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HomeMy WebLinkAboutEDA 2019-10-03 Minutes MINUTES OF THE ECONOMIC DEVELOPMENT ADVISORY COMMITTEE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS HELD IN THE COUNCIL WORKROOM, 4301 CITY POINT DRIVE OCTOBER 3, 2019 The Economic Development Advisory Committee of the City of North Richland Hills, Texas, met on the 3rd day of October, 2019 at 11:30 a.m. in the City Council Workroom. Present: Ms. Rena Arnold In Aereo Mr. Ron Huggins Huggins Honda Ms. Mindy Monroe Legend Bank Ms. Janice Townsend Roots Coffeehouse Mr. Mike Vasquez Cirque Real Estate Mr. Michael Wright MJW Architects Mr. Mark Wood Howe/Wood & Company Absent: Mr. Bob Brown Smurfit Kappa Mr. Jay Redford CBRE Valuation & Advisory Services Staff Members: Mr. Craig Hulse Economic Development Director Ms. Elizabeth Copeland Economic Development Analyst Ms. Pamela Meek Communications Assistant 1. CALL TO ORDER Mr. Wood called the meeting to order at 11:41 a.m. 2. PUBLIC COMMENTS No public comments 3. APPROVAL OF MINUTES OF THE JUNE 13, 2019 ECONOMIC ADVISORY COMMITTEE MEETING APPROVED A MOTION WAS MADE BY MR. VASQUEZ, SECONDED BY MS. TOWNSEND TO APPROVE THE MINUTES FROM THE JUNE 13, 2019 MEETING. MOTION TO APPROVE CARRIED 7-0. 4. ECONOMIC DEVELOPMENT DIRECTOR'S REPORT 4.A NEW AND UPCOMING BUSINESS UPDATE October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 1 Mr. Hulse mentioned that the noteworthy new businesses are primarily office-related. They include Stone Creek Assisted Living, 8505 Mid Cities Blvd.; Tenant Base, 9001 Airport Freeway; American Defense Systems, 8701 Bedford-Euless Rd.; The Patriotic Pig, 3900 Rufe Snow Dr.; CUNA Mutual, 9001 Airport Fwy.; and Navy Federal Credit Union, 9001 Airport Fwy. Mr. Hulse said that in 2019, we have welcomed 85 new businesses with a 45 net increase in businesses, although we have lost some as well. We have welcomed 683 new employees to our community, with a net increase of 417. Almost 400,000 square feet has been leased or constructed, with 280,000 square feet of net absorption. He then discussed the upcoming new businesses: The first noteworthy business is What's On Tap, which is located in Home Town near Roots Coffeehouse. It is a tap room and will feature 30 local craft beers. What's On Tap's current locations are in Highland Village and Keller. False Idols Brewery in Dallas will be located at 7924 Maplewood. The building was an automotive business and will now become a brewery. Additional new businesses include Keyworth Brewing, 6428 Davis, also planned to go under construction in the Smithfield TOD; Dunkin', 8183 Precinct Line Rd. currently under construction, just east of Kroger Marketplace; and Sweetie Pie's Ribeyes, a sister company to Babe's Chicken Dinner House, which will offer a full menu with beer and wine, located at 6720 NE Loop 820. He went on to say that the City will be home to the first Fatburger in North Texas, located in The Crossing Shopping Center, 6039 Precinct Line Rd. Fatburger originated in the southern California area and it is taking the spot of a former Sushi restaurant that closed. Finally, new business NT Offices, 8813 N. Tarrant Pkwy behind the Chili's restaurant is geared towards co-working and executive suites. Their current location is in Southlake, so they are now expanding to North Richland Hills. 4.B DEVELOPMENT TRENDS (COMMERCIAL, RESIDENTIAL, MULTI-FAMILY) Mr. Hulse discussed the Development Trends from October 2018 to July 2019 fiscal year and that the City is trending slower than the previous year as far as development permits are concerned. The 2019 Fiscal Year projection is 16 projects versus 24 from the previous year. However, these are traditionally more significant projects, so there is no cause for alarm and the volume is outpacing historical trends. He said that commercial remodels are slightly behind, but still high historically speaking. NRH continues to see new single family under construction including townhomes. These are more fee-simple townhomes that usually have an asking price of$300,000 and over. Remodeling is continuing with about 617 permits, just slightly less than the 700 from the previous year. Mr. Hulse then asked for comments from the Board on the current market conditions and if there would be any cause for alarm. Mr. Wood commented that he continues to hear that the volume of people moving into this area is really driving the train and he expects that trend to continue. He stated that our density evolution will help that. October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 2 Mr. Vasquez said he is seeing a lot of residential buyers from the Northeast, from Chicago and Boston. He said it is because Alliance is highly attractive with Amazon and the high quality restaurants that North Richland Hills offers. Ms. Arnold commented that nationally, the new developments are lower than what we see in NRH. Even though new commercial is lower in NRH, on the retail side the price per square foot will