HomeMy WebLinkAboutMIN 07.16.2003 CC-RThe City Council of the City of Georgetown, Texas, met in Special Session on the above date with Mayor
Gary Nelon presiding.
!I Council Present: Council Absent: �
1( Patty Eason, Gabe Sansing, Doug Smith, Jack All Council present
Noble, John Kirby, Farley Snell, Ken Evans
Staff Present: --- — --- -_- - -
Paul Brandenburg, City Manager; Tom Yantis, Assistant City Manager; Jim Briggs, Assistant City
Manager for Utility Operations; Trish Carls, City Attorney; Sandra Lee, City Secretary; Micki Rundell,
Director of Finance and Administration; Amelia Sondgeroth, Director of Planning and Development
Services; Ed Polasek, Chief Long -Range Planner; Bobby Ray, Chief Current Planner
There was no Workshop held at this meeting.
Regular Session
Called to order at 6:00 p.m.
Mayor Nelon led the Pledge of Allegiance.
Mayor Nelon welcomed the Council and briefly explained the meeting procedures.
Councilmember Kirby read a statement regarding his reasons for recusing himself from consideration of
the posted items on this meeting agenda, and he left the dais.
A Consideration and possible action to approve the Wolf Ranch Development Agreement --Tom
Yantis, Assistant City Manager and Trish Carls, City Attorney
Yantis reviewed a list of decision points accomplished by the City Council regarding the Simon
Development, saying Simon chose to wait until the new Unified Development Code was effective
before submitting their first application with the City, on March 26, 2003. He reviewed a
chronology of events regarding the project. He said there have been at least eight public
meetings on the development.
Yantis reviewed highlights of the responsibilities of Simon under the agreement, saying that Simon
agrees to construct the project with the first stores opening no later than the end of 2005; they will
dedicate 17 acres of parkland to the City; they will provide office space to the City, free of charge,
for a police substation and tourism promotion efforts; Simon will secure electric utility service for
their Round Rock project from Georgetown Utility Systems; Simon will be a part of the
Neighborhood Empowerment Zone, but will waive their rights to receive any benefits from that
City Council Meeting Minutes/July 16, 2003
Page 1 of 7 Pages
zone; Simon will assist downtown Georgetown with marketing and promotion of downtown special
events as well as city-wide tourism promotion.
Yantis reviewed highlights of the responsibilities of the City, saying the City has agreed to fund up
to $10.5 million in off-site public road improvements, using 50% of the annual 1/2 cent GTEC
sales tax revenue generated by the Simon project to repay that obligation. He said the City has
also agreed to fund up to $3.5 million dollars in off-site public utility improvements, utilizing 25% of
the annual utility revenue generated by the Simon project. He said the City has agreed to
reimburse Simon over 20 years through a performance-based sales tax sharing agreement of up
to $15 million plus 10% interest of on-site public improvements, utilizing 53% of the annual
one -cent sales tax revenue generated by the project. He said that if, over the life of the 20 -year
term, 53% of the annual one -cent sales tax does not generate adequate revenue to reimburse
Simon within that time frame, the outstanding balance does not have to be paid by the City. He
said the City has the option in this agreement to refinance the $15 million on-site public
improvement costs in order to lower the financing costs, so after a period of time, depending on
the performance of the Center, the City could choose to refinance that obligation. He said a tax
increment reinvestment zone will be established on the property to allow the City to do the
refinancing, if the City chooses. He said a public improvement district will be established on the
property to allow the City to assess the property if annual revenues are not sufficient to cover any
outstanding City debt and in order to make City debt service payments.
