**UPDATE 11-3-20** Rowlett Files Objection to Motion to Dismiss with the PUCOn November 3, 2020 the City of Rowlett, along with the cities of Fate and Lucas (The Alliance), filed a motion with the Public Utilities Commission (PUC) objecting to a motion to dismiss proceedings filed last week by the North Texas Municipal Water District (NTMWD) and its 13 member cities to settle a dispute regarding wholesale water rates. The Alliance asserts that not all outstanding issues regarding the dispute have been resolved as The Alliance was not included in the settlement negotiations. The City of Rowlett intervened in the PUC proceedings to ensure that its residents will participate in benefits arising from revised wholesale water rate terms and not continue to pay rates that are defined by the PUC as “adverse to the public interest.”
“While it is encouraging that the NTMWD and its member cities have come to an agreement on a very complex and lengthy issue, we are disheartened that our citizens have no guarantee of relief from high water rates,” said Mayor Tammy Dana-Bashian. “By filing this motion, Rowlett, as the NTMWD’s largest customer city, continues to vigorously advocate for our community.”
The North Texas Municipal Water District is a wholesale water provider serving more than 1.8 million people in nearly 90 communities across 10 North Texas counties. There are 13 member cities and over 30 customer cities and Special Utility Districts. A wholesale customer for 54 years, Rowlett is the largest customer city, with a population of over 66,000 residents and over 20,000 water accounts. Based on the current Take or Pay wholesale water pricing methodology in place, Rowlett will continue to be charged every year for hundreds of millions of unused gallons of water. Due to limited resources and the high cost of water infrastructure, communities such as Rowlett have no ability to mitigate the negative impact of the take-or-pay structure and there is no feasible option to transition to an alternate wholesale water provider.
What is the North Texas Municipal Water District?The North Texas Municipal Water District is a wholesale water provider serving more than 1.8 million people in nearly 90 communities across 10 North Texas counties. This water is purchased by the City of Rowlett and then passed on to Rowlett customers. There are 13 Member Cities and over 30 Customer Cities (including Rowlett), and Special Utility Districts. The City of Rowlett became a customer city of the NTMWD in July 1965. The current contract began May 1994 and is a 30-year agreement that expires in May 2024.
Who are the Water District’s Member Cities?Allen, Farmersville, Forney, Frisco, Garland, McKinney, Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City, and Wylie.
What is the difference between Member and Customer cities?NTMWD Member cities are the only guarantors for the District’s debt and are responsible for a proportional share of the debt issued while they are a member. Member cities also appoint representatives to the Water District Board of Directors, while Customer entities have no board representation and therefore no voice on important matters such as the District’s budget, rate setting or on policy changes such as permanent water conservation.
What is Take-or-Pay?Take-or-pay is the commonly used phrase for a NTMWD contract provision requiring a city to pay annually for the amount of water which is the greater of: a) its highest historic annual usage or b) its current annual usage. The intent of this contract provision is to ensure a guaranteed revenue stream to the district to provide financial stability. In effect, once a city establishes its highest historic annual usage, it continues to pay at that rate irrespective of lower usage in subsequent years. In other words, if the city does not “take” or use the water, it must still “pay” for that amount of water represented by its highest historic annual usage. For Rowlett, this amount is 3.2 billion gallons, which was set after the drought of 2006. Under the compulsory NTMWD take-or-pay structure, Rowlett has paid nearly $20 million for over 10 billion gallons of water that was not received or used by Rowlett citizens or customers. Rowlett understands the need for adequate rates and an appropriate rate structure to maintain this essential regional water commodity, but Rowlett residents are carrying an unjust burden of the cost of water for the area serviced by the NTMWD. Our citizens understand how unfair it is that they must pay more than residents of certain neighboring communities that currently benefit from this take-or-pay methodology.
What is the Public Utilities Commission?The Public Utility Commission (PUC) of Texas is a state agency that regulates the state’s electric, telecommunication and water and sewer utilities, implements respective legislation, and offers customer assistance in resolving consumer complaints.
What are Rowlett’s concerns?In the past 18-years, Rowlett has paid nearly $20 million for over 10 billion gallons of water that was not received or used by Rowlett citizens or customers. Based on the current take-or-pay wholesale water pricing methodology in place by the NTMWD, Rowlett will continue to be charged every year for hundreds of millions of gallons of water that we do not use. The high cost of water is the most common complaint we address with our citizens and it correlates directly with the NTMWD’s take-or-pay pricing structure. Due to limited resources, smaller communities such as Rowlett have no ability to mitigate the negative impact of the take-or-pay structure and we have no choice but to purchase water from the NTMWD as there is no feasible alternative. The take-or-pay rate methodology is fundamentally flawed. It does not ensure that users pay cost-based rates, as the rates never reset over the term of the contract to reflect the current actual usage of the NTMWD’s customer base.
In 2015, the NTMWD adopted a permanent water conservation policy that recommended their customer base implement an increasing-tiered retail water rate to spur even higher levels of water conservation. As a result, Rowlett achieved significant water conservation, even though the take-or-pay provision financially disincentivizes this approach. In fact, the take-or-pay rate methodology actually rewards overconsumption – the more you use the cheaper the water. Permanent water conservation, as a policy, put communities in direct conflict to sell the water needed to support their utility systems due to the take-or-pay provision. Of course, we believe conservation is needed, but we did not sign up for policies adopted unilaterally by the NTMWD that change the rules of the game without allowing water providers the ability to reset their projected water use under the new rules.
Although the take-or-pay rate methodology is the number one contributor to an unfair pricing structure, we have other areas of concern. Non-member customer entities such as Rowlett pay an additional 5 cents per thousand-gallon upcharge over member cities for the same water. This cost the 34 customer cities and special utility districts nearly one million dollars in fiscal year 2019. And, the NTMWD Board has discussed significantly increasing this upcharge for customer entities.
Customer entities have no representation on the NTMWD Board and, based on barriers in place, Rowlett has no ability to become a member city with representation. This customer group utilizes over 15% of the water the District produces, which is expected to increase to 25% by 2030, yet has no voice on important decisions such as the District’s budget, rate setting or on policy changes such as permanent water conservation.
Probably most disturbing is the requirement to have 100 percent agreement by the member cities to revise critical contract terms, such as take-or-pay pricing methodology, since some member cities are benefitting from the take-or-pay structure at the expense of other member and customer entities.
This is not just a “Rowlett” or “Customer City” issue!Under the take-or-pay rate methodology, Rowlett has paid nearly $20 million for over 10 billion gallons of water that was not received or used by Rowlett citizens or customers. The NTMWD Member Cities of Garland, Mesquite, Plano and Richardson have also been severely impacted by this outdated pricing structure. In 2016, they filed the action with the PUC seeking water rate relief. Although these four cities are voting members, any change in the take-or-pay provision requires all 13 member cities to agree. The nature of any change would create winners and losers, meaning some cities would pay more than they currently pay while others would pay less. Since every city represents a different customer base, this is a sensitive issue. The critical legal argument raised by the member cities who filed this action is that the NTMWD rates are “against the public interest and inconsistent with conservation.”