increase. Additionally, she commented that we may see a little higher rent on the retail side. Nationally, restaurants are still the anchor. She doesn't see that a lot of the big box retail will be coming back any time soon. Mr. Wright commented that definitely we will have 16 new commercial projects, but probably more like 17. Mr. Hulse said that we continue to hover at an 11 percent vacancy rate. It has slightly increased, but it is forecasted to go down. However, the rent per square foot continues to increase. He stated that with office trends, there is a dramatic drop in vacancy and it is quite stabilized. It is very positive and the rent rates continue to increase. Mr. Wood inquired why the vacancy rate decreased in such a short period of time between 2017 and 2018 as indicated on the chart. Mr. Hulse said the Frost Bank tower was distressed and primarily vacant, but they now have new leadership and have fully leased it. Stericycle leased over 100,000 square feet for their call center. We have seen absorption with the existing garden office throughout the period. He said he isn't sure if the downtown Fort Worth area and/or DFW is at capacity or maybe that is why they are attracted to us because our rents are less and we are a central location. Additionally, Legend Bank absorbed some square feet on IH Loop 820. Mr. Hulse said that on the multifamily front, the rents are continuing to increase, with the vacancy rate going up in 2018 because Dolce Living Phase 2 in Home Town was brought to the market. The vacancy projection from 6 percent to the 9 percent is due to the anticipated opening of The Millennium next door to Dolce Living. Although it is going a little slower than we desire, it is a big project that will add 300 units. For single family, the current median list price for 76180 is $299,000 and shows little increase month to month with 48 days on the market. For 76182, the average listing price is $350,000 and includes the new list prices. The days on market have gone down from 60 days on the market to 48 days on the market with a 20 percent reduction. He indicated that the home values are peaking. Mr. Hulse asked the Board for comments. Mr. Wood said that the lot prices keep increasing. He explained that some of the lot prices are almost as high as the cost of the house and yet houses are still selling rapidly. He said that ten years ago, $60,000 to $75,000 would be a high-end lot. Today, they could be as high as $150,000-$250,000 for a standard subdivision lot. Ms. Arnold said that historically, the cost of your home should be three to four times the price of the lot. Mr. Wood stated it was five to one. He said that today, you may buy a lot October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 3 and not take that ratio into consideration any longer and that it may get to the point where the cost of your house is the same cost as your lot. 4.0 PROPOSED CITY POINT DEVELOPMENT Mr. Hulse discussed the history of the North Hills Mall and showed photos of how it became dilapidated until finally in 2007, it was condemned by the City. He showed an aerial of the current property in 2018 and explained how the City spent the last 10 years trying to attract a developer for this piece of land. He stated that Centurion American out of Farmer's Branch is the master developer who is also developing the Entrada in Westlake and Flower Mound's Riverwalk. The City Point development will be a 53 acre, $187 million mixed use development. It is estimated to be an 8-year build out and calls for 364 single family homes including zero lot line bungalow homes and townhomes. The average taxable value is just under $300,000 and there will be 300 (surface parked) to 600 multi- family units (podium parked). The commercial will be 60,000-70,000 square feet, as well as a 100+ room upscale hotel. Mr. Hulse showed an aerial rendering of City Point with different areas indicating commercial, multi-family, single family and open space, as well as a rendering of the multifamily 4-story building, designed by Bush Architects. He stated that City Point will be a walkable Urban Village. Mr. Hulse explained that what makes Centurion American so appealing is that they are a restauranteur and are known for having revitalized a hotel in downtown Dallas and also opened four restaurants: Scout, which is like a Main Event for adults; Overeasy, a breakfast café; a Chinese restaurant and a speakeasy-themed restaurant. Mr. Hulse showed a rendering of Flower Mound's Riverwalk restaurant row and described a variety of restaurants that will be opening there. Centurion intends to open at least four restaurants in the commercial area of City Point. He showed different renderings of the development on City Point Drive, a close up view, and a rendering of a traffic circle. He indicated that this will be very compact, which is appealing to the younger generation. Additionally, he showed various renderings of the single-family residential, urban homes and bungalow