximum Interest $ 9,992,955

Total North Parking $31,792,955

Economic Development Grant $ 1,478,886

Total TIF Funding Proposed $33,271,841


Sports Arena TIF – Victory Sub-district North Parking Garage – Reimbursement Conditions

Hillwood fronts all construction costs and is responsible for cost overruns; must invest a minimum of $15,000,000 Garage must contain a minimum of 1,200 parking spaces, maximum 1,300 Garage must be located no more than 800 feet from AAC Submit Preliminary Design Plans within 60 days of City Council’s approval of TIF funding for garage for review and approval by TIF Board, City Design Studio and Economic Development Director Apply for a Building Permit by December 31, 2013 and begin construction within 60 days after receiving a building permit Apply for a Certificate of Occupancy by March 1, 2016 City Design Studio appointed to Victory Owners Association Design Review Board MWBE Participation – 25% of Total Expenditures Executed Operation and Maintenance Agreement for the garage

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Sports Arena TIF – Victory Sub-district North Parking Garage – TIF Grant Conditions

Issuance of building permit for garage

Submittal of a Parking Analysis (Hillwood) by July 9, 2013 to include: • Existing Parking (surface and structure) • Possible future structures • Potential future private development

Waiver of Claims against City regarding Continental Street Bridges or Parking Rights Agreements

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Sports Arena TIF – Victory Sub-district North Parking Garage – Operation Amenities

Following amenities may be incorporated into final design of garage if funding is adequate:

• Cashier stations with proper electrical connections • Two-way vehicle lane counter for each lane with appropriate phone/data lines • Parking operations office on the ground level of the garage , with a restroom and ground

safe • Surveillance equipment for a security system • Storage areas to accommodate barricades, cones and other parking equipment

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Sports Arena TIF – Victory Sub-district TIF Grant – District Study

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Project Description • Amended Sports Arena Project Plan requires completion of a district wide

technical study prior to authorization of any Tier Two Improvements • District’s TIF Grant Program allows grants to be used as reimbursement for:

• Costs related to planning, development and management of parking systems within Sports Arena TIF District

• Encourage increased retail occupancy in the Victory Sub-district and a more diverse mix of retailers

• Victory Park UST has proposed to fund costs associated with hiring independent consultants to complete parking, traffic, vehicular and pedestrian circulation, place making and retail design studies related to public and private improvements within the sub-district

• Objective of studies is the creation of an active urban destination and neighborhood that supports pedestrian activity, successful retail, and vibrant mix of uses within Victory Sub-district


Sports Arena TIF – Victory Sub-district TIF Grant – District Study

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Study will address the following: • Parking. Location and distribution plan for existing and proposed public parking

that satisfies AAC Parking Agreements, general public parking as well as private parking for Sub-district

• Circulation. Vehicular, bicycle and pedestrian circulation throughout the Sub-district and adjacent neighborhoods, including a traffic analysis and management plan addressing existing flow of traffic during American Airlines Center event and non-event times, traffic flow patterns, extension of Victory Park Lane, south of High Market Street

• Retail Analysis. Retail mix, design and branding for the Sub-district that will provide the criteria for public retail incentives, guide development of new retail space and recruitment efforts to occupy existing vacant retail space in Sub-district

• Urban Neighborhood Design. Place making for private development in the Sub-district, integrating development efforts both north and south of AAC


Sports Arena TIF – Victory Sub-district: District Study – TIF Reimbursement

Amended TIF Plan allocated funds in Tier Two Improvements for Special Studies in an amount not to exceed 750,000 Estimated Cost of studies is $400,000 Victory Park UST will fund costs associated with hiring independent consultants to complete studies Although this project is a Tier Two Improvement, TIF can reimburse VP UST in full upon completion of studies, if there is sufficient increment to do so (Increment Net Tier One Improvements, if completed and eligible for reimbursement) Project Start Date July 2012 Project Completion Date May 2013

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Budget Line Item Amount Tier Two Improvements

Other District Improvements – Open space, Connectivity, Special Studies, Infrastructure Improvements, and Retail