What is the Customer Coalition?An informal group of the 14 “non-member” customer cities of the NTMWD including Fairview, Fate, Josephine, Kaufman, Little Elm, Lucas, Melissa, Murphy, Parker, Prosper, Rowlett, Sachse, Sunnyvale, and Terrell. This group shares many of the same concerns with the unfair water rates and practices of the NTMWD.
Who represents the voice of the nearly two million customers served by the North Texas Municipal Water District?The Public Utilities Commission, who initially agreed to initiate a cost-of-service hearing. A favorable outcome would include just and reasonable rates set for all of the wholesale customers of the district and a determination of the best mechanism to promote conservation while ensuring the district remains financially strong.
Why Request a PUC Cost of Service Review Now?Over the years that Rowlett has been a customer city, the NTMWD’s budget and rates have grown exponentially with little to no regulatory oversight or checks and balances. Over the last 10 years, they have raised water rates by 239%. No independent regulatory authority has ever reviewed those rates, the NTMWD’s annual costs, or its cost structure across the customer base. It is time.
What’s Next?Based on the request from the member cities, the PUC granted a 90-day extension to the requirement of a third-party mediator. If the parties cannot come to an agreement by then, the PUC could grant another extension or order/appoint a third-party mediator. Rowlett will closely monitor all actions and will intervene as necessary to represent our interests and will continue to vigorously advocate for our citizens.
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What is the North Texas Municipal Water District (NTMWD)?The NTMWD was created in 1954 to provide drinking water and other services to its customers. It was originally created by ten cities, referred to as “member cities”, including Farmersville, Forney, Garland, McKinney, Mesquite, Princeton, Plano, Rockwall, Royse City, and Wylie. Today, the NTMWD services over two million residents and businesses in the north central Texas area.
Since then, have any other cities become members?Yes. Richardson joined in 1973, Allen in 1998, and Frisco in 2001.
Is Rowlett a member of the NTMWD?No. A “customer” agency since 1965, Rowlett is one of 14 cities and 16 utility districts that are non-member wholesalers of the NTMWD. Rowlett is the largest customer wholesaler, in terms of water usage, and would be the 8th largest water user among the member cities of the NTMWD.
Why is the City of Rowlett petitioning for membership with the NTMWD?Rowlett has long desired to be a member of the NTMWD. As a member, Rowlett would have a voice in decisions that have long impacted Rowlett residents and businesses. This originally stemmed from concerns with the mandatory “Take-or-Pay” policy and remains true today due to concerns about the additional surcharge or “premium” that non-member cities pay.
How much is the customer premium?The premium paid by non-member customer wholesalers is five cents per 1,000 gallons. Currently, this costs Rowlett customers $160,000 annually. A consultant hired by the NTMWD in 2020, Amawalk Financial Consultants, LLC, recommended that this premium be changed to 10% of the base rate, which at the time was $3.00 per 1,000 gallons. This would increase Rowlett’s annual premium from $160,000 to around $1.0 million and would increase each time the base rate changed. Rowlett has paid $3.3 million for this premium over the past 21 years.
Has the NTMWD already changed the customer premium policy?No. The NTMWD decided to perform a more comprehensive study that includes, among other things, reviewing the premium as well as a potential buy-in clause for new members. This study is currently underway and is expected to be completed sometime next spring.
Will membership have any impact on the “Take-or-Pay” policy?No. All NTMWD wholesalers, both member and non-member, are bound by the current Take-or-Pay policy. However, in 2020 the Member cities settled a legal dispute between the parties that would eventually provide a five-year rolling average method as the new policy. While it has an 8-year lead time before the new policy starts, it is considered inherently fairer than the permanent minimum that exists today, which was found to be “adverse to the public interest” by the Public Utilities Commission (PUC).
What are the benefits of membership?Membership will give Rowlett the opportunity to participate in the policies and practices that affect Rowlett customers. In addition, members do not have to pay the premium non-member cities pay, which as explained in the "How much is the customer premium" question above, could significantly increase in the future.
Why does NTMWD charge a premium to non-member wholesalers?In the 2020 study performed by the NTMWD’s consultant, Amawalk Financial Consultants, LLC, four factors were listed to potentially justify the premium:
Does the NTMWD accept new members, and will Rowlett qualify?Yes. Rowlett would not be the first “new” member. Richardson joined in 1973, Allen in 1998 and Frisco in 2001.
Rowlett fits the membership profile…
Water supplies are available…
Rowlett has a demonstrated track record in regionalization…
Rowlett practices water conservation…
Why now?Rowlett’s current contract with the NTMWD expires in May 2024. Rowlett has a sense of urgency to complete the membership process before it may be forced to renew its “customer” contract, particularly with some of the policies and practices customer wholesalers must abide by.
What comes next?The “petition” for membership was approved by the Rowlett City Council on December 6, 2022 and will be forwarded to the NTMWD for approval.
1. What is the North Texas Municipal Water District and what is making their rate so high? The NTMWD is a wholesale water provider serving more than 1.6 million people across nearly 90 communities in 10 North Texas counties, including the City of Rowlett. This water is purchased by the City of Rowlett and then passed on to Rowlett customers. NTMWD rate increases ensure reliable, uninterrupted water delivery now and in the future by maintaining NTMWD’s existing system and funding future expansions.
2. What is "Take or Pay"? Rowlett is a “Customer” City of the North Texas Municipal Water District (as opposed to one of the 13 “Member” Cities). Like many such wholesalers, the District has a “take-or-pay” provision in the contract that requires the annual purchase of a minimum amount of water based on the highest annual usage. For Rowlett, this amount is 3.2 billion gallons, which was set after the drought of 2006. Over the past 21 years, Rowlett has paid $19.6 million for water it did not sell under the “take-or-pay” agreement with NTMWD.
**UPDATE 3/15/2022**To build upon the improvements which have already been installed at the south curve, at the March 15, 2022 City Council Meeting Garver Engineering provided an update for further improvements based on their recent study. This study was commissioned in late fall 2021 to identify solutions to improve roadway conditions and reduce crashes in the area.
As a result, the Rowlett City Council has approved moving forward with
Once these improvements have been completed, a high friction coating will be installed on the roadway to increase the surface friction. Work on these solutions will begin immediately.Garver Engineering Rowlett City Council Presentation (PDF)Watch the meeting here...
What are the “Dalrock Curves” and why are they a concern?There are two curves on Dalrock Road between Princeton and Liberty Grove that have become a focus for the City due to the number of crashes which have occurred. On the Dalrock south curve alone, sixteen crashes happened between 2016-2020. Eleven of these caused property damage to residential fences at five different homes. The cause of these crashes is mainly due to driver inattentiveness and speeding. As you are driving North up Dalrock, the locations of the two curves are:
What is the City doing to address these concerns?A study by Garver Consulting is underway to determine if a barrier, a recoverable shoulder, more signage, or additional lighting would assist with the reduction of vehicular accidents. City staff anticipates presenting the results of this study to the City Council in March. Whether included in any recommendations or not, once the study is complete a high-friction pavement treatment will be added to the South Curve. This will significantly increase traction and serve as a prevention treatment.
