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HomeMy WebLinkAboutEDA 2022-03-23 Minutes MINUTES OF THE ECONOMIC DEVELOPMENT ADVISORY COMMITTEE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS HELD IN THE COUNCIL WORK SESSION ROOM, 4301 CITY POINT DRIVE MARCH 23, 2022 The Economic Development Advisory Committee of the City of North Richland Hills, Texas, met on the 23rd day of March 2022 at 11:30 a.m. in the Council Work Session Room. Present: Ms. Janice Townsend Roots Coffeehouse Mr. Mark Deno Medical City North Hills Ms. Darlisa Diltz NTEEC Mr. Mark Wood Howe/Wood & Company Mr. Mike Vasquez Century 21 Ms. Mindy Monroe Legend Bank Absent: Mr. Bob Brown Smurfit Kappa Mr. Jay Redford CBRE Valuation &Advisory Services Mr. Michael Wright MJW Architects Mr. Ron Huggins Huggins Honda Staff Members: Mr. Craig Hulse Economic Development Director Ms. Elizabeth Copeland Economic Development Analyst Mr. Mark Hindman City Manager Mr. Clayton Comstock Planning Director Ms. Pamela Meek Communications Assistant A. CALL TO ORDER Chairman Wood called the meeting to order at 11:47 a.m. B.1 CITIZENS PRESENTATION No citizens presentation. B.2 PUBLIC COMMENTS No citizens present for public comments. C. ACTION ITEMS C.1 APPROVAL OF MINUTES OF THE MAY 13, 2021 ECONOMIC ADVISORY COMMITTEE MEETING APPROVED March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 1 A MOTION WAS MADE BY MS. MONROE, SECONDED BY MR. DENO TO APPROVE THE MINUTES FROM THE MAY 13, 2021 MEETING. MOTION TO APPROVE CARRIED 6-0. D. DIRECTOR'S REPORT D.1 2021 YEAR IN REVIEW Mr. Hulse reported that the 2020 Census figures were released late in 2021 and mentioned that NRH is just shy of 70,000, coming in at 69,917. It was also indicated that North Richland Hills is the 4th largest community in Tarrant County and thanked Mr. Comstock and his team as staff processed over 100 development applications last year-- an increase from 2020. Additionally, over 300,000 square feet of commercial space was permitted, including 100,000 square feet of new office space; also, the City welcomed 116 new businesses—a 40% increase over 2020.Although NRH lost 67 businesses, overall it was a healthyincrease g over the pandemic. Commercial construction was at $23 million, a 14% increase over 2020. Finally, 290 single family homes and 634 multifamily units were added to North Richland Hills. D.2 DEVELOPMENT TRENDS (COMMERCIAL, RESIDENTIAL, MULTI-FAMILY) Development trends were discussed by displaying a chart showing a dip in 2020 on commercial capital investment, while 2021 indicated a recovery. Mr. Hulse showed an example of a property that underwent a transformation, "V's House,"which serves elevated Vietnamese cuisine and offers a bar. Another chart showed the impact the pandemic had on development trends in retail, as the vacancy rate was 9% pre-pandemic, but then rose up to 13% during, and currently sits at 11.5% of vacancy. It was mentioned that the highest rate of vacancy in retail for North Richland Hills was 15.5% in 2011, at the tail end of the recession, which really hit a lot of businesses hard. Mr. Hulse updated that Alamo Drafthouse recently filed for bankruptcy protection. That being said, there is anticipation that the property will remain a theater use because it was designed for that, although Alamo will not be reopening at the current location. Continuing with real estate office trends, Mr. Hulse indicated there are 163 office buildings in town representing two and a half million square feet of space and a 10% vacancy rate— the lowest in his 14 years with the City. The highest vacancy rate was in 2017 at 23%. Additionally, a new development trend is taking place in central business districts and across the country where vacant office space is being converted into apartments. A graph was displayed noting an increase in vacancy rates for offices. Furthermore, the downtown Fort Worth and Dallas developments are now converting vacant office space to residential as more people are now working from home or remote. While it is a detriment to the downtown environments, it is a benefit to suburban communities like North Richland Hills. { March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 2 A chart was then shared on Single Family Residential Capital Investment, indicating over $102 million investment in 2021—a record. It was explained that the cost of materials and housing prices have increased. Chairman Wood discussed that plywood is up 79%, plastics are up 25% and concrete is up 12%, which is then passed on to the home buyers. In fact, in the past 2 years, home values in North Richland Hills have gone up by 25%, while the number of listings has decreased by 50%. The market average is 18 days. Three different scenarios are reflective of the type of development taking place in North Richland Hills: Eden Estates, single family homes; Urban Trails townhomes and another type of home that has zero lot lines, called "patio homes." Mr. Hulse indicated that there are currently 600 platted home sites waiting to be permitted in the City, with 367 in City Point. In sum, the City is growing and in fact running