COUNCIL CHAMBER 170367 - Dallas City...

COUNCIL CHAMBER

170367February 22, 2017

WHEREAS, the City recognizes the importance of its role in local economicdevelopment initiatives and programs; and

WHEREAS, the City has established Tax Increment Financing Reinvestment ZoneNumber Twelve, (“Deep Ellum TIE District” or “District”) and established a Board ofDirectors for the District to promote development or redevelopment in the Deep Ellumarea pursuant to Ordinance No. 26043, authorized by the City Council on June 22,2005, as authorized by the Tax Increment Financing Act, Chapter 311 of the Texas TaxCode, as amended; and

WHEREAS, on April 12, 2006, City Council authorized the Project Plan andReinvestment Zone Financing Plan for the Deep Ellum TIE District by Ordinance No.26304, as amended; and

WHEREAS, on September 10, 2014, City Council amended the Project Plan andReinvestment Zone Financing Plan for the Deep Ellum TIE District by Ordinance No.29469; and

WHEREAS, the Tax Increment Financing Act specifies that the governing body of a cityshall submit an annual report on the financial status of the district to the Chief ExecutiveOfficer of each taxing unit that levies taxes on real property in a reinvestment zone, anda copy of the report shall be forwarded the State Comptroller; and

WHEREAS, on December 6, 2016, the Deep Ellum TIE District Board of Directorspassed a motion accepting the FY 2016 Annual Report for Tax Increment FinancingReinvestment Zone Number Twelve and recommending approval of same by the CityCouncil.

NOW, THEREFORE,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS:

Section 1. That the FY 2016 Annual Report for Tax Increment Financing ReinvestmentZone Number Twelve, (Deep Ellum TIF District), City of Dallas, Texas, as of September30, 2016, a copy of which is attached hereto (Exhibit A), is hereby accepted.

Section 2. That the City Manager is hereby authorized to submit the FY 2016 AnnualReport for Tax Increment Financing Reinvestment Zone Number Twelve to the ChiefExecutive Officer of each taxing jurisdiction that levies taxes on real property in theDistrict and to the State Comptroller, as required by state law.

Section 3. That this resolution shall take effect immediately from and after its passagein accordance with the provisions of the Charter of the City of Dallas, and it isaccordingly so resolved APPROVED

CITY COUNCIL

FEB 22 2017

J’41 4

Deep Ellum TIF DistrictFY2016

Annual Report

City of Dallas

Office of Economic Development1500 ManIla Street, 2CN

Dallas, Texas 75201(214) 670-4551

http:Ilwww. dallas-ecodev. org

170367Exhibit A

October 1, 2015 to September 30, 2016

Deep Ellum TIF District Exhibit A - FY 2016 Annual Report

170367

Source: Parcels - DCAD, 2009; Rail - DART, 2009; All Other Data - City of Dallas, 2014

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170367Deep Ellum TIF District Exhibit A - FY 2016 Annual Report

Reinvestment Zone Number TwelveDeep Ellum Tax Increment Financing District

Table of Contents

Mission Statement 4Deep Ellum TIE District Accomplishments 4Value and Increment Revenue Summary 8Objectives, Programs, and Success Indicators 8Year-End Summary of Meetings 11Pending TIE Items 14Budget and Spending Status 15EY 2017 Work Program 21Appendix: Financials 22

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Mission Statement

The mission of the Deep Ellum Tax Increment Financing District is to provide a source offunding for public infrastructure improvements anticipated to enhance the real estatemarket for the Deep Ellum TIF District area. The Deep Ellum Tax Increment Financing(TIF) District represents the outgrowth of the City of.Dallas’ effort to provide a model forredeveloping districts to take full advantage of the expanding DART light rail system,promote transit oriented development, improve the historic core area of Deep Ellum,implement appropriate urban design standards to differentiate and brand the area, andimprove the quality of development east of Downtown.

The Deep Ellum TIF District (the “District”) was established in June 2005 to assist in thetransformation of the Deep Ellum area into a more diversified, pedestrian friendly, mixed-use neighborhood in the area and improve the urban fabric and connections betweenCentral Expressway and Fair Park. Strengths of the District include a mix of unique andhistoric buildings that create an identifiable district, adjacency to three DART light railstations and proximity to Downtown Dallas, the Arts District, Dallas Farmers Market,Baylor Medical Center, and Fair Park.

The Dallas City Council established the Deep Ellum TIF District by Ordinance Number26043 on June 22, 2005. The Deep Ellum TIF District took effect on January 1, 2006 andis scheduled to terminate on December 31, 2027 (including collection of the 2027increment on calendar year 2028 and any related matters to be concluded in 2028) orwhen the budget of $30 million (2006 dollars) has been collected. The TIF boundary andfinal plan were amended in 2008, 2011, and the final plan was also amended in 2014.The City of Dallas and Dallas County are the two participating jurisdictions; the City’sparticipation rate is 85% of incremental property taxes collected, and the County’sparticipation rate is 55%.

Deep Ellum TIF District Accomplishments

To date, in property value increased by $125.9 million within the district, an increase of66.6% from the base value. This increase of $125.9 million is due to over $82.1 million(65.2%) in new development projects and approximately $43.8 million (34.8%) in propertyvalue appreciation.

During the FY 2011, DART completed construction of the new SE-i Corridor light rail line,which included the Deep Ellum, Baylor, and Fair Park stations within the Deep Ellum TIFDistrict.

Completion of the Ambrose set the stage for future residential development in the area.In FY 2014-1 5, construction was completed on the City Lights Phase I project located atthe northeast corner of Live Oak Street and Good - Latimer Expressway. Other apartmentdevelopers continue to look at the Deep Ellum area as well. The CASE Building at MainStreet and Trunk Avenue, is currently under construction with completion expected in2017. Phase II of the City Lights project on Live Oak Street has been announced. As

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part of the project a 50,000 square feet Tom Thumb grocery store will be located on thefirst floor with parking located underground.

