Economic Development Agreement for the Casino Beach Development

Transcription

1 Economic Development Agreement for the Casino Beach Development Jay Chapa, Director Housing and Economic Development June 5, 2012

2 Location

3 Background 1930s Now The Lake Worth watershed is ~94 square-miles w/ 230 miles of streams, rivers 1930s the popular Casino at Lake Worth featured a ballroom, bathhouse, sandy beach, Thriller roller coaster, boardwalk, carnival, docks for swimming and boating, and a 9-mile bridge across the lake Now City owned vacant land, a portion is public park area Future transform vacant land into entertainment destination

4 Proposed Casino Beach Development Developer proposes to create an entertainment destination development on Casino Beach on City owned property Development to include restaurants, a boardwalk, beach area, boat slip, amphitheatre with the potential of other entertainment attractions like movie theatres or a drive in theatre Developer will be Casino Beach Partners, LLC, which is associated with Patterson Equity Partners, LTD (PEP). PEP has purchased $60M +/- of property in and around Possum Kingdom Lake in the last 3 years for subsequent sale and/or development. Headquartered in Tarrant County PEP is managed by 3 partners, 2 of whom live in Fort Worth.

5 Developer s Shared Vision Lake Worth Vision Protect and enhance water quality, natural beauty and recreational character; Develop Model Sustainability Communities; Create Lake Worth Regional Park, a linear park encompassing the lake that provides recreational amenities and cultural hubs; and Connect communities, resources, and amenities with parkways, greenways and trails. Patterson Equity Partners Develop and re-create historic Casino Beach to protect Lake Worth s beauty and provide recreational activities; Preserve and protect Lake Worth park spaces; and Provide a first-class entertainment center that will connect with the linear regional park and can be reached either from the park or the lake.

6 Preliminary Site Plan

7 Restaurants

8 Entertainment

9 Marina

10 Amphitheater

11 City-Owned Property Park Property Fee Owned Property

12 Property Related Financing Issues The amount of private development is limited by the amount of City owned property that is available for purchase and not designated as parkland (would require vote of citizens) Private development requires public improvements on lake s edge and surrounding City property to make it a recreational destination Cost of public improvements make the overall project unfeasible because of the gap created by the cost of capital associated with infrastructure

13 Proposed Solution Enter into a Chapter 380 Economic Development Program Agreement with developer to provide a mechanism to fill gap created by the public infrastructure to be financed by the development Utilize gas lease revenues from current and future Lake Worth leases to pay out Chapter 380 over a 20-year period, along with funds from sale of property Infrastructure to be constructed is consistent with the Lake Worth Vision Plan Structure allows already approved projects to proceed without delays

14 Lake Worth Capital Improvement Implementation Plan (Original) Project Cost Date Lake Dredging 30,706,855 In Progress Arrow S/Casino Beach Boat Ramp Improvements 630,804 Completed Nature Trail (Phase I) and Lake Worth Parks Improvements 9,000,000 Under Design Comanche Creek Drainage Channel 1,300,000 Under Design Woodvale Low Pressure Sewer System 2,200,000 Completed 20 Northside III Water Main Along IH820 2,200,000 Completed Access Control Improvements 1,715,612 Under Design Love Circle/Casino Beach Water & Sewer 9,057,875 Under Design Sunset Park/Freemons Park Boat Ramp Improvements 1,023, Nature Trail (Phase II) 9,636, Watercress Low Pressure Sewer System 4,428, Maintenance Fund 9,550, Northside II Water Improvements 26,554, SW Silver Creek Road Expansion 9,073, TOTAL $117,077,508

15 Lake Worth Regional Coordination Committee Dennis Shingleton (Chair) Jim Wietholter Brett McGuire Dianna Buchanan J.D. Johnson Mark Riley Joe Waller Patricia Hyer Gale Cupp Michael Barnard Michael Dallas Jim and Diane Smith Doug Woodson Kenneth Davis Bob Manthei Mark Ernst Adelaide Leavens Rick Shepherd Tom Huffhines Lee Nicol Captain Robert Bennett* Sam Brush* * Ex Officio

16 Proposed 380 Program Agreement Developer upfronts costs of all public and private improvements, minimum of $10 million in private improvements City pays developer up to $10 million in 20 Program 380 grants to provide gap financing Payment based on actual costs of public improvements Outstanding balance after first payment will carry 8% annual interest

17 Developer Commitments Design & construct public improvements required for the development within 36-months of executing options Enter into 36-month option after completion of water and sewer to lease and/or purchase non-parkland property and license parkland property Property to be sold and leased at appraised value: Parkland Lease approximately $100,000 annually Sale approximately $2.0 million (revenues from sale to be used toward 380 payments to supplement mineral revenues) Construct a minimum of 40k sq. ft. of retail/restaurant space with minimum investment of $10 mil. within 36- months of executing options Enter into a license agreement and an exclusive operating agreement on the parkland for a 20-year lease period, with renewals Revenue split: 90% (Developer) / 10% (City) on gross revenues

18 Developer Commitments Enter into a maintenance agreement to provide routine maintenance, upkeep of parkland & improvements Create 25 new jobs Expend > 30% of all hard construction costs with Fort Worth companies Expend > 25% of all hard construction costs with Fort Worth M/WBE companies Expend > $100,000 annually with Fort Worth vendors Expend > $50,000 annually with Fort Worth M/WBE vendors

19 City Commitments Enter into 20-year Chapter 380 Economic Development Program Agreement with Casino Beach Partners, LLC Sale and lease properties for development; property transfer not to occur until minimum investments are completed City pays developer up to $10 million in 20 Program 380 grants to provide gap financing Payment based on actual costs of public improvements Outstanding balance will carry 8% annual interest Primary funding source to be funds derived from Lake Worth Mineral leases Deposit annual lease payments into dedicated capital maintenance fund for PACS

20 Tax Analysis City Property Tax Generated City Sales Tax Generated Initial Development (Lo) Full Development (Hi) Initial Development (Lo) Full Development (Hi) 1 Year $85,500 $203,063 $120,000 $267, Years $936,201 $2,223,478 $1,313,967 $2,931, Years $2,079,551 $4,938,934 $2,915,684 $6,505,621 Generation of $11.4M+ in City property and sales tax over 20-year period School Districts (FWISD, Azle ISD) Property Tax $125,600 (Lo), $298,300 (Hi) in Year 1 $1,375,285 (Lo), $3,266,302 (Hi) after 10 years $3,051,750 (Lo), $7,247,905 (Hi) after 20 years

21 Staff Recommendation Enter into a Chapter 380 Economic Development Program Agreement with Patterson Equity Partners, LLC for the development of Casino Beach and adjacent City-owned park property

22 Next Steps Date June 12 July August Action Item City Council Consideration M&C for Economic Development Agreement Establish Reinvestment Zone; Council Consideration of Sale, Lease and License Documents; Council Consideration of Operating Agreement on Parkland

23 Questions / Comments