He reviewed the changes to the development agreement from the draft that was presented to
Council on July 7, as provided in the "redline" version that was included in the Council Agenda
packet. He said he would not mention the minor wording changes but concentrate on the
substantive changes since the last draft. He called Council's attention to Section 2.9
Neighborhood Empowerment Zone, saying in response to questions from Council on July 7,
language has been added to say that any outlots sold by Simon to other tenants would also waive
their rights to any benefits of the Zone. Yantis called Council's attention to additional wordiing in
Section 2.12 Cooperative Marketing. He said language referring to the removal of the waterline
across the property as part of the public utility improvements has been added back in Section 3.2
Public Utility Improvements. He also noted the clarification in the paragraph regarding the cost
overruns, saying that Simon is responsible for any costs over $3.5 million. He said in Section
3.3.1 Public On -Site Improvements/General, it now states that there will be a 50-50 sharing of any
savings in the $15 million. He said a sentence was added at the bottom of that paragraph to state
that the annual percentage of the 1 % sales tax used to reimburse Simon for those costs could be
reduced by a like amount. Yantis was asked to explain the sharing arrangement and noted that it
is being used as an incentive to Simon to strive to lower the costs. Nelon noted that Simon had
originally requested to receive the first piece of savings, up to $650,000, but that has been
eliminated and is now set at 50-50. Yantis said in Section 3.4.2 Source of Funds for the
Peformance-Based Economic Development Incentive Grant Payments, language was added to
say that the source of the funds is subject to Chapter 380 of the Local Government Code. He said
wording was added that Simon would comply with the requirements of Exhibit F which outlines the
repayment process. Eason asked and Yantis noted that there is clarification in the document that
the reimbursement to Simon would be paid solely from the sales tax from the project. Yantis said
in Section 3.4.3 Interest, there is clarification of when the interest shall acrue on the $15 million.
He said Section 3.4.4 Principle Reduction has been added regarding how initial payments could
be applied to principle reduction. Yantis said in Section 3.4.8 City Accounting, a sentence was
added to describe how annual reports would be done on the on-site reimbursement. Nelon
confirmed that the City would therefore be lessening the 10% interest over the three-year
"prove -up" period. Yantis said, in Section 6.6 Assignability, language has been added giving
specific parameters under which Simon would have the ability to sign financing assignments with
notification to the City, but with no prior consent from the City being required. There were
questions from Council and discussion. Yantis noted that clarifying language could be added that
the obligation would remain with Simon.
Eason asked and Yantis noted she had spoken with him prior to the meeting to be prepared to
City Council Meeting Minutes/July 16, 2003
Page 2 of 7 Pages
show how the Wolf Ranch Project impacts the City budget. Yantis showed a slide of a spread
sheet of General Fund Sales Tax Revenues in 2001, 2002, 2003 and estimated in 2004/2005. He
said the net Simon sales tax revenue, after repayment of the 50% of the sales tax, would impact
the City in 2004/2005 and would be about $189,000 to the General Fund for the three months
from July through September. He said in 2005, not yet at full build -out, the impact to the General
Fund would be $964,000. He said the General Fund will become more diversified and have a
greater impact from sales tax. Smith asked if those figures take into account the loss of sales tax
revenue from other merchants in Georgetown, and if the same subsidies would apply to all
developers. Yantis said the spread sheet shows the existing sales tax base plus the Simon
Project.
Judy Shepherd, 2918 Gabriel View, told Council the average citizen doesn't understand what will
happen to the sales and property taxes in the long run. She said the City should not pay anyone
to come to Georgetown. She urged the Council to closely review the proposal.
Jeanette Murphy, Leander resident, and Beth Ann Forest, 1401 Laurel, gave their time to Rusty
Winkstern. (Winkstern was allowed an additional three minutes for a total of six minutes.)
Rusty Winkstern, 610 Innwood Drive, said development will come anyway and he doesn't
understand why the City is subsidizing development. He said he thinks the jobs that will be
brought in by the Simon development will be primarily low-paying jobs and will put a burden on the
Community Clinic. He said he feels because the sales tax will be diminished, an increase will be
needed in the property tax. He said the Council has an obligation to bring in high -paying jobs. He
asked Council to do a cost-benfit analysis on this project. He suggested putting this to a vote of
the citizens.
Jeff Unkle, 1953 S. Austin Avenue, said he moved to Georgetown to be able to participate in the
Monument Cafe and have a high quality of life for his family. He said if the Simon development is
subsidized, local businesses will be hurt or destroyed. He said there are other developers that
could come to Georgetown without subsidies. He said the Simon project will be a long-term
detriment to the City. He asked that the decision be put to the voters.
Anne Muilman, 605 E. 15th Street, told Council she is strongly opposed to the subsidy for Simon.
She said she has seen a lot of businesses come to Georgetown without subsidy. She feels a mall
is not needed in Georgetown when there is one 15 miles away in Round Rock. She said it should
be Simon's choice to develop in Georgetown without being bribed by the City. She said she feels
all sales tax generated in Georgetown should stay 100% in Georgetown.
MaryEllen Kersch, 1903 E. 19th Street, gave her time to Clark Lyda. (Lyda was allowed a total of
six minutes.)
