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CITY COUNCIL JOINT MEETING WITH THE HU DEVELOPMENT CORPORATION TO ORDER FOR THURSDAY, JULY 10TH, 2025.CALLING THAT TO ORDER WITHOUT A FORM.
HERE WE HAVE FOUR, THE QUORUM.
WE HAVE THE QUORUM UNDER THE OPEN MEETINGS ACT.
WE JUST WON'T IN ORDER TO TRANSACT THE BUSINESS, YOU NEED FIVE.
SO, ORDER? NO, JUST THE LAST TIME THIS HAPPENED, IT, IT GOT CANCELED.
WHAT, WHAT YOU WANNA DO? CAN I FINISH? YEAH.
AND BECAUSE WE DON'T HAVE QUORUM, WE WON'T START.
IF, IF A QUORUM OCCURS, WE'LL DEVELOP A MEETING ALL.
[3.1. Discussion and possible action related to the formation of a Municipal Management District for the Cottonwood Properties.]
POSSIBLE ACTION RELATED TO THE FORMATION OF A MUNICIPAL MANAGEMENT DISTRICT FOR THE CONWOOD PROPERTIES.UH, THIS IS PART OF OUR QUARTERLY JOINT EDC CITY COUNCIL MEETINGS.
AND, UM, A SUBCOMMITTEE OF THE EDC BOARD HAS RECEIVED A SIMILAR PRESENTATION PREVIOUSLY ABOUT M AND D.
AND, UM, BASED ON THEIR FEEDBACK AS WELL AS, UH, SOME DIRECTOR LEVEL STAFF THAT WAS PRESENT FOR THAT PRESENTATION, WE FELT IT WAS IMPORTANT TO BRING TO THE FULL EDC BOARD,
AND IT IS A NEW CONCEPT FOR THE CITY OF HURO.
WE DON'T CURRENTLY HAVE ANY MMDS, UH, 6 0 2.
UM, SO WITH THAT, WE HAVE, UM, SOME WONDERFUL EXPERTS WITH US TONIGHT THAT ARE GONNA LEAD US THROUGH THE PRESENTATION.
UM, BUT FIRST I'LL INTRODUCE DAVID HIGHTOWER FROM MIDWAY AND LET HIM INTRODUCE THE REST OF THE TEAM.
AND THEN WE'LL DIG INTO THE PRESENTATION AND WE'LL HAVE QUESTIONS AT THE END, UM, TO ALLOW TIME TO GET THROUGH THE MATERIAL SINCE WE ARE THE TIMELINE FOR THIS MEETING.
SO, DAVID, WELL THANK YOU BOARD MEMBERS, COUNCIL MEMBERS FOR, UH, ALLOWING US TO COME AND, UH, SPEND A LITTLE TIME WITH YOU TODAY AND, AND, UH, PRESENT THIS PRESENTATION.
UH, ATTORNEY NOTED, UH, WE HAVE BEEN PURSUING, WOULD LIKE TO PURSUE
WE, AS I THINK EVERYBODY MIGHT, SHOULD BE AWARE, UH, WE HAD THE, UH, GREAT FORTUNE OF BEING AWARDED, THE ABILITY TO COME IN AND BACK PLAN THE DEVELOPMENT PROJECT THAT IT'S, IT'S A PROCESS THAT WE'VE BEEN WORKING ON FOR SOME TIME.
UH, THERE'S A LOT OF PRE-WORK THAT GOES INTO THESE KIND OF PROJECTS BEFORE, UH, YOU ACTUALLY ARE OUT THERE TURNING DIRT.
AND WE'VE BEEN INVOLVED IN ALMOST ALL OF THOSE.
WE HAD A LITTLE BIT OF A HICCUP BECAUSE OF THE 79 1 32 INTERSECTION ISSUE.
BUT, UH, THAT WAS RESOLVED, UH, I GUESS LAST JUNE, EARLY JUNE BEFORE MEETING IT.
MY UNDERSTANDING IS IT WAS DUMPED IN MY BACK.
SO OUR ENGINEERS ARE STARTING TO WORK ON THAT TOO.
UH, BUT I'M HERE TODAY TO INTRODUCE, UH, MS. HOLBECK WITH HOBO HUMPHREYS ROBINSON, A LAWYER WHO I'VE BEEN WORKING WITH NOW FOR 20 PLUS YEARS.
WE WON'T SAY WE WON'T, UH, UH, WHO IS A BOND LAWYER AND, AND HER SPECIALTY IS MUNICIPAL DISTRICTS OF ALL KINDS.
UH, AND DREW MASTERSON AND JOHN GAN.
DREW IS CEO OF, UH, MASTERSON ADVISORS.
HE, HE RUNS THEIR, THEIR SHOP HERE IN THE AUSTIN MARKET.
THIS IS REALLY THEIR SHOW BECAUSE THEY ARE THE EXPERTS, THEY'RE THE BEST IN THE BUSINESS.
AND SO I'M GONNA TURN IT OVER TO JESSICA, LET HER GET STARTED.
DAVID SAID, I'M JUSTIN BECK WITH JBR.
I'VE ACTUALLY BEEN PRACTICING FOR MAYBE 15 YEARS, UM, AND OUR FIRM SPECIALIZES IN REPRESENTING SPECIAL PURPOSE DISTRICTS.
MUNICIPAL MANAGEMENT DISTRICTS.
TOUR IS, UH, THE ONLY THING ARE FIRMS AS SO BESIDES MY CHILDREN AND WHAT I'M WATCHING ON TELEVISION, THIS IS MY FAVORITE THING TO TALK ABOUT.
SO THANKS FOR INVITING ME HERE TONIGHT TO TALK WITH YOU.
UM, I'M JUST GONNA START WITH A QUICK ORIENTATION OF THE PROPERTY THAT WE'RE TALKING ABOUT.
YOU CAN SEE ON THE SCREEN THAT PROPERTY BOUNDARIES.
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SIDE OF THE CITY ACROSS FROM COTTONWOOD CREEK AND ACROSS FROM PITTSBURGH.AS YOU KNOW, IT'S CURRENTLY OWNED BY THE DEVELOPMENT CORPORATION, UNDEVELOPED PROPERTY.
OF NOTE, THE WEST SIDE, AS I UNDERSTAND IT, IS LOCATED IN THE FLOODWAY, RIGHT ADJACENT TO THE CREEK.
UM, I BELIEVE DAVID'S COMING BACK MONDAY TO TALK MORE WITH AT LEAST SOME OF YOU ABOUT THE DEVELOPMENT PLAN.
SO I'M NOT GONNA DESCRIBE THIS TOO HEAVILY, BUT JUST FOR GENERAL ORIENTATION, THE GOALS ARE TO DEVELOP A MIXED MULTI-USE DEVELOPMENT TO INCLUDE SOME RESIDENTIAL, UH, HIGH DENSITY AND RETAIL TO SUPPORT THAT.
UM, ALSO SOME MUNICIPAL SERVICES, OPPORTUNITIES FOR LIBRARY, UH, MUNICIPAL USE SPACES, MEDICAL, WHETHER THAT'S, UH, MEDICAL OFFICES OR A HOSPITAL.
AND ALSO UTILIZING THAT FLOODPLAIN FOR RECREATIONAL SPACE.
SPORTS FIELDS, UM, MAKE GOOD USE FOR FLOODPLAIN.
WE WERE INVITED HERE TONIGHT TO TALK TO YOU SPECIFICALLY ABOUT, UM, MUNICIPAL MANAGEMENT DISTRICT AS A TOOL FOR SUPPORTING THE FINANCING OF THE PUBLIC INFRASTRUCTURE NEEDED TO REACH THESE DEVELOPMENT GOALS.
BUT I'M GONNA START BY TALKING TO YOU ABOUT WHAT YOU ALREADY HAVE IN PLACE JUST TO MAKE SURE WE'RE ALL WORKING FROM THE SAME PAGE.
SO IN 2019, THE CITY DESIGNATED THE AREA THAT YOU CAN KIND OF SEE IN RED OUTLINED THERE AS A PUBLIC IMPROVEMENT DISTRICT.
PUBLIC IMPROVEMENT DISTRICT, UNLIKE A MUNICIPAL MANAGEMENT DISTRICT, IS NOT A SE SEPARATE POLITICAL SUBDIVISION.
IT IS A GEOGRAPHICAL BOUNDARY THAT IS AUTHORIZED TO LEVY AN ASSESSMENT.
SO THIS PARTICULAR PIT IS AUTHORIZED TO LEVY UP TO $10 MILLION IN ASSESSMENTS THAT WOULD BE PAID BY EACH PROPERTY OWNER ON AN ANNUAL BASIS.
UH, TO DATE THAT ASSESSMENT'S NOT BEEN LEVIED.
I'M JUST TALKING TO YOU ABOUT WHAT'S AUTHORIZED POTENTIALLY, IN ADDITION TO THERE BEING A PIT, YOU GUYS HAVE DESIGNATED A TAX INCREMENT REINVESTMENT ZONE.
ACTUALLY, I'M GONNA GO BACK IF I CAN.
I DO WANNA POINT OUT, UM, THAT THE PIT BOUNDARIES ARE LARGER THAN THE COTTONWOOD SITE PROPERTY.
I DON'T, OOPS, I DON'T HAVE A MAP OF THE TAX INCREMENT REINVESTMENT FUND, BUT MY UNDERSTANDING IT AS IT WOULD BE ALL OF THE SAME PROPERTY SHOWN IN THE PIT THAT'S INSIDE THE CITY LIMITS.
SO THERE IS A PIECE ON THE EAST SIDE THAT'S OUTSIDE THE CITY LIMITS.
A TUR LIKE A PIT IS ALSO NOT A SEPARATE POLITICAL SUBDIVISION.
IT IS A GEOGRAPHICAL DESIGNATION WHERE THE TAX COLLECTIONS ARE CAPPED, EXCUSE ME, THE, THE COLLECT THE TAX REVENUE ON THE BASE YEAR PROPERTY GOES TO THE CITY, AND THEN ANY TAX COLLECTIONS ON ANY INCREASES IN VALUE FROM THE BASE YEAR.
WHETHER THAT IS BECAUSE OF NEW IMPROVEMENTS OR JUST REGULAR INCREASES IN ASSESSED VALUE, IT SET ASIDE INTO A SEPARATE TAX INCREMENT FUND.
AND THAT FUND IS UTILIZED TO REINVEST ONLY IN THE ZONE.
SO FOR THOSE OF YOU WHO LIKE GRAPHICS, THAT IS A GOOD DESCRIPTION OF THE BASE.
AVALOR TAX REVENUE CONTINUES TO BE COLLECTED AND HELD BY THE CITY'S GENERAL FUND.
AND THEN THAT YELLOW TRIANGLE IS THE TAX INCREMENT REVENUE THAT'S AVAILABLE TO REINVEST IN PROJECTS WITHIN THE ZONE.
I WAS ASKED TO, UM, WHEN I WAS HERE PREVIOUSLY, GIVE A COMPARISON OF A MUNICIPAL MANAGEMENT DISTRICT IN A PI.
SO I'M GONNA REVISIT SOME OF THOSE THEMES HERE.
