CypressWaters_annualreport

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Cypress Waters TIF DistrictFY 2011

Annual Report

Office of Economic Development1500 Marilla Street, 2CN

Dallas, Texas 75201(214) 670-4551

www.dallas-ecodev.org/redevelopment

October 1, 2010 to September 30, 2011


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Reinvestment Zone Number NineteenCypress Waters

Tax Increment Financing District


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Cypress Waters TIF District FY 2011 Annual Report

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Table of Contents

Table of Contents ............................................................................................................ 3Mission Statement ........................................................................................................... 4

District Accomplishments ................................................................................................ 4Value and Increment Revenue Summary ........................................................................ 5Objectives, Programs, and Success Indicators ............................................................... 5Year-End Summary of Meetings and Council Items ........................................................ 7Pending TIF Items ........................................................................................................... 9Budget and Spending Status ........................................................................................... 9FY 2012 Work Program ................................................................................................. 10Appendix: Financials .................................................................................................... 11


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Mission Statement

The Cypress Waters Tax Increment Financing (TIF) District represents the outgrowth ofthe City of Dallas effort to provide a model for supporting the development of

underdeveloped land near employment centers and to take full advantage of theplanned expansion of the DART light rail system along the Cotton Belt Line.

The Cypress Waters TIF District was established on December 8, 2010 to encouragethe initial development of a large tract of undeveloped land within the City of Dallas(approximately 1,661 acres in total) surrounding North Lake. This district will promotethe creation of pedestrian-oriented traditional neighborhood development (TND)containing multifamily and residential development, a potential senior housingcomponent, pedestrian-oriented retail development, and additional commercialdevelopment.

The Dallas City Council established the Cypress Waters TIF District by OrdinanceNumber 28074 on December 8, 2010. The Cypress Waters District will begin to collectfunds on January 1, 2012, and it is scheduled to terminate on December 31, 2040(including collection of the 2040 increment in calendar year 2041 and any relatedmatters to be concluded in 2041) or when the budget of $65 million (2010 dollars) hasbeen collected. The City of Dallas and Dallas County are the two participating

jurisdictions. The City will participate at 85% starting in 2012. The Countys participationwill be 55% from 2014 to 2033 or until the Countys participation reaches the budgetlimit of $10,500,000.

District Accomplishments

The district is located in the area north and east of the intersection of LBJ Freeway (I-635) and Belt Line Road, with the entire site being located within the City of Dallas. Thedistrict contains approximately 939 acres of contiguous undeveloped land which will beadjacent to a 362 acre lake (upon the planned reduction of North Lake). The remainingproperty in the 1,661 acre area is non-TIF area, including proposed school sites, drillingsites, and a former power plant. Due to the remoteness of the property in the CypressWaters TIF District from the remainder of the City of Dallas, fully developing theproperty will require significant public expenditures for infrastructure/utilityimprovements (including extensive water and wastewater transmission, storage anddistribution improvements); construction of primary roadway improvements; facilities for

police, fire and emergency services; environmental remediation; lake reclamation, etc.The use of TIF funds will allow this large, master-planned development, which iscurrently located outside of accessible City of Dallas services, to commencedevelopment much sooner, and to proceed to completion much more quickly, than suchwould occur absent the use and availability of TIF funds.

One project has been approved by the TIF board and by Council. Cypress WatersPhase I was approved by Council on June 6, 2011. This phase will be approximately


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660 multifamily units, master planned using the design principles of TraditionalNeighborhood Development. The unit mix includes both flat and townhome rental units.

Projects Within the Cypress Waters TIF District Utilizing TIF Funding1

Project Location

Calendar

YearComplete

Status Units/ SF2Approx.Value3

TIF

Investment4

Cypress Waters Phase I

Cypress WatersBlvd & ChapelOaks, northeast ofBelt Line Rd andHackberry Rd

2013 Approved 660 units $45,000,000 $9,757,267*

Subtotal660 units $45,000,000 $9,757,267*

1All information updated as of September 30, 2011.

