07-08-13 Meeting of the La Porte Development Corporation Board of Directors

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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM Agenda Date Requested: 8 Julv 2013 Requested By: Scott D_ Living%ton Department: Report: Resolution: Ordinance: Exhibit: Incentive Grant Request from Mr. Rob Johnson Exhibit: Roundag, Sun*y Exhibit: Marketing Flyer Exhibit: Project Facts and Figures Budget Source of Funds: Account Number: Amount Budgeted: Amount Requested: Budgeted Item: YES NO SUMMARY & RECOMMENDATION Mr. Rob Johnson is the Owner of Rob Johnson Interests, which is a local Real Estate Development Company. He developed the Shoppes of Town Square on Center Street and Pasadena Blvd in Deer Park, Texas. He recently placed a portion of the Jay Marks Chevrolet dealership under contract to do a new retail/commercial development. Phase I is planned to encompass 2.86 acres, while Phase 11 is planned to encompass 1.67 acres. His plan is to complete Phase I in 2014 and Phase II by either late 2014 or early 2015. His current plan is to start the project this fall, once he has secured tenant interest and finalized an approved site plan. In order to make his project more competitive and viable, he is requesting an incentive grant in an amount up to $66,000 to demolish and remove the existing slab structure and level the site for development. The subject property is currently on the tax rolls for $650,000, which yields approximately $4,615 (at $0.71/$100 of assessed value) annually in taxes to the City of La Porte. Once the multiple -phase development has been completed, the estimated taxable value of the new development is $6,000,000 to $8,000,000. Excluding sales tax revenue, the estimated annual taxes would be $42,600 to $56,800. Taking an average of the two, if the estimated taxable value were to be $7,000,000, the annual taxes would be $49,700. Therefore, the estimated annual increase in taxes upon completion of the multi -phase project is $45,085. Assuming an incentive grant of $66,000, and new annual taxes ($49,700 - $4,615) of $45,085, the break-even point (i.e. the payback period) would be seventeen and a half (17�/z) months.