out of room with about 90-95% being built out. The Committee reviewed a map showing the locations of single-family residential developments throughout the City and the various home types, subdivisions, and the developers. Mike Vasquez commented that Urban Trails developer Ashton Woods is nearly sold out, so now they are directing people to options at City Point. While they have different elevations available, the features are all identical. Mr. Hulse mentioned that the Ashton Woods City Point website was launched. Mr. Hulse shared that the City currently has various multifamily communities under construction with approximately 8,000 multifamily units across the City versus 21,000 single family homes. The demand is very high in NRH with just a 4%vacancy rate. Specific projects were discussed: Watermere, a senior living community at Davis and Precinct Line, as well as Iron Horse Commons, Cavalli at Iron Horse and Spanos Iron Horse. It was discussed that multifamily is a very lucrative residential sector as rents are rapidly increasing, even in more mature parts of the community. For example, The 26 @ City Point rent is $1.89 per square foot, which amounts to $2,045 per month for a 1,090 square foot, 2-bedroom, 2 bath unit. In the current market, renting can cost as much as a typical mortgage. Chairman Wood shared that he was looking at similar figures from the Tarrant Appraisal District valuation based on square foot, which indicated the average range for a 3,000 square foot unit was $140-$160 square foot, which was at or above single-family residential pricing. Mr. Hulse shared that multi-family rents have increased by 15% in 2021. D.3 NEW AND UPCOMING BUSINESS UPDATE Several new businesses were highlighted who have chosen NRH as their home base: V's House Restaurant on Bedford-Euless featuringVietnamese cuisine is owned bya restauranteur that owns a second restaurant in Bedford; the corporate headquarters for Calloway's Nursery is located at 9003 Airport Freeway; and Give Me The Vin is located at 8721 Airport Freeway. Ms. Diltz was praised for her efforts in opening The Center NTX flexible workspace off 5555 Rufe Snow after the challenges she initially faced due to the historical "Snovid" event and the fire sprinkler damage to the building. March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 3 Other businesses of note include Dutch Bros, the City welcomed two of them and Keyworth Brewing at 6428 Davis Blvd.—a unique building that finally has their permits and is finishing out. Additionally, both Braum's are under construction. Of special mention is Volli Entertainment and Catapult Adventure Park that will be leasing the former Hobby Lobby at 6635 Rufe Snow. They claim to be the largest indoor pickleball venue and have locations in Florida and Washington. Also, it will include inflatables for jumping, as well as a restaurant and full bar. Tru by Hilton, located at 8925 Airport Freeway is currently under construction. PJ's Coffee, 5555 Rufe Snow will be the latest coffee business to join the City. They are a franchise out of New Orleans that features pastries and has a New Orleans flair. They will be located near the Center NTX as well as Remington College. In sum, the City welcomed 177 businesses, lost 70, but gained about 350 jobs, with most coming from Give Me The Vin and Calloway's Nursery. Another business highlighted is Warespace, which will occupy the space at 7601 Boulevard 26, directlyacross from CityHall.Warespace is an entrepreneurial center for those that need p p items. will subdividedand have shared space toproduce, store and shipThe spacebe p efficiencies like dollies, shipping and receiving corridors and more. It will be an ideal location for small businesses, e-commerce brands and entrepreneurs who don't have the capital to commit to a five-year lease somewhere else and allows them to start up their business. Ms. Diltz asked if Mr. Hulse could share about NT Suites. Mr. Hulse said they are located on North Tarrant Parkway in the northern part of North Richland Hills. They have been so successful that Mr. Sandeep Sandhu, the owner, is already expanding after one year of opening. Mr. Hulse concluded the Director's report by asking if anyone had questions. Chairman Wood asked if staff knew what might be happening to the tenants of multifamily who could no longer afford to lease in North Richland Hills? Mr. Hindman said we don't know the answer to that question. Mr. Hulse shared that the competition for housing is very strong and that a City-owned home that had no improvements went for $30K over asking with half of the 50 offers from investors. Mr. Vasquez agreed that properties move extremely fast and there are cash offers coming from investors, not the traditional buyers. On rehab properties, buyers cannot get a traditional loan so cash takes all. Ms. Monroe asked if the City has metrics that measures the number of people per household? Mr. Hulse said that we don't have raw data on that. Mr. Vasquez said that he sold a house last year that occupied two families, which helps decrease the cost of a mortgage for those occupying it. Mr. Comstock