What are the issues at the curve that the City is trying to address by contracting a study?Overall, the goal is to reduce vehicular accidents along that section of Dalrock Road. Lee Engineering performed the initial analysis, which included:
Didn’t the City already study the Dalrock curves?No. In 2010, Lee Engineering performed a study on the 90-degree curve between Quail Ridge Drive and Blackfin Drive, the north curve location. As a result of that study, signage and reflective bollards were added to enhance the early warning of the pending curve and improve nighttime visibility through the curve. Improvements were proactively installed at the south curve at that time as well. The City added Raised Pavement Marking; reflective bollards on the outside of the curve; additional chevrons; and added a large directional arrow to guide motorists through the turn at night. While these remedies helped reduce crashes in the north curve, crashes at the south curve have increased.
What were the recommendations from that study and what is the update?South Curve enhancements Phase 1:
South Curve enhancements Phase 2:
South Curve enhancements Phase 3:
Why is the existing merge lane from Princeton closed?The merge lane was closed as an additional tool to reduce the speed of vehicles from Princeton Rd. to Dalrock Rd. The closure is a temporary condition until the current study underway determines the exact improvements that need to be made to the south Dalrock curve.
Next Steps…City staff anticipates presenting the results of the current study to the City Council in March. An update and further action items will be provided here at that time.
Sapphire Bay is a $1 billion mixed use development located on the shores of Lake Ray Hubbard. With features such as a Crystal Lagoons amenity and an island entertainment component with an incredible synchronized water and video show; a resort and conference center; a world class marina; and the Surf and Beach Club, Sapphire Bay will become a national destination for conferences, vacationing families, residents looking for a unique place to call home, and businesses who want to locate where their employees can live, work, and play.
**UPDATE - February 4, 2022**Sapphire Bay Marina announces Marina District and Baywalk project. The district includes one of the largest marinas in the state, with 10 new dock houses and seven others remodeled and refurbished, a restaurant complex, and on-the-water boat rental and brokerage centers. The highlight of the district will be a collection of casual waterfront food concepts called Baywalk. The developers describe it as a casual experience unlike anything in the metroplex, creating an escape from the ordinary. Baywalk will hug the lakefront, jutting out over the water at various points, and features a variety of seating for all seasons, entertainment areas, string lights and an assortment of plantings. The District will provide family options, appealing to locals and young adults as well as our local boaters/sailors and water sports enthusiasts who want a fun, lake lakefront experience with a one-of-a-kind boardwalk frontage and waterfront views. Read on...
**UPDATE - MARCH 3, 2021**Sapphire Bay announced Hyatt will operate the new Sapphire Bay Resort & Conference Center on behalf of a public-private partnership with the City of Rowlett. Expected to open in fall 2023, the resort will join Hyatt’s Destination Hotels brand and showcase more than 500 guestrooms, suites, and villas each with waterfront views overlooking Lake Ray Hubbard and the seven-acre man-made Sapphire Bay Lagoon.
“We are very excited to see Destination Hotels by Hyatt join the Sapphire Bay team,” said Rowlett Mayor Tammy Dana-Bashian. “The resort and conference center are integral components of this development. With the Hyatt brand offering their distinctly well-known and upscale experience, we look forward to the Sapphire Bay Resort becoming a sought-after and unique national destination for business conferences and vacationers alike.”
Sapphire Bay Resort will offer luxurious amenities, a full-service spa, state-of-the-art fitness center, six pools and tropical gardens. The property will feature more than 100,000 square feet of indoor and outdoor event space including two grand ballrooms, multiple-sized breakout boardrooms, pre-function areas, event lawns, and a special event island nestled along the eastern shore of the Sapphire Bay Lagoon.Read more here...
Visit SapphireBayTexas.com for more information.**
2019Who is the City’s development partner?Sapphire Bay Land Development, LLC - comprised of President Marc S. English and local real estate developer Kent Donahue, who bring more than 40 years’ combined development experience to the project. Marc English will spearhead all contractual negotiations, manage the construction of all public improvement district (PID) amenities, including an approximately 6.5-acre Crystal Lagoons water feature and island show fountain, and the eventual award of all construction contracts with the many contractors that will competitively bid on this project. Kent Donahue will design, oversee, and collaborate with the many experiential design consultants and architects to envision, facilitate and design the project, anchored by a 500-room resort hotel, spa, conference center, approximately 1.4 million square feet of commercial lease space, and a surf and beach club featuring not only the Crystal Lagoons amenity, but also a one-of-a-kind, competition-quality surfing venue.
What is the purchase price and who is funding it?Funding for the $37,013,000 acquisition price, including the $150,000 in earnest money, has been provided by Sapphire Bay Land Holdings. This land is now owned by Sapphire Bay Land Holdings I, LLC and the marina is now owned by Sapphire Bay Marina, LLC.Has the lawsuit against Bayside Land Partners been settled?Yes, the lawsuit has been dismissed.
Will the City be reimbursed for legal fees?Yes, as a condition to the Purchase and Sale agreement between the City and Sapphire Bay Land Holdings I, LLC, the City has been reimbursed for the litigation expenses of Locke Lord, the City’s third-party legal firm.
What is included in the purchase?The 117-acre tract of land south of IH-30; the Crystal Lagoon license previously purchased by Bayside; and the existing operating marina including rights to 1,005 boat slips.
Does this purchase affect leaseholders at the Marina?This purchase will have limited impact on the leaseholders at the Marina. Essentially, it means changing one landlord for another. The shared vision between the City and Sapphire Bay Marina, LLC is to improve and renovate the existing marina, add restaurant, retail and hospitality facilities and expand marina services.
Will the tract of land on the north side of IH-30 be renamed Sapphire Bay as well?No. The two tracts have been bifurcated and the north tract will retain the Bayside name.
What happens if the new developer defaults? Does the City get the land back?No, lender requirements for financing the real estate and vertical development components do not allow for the City to have a “recapture or reverter” provision in which the land would be owned by the City should Sapphire Bay default. The Development Agreements do contain specific performance requirements that legally and contractually obligate the developer to perform. As mentioned earlier, the City’s intention has never been to own or develop this property. Our focus has been on creating a public-private partnership with a developer that shares the community’s vision for this unique property.
What is the project timeline for Sapphire Bay?The first phase of Sapphire Bay is anticipated to be completed by December 31, 2023. That phase includes mass grading of the site to elevate out of the flood restriction easement, the Crystal Lagoon and island entertainment feature, all the on-site and off-site public infrastructure (streets, water, wastewater, storm sewer, etc.) a portion of the extensive hike and bike trail, community parks and the entertainment and dining promenade surrounding a significant portion of the Crystal Lagoon.
In addition, the City and our new development partner are working to determine a funding plan for a Hotel Resort and Convention Center by December 31, 2019. Once that funding plan is agreed to by both parties, the Hotel Resort and Convention Center along with the Surf and Beach Club components will be included in the first phase with an anticipated completion by December 31, 2023.
The timing of the first phase opening for Sapphire Bay was in large part determined by the public infrastructure, including the TXDOT IH-30 Improvements, to be constructed between now and December 2023.
The City and Sapphire Bay Land Holdings I, LLC will be working on future phases and look forward to announcing a significant number of projects in the near future. At full build out, which is anticipated over a 10-year period, Sapphire Bay will have nearly 1.4 million square feet of combined commercial facilities including retail, office, hospitality, entertainment and restaurants and an estimated 1600 residential units consisting of condominiums, townhomes and apartments.