I'VE SAID TWICE NOW THAT THE PIT AND THE TURS ARE NOT SEPARATE POLITICAL SUBDIVISIONS.
UNLIKE A MANAGEMENT DISTRICT, WHICH IS SEPARATELY CREATED BY EITHER THE TEXAS LEGISLATURE OR BY ORDER OF THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY.
UM, IT'S MORE ROUTINE TO HAVE A MANAGEMENT DISTRICT CREATED BY THE TCPO.
BOTH OF THOSE SCENARIOS, THE CITY HAS TO CONSENT BEFORE THE DISTRICT IS CREATED.
UM, IT IS A MANAGEMENT DISTRICT IS GOVERNED BY A FIVE MEMBER BOARD OF DIRECTORS THAT WILL INITIALLY BE APPOINTED BY THE TCEQ, BUT WE GIVE THEM THE NAMES.
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THE FIVE BOARD MEMBERS SERVE FOUR YEAR STAGGERING TERMS, AND THEY'RE SUBJECT TO APPOINTMENT BY THE CITY.UM, IN COMPARISON TO A PI, WHICH IS ADMINISTERED BY THE CITY, UM, IT IS NOT A SEPARATE POLITICAL SUBDIVISION.
SO THEREFORE, CITY STAFF PROVIDES THE EITHER CITY STAFF OR CONSULTANTS HIRED BY THE CITY, PROVIDES THE PI OVERSIGHT AND ADMINISTRATION, INCLUDING THE ASSESSMENT PLAN AND LEVYING THE ANNUAL ASSESSMENT MANAGEMENT.
DISTRICTS ARE REIMBURSEMENT BASED FINANCING MECHANISMS. WHAT THAT MEANS IS THAT THE MANAGEMENT DISTRICT FROM DAY ONE WILL NOT HAVE ANY AVAILABLE FUNDS, THEREFORE, THE DEVELOPER IS GOING TO ADVANCE ALL OF THE COSTS FOR THE PUBLIC INFRASTRUCTURE.
AND THE DEVELOPER ONLY GETS REIMBURSED IF THE DEVELOPMENT CREATES ENOUGH TAXABLE VALUE TO SUPPORT THAT REIMBURSEMENT.
AND I'LL TALK IN MORE DETAIL ABOUT THAT IN COMPARISON.
A P CAN LEVY ITS ASSESSMENT ON DAY ONE ALL IN, UM, AND IT, IT IS SET AT A FIXED AMOUNT.
SO IF YOU DON'T GET YOUR COST ESTIMATES RIGHT ON THE FIRST DAY, OR IF THE DEVELOPMENT DOESN'T COME TO FRUITION, THE ASSESSMENT PLAYER PAYERS STILL HAVE TO PAY THAT FIXED RATE EACH YEAR.
UM, IN COMPARISON TO A MANAGEMENT DISTRICT, WHICH LEVIES A TAX, UM, THAT IS BASED ON THE TAXABLE VALUE OF EACH PROPERTY.
SO, UH, UH, MANAGEMENT DISTRICT'S TAX, THE TOTAL AMOUNT OF TAX IS BASED ON THE ASSESSED VALUE AS COMPARED TO A PID WHERE IT'S A FLAT RATE FOR EACH PROPERTY.
SO YOU AND YOUR NEIGHBOR AND THEN THE TARGET NEXT DOOR, YOU ALL PAY THE SAME AMOUNT.
WHEREAS A MANAGEMENT DISTRICT, THE RATE THE TAX BILL IS BASED ON YOUR TAXABLE VALUE SO THAT HOMEOWNERS PAY A LESSER TAX BILL THAN THE COMMERCIAL DEVELOPMENT.
LIKEWISE, UM, A MANAGEMENT DISTRICT AS A POLITICAL SUBDIVISION CAN OFFER HOMESTEAD TAX EXEMPTIONS.
SO THAT REDUCES THE HOMEOWNER'S TAX BURDEN AND SHIFTS IT TO COMMERCIAL DEVELOPMENT, WHICH IN THIS PARTICULAR DEVELOPMENT IS NOTEWORTHY BECAUSE WE ARE PROPOSING SOME HOUSING, SOME DENSE HOUSING.
BUT THE, THE BULK OF THE TAX BURDEN WOULD BE CARRIED BY THAT COMMERCIAL DEVELOPMENT.
THIS IS JUST A GRAPHIC TO DEMONSTRATE WHAT A MUNICIPAL MANAGEMENT DISTRICT CAN DO.
UH, IT HAS THE AUTHORITY TO CONSTRUCT AND OPERATE WATER, SEA DRAINAGE.
IT CAN CONSTRUCT ROADS, IT CAN CONSTRUCT PARKS AND RECREATIONAL FACILITIES.
AND IT CAN ALSO PROVIDE SUPPLEMENTAL SERVICES, UM, LIKE FIREFIGHTING, TRASH COLLECTION, AND POLICE SERVICES.
MY FIRM SPENDS AN A LOT OF TIME AT THE LEGISLATURE WHEN IT'S IN SESSION, UH, TALKING TO LEGISLATURES ABOUT HOW WE BELIEVE MANAGEMENT DISTRICTS AND MUDS ARE GOOD FOR TEXAS.
AND THAT IS BECAUSE OF HOW HEAVILY REGULATED MANAGEMENT DISTRICTS ARE.
THEY ARE THE MOST HEAVILY REGULATED POLITICAL SUBDIVISION IN THE STATE OF TEXAS.
WE CAN ONLY EXERCISE THE POWERS THAT ARE EXPRESSLY GRANTED UNDER THE WATER CODE IN THE LOCAL GOVERNMENT CODE.
I MENTIONED EARLIER THAT THE DISTRICT HAS THE AUTHORITY TO CONSTRUCT THE INFRASTRUCTURE, BUT ALL OF ITS PLANS FOR THAT PUBLIC INFRASTRUCTURE ARE STILL SUBJECT TO ALL CITY CODE AND ORDINANCE.
THAT THE, THE CITY WILL STILL REVIEW ALL OF THE CONSTRUCTION PLANS, CITY INSPECTS THE FACILITIES, AND ULTIMATELY IN THIS PARTICULAR DEVELOPMENT, WE WOULD BE LOOKING TO CONVEY THOSE FACILITIES AT THE END OF CONSTRUCTION TO THE CITY FOR OWNERSHIP.
UM, SIMILAR TO CONSTRUCTION PLANS BEING SUBJECT TO THE CITY'S REVIEW, THEY'RE ALSO REVIEWED BY THE TCEQ OR SUBJECT TO EPA REQUIREMENTS.
UM, MANAGEMENT DISTRICTS ARE SUBJECT TO TCEQ FEASIBILITY RULES THAT PIS ARE NOT.
THESE ARE ECONOMIC FEASIBILITY RULES THAT REQUIRE THAT THE DISTRICT HAVE ACHIEVED CERTAIN ECONOMIC MEASURES BEFORE IT CAN ISSUE DEBT.
AND THIS IS, THIS IS WHAT MAKES IT A DEVELOPER REIMBURSEMENT VEHICLE.
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BONDS THAT ARE SUPPORTED BY THE TAXABLE VALUE.SO THE DEVELOPER COMES IN, BUILDS THE INFRASTRUCTURE, PUTS THE IMPROVEMENT, THE VERTICAL IMPROVEMENTS ON THE GROUND.
AND ONLY WHEN THE MANAGEMENT DISTRICT CAN MEET THE TCE Q'S ECONOMIC FEASIBILITY, CAN IT ISSUE DEBT TO REIMBURSE THE DEVELOPER.
UM, I MENTIONED EARLIER THAT THE MANAGEMENT DISTRICT'S CREATED BY ORDER OF THE TCEQ, BUT ONLY WITH THE CITY'S CONSENT.
AND THERE THE CITY IS AUTHORIZED TO PUT CERTAIN PARAMETERS ON ITS CONSENT CONDITIONS, UM, IN TO INCLUDE PARAMETERS FOR THAT.
ADDITIONALLY, MMDS HAVE TO HAVE THEIR BONDS APPROVED BY THE TEXAS ATTORNEY GENERAL'S OFFICE.
THE TEXAS ATTORNEY GENERAL HAS A SPECIFIC SECTION THAT IS DEDICATED TO THE REVIEW OF MUNICIPAL SECURITIES, OF WHICH A MANAGEMENT DISTRICT BONDS WOULD BE ONE AS A SEPARATE SUBDIVISION POLITICAL SUBDIVISION.
THE MANAGEMENT DISTRICT HAS TO COMPLY WITH OPEN MEETINGS ACT AND PUBLIC INFORMATION ACT JUST LIKE THE CITY.
UM, AS I MENTIONED, THE BOARDS ARE APPOINTED BY THE CITY AND THEY'RE SUBJECT TO ALL THE TEST TECH, SAME TEXAS ETHICS LAWS THAT ARE APPLICABLE TO THE CITY COUNCIL.
AND FINALLY, WE MANAGEMENT DISTRICTS HAVE TO COMPLY WITH PUBLIC BIDDING REQUESTS.
WE KNOW A LITTLE BIT ABOUT WHAT A MANAGEMENT DISTRICT CAN DO.
WHERE DOES IT GET ITS FUNDS? I'VE TALKED TO YOU ALREADY ABOUT THE DIFFERENCE BETWEEN TAX LEVIED ON THE TAXABLE PROPERTY IN THE DISTRICT AS OPPOSED TO LUMP SUM ASSESSMENTS THAT ARE PAID ANNUALLY.
UM, WHEN THE DISTRICT LEVIES THE TAX, IT, IT WOULD BE DIVIDED OR POTENTIALLY DIVIDED INTO TWO COMPONENTS, THE, UH, AMOUNT THAT'S USED TO SERVICE DEBT.
AND THEN IT CAN ALSO LEVY AN OPERATIONS AND MAINTENANCE TAX TO PAY FOR ITS OVERHEAD AND ADMINISTRATIVE EXPENSES OR ANY ONGOING OPERATING COSTS.
YOU KNOW, WHETHER THAT'S TRASH, FIRE, POLICE, OTHER SERVICES.
THE LIMITING FACTOR FOR HOW MUCH A DISTRICT CAN FINANCE IS ALWAYS GOING TO BE ITS TAXABLE VALUE.
THE DEVELOPER IS THE ONE AT RISK.
THEY WILL ADVANCE THE FUNDS AND, AND WE LIKE TO SAY THEY CAN ONLY EAT WHAT THEY GROW.
OR SOME PEOPLE LIKE TO SAY, EAT WHAT THEY KILL.
IN COMPARISON, A KID ESTABLISHES UPFRONT THE TOTAL LUMP SUM THAT IT'S EVER GOING TO, UM, STUDY OR ASSESS.
AND IT HAS TO BE SURE THAT THAT AMOUNT IS GOING TO BE SUFFICIENT AT THE ONSET TO PAY FOR THE PUBLIC INFRASTRUCTURE.
THERE IS NO WAY TO, UM, RETROFIT THAT ASSESSMENT AMOUNT OR INCREASES IN COSTS IN RESPONSE TO MARKET ISSUES.