reported that accessory dwelling units, such as a mother in law suite are becoming more common, which increases the density of a neighborhood. E. PROJECT AND PROGRAM UPDATES E.1 STREET BOND PROJECT UPDATE March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 4 The committee was updated on the status of the street bond election, which was approved in November 2020.Around the time of the last committee meeting, voters had just approved $49 million at 79% voter approval on 27 NRH streets. The larger thoroughfares include Bedford-Euless, Glenview, and Iron Horse, which are scheduled to start construction soon. Additionally, the City was able to secure $4.2 million from the Economic Development Administration through the Cares Act to help offset some of the cost to redo Iron Horse. Iron Horse has needed an upgrade due to traffic generated by Prestige Ameritech, ESNA Aerospace and Tyson Foods in that corridor and additionally, did not include any tax rate increase. E.2 BUSINESS IMPROVEMENT & GROWTH PROGRAM UPDATE The City has granted funds to 27 different business participants amounting to $350,000 through gas development reserves over the past 13 years. This funding comes from the lease bonuses that the City has received from park land. Staff and City Council decided to allocate it to specific projects, which have in particular, benefited NRH businesses. This plan has generated nearly $5 million in private investments and spurred significant projects like Niki's Italian Bistro on Davis and Painted Tree on Boulevard 26. Additional funds are being sought in fiscal year 2023 because staff is estimating that funds will likely run out by end of 2023. This program was recognized for "Redevelopment & Re-use" by the International Economic Development Council (IEDC) in 2021. Mr. Hulse showed several examples on a slide, which included False Idol Brewing, Painted Tree Marketplace and V's House restaurant. E.3 CITY POINT DEVELOPMENT UPDATE An overview of the entities involved in City Point include master developer Centurion American, home builders Ashton Woods, Mattamy Homes and CB Jeni; the NRP Group, in charge of the multifamily and single deck garage; and Weitzman is the representative for the commercial on City Point Drive. Plans for the commercial are expected to be submitted in April for staff review. Mr. Vasquez asked for clarification on the aerial photo in the slide of City Point, as well as how parking would be set up and the overall layout. Mr. Hulse explained where the 150 multifamily units will sit and gave further detail on how commercial will be laid out. He explained that Mr. Comstock and his team had worked with Centurion American on whether the commercial would be first floor with residential above it or that it would exist separately. Mr. Comstock explained it was ultimately decided that for financing purposes, ease of getting in tenants, and more design flexibility, commercial would be kept separate. He further explained that the commercial will be tall, one-story buildings with four and five story residential behind it. It will have the look and feel of a Town Center—pedestrian- oriented with large patio and plaza spaces. Mr. Vasquez inquired if there is interest from businesses on locating to City Point Drive. Mr. Hulse explained that the developers are bringing in two or three restaurants, which was part of the agreement. Additionally, Veritex Bank and Starbucks are potential tenants. March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 5 It was explained that the development is in the second year of a six-year project, with an estimated completion of December 2026 with two different phases. Originally, it was supposed to be a $185 million project, but it has increased to $225 million due to the increases in residential property values—a 20% increase. Mr. Vasquez inquired what schools City Point will feed into. Mr. Hulse indicated it would include Jack C. Binion Elementary, Richland Middle School and Birdville High School. The horizontal infrastructure is 90% complete and streetlights have already been completed in certain sections. He added that Mr. Comstock is in the process of reviewing the elevations on the model homes. It is projected that there will be 2,000 additional residents. Additionally, he mentioned that the Hospital Corporation of America (HCA) has provided an easement to the City and the master developer on a floodplain behind the medical office buildings on the west side of Calloway Creek for a park and public use easement. It will have some amenities for the residents of City Point, and the employees of the nearby medical complex and hospital. Mr. Hulse thanked Mr. Deno of Medical City North Hills for his assistance in facilitating the process of the easement. E.4 SMITHFIELD MIXED USE DEVELOPMENT UPDATE An overview was provided on what is happening with the Smithfield Mixed Use Development, which is City owned land on the north end of Main Street for the past 10 years. He expressed how fortunate NRH is to have a City Council that thinks strategically with long- term planning. He explained that currently, there