$27,350,457

Total TIF Funding Proposed $400,000


North Parking Garage & District Study Benefits to the City

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Opens 7 acres for new development, producing an estimated $65M of new investment in Victory Sub-district Victory Sub-district increased value and increment supports new development in West Dallas and leverages additional funding City will own the North Parking Garage and land Additional revenue anticipated through lease of garage and operation of retail ready space adjacent to DART Plaza Additional revenue could be generated from advertising opportunities on façade of the garage Involves City Design Studio and independent consultants on front end to address parking, retail, pedestrian and traffic circulation issues and guide public and private investment in the Victory Sub-district


North Parking Garage & District Study TIF Board Recommendations

On May 24, 2012, Sports Arena TIF District Board of Directors approved and forwarded a recommendation of approval to City Council for a development agreement with Anland GP, L.P. for TIF reimbursement and dedication of TIF funding for the North Parking Garage in an amount not to exceed $33,271,841

On May 24, 2012, Sports Arena TIF District Board of Directors approved and forwarded a recommendation of approval to City Council for a grant agreement with Victory Park UST to reimburse costs for planning efforts for the Victory Park sub-district in an amount not to exceed $400,000.

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Recommendations & Next Steps

Recommendations • Staff requests Committee to approve and forward a recommendation of approval

by City Council a Development Agreement with Anland GP, L.P. for TIF reimbursement not to exceed $33,271,841 for the North Parking Garage, to be considered at the June 14, 2012, Council meeting.

• Staff requests Committee to approve and forward a recommendation of approval by City Council for a Grant Agreement with Victory Park UST for TIF reimbursement not to exceed $400,000 for planning activities for the Victory Sub-district, to be considered at the June 27, 2012, Council meeting.

Future Steps • August 2012

• UST Garage Development Agreement • Lease Management Agreement for the North Parking Garage

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APPENDIX

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Appendix A: Victory Park Agreement Highlights

Arena Master Agreement • Parties – City and Arena Group (Center Operating Company (COC) and

Hillwood Development) • Project – 12 acres donated to the City for construction of the American

Airlines Center and Platinum Garage (2,000 parking spaces) • NBA/NHL Franchise Commitment – 30 years • City Financial Commitment Capped - $125M (30 year Revenue

Bonds/Repaid 08/2011) • Car Rental Tax – 5% • Hotel Occupancy Tax – 2%

• Arena Group Investment – Minimum of $105M and any cost overruns • Infrastructure – ‘Orange Roadways’ constructed using bond funds

($12.5 million) and funds advanced by the Arena Group and reimbursed through the Sports Arena TIF District

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Arena Master Agreement (Continued) • Arena Group Rent – $3.4M annually ($102M over 30 years) + $1M

annually for capital improvements, major repair and maintenance (Rent intended to off set public investment in the AAC)

• At end of term, Arena Group has an option to purchase or continue to lease • Arena • Plaza • Platinum Parking Garage and land

• Purchase Price is $133M at end of 30 years • Net purchase price of $1M if all lease and maintenance payment are made ($133M-

$102M-$30M = $1M) • May opt to lease on a year to year basis at a cost of $200K annually

• Arena Group keeps all revenue and pays all costs of operation for the AAC and Platinum Garage

• City receives sales tax on AAC sales 21



Amended and Restated Parking Agreement • Parties – City, COC, Hillwood • Provides for all arena event parking • Lists tracts within district to be used for parking (Hillwood can add or

remove parking tracts if replaced with tracts comparable in proximity and access)

• Minimum 3,000 parking spaces required by agreement (841 spaces must be within 400 feet of the arena); agreement does not include Platinum Garage spaces

• Hillwood may replace existing surface parking with comparable surface or structured parking

• Surface lots currently provide all 3,000 parking spaces within the district (See Slide 10)

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Amended and Restated Parking Agreement (Continued) • Minimum parking requirements:

• Hillwood owns and provides land for 2,398 surface parking spaces • As of April 2009 Victory Park UST owns and provides land for 602 surface

parking spaces • COC provides parking attendants and retains all revenue from arena event

parking • Dual Usage of Parking Structures

• Spaces only count towards minimum requirement if they are generally available (cannot be reserved for some other use)

• Subject to reduction in spaces counting towards minimum parking requirements

• 70% of spaces on decks 1 thru 5 • 50% of spaces on decks 6 and 7 • 25% of spaces on decks 8 thru 10

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Amended and Restated Parking Agreement (Continued) • No building permit or CO issued on tracts satisfying minimum parking

requirement until all parking spaces displaced have been relocated on tracts listed in parking agreement

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Lender Parking Agreement • Parties – Lender, COC and Hillwood • Agreement governs use and release provisions for parking tracts • Lender/COC have non-exclusive easement on parking tracts for minimum

3,000 parking spaces (must comply with parking rights agreement) • Tracts may be released from easement if remaining parking tracts meet

minimum 3,000 parking requirement • Easement is part of security for COC loan to construct the arena • Real property only released after receiving consent of both COC and

Lender • Can satisfy minimum parking requirement with surface parking or parking

structures • COC operates all space and receives all revenue related to minimum

parking requirement (Platinum Garage and 3,000 surface parking spaces) 25


Lots P & Q

Appendix B: Victory Park Parking Tracts: Under Parking Easement

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Lot C 337 spaces Lot E 1,510 spaces Lot F 785 spaces Lot H 296 spaces Lots P & Q 72 spaces Total 3000 spaces


Appendix C: Sports Arena TIF District Victory Sub-District

Anticipated Private Development • Development will mostly occur on ± 20

acres of surface parking in the sub-district • Approximately $464M in new taxable value

will be created by new development projects within the Victory Sub-district

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Appendix D: North Parking Garage City Design Studio Objectives

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Appendix D: North Parking Garage City Design Studio Objectives (Continued)

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Appendix E: North Parking Garage Conditions of Funding

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American Airlines Center


Private investment of at least $15,000,000 for land acquisition, design and construction of the North Parking Garage. Submission of draft preliminary plans (including conceptual drawings of the proposed North Parking Garage highlighting the general location, elevations, entrances, exits, elevator and escalator locations and approximate parking space count) for the design of the North Parking Garage (the "Preliminary Plans") to the District's Board of Directors, City Design Studio and Director for review, recommendations and approval within 60 days after Council approval of the North Parking Garage project. At Developer's discretion, Developer will proceed with preparing final construction drawings signed and sealed by a licensed professional engineer, architect, or landscape architect (the "Final Plans") for submission to the City of Dallas and make application for a building permit for the North Parking within 12 months after Developer's receipt of approval of the Preliminary Plans from the District's Board of Directors, the City Design Studio and the Director. Meeting all standard requirements for and applying for a building permit for the North Parking Garage by December 31, 2013, and commence construction within 60 days after issuance of a building permit.


Appendix E: North Parking Garage Conditions of Funding (Continued)

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Meeting all standard requirements for and applying for a Certificate of Occupancy (CO) on or before the earlier of 24-months following the issuance of a building permit or March 1, 2016, which date may be extended up to 180-days or longer if necessary to repair or restore the North Parking Garage in the event force majeure conditions delay completion of construction. The North Parking Garage shall include new construction of a parking garage that meets the following requirements:

• Contain a minimum of 1,200 parking spaces; Maximum of 1,300 parking spaces; • Maximum of 6 above-ground levels, and no more than 1 subsurface level; • Two 3,500 lb passenger elevators and one reversible escalator; • Located no more than 800 feet from the nearest public entrance to the American Airlines

Center; • All design and construction requirements in the Parking Rights Agreements, so that the

number of parking spaces constructed in the North Parking Garage meet all applicable requirements in the Parking Rights Agreement to provide at least 1,200 dedicated parking spaces for event parking for the American Airlines Center;

• All design and construction requirements in the West Access Road Agreements, and



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• All the primary design objectives and approvals from the District’s Board of Directors for the North Parking Garage detailed in Section G below.