Redevelopment of consolidated property in the commercial core of Deep Ellum andplanned reinvestment in these properties, includes the under construction projects DeepEllum Crossroads and Westdale 2800 DE projects, both TIF funded in the Deep EllumTIF District, continue to expand dining and retail choices in the area.

The Old Dallas High School, added to the Deep Ellum TIF District in 2014, was approvedfor TIF funding in 2016. The project, which will include office and retail space, is underconstruction with completion planned for 2017.

Baylor Light Rail Station Deep El/urn Light Rail Station

The Ambrose on Indiana Street Elan City Lights

Commerce Street Lofts Eastside Lofts

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“The Olympia Arts” Building Pecan Lodge

ReeIFX CASE Building

City Lights Phase II Site Proposed EPIC Project Site

:Latino Cultural Center Westdale 2800 DE

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Current Development Status in the District

Deep Ellum TIF District Projects

CalendarYear

Complete

Ii

Project

?otent

Location

tts Wit...

Status

I TIF1Jistri

Units! SFApprox.Value3

TIF Investment

4000 East 25,116 SFSide Ave I

Olympia Arts3995 Benson

2010 Completed office, 4,040 $1,123,870 $595,000SF commercial

St

67,166 SF

Reel FX4301 N Office,

$7,000,000 $652,0002014 Completed StreetscapeCrowdusImprovements

59058 SFMain and

Deep Etum Commerce 2017Under Retail, 4,800

$14,000,000 $3,500,000Crossroads Construction SF Open

Streets Space30595 SF

Westdale 2800 Main and Elm 2016Under Retail, 13,740

$7,000,000 $1,600,000DE Streets Construction SF Open

Space26,000 SF

Retail Space,Old Dallas Live Oak and 2017

Under 13000 SF$50,409,542 $6,240,934

High School Pacific Construction Open Space,and 66,000 SFOffice_Space

0 res. units; 0SF retail,

Total 25,116 SF $79,533,412 $12,587,934office, 4,040

SF Commercial

Projects Within TIF District Not Utilizing TIF Funding1

City Lights 2627 Live Oak2015 Completed 424 res. units $46,642,630 $0

Phase I St

325 res. units;2901 Indiana

The Ambrose 2008 Completed 15,000 SF $49,989,970 $0St. Retail

3701, 3703,3705,3507, 8 live/ work

Commerce 3509, 3711, 2007 Completed units (approx. $2,135,000 $0Street Lofts 3713, & 3715 18,000 SF)

Commerce St.

4 residential500, 502, 504,

Eastside Lofts 2006 Completed units (approx. $1,452,560 $0506 1 St. 9,300 SF)

$7,362,368($1,750,000

ReelFXlCrowdus &

Streetscape ED Grant301 N and 2006 Prop 8

Indiana 2014 Completed infrastructure Bond Funds$0

CrowdusStreetscape

Improvements4improvements $428,980

Water Utilities$22,820)

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170367Deep Ellum TIF District Exhibit A- FY 2016 Annual Report

Main and Hall Under 337 res. Units,The CASE

Streets2018

Constwction 10,738 Retail$77,000,000 $0

. Live Oak and 368 res.Cy Lights

Cantegral 2018 Planned UnitsI56,625 $100,000,000 $0Streets SF Grocery

761 res. units;

Total reta 67,166$284,582,528 $0

SF Office

Total Projects Within TIF District Utilizing and Not Utitizing TIF FurilingTotal (TIF and Non-TIE) $364,115,940 $12,587,934

761 res. Units, 15,000 SF Retail Space, and 67,166SF Office Space Completed $108,344,030 $3,448,800

368 res. Units and 86,625 SF Retail Space Planned $100,000,000 $0

18,540SF Open Space, 4,040SF Commerical, 101,854SF Office Space, 115,854SFRetail Space, and 337 resid. Units Under Construction $148,409,542 $11,340,934

Streetscape and infrastructure improvements $7,362,368 $0Ill in formation updated as of September 30, 2016

2A11 TIF funded projects.upon estimated market value at completion or of comparable projects for anticipated projects, or DCAD market value for

completed projects (unless project has not yet been assessed). Values may not be fully captured by the TIF district forredevelopment projects once pre-existing value and/or the demolition of structures is netted out.

4Reel FX was funded as part of a Streetscape project on Elm Street from Crowdus Street to Indiana Street. Deep Ellum TIFFunds assisted with the costs, along with a Chapter 380 Economic Development Grant, Water Utilities Captial ImprovementFunds, and 2006 Prop 8 Bonds.

The City and community partners have initiatives in and adjacent to the district that beganin FY 2014 or have been ongoing. Together, over $13,041,609 in bond funding, grantfunding, federal funds, and private funds will be spent for these projects. They will helpto support transit oriented development, implement appropriate urban design standards,improve pedestrian connections between downtown, Fair Park, the Farmers Market, andthe Baylor University Medical Center, and improve the quality of development east ofdowntown.

The Reel FX infrastructure project includes as part of the incentive package for Reel FX,streetscape improvements including the reconstruction of street paving, landscaping,drainage and wastewater main improvements on Indiana Street, west from Malcolm XBoulevard, and on Crowdus Street north of Elm Street. On June 25, 2012, the DeepEllum TIF board approved the use of TIF funds as part of an incentive package for ReelFX, to be used for streetscape improvements on Indiana and Crowdus Streets adjacentto the Reel FX building. The incentive package for Reel FX, including streetscapeimprovements, was previously authorized by City Council on June 27, 2012. Dallas WaterUtilities (DWU) has agreed to pay for the water/wastewater improvements that are locatedunder the streets while TIF funds will be utilized for its design and construction. Sinceapproval of the overall project, the costs of the streetscape and infrastructureimprovements along Indiana and Crowdus Streets have increased and an additional$100,000 of funding was allocated from the Deep Ellum TIF District Funds to finance thecompletion of the project with the remainder funded by 2006 Prop 8 Bond funds. Totalfinancial incentives for the Reel FX project are $1,180,980: $552,000 Deep Ellum TIFDistrict Funds; $451 800 other sources.