2Based upon either the TIF application or required minimum stated in the development agreement. May be updated for

completed projects based on actual unit mix and square footage.3Based upon 1) market value of comparable projects for anticipated projects, 2) private investment stated in thedevelopment agreement for projects that are approved or under construction, or 3) DCAD market value for completedprojects (unless project has not yet been assessed).4

Principal amount not to be exceeded per the development agreement. TBD indicates that development agreement hasnot yet been adopted. Asterisk indicates investment also includes interest not shown.

Value and Increment Revenue Summary

The Cypress Waters TIF Districts base tax value for 2010 was $73,382. This basevalue reflects adjustments to the base to reflect the final 2010 values of the parcels in

the district. The districts 2011 assessed tax value, as determined by the Dallas CentralAppraisal District, was $73,381. No increase over the assessed value of the base yearis expected until 2013, when Phase I is partially under construction and the agriculturalexemption is removed from some of the property in the district. The City beginsparticipation in 2012 and Dallas County begins participation in 2014.

Objectives, Programs, and Success Indicators

The final Cypress Waters Project Plan and Reinvestment Zone Financing Plan wasadopted on June 8, 2011. The Final Project Plan addresses the following developmentgoals and objectives:

Create additional taxable value attributable to new private investment in projects in theCypress Waters TIF District totaling approximately $2.2 billion over the thirty year lifeof the TIF district.

Cypress Waters Phase I is expected to generate an additional $45 millionin added taxable value.


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No additional taxable value is expected until the agricultural exemption forapproximately 34 acres under Phase I is removed in 2012. Removing thisexemption is expected to increase the taxable value for the district from$73,382 to more than $1.5 million.

Attract new private development, including approximately 10,000 new residentialunits, 4,000,000 square feet of commercial space (including approximately700,000 square feet of data center use and 2,000,000 square feet of lightwarehouse/industrial use), and an estimated 150,000 square feet of pedestrian-oriented retail space, all of which are anticipated to create an estimated 9,000on-site jobs.

Construction on Phase I is expected to begin in January 2012. Whencomplete, this project will add 660 multi-family homes, representing 6.6%of the housing goal.

To improve ridership on DART via the planned expansion along the Cotton BeltLine.

The master plan for the district includes development adjacent to theplanned Cotton Belt Station on the north side of the district.

Improve recreational opportunities for the community and the future residentswithin the TIF district via extensive, publicly accessible green space on the sitealong the lake edge and along power line easements, in addition to multipleparks, hike and bike trails and pedestrian connections throughout the district.Additional open space may be available through the utilization of Coppell ISD

land and as part of an MMD and/or TIF-funded public amenity center.

The Phase I development includes extra wide sidewalks leading to theadjacent power line easement and to a future connection to the lake trail

Create a model for exceptional development standards in terms of its complexity,scope, design, environmental sensitivity, and connectivity.

The Phase I development is a model for dense, pedestrian-orienteddevelopment on under-utilized, infill property.

Develop the property in a manner where fiscal impacts for the remainder of theCity are limited and a development pattern is secured that is a net benefit to theCity from a fiscal, land use and community standpoint.

Cypress Waters is in a location outside of currently accessible Cityservices. As part of Phase I, the developer will construct temporaryfacilities for police and fire service.


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Generate an NPV of $65 million or approximately $160 million in total dollars inTIF revenues over the 30-year life of the district.

City participation in TIF increment collections will begin in tax year 2012.No incremental revenue is expected for the district during the 2011 fiscal

year.

Year-End Summary of Meetings and Council Items

During the fiscal year from October 1, 2010 to September 30, 2011, the Cypress WatersTIF District Board of Directors held 3 meetings.

The board can consist of up to ten members, including five City of Dallas appointees,one Coppell Independent School District appointee, one Carrollton-Farmers BranchIndependent School District appointee, one Dallas County appointee, one Dallas

Community College District appointee, and one Dallas County Hospital Districtappointee. On January 24, 2011, the Dallas County Community College District officiallywaived its right to appoint a representative to the Cypress Waters TIF Board. Thisaction allows the City of Dallas to appoint a total of six members to the board.

