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Council authorizes $7.8 million downtown land purchase using TIF funds and AEDC support
Summary
The Allen City Council authorized a project development agreement allowing the Allen Economic Development Corporation and the city's TIF Zone No. 2 to fund a $7.8 million acquisition of about 7.1 acres in downtown Allen; the purchase includes demolition of derelict structures and infrastructure work, and was approved unanimously.
The Allen City Council on March 25 authorized the city manager to negotiate and execute a project development agreement enabling the Allen Economic Development Corporation (AEDC) and Tax Increment Financing (TIF) Zone No. 2 to fund the purchase of roughly 7.1 acres of undeveloped land in downtown Allen for $7.8 million.
The purchase, presented by Dan Bowman, executive director of the Economic Development Corporation, is intended to preserve a site near U.S. 75 at Boyd and Bonham for a future commercial project that the city says would benefit downtown. "The land that we're looking to acquire, is approximately 7.1 acres located right here at, the intersection, it's right off US 75 near Boyd And Bonham," Bowman said during his presentation.
The agreement calls for the total acquisition cost of $7,800,000 to be split roughly 50/50 between the AEDC and the TIF, about $3,900,000 each, with the TIF also funding road reconstruction directly attributable to the property. Council materials state the appraisal used was for undeveloped land; city staff said an appraisal provided by the seller was higher and the city elected to rely on its lower appraisal.
Bowman told council the purchase includes steps to remove and remediate about 15 to 16 derelict structures on the tract before closing; asbestos mitigation and proper disposal will be completed, he said. The proposed agreement also includes provisions to require infrastructure work and a lien on remaining property if agreed improvements are not completed.
The Economic Development Corporation and the TIF were described to council as appropriate financing sources for this work; city materials and Bowman referenced the TIF’s founding documents and financing plan, which identify land acquisition and infrastructure investment in Downtown Allen as eligible uses. Bowman also said TIF Zone No. 2 is projected to have about $17,600,000 in fund balance at the end of the current fiscal year.
Councilmember remarks during the discussion emphasized coordinated use of EDC, TIF and other city funding sources. A motion to authorize the city manager to negotiate and execute the TIF Zone No. 2 project development agreement passed; the motion was seconded and the item passed by council vote. City staff indicated the EDC would take title initially and future proceeds, if any, would be used to reimburse the TIF and the EDC so each entity is made whole.
The council did not take a final vote on a specific redevelopment plan for the parcel; Bowman said future councils would determine the appropriate commercial use consistent with downtown goals and previous steering-committee planning.
