City’s incentives for developer still include protections for mall
The Denton City Council approved a revised incentive package for the developers of Rayzor Ranch on Tuesday that retains protections for Golden Triangle Mall.
The deal allows RED Development more time to meet performance thresholds, allows the company to recover more types of costs and increases the original $62 million cap to $68 million. It was one of several financial packages approved in a special session Tuesday afternoon aimed at boosting development on the city’s west side.
The council also made final the creation of two new special taxing districts — a tax-increment reinvestment zone for Westpark, the city’s industrial park, and a public improvement district for Rayzor Ranch Town Center.
Not all council members were in favor of the changes to the Rayzor Ranch deal, which now allows RED to claim some of the city’s new sales tax revenue as reimbursement for the public improvements that are part of Rayzor Ranch Marketplace, on the north side of University Drive, and the soon-to-be-built Town Center, on the south side.
Casting the sole vote against the changes, council member James Engelbrecht said he was concerned that the city continues to make concessions even as the massive, mixed-used project appears to be shrinking.
Design standards — key to attracting high-quality retail and inspiring construction of high-end townhomes — have not been formally changed, but the city is already having more fights to maintain those standards, Engelbrecht said.
He told fellow council members he was in favor of continuing protections for the mall, but he wasn’t in favor of more concessions to RED without seeing more of what the city would be getting.
First inked just before the economic downturn in 2007, efforts to bring the 410-acre project to life have been fitful. RED is the third developer to take over the project.
Representatives from RED and Golden Triangle Mall made one last pitch to the council Tuesday afternoon over one of the most controversial elements of the deal — terms that do not allow Rayzor Ranch credit for sales tax revenue it lures away from the mall and that hold RED responsible for anchor store vacancies it might create by doing so.
The city added those provisions to the deal several years ago, after reports emerged that a previous developer was pursuing the mall’s tenants.
After Tuesday’s vote, those protections remain for the life of the agreement.
The public improvement district for Rayzor Ranch Town Center will allow RED to borrow up to $40 million in publicly backed bonds, or one-third the value of the land, to build water and sewer lines, roads and other public infrastructure.
Property owners in the district would pay assessments in addition to county, city and school taxes to help repay those bonds.
Both the authorizing language of the district and the revised incentive package allow RED to finance and possibly recover about $3 million in new costs it anticipates from the Texas Department of Transportation’s expansion of Interstate 35.
The City Council unanimously approved the final arrangements for a tax-increment reinvestment zone for Westpark, the city’s industrial park near Denton Enterprise Airport, which includes agreements with Denton County and Westray Group.
The city anticipates about $14 million in new property values in the zone as it grows, values that can be used to reinvest in the area, according to Aimee Bissett, the city’s economic development director. Denton County has opted to contribute 40 percent of its new value to the zone, with the exception of covering interest costs.
Bissett told the City Council that the agreement with Westray Group, the primary developer of Westpark, will come in phases. Westray, composed primarily of members of the Rayzor family, is obligated to make specific improvements for the first phase of Westpark, but the second and third phases are optional.
Bissett told the City Council that if Westray opts out of the second and third phases, the city has its own options.
“The city will still have the revenue to enter into agreements with other developers, or develop itself,” Bissett said.
It is possible that the zone could also issue publicly backed bonds to finance construction, Bissett said, though there are no plans right now to do so.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.