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On August 27, 2008, City Council authorized a professional services contract withTranSystems Corporation for the engineering design of streetscape improvements onCommerce Street, Main Street and Elm Street from Good Latimer Expressway to HallStreet and on Good Latimer Expressway from Canton Street to Elm Street. This actionwill authorize a construction contract for the reconstruction of street paving, stormdrainage, water and wastewater mains and streetscape improvements for Elm Street fromGood Latimer Expressway to Exposition Avenue. During the early design phase and aftera series of meetings with project stakeholders and City staff, the decision was made toexpand the scope of design on Commerce Street and Elm Street. The limits of the projecton Commerce Street and Elm Street were proposed to be expanded from Hall Street toExposition Avenue in order to obtain a continuous look and feel through all of Deep Ellumand to design the optimal connection of both Elm Street and Commerce Street to thefuture Fair Park Link Extension. The scope of the design project was also proposed tobe broadened to include “complete street concepts” to accommodate the needs ofpedestrians, cyclists, vehicles and businesses. The redesign included wider sidewalks,new roadway, recessed parallel parking spaces and streetscape improvements. Theredesign allowed continued one-way traffic flow or conversion to two-way traffic flow onboth Elm Street and Commerce Street. Prior actions authorized the reprogramming ofthe available bond funds from the Commerce Street, Main Street and Good Latimerprojects to fund the full design of the expanded scope for Elm Street and CommerceStreet and construction of the proposed improvements for Elm Street only. The proposedimprovements for the expanded limits of Commerce Street will be proposed for inclusionin a future bond program.

The CBD Fair Park Link project is a principle arterial thoroughfare project to connectDowntown (CBD) to Fair Park by extending the Fair Park Link from Hall Street to IH-30. Itis a 4-lane undivided roadway from Hall Street to Race Street and divided roadway fromRace St to Main Street with an additional conceptual thoroughfare from Main St. to IH30. The design from Hall Street to the intersection with Elm Street/Exposition Avenue willinclude a 14-foot-wide bike trail on the DART side of the alignment. This is new roadwayconstruction with no existing right-of-way that will require necessary property acquisitionto complete. Funds from the 2006 Bond Program will finance the project’s design andright-of-way acquisition. The Thoroughfare when completed will be a 5-lane undividedRoadway transitioning from Hall St. to Elm into a 4-lane divided roadway withsidewalks. The project also includes Bike lanes from Hall Street connecting to the EastDallas Veloway Bike Trail near Elm Street. The 2006 Bond Program funded along withthe conceptual design and right-of-way acquisition from Hall Street to IH-30 also fundedthe full design and construction funding for the segment from Hall Street to MainStreet. This new roadway which will serve as an arterial connector from the CentralBusiness District area to Fair Park as well as a connector from lH-30 to Baylor MedicalCampus, Deep Ellum and the Central Business District. The alignment for thisthoroughfare was approved by City Council on December 9, 2009. Additional designincludes a bike trail and landscape improvements that aren’t included in the scope. Theproposed alignment of CBD-Fair Park link from Hall Street to Hickory Street in conjunctionwith TXDOT’s improvements to IH-30 will provide a direct arterial link connecting IH-30

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to the Baylor University Medical Campus, Deep Ellum, and Wilson Historic District.Currently the project is supported by 2006 Bond funds ($4,125,929).

On May 28, 2014, City Council approved a zoning amendment that impacted to district(Planned Development District-269), amending certain use regulations and developmentstandards. These amendments would amend certain use regulations and developmentstandards. The amendment were brought forward by the Deep Ellum AssociationFoundation and other stakeholders and resulted from numerous meetings between 2011to present. The recommended amendments incorporate new uses, modify parkingreductions for uses in original buildings, simplify the ability to enter into shared parkingagreements, and encourage the development of outside seating and provision ofamenities in and adjacent to street right-of-way. The reduced parking requirements formultifamily, office, retail and restaurant uses in original buildings and additions to originalbuildings, is intended to encourage the preservation of original buildings and encouragean appropriate mix of uses. The proposed parking reductions are possible because of thelocation of the two DART stations in the district and a substantial number of parking lotsand metered spaces in the area. In addition, the Santa Fe Trail ends just to the east ofthe district boundaries. The proposed amendments are focused on the type ofdevelopment envisioned for this area as it provides for additional housing and recreationalactivities in the urban core of downtown area and is in compliance with the vision of theDowntown 360 Plan.

District InitiativesActivity Scope Status Investment/source Comment

Construction wasStreetscape and substantially completed in

July 2015, with the Elm St.Reel infrastructureComplete $7,362,368.09

construction project. 2-yearFX Infrastructure improvements alongIndiana and Crowdus landscape maintenance is

______________________

currently on-going.

The project is currently onhold. The limit extension andComplete Street (Main

$734,700 2012 - Bond scope change is a candidateMain Street from Good Latimer to In Design

Funds project for fundingExposition)consideration in the 2017

. Bond Program.

Phase 1A (from Hall St. toConstruct a new five Main St.) is in the final designundivided roadway on phase, and estimated tonew right-of-way from advertise for construction inCBD/Fair Park Hall St. to Main St. $4,125,929 2003- Bond Spring of 2017. Phase lBLink - Hall St. toSecure right of way only

In DesignFunds (from Main St. to Canton St.)30 to accommodate a six currently is not funded and is

lane divided roadway a candidate project for fundingfrom Main St. to Canton. consideration in the 2017

Bond Program.