What will be built first?The City and Sapphire Bay Land Holdings I, LLC will be determining an overall Development Schedule no later than December 31, 2019. Currently, the first phase is focused on the public infrastructure and public amenities such as the Crystal Lagoons and island entertainment features along with entertainment and dining promenade, portions of the extensive hike and bike trail system, and community parks. Once the funding plan is finalized, the Hotel Resort and Convention Center along with the Surf and Beach Club will also be included in the first phase.
Additional phases or announcements about additional projects, which may include residential units, will occur in the near future.
What is included in the Surf and Beach Club and the Crystal Lagoons amenity? This one-of-a-kind out-of-ocean surf venue will deliver a world-class, competitive-quality surfing experience to be enjoyed by all ages and skill levels. In tandem with the Crystal Lagoons amenity, the exciting Sapphire Bay water activities will include not only surfing, but kayaking, stand-up paddle boarding, waterpark features with a lazy river, and private dining cabanas. With an entertainment island featuring synchronized water and video displays, the Crystal Lagoons amenity is envisioned to be one of the key attractions and differentiators to establish Sapphire Bay as a world class destination. The Surf and Beach Club will serve as the anchor for the overall public immersive experience. Consulting and management firm VenuBlue, which specializes in innovative beach life style destination attractions, will operate this component of Sapphire Bay.
Will the Crystal Lagoons amenity be open to the public?Yes, the general public will have access to the 6.5-acre Crystal Lagoons water feature.
Is Sapphire Bay a public-private partnership?Sapphire Bay is a true public-private partnership. In a traditional development, the City’s involvement is limited to zoning the property, providing utility services, and making inspections. In this project, however, the City of Rowlett and Sapphire Bay Land Holdings I, LLC have committed to a vision and are obligated to executing that vision and realizing the parameters established in the development agreements. The City facilitated the original purchase of the property from the City of Dallas, annexed the property into the municipal boundary, rezoned the property with Form Based Code, created Tax Increment Reinvestment Zone Number Two (TIRZ#2), approved a public improvement district, drove a change in state law to qualify Rowlett for a ten-year tax rebate from the State of Texas for a new conference center, and championed improvements to IH-30 to support the region’s growth and this project.
How does the funding for the Hotel Resort and Convention Center work?The Hotel Resort and Convention Center is an integral part of Sapphire Bay. Planned is a minimum 450- room full-service destination hotel resort and a minimum 70,000 square foot convention center containing conference, meeting and event space that is of the same resort quality as the planned hotel.
The City and Sapphire Bay Land Holdings I, LLC are working to determine the funding plan for the Hotel Resort and Convention Center by December 31, 2019. Once that funding plan is agreed to by both parties, the Hotel Resort and Convention Center, along with the Surf and Beach Club components, will be included in the first phase with an anticipated completion by December 31, 2023.
The funding plan as outlined in the Development Agreement between the parties indicates that the City will issue special revenue bonds for the cost of construction of the Convention Center facility and Sapphire Bay Land Holdings I, LLC will make the private investment to fund the Hotel Resort and the Surf and Beach Club. It is anticipated that the Convention Center cost of construction would not exceed $50 million and the Hotel Resort and Surf and Beach Club private investment would be approximately $215 million.
The City’s issuance of special revenue bonds would be supported by the project tax revenues including State Hotel Occupancy Tax, State Sales Tax, State mixed beverage tax, Tax increment Reinvestment Zone (TIRZ) funds, and City Hotel Occupancy Tax. Additional details will be provided once the City and Sapphire Bay Land Holdings I, LLC determine a funding plan by December 31, 2019.
What are the incentives provided by the City? Incentives include the creation of Tax-increment Reinvestment Zone Number Two (TIRZ#2) to help mitigate extraordinary development challenges and remove barriers to development. These include the costs associated with improvements to the future Dalrock Road overpass at IH-30, earthwork to elevate the site out of the flood restriction easement and construction of sea walls on the south side, offsite utility improvements, and parks, trails, public art and monuments. TIRZ#2 provides a contribution rate of 50 percent of all property taxes collected for a period of twenty years (through 2036) with the amount capped at $40.7 million plus interest. During this same twenty-year time period, the City of Rowlett expects to generate nearly $165 million in property taxes, sales taxes and hotel occupancy taxes. Upon full build-out (about 10 years), City taxes are expected to be approximately $6.4 million annually, net of the TIRZ#2 contribution, or equivalent to 12 cents on the tax rate.
How was Tax Increment Reinvestment Zone Number Two (TIRZ#2) bifurcated?Tax Increment Reinvestment Zone Number Two (TIRZ#2) was bifurcated, or split between the north and the south parcels as part of the settlement agreement with Bayside Land Partners. As a result, 50 percent of all property taxes collected from the north parcel will be used to reimburse projects attributable to the north parcel and 50 percent of all property taxes collected from the south parcel will be used to reimburse projects attributable to the south parcel. The reimbursements are capped for each parcel.
How will the City be reimbursed for offsite utility costs?The City, as outlined in the Development Agreement between the parties, will contribute an amount not to exceed $13.4 million for off-site public infrastructure improvements for five sanitary sewer projects and one water project. The City is utilizing several sources to fund these projects, including water and sewer impact fee funds and water and sewer revenue bonds. The City will be fully reimbursed for these costs from several sources including 1) state taxes (i.e. hotel occupancy tax, sales tax and mixed beverage tax) from the ten-year grant, 2) the Tax Increment Reinvestment Number Two (TIRZ#2) - South subaccount over the remaining life of TIRZ#2 (through 2036) and, 3) City’s hotel occupancy taxes collected from the project.
Who did the City use to help evaluate the engineering, legal, economics and financial sustainability of this project?Rowlett assembled a great team to help evaluate a myriad of issues including the legal documents and negotiations of the land transaction; the underlying market research and economic assumptions utilized by the new developer for the proposed land uses; and financial considerations of any potential financing for a new convention center. Our team included the following:
How does Sapphire Bay benefit Rowlett citizens? Sapphire Bay is projected to add nearly $1 billion in new taxable value, resulting in nearly $165 million in revenue from property, sales and hotel occupancy taxes over a period of twenty years (through 2036).Sapphire Bay will also offer residents an entertainment mecca without ever leaving their hometown! With amenities such as a Crystal Lagoons feature housing an entertainment island and incredible synchronized water and video show; a hotel resort and convention center; a world class marina; and the Surf and Beach Club, Sapphire Bay will become a national destination for conferences, vacationing families, residents looking for a unique place to call home, and businesses who want to locate where their employees can live, work, and play - as well as for professional and amateur surfers who come to train at the only wave park of its kind in the world.Sapphire Bay will help grow the City’s economy through diversification of jobs, housing, tourism and business opportunities, making Rowlett a community attractive to people in all stages of their life. Sapphire Bay will optimize Lake Ray Hubbard and Rowlett’s natural assets to create a distinctive identity and offer the quality of life long-desired by Rowlett residents.