Clark Lyda, Georgetown, told Council that once again a legitimate debate over public policy in
Georgetown has degenerated into theft, vandalism, lies, interference with citizens' exercise of
their constitutional rights, and personal attacks. He said the Council's proposed action is unfair,
unnecessary, a bad business deal, and illegal.
James Ray, 317 Southridge Circle, said he objects to the City spending 10% on a $15 million loan
along with paying other large amounts regarding the development. He gave estimates of what he
expects the amount of sales tax to be. He asked Council for a critical review.
Jennifer Fomby, 30401 Berry Creek Drive, gave her time to Howard Fomby. (Howard Fomby was
allowed a total of six minutes.)
Howard Fomby, 30401 Berry Creek Drive, gave a satirical presentation regarding his impress of
what the opposition to the project has to say about the economics of the Simon project.
City Council Meeting Minutes/July 16, 2003
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Clare Easley, 912 Forest Street, told Council that she feels that "this deal" has moved too swiftly
without a lot of citizen input and asked for assurance from the Council that they have negotiated
the best possible deal for the citizens.
James Brown, 117 Randolph Road, said most of his points have been covered. He said he thinks
it is a "cliche" that residential building won't support the taxes. He said he has heard this project
described as an "investment" and asked that the City not make investments for him. He said he
would rather make his own investments.
Ruth Roberts, 700 Berry Lane, said she lives in the ETJ, but spends a lot of time in Georgetown
and wants to see the local businesses succeed. She said it looks like the City took the first "deal"
that was offered by Simon without negotiating in the best interest of the City. She said she thinks
Simon would come anyway.
Carol Daughtery, Jarrell, told Council she came with her coworkers who work for Rusty Winkstern
at the Monument Cafe. She said she is worried about not being able to make good tip money
when people don't come to the Monument anymore because of the restaurants that will be in the
Simon development.
Jody Warden -Boatman, 3701 Brangus Road, said she is against tax concessions for any
corporation. She said the extra traffic that is brought by the development will require more
services. She said the spreadsheet provided earlier didn't take into consideration the loss of tax
revenue from the local establishments that will go out of business when the mall is developed.
She said she would rather drive to Austin and pay extra taxes there than lose tax money in
Georgetown.
Doug Cota, 30302 Berry Creek Drive, told Council he is a small business owner in Georgetown
and was never offered anything. He encouraged Council to make development pay its own way.
Marjorie Herbert, 1246 Main Street, said she has sent Council a letter and would not take the time
to repeat it. She asked Council to give this decision more time.
Della Green, 1901 Vine Street, said she wanted to approach this issue from a "black" perspective.
She said she fully supports the Wolf project because of the jobs it will bring. She said national
companies have a more diversified workforce.
Kathy Heidemann, 407 Golden Oaks, gave Council a handout of the reasons she supports the
Wolf Project and read those reasons, including the fact that the project will bring entry-level and
management job opportunities to Georgetown and the fact that it creates a method to extend
utilities beyond the interstate and open development opportunities to the west.
Tom Crawford, 103 Egret Cove, gave his time to Henry Carr. (Carr was allowed a total of six
minutes.)
Henry Carr, 119 Yaupon, said he is speaking on behalf of the Economic Development
Commission. He said a unanimous resolution in support of the Wolf Ranch Development was
previously presented to the Council. He highlighted some of the reasons for supporting the
project as listed in the resolution, such as the fact that the development exceeds the requirements
in the EDC's Principles for Economic Development Incentives Document and will provide a
revenue source for the City's 4B corporation, allowing major roadway improvements to SH29 and
Interstate 35. He said the Economic Development Commission recommends that the Council
approve this project.
Johnny Anderson, 418 Champions Drive, said Simon is a great corporate citizen and will become
an enabler for future economic development in Georgetown. He said the amenities provided in
the development will attract companies to relocate in Georgetown. He said the local newspaper
City Council Meeting Minutes/July 16, 2003
Page 4 of 7 Pages
should be ashamed for the bias reporting that has been done. He said this project is self -funding
and should be supported.
Don Dison, 607 Esparada, told Council he owns an existing small business in Georgetown and
has purchaed another business that will be moving here. He said the elected officials should
always make decisions based on the "greater good" for the community. He said there will be
immediate revenue produced from the project, even before the stores are opened and operating,
such as the existing restaurants and fast-food establishments will benefit from the influx of
construction workers to build the project.