During FY 2011 the Board members were: Mary Poss, city appointee and vice-chairperson (attended 2 of 3 meetings); Veletta Lill, city appointee (attended 3 of 3meetings); Elizabeth Solender, city appointee (attended 2 of 3 meetings); Dr. JoseGomez, city appointee (attended 2 of 3 meetings); Michael Buckley, city appointee(attended 2 of 2 meetings); Kelly Penny, Coppell ISD appointee (attended 3 of 3meetings); Rick Loessberg, Dallas County appointee (attended 2 of 3 meetings); and

Steven Roth, Dallas County Hospital District appointee (attended 3 of 3 meetings). TheCarrollton-Farmers Branch Independent School District has not appointed a boardmember and has not waived its right to do so.

During the fiscal year from October 1, 2010 to September 30, 2011, the City Councilapproved six items associated with the Cypress Waters TIF District:

On December 8, 2010, Council held a public hearing to receive commentsconcerning the creation of Tax Increment Financing Reinvestment Zone NumberNineteen for the Cypress Waters area, to be known as the Cypress Waters TIFDistrict, under the authority of the Tax Increment Financing Act, as amended

(V.T.C.A, Tax Code Chapter 311) - Financing: No cost consideration to the City On December 8, 2010, through Resolution 10-3052, Council approved

Ordinance 28074 establishing Tax Increment Financing Reinvestment ZoneNumber Nineteen to be known as the Cypress Waters TIF District, under theauthority of the Tax Increment Financing Act, as amended (V.T.C.A, Tax CodeChapter 311) - Financing: No cost consideration to the City.

On June 8, 2011, through Resolution 11-1545, Council approved Ordinance28224, 1) approving the Project Plan and Reinvestment Zone Financing Plan for


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Tax Increment Financing Reinvestment Zone Number Nineteen (Cypress WatersTIF District); and (2) authorizing a participation agreement with Dallas County forTax Increment Financing Reinvestment Zone Number Nineteen - Financing: Nocost consideration to the City.

On June 8, 2011, Council approved Resolution 11-1546 authorizing the

establishment of the City of Dallas Cypress Waters TIF District Grant Program toimplement the Project Plan and Reinvestment Zone Financing Plan (ProjectPlan) for Tax Increment Financing Reinvestment Zone Number Nineteen,(Cypress Waters TIF District) pursuant to Chapter 311 of the Texas Tax Code,V.T.C.A. to be administered by the City of Dallas Office of EconomicDevelopment to promote economic development within the Cypress Waters TIFDistrict - Financing: No cost consideration to the City.

On June 8, 2011, Council approved Resolution 11-1547 authorizing (1) adevelopment agreement with Billingsley LD, Ltd. to: (a) dedicate future TIFrevenues for TIF eligible project costs related to the Cypress Waters Phase Idevelopment located at the northeast quadrant of South Belt Line Road and

Hackberry Road in Tax Increment Financing Reinvestment Zone NumberNineteen (Cypress Waters TIF District); (b) participate in the construction costs ofcertain water infrastructure improvements not to exceed thirty percent of theactual contract costs for such water and wastewater infrastructure improvements,pursuant to Section 212.071 of the Local Government Code subject to futureappropriations from Dallas Water Utilities; and (c) participate in the cost of theengineering in an amount not to exceed $221,220 for Cypress Waters Phase Ieligible water and wastewater infrastructure; and (2) the Cypress Waters TIFDistrict Board of Directors to dedicate an amount not to exceed $9,757,267 plusan additional grant in an amount not to exceed five percent of such dedicationnet of DWU participation costs as necessary and convenient to the

implementation of the Cypress Waters TIF District Project Plan - Not to exceed$9,978,487 - Financing: Cypress Waters TIF District Funds ($9,757,267) andWater Utilities Capital Improvement Funds ($221,220)

On June 8, 2011, Council approved Resolution 11-1548 declaring the intent ofTax Increment Financing Reinvestment Zone Number Nineteen (Cypress WatersTIF District) to reimburse Billingsley LD, Ltd. a principal amount not to exceed$9,757,267 plus an additional grant in an amount not to exceed five percent ofsuch dedication, net of DWU participation costs, as necessary and convenient tothe implementation of the Cypress Waters TIF District Project Plan and related tothe Cypress Waters Phase I development located at the northeast quadrant ofSouth Belt Line Road and Hackberry Road in the Cypress Waters TIF District -

Financing: No cost consideration to the City.