Sapphire Bay Land Development News ReleaseAugust, 2019 Mayor’s Spotlight - Sapphire Bay
The City of Rowlett, like many other municipalities, provide economic development incentives to promote development in their communities. Attracting businesses or development, keeping them, or getting them to expand operations often involves a request for some sort of incentive. While this may appear to be corporate welfare to some, cities are motivated to provide such incentives to ensure higher quality growth, diversify their tax base, bring in jobs, and/or provide amenities that may not currently exist. Every city competes with other cities to attract businesses or development – every city! Sometime, cities even compete with each other for the same deal. The challenge is attracting development that provides a benefit to the community, or else why would a city provide a financial incentive? Each project has to be viable and make economic sense.
2. Why doesn't Rowlett have an Economic Development Corporation?These incentive deals are often very complex. But, not every city has the same tools in their toolbox. For example, some cities have economic development corporations that are funded by a portion of the sales tax. These cities, referred to as 4A/4B cities, utilize a portion of the second of the two cent sales tax rate that cities are allowed under the State of Texas.
Rowlett doesn’t have a second cent on the tax rate. Instead, Rowlett is a founding member of the Dallas Area Rapid Transit system. When Rowlett voters elected to become such a member in 1983, the City had to give up the ability to levy one of the two cent sales tax cities are allowed under the State of Texas. This means that cities like Rowlett do not have access to cash for economic development and must use other tools that are available. These include property tax rebates, waiver of roadway/water/sewer impact fees, land grants, and public/private partnerships, some of which are available under Chapter 380 of the Texas Local Government Code. The incentives granted by the City typically require performance agreements and “claw back” provisions, should the business or developer not meet the criteria.
3. What kind of projects are awarded incentives?There is an old adage in business that you have to spend money to make money. That is very true in economic development. Without providing economic development incentives, the City would be unable to attract the kind of high quality businesses and development our community wants to see in Rowlett. Sometimes it doesn’t make sense.
Here are two examples, one that did not make sense and one that did.• In 2012, the City turned down a deal to bring in a Kroger’s grocery store. In order to make the deal, Kroger wanted ten years’ worth of tax rebates and a land contribution from Rowlett which was worth considering. However, Kroger also asked for a $1.8 million cash contribution which Rowlett did not have at that time. That was untenable and not economically viable. The City did not approve the deal.
• In 2014, the City approved the Terra Lago deal with no cash upfront. Instead, the City agreed to rebate 57% of the annual property taxes collected for ten years. At the time the incentive was approved, the City was collecting $4,855 annually. Once built, Rowlett will collect $160,642 per year for the next ten years or 33 times the amount of taxes it was collecting!
Please view the Policy Statement on Economic Development Incentives (link below) available on the Economic Development website, www.rowlettonthemove.com.
Policy Statement on Economic Development Incentive
1. What is the senior tax freeze?The freeze sets a ceiling on the amount of actual taxes the person will ever pay to the City of Rowlett - the frozen amount is determined in the first year they obtain the senior exemption. They will never pay more than that amount, regardless of what happens to their assessed value and regardless of what happens to the tax rate. They may pay less - if the assessed value and/or the tax rate goes down.
2. What is the senior tax exemption?The $30,000 exemption means the year that a person becomes 65, they are given a $30,000 exemption off of their home's assessed value.
The exemption amount can be changed, but the tax freeze is forever.
In 2004, the City set the senior tax exemption at $67,000, the third highest rate in Dallas County. In addition, the City adopted the freeze (again the freeze can never be changed) and was one of only seven cities in Dallas County to provide the senior tax freeze.
3. How does this affect the City?For the FY2018 tax year - 10/1/17 through 9/30/18, the City will not receive $2.7 million in property taxes due to the senior tax exemption and freeze. That equates to 7 cents of the property tax rate.
Due to the senior exemption and freeze, property taxes paid to the City in 2014 were $3.4 million less than if the senior exemption and freeze were not in place. In 2014, the City had an across the board tax increase to fund city services and deferred maintenance that suffered tremendously from the great recession. The City also lowered the senior exemption amount from $67,000 to $30,000. Since the senior freeze was still in place, seniors that already had the exemption and freeze in place were not negatively impacted. And new seniors coming to that age still receive a great tax break in the year they turn 65 - the $30,000 exemption and the tax freeze.
1. How do multi-family developments benefit the City of Rowlett and its citizens?Multi-family developments are helping the City diversify its tax base and housing stock. In general, higher density brings certain benefits that purely single-family neighborhoods may not. For example, higher density can attract a different mix of retail than usually is attributed to an area dominated by single-family. In addition, restaurants need volume to be successful and higher density areas can be desirable markets for restaurateurs.
In Rowlett, multi-family units also contribute to our property tax base and water rates.
Property Tax: Each multi-family property owner is assessed a tax based on the respective property’s assessed value. The City’s tax rate for properties with multi-family dwellings is identical to its tax rate for properties with single family dwellings with the exception that properties that are rented do not qualify for certain tax exemptions such as Homestead, Over 65 and Disabled Persons. For property taxes paid in 2019, the City’s tax rate is $0.757173 per $100 of assessed value.
Based on Rowlett’s own experience, a multi-family development will generate approximately $18,163 in property taxes per acre. By comparison, a single-family development zoned as SF-10 (10,000 square foot lots) will generate $4,255 per acre for $200,000 homes. A single-family development zoned as SF-8 (8,000 square foot lots) will generate $5,724 per acre for $200,000 homes. This means that it takes 3-4 times the amount of acreage of single-family units to equal the tax revenue of one acre of multi-family assuming a taxable value of $200,000. A tax value of $300,000 per single-family unit would still take 2-3 times the amount of acreage as one-acre of multi-family.
Water Rates: The North Texas Municipal Water District (NTMWD) is the City’s contracted water supplier. The contract requires the City to pay for a minimum of 3.2 billion gallons of water per year from NTMWD, the cost of which influences water rates for every customer in Rowlett. The City delivered approximately 2.3 billion gallons to customers in fiscal year 2019 (ending on September 30, 2019). Therefore, the cost of the unused water, $2.8 million in fiscal year 2019, had to be spread over the entire customer base.
With more customers, more water is expected to be sold. This then reduces the amount of unused water for which we all pay. New customers will have a positive impact on future water rates for all customers. The addition of higher fees charged to multi-family units has also benefitted our water rates as single-family homes no longer subsidize multi-family.
2. How many multi-family developments and units are there in the City?A dwelling unit typically consists of some combination of living/sleeping areas, a bathroom(s), and a kitchen. A multi-family development is a structure or collection of structures, each designed to contain more than one dwelling unit. For the purposes of this discussion, multi-family incudes apartments, condominiums and age-restricted units (i.e. 55+). It does not include nursing homes, assisted living units or mobile home parks.
Table 2 lists the multi-family developments in Rowlett, which are all multi-structure complexes of apartments or condominiums. In this case, ’Built’ means all primary construction is complete and the City has issued a Certificate of Occupancy; whereas ‘Under Construction’ means that the City has issued a building permit but not yet performed final inspections and/or issued a Certificate of Occupancy
3. How many multi-family developments and units are planned?As of January 2020, there are currently five multi-family developments planned but not yet under construction, which are listed in Table 3. In this case, ‘Planned’ means the City has formally accepted preliminary plans into the development process but has not yet issued a building permit.