$7,000,000 2006 -

Construction wasBond Programsubstantially completed inStreetscape — Elm from

Complete July 2015. 2-year landscapeElm StreetscapeGood Latimerto Hall

maintenance is currently on-$1,300,000 DWUgoing.

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The Commerce Streetproject’s scope/cross sections

Streetscape- are being studied and is up for

Commerce $1,743,681 2006 - Bond funding consideration in theCommerce from Good- In Design

Streetscape Latimer to HallFunds 2017 Bond Program. A design

partnering meeting istentatively planned forDecember 2016.

East DallasVeloway Ph II - Construct 12’ hike and Under Award for NA 2006-Park & Rec Project was completed inTrail from Elm Stto bike trail construction Dept. Bond Funds September 2016Parry Avenue

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170367Deep Ellum TIE District Exhibit A- EY 2016 Annual Report

Value and Increment Revenue Summary

The Deep Ellum TIE District’s assessed 2016 taxable value was $372,843,197.Compared to previous years, the value increased as a result of the addition of the ElanCity Lights apartment development and improved existing developments on Main Streetowned by 42 Deep Ellum, LP and Westdale Associates. This represents an increase of$58,003,710 (18.4%) from the 2015 value and an increase of $183,680,584 (97.1%) fromthe base year value. This resulted in total increment revenue collected in 2016 ofapproximately $1,468,625.

Objectives, Programs, and Success Indicators

The final Deep Ellum Project Plan and Reinvestment Zone Financing Plan as amendedwas adopted on April 12, 2006 and amended in September 2014. Among the goals ofthe Plan are:

• To create additional taxable value attributed to new private investment in projectsin the Deep Ellum TIE District totaling approximately $795 million.

Completed projects within the district contributed approximately $106.3million in additional taxable value (13.4% of goal).

• To attract new private development in the Deep Ellum TIE District totalingapproximately 650,000 square feet of retail space, 850,000 square feet of officespace, 500 hotel rooms, and at least 3,500 new residential units including lofts,town homes and apartments.

Completed projects and projects underway within the district contributedapproximately 130,854 square feet of retail (20.1% of goal), 173,060 squarefeet of office/commercial (20.4% of goal), no hotel rooms, and 1,098additional residential units (31.4% of goal), and planned projects willcontribute approximately 86,625 square feet of retail (13.3% of goal) and368 additional residential units (10.5% of goal), totaling 217,479 square feetof retail (33.5% of goal), 173,060 square feet of office/commercial (20.4%of goal), no hotel rooms, and 1,466 residential units (41.9% of goal).

In 2011 City Council authorized the sale approximately 83,478 square feetof unneeded and unwanted City-owned land located near the intersectionof Live Oak and Cantegral Streets to the developer of the proposed CityLights project. City Lights Phase I, Elan City Lights was completed in 2015.Phase II, featuring a Tom Thumb grocery store and additional 368residential units, was proposed for construction in 2017 and completion in2018.

In 2012 City Council authorized $1,180,980 public-private partnershipinvestment in Reel FX to retain 250 employees and add 125 employees

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over two years to the Reel FX headquarters at 301 North Crowdus Street.A portion of the funds are for remodeling and construction on the propertyand for the 67,166 square foot building. The TIF Board moved to partiallyreimburse the costs of streetscape improvements to enhance thepedestrian environment and visual connectivity of that area of the T1FDistrict ($552,000 in TIF Funds including 2014 adjustments). The projectwas completed in 2015.

To reach ridership at future DART light rail stations in the district averaging over3,000 riders per weekday by 2025.

The SE Corridor (Green Line) DART light rail line opened in December2010complementing the Deep Ellum, Baylor, and Fair Park light rail stationswhich opened in 2009. In 2016, average ridership per weekday is 348 atthe Deep Ellum Station, 918 at the Baylor Station, and 989 at the Fair ParkStation for a total average weekday ridership of 2,256. This is an increaseover 2015 totals by 134 (6.3% increase). Ridership has increased from thebase year by 63 (2.9% increase).

To improve access and connections to the DART light rail system within the district.

Staff and the Board will continue to foster working relationships with DARTand potential developers to encourage access and connections to thesestations.

In 2012 design work began for streetscape improvements on Indiana Streeteast of Malcolm X Boulevard (near the Deep Ellum DART Station) and onCrowdus Street between Indiana Street and Elm Street. Improvementsinclude enhanced pedestrian crosswalks and a plaza at the Reel FXheadquarters serving as a terminating vista on Crowdus Street throughDeep Ellum. Construction was completed in Spring 2015.

• To support the conversion of the Deep Ellum area to a mixed-use, transit-orientedneighborhood that complements Baylor Medical Center, Downtown Dallas, LatinoCultural Center and Fair Park.

Streetscape improvements and the changing from a one-way to a two-waystreet were included in the 2006 Bond program for Elm Street betweenExposition Avenue and Good-Latimer Expressway. Planned improvementsinclude wide sidewalks street trees, benches and bike racks; parallelparking; marked pedestrian crossings; and bikes sharing the two lanes oftraffic. Work was completed in spring of 2015. Additional funds will beneeded to complete Commerce Street. Math Street from Good La timer toExposition under the Complete Street program is currently under designwith construction expected to be completed by Fall 2017. Improvementsinclude sidewalk repair, utility improvements and upgrades existing lighting

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fixtures. Final scope of work is still being developed with the Deep EllumFoundation, who are looking to contribute funds for furtherer improvements.At such time Elm and Commerce Streets will be converted to two-wayoperations.