Rick Smith, 30311 Oak Tree Drive, gave his time to Bob Brent. (Brent was allowed a total of six
minutes.)
Bob Brent, 30104 Briarcrest Court, representing the Chamber of Commerce, said the Chamber
has 800 members, the majority being small business owners and they want the project. He said
over 1,000 people in Georgetown are unemployed and 30,000 people have contacted the
Community Clinic in one year. He said the Simon project will be an economic benefit in a tough
economic time. He thanked the Simon Property Group for their professional, high quality
approach to the community. He thanked the Council and staff for their professional efforts in this
matter. He said he thinks the community needs to celebrate again, and this will give cause for
celebration. He said the Chamber of Commerce overwhelmingly supports the project.
7:30 p.m. -- recessed
7:41 p.m. -- resumed
Evans asked for Executive Session.
7:41 p.m. recessed to Executive Session
8:00 p.m. -- resumed Open Session
Motion by Noble, second by Sansing to approve the Wolf Ranch Development Agreement with
the adjustments made tonight by the staff.
Noble said he thinks the real purpose in approving this project is for the jobs. He said he thinks
the Council should go ahead with the project.
Smith said he likes the project and feels it would be a welcome amenity for Georgetown, but said
he is opposed to this agreement and will vote against it. He said he is against the subsidy, based
on the fact that a fixed rate of return on an investment sets a very dangerous precedent that will
put the City's long-term financial stability at risk. He said there was no attempt to negotiate and
there was no counter offer. He asked how the Council could now deny incentives to any future
development. He said the developers will have no incentive to negotiate with owners on price
because the City will be there to subsidize the cost. He said he feels the City will be forced to
raise property taxes. He said a policy on taxpayer incentives should apply equally to all, and said
he doesn't think the City needs to guarantee a developer a good rate of return. He said he feels
this issue has been contentious and divides the community. He told local businesses that
Georgetown wants and needs them.
Eason said a lot of thought has been put into this agreement by all the parties involved, and it is
an effort to do what is best for all of Georgetown. She listed the qualities of the agreement that
are most appealing to her such as the 17 acres of parkland; the help of TXDOT on the traffic
problems; the empowerment zone that will support downtown; jobs for her constituents in District
1; cooperative marketing for downtown; and the saving of the trees by doing a large development
rather than if there were a lot of small developments in the same area. She said she believes, on
the whole, this is a good project for Georgetown.
City Council Meeting Minutes/July 16, 2003
Page 5 of 7 Pages
Evans said he is glad to see the room full of people who came to express their opinions. He said
he likes the project and has wrestleed with the subsidy issue. He said one of the main reasons he
is in favor of the development agreement is because of the ability to implement the Nore Winter
Downtown Plan. He also said the Simon project will beautify one of the gateways to the City and
will provide jobs for the community. He said the newspaper was incorrect when they said the City
would pay 10% interest for the next twenty years. He said the staff didn't just take the first deal
offered, saying staff has worked very hard to negotiate with Simon. He said many of his friends
spoke against the project, but they are hard-working, long-time residents who just want what is
best for Georgetown.
Sansing said it seems a lot of the arguments that people made against the project are really
reasons why the project is needed. He said the majority of the correspondence he has received,
particulary from his constituents in District 2, is in favor of the project. He said he believes a lot of
the information that was provided in the local newspaper was incorrect. He thanked Kate
Alexander of the Statesman for her article about the project. He asked that staff project a slide
that shows the estimated revenue. Rundell explained a spread sheet that estimates the annual
tax revenue that will come from Simon. Sansing said that proves the City is not funding upfront.
He said it is important that everyone realize that the funding is coming from sales taxes generated
from the project, not from stores downtown or in other parts of Georgetown.
Snell said he immediately liked the project and had to work through all of the fairness issues to
see if the project could prove up to what he expected. He pointed out that the Council had, in
February, adopted policies for incentives for economic development. He said there are policies in
place to make these determinations. He said if another project came in tomorrow that is exactly
identical to the Simon project, the Council would have to say "no," because each project has to be
handled on a case-by-case basis. He said the real reason he is in favor of this project is because
of the quality. He said the Wolf property is a "gateway" and the Simon project will be a beautiful
amenity to the area.
Nelon asked for the vote.
Approved 5-1-1. (Smith opposed)(Kirby abstained)
Nelon said the Council is truly proud of the staff and he is proud of the Council.
