New tax district creates incentive for development near arena
Approximately 17 acres of land adjacent to the Cedar Park Center is poised for development as the City Council prepares to review an incentive agreement Sept. 5 that would add infrastructure to the tax increment reinvestment zone, or TIRZ.
The TIRZ approved by Cedar Park City Council on July 25 takes 80 percent of the city's 1-cent sales tax collected within the zone that would otherwise go into the general fund, as well as 80 percent of the taxable property value added in the zone after its creation, and redistributes it to finance development incentives on the land.
Assistant City Manager Josh Selleck said the city's goal is to promote development in the zone—located at the northwest corner of Toll 183A and New Hope Drive—that complements the existing $55 million event venue.
"[The TIRZ is] a tool that allows cities to work to expedite the development of land and increase the public benefit of those developments through the use of an economic development agreement," Selleck said. "It captures the new incremental city tax revenues that are generated within the zone. So whatever is developed, it uses those revenues or some portion of them to fund the incentive."
Details of the city's incentive agreement with the Cedar Park Center's operator Hicks Cedar Park LLC will be revealed during the Sept. 5 City Council meeting, according to city staff. Among other items, the agreement includes reimbursements for infrastructure costs needed to start development on the tract of land, Economic Development Director Phil Brewer said.
When the city first partnered with Hicks in 2008, a lease and development agreement was established that outlined both parties' roles and responsibilities. Hicks had until the four-year anniversary of the center's opening, which is Sept. 25, to initiate the first stages of development or otherwise lose the opportunity.
"All of these things with the TIRZ are part of the process that has to take place in order for [Hicks] to exercise the option and take down the property, as in purchase and pay the rest of the money for it," Brewer said. "If they don't take down that property before then, they lose the option, and it reverts back to the city."
However, the city has no intention of developing the area on its own, Cedar Park Mayor Matt Powell said. A mixed-use site abutting the venue has for many years been envisioned as an ideal place for a private-public partnership, he said.
"The concept for the Cedar Park Center from the beginning was much more than putting an arena or entertainment facility in town. The idea was to create a facility that would be an anchor for economic development in a part of town that didn't have as much activity as the other areas of town," Powell said. "By doing this as a private-public partnership, we got both private capital to come in and help fund the project and we also brought in a partner that knows how to do this thing. As originally envisioned, we will create the framework that will help that area develop right and at the right time."
In March, Cedar Park City Council approved a special entertainment district zoning designation around and including the Cedar Park Center—in the same area that is now part of the TIRZ. The zoning allows complementary land uses, including art galleries, bars, convenience stores, hotels, offices and restaurants, and Powell said the TIRZ offers a tangible financial incentive to spur
"The Cedar Park Center is one of the crown jewels of the city, and development in the TIRZ should be something that is complementary," Powell said. "As for what exactly it would be, we are going to ask our partners with expertise to determine what that is. What they do will be largely up to them in the same way it's up to them what concerts and events they are able to bring to town."
Bennett Benner Pettit Inc., the planning and architecture firm representing Hicks, submitted preliminary site plans to the planning department in June showing single- and two-story bars and restaurants in addition to some second-floor office space and a 130-room hotel.
Principal David Pettit said in an email that no future tenants have been identified, and it is still too early to pinpoint when construction could begin on any portion of the planned development.
"Hicks Cedar Park LLC, the operator of Cedar Park Center, is in the preliminary phase of planning the development of the property and is working with the city of Cedar Park to establish a TIRZ and zoning that will encourage a mixed-use, pedestrian-oriented development that is consistent with the city's vision for the area," he said. "Our hope would be to complete these planning phases and then begin in earnest to seek appropriate users and put the deal together."
Updated 8:39 p.m. CST Aug. 16, 2013
Editor's note: The original story stated city council would tentatively review the incentive agreement Aug. 22 . However the hearing has been set for Sept. 5 according to city staff.