City Design Studio shall review and make recommendations on the Preliminary Plans, including the primary design objectives for the North Parking Garage. The City Design Studio and the Director will review any modifications to the approved Preliminary Plans including final material selections. Further review will not be necessary as long as the District's Board of Directors, the City Design Studio and the Director have approved the Preliminary Plans and the conceptual plans and primary design objectives included in the approved Preliminary Plans are fully incorporated into the Final Plans. The Preliminary Plans shall include conceptual drawings of the proposed North Parking Garage highlighting the general location, elevations, entrances, exits, elevator and escalator locations and approximate parking space count and including the following:

• Site Plan showing the location of parcel boundaries. • Pedestrian Lighting Plan for the sidewalk adjacent to the site and on the façade of the

North Parking Garage facing the DART Plaza, using lighting acceptable to the City and spaced at approximately 75 feet unless otherwise required by the City’s Public Works and Transportation Department.



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• Sidewalk Plan for the project. Sidewalks with high anticipated levels of pedestrian traffic shall be designed to accommodate the traffic. The sidewalks shall have a minimum 12 foot walking zone and a minimum 3 foot landscaping and lighting zone, where possible. Landscaping and pedestrian lights shall be placed in the area closest to the back of curb for the length of the sidewalk. The plan shall show the location and type of all landscaping materials.

• Elevations for all sides of the building visible from the public right of way, focusing on the ground floor. Special attention should be given to the facades and ground floor space of the parking garage that face the DART plaza and Victory Avenue.

• Signage plan for the parking facility. • Operational Plan for the parking facility including, but limited to plans for vehicular ingress and egress,

vehicle queuing areas, pedestrian accessibility throughout the site and to the American Airlines Center.

Victory Owner’s Development Review Board. A portion of the District is subject to the Declaration of Covenants, Conditions and Restrictions for the Victory Development (the "Victory CCRs") dated October 18, 2004, generally covering all of the property in Victory development with the exception of the American Airlines Center and the Platinum Garage. Under the Victory CCRs, affiliates of Developer currently have the authority to appoint the board of directors for the Victory Owners’ Association, which in turn appoints



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members to the Development Review Board (the “DRB”). Article 10 of the Victory CCRs details the authority of the DRB, including the right to approve all plans and specifications for any improvements in the Victory Development and the right to select and employ professional consultants to assist it in discharging its duties under certain circumstances. As part of the design review process of all projects subject to the Victory CCRs, for so long as Developer or its affiliates retains control as the "Declarant" under the Victory CCRs (as defined therein), Developer or its affiliate agrees to appoint at least one member of the City Design Studio to the DRB for so long as the City Design Studio continues to act as a representative or consultant for the City of Dallas. The City Design Studio will provide consulting services to the DRB at no cost to Developer or its affiliates, or to any applicable third party developer, for any parcels submitted for review. Developer shall submit to the Director a quarterly status report for ongoing work on the North Parking Garage, as well as public improvements, if any. Such status reports will be due once every 3 months after the Council approval date (See Exhibit A). Comply with the Business Inclusion and Development ("BID") policy for Minority/Women-owned Business Enterprise (M/WBE) participation for TIF reimbursable improvements. Developer shall make a good faith effort to achieve a goal of certified M/WBE participation



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of 25% of total expenditures for the North Parking Garage, and meet all reporting requirements for each. A Management/Operating Agreement between the City and a party acceptable to the City must be executed for the operation and management of the North Parking Garage during American Airlines Center event times, in form and substance satisfactory to the City. A separate Management/Operating Agreement between the City and a party acceptable to the City must be executed for the operation and management of the North Parking Garage during non-event times, in form and substance satisfactory to the City. If necessary, the deadlines may be extended up to 6 months, subject to the Director’s approval. Payment of the TIF Grant is subject to the issuance of a building permit for the North Parking Garage and submittal of a report to the City addressing parking issues by July 9, 2013. The report shall consist of the following:

• Detailed map of existing parking within the District that addresses and/or depicts the following:

• Surface parking lots in the District;