UM, THE LAST POINT I'M GONNA MAKE ON THIS SLIDE IS A MANAGEMENT DISTRICT CAN ALSO BE AN ISSUER FOR TAX INCREMENT REVENUE BONDS.
AND THAT'S IMPORTANT FOR THIS DEVELOPMENT BECAUSE YOU GUYS HAVE ALREADY CREATED TERMS HERE.
SO THIS BRIGHT RED GRAPHIC, UM, SHOWS HOW WE WOULD PROPOSE STRUCTURING A MANAGEMENT DISTRICT'S REIMBURSEMENT MODEL TO THE DEVELOPER.
IT WOULD HAVE FOR COTTONWOOD TWO SOURCES OF REVENUE, THE PROPERTY TAX THAT IT CAN LEVY ITSELF, AND THEN TAX INCREMENT REVENUE THAT THE TS MAY GIVE TO THE MANAGEMENT DISTRICT TO ISSUE DEBT OR THE SERVICE DEBT.
ALRIGHT, THE TIME IS, EXCUSE ME.
UH, CALL THIS, UH, ECONOMIC CORPORATION, UH, MEETING ORDER, UH, ROLL CALL.
COULD YOU HAVE A QUORUM? AND I THINK MAYBE I RECOGNIZE YOU FROM THE LAST TIME I WAS HERE.
UM, I, I AM GOING TO START BLURRING MY EXPERTISE IN WITH MASTERSON ADVISORS EXPERTISE.
SO I THOUGHT THIS SLIDE AND THEN I'M GONNA TURN OVER THE NEXT TWO SLIDES TO GIVE YOU INSIGHT ON HOW MANAGEMENT DISTRICT FINANCING MODEL WORKS AND WHAT ITS
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BENEFITS ARE.UM, REMINDER THAT THE DISTRICT'S STANDALONE POLITICAL SUBDIVISION.
SO THE DEBT THAT IT ISSUES, ITS A STANDALONE CREDIT AS OPPOSED TO PUBLIC IMPROVEMENT DISTRICT WHERE THE CITY IS THE ISSUER.
UM, I WILL NOTE THAT THE CITY IS THE ISSUER, BUT IT IS ONLY SECURED BY THAT ASSESSMENT REVENUE.
UM, SO IT'S NON RECOURSE, NOT AGAINST THE CITY.
UM, AND I'LL, I'LL LET DREW AND JOHN TALK MORE ABOUT THAT AS MUNICIPAL ADVISORS.
UM, UNDER THE BENEFITS TALKING TO YOU ABOUT THE EFFICIENT FINANCING MODEL OF THE MUNICIPAL MANAGEMENT DISTRICT, WHEN IN UTILIZING TAX INCREMENT REVENUE, UM, AGAIN, THE TOURISM IS NOT A STANDAL POLITICAL SUBDIVISION.
SO THE CITY WOULD BE ISSUER THE ISSUER OR A LOCAL GOVERNMENT CORPORATION, AND THEY WOULD, YOU WOULD BE ISSUING TAX INCREMENT REVENUE BONDS.
SO IT'S SECURED BY THAT TAX INCREMENT REVENUE.
UM, TYPICALLY THE MARKET REQUIRES A RESERVE FUND, UM, OR PERHAPS PRICING IS A LITTLE BIT MORE EXPENSIVE.
WHEN YOU UTILIZE THE MANAGEMENT DISTRICT AS THE ISSUER, IT'S ABLE TO PLEDGE ITS OWN TAXES, AUTHORITY, AND THEREFORE, UH, UH, RESERVE FUND NOT REQUIRED.
UH, IT'S A VERY BIG POOL OF PURCHASERS SO THAT YOU MAY GET A SLIGHTLY BETTER INTEREST RATE.
UH, THEREFORE MAKING THE, THE ISSUANCE MORE EFFICIENT.
THERE'S MORE OF THE DOLLARS ARE BEING USED TO PAY PROJECT COSTS.
SIMILARLY, UM, UTILIZING A TAX INCREMENT CONTRIBUTION TO THE PROJECT, LOWER THE TOTAL MUNICIPAL MANAGEMENT DISTRICT TAX RATE, MAKING IT COMPETITIVE.
IF IT'S NOT RELYING SOLELY ON ITS OWN TAX TAXING SOURCE, UH, TO FINANCE ALL OF THE INFRASTRUCTURE, IT TIES DOWN THAT TAX RATE.
THE DEVELOPER'S, THE ONE AT RISK HERE, ALL THE COSTS ARE ARE PREFUNDED AND REIMBURSED BY, BY THE DISTRICT DEVELOPER, NOT AT RISK ON THE, THE COULD ISSUE THE DEBT UPFRONT BE WITHOUT THE DEVELOPER CONTRIBUTING.
WHAT HAPPENS IF THEY DON'T, IF THE DEVELOPER DOESN'T PAY THE ASSESSMENT, WHAT HAPPENS TO THE DEVELOPER'S LAND? THAT IS WHAT WE DON'T LIKE ABOUT THEM.
IT COULD, THE, THE PI, IF THE, THE ASSESSMENT PAYERS DON'T PAY THE ASSESSMENT, THEN THAT THEY'RE IN DEFAULT.
WHAT HAPPENS TO THE LAND IS A LIEN ON THE PROPERTY.
THAT SO IT COULD BE FORECLOSED FOR.
SO THE BOTH OF THEM, THE DEVELOPER'S AT RISK, BECAUSE IF THE DEVELOPER OWNS A HUNDRED ACRES AND THEY DON'T PAY THEIR PIT ASSESSMENTS AND IT GETS FORECLOSED ON AND THE CITY FORECLOSES AND TAKES IT FROM THE DEVELOPER, ONE COULD SAY THE DEVELOPER WAS AT RISK 'CAUSE THEY NOW DON'T HAVE A HUNDRED ACRES.
WHEN I'M SPEAKING OF THE DEVELOPER BEING AT RISK, WHAT I MEAN IS THE DEVELOPER'S AT RISK OF NOT EVER BEING REIMBURSED IN BOTH INSTANCES.
THE DEVELOPER'S AT RISK OF THE PROJECT, NOT SUCCEEDING OF A DEALER TAX LIEN OR A BID ASSESSMENT BEING FORECLOSED ON.
UM, SAME WOULD BE TRUE FOR ANY PROPERTY OWNER IN THE, IT JUST SOUNDED A LITTLE BIT LIKE, NOT THAT YOU SAID IT SOUNDED A LITTLE BIT LIKE IN THIS SCENARIO, THE DEVELOPER'S AT RISK IN THIS SCENARIO, IT, WHAT'S UNSPOKEN IS THEY'RE NOT AT RISK WHEN IN REALITY I VIEWED IT AS THEY'RE BOTH AT RISK.
IT JUST VARIES WHAT THE, WHAT THE OUTCOME IS.
BUT ANYWAY, IT'S JUST A, UNLESS I'M WRONG ON THAT, THAT THERE, THERE'S SOME SORT OF RISK FOR THE DEVELOPER IN BOTH SCENARIOS, RIGHT? E ECONOMICALLY A PI COULD, COULD BE THE ONE THAT HA THAT PUTS THE MONEY UPFRONT FOR THE PUBLIC INFRASTRUCTURE.
SO THE DEVELOPER IS AT LE LESS RISK ERROR BECAUSE IT'S GETTING THE PI TO PAY FOR WHAT IT OTHERWISE WOULD HAVE TO ADVANCE IN A MANAGEMENT DISTRICT SCENARIO, WE DON'T CARE EITHER WAY BECAUSE IT'S NONRECOURSE TO US, IT'S A BOND HOLDER, A PIT BOND HOLDER SOMEWHERE IN AMERICA OR THE WORLD THAT REALLY CARES HOW THAT MONEY SPENT.
ULTIMATELY, IF YOU CARE ABOUT ENCOURAGING THE DEVELOPER TO PURSUE THE PROJECT TO ITS END TO GET REIMBURSED, A DEVELOPER WHO'S NOT HAD TO PUT UPFRONT ANY PUBLIC INFRASTRUCTURE COSTS, UM, ARGUABLY COULD BE A LESS TRUSTWORTHY PARTNER THERE.
THERE'S SOME COMPLEX, UM, CIRCUMSTANCES THAT WE COULD UNPACK LATER ON.
I JUST, SOMETIMES IT'S WHAT'S NOT SAID.
THAT'S JUST AS IMPORTANT AS IS SAID.
NO OFFENSE, LIKE YOU SAID, YOU DO MUDS AND MMDS
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HERS, YOU DON'T DO PITS.BUT IF A PIT PERSON CAME HERE, THEY WOULD TELL US ALL THE BENEFITS OF PITS AND THEN THEY WOULD LEAVE UNSPOKEN BAD THINGS THAT THEY VIEW ABOUT PITS, BUT THEY WOULD TELL US ALL THE BAD THINGS ABOUT MUD.
SO IT JUST, IN MY MIND, I LIKE TO MAKE SURE WHEN IT'S JUST A, WE ONLY GOT YEAH, WE'RE ALMOST AT TIME.
DO YOU WANNA PICK UP FROM HERE? YOU SWITCH THROUGH THIS.
UM, FORWARD AND, UM, SEE FOLKS, AND WE, UM, ONE OF THE BIG THINGS I THINK TO TALK ABOUT WITH THE BOND MARKETABILITY DEALING WITH KIDS VERSUS MMDS NUMBER ONE, YES, THE DEVELOPER HAS A LITTLE BIT MORE SKIN IN THE GAME WITH, UH, FRONT OF THE INFRASTRUCTURE AND WE'RE TO SELL THE BONDS AT A LATER TIME.
SO BECAUSE OF THAT, UH, THE, THE BOND MARKET LOOKS AT THE TWO DIFFERENT TYPES OF BONDS AND ASSIGN A RISK COMPONENT IN EACH ONE.
YOU WILL SEE THAT ON THE MUD SIDE OR THE MMD SIDE BECAUSE OF THE DEVELOPMENT DEVELOPER FUNDING THE INFRASTRUCTURE IN PLACE AND CREATING THAT VALUE BEFORE ANY BONDS ARE ISSUED, IT DEMANDS A LOWER INTEREST RATE COST.
SO THAT GOES TO, INTO PLAY OF THE TAXPAYERS WITHIN THAT BOUNDARY.
UH, UH, THE COST OF FUNDS ASSOCIATED WITH IT.
WE, WE REALIZED OVER THE LAST, UH, LOOKED AT THE NUMBERS OVER THE LAST THREE MONTHS AND THE AVERAGE, UH, IS ANYWHERE FROM, UH, 65 TO A HUNDRED BASIS POINTS.
UH, ISSUING MMD BONDS VERSUS PIT BONDS.
FOR EVERY MILLION DOLLARS THAT, UH, THAT IS ISSUED, THAT TRANSLATES TO ABOUT A HUNDRED THOUSAND TO $150,000 OF INTEREST, ADDITIONAL INTEREST COST, UH, WITH A PIT OVER THE 30 YEAR PERIOD.
SO I THINK MIDWAY'S ALSO LOOKING AT THIS AND TRYING TO BE, UH, AWARE OF WHERE THOSE TAX REVENUES ARE BEING USED AND TRYING TO BE AS EFFICIENT AS THEY POSSIBLY CAN AND NOT SPEND ADDITIONAL MONEY ON INTEREST COSTS THAT MAYBE DOESN'T HAVE TO BE IN PLAY.