Staff and the Board will continue to foster a working relationship with BaylorUniversity Medical Center, DART, and potential developers to encouragetransit oriented development that complements the district. When possible,staff and the Board will also take special studies into account. Though notphysically in the TIF District, Baylor continues to be a powerful demandgenerator for Deep Ellum. Baylor University Medical Center at Dallas is a1025-bed not-for-profit teaching hospital, providing patient care andresearch to residents of Dallas and the southwest United States. Thisnationally acclaimed medical center seives as flagship hospital for BaylorHealth Care System and in 2009 was recertified as a Magnet Hospital for“Excellence in Nursing Services” from the American Nurses CredentialingCenter -- the organization’s highest level of recognition which merely twopercent of hospitals nationwide have received. Also, Baylor UniversityMedical was recognized in U.S. News & World Report’s 2012 “America’sBest Hospitals,” a recognition that it has received for the past twentyconsecutive years.

To address the immediate health needs of the community, in 2009 BaylorDallas announced the creation of it Diabetes Health and Fitness Center.The program opened June 2010 at the Juanita J. Craft Recreation Center,providing treatment and prevention services to the area’s medicallyunderserved population. The Institute has a health clinic staffed by doctorsand other medical specialists, affordable medications, plus diabeteseducation ranging from nutrition and cooking classes to exercise programs.The Craft Recreation Center continues to offer its regular services inaddition to the institute’s expansion. Baylor has invested $15million into the center which is open to all regardless of residency, insuranceor income.

Growth and development on the hospital’s campus was celebrated inseveral ways during 2009. In April, Baylor University Medical Centerannounced that it was the first hospital in the country to collaborate with GEHealthcare and BrainLAB to open technically advanced neurosurgeryoperating suites. The technology allows neurosurgeons on the medical staffto use real-time, intra-operative images of the brain during surgery. The$16.5 million operating suites and four operating rooms opened along withimplementation of a high-definition magnetic resonance scanner andBrainSUITE iMRI navigation system. The technology was implemented tohelp physicians more accurately view a tumor’s location and removediseased tissue with minimal impact. The $350 million expansion of theBaylor Charles A. Sammons Cancer Center at Dallas opened in 2011.

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• To increase recreational opportunities, public open space and improveconnections to the City of Dallas trails and open space system in the District.

Extension of the Santa Fe Trail (East Dallas Veloway II Project) into DeepEllum was completed from Woodrow Wilson High School to Hill Avenue in2010. The Trail was extended from Deep Ellum to White Rock Lake withthe completion of the bridge over Winstead Drive in December, 2010.

Funding was approved in 2013 to construct the hike and bike trail andassociated storm drainage, water and wastewater appurtenanceadjustments for the East Dallas Veloway, Phase II Extension from ElmStreet to Parry Avenue. Construction has begun with completion expectedby spring 2016.

Installation of the Core Connector Bicycle lanes and shared lane markingsin 2012 now connect the Santa Fe Trail to the Katy Trail through Deep Ellumand downtown. Funding was granted to the Deep Ellum Foundation whichinstalled Bicycle Fix-It Stations in Deep Ellum.

As part of the currently under construction Deep Ellum Crossroads andWestdale 2800 DE projects, 18,540 square feet of open space is beingcreated with uses include plazas, public seating, and pedestrian walkingareas to enhance walkability in the district. Westdale 2800 DE will becompleted winter 2017.

The Staff and the Board will continue to encourage developers to createlinkages to the trail system as well as additional bicycle facilities.

• To generate approximately $30.0 million (net present value) in increment over 20years of collections.

The assessed property value from the base year to 2016 increased byapproximately 97.1% including an increase of 25.4% since 2015. This is anincrease of approximately $183.7 million. Based upon current estimatesand established 2015 values, the district will generate $30,691,427 (in 2006dollars) by FY 2027 before the TIF expires in 2028.

• To diversify retail and commercial uses in the district.

In 2011 the staff and the Board saw the Phases I, II, & Ill of the OlympiaArts completed, which along with the Ambrose development, added over44,000 square feet of retail, service, and commercial space. The staff andthe Board will continue to work to expand retail and commercial uses tomeet the existing and growing needs of the residential population and the

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170367Deep ElIum TIF District Exhibit A - FY 2016 Annual Report

increased traffic as a result of the expansion of the DART Light Rail systeminto the area.

In 2014, City Council approved the redevelopment of multiple buildings andparking lots along Main and Commerce Streets for the Deep EllumCrossroads project which will add 50,058 square feet of retail and restaurantspace along with the creation of 4,800 square feet of open space.

In 2015, City Council approved the redevelopment of multiple buildings andparking lots along Main and Elm for the Westdale 2800 DE project whichwill add 30,595 square feet of retail and restaurant space along with thecreation of 13,740 square feet of open space.

In 2016, City Council approved the redevelopment of the Old Dallas HighSchool site, which was added to the Deep Ellum TIF Boundaries in 2014.The project will add 26,000 square feet in Retail Space, 13,000 square feetin Open Space, and 66,000 square feet of Office Space.

Encourage the redevelopment of the property located on Live Oak Street north ofthe Latino Cultural Center including the sale of some City-owned property in thearea and some street abandonment to create a more usable site.

In 2008, the boundaries of the Deep Ellum TIF District were amended toinclude the City of Dallas Latino Cultural Center and the site of the CityLights Project. These two sites comprise 10.2 acres. This boundaryamendment was initiated to promote new development and increasedurban density near the Latino Cultural Center and nearby the Deep EllumDART Light Rail station.

Year-End Summary of Meetings

The Deep Ellum TIF District Board met three times during the fiscal year from October 1,2015 to September 30, 2016. For the Annual Report, the Board was unable to approvedue to lack of quorum.

The Board approved and forwarded two (2) items to City Council for approval. Anadditional item related to properties in the TIF District was also considered by Councilduring the year. The most significant of these actions related to approval of the Old DallasHigh School redevelopment project.