Note: Number of units is subject to change. Building Permits have not been issued for these projects.
4. How many of the multi-family developments and units in Rowlett are planned for senior residents?There are currently three multi-family developments in Rowlett either built or under construction that have (will have) a minimum age criterion as a leasing requirement, which are listed in Table 4. This list does not include assisted living facilities or other specialized nursing/medical care facilities, which are not considered multi-family developments.
Note: Number of senior living units is part of the grand total listed in question #2 above.
5. How does the number of multi-family units in Rowlett compare to neighboring cities?Measuring the number of multi-family dwelling units based on population provides a useful and meaningful way to compare numbers of multi-family units in Rowlett and other cities.
The Apartment Association of Greater Dallas (AAGD) was founded in 1959 and is one of the largest local rental housing associations in the United States. AAGD recently published its 2020 Multi-Family Fee Survey report, which includes comparative data from cities spread across its service area. Based on the AAGD data, there are 61 multi-family units for every 1,000 residents in Rowlett. Table 5 lists the number of multi-family units for every 1,000 residents of several other DFW cities. Comparatively, Rowlett has fewer multi-family units for every 1,000 residents than 21 of the 23 cities listed. The AAGD report includes multi-family units that are built or under construction.
6. What incentives have been provided for the construction of new multi-family developments?The City has a variety of economic development tools available to attract new businesses to Rowlett, including property tax rebates, property tax abatements, impact fee waivers/reductions, permit fee waivers/reductions, and job grants. Although the City does not actively market incentive packages for multi-family developments, it has chosen to use incentive packages to catalyze development in certain locations. The City evaluates incentive requests on a case-by-case basis according to its Economic Development Incentive Policy.
Incentive Projects:The multi-family projects Rowlett has directly incentivized are as follows:
Village of Rowlett-The City agreed to grant land to the developer in the amount of $2,120,000; waive water, wastewater and street impact fees for the project; grant infrastructure improvements to the developer in an amount not to exceed $1,950,000; and to rebate 100% of its portion of the developer’s property taxes between 2017 and 2031. The rebate for FY2019 was $227,152.
Terra Lago-The City agreed to waive roadway impact fees in an amount not to exceed $902,493; and to rebate 57% of its portion of property taxes in an amount not to exceed $2,129,450 over a 10-year period. Although the incentive was approved, the developer failed to meet the performance criteria required to collect the incentive payments and, therefore, did not qualify for the incentive. Therefore, no incentive was paid for FY2019 or will be paid in the future.
Bayside / Sapphire Bay-The City created a tax-increment reinvestment zone (TIRZ) for the Bayside/Sapphire Bay area. Under the agreement, the TIRZ will receive 50% of the property taxes paid for the first twenty years (i.e. 2015-2034) for site work, public domain and open space, and infrastructure purposes.
Non-Incentive Projects supported by Rowlett:There are other multi-family projects that are not directly incentivized by Rowlett. This includes the age-restricted development Lakeview Point, which is a tax-exempt project sponsored by the Rowlett Housing Finance Corporation. The City will be paid a property tax equivalent amount under a payment-in-lieu-of-tax arrangement under that agreement. The City also entered into a short-term loan arrangement with the age-restricted development Evergreen, which was paid back in the same year. Additional detail can be found on the City’s Economic Development Transparency Page.
7. Can the City’s absorb the units currently being built? Since the inception of Realize Rowlett 2020 in 2011 and the Form Based Code in 2012, over 3,000 multi-family units have been either built or are under construction, which is an average of approximately 410 units each year. According to a study commissioned for the 2019 Comprehensive Plan update, Rowlett can absorb up to 527 units annually over the same period with average rents approaching $1,400. As a result, the delivery of new multi-family units between 2012 and 2019 totaled approximately 920 units below what the City can absorb. Among other variables, the absorption analysis accounts for existing street, water, and wastewater infrastructure capacity and planned future expansion.
While the market ultimately will make the decision about how many units should be built in what timeframe, there are indicators that Rowlett may be reaching the limits of what it can currently absorb based on its absorption rate and the units currently under construction or planned. If all of these units were built today, it could take 5+ years for the market to adjust.
8. What is the rent range for these apartments?The Multi-family units being built in Rowlett today are high quality and, in some cases, luxury style units. Many developments include amenities often found in higher income neighborhoods such as pools, community centers, open space, dog parks and trails. The rent range for six of the most recently completed units are listed in the charts below.
9. Are drivers living in apartments to blame for the increased traffic we see City wide?Only a small percentage of the overall traffic in Rowlett can be attributed to those living in apartments. For example, there are currently 636 apartment units along Lakeview Parkway from Chiesa to Scenic Drive, with another 342 in the construction or planning phase. Upon buildout, these developments are expected to make up approximately 14% of the traffic in the peak evening hours. Breaking it down to specific areas on Lakeview Parkway, 8.53% of the peak evening traffic at Scenic Drive is attributed to these drivers, with 2.2% near Dalrock and 3.8% at Chiesa.
The biggest driver of our traffic is derived of pass-through traffic from east of Rowlett. 15,189 cars a day pass westbound on Hwy 66 near Scenic Drive. While some of that is returning Rowlett citizens who attend school or work in Rockwall, many of these trips are from people travelling through Rowlett. This is borne out by recent data collected that reflects peak hours to be high volume are westbound in the morning and eastbound during evening traffic. The highest traffic count of any section of Rowlett is just west of PGBT where traffic counts total 22,605. This suggests that pass-through traffic could account for as much as 67% of total traffic along State Highway 66.
10. Are the new apartments contributing to Rowlett’s crime rate?Rowlett is consistently listed as one of the safest cities in Texas ranking 9th in the most recent update from SafeHome.org. The luxury multi-family, senior living, workforce housing or mixed-use developments being built in Rowlett do not have any more impact on crime than comparable single-family developments. The crime rate in Rowlett is impacted and being driven by the substantial and significant growth in the region. Numerous factors, including easy access from I30 and PGBT, DART light-rail, and socio-economic demographics have a bigger impact on Rowlett’s crime rate than the existence and addition of multi-family developments.
At less than 2% for the last three years, police calls for service at apartments make up a very small portion of the overall call volume as the chart below demonstrates. Even with the number of apartment units more than doubling from 2018 to 2019, the number of calls per unit has decreased.
11. What is driving the development of these Multi-Family Units?There is not a simple answer to this question but there are some factors contributing to the growth of quality, multi-family units. First, in a December 2019 article, State Demographer, Lloyd Potter stated that the population of Texas is growing by 1,039 every day. This growth is made up of 524 more births than deaths and 515 new residents moving to Texas from other states and countries. He also stated that “Texas has added more population than any other state” every year since 2006.
Second, a huge demographic shift occurred after the Great Recession. Many workers are choosing to live in apartments and condominiums rather than face the uncertainty and cost of owning a single-family home. This paradigm shift is significant and is being seen in north Texas from the increase in the construction of multi-family units as well as the high occupancy rate. In a November 2019 Dallas Morning News article by Steve Brown, he indicated that almost 44,000 apartments are being built in North Texas and that the predicted vacancy rate is 7.7%. In fact, DFW has averaged 8.1% and 8.0% in 2018 and 2019 according to the Real Estate Center at Texas A&M University outperforming Houston and San Antonio and right on par with Austin.