UM, SO BECAUSE OF THE HISTORY OF THE MMD MARKET, UH, THERE ARE A NUMBER OF BUYERS FOR, UH, FOR THESE TIGHT BONDS, WHICH ABSOLUTELY PUSHES THAT INTEREST RATE, INTEREST COST DOWN THAT, UH, THE DEVELOPER UP FRONT, UH, FRONTING THE INFRASTRUCTURE COSTS PLUS ALL THE RULES AND REGULATIONS THAT JESSICA JUST TALKED ABOUT.
UH, GOING THROUGH THE TCEQ, UH, MAKING SURE THAT WE CAN ONLY ISSUE BONDS ONCE WE HAVE THE VALUE IN PLACE ALLOWS US TO ISSUE AT A MUCH LOWER INTEREST COST OVER THE LIFE OF THE BONDS.
UH, SO THAT'S, UH, DON'T WANNA READ EVERY SINGLE POINT ON THAT, BUT THAT'S KIND OF, UH, THE GIST OF THIS SLIDE.
UH, THAT ALONG WITH THE EFFICIENCIES OF, OF, UH, NOT HAVING ADDITIONAL COST OF RESERVE FUNDS, LIKE JESSICA SAID, THAT'S JUST ADDITIONAL COSTS THAT, UH, PITS HAVE TO ISSUE ADDITIONAL BONDS TO COVER THAT.
JUST TRYING TO BE BRIEF WITH THIS, UH, DREW YOU HAVE HERE.
MOSTLY THIS LAST SLIDE IS JUST BECAUSE I WANTED TO SHOW OFF THAT I FOUND THIS CUTE PICTURE THAT LOOKS LIKE A POSTPARTUM.
UM, AND BECAUSE HAVING PRESENTED TO A NUMBER OF CITY COUNCIL IN THE PAST, I KNOW THAT ONE OF THE THOUGHTS ON YOUR MIND IS HOW DO WE MAINTAIN CONTROL OF THE SEPARATE DIVISION? SO I JUST WANNA REMIND YOU THAT THE CITY STILL APPOINTS THE DIRECTORS.
YOU'RE STILL RESPONSIBLE FOR APPROVING ALL THE PUBLIC CONSTRUCTION PLANS AND THAT STILL WOULD BE TRUE FOR A PIT.
UM, YOU, YOU BENEFIT FROM THE MANAGEMENT DISTRICT LEVYING A TAX ON THE PROPERTY THAT'S GOING TO BENEFIT FROM ALL OF THIS NEW CITY INFRASTRUCTURE AS OPPOSED TO, UM, YOU KNOW, CITYWIDE TAXPAYERS, WHICH IS ALSO TRUE OF A PIT.
UH, AND WITH THIS NEW INFRASTRUCTURE, THE CITY WOULD BE ABLE TO PROVIDE WATER, SEWER, COLLECT TAP FEES AND MONTHLY REVENUE.
I HAVE ONE THING I'D LIKE TO ADD.
UM, ONE BIG ADVANTAGE TO THIS PROJECT IN PARTICULAR, UH, OF A MANAGEMENT DISTRICT IS THE FLEXIBILITY TO HAVE PHASES.
AND I KNOW THAT MIDWAY IS CONTEMPLATING DEVELOPING THIS IN PHASES.
UM, PIT, EVERYTHING HAS TO BE SET UP FRONT, BUT A MANAGEMENT DISTRICT, YOU CAN CHANGE YOUR MIND AS YOU GO AND REACT TO MARKET FORCES TO GO MORE OF COMMERCIAL
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OR DENSE RESIDENTIAL, WHATEVER IS DRIVING THE VALUE AND WHATEVER IS THE DESIRE OF THE COLLECTIVE.UH, SO THAT'S JUST ONE BIG DIFFERENCE THAT THIS PARTICULAR PROJECT, UH, KIDS ARE ARE FINE OR ESPECIALLY, UH, YOU KNOW, A A RESIDENTIAL PROJECT THAT'S GONNA GET ALL DEVELOPED AT THE SAME TIME.
YOU KNOW, YOU KNOW WHAT, WHAT YOUR BOUNDARIES ARE THERE, WHAT YOUR, WHAT YOUR FUTURE IS THERE.
UM, BUT IN A COMMERCIAL MULTIPHASE PROJECT LIKE THIS, THAT MANAGEMENT DISTRICT IS A MUCH MORE FLEXIBLE STRUCTURE.
THIS IS CONTACT INFORMATION FOR ALL OF US.
AND WHAT OTHER QUESTIONS? I'VE
[3.2. Discussion and possible action related to Work Session topics]
GOT A NUMBER OF QUESTIONS.SO WHO SETS THE TAX RATE? THE BOARD DOES AND DOES THAT TAX RATE THAT THE BOARD SETS HAVE TO BE APPROVED BY THE CITY COUNCIL OR DO THEY JUST SET THE TAX RATE? SO FIRST IT HAS TO HAVE IT'S SUBJECT TO AN ELECTION.
THE DISTRICT HOLDS AN ELECTION ON THE MAXIMUM TAX RATE AND THEN IT AN ELECTION, MEANING LIKE A BOND ELECTION WHAT THE VOTERS AND VOTERS APPROVE.
WHAT THE INITIAL TAX RATE IS THAT JUST FOR WITHIN THE BOUNDARIES OF THE DISTRICT.
UM, AND THEN SO THERE'D BE ONE VOTE OR TWO? YEAH.
SO ONE VOTE FOR THE ENTIRE, WELL, BECAUSE THE, ALL OF THE PROPERTIES OWNED BY THE ECONOMIC CORPORATION SUBSTANTIALLY, UH, SINCE IT'S SECOND.
BUT SHOULD IT GO LIKE TO A MAY OR A NOVEMBER ELECTION, BUT THE ENTIRE CITY WOULD VOTE TO SET THE
THAT'S WHERE I WAS GETTING CONFUSED.
SO THE 220 ACRES THAT'S OWNED BY THE ECONOMIC DEVELOPMENT CORPORATION, THAT WOULD BE ONE VOTE.
AND THEN IF IT IS DROPPING DOWN BELOW 79, THE, THE PROPERTY OWNER THERE, WHICH IS CURRENT, BUT THEN THAT TURNS IT WOULD HAVE THOSE, THOSE PROPERTY OWNERS COULD HAVE A VOTE AS WELL.
SO THAT'S HOW YOU SET THE INITIAL TAX RATE? SORRY? IT'S HOW YOU SET THE MAXIMUM TAX RATES.
UM, SO YOU COULD NEVER LEVY ABOVE WHAT THAT VOTE AUTHORIZATION? NEVER, EVER, NEVER EVER.
NOT WITHOUT HOLDING ANOTHER ELECTION.
UM, AND THEN WOULD THE CITY STILL COLLECT TAX WITHIN THERE? SO THE CITY TAX WOULD BE COLLECTED? SO THIS WOULD BE SIMILAR TO A P WHERE WE HAVE IN CITY BID, THE CITY COLLECTS THEIR TAX AND THE P COLLECTS THE ASSESSMENT.
THIS WOULD JUST BE TWO TAX RATES THAT THEY WOULD PAY? CORRECT.
AND THEN I THINK YOU ANSWERED THIS ONE.
SO IT SOUNDS LIKE YOU SAID THE MAXIMUM TAX RATE, THEY CAN'T GO ABOVE IT WITHOUT DOING ANOTHER ELECTION.
RIGHT? THE ELECTION WOULD BE FOR THE PEOPLE WHO WOULD, WHO WOULD AFFECT, CAN THEY LOWER IT? OH YEAH.
OR WOULD SO THEY CAN LOWER IT WITHOUT ANY KIND OF AN ELECTION.
CORRECT? THEY CAN, THEY JUST CAN'T INCREASE IT.
IF THEY LOWER IT AND THEN THEY WANNA GO BACK UP TO THE MAX, COULD THEY DO THAT? THEY JUST CAN'T BUMP UP PAST THE MAX? UM, WELL THE DISTRICT IS SUBJECT TO THE SAME ROLLBACK TAX RATE CALCULATIONS THAT A CITY OR A COUNTY WOULD BE.
SO YES, THEY COULD BUMP IT UP WITHIN THOSE PARAMETERS.
AND THEN, UM, ONCE ALL THE DEVELOPMENT IS PAID FOR, DOES THE TAX GO AWAY OR IS IT THERE FOREVER? THE GOAL IS THAT YOU HAVE A DESCENDING TAX RATE AND AS YOU PAY OFF THE DEBT, IT EVENTUALLY GOES AWAY.
SO THE IDEA IS TO SET IT MAX AND THEN JUST KEEP LOWERING IT UNTIL GOES TO ZERO.
UM, AND THEN I THINK YOU ANSWERED THIS ONE.
I WAS WONDERING WHAT THE BENEFITS OF KEEPING THE TURS IN PLACE ARE, BUT IT SOUNDS LIKE IT'S ANOTHER WAY TO HELP FINANCE THE DEBT.
UH, COUNCIL MEMBER GORDON, ONE OF THE OTHER THINGS IS THAT WITH THE TURS IN PLACE THEN THE INCREASED VALUE OF THE PROPERTY DURING THE IMPROVEMENT PHASE, WHICH COULD BE 20 YEARS, YOU WOULD NOT SEE AN ADDITIONAL TAX IN YOUR COFFERS BECAUSE THE TAX, UNLESS YOU RAISE TAXES, BECAUSE THE, THE VALUE WOULD STAY THE SAME VALUE FOR YOUR PURPOSES, FOR YOUR TAX.
UM, BUT ONCE THAT INCREMENT IS USED AND THEN THE, THE TUR THE PURPOSE OF THE TUR HAS BEEN COMPLETED, THEN THAT'S WHEN THE ADDITIONAL TAX FROM THE PROJECT, SO YOU'RE GONNA HAVE A BIG HIT, RIGHT.
YOU KNOW, WILL GO YEAH, THE TUR WILL RETIRE AND THEN TO 10 MILLION, WHATEVER BIG YEAR IS RIGHT.
THAT THAT INCREMENT WILL, WILL THEN BE GOING TO THE CITY.
UM, THAT IS SOMETHING THAT YOU'LL WANT TO TALK WITH YOUR FINANCIAL ADVISORS AND AND FINANCE BECAUSE THE HOW THAT, THAT INCREMENT ROLLED OVER INTO THE CITY CAN SIGNIFICANTLY IMPACT THE MANNER IN WHICH YOU DO YOUR TAX, YOUR YOUR TAX ROLES.
SO, UH, YOU, YOU WANT TO FIND, UM, WE HAVE THE SAME ISSUE WITH THE, WITH THE DATA CENTER, UH, WHERE, YOU KNOW, WE, THE, THE MANAGEMENT OF THESE THINGS HAVE TO BE DONE VERY
[00:35:01]
WELL.OR ULTIMATELY YOU CAN BE IN A VERY TIGHT SPOT BECAUSE YOUR PROPERTY SUDDENLY INCREASED VERY RAPIDLY, WHICH THEN WOULD IMPACT YOUR ABILITY TO, YOU'D HAVE TO HAVE ROLLBACK TAXES.