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• Location of all types of parking (structured, surface or on-street) in the District and its distance from the American Airlines Center and restaurants on Victory Park Lane; and

• Number of spaces provided on each surface parking lot, parking garage and on-street parking; and

• Detailed map locating possible parking structures within the District that addresses and/or depicts the following:

• Locations of potential parking structures (D Block Garage, A12 Garage, 2nd North Garage); and

• Estimated costs of construction of parking structures; and • Size (square footage of garage and land size) and number of parking spaces provided

for each parking garage; and • Garage distance from the American Airlines Center and restaurants on Victory Park

Lane. • Detailed map locating potential future private development within the District that

addresses and/or depicts the following: • Potential location and type (i.e. mixed use, multi-family) of each development project;

and



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• Number of units, square feet of retail, number of rooms in hotel and office space; and • Estimated costs for each project.

• Prior to payment of the TIF Grant, Developer, for itself and on behalf of its related entities, will provide a general release approved as to form by the City Attorney expressly waiving any and all obligations, contract claims, demands and causes of action, if any, against the City involving the Continental Street bridges or the Amended and Restated Parking Rights Agreement, for the benefit of City and the American Airlines Center, and the Easement and Parking Rights Agreement, for the benefit of the American Airlines Center, both of which are dated December 15, 1999 (collectively, the "Parking Rights Agreements") so long as the City takes no action (other than the exercise of rights expressly granted to the City under the Parking Rights Agreements, which exercise of rights by the City (i) shall be expressly permitted, and (ii) shall not constitute a defense by Developer to the enforceability of the general release) that would preclude the all of the parking spaces in the North Parking Garage from being kept open and available in partial satisfaction of the Minimum Parking Requirement under the Parking Rights Agreements.


Appendix F: VP UST Technical Study Conditions of Funding

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VP UST shall commence solicitation and selection process for vendors to complete the various studies by August 31, 2012; and The City of Dallas, Office of Economic Development Director (the “Director”), or his designee shall participate in the solicitation and selection process; and VP UST shall complete the studies and submittal of final documents to the City by May 31, 2013; and City shall participate in meetings regarding, review provide input and approve, approval not to be unreasonably withheld, the following:

• Vendors selected to perform the studies • Contractual language with selected vendor • Scope of services and required deliverables • Objectives for the studies • Schedule of work, including participation by key stakeholders and City in specific meetings

The studies shall address the following with the intent to guide public and private investment in the Victory Sub-district:

• Parking. Location and distribution plan for existing and proposed public parking that



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satisfy the Amended and Restated Parking Rights Agreement, for the benefit of City and the American Airlines Center, and the Easement and Parking Rights Agreement, for the benefit of the American Airlines Center (the “AAC”), both of which are dated December 15, 1999 (collectively, the "Parking Rights Agreements"), general public parking as well as private parking for the Sub-district

• Circulation. Vehicular, bicycle and pedestrian circulation throughout the Sub-district and adjacent neighborhoods, including a traffic analysis and management plan addressing existing flow of traffic during American Airlines Center event and non-event times, traffic flow patterns, extension of Victory Park Lane, south of High Market Street

• Retail Analysis. Retail mix, design and branding for the Sub-district that will provide the criteria for public retail incentives, guide the development of new retail space and recruitment efforts to occupy existing vacant retail space in the Sub-district

• Urban Neighborhood Design. Place making for private development in the Sub-district, integrating development efforts both north and south of the AAC

The studies shall deliver the following: • Detailed analysis, recommendations and strategic actions that will shape future public

investment and private development while strengthening the Sub-district as an urban neighborhood



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• Phased and realistic Implementation Plan that addresses district wide parking, circulation, retail, urban design and public improvements within the District

VP UST shall comply with the Business Inclusion and Development (“BID”) Plan attached and with the City’s Fair Share goals applicable to the project and meet all reporting requirements.

