CC MEETING: July 16, 2024
DATE: July 10, 2024
TO: Erin Rinehart, City Manager
FROM: Josh Giles, Development Program Manager
Ravi Shah, Executive Director of Development Services
Title
Consider A Resolution Authorizing The Assignment Of An Economic Development Grant Agreement To Rebate Property Taxes At 1415 South Broadway From BSPMT Broadway Carrollton, LLC to CRP/RPM LYV Broadway Owner, L.P..
Body
BACKGROUND:
LYV Broadway, formerly known as Olympus on Broadway, is a mixed-use multi-family project in Downtown Carrollton. Trammell Crow, d/b/a High Street Carrollton Developer, LLC, entered into an economic development agreement with the City to construct LYV Broadway on February 13, 2019. The project was subject to the following incentive requirements:
Trammell Crow agreed to develop a Class-A apartment building, including:
o Minimum 300 apartment units (390 units were built)
o Multi-level structured parking garage
o Streetscape improvements on Broadway
The City agreed to:
• Provide a construction reimbursement incentive in an amount not to exceed $4,662,000 for the purpose of paying the costs of the reconstruction of City infrastructure improvements, including the reconstruction of South Broadway and installation of associated streetscape improvements;
• Provide an economic development grant to rebate 50% of the property’s ad valorem taxes for a 7-year period, beginning 18 months after the completion of construction.
With the exception of the rebate grant, the City and Trammell Crow completed all other obligations of the economic development agreement. In 2022, Trammell Crow sold the property to BSPMT Broadway Carrollton, LLC. On June 7, 2022, the City authorized an assignment of the remaining property tax rebate benefit to BSPMT Broadway Carrollton, LLC.
In June 2024, LYV Broadway was sold by BSPMT Broadway Carrollton, LLC to CRP/RPM LYV Broadway Owner, L.P. The new owner has requested receipt of the assignment of the benefits of an economic development grant agreement to rebate a portion of property taxes, which was provided to High Street Carrollton Developer, LLC and BSPMT Broadway Carrollton, LLC.
The obligation of the agreement to rebate a portion of property taxes began in September 2022. The funding for payment of the property tax rebate is included in the Economic Development Fund, and none of the original deal terms of the economic development agreement are proposed to be modified. In order to fulfill the intent of the economic development grant, an assignment is necessary in order to provide the property tax rebate benefit to the current owner.
FINANCIAL IMPLICATIONS:
The 2024 tax-year assessment of the development is $77,175,970 according to DCAD public records. Based on the current City property tax rate, the estimated annual City property tax for this project is approximately $428,000. Assuming a constant tax rate and property value assessment, a 7-year, 50% rebate of the City property taxes is valued at approximately $1,498,000. Two years have already lapsed since the tax abatement began, and the City has already paid approximately $409,000; the remaining five-year period for the property tax abatement amount due will be approximately $1,100,000.
IMPACT ON COMMUNITY SUSTAINABILITY:
The mixed-use project provides the Downtown area with nearly four-hundred apartment units and adds to the economic vibrancy of the area.
STAFF RECOMMENDATION/ACTION DESIRED:
Staff recommends City Council approval of a resolution authorizing the assignment of the economic development grant at LYV Broadway to CRP/RPM LYV Broadway Owner, L.P.