AND SO THAT'S KIND OF THE, THAT IT'S A, IT'S A COMPLICATED CALCULATION.
THERE ARE SOME THINGS I GOT DREW HIT ON ONE.
IT'S FLEXIBILITY THAT BOTHERS ME BECAUSE WE GO IN WITH A PICTURE AND WHAT WE GET BACK OUT IS COMPLETELY DIFFERENT BECAUSE WE ALLOW FLEXIBILITY.
LIKE YOU SAID, THIS GIVES FLEXIBILITY TO WHERE MARKET CONDITION CHANGE.
IT COULD BE LESS COMMERCIAL, MORE MULTIFAMILY.
I HAVEN'T HEARD A WHOLE LOT OF PEOPLE THAT WANT THAT KIND OF FLEXIBILITY.
WE WANT DEVELOPERS TO SAY IF MIDWAY'S A PROFESSIONAL DEVELOPER THAT DOES A LOT, THEN THEY SHOULD KNOW, BASED ON TODAY'S MARKET CONDITIONS AND WHAT WE FORESEE IN THE NEXT FEW YEARS, WE ANTICIPATE NO MORE THAN X AMOUNT OF PERCENT TO MULTIFAMILY X TO THIS AND THIS MUCH COMMERCIAL.
IF THEY GET THREE OR FOUR YEARS IN.
THAT'S WHAT I LOOK AT AMENDMENTS FOR AND RENEGOTIATIONS.
BUT IF THE FLEXIBILITY IS ALL IN THE DEVELOPER'S HANDS WHEN YOU DROVE IN HERE, THAT'S WHAT FLEXIBILITY GETS YOU TO CO-OP.
THIS IS NOTHING LIKE WE THOUGHT IT WAS GONNA BE FOR THE MOST PART.
UM, I'D LIKE TO SEE THE MMD BOND SALES BECAUSE WHEN WE DO PIT BONDS, WE GET A LIST OF ALL THE RECENT PIT BONDS.
AND ONE THING IN HUS LIKE
BUT I LIKE TO SEE WHAT YOU GUYS HAD FOR YOUR RECENT MMD BOND SALES AND COMPARE IT TO A BOND, A PIT BOND WE JUST DID.
BECAUSE IT SEEMS LIKE OUR PID GUYS SAYS THE SAME THING THAT THEY'RE OVERSUBSCRIBED AND EVERYBODY WAS LINED UP FOR IT.
UM, PIS LIMIT, IF YOU GO BACK A COUPLE SLIDES, YOU SAID PIS LIMIT INCREASE INCREASES, WHICH MAYBE ONE MORE OR UM, OKAY.
THAT BOTTOM RIGHT ASSESSMENTS ON A PI REMAIN FLAT FOR THE LIFE OF THE PIT.
ELIMINATING THE BENEFITS FROM INCREASES IN TAXABLE VALUE.
SEE I VIEW OF PI IS YOU'RE PAYING A THOUSAND DOLLARS A YEAR TODAY AND AS THE VALUE GOES UP AND YOUR HOUSE OR BUSINESS IS WORTH A MILLION, YOU PAID A THOUSAND, IT'S WORTH 2 MILLION, YOU PAID A THOUSAND.
WHAT I FIND HAPPENS WITH BUDS IS THEY LIKE TO UM, UH, REFUND THE BONDS.
THEY LIKE TO TAKE OUT ADDITIONAL BONDS TO WHERE THE TAX RATES CONSTANTLY FLOATING.
OR THEY DO THIS THING, WHICH SOME CITIES DO.
WE KEPT YOUR TAX RATE THE SAME.
THE REASON YOUR TAXES WENT UP IS BECAUSE YOUR VALUE WENT UP.
AND SO WITH A PI PAY A THOUSAND FOR 30 YEARS OR YOU PAY IT ALL AT ONCE, BUT YOU'RE OUT.
UM, CAN I EXPLAIN TO THAT? UH, OKAY, WELL LET ME GET TO THIS BECAUSE SOMEONE'S GONNA HAVE, THERE'RE GONNA HAVE SOME OTHER THINGS.
UM, I THINK WE'RE GONNA HAVE HAVE A LOT MORE THOUGHTS ON THIS, BUT UM, AND I JUST WANNA MAKE SURE YOU GUYS READ OUR MUD AND PED POLICY.
'CAUSE IF I REMEMBER CORRECTLY, IN ORDER TO DO LIKE A MUD, YOU HAVE TO GO THROUGH OUR FA OR SOME ANALYSTS WE HAVE AND THEY HAVE TO DO A CALCULATION BOTH SETS.
AND YOU HAVE TO TAKE THE ONE THAT COMES OUT THE BEST.
YOU CAN'T JUST PICK MUD BECAUSE YOU WANT IT, YOU MAY HAVE TO PICK PIT 'CAUSE IT'S BETTER.
OR YOU MAY WANT A PIT AND YOU CAN'T PICK A PIT 'CAUSE THE MUD'S BETTER.
SO I REMEMBER IN OUR POLICY THERE'S SOMETHING LIKE THAT IN THERE.
THERE'S ALSO A DEAL TO WHERE, UM, AGAIN, THIS IS AN MM B NOT QUITE LIKE A MUD, BUT KIND OF LIKE A MUD.
I DON'T THINK WE HAVE A POLICY EXACTLY ON MM BS.
BUT ON THE MUD POLICY, THE BOND'S GONNA BE ISSUED FOR SO MUCH TIME AND AT THE END OF THAT TIME, THE DISTRICT AUTOMATICALLY HAD THE CITY.
I THINK AS IT'S WORDED IS WE HAVE THE RIGHT, NOT THE OBLIGATION TO ABSORB INTO THE CITY THIS WERE TO BEING INTO THE CITY.
I THINK IT'S PROBABLY LIKE A IN CITY MUD.
SO WHO'S THE DEVELOPMENT GROUP MADE OF? IS IT JUST MIDWAY OR WHO ARE ALL YOUR PARTNERS THAT'S GONNA BE INVOLVED IN THIS? RIGHT NOW IT'S JUST MIDWAY.
SO, UH, FIDEL IS NOT PART OF IT.
FIDEL WILL BE A, UH, A SALE BASICALLY ABOUT TERRAMARK.
THEY MAY BE, BUT THOSE DISCUSSIONS HAVE NOT BEEN COMPLETED.
SOME OF US CALL IT GETTING HOOKED, BUT WE HAD A DEAL.
WE DIDN'T DIAL DOWN ENOUGH ON SOME OF THE DETAILS AND AGREEMENTS AND OWNERSHIP STRUCTURE AND THINGS CHANGED LITERALLY THREE MONTHS BEFORE WE HAD GRAND OPENINGS, WE HAD SHOVELS, WE HAD LIGHTS, WE CAMERAS, WE HAD THIS WHOLE THING.
AND THEN A YEAR LATER IT WAS LIKE EVERYTHING CHANGED.
AND SO I THINK YOU GUYS GOTTA BE PREPARED.
WHOEVER YOU'RE GONNA HAVE, IF YOU'RE GONNA SELL TO FIDELIS, FIDELIS IS RIGHT NOW MARKETING THIS PROPERTY TO THE ENTIRE METRO AREA.
LIKE THEY OWN IT OR LIKE THEY HAVE RIGHTS TO MARKET IT, WHICH IS REALLY KIND OF UNETHICAL.
NORMALLY WHEN YOU MAKE A SITE PLAN THAT YOU'RE GIVEN OFF THE IMPRESSION, WHICH I'LL PASS ABOUT EVERYBODY THAT YOU
[00:40:01]
ARE MARKETING THIS, YOU HAVE SOME KIND OF SAY IN IT.AND AS FAR AS I KNOW, THE EDC HAS NOT GIVEN ANY CONSIDERATION TO FIDELIS.
SO WHY THEY'RE MARKING THE WHOLE PROPERTY.
WHEN I WORK WITH PEOPLE LIKE THAT, I CUT 'EM LOOSE BECAUSE YOU ONLY GOT ONE CHANCE TO MAKE A GOOD IMPRESSION.
AND I'VE NEVER BEEN BY FIDELIS, BUT THERE'S THAT.
WHAT I REALLY DON'T LIKE ABOUT MUDS IS IT'S A SEPARATE POLITICAL SUBDIVISION.
TOO MANY PEOPLE MOVE HERE FROM PLACES THAT DON'T KNOW WHAT A MUD A P THEY DON'T KNOW THAT THE ESD IS RUN BY A SEPARATE POLITICAL ENTITY.
THEY DON'T KNOW THAT THE HIGH SCHOOL, THE, THE SCHOOL DISTRICTS ARE SEPARATE ENTITY.
AND SO WHAT HAPPENS IS PEOPLE FROM COME UP AND SPEAK, THEY COMPLAIN ABOUT THE MUD THREAD, THEY COMPLAIN ABOUT THE, THE SCHOOL DISTRICT, THEY COMPLAIN ABOUT THE FIRE.
AND SO HERE WE HAVE CONTROL AND IF IT'S TO HELP OUT THE DEVELOPERS, SAVE SOME INTEREST PERSONALLY, THAT'S NOT MY PROBLEM.
BECAUSE WHAT WILL BE MY PROBLEM IS THEN WE'RE GONNA HAVE A BUNCH OF PEOPLE THAT LIVE OVER THERE IN A THOUSAND MULTIFAMILY HOMES COMPLAINING ABOUT THINGS AND WE'RE GONNA GO, WELL THAT'S NOT OURS.
THAT'S YOUR POLITICAL SUBDIVISION AND SORRY, YOU KNOW, YEAH.
I JUST DON'T THINK CUDO NEEDS.
BUT THE COUNCIL MAY VOTE DIFFERENTLY.
I KNOW THERE'S AN MOU EXTENSION.
I THINK IT'S ACTUALLY EXPIRED.
BUT MY RECOMMENDATION TO THE EDC THEY MAY NOT TAKE IT IS DON'T EXTEND THE MOU TAKE A STEP BACK AND MAKE SURE WE'RE DOING ALL THIS RIGHT.
IT'S BEEN TWO AND A HALF YEARS, TWO AND A HALF YEARS IN THIS DEAL OR MAYBE 19 MONTHS.
I THINK WE FIGURED FROM THE ACTUAL SIGNING OF THE AGREEMENT, NOT THE THE COURTSHIP, BUT HERE WE ARE, 19 MONTHS AND NOW IT'S, THIS IS JUST COMING.
AND I'M NOT GONNA TAKE THE BRIDGE JUST TO BLAME FOR THIS BECAUSE YOU SHOULD HAVE KNOWN YOUR FINANCING 12 MONTHS AGO AND HOW YOU WANTED TO LOOK AT IT.
AND I GET IT, YOU GUYS ARE FROM HOUSTON, THAT'S A MUD AREA.
THIS IS MORE OF A PIT AREA AND IF YOU GO TO DFW, IT'S A MIXTURE.
BUT WE ARE JUST NOW GETTING AROUND TO HOW YOU WANNA FINANCE THIS.
AND I THINK THIS IS A MAJOR CHANGE FROM WHAT WE'RE USED TO HERE.