are two mixed-use projects within the Smithfield TOD surrounding the train station. He referred to a slide that showed a 4-story, 325-unit, multi-family development by Presidium and mentioned that they will also be activating Main Street with 20,000 square foot of commercial development around Back Forty Smokehouse, which is a requirement of the development. Both projects will encompass 14 acres and a total of 539 multi-family units and approximately 30,000 square foot of commercial. The 31/2 acre Jamieson Fence/Master Halco fence property in the south area located at the heart of the train station had also become available; the City purchased the property. Therefore, the City can now redevelop the property and is currently reviewing plans for a four-story, 214-unit multi-family that will include a parking garage and 10,000 square foot of commercial space directly across from the station platform. Mark Wood asked what is the timing on the development and if the current owners have been notified. Mr. Hulse explained that both the owners of Back Forty Smokehouse and the Smithfield Masonic Lodge have been notified and a relocation of the lodge may be a possibility. Additionally, Main Street is going to be completely reconstructed from grant funding, changing from an asphalt to a concrete street, as well as sidewalks. Ms. Diltz asked how the increase in all of the development and addition of many families will impact traffic. Mr. Hulse mentioned that Smithfield Elementary School was expanded, so it is ready to absorb additional growth and capacity in the area. Mr. Comstock explained that the City did a long-range comprehensive planning process to look at the NRH transportation March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 6 network and future land use modeling. The studies indicated that though many of the roadways were planned to be widened to four lanes, two-lanes were shown to be sufficient to handle the growth. From a taxpayer perspective, that allows for the capital improvement projects to now refocus to the roadways that do need the capacity increases and the improvements. Ms. Diltz mentioned that on school days, traffic tends to back up in one lane on Davis Blvd. with cars turning into Smithfield—the congestion could cause an accident. Mr. Comstock said that changes were initiated, such as the Northeast Parkway connection with traffic signals now in place. Additionally, there is an entrance on the east and west side for the elementary school and soon there will be connectivity through Main Street. F. MARKETING REVIEW F.1 FORT WORTH CHAMBER REGIONAL ECONOMIC DEVELOPMENT PARTNERSHIP Ms. Copeland shared that a new regional economic development partnership was shared with the committee where Chris Strayer, the Executive Vice President of the Fort Worth Chamber began reaching out to some of the municipal economic development departments in Parker County and Tarrant County. He wanted to form a coalition of sorts between the economic development organizations on the west side of the metroplex. For a long time, the Fort Worth Chamber has been more isolated and focused on Fort Worth rather than embracing regionalism like the Dallas Chamber has been doing. It was explained that the City will benefit from this partnership in a couple of very beneficial ways. NRH will be a part of Economic Development "Pitch Decks" and be highlighted and promoted when the Fort Worth Chamber goes in front of site selectors. She displayed two slides with imagery and features that were provided to them showing what the City has to offer. Also, the Economic Development department will have the opportunity to tap into a Customer Relationship Management (CRM) tool offered through the partnership to assist with managing the North Richland Hills business database that keeps track of all existing business, currently maintained in Microsoft Excel. There are other cities in the area that will also be utilizing the tool, but the data will be siloed and kept private. Additionally, the partnership includes a board membership with cities rotating on the board. Chairman Wood commented that he receives numerous site selection emails on a weekly basis from the Fort Worth Chamber, so it is good to know that they will be cooperating and partnering with communities now, especially since they have knowledge of national and regional type projects. Mr. Hulse concluded by explaining why several of the EDAC committee members were not present at today's meeting: Michael Wright has retired and is getting ready to move, as his practice is ending. Bob Brown has been promoted to COO for Smurfit Kappa, United States. Ron Huggins is selling his Honda dealership to a company out of California called Norm Reeves Honda Superstore. His sons are not interested in taking over the business, so he is selling the business and retiring. March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 7 G. ADJOURNMENT Chairman Wood adjourned the meeting at 12:57 p.m. Mr. Vasquez seconded. rk Wood, Chairm n Craig Hu e, ecretary II II II' iG March 23,2022 Economic Development Advisory Committee Meeting Minutes Page 8