Multi-family is not the only rental outlet for today’s families. In Rowlett, there are an estimated 2,000+ single-family homes that are rented representing over 10% of the entire stock of single-family homes.
12. What has been the Community’s feedback on housing diversity?
In September of 2011, the Realize Rowlett 2020 Comprehensive Plan was adopted. That document provided a framework for future development moving forward over the next nine years. The Comprehensive Plan established 13 opportunity areas that individually identified the desired product types that were anticipated to be developed within each district, including higher density residential types such as townhomes, condominiums and apartments. An analysis was included in the final document that outlined the applicability of this category as it aligned community desire with market support. The outcome of this study resulted in the reinforcement of higher density residential as a recommended product type for seven “Opportunity Areas” in key locations throughout Rowlett. Throughout the document, the Comprehensive Plan acknowledged the desire to provide a more diverse housing stock throughout the City.
One of the guiding principles of Realize Rowlett 2020 was to “make Rowlett a community that is attractive to people at all stages of their lives”.
Following the adoption of Realize Rowlett 2020, amendments to the Comprehensive Plan were made in November 7, 2012 and April 15, 2014, to further the vision of the opportunity areas. In 2012, specific areas such as Woodside Living, Healthy Living, Signature Gateway, and Downtown were further studied and rezoned to Form Based Code districts. All four Opportunity Areas included Form-Based Urban Village Districts that permit multifamily, as an allowed use. In 2014 the Northshore area was further studied and rezoned to Form Based Code districts. With the rezoning initiative, three more Form-Based categories were created and incorporated into the Form Based Code: Rural Neighborhood, Urban Neighborhood, and Commercial Center. The new districts were intended to tie into the existing Form Based Code to provide for a more complimentary range of density necessary to meet the community’s vision. Both Urban Neighborhood and Commercial Center were established with limitations on multi-family development and are described below:
Urban Neighborhood:Requires a minimum mix for 20% of the total units constructed to be comprised of any combination of: Mixed-Residential, Shopfront and Mixed-Use.
Commercial Center:Mixed-Residential units will be evaluated as part of a larger mixed-use development and may only occupy 25 percent of the land area (excluding parks and streets) or building square footage in a Regulating Plan/Phased Development Plan or Development Plan. A request to deliver more than 25 percent Mixed Residential will require approval by Major Warrant.
In 2019, the City of Rowlett adopted an update to the Comprehensive Plan that primarily focused on updating six Opportunity Areas: North Shore, Active Living, Signature Gateway, Lakeside Center, Business Beltway, and Southshore. The update also provides a Future Land Use Plan to infuse an additional layer of strategic guidance for anticipated and desired land use patterns. The update builds upon the successes of Realize Rowlett 2020 and provides further direction for how Rowlett should develop in the future. View the 2019 Rowlett Comprehensive Plan.
The vision of the updated Comprehensive Plan is “to balance Rowlett’s growth with its small town feel to provide a place with affordable and diverse housing, quality restaurants and retail, and major employers; while caring for its existing neighborhoods and maintaining its roads and infrastructure”.
A major theme and key goal that came out of the update was to provide housing that supports various lifestyles and population demographics within the community. This added emphasis on housing diversity not only tied back to the Realize Rowlett 2020 plan, but also reinforced a continued vision to deliver a mix of housing to the single-family residential product that represents a super majority of Rowlett’s current housing stock.
13. Is the City planning for all of this growth? Yes. The City uses several tools to anticipate future growth and plan for improving street, water, wastewater, drainage, and facilities infrastructure to accommodate it, which includes the following:
Although each of these plans is tailored for a specific purpose, they all work together to provide the City with a comprehensive way to plan and prioritize infrastructure projects based on current and future needs. Funding projects falls outside the scope of these plans but is addressed through other method such as selling bonds and collecting impact fees.
1. What are the Current Rates?
NEW RATES IN EFFECT OCTOBER 1, 2021:
Base Rates•Water Base (5/8” meter) = $22.00•Sewer Base = $21.67 •Storm Water Management = $5.50•Trash Base (1 Trash/1 Recycle) = $19.01•Tax on Standard Trash Service = $1.57•Maintenance Fee Pavement = $3.00Consumption RatesWater•0 – 3,000 = $3.55 per 1,000 gallons•3,000 – 15,000 = $5.76 per 1,000 gallons•15,000 and Above= $7.20 per 1,000 gallons•(Commercial Rate) = $5.76 per 1,000 gallons (1 tier only)
Sewer•$5.34 per 1,000 gallons (Residential Capped at 10,000 gallons)
2. How is my water bill actually calculated?The City of Rowlett has over 20,000 accounts with each account having one or more water meters. Each water meter is electronically read once every 30 days. That reading is uploaded into the billing system, and the account is charged based on the amount of usage.3. Are sewer charges calculated the same as water?Not exactly. Sewage is not metered at the property; therefore, the City uses the amount of water usage measured by the water meter to calculate sewer charges. However, for residential customers, the City has a cap of 10,000 gallons. Therefore, if a customer uses less than 10,000 gallons of water, the City would use the actual amount of water usage to calculate the sewer volume charges. If a customer used a higher amount, they are only charged 10,000 gallons for sewer.4. Why is my water bill so high?We have heard two main questions/statements from numerous customers - that their bill has never been this high and/or that they have never used this much water. The answer is complicated because every customer has different personal habits and some have irrigation systems or swimming pools while others do not.•My bill has never been this high.For many customers this is a true statement. Over the past seven years, Rowlett has increased the water and sewer charges by an average of 5.5% each year (based on 10,000 gallons of usage) to pass on increases from North Texas Municipal Water District (NTMWD) for water purchases and the City of Garland for sewer treatment.•My usage has never been this high.For most customers, this is not accurate. Customers can check their historical usage on both the AMI and Citizen Self Service Portals. Customers can also contact the Utility Billing office to discuss their past usage patterns.5. Does the City of Rowlett use “estimates” in billing?The City reads each customers’ water meter every month to obtain actual usage. The only time “estimates” may be used are in situations when the customers’ water meter is pulled and tested or even rarer times when a resolution to an issue cannot be resolved during the billing period. Otherwise, we do not estimate bills.6. What is the “pavement fee” that appears on my utility bill each month?The pavement fee assessed each month on the utility bill is for providing a funding source for pavement maintenance to alleys and streets each year. Approximately $750k is generated each year for pavement maintenance. The fee was included in the refuse collection fee previously but to improve transparency, the fee was recently broken out so customers can view what amount is assessed each month.7. What Is AMI?New water meter reading system, AMI-Flexnet, is now online...giving water customers (YOU!) the ability to access and track water consumption online. In fact, the system reads every hour so you can get real-time usage information. Simply create an account at www.rowlett.com/AMI, set up your alerts and start tracking your daily usage. Armed with this information, customers can spot and repair potential leaks before they result in a higher bill! Realizing that we all have to work together to reduce water use, improve the reliability and sustainability of our water system and minimize costs, over the past year the City replaced ALL of the radio antennas for this important upgrade to the water meter reading system. In fact, approximately 18,000 meter radio antennas were installed! These new Advanced Metering Infrastructure (AMI) antennas transmit water consumption data directly to the City’s Utility Billing Department, thereby eliminating the need for staff to drive by each home and business to acquire the meter readings.8. Why doesn’t the AMI record usage when I take a shower?The AMI system registers usage in 100 gallon increments. Common household tasks alone are not enough to register while occurring:•Shower (17-32 gal);•Washing dishes by hand (8-27 gal);•Dishwasher (6-16 gal);•Washing load of clothes (25-40 gal)
Read Mayor Tammy Dana-Bashian’s July, 2020 Mayor’s Spotlight newsletter (linked below) for more great information about the complex issue of water in our community.