UM, AND THEN THE TURS PART OF THATT MONEY IS SUPPOSED TO BE FUNDING A HUNDRED MILLION DOLLAR BRIDGE COMING ACROSS THERE.
SO IF THE IDEA IS TO GIVE ALL OF OUR TURS MONEY THAT WAS SUPPOSED TO DO OTHER BENEFITS TO FEED FOR YOU ALL, I MEAN THE DEVELOPER'S GOTTA PAY SOMETHING.
YOU CAN'T HAVE ALL YOUR STUFF, YOU CAN'T HAVE YOUR ROADS, YOUR WATER.
WE ALREADY PUT A 40 INCH WASTEWATER LINE.
WE'VE ALREADY RUN WATER TO THE SITE.
WE'VE ALREADY DONE A LOT OF WORK THAT THE TAXPAYERS ARE PAYING.
AND SO THEY'RE HOPING, I THINK THE ONES THAT I'M THINKING OF THE MAJORITY ARE HOPING THAT THIS TERM WE CREATED, WHEN THE VALUE STARTS COMING, IT CAN EITHER REPAY THE CITY FOR SOME OF THE COSTS.
THAT'S WHY OUR WATER BILLS ARE SO HIGH IS WE'RE FUNDING A LOT OF THIS STUFF.
BUT IF WE SAY ALL THIS MONEY THAT COULD HAVE GONE TO YOU TO HELP OFFSET YOUR BILLS IS GOING TO DEVELOPER IS GOING TO GET THEIR ROADS AND ALL THAT DONE.
WE'RE TELLING OTHER DEVELOPERS, BUILD YOUR OWN ROADS, BUILD THEM, THAT THAT'S ON YOU, THAT'S NOT ON TAXPAYER.
SO FOR ME, IF WE GET TO A PART AND SOMEHOW GET CONVINCED THAT AN IN-CITY MUD OR AN MM MD IS GREAT, I DON'T SEE MYSELF EVER LETTING THE WHOLE BENEFIT OF THE TURS TO GO TO THE DEVELOPER WHEN THE DEVELOPER'S SUPPOSED TO BE OFFSETTING THE SUPPOSED TO BE OFFSETTING TAXES TO THE PUBLIC, NOT THE PUBLIC FURTHER SUBSIDIZED AND DEVELOPER.
WE GOT WE'LL GO EXTRA SO EVERYBODY HAS A CHANCE TO TELL ME I'M WRONG OR YOU, YOU HAD A RESPONSE TO ONE OF THE QUESTIONS THAT HE HAD
I DON'T SPECIFICALLY REMEMBER WHAT MY RESPONSES, BUT I HAD SO MANY THOUGHT, BUT I'LL BRING THAT OUT IN PEOPLE WILL BE QUIET.
I'LL SPEAK THE UM, INTEREST RATE COMPARISON WAS PASSED OUT TO YOU.
UM, I I THINK ELIMINATING BENEFITS FROM INCREASES IN TAXABLE VALUE.
WHAT I'M TRYING TO ASSERT THERE IS THAT WHEN YOU'RE LEVYING A TAX AND YOU CAN USE A HOMESTEAD TAX EXEMPTION, THE THE, THE RESIDENTS ARE PAYING A A LOWER RATE AND THE BURDEN IS BEING CARRIED BY COMMERCIAL, WHICH IS DIFFERENT FROM A PI WHERE THE RESIDENTS AND THE COMMERCIAL ARE PAYING THE EXACT SAME AMOUNT.
WELL THAT'S NOT TRUE BECAUSE AS I UNDERSTAND PS WE DETERMINE IN THE BEGINNING HOMES ARE GONNA PAY $500 A YEAR AND EVERY ACRE COMMERCIAL'S GONNA PAY $100,000.
AND SO WE DETERMINE THAT UPFRONT AND THEN ONCE WE AGREE TO IT, I THINK THAT'S A PROBLEM WITH THE FLEXIBILITY.
[00:45:01]
A SUPPOSED TO BE A EIGHT OR NINE STORY HOTEL OUT HERE THAT HAS ONE HELL OF A PIT ASSESSMENT ON IT.WELL THEY BULKED IT ALL THERE AND NOW WHOEVER DEVELOPS ON THERE HAS ONE MASSIVE PIT.
SO MY GUESS IS THEY'RE GONNA WAIT UNTIL THE, THE COST OF PAYING OFF THE PIT PLUS THE LAND EQUALS WORTH GOING UP.
AND MAYBE IT'S NOT EIGHT STORIES, BUT AS I UNDERSTAND PIS, UM, WE DETERMINED IN SOME FORM OR FASHION THROUGH THE INITIAL SAP WE'RE DETERMINING ALL THE ASSESSMENTS.
SO I DON'T THINK IT'S TRUE THAT THE COMMERCIAL PEOPLE WOULD PAY THE SAME AS RESIDENTIAL.
WE COULD SAY RESIDENCES ARE FREE AND THE COMMERCIAL'S GOTTA PAY THE WHOLE BRUNT OF IT.
IT IS TYPICALLY BASED ON LOT SIZE OR AND THEN THE COMMERCIAL IS DIFFERENT DIFFERENTLY.
YEAH, BECAUSE EACH ONE OF THESE PADS OUT HERE, ONE OF 'EM GOT AN 80,000 A YEAR.
ONE OF 'EM GOT A, THERE'S A $480,000 OVER HERE BY THE POST OFFICE.
SO MY GUESS IS IT'S GONNA HAVE TO BE A MULTIFAMILY OR SOMETHING VERTICAL.
SO I MEAN ANYWAY, AND HU HAS LIKE EIGHT PITS AND WE SHOT DOWN, WE'VE ONLY APPROVED ONE MUD AND IT WAS ON THE VERY, VERY EDGE OF TOWN THAT NOBODY CARED ABOUT.
WE JUST KILLED ONE OVER HERE AND MADE IT BE A PIT AND WE KIND OF FOUGHT BACK.
SO IT'D BE SHOCK IF ALL OF A SUDDEN WE SAID, HEY, WE CHANGED THEIR MIND, MUDS ARE GOOD.
UM, AND THEN ALL OF A SUDDEN EVERYBODY THAT WANTS TO DO A BUD IS, IS HERE AND NOW WE'RE NOT DOING PS ANYMORE.
BUT IT, IT WEIRD STUFF HAS HAPPENED AND WE'VE CHANGED BEFORE.
I THINK THIS IS ALSO A DIFFERENT CIRCUMSTANCE THOUGH TOO.
AND I THINK THAT, YOU KNOW, THE CONCERN FOR, YOU KNOW, THE RESIDENTIAL SIDE OF THINGS, YOU KNOW, BASED OFF THE PRESENTATION IT'S LIKE YOU CAN KIND OF PICK AND CHOOSE AND DO WHAT YOU WANT.
SO, YOU KNOW, A RETAILER OR ANYTHING REMOTELY OF THE SORT, OBVIOUSLY THEY ARE, THAT'S BUILT INTO THEIR OPERATING EXPENSES.
YOU KNOW, US ON AN INDIVIDUAL LEVEL AS A HOMEOWNER, WE'RE NOT EXPECTING, YOU KNOW, MULTI THOUSAND DOLLAR BILLS EVERY YEAR FOR PIT ASSESSMENT.
UM, I THINK IN THESE TYPE OF SCENARIOS DOES AFFORD MORE FLEXIBILITY.
I THINK THAT FLEXIBILITY CAN BE CONTROLLED, BUT I THINK THAT IT CAN BE REALLY HYPER-FOCUSED ON ENSURING THAT, YOU KNOW, MIDWAY AND THEIR TEAM CAN BE SUCCESSFUL BUT ALSO NOT PASS THAT BURDEN ONTO, YOU KNOW, THE, THE HU TAXPAYER.
THE BURDEN WILL BE ON PEOPLE SHOPPING AT WHATEVER RETAILER OR WHATEVER ELSE INDIRECTLY.
THAT'S THE WAY I VIEW THIS WHOLE THING.
UM, I THOUGHT OF SOMETHING ELSE I DID NOT SAY IN IN RISK REACTION TO THE IDEA THAT THE MANAGEMENT DISTRICT COULD BE TAKE TAKING ALL THE TAX INCREMENT.
WHAT I WAS TRYING TO COMMUNICATE IS THAT THE MANAGEMENT DISTRICT WOULD MAKE THAT TAX INCREMENT REVENUE MORE EFFICIENT.
AND I HEARD YOUR POINT, YOU DON'T CARE ABOUT SAVING THE DEVELOPER INTEREST.
BUT IN THE INSTANCE WHERE THE TAX INCREMENT WAS BEING USED TO FINANCE, LET'S SAY FOR EXAMPLE YOUR BRIDGE, THE MANAGEMENT DISTRICT ISSUING THE DEBT IS MORE EFFICIENT.
AND SO MORE DOLLARS GO TO THE BRIDGE THAN IF THE CITY WERE ISSUING THE TAX INCREMENT REVENUE BECAUSE IT WOULDN'T, THE MANAGEMENT DISTRICT WOULD BE ABLE TO PLEDGE ITS OWN UNLIMITED TAX LOWER INTEREST RATE NUMBER RESERVE.
YOU DON'T SEE TURS MONEY GOING TO THE DISTRICT.
I DON'T KNOW, I WELL CAN YOU GO BACK TO THAT SIDE? 'CAUSE I THOUGHT YOU HAD AN ARROW TS AND YOU HAD IT GOING TO THE MMD.
SO IN THAT, IN, SO IF THE MANAGEMENT DISTRICT IS THE ISSUER OF ANY DEBT THAT'S GOING TO BE PAID BY THE TAX INCREMENT REVENUE, WHETHER THAT DEBT IS PAYING FOR THE BRIDGE OR PUBLIC INFRASTRUCTURE THAT THE CITY, YOU KNOW, FOR THIS PARTICULAR DEVELOPMENT, THE TAX INCREMENT REVENUE HAS TO GO FLOW THROUGH THE MANAGEMENT DISTRICT.
YOU SAYING THE MD COULD BUILD A BRIDGE INSTEAD OF CITY OR CONTRIBUTE TO IT? YEAH, I, I I THINK THE POINT I LIKE TO MAKE ON THE TERMS IS THE PROJECT PLAN IS 100% CONTROLLED BY THE CITY, NOT THE DEVELOP IS, YOU KNOW, ANY INFRASTRUCTURE THAT THE CITY DEEMS FOR THIS PROJECT WORTHY OF REIMBURSEMENT COULD BE DONE.
BUT IT'S TOTALLY UP TO THE CITY TO DO THAT.
UM, WITH REGARDS TO THE FLEXIBILITY POINT IS TRYING TO MAKE, UH, THE, THE MAIN POINT FOR MIDWAY IS THE PHASING THAT, THAT THEY CAN ISSUE BONDS OVER TIME AS THE VA VALUE IS THERE.
UH, YOU CONTROL THE BOARD, YOU CONTROL PRETTY MUCH EVERYTHING ABOUT THIS DEVELOPMENT.
IF YOU WANT IT TO BE A RIGID DEVELOPMENT PLAN, IT CAN BE, UH, NOT TYPICAL, BUT IT CERTAINLY CAN BE IN THIS CASE.