The Board can consist of up to ten members, including five City of Dallas appointees, oneDallas County appointee. Board members are (FY 2016 Board meetings attended):Chuck Hixson — City Representative (0 of 3 meetings; Resigned prior to first meeting),Charles Shelburne — City Representative (3 of 3 meetings), Joseph O’Brien (CityRepresentative (1 of 2 meetings — Resigned prior to third meeting), Chase Evans, Chair— City Representative (3 of 3 meetings), Gene Dennis — City Representative (3 of 3

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meetings), Cash Harbaugh (1 of I meetings — Appointed prior to third meeting), and RickLoessberg — Dallas County Representative (1 of 3 meetings). There are two (2) vacantpositions on the Board as of September 30, 2016.

During the fiscal year the City Council approved seven (7) items associated with the DeepEllum TIF District. In an ongoing effort for Deep Ellum to improve the area for moresuitable and compatible commercial uses, bars, lounges, taverns and similarestablishments are required to obtain a Specific Use Permit (SUP) from the City of Dallasto comply with new zoning regulations.

• On October 14, 2015, City Council by Resolution No. 15-1883, authorized (1) aLocal Project Advance Funding Agreement with the Texas Department ofTransportation for a U.S. Department of Transportation - Federal HighwayAdministration 2013 Highway Safety Improvement Program grant to design,upgrade and construct seven traffic signals and associated on and off systemintersection improvements at Loop 12 (Buckner Boulevard) and John West Road,Abrams Road and Forest Lane, Bruton Road and St. Augustine Drive, Dilido Roadand John West Road, Bruton Road and Prairie Creek Road, Bruton Road andMasters Drive, and Commerce Street and Good Latimer Expressway; (2) arequired local match in the amount of $184,842; and (3) an amendment toResolution No. 15-1172, previously approved on June 17, 2015, to identify arequired local match for design of the signals in the amount — Financing: of$97,886 - Total not to exceed $2,171,698 - Financing: Texas Department ofTransportation Grant Funds ($1,888,970) and Street Assessment Funds($184,842)

• On October 28, 2015, City Council by Resolution No. 15-2003, authorized a publichearing to receive comments to amend the City of Dallas Central Business DistrictStreets and Vehicular Circulation Plan to delete Hawkins Street from Canton Streetto Commerce Street; and at the close of the hearing, authorize an ordinanceimplementing the change - Financing: No cost consideration to the City

• On February 10, 2016, City Council authorized Addendum #5 to Resolution No.16-0306, an ordinance abandoning a portion of an alley to Deep Ellum BrewingCompany, LLC, the abutting owner, containing approximately 3,450 square feet ofland, located near the intersection of St. Louis Street and Malcolm X Boulevard,and authorizing the quitclaim - Revenue: $83,000, plus the $20 ordinancepublication fee

• On February 24, 2016, City Council by Resolution 16-0340, accepted the FY 2015Annual Report on the status of Tax Increment Financing Reinvestment ZoneNumber Twelve, (Deep Ellum TIF District), and authorizing the City Manager tosubmit the annual report to the Chief Executive Officer of each taxing jurisdictionthat levies taxes on real property in the District, and to the State Comptroller, asrequired by state law - Financing: No cost consideration to the City

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On April 13, 2016 City Council by Resolution 16-0574, authorized (1) anamendment to the development agreement with 42 Deep Ellum, LP, for the DeepEllum Crossroads redevelopment project previously approved on September 10,2014 by Resolution No. 14-1 631 in Tax Increment Financing District ReinvestmentZone Number Twelve (Deep Ellum TIE District) to (a) split project into phases andallow TIE reimbursement for each phase upon completion and satisfaction of TIEcontingencies for that phase; (b) define Project phases as follows: Phase A$1,379,700 in private investment and $500,000 in TIE reimbursement to renovateand lease 2702 Main; Phase B at $5,500,000 in private investment and $1,125,000in TIE reimbursement to renovate and lease 2625, 2626, 2646, 2650, and 2701Main; Phase C $12,047,680 in private investment and $1,875,000 in TIEreimbursement to renovate and lease at 2635, 2642, 2639, 2647, 2649, 2653,2656, 2708 Main, 2646 Elm, and 2653 Commerce, and Parking lots at 2607, 2619,2621, 2623, 2626, and 2642 Main, 2703, 2705, and 2711 Commerce; (c) increasemaximum Economic Development TIE grant funding by $25,000 from $775,000 to$800,000 and decrease public improvements TIE funding by $25,000 from$2,725,000 to $2,700,000; (d) clarify that project is only eligible for 10% allocationfrom general increment upon completion of all phases and satisfaction of all TIEcontingencies; (e) assign ownership from 42 Deep Ellum, LP (“Assignor”), a limitedpartnership which intends to assign all right, title, and interest in and to the propertyowner to 42 GP Deep Ellum, LLC, a limited liability company and general partnerof 42 Deep Ellum, LP, a limited partnership (“Assignee”), through Assignment andAssumption of TIE Agreements, executed by the final executed DevelopmentAgreement for Deep Ellum Crossroads; and (2) a resolution declaring the intent ofTax Increment Einancing District Reinvestment Zone Number Twelve (Deep EllumTIE District) to reimburse 42 GP Deep Ellum, LLC, up to $3,500,000, for TIE eligibleproject costs pursuant to the development agreement with 42 GP Deep Ellum, LLC- Einancing: No cost consideration to the City

• On April 27, 2016 City Council by Resolution 16-0668, authorized (1) aDevelopment Agreement with MSW Crozier Tech, LP and Matthews HoldingsSouthwest, Inc., to dedicate future TIE revenues for reimbursement of eligibleproject costs related to paving, streetscape and lighting, façade restoration,environmental remediation, and interior/exterior demolition for redevelopment of2218 Bryan Street, for the Old Dallas High School redevelopment project, locatedin Tax Increment Einancing Reinvestment Zone Twelve (Deep Ellum TIE District);and (2) the Deep Ellum TIE District Board of Directors to dedicate an amount notto exceed $6,040,036 plus an Economic Development TIE Grant in an amount notto exceed $200,898 for a total amount not to exceed $6,240,934 from future DeepEllum TIE District revenues, in accordance with the development agreement - Notto exceed $6,240,934 - Financing: Deep Ellum TIE District Funds (subject toappropriations)