B Consideration and possible action to authorize the Mayor to execute an Advance Funding
Agreement for Voluntary Transportation Improvement Projects On -System, between the City of
Georgetown and the Texas Department of Transportation (TxDOT) -- Jim Briggs, Assistant City
Manager for Utility Operations
Briggs explained that staff has been working with TXDOT for improvements to SH29. He said
Simon has advanced $15,000 to the engineering firm that TXDOT wants to use on this work, so
there would be no lost time in the process of getting this development agreement approved. Snell
clarified that this is a portion of the amount already projected to be spent on the improvements
and Briggs confirmed that this is for the widening of the road, the relocation of Round Rock's raw
water line, and the relocation of utilities in that area. Nelon said the Round Rock City Council has
already approved the $2.5 million they are dedicating to the movement of their raw waterline.
Briggs confirmed that City of Round Rock has already signed a memorandum of understanding
with Simon to do what is necessary to relocate the line.
Motion by Evans, second by Noble to authorize the Mayor to execute the Advance Funding
Agreement.
Smith said he knew he was going to have a problem with this project because he has a bias
against government becoming involved in private business. He said, in business, when a decision
is made by the boss, all others "fall in" and support the decision and he is going to do that now for
City Council Meeting Minutes/July 16, 2003
Page 6 of 7 Pages
this motion and for the other items onthe agenda. Approved 6-0-1.(Kirby abstained)
C Second Reading of an ordinance providing for the annexation into the City 103.50 acres, more or
less, in the Clement Stubblefield Survey, located at the southwest corner of the intersection of
1H 35 and SH 29 -- Ed Polasek, Chief Long -Range Planner and Amelia Sondgeroth, Director of
Planning and Development
Polasek said the acreage in this annexation is larger than the acreage in the PUD on Item F
because it includes all of the land in the Simon project, including the outparcel on the corner piece
of property that was not included in Simon's PUD or Concept Plan. He read only the caption of the
ordinance onsecond reading. Motion bySnell, second bySenningtoapprove Ordinance No.
2003-44. Approved 6-0-1. (Kirby abstained)
D Second Reading of an ordinance providing for the annexation into the City 0.68 acres in the
Clement Stubblefield Survey, located near the southwest corner of the intersection of IH 35
and SH 29 -- Ed Polasek, Chief Long -Range Planner and Amelia Sondgeroth, Director of
Planning and Development
Puaoekexplained the item, saying disactually contiguous with the city limits now that the
previous annexation is official, saying this is the one outparcel in the middle of the Wolf project,
and read only the caption nfthe ordinance onsecond reading. Motion bvEvans, second by
GonoinQtoapprove Ordinance No. 2003-45. Approved 6-0-1. (Kirby abstained)
E Second Reading of an Ordinance for a Century Plan Amendment for 102.627 Acres out of the
Clement Stubblefield Survey, to change the Intensity Level 3to the proposed Level 5.and to
modify the Thoroughfare Plan by shifting the proposed southern extension of CR 265 from the
east to the west in order to connect to the proposed Southwest Inner Loop, located at the
southwest corner ofthe intersection ofIH-35and SH28—Edpo|aoek.Chief Long -Range
Planner and Amelia Sondgopoth.Director nfPlanning and Development
Polasekuaid this amendment changes the intensity plan and shifts the road that used tnshow
going through the middle ofthe development toshow it now going west to connect with the
proposed Inner Loop. Heread the caption ofthe ordinance onsecond reading. Motion byNoble,
second byEvans boapprove Ordinance No. 2003-4G' Approved 6-0-1. (Kirby abstained)
F Second Reading of an Ordinance establishing a Planned Unit Development (PUD) for 102.627
acres out of the Clement Stubblefied Survey, Abstract No. 558, located at the southwest corner of
State Highway 29 and I.H. 35 -- Bobby Ray, Chief Current Planner and Amelia Sondgeroth,
Director ofDevelopment Services
Ray read the caption only nfthe ordinance onsecond reading. Motion bySnell, second byEason
toapprove Ordinance No. 2003'47. Approved 8-O-1.(Kirby abstained)
Bill Hammer of Simon Property Group thanked each member of the Council and staff who have worked
very hard on this project. He said Simon looks forward to a very good project.
8:45 p.m. —adjourned
Mayor Gary Nelon
City Council Meeting Minutes/July 10.2003
City Secretary Sandra D. Lee