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Pending TIF Items

The Cypress Waters TIF District is expected to review the following items during FY2011-2012:

FY 2011 Annual Report for the Cypress Waters TIF District Potential changes to TIF by-laws to reflect changes in board composition and

design review process A mixed income housing policy

Budget and Spending Status

Each TIF district, in the Project Plan and Reinvestment Zone Financing Plan,establishes a budget for the public improvement expenditures necessary to supportprivate investment in the district. The Cypress Waters TIF District was established inDecember 2010 and has not collected any TIF funds in FY 2011. No funds are expectedto be collected until the agricultural exemption is removed from the Phase I land in 2012and a portion of the resulting rollback taxes paid to the fund in 2013.

The Cypress Waters budget and spending to date is shown below.

Cypress Waters TIF DistrictProjected Increment Revenues to Retire TIF Fund Obligations*

Category TIF Budget Allocated Balance

Public infrastructure improvements $146,736,068 $9,757,267 $136,978,801

Public safety improvements $11,313,895 $0 $11,313,895

Administration and implementation $2,065,585 $54,138 $2,011,447

Total project costs $160,115,548 $9,811,405 $150,304,143

*Budget shown above in current dollars, updated yearly; TIF Project Plan shows the budget in net present value.Values above do not include interest payments.**Administration and implementation for FY 2011 are included in the above allocation.

Cypress Waters TIF DistrictProject Plan Budget (NPV, 2008 dollars)

Category TIF Budget*Public infrastructure improvements: paving, streetscape, water/wastewater,storm sewer, utility burial/relocation, and land acquisition

$58,198,583

Public safety $6,000,000

Administration and implementation $1,500,000

Total project costs $65,698,583

* As approved in the Final Project Plan and Reinvestment Zone Financing Plan.


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FY 2012 Work Program

Pending items for the Cypress Waters TIF District include:

Encourage development projects within the district in accordance with the finalProject Plan and Reinvestment Zone Financing Plan.

Consider changes to TIF by-laws related to the design review process and themembership of the TIF board.

Review and approve overall TIF design guidelines.

Develop a mixed income housing policy for the district.


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Appendix: FinancialsCity of Dallas, Texas

Cypress Waters Tax Increm ent Financing Distr ict Fund

Reinvestment Zone Number Nineteen

As of September 30, 2011

Chapter 311.016 of V.C.T.A. requires the follow ing information

as part of the annual report on the status of the TIF District.

Information is contained in detail on the attached

financial statements.

1. Amount and source of revenue in the tax increment fund established for the zone:

$0 Interest Income

$0 Af fordable housing payment

$0 Ad Valorem Taxes (Collected in FY'2010-11 based on 2010 Final Tax Roll)

$0 Total Revenue

2. Amount and purpose of expenditures from the fund:

$0 Administrative Expense

$0 Interest and fiscal charges

$0 Total Expenditures

3. Amount of Principal and Interest due-on outstanding indebtedness:

a. The zone did not have any bonded indebtedness at f iscal year end.

b. The Zone entered into a development agreement w ith Billingsley LD, Ltd for the Cypress Waters Phase I development

in an amount not to exceed $9,757,267 w ith anticipated completion by December 31, 2014 and reimbursement to begin thereaf ter

upon availability of TIF funds.

4. Tax increm ent base and current captured appraised value retained by the zone:

Taxable Base Year Est. Captured

Taxing Jurisdiction Value 2011* 2010 Value Value 2011**

City of Dallas $0 $73,382 $0

Dallas County $0 $73,382 $0

Dallas Independent School District $0 $0 $0

Dallas County Hospital District $0 $0 $0

Dallas County Community College Dist. $0 $0 $0

*Taxable value show n for participating taxing jurisdictions. County w ill begin participating in tax year 2014 and the values w ill

vary slightly f rom the City value due to diff erent exemption levels.