• On September 14, 2016 City Council by Resolution 16-1464, authorized anordinance abandoning portions of Elm and Main Streets to Westdale PropertiesAmerica I, LTD, the abutting owner, containing a total of approximately 480 square

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feet of land, located near the intersection of Elm Street and Malcolm X Boulevard,and authorizing the quitclaim - Revenue: $8,950, plus the $20 ordinancepublication fee

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170367Deep ENum TIF District Exhibit A - FY 2016 Annual Report

Pending TIF Items

The pending items for the Deep Ellum TIF District include:

City Council consideration of the FY 2016 Annual Report regarding thedevelopment and financial status of the District.

Budget and Spending Status

Each TIF district establishes a budget for the public improvement expenditures necessaryto support private investment in the district in the Project Plan and Reinvestment ZoneFinancing Plan. The Deep Ellum TIF District was established in June 2005 and did notcollect or allocate any revenue in FYs 2006, 2007 & 2008; however, the Project Plan andBudget were amended in FY 2008 and 2014 and project allocations were made for theOlympia Arts project and streetscape improvements to Crowd us/Indiana (part of Reel FXdevelopment project). Preliminary estimates for TIF public improvements total$71,673,978 million, $36,669,042 in 2006 dollars). The amended budget for the TIEdistrict is below.

Water, Wastewater, Storm & Off-site Utility$2,981,738 $138,183 $2,843,555

ReplacementPaving Streetscape & Lighting $34,669,646 $2,554,134 $32,115,512Open Space & Trails $3,370,660 $1,197,998 $2,172,662Façade Restoration $13,207,158 $8,447,324 $4,759,834/Environmental/Remediation/Demolition***

Latino Cultural Center Area Improvements $11,948,477 $0 $11,948,477Administration & implementation2 $5,496,299 $300,058 $5,196,241

Total Project Costs (excluding interest) $71,673,978 $12,637,697 $59,036,281

Deep Ellum TIF District Project Plan BudgetProjected IncrmentRcpuestoRetire TIF Fund Obgabors

Category TIF Budget1 Allocated** Balance

‘Budget shown above in current dollar; TIF Project Plan shows the budget in net present value.**project and Administrative costs are allocated as increment collection began in FY 2008***lncludes $775, 000 Grant under Façade Restoration/Environmental/Remediation/Demolition2 TIF administration fee include funds expended of committed through FY 2016. FY 2016 Costs havenot been included.

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--°

-

Category TIF Budget*

Water, Wastewater, Storm & 0ff-site Utility Replacement $1,525,483

Paving Streetscape & Lighting $17,737,298

Open Space & Trails $1,724,460

Façade Restoration/Environmental Remediation & Demolition $6,756,899

Latino Cultural Center Area Improvements $6,112,947

Administration and lmplementation** $2,811 955

Total Project Costs (excluding interest) $36,669,042* As approved in the Project Plan and Reinvestment Zone Financing Plan as amended September 10, 2014Note. TIF Board may amend Project Plan budget with City Council approval.

FY 2017 Work Program

The FY 2017 work program for the Deep Ellum TIE District includes:

Improve the pedestrian environment through sidewalk improvements,landscaping, lighting and design standards.

• Provide funding for environmental remediation and interior/exterior demolitionassistance to encourage redevelopment of land within the Deep Ellum TIE District.

• Upgrade basic infrastructure including storm drainage, water/wastewater lines,and burial of overhead utilities to support redevelopment in the District.

• Coordinate linkages with the three DART light rail stations located in the District byextending streetscape improvements between stations to create an extendedpedestrian area to destinations such as the Latino Cultural Center, the BaylorHospital Campus, the Old Dallas High School site, and Fair Park.

• Direct overall development of the Deep Ellum TIF District through the applicationof design guidelines for public improvements and private development.

• Encourage development of new residential and retail uses to complement theDistrict.

• Encourage redevelopment of the commercial core area of Deep Ellum tocomplement the existing building stock, diversify the retail mix and encourage infilldevelopment and structured parking.

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170367Deep Ellum TIE District Exhibit A - FY 2016 Annual Report

Appendix: Financials

City of Dallas, TexasDeep Ellum Tax Increment Financing District

Notes to Financial Statements for the Year Ended September 30, 2016

1. The measurement focus used for the TIE Zone fund is a flow of financial resources. Thefinancial statements are prepared using the modified accrual basis of accounting. Under themodified accrual basis of accounting, tax increment revenues and interest are recognized asrevenue when they become both ‘measurable” and ‘available” to finance expenditures of thecurrent period. Expenditures are recognized when the liability is incurred.

2. State statute requires that each taxing jurisdiction remit its ad valorem taxes to the Zone byMay 1 of each year (remittance to occur no more than 90 days after taxes for the jurisdictionbecome delinquent).

3. The Zone’s cash balances are invested in the City’s 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.

4. The Zone’s Financial Plan permits expenditures not to exceed $2,300,000 over the life of theTIE to reimburse the City for administrative costs. The Zone began reimbursing the GeneralFund in fiscal year 2009-10. Any future remittance for administrative expenses would comefrom excess cash as tax increment revenue increases as a result of increased assessedvalues.

5. All project costs resulting in capital improvements that are owned by the City are capitalized bythe City.

6. ‘Due to general fund” amount of $6,963 at September 30, 2016 represents the TIEadministration costs that have been earned but will be reimbursed to the General Fund in futureyears based on the availability of TIF funds.