'CAUSE THIS IS, UH, IS DIFFERENT THAN IN CITY MUD AND YOU CONTROL EVERYTHING ABOUT THE CREATION OF MUD.
SO I THINK THAT'S THE FUNDAMENTAL DIFFERENCE THOUGH, TO REALLY HIGHLIGHT THAT PART.
THAT WAS LIKE, YOU CONTROL THE BOARD BEING AN MM MD BEING A MUD THAT'S UP TO THE
[00:50:01]
VOTERS OR WHOMEVER LIVES IN THAT MUD FOR APPOINTMENT.SO YOU HAVE FULL CONTROL ON THIS THE ENTIRE TIME IS WHAT I'M TAKING AWAY FROM THIS VERSUS OH YEAH, HEY GO ISSUE SOME BONDS.
OH HEY THE CITY DOESN'T WANNA TAKE THE DECK, IT'S MUD, THAT WHOLE THING.
WELL YOU CAN'T CONTROL ANY OF THAT.
WHEREAS WITH THIS, OH YEAH, I DON'T LIKE THAT.
WELL I LIKE TO SEE IF IT'S THAT EASY BECAUSE IS IT THAT EASY? WE JUST ALL OF A SUDDEN WAKE UP ONE DAY AND GO, WE WANNA WIPE THE BOARD AND WE JUST TAKE A VOTE AND THEY'RE GONE.
WE PUT NEW PEOPLE IN IF THEY'RE STAGGERING FOR YOUR TERM.
SO YOU'VE GOT A DIRECTOR ON THERE THAT YOU DON'T LIKE, YOU DO, UNLESS YOU CAN CONVINCE THAT DIRECTOR TO RESIGN, YOU GOTTA LET 'EM FOR HER LIVE OUT THE THEIR TERM AND YOU DON'T REAPPOINT THEM.
OH SEE IT'S NOT QUITE LIKE THAT.
SO WE'VE HAD THE FIRST TWO TO THREE YEARS TO GET THROUGH BEFORE PEOPLE HAVE ROLLED OFF AND WE'VE DONE TO REPLACE THEM.
IF YOU MAKE A MISTAKE ON YOUR PICKS, YOU GOT ONE HELL OF A PROBLEM.
AND BY THEN THEY, AS OPPOSED TO THEM BEING ELECTED FROM THE RESIDENTS IS THERE IS AN ELECTION ON THE PIT? I THAT IS WHAT HE WAS.
THAT'S BUT DON'T LIKE NEITHER ONE OF THEM IS, YOU DON'T HAVE TO WORRY ABOUT THAT.
BUT YEAH, IT DEPENDS ON HOW YOU WANNA GET THERE.
LIKE I SEE THIS AS A, YOU KNOW, FROM A, LIKE A FINANCE AND BANKING PERSPECTIVE, I SEE IT AS A MUCH MORE, YOU KNOW, OBVIOUSLY IT'S HIGHLY REGULATED.
I'VE SPENT SOME TIME TODAY DIGGING INTO MMDS JUST 'CAUSE I WASN'T UP TO SPEED ON THOSE AND I'VE GONE FOR A WHILE AND YOU KNOW, IT'S HIGHLY REGULATED IF YOU CAN'T, YOU KNOW, YOU CAN'T EVEN GET ANYWHERE CLOSE TO SPENDING A, YOU KNOW, GOING AND GETTING A BOND FOR ANYTHING UNTIL YOU CAN FINANCIALLY SUPPORT IT.
SO IT IS GOING TO BE A MORE SECURE FORM FOR ANYBODY GOING AND, YOU KNOW, OBTAINING A MUNI BOND OR WHATEVER ELSE.
WHY? BECAUSE THE MONEY HAS TO BE THERE.
UM, AND IT KEEPS EVERYTHING SEGREGATED AWAY AND KEEPS THE BONDING CAPABILITY OF THE CITY AND EVERYTHING ELSE WHERE IT NEEDS TO BE.
THIS INFORMATION, SO YOU GUYS SAID TYPICALLY THE DIFFERENCE BETWEEN MMD AND PIT BONDS IS 65 TO A HUNDRED BASIS POINTS.
CITY OF HU HAD TWO ON THIS ONE'S A 5.3 AND A 5.34.
SO THAT'S POINT OF 16 BASIS POINTS.
UH, I DON'T KNOW WHAT UNLIMITED TAX ROAD BONDS IS, BUT THAT'S A 5.22.
UM, WE HAVE ANOTHER, BUT IT'S FIVE POINT TWO'S, 10 BASIS POINTS.
UH, WE HAVE ANOTHER BUT 5.29, THAT'S ONE BASIS POINT.
MY POINT BEING, IF YOU TELL ME IT'S 65 TO A HUNDRED BASIS POINTS DIFFERENCE AND YOU'RE TALKING TO HUDU AND YOU HAVE HU ON HERE, ARE YOU, ARE YOU COMPARING THE RECENT MOST CELLS TO YEAH, I'M TALKING JUNE 25TH.
SO NOW YOU HAVE ONE HERE, WALLER.
I DON'T KNOW WHERE WALLER IS AND THEY'RE LOWER.
SO, SO THE WAY TO COMPARE THIS IS OVER HERE BY THE DATE.
SO YOU WANNA GET THE ONES AS CLOSE AS POSSIBLE BECAUSE THE MARKET DOES FLUCTUATE BACK AND FORTH.
UM, YOU PROBABLY WOULDN'T BE AS INTERESTED IN MUD ON THE WEST SIDE OF TEXAS OUT, UM, IN, IN OUR MARKET, IT DOESN'T REALLY MATTER.
THE STATE OF TEXAS MUD, THE INVESTORS THAT ARE LOOKING AT IT, UH, REALIZE THAT REGULATIONS ARE IN PLACE FOR MUD MM-HMM
AND IT DOESN'T MATTER IF IT IS IN HOUSTON AREA.
AUSTIN AREA, DFW AREA, THEY ALL TRADE EXTREMELY CLOSE TO EACH OTHER.
WE JUST DID A BID BOND, DIDN'T WE DO LIKE A MONTH OR SO AGO? YEAH.
I WAS GONNA SAY, 'CAUSE YOU KNOW, AGAIN, I SEE DATES AND THE MONTH OFF.
THE RATES CAN FLUCTUATE ON, YOU KNOW, I, I GET THAT, BUT I ALSO DO THINK AREA HAS SOMETHING TO MATTER BECAUSE IF YOU'RE IN, I DON'T KNOW, OIL, IF OIL PRICES SINK AND YOU'RE IN WEST TEXAS TRYING TO SELL MUD BONDS, I FIND IT HARD TO BELIEVE THEY'RE GONNA TRADE THE SAME WAY AS AUSTIN WHO MAYBE IS HAVING A TECH BOOM AND EVERYBODY'S TRYING TO GET INTO, BUT YOU KNOW, THE INVESTMENT CYCLE BETTER.
BUT, UH, WE SOLD BONDS IN EL PASO, SAN ANTONIO, UM, AUSTIN, UH, ALL OVER THE STATE.
AND ON A DAY BY DAY BASIS, THEY ALL TRADE EXTREMELY CLOSE TO EACH OTHER.
WE'LL FIND OUT WHICH ONE IT WAS.
AND LIKE THEY, MAYBE ONE OTHER POINT ON THE MARKETABILITY IS THAT ONLY LISTS TOTALLY NON-RATED MUDS COMPARED TO PITS, WHICH ARE ALL NOT RATED ON THEIR INITIAL SALES.
MAJORITY OF MUDS ACTUALLY ACHIEVED AND INSURANCE AND THE AA RATING, UH, BECAUSE THEY ARE A REIMBURSEMENT BASED CREDIT, THEY'RE MUCH STRONGER AND BOND INSURERS.
BUT WE DIDN'T, THAT'S WHERE THE A HUNDRED BASIS POINTS COME TO IF YOU FACTOR THOSE IN.
[00:55:01]
NON-RATED, NON-INSURED.CAN YOU DO, UH, UH, ARE YOU ALLOWED BY LAW TO DO, UH, REIMBURSABLE PS UM, YOU ARE, WOULD THEY CARRY A BETTER PREMIUM ON A RE REIMBURSABLE PIT AS OPPOSED TO A THE OTHER P LIKE A REIMBURSABLE MUD WOULD BE DIFFERENT THAN A REGULAR MUD? YEAH, I, I DON'T KNOW OF ANY REIMBURSABLE PIS, BUT YOU COULD TECHNICALLY DO, I THINK WE HAVE ONE HERE, DON'T WE? YEAH, WE HAD SOME.
WE GET INFORMATION AND YOU'LL GET TO SEE HOW WE DID A, A REIMBURSABLE PIT HERE, UH, BECAUSE WE DID HAVE, YOU'RE LOOKING AT A PIT OUT HERE THAT WENT LY WRONG AND SO WE MADE SOME CHANGES.
UM, BUT WE'RE STILL WORKING ON THAT I THINK.
ALL RIGHT, WHAT'S THE NEXT STEP? WE NEED TO HAVE THIS ON A COUNCIL AGENDA COMING UP SO WE CAN JUST YAY OR NA SO WE KNOW WHERE THE PROCESS TO GO.
UH, SO I THINK DO, I GUESS I WOULD ASK COUNSEL, HOW Y'ALL FEEL ABOUT THE INFORMATION PRESENTED.
DO YOU FEEL STRONGLY ONE WAY OR THE OTHER? DO YOU NEED MORE INFORMATION? I'LL MAKE A MOTION THAT WE DO NOT DO AN MMD FOR THIS DEVELOPMENT.
BEST WAY TO TRY TO GET THIS GOING FOR A SECOND.
AND IT'S JUST FOR THE REASONS I STATED.
WE HAVE EIGHT OR NINE OF THEM THAT WE'VE DONE AND OTHERS INFORMATION THAT WE CAN PROVIDE TOGETHER.
HAPPY TO RECONSIDER BY THE TELL THAT TIME WE HAVEN'T TALKED TO OUR, WHOEVER FMS BONDS IS TO US, OUR PIT UNDERWRITERS OR JIM SABONI OR FA UNTIL THEY COME UP AND PRESENT THAT YOU NEED TO GO WITH THE MUD.
I, I PERSONALLY, I CAN'T SUPPORT IT.
IT WOULD BE THE, THEY WOULD PRESENT ON MP AND THEY HAVE NOT DONE THAT.
IT COULD CHANGE IN THE FUTURE, I GUESS IN A DISCUSSION.
SO IF THIS PASSES, ARE WE SAYING THEY'RE BASICALLY FOREVER FORBIDDEN FROM CONSIDERING AN MMD FOR THIS? BECAUSE I THOUGHT, I THOUGHT WE WERE LIKE, THERE'S GONNA BE MORE RESEARCH DONE.
I HEARD 40 MINUTES WORTH OF, OR I GUESS I'M JUST CONFUSED AS, I'M NOT SAYING FOREVER, BUT ONE THING WE LEARNED WITH THE BRIDGE IS WE TALK ABOUT IT.
AND ONE THING I LEARNED LAST ON THE EDC, THEY WANT DIRECTION.