Office of Economic Development | dallas-ecodev.org

Retention & Expansion of Reel FX Headquarters in Deep Ellum

Economic Development Committee June 4, 2012

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Overview • Discuss the retention and expansion of

Reel FX’s headquarters and production studio in Deep Ellum

• Present proposed City of Dallas economic incentives for the project

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Background • Reel FX

– Founded 1993 – Dallas Headquarters – Deep Ellum 301 North

Crowdus – 250 employees (doubled over last six years) – Animation and design studio with offices in

Dallas and Santa Monica, CA – Types of work include animated films and shorts,

visual effects for commercials, music videos, etc. – Feature films coming soon: Day of the Dead &

Turkeys

Background (cont’d) • Project Site

– 301 North Crowdus

– 67,166 SF – 182 parking

spaces on site – Approximately

2.69 acres

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Background (cont’d) • Company is neighborhood’s largest private

employer and growing • Company subleased former Yahoo! space in

Deep Ellum through December 2012 • Lease expiration required company to find a

permanent real estate solution • Company considered multiple area cities –

including an investor owned building outside of Dallas

• Company desired to own facility

Highlight Reel

Project Site

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Project Description • Approximately $7M investment

– $2.25M remodeling, construction and related costs

– $4.75M personal property investment • Jobs:

– Retain 250 employees – Add 125 employees over two years

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Project Challenges • In order to retain Reel FX in Dallas, we

had to address: – Competitive offers and sites in the region – Streetscape and curb appeal

• High level clientele visiting the site required streetscape enhancements be made to better integrate the facility into the overall neighborhood

– Parking • Street improvements will add approximately 12

spaces and the company has identified other area parking options for the future

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Existing Conditions Looking West on Indiana at the side of Reel FX building

With road improvements can add 12+ parking spots along the street

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Existing Conditions cont’d Indiana Drive right in front of facility entrance

Looking west on Indiana toward the entrance of Reel FX

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Proposed Incentives • Economic Development Grant

– $1,750,000 payable over two years • Streetscape and Infrastructure improvements

– Brought to Council by Public Works – Estimated $904,000

• Deep Ellum TIF District would cover $452,000 – May 22 - Deep Ellum TIF District voted to recommend

funding • Balance covered with 2006 Prop. 8 Bonds

• Other potential assistance to be provided – State/Federal training funds will be sought – Support application for Enterprise Zone

designation with the State of Texas


Proposed Terms • Economic Development Grant

– Company will invest a minimum of $2,000,000 in site and building improvements and related costs

– 50 percent of the grant ($875,000) will be paid upon verification of acquisition of the building by the company

– Once the company reaches 310 jobs (60 new), 25 percent ($437,500) of the grant will be paid

– Once company has met full hiring requirements of 375 jobs (125 new) on site the remaining grant will be paid ($437,500)

– Recapture provision: $2500 per job below 375 up to $437,500 – Failure to operate its Headquarters in Dallas will result in recapture

of $875,000 • Streetscape & Infrastructure Improvements

– Owner acquires the building and makes capital improvements – City will publicly design & construct streetscape improvements with

the associated Elm Street improvements


Fiscal Impact

City of Dallas General Fund Fiscal Impact

10 Year 20 Year

Total City GF Revenue Generated $25,779,313 $61,386,674

Total City GF Service Costs $14,507,816 $30,105,758

Net Impact Before Incentives $11,271,497 $31,280,916

City Incentives $2,654,000 $2,654,000

Net City Fiscal Impact $8,617,497 $28,626,916


Economic Impact

10 Year 20 Year

Jobs Economic Output

Economic Output

Direct Impact 375 $529,273,697 $1,387,723,477

Indirect & Induced Impact

900 $476,120,328 $1,248,725,129

Total 1275 $1,005,394,025 $2,636,448,606

Recommendation • City Staff recommends approval of the

following incentives – Economic Development Grant of

$1,750,000 payable over two years – Streetscape and infrastructure

improvements along Indiana and Crowdus near the building of up to $904,000 (Deep Ellum TIF District will fund $452,000 of this cost – remainder will be funded with 2006 Prop 8 Bond funds)

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Next Steps • On June 27, 2012, City Council will

consider authorizing the proposed incentives

Office of Economic Development | dallas-ecodev.org

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