Item 4K
Item 4K: Approve Resolution No. 17-010, adopting a 380 and tax abatement agreement between the City of Southlake and TD Ameritrade Holding Corporation
March 7, 2017
Hello mayor and members of the City Council. This is Alison Ortowski presenting Item 4K, resolution no. 17-010 proposing the adoption of (read from slide)
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Presentation Overview
This presentation will cover the project background, highlight how this project supports the City’s strategic goals and also present financial considerations related to the proposed
agreement.
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Development Overview
Regional Office
House 1400 DFW current associates
TD Ameritrade Regional Financial Business Center
Southlake site details
Approx. 350,000sf Class A Office
Structured parking
Workspace for up to 2000 employees
Sustainability emphasis
LEED Gold
Site’s natural features incorporated
Employee
amenities
Sabre
In October 2015, TD Ameritrade purchased approximately 78 acres along SH 114 and Kirkwood Boulevard. Some details about the project are shown on the screen.
On October 15, 2015
TD Ameritrade acquired approximately 78 acres between SH and Kirkwood Blvd. More specifically, It property is located NW of the Verizon Operations Center and south east of the sabre
campus and east of SH 114.
Relocating 1400 current area associates who are working at the company’s Alliance Gateway location (There will be staggered shifts)
According to TD Ameritrade
the office building will allows a more collaborative, innovative and productive work place and enhance associate retention and recruitment capabilities with an updated, modernized work
environment.
This campus will house all of their primary financial services business units, including Retail Services, Institutional, Technology and Brokerage Operation, as well as,
Corporate support functions.
There is no retail branch at this location
Site details:
Class A Office
Two wings, one 2 story (north) and one 3 story (south)
Structured parking
(2014 spaces, 5 levels)
Workspace is planned for up to 2000 employees; shifts are staggered with arrival on site between 7am and 10am
Sustainability emphasis
LEED, or Leadership in
Energy & Environmental Design, is a green building certification program that recognizes best-in-class building strategies and practices. The LEED program is the definitive building
standard in the country.
LEED Gold (second highest designation for commercial) -
Site’s natural features incorporated (speak to tree preservation)
Employee amenities will include:
--Fitness
center
--Cafeteria with outdoor seating
--Expansive green space with trails
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Key Dates
This slide provides some key dates for the project, beginning in September 2015 when City Council directed the City Manager to enter into a memorandum of understanding regarding terms
of a future incentive agreement.
In October of that same year, TD Ameritrade purchased the site and in April of 2016, City Council approved their site plan. They began construction
that summer.
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City of Southlake Strategy Map
The City of Southlake provides municipal services that support the highest quality of life for our residents, businesses, and visitors. We do this by being an exemplary model of balancing
efficiency, fiscal responsibility, transparency, and sustainability.
C1 Achieve the highest standards of safety & security
C2 Provide travel convenience within City & region
C3 Provide attractive & unique spaces for enjoyment of personal interests
C4 Attract & keep top-tier businesses to drive a dynamic & sustainable economic environment
C5 Promote opportunities for partnerships & volunteer involvement
Serve our Customers
Manage the Business
B1 Achieve best-in-class status in all City disciplines
B2 Collaborate with select partners to implement service solutions
B3 Enhance resident quality of life & business vitality through tourism
B4 Provide high quality services through sustainable business practices
B5 Enhance service delivery through continual process improvement
B6 Optimize use of technology
Provide Financial Stewardship
Promote Learning and Growth
F1 Adhere to financial management principles & budget
F2 Invest to provide & maintain high quality public assets
F3 Achieve fiscal wellness standards
F4 Establish & maintain effective internal controls
L1 Ensure our people understand the strategy & how they contribute to it
L2 Enhance leadership capabilities to deliver results
L3 Attract, develop & retain a skilled workforce
L4 Recognize & reward high performers
L5 Empower informed decision-making at all levels in the organization
C6 Enhance the sense of
community by providing excellent customer service and citizen engagement opportunities
L6 Foster positive employee engagement
Deliver on Our Focus Areas
This project supports the City’s strategy through C4…and CBO 4…
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Comprehensive Plan Alignment
Southlake 2030 Vision, Goals and Objectives:
2.2 Support appropriate public-private financial partnerships that will help retain and enhance the City’s economic base.
6.4 Attract desired
businesses to ensure economic growth as well as continued employment and services for residents of the City.
And this slide shows the alignment with the goals set forth in the City’s Comprehensive Plan.
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Financial Considerations
There are a number of financial considerations in the agreement shown summarized on this slide. I’ll talk in detail about each category over the next few slides.
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Financial Considerations
First, The agreement provides for an abatement of real and business personal property taxes for a term of 10 year. If they meet their minimum taxable value of $139,500,000 they will
be eligible for the full 90% abatement. The agreement includes step down provisions related to the taxable value and also states that if values fall below $77,500,000, TD Ameritrade
will forfeit the tax abatement for that corresponding tax year.
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Financial Considerations
The agreement also includes provisions related to infrastructure improvements. TD Ameritrade as agreed to construct water line, sewer upgrades and duct bank improvements. The City
has agreed to pay them 50% of their costs, with a cap set at just over $663000.
Additionally, TD Ameritrade will construct deceleration lanes and median cuts on Kirkwood Boulevard and
the City has agreed to reimburse them 50% of their costs with a cap at about $255,000.
And finally, the agreement notes that the City will construct the signal at Kirkwood and TW King
and TD ameritrade will reimburse the City at 50% of costs with a cap at $152,500.
The agreement also notes that TD Ameritrade has agreed to donate the ROW necessary to construct the
frontage road.
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Financial Considerations
The agreement also includes provisions related to infrastructure improvements. TD Ameritrade as agreed to construct water line, sewer upgrades and duct bank improvements. The City
has agreed to pay them 50% of their costs, with a cap set at just over $663000.
Additionally, TD Ameritrade will construct deceleration lanes and median cuts on Kirkwood Boulevard and
the City has agreed to reimburse them 50% of their costs with a cap at about $255,000.
And finally, the agreement notes that the City will construct the signal at Kirkwood and TW King
and TD ameritrade will reimburse the City at 50% of costs with a cap at $152,500.
The agreement also notes that TD Ameritrade has agreed to donate the ROW necessary to construct the
frontage road.
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Equivalent to $60 million development
Return on Investment
Annual Benefit During Abatement $284,772 (avg)
Current Annual Benefit ~$20,000
Annual Benefit After Abatement $1,229,143 (avg)
This slide shows the estimated annual net benefit from TD Ameritrade. As you can see, the current annual benefit is about $20,000 and the benefit during the abatement is estimated to
be just under $300,000 which is the equivalent to a $60,000,000 development.
The estimated benefit after abatement is about $1.24 million.
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Performance requirements
The agreement includes a number of performance requirements as well. The developer must front the cost of the infrastructure and the City’s participation is capped at both the percentage
and total dollar amount.
There is a minimum capital investment of $145,000,000 which is required to qualify for program grant payments and the tax abatement. Additionally the agreement
includes employment targets related to total employees and the minimum average annual salary. There is a financial penalty if the employment numbers are not met.
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Staff Recommendation
Staff recommends approval
of Item 4K:
Agreement in accordance with MOU
Generates sufficient return to warrant public investment
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Questions?
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