AND SO TO ME THIS IS A CHANCE FOR THE COUNCIL TO GO THE DIRECTION'S NOT TO GO THIS ROUTE, NOT TO COME BACK WITH SOME OVERWHELMING THING WE CAN ALWAYS RECONSIDER.
UM, BUT UNTIL THAT HAPPENS, CAN WE PUT THAT IN THE MOTION THEN? YEAH.
WELL ONE, BUT SEE, BUT SEE, WAIT A MINUTE.
THAT'S THE PROBLEM THEN BECAUSE THAT GIVES, THAT DOESN'T GIVE YOU CLARITY, RIGHT? WELL I THINK IF THE CLARITY IS YOU WANNA HEAR FROM YOUR OWN BOND COUNCIL BEFORE MAKING A DECISION, I THINK THAT THAT'S THE DIRECTION IS THAT IT NEEDS TO BE AN AGENDA ITEM PRESENTED FROM YOUR BOND COUNCIL ON NFTS.
IT SOUNDS LIKE THAT'S WHAT YOU'RE ASKING FOR IS THAT YOU WANNA HEAR FROM YOUR TEAM? NO, I WANNA HEAR NO, I I'M A NO UNTIL SOMEONE THAT WORKS FOR THE CITY OF HU MM-HMM.
TELLS US THIS IS A BETTER DEAL.
UM, NOT THAT IT IS TRUST DEVELOPERS, BUT ALWAYS SAY DEVELOPERS LIE BECAUSE, AND I LIKE THAT BECAUSE THEY'RE CAPITALISTS ARE OUT FOR THEMSELVES.
WE HAVE TO BE CAREFUL OF THAT.
AND SO TO ME, I'M ALWAYS A NO UNTIL SOMEONE PROVIDES REALLY GOOD EVIDENCE AND THAT USUALLY HAS TO COME TO PEOPLE THAT WE PAY TO PROTECT US.
AND NO ONE'S MENTIONED ANYTHING ABOUT THAT.
AND IF IN A MONTH OR TWO, UM, FIDELIS OR TERRAMARK OR MIDWAY OR WHOEVER COMES UP WITH A FINANCING PLAN THAT'S NOT A P, BUT SOMETHING DIFFERENT, WE CAN ALWAYS REVISIT IT AND THEN WE CAN ALL VOTE TO SAY, YOU KNOW WHAT, THAT'S A LITTLE BIT DIFFERENT PLAN.
SOMETHING WITH SOME DETAILS INSTEAD OF A, A DEAL.
SO FOR ME, I JUST BEAT UP A MUD GUY OVER HERE AND TELL YOU WHAT'S A PIT? SO I CAN'T ALL OF A SUDDEN GO, OH YEAH, I CHANGED MY MIND.
MUDS AND MDS ARE GREAT THINGS.
WELL I THINK TO YOUR POINT THOUGH, IF, IF EVEN IF THE DEVELOPMENT TEAM IN WHATEVER CAPACITY THAT LOOKS LIKE CAME BACK TO YOU, YOU, YOU'VE INDICATED THAT YOU'D LIKE TO HEAR THAT FROM YOUR FOLKS, THE CITY SIDE FOLKS.
SO YEAH, THEY, THEY NEED THAT.
I WOULD SAY IN THEIR DUE DILIGENCE THEY ASKED FOR THAT.
THEY NEED TO FOLLOW 'EM BUTTON PIT POLICY, WHICH IS TO GO TALK TO THESE PEOPLE THAT WORK FOR THE CITY AND TO GET VERIFICATION WHAT THE BEST ROUTE IS.
AND WHEN THEY GO THROUGH ALL THOSE STEPS, THEN I THINK IT'S ONLY NATURAL WHEN THEY COME BACK UP AND SAY, I'VE GOT, THIS IS A, THE REVISED FINANCING PLAN.
THEY'LL ENGAGED OUR PEOPLE WHO WILL THEN COME UP AND SAY YAY OR NAY.
AND THEN IT'S A DIFFERENT DISCUSSION.
UNTIL THEN, I DON'T WANT ANYBODY TO HAVE ANY, WHAT DO
[01:00:01]
WE DO FOR FINANCING? SO HOW ABOUT A NO AND WORK ON ANOTHER WAY, OR YOU COME BACK WITH A REISE AND FOLLOW A PIT POLICY AND MUD POLICY AND THEN AT THAT POINT IT, IT COULD CHANGE.YEAH, IT JUST, THE NO MEANS NO TO ME.
DO YOU HAVE A PROTOCOL FOR THE CITY COUNCIL THAT SAYS LIKE, IF THEY SAY NO ON SOMETHING, IT CAN'T COME BACK FOR SIX MONTHS? WE DON'T HAVE THAT PROTOCOL.
WHAT I THINK THE MAYOR IS SAYING IS FIDEL IS OUT THERE SHOPPING THIS THING AROUND AND NOBODY KNOWS WHETHER THEY HAVE ANY AUTHORITY IS I THINK WHAT I HEAR IS IF SOMEBODY CAN BRING BACK A DEVELOPER SAYING, HERE'S WHAT I'M GONNA DO, I NEED AN MMD TO DO IT.
IS THAT WHAT YOU'RE SAYING? YEAH.
I NEED MORE DETAILS, MORE CONCRETE PLANS, BUT HERE'S MY SITE PLANS, YOU KNOW, AND IF I SHIFT IT AROUND, GONNA LOOK LIKE THIS NOW, BUT IN THE FUTURE IF MARKET DOESN'T BEAR, THIS IS A POSSIBILITY.
IT NEEDS TO BE CONCRETE DEVELOPER SAYING, I'M READY TO GO TOMORROW.
YEAH, BECAUSE OUR, OUR SUBCOMMITTEES AT EDC LAST NIGHT TOLD US THEY HAVEN'T RECEIVED A SITE PLAN YET, WHICH IS WHY I PASSED OUT THE SITE PLAN THAT THE MARKET SEES GOING.
SO WE'RE NOT GETTING THE SITE PLAN, BUT SOMEONE THAT'S WORKING WITH MIDWAY HAS THE SITE PLAN BUT WHAT'S NOT BEING SHARED WITH US.
AND I'M LIKE, HEY, IT'S OUR LAND.
I THOUGHT WE WERE PART OF THIS TO ME.
BUT THAT'S ALL I'M TRYING TO DO IS SOMEHOW WE GOTTA GET GOING.
IT'S BEEN TWO AND A HALF YEARS.
I REALLY DON'T WANT THE MOU EXTENDED UNTIL WE FIGURE OUT THE DETAILS AND WHO'S IN CHARGE AND WHO'S DEVELOPING AND WHAT ALL IS HAPPENING BECAUSE WE'VE BEEN THROUGH THIS BEFORE.
SO POINT OF CLARIFICATION WHILE WE'RE IN HERE.
I WENT ON FIDEL'S WEBSITE TO SEE IF THEY'RE MARKETING THIS LAND.
THEY ARE NOT, I UNDERSTAND THIS IS IN FRONT OF US, BUT IF YOU GO ON THEIR WEBSITE, THERE IS NOTHING ABOUT HUDU.
IF YOU GOOGLE FIDELIS HUDU, THERE'S THE PROPERTY THEY'RE WORKING ON FOR THE OLD, UH, CONCRETE LINK RIGHT THERE ON 6 85 THAT WAS ZONED WRONG AND THAT STICK HOWEVER LONG AGO, BUT I CAN'T FIND ANYTHING THROUGH A SEARCH ENGINE OR ANYTHING ELSE THAT WOULD INDICATE THEY ARE ACTIVELY MARKETING THIS PROPERTY.
I'LL EMAIL YOU THE EMAIL FROM THE FIDELIS PEOPLE TO THE PERSON THAT GOT TO ME.
AND SO THEN YOU CAN HAVE IT FROM THE DELS PERSON AND YOU CAN REACH OUT TO THAT GUY HIMSELF.
I, I DON'T KNOW WHY THEY DIDN'T UPDATE THEIR WEBSITE.
I DON'T KNOW IF IT'S A POCKET LISTING.
UM, UH, JUST FROM OUTSIDE LOOKING IN AND LIKE, AND I'M NOT PRIVY TO CERTAIN CONVERSATIONS THAT HAPPENED PRIOR TO ME COMING BACK ON THE BOARD, BUT OUTSIDE LOOKING IN, IT DOES NOT APPEAR THAT WAY, IS MY POINT.
BUT PUBLIC INFORMATION DOES NOT INDICATE THAT AT THIS JUNCTURE FROM WHAT I CAN FIND WHILE IN HERE.
I WAS RUNNING COMPS ON THE CORRECT SEAT TODAY.
LOOKING ALL IN THAT, UP IN THAT AREA FOR SOMEBODY ELSE.
I I DIDN'T SEE THIS ON CORRECT SEAT.
DO YOU EVER KNOW ABOUT HOUSES THAT ARE ON THE MARKET BUT NOT ON THE MARKET? I MEAN, WE HAVE, SOMETIMES WE HAVE PROPERTY THAT'S FOR SALE THAT'S NOT PUBLICLY LISTED.
AND WE WOULD MARKET THAT VIA, YOU KNOW, EMAIL, THE DATABASE PHONE CALLS.
SO IS THE MOTION WITH THE AMENDMENT UNLESS, UM, THERE IS A DEVELOPER THAT NEEDS DMMD TO DEVELOP? IS THAT WHAT THE YEAH, I DON'T, ARE YOU OKAY WITH THAT? UNLESS THEY NEED IT.
YOU REREAD THEM TO DENY THE REQUEST FOR AN MMD UNLESS IN FUTURE TIME IF A DEVELOPER THUMBS UP AND SHOWS THIS IN SOME FORM OR FASHION THAT THEY ACTUALLY NEED THIS FORM OF FINANCING.
THAT SOUND FAIR? THAT'S WHAT THE OTHER GUY DID.
HE CAME AND HE SAID, I NEED THE MUD FOR MY DEVELOPMENT.
AND THEN COUNSEL SAID, WOULD YOU CONSIDER A HIDDEN AT CURSE? SO WOULD NO DISCUSSION.
I MEAN, I'M, I'M NOT READY TO COMMIT OURSELVES TO GO DOWN THE MMD ROUTE BY ANY MEANS.
AND I THINK IT WOULD BE A MISTAKE FOR STAFF TO SPEND A WHOLE LOT OF TIME RIGHT NOW ON AN MMD WHEN WE'RE NOT COMFORTABLE WITH IT YET ANYWAY.
SO YEAH, WE HAVEN'T BEEN, YOU'VE TOLD US WHAT AN MMD IS AND, AND, BUT WE HAVEN'T SEEN A COMPELLING ENOUGH CASE THAT IT'S NEEDED HERE AS FAR AS I'M CONCERNED.
SO I DON'T WANT OUR STAFF BURNING A LOT OF TIME ON AN MD.
UH, WE EITHER NEED A DIFFERENT ANSWER OR WE NEED A BETTER ANSWERS.
ACTUALLY WE NEED TO MIX IT UP.
[01:05:01]
AYE.ANY OTHER ITEMS TONIGHT? SO I RUN THIS OVER AFTER BE TALKING.