homes with front entry garages that will be developed in City Point. Mr. Wood asked if Centurion American has builders lined up. Mr. Hulse indicated that they intend to sell them to builders. There was a discussion about what schools would serve City Point and Mr. Hulse indicated that it will be Jack Binion Elementary, Richland Middle, and Birdville High School and that no schools would be built in City Point. It is anticipated that 2,500 additional people would live in City Point, but they would be absorbed in the existing BISD footprint. He suggested that perhaps BISD would re-zone at some point. Also, St. John the Apostle is within the boundaries to serve children. He said that the goal is to attract younger families, adults, empty nesters and retirees. Additionally, he explained that there will be an HOA that will service an amenity-center that will include a pool and clubhouse. Other areas will include dog parks. Ms. Arnold inquired about the target rents on the commercial. Mr. Hulse indicated that Centurion will maintain ownership of the commercial and that he is currently working on a public-private partnership, which helps aid the cost structure of the commercial to make it October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 4 competitive for leasing. It includes a sales tax reimbursement, so they will be motivated to lease up that space. Centurion will not be paying rent on their restaurants; however, they will also then get the tax advantage. He stated that this area of North Richland Hills needs revitalization, but it is a difficult piece of property to develop due to the lack of public utilities like water, sewer, drainage and streets. However, the City's desire was to find an entity that is willing to purchase and develop the land in order to enhance the quality of the area and to expedite the timing of . The tools staff is utilizingto developthis property is th rough h a Public this development p p Y g Improvement District (PID), Tax Increment Reinvestment Zone (TIRZ) and Tax Increment Financing (TIF). He explained that a PID is a district that funds public improvements to facilitate development of an area and consists of streets, sidewalks, public utilities, etc. The property owners within that district pay an assessment over 30 years for those public utilities and it appears on their property tax bill. It amounts to approximately $20,000 and may be paid outright. The estimated cost for all of those utilities is approximately $12,650,000 and would be paid over 30 years. It amounts to $1,700 a year for each single family lot or $141 per month. Mr. Hulse displayed a rendering of the PID and pointed out the improvement areas for sanitary sewer, drainage and water. He explained that a property owner has to request a PID. It is authorized by the City, though not a part of the City and has its own Board. He explained that along with the PID, we are also establishing a TIF district. The baseline of this property is quite low just $6 million dollars for the 52 acres on the tax rolls, so when you add $187 million dollars there is a sizable tax increment that can be used to help offset the PID obligation. Additionally, the County will also participate in the TIF district. Because both the City and the County intend to commit 25% of tax revenue over 20 years, it will reduce the $1,700 assessment from the PID on each family lot by 25%, which equates to an annual $427 reduction. As a result, there will be a $1,276 assessment fee annually or $106 per month. The benefit to the buyers is that they will have a lot of amenities within walking distance. Mr. Huggins asked if there would be a Home Owners Association fee in addition to the assessment fee for the buyers. Mr. Hulse indicated that there would be. Mr. Hulse described how traffic would successfully flow in and out of City Point and indicated that Ruth will be a new point of access. He said that there is no concern about the traffic flow because these streets were designed to support a shopping mall and in fact, the traffic volume on Boulevard 26 has actually gone down since the mall was demolished. 5. DISCUSS TARGET INDUSTRIES Mr. Hulse explained that Target Industries are businesses that match a city's assets or competitive advantage and that they coincide with the City's goals. They have investment and growth potential and are referred to as sunrise industries. He explained the difference October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 5 between sunrise and sunset industries and that the City wants to pursue sunrise industries. Target industries help to diversify the economy and are an effective and efficient use of limited resources. Additionally, we want them to be desirable by the community. 5A. PROFESSIONAL OFFICE & BUSINESS SERVICES, ENTERTAINMENT & EXPERIENTIAL RETAIL, OMNICHANNEL RETAIL, SPECIALTY FOOD & BEVERAGE AND PEDESTRIAN FRIENDLY BUSINESSES The Target Industries we have identified include specialty food and beverage, professional office and business services, pedestrian friendly businesses, entertainment and experiential retail and omni-channel retail, which combines a show room and warehouse. 