**Based on preliminary Taxable Value. The final values w ill be determined on February 1, 2012.


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5. Captured appraised value by the municipality and other taxing units, the total amount of the tax

increm ent r eceived, and any additional information necessary to demonstrate compliance with the

tax increment financing plan adopted by the governing body of the municipality:

A. Estimated tax increment shared by the municipality and other participating taxing jurisdictions:

Amount of

Assessment Estimated 2012

Taxing Jurisdiction Per $100*** Increment***

City of Dallas 0.67745 $0

Dallas County 0.00000 $0

Dallas Independent School District 0.00000 $0

Dallas County Hospital District 0.00000 $0

Dallas County Community College District 0.00000 $0

Total for all Jurisdictions $0.67745 $0

***Participation rates f or City of Dallas and Dallas County are 85% for tax years 2012 to 2034 and 55% for tax years 2014 to2033 respectively.

B. The total amount of estimated tax increment to be billedfor the 2011 tax year is show n above. For the 2010 tax year, the

Zone collected no increment.


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City of Dallas, Texas

Cypress Waters Tax Increm ent Financing District Fund

Balance Sheet as of Septembe r 30, 2011 (Unaudited)

With Comparative Totals for Septembe r 30, 2010

2011 2010

Assets:

Pooled cash and cash equivalents $0 $0

Interest receivable $0 $0

Total assets $0 $0

Liabilities and Fund Balance (Deficit):

Liabilities:

Accounts and contracts payable $0 $0

Due to general fund $8,025 $8,025

Total liabilities $8,025 $8,025

Fund Balance (Deficit):

Fund Balance (Deficit) ($8,025) ($8,025)

Total Liabilities and Fund Equity $0 $0

$0 $0

Cypress Waters Tax Increm ent Financing District Fund

Statem ent of Revenues , Expenditures and Changes in Fund Balance (Deficit)

For the Period September 30, 2011 (Unaudited)

With Comparative Totals for Septembe r 30, 2010

ITD 2011 2010

Revenues:

Tax increment-Governmental $0 $0 $0

Tax increment-Intergovernmental $0 $0 $0

Interest income $0 $0 $0

Affordable housing payment $0 $0 $0

Net increase (decrease) in fair value of investments $0 $0 $0

Total revenues $0 $0 $0

Expenditures:

Administrative expenses $8,025 $0 $8,025

Non-Capital Outlay $0 $0 $0

Capital outlay $0 $0 $0

Interest and f iscal charges $0 $0 $0

Total expenditures $8,025 $0 $8,025

Excess (Deficiency) of Revenues over Expenditures ($8,025) $0 ($8,025)

Fund balance (Deficit) at beginning of year

as previously reported $0 ($8,025) $0

Fund balance (Deficit) at beginning of year,

as restated $0 ($8,025) $0

Fund balance (deficit) at end of year ($8,025) ($8,025) ($8,025)

Note: Fiscal year 2010-11 unaudited financial stateme nts are based on the 13th period close numbe rs and are subject

review by the City Controller's Office pr ior to approval by the City Council. In case of any mater ial changes, TIF board

will be provided with the updated financial statements.

Note: Fiscal year 2010-11 unaudited financial statements are based on 12th period close numbers and are subject to


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City of Dallas, TexasCypress Waters Tax Increment Financing District

Notes to Financial Statements for the Year Ended September 30, 2011

1. The measurement focus used for the TIF Zone fund is a flow of financial resources. The financialstatements are prepared using the modified accrual basis of accounting. Under the modifiedaccrual basis of accounting, tax increment revenues and interest are recognized as revenuewhen they become both "measurable" and "available" to finance expenditures of the currentperiod. Expenditures are recognized when the liability is incurred.

2. The TIF's cash balances are invested in the Citys investment pool and include amounts indemand deposits as well as short-term investments. Pooled investments and short-term non-pooled investments are treated as cash equivalents. Investment income on the pooledinvestments is prorated monthly based upon the average daily cash balance in each fund.

3. State statute requires that each taxing jurisdiction remit its ad valorem taxes to the Zone by May 1of each year (remittance to occur no more than 90 days after taxes for the jurisdiction becomedelinquent).

4. The Zone's Financial Plan permits expenditures not to exceed $2,065,585 over the life of the TIF

to reimburse the City for administrative costs. Any future remittance for administrative expenseswould come from excess cash as tax increment revenue increases as a result of increasedassessed values.

Documents

CypressWaters_annualreport