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170367Deep Ellum TIF District Exhibit A - FY 2016_Annual Report

City of Dallas, TexasDeep Ellum Tax Increment Financing District Fund

Balance Sheet as of September 30, 2016 (Unauditecl)With comparative Totals for September 30, 2015, 2014, 2013, and 2012 (Audited)

Pooled cash and cash equialentsInterest receivable

Total assets

Liabilities and Fund Balance (Deficit):Liabilities:

Accounts and contracts payableAdances from deselopersAccrued interestAccrued liabilityDue to general fund

Total liabilities

Fund Balance (Deficit):Fund Balance (Deficit)

Total Liabilities and Fund Equity

$2;296,670 $1,267,424 $1,226,235 $785,790 $508,807

$3088 $1971 $1303 $862 $380

$2,299,758 $1,269,395 $1,227,538 $786,653 $509,187

$0 $159 $203,343 $28,465 $0$0 $0 $0 $0 $0$0 $0 $0 $0 $0

$4,448 $8,897 $0 $0 $0

$6,963 $6,963 $6,963 $6,963 $0

$11,412 $16,019 $210,306 $35,428 $0

$2,288,346 $1,253,376 $1,017,232 $751,224 S509, 187

$2,299,758 $1,269,395 $1,227,538 $786,653 $509,187

$0 $0 $0 $0 ($0)

Deep Ellum Tax Increment Financing District Fund

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

Forthe Period September 30, 2016 (Unaudited)With Comparative Totals for September 30, 2015, 2014, 2013, and 2012 (Audited)

Excess (Deficiency) of Resenues oer Expel $2288346 $1034970 $236143 $266008 $242037 $258242

Fund balance (Deficit) at beginning of year

as pre.ously reported $0 $1,253,376 $1,017,232 S751,224 $509,187 $250,945

Fund balance (Deficit) at beginning of year,

as restated

Fund balance (deficit) at end of year

$0 $1,253,376 $1,017,232 $751,224 $509,187 $250,945

$2,288,346 $2,288,346 $1,253,376 $1,017,232 $751,224 $509,187

Note: Fiscal year 2015-16 unaudited financial statements are based on preliminary close numbers and are subjectto

review by the City Controller’s Office prior to approval by the City Council. In case of any material changes, TIF board

will be provided with the updated financial statements.

Assets:

2016 2015 2014 2013 2012

lTD 2016

$3,011,608$672,818

$39,025$53,491$3262

$847,394$173,843

$14,460$0

($148

2015

$421,447$95,143

$6,616$0

$3525

Reenues:Tax increment-Go.emmentalTax increment-lntergoemmentalInterest incomeDeseloper conthbutionNet increase (decrease) in fair value of inw

Total resenues

Expenditures:Administratke expensesNon-Capital OutlayCapital outlayInterest and fiscal charges

Total expenditures

2014

$377,203$84,572

$4,678$53,491

($754t

2013

$275,743$64,841$3,481

2012

$239,543$62,217$1,942

($87) ($47)

$3,780,204 $1,035,548 $526,731 $519,189 $343,978 $303,655

$300,499 $0 $48,941 $29,813 $13,030 $29,413

$43,424 $0 $0 $0 $7,386 $16,000

$1,147,935 $578 $241,647 $223,368 $81,525 $0

$0 $0 $0 $0 $0 $0

$1,491,858 $578 $290,588 $253,181 $101,941 $45,413

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City of Dallas, Texas

Deep EJlum Tax Increment Financing District Fund

Reinvestment Zone Number Twelve

As of September 30, 2016

Chapter 311 016 of V,C.T.A requires the following 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:

$14,311 Interest Income

$1,021,237 Ad Valorem Taxes (Collected in FY’2015-16 based on 2015 Final Tax Roll)

$0 Deseloper contribution

$1,035,548 Total Rewnue

2. Amount and purpose of expenditures from the fund:

$0 Administratiw Expense (FY 2016 Costs to be updated)

$0 Non-Capital Outlay *

$578 Capital outlay *

$0 Additional Subsidy in Form of Grant (in lieu of interest expense)

$578 Total Expenditures

(1) These expenditures were for the following projects:

Crowdus/Indiana Streetscape Design $578

Oher $0

Total $5781

3. TIF Administration Costs:

The Zone continued to reimburse the General Fund for administratiw costs incurred during the fiscal year.

4. a. Amount 0f Principal and Interest due.on outstanding bonded indebtedness:

Deep Ellum TW District has incurred no bonded indebtedness as of September 30. 2016.

b The Zone entered into a dewlopment agreement vath 42 Deep Ellum, LP for the dewlopment of Deep

Ellum Crossroads project in an amount not to exceed $3,500,000 vath anticipated completion in 2017 and

reimbursement to begin thereafter subject to availability of]1F funds

5. Tax increment base and current captured appraised value retained by the zone:

Taxable Ease Year 8sf. Captured

Taxing Jurisdiction Value 2016 * 2008 Value Value 2016**

City of Dallas $372,843,197 $189,162,613 $183,680,584

Dallas County $374,038,743 $18g,363,589 $184,675,154

2016 taxable value shown for participating taxing jurisdictions. County values are approximate and

will vary slightly from the City value due to different exemption lewis.

Based on Certified Taxable Values. Final values will be determined on February 01. 2017.

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

increment received, 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 Eshmated 2016

Taxing Jurisdiction Per S100* lncremenr***

City of Dallas 0.66513 $1,221,705

Dallas County 0.13371 $246920

Total for all Jurisdictions $079883 $1,468,625

***participation rates for City of Dallas and Dallas County are 85% and 55% respectiwly for tax years

2008-2021.****The District began collecting increment in fiscal year 2008-09.

B The total amount of estimated tax increment to be billed for the 2016 tax year is $1,468,625. For 2015

Tax year. increment in the amount of $1,021,237 was receivad

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