6. REVIEW ECONOMIC DEVELOPMENT MARKETING 6.A ADVERTISING Ms. Copeland began by explaining that Pamela Meek, Communications Assistant, reports both to Mr. Hulse and Mary Peters, the City's Public Information Officer. This is beneficial because more economic development messaging can occur with a dedicated staff member and new projects can now be tackled. I. MAGAZINE, BILLBOARD, AERIAL MAP She explained that one of the new projects that was just introduced is a billboard campaign that promotes the unique offerings in North Richland Hills. She showed some examples and explained that Clear Channel has four digital billboards in NRH and the agreement has allowed for the City to have free advertising space. The Explore North Richland Hills billboard campaign highlights different entities within the City such as the library, but will also promote some of our unique businesses. Although we are not allowed to name a business, we can still feature them. Additionally, she explained that for years, we have advertised in Dallas Regional Chamber publications including the Dallas-Fort Worth Real Estate Review Magazine and the Dallas Economic Development Guide Magazine, which targets the development community and site selectors throughout the country. She explained that the department has started to brand the advertisements and provided an example of an ad that is running. Additionally, printed aerial maps of the City were created, which have been an important resource at trade shows and meetings when internet is not always available. 6.B DIGITAL MARKETING I. WEBSITE, SOCIAL MEDIA, VIDEO Ms. Copeland pointed out that since the website was redesigned last year to make it more mobile-friendly, there has been a 27% increase in visits per month. Fresh and current October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 6 content is an important part of attracting visitors as well. Additionally, initiating Google analytics has allowed the department to track some of the visitors to the website. She shared that because the Economic Development posts on the City's social media sites have a higher level of engagement than many of the other posts, a strategy was implemented which includes raising awareness of the NRH Business and Development Community, revitalization efforts and marketing to enhance the image of North Richland Hills. Communicating information to the media via press releases is now non-existent and social media has replaced that avenue. She indicated that the rise in social media and increased dialogue from citizens through the City's Facebook and Nextdoor accounts initiated the idea that it could be beneficial to educate residents about the City's role in the site selection process. As a result, the Economic Development Department is creating a video series to explain how businesses choose to locate and remain in North Richland Hills. Ms. Copeland showed the introductory video and explained that it will not be launched until the entire series has been completed. She explained that the videos will be launched on social media and included on the Economic Development website and potentially on the City's website. Mr. Wood asked how the videos will be able to be viewed. Additionally, he asked what meetings may be viewed through the City's website and whether they can be viewed live. Mr. Hulse explained that certain meetings may be viewed live and Charles Swanigon in Citicable houses the videos online for the P & Z and Council meetings. Additionally, he explained that City Council requested that the citizens be more informed about the site selection process and the role of Economic Development given the amount of community interest. 7. UPCOMING EVENTS Mr. Hulse announced that the Heart of North Texas conference will take place on November 1st and though sold out, seats are still available through the City for those who wish to attend. He highlighted the keynote speakers include Judge Glen Whitley, as well as Parker Harvey, the Chief Regional Economist and U.S. Census Bureau Data Dissemination Specialist Eric Coyle. He also highlighted the Annual Business Appreciation Luncheon which will take place on December 5th, featuring a panel discussion with Paul Vinyard, owner of Babe's Chicken Dinner House and Bill Digaetano, owner of Alamo Drafthouse. On a side note, Mr. Hulse announced that Janice Townsend with Roots Coffeehouse is in the final stages of her second store, which will be located in Fort Worth, south of 30. It will be a coffee house and a co-working space in the vortex of where much revitalization will take place. 8. ADJOURNMENT Mr. Wood adjourned the meeting at 12:53 p.m. October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 7 ,7;74 4:2- Mark od, Chairman .a t Craig Hu sei, ecretary October 3,2019 Economic Development Advisory Committee Meeting Minutes Page 8