Council to eye RED deal

Comments () A Text Size

Changes to a tax incentive agreement with Rayzor Ranch are back on the Denton City Council agenda today, one week after the council voted 6-1 to table the matter.

The council will also be asked to vote on a special taxing district for the project and another tax incentive package for the industrial park.

During a marathon meeting last week, representatives from the Golden Triangle Mall told the City Council that they disapproved of a proposal that would see a number of changes to the nearly eight-year-old deal that provides tax incentives to RED Development, which took over the development of the massive, mixed-use project on the city’s west side.

At one point, the mall stood to lose one of its anchors, Dillard’s, to the town center portion of Rayzor Ranch. However, the department store recently announced it will stay at the mall.

Although council member Kevin Roden made a brief pitch to fellow council members to settle on revisions to the deal last week, he eventually voted with the others to table the issue in order to gather more information. Mayor Mark Burroughs was the sole vote against delaying consideration of the deal.

Mall representatives were most upset at possible sunset provisions in the city’s deal with RED, which is based in Scottsdale, Ariz., that ostensibly protect the mall. The council added the terms after reports emerged that a previous developer was pursuing Golden Triangle tenants.

Under the terms, the city does not allow credit for sales tax revenue Rayzor Ranch lures away from the mall and requires the Rayzor Ranch developer to be responsible for vacancies left behind at the mall.

Mall manager Matt Ludemann told the City Council that mall officials felt those protections needed to last for the life of the agreement, which allows RED to recover some of its development costs through tax incentives.

RED told the City Council that the protections are no longer needed, since the mall has received its own incentives from the city.

RED is asking the city to make other changes to its original agreement, which allowed the company to recover some costs through $62 million in tax incentives.

RED has asked that the cap of the agreement be increased to $68 million and other terms be extended, including the deadline to meet performance thresholds. The company also is asking that additional categories of expenses be considered reimbursable.

In addition, RED has asked the city to set up a public improvement district for the town center portion of the development on the south side of University Drive.

This special taxing district would allow RED to borrow about $40 million in public bonds, about one-third the value of the land, in order to build water and sewer lines, roads and other public infrastructure. Property owners in the district would pay taxes above county, city and school taxes to repay those bonds.

RED has also asked the city to allow it to charge the cost of setting up the district to the bond money to recoup funds.

The council meeting begins at 2 p.m. in the work session room at City Hall with consideration of another tax-incentive deal for Westray Group, the developer of the city’s industrial park west of Rayzor Ranch.

Council work sessions are recorded and broadcast online on the city’s website, www.cityofdenton.com.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.


Comments
DentonRC.com is now using Facebook Comments. To post a comment, log into Facebook and then add your comment below. Your comment is subject to Facebook's Privacy Policy and Terms of Service on data use. If you don't want your comment to appear on Facebook, uncheck the 'Post to Facebook' box. To find out more, read the FAQ .
Copyright 2011 Denton Record-Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.