What is Senate Bill 2? Senate Bill 2 (SB2), also known as the Texas Property Tax Reform and Transparency Act of 2019, was passed by the Texas Legislature in 2019. At its most fundamental level, SB2 reforms the system of property taxation in three primary ways:
(1) lowering the tax rate a taxing unit can adopt without voter approval and requiring a mandatory election to go above the lowered rate;(2) making numerous changes to the procedure by which a city adopts a tax rate; and(3) making several changes to the property tax appraisal process.
Is there a provision in SB2 allowing cities relief from the lowered voter-approval rate during a disaster?Yes, in two different ways.
First, a city council may direct the designated officer or employee* to calculate the voter-approval tax rate in the manner provided for a special taxing unit (8 percent) if any part of the city is located in an area declared a disaster area during the current tax year by the governor or by the president of the United States (TEX. TAX CODE § 26.04(c-1)). The designated officer or employee shall continue calculating the voter-approval tax rate using 8 percent instead of 3.5 percent until the earlier of:
The other SB2 provision pertaining to disasters gives cities the ability to avoid an automatic tax rate approval election following certain disasters. When an increased expenditure of money by a city is necessary to respond to a disaster, including a tornado, hurricane, flood, wildfire, or other calamity, but not including a drought, that impacted the city and the governor has declared any part of the city as a disaster area, an election (petitioned or automatic) is not required to approve the tax rate adopted by the governing body for the year following the year in which the disaster occurs (Id. § 26.07(b)).
* The term “designated officer or employee” is not a new one added by SB2. The city council has the ability to designate any officer or employee to calculate the tax rate (Tax Code § 26.04(c)).
Did the City Council vote to trigger the disaster provision of SB2 at the June 16, 2020 City Council Meeting?Yes. The City Council passed a resolution to direct the voter-approval tax rate be calculated at 8 percent due to the declarations of disaster because of COVID-19 by the Governor of Texas and the President of the United States.
Did the City Council’s action on June 16 to trigger the disaster provision automatically increase property taxes by 8 percent?No. The proposal to adopt a tax rate for Fiscal Year 2021 will be made on August 4, with Public Hearings on the proposed tax rate scheduled for August 18 and September 14. The vote simply gives the City Council more flexibility in adopting a tax rate for Fiscal Year 2021.
If the City Council’s action on June 16 did not set the tax rate, what did it do?The resolution adopted on June 16 effectively changed the threshold for an election on the tax rate from an increase of 3.5 percent to an increase of 8 percent. This is a return to the historical threshold required for an election on property taxes. Again, the June 16 vote did not establish a new tax rate, but it does give the City Council more flexibility in determining the tax rate for Fiscal Year 2021.
Why did this resolution receive City Council support?
City of Rowlett Property Tax InformationAd valorem (property) tax is one of the largest revenue sources for the City and is based on certified assessed values provided by the Dallas County Appraisal District (DCAD) and the Rockwall County Appraisal District (RCAD), as well as the tax rate set by the Rowlett City Council.
The ad valorem tax rate is allocated between the General Fund and the General Debt Service Fund. The Debt Service Rate provides for the payment of principal and interest of the City’s tax supported debt each year. The Operations and Maintenance (O&M) rate provides for operations and maintenance of the services provided by the General Fund to the citizens of Rowlett, such as police & fire services and response, public works roadway and utility services and improvements, community and economic development, parks and recreation facilities and programs, and library facility and programs.
Over the past two years, the City of Rowlett tax rate has decreased by 2 cents. The tax rate history is shown below –
Exemptions and Tax Freezes provided in Rowlett are some of the most beneficial in the area to citizens. Rowlett is one of the few cities in Dallas County to provide a tax freeze for citizens over 65. All exemptions to Rowlett citizens provide tax relief in an amount equivalent to 7.42 cents on the tax rate for the current FY2020. Seniors alone receive a benefit equivalent to 5.46 cents.
The City Council is committed to providing citizens with significant tax relief through exemptions and the senior tax freeze as detailed in the table below –
In the current FY2020, approximately 31 percent of Rowlett citizens residing in Rockwall County supports City of Rowlett services. The remaining 69 percent supports Rockwall County and Rockwall ISD and is based on a rate set by each of those entities.
In the current FY2020, approximately 27 percent of Rowlett citizens residing in Dallas County supports City of Rowlett services. The remaining 73 percent supports Garland ISD, Dallas County, Dallas County Community College, and Parkland Hospital and is based on a rate set by each of those entities.
SB2 InformationWhen did SB2 go into effect?Most of the bill, including the new tax rate calculations, took effect on January 1, 2020. A few other provisions, including those related to the use of comptroller forms in calculating the tax rate and injunctive relief for failure to comply with statutory requirements, do not go into effect until January 1, 2021.
There is some new terminology in SB2, what are the changes?Prior to SB2, the term “effective tax rate” referred to the benchmark tax rate needed to raise the same amount of maintenance and operations property taxes on existing property as the previous year, after considering changes in appraised values. SB2 changed the terms “effective tax rate” and “effective maintenance and operations tax rate” to “no-new-revenue tax rate” and “no-new-revenue maintenance and operations tax rate,” respectively.
Additionally, the term “rollback tax rate” was changed to “voter-approval tax rate.” More significant than the change in terminology is the modification to both the voter-approval rate formula (discussed in the next question), and the requirement that cities hold automatic elections to approve tax rates exceeding the voter-approval tax rate.
How does SB2 modify the calculation of a city’s rollback tax rate (now called “voter-approval rate”)?Under pre-SB2 law, a city’s rollback rate was the rate necessary to raise precisely eight percent more maintenance and operations tax revenue as the year before after considering appraisal fluctuations. The debt service component of the tax rate is then added to the product of the effective maintenance and operations rate and 1.08.
In addition to changing the terminology from “rollback rate” “to “voter-approval rate,” SB2 lowers the multiplier used in the rate calculation from 8 percent to 3.5 percent for cities that aren’t considered to be “special taxing units,” which is nearly every Texas city. To illustrate, the old calculation of a city’s rollback rate was as follows:
Rollback Rate = (Effective Maintenance and Operations Rate x 1.08) + current debt service tax rate
Under SB2, that calculation now looks like this:Voter-Approval Rate = (No-New-Revenue Maintenance and Operations Rate x 1.035) + current debt service tax rate
Do cities use a specific form to calculate their tax rate?Yes. The comptroller is required to create tax rate calculation forms to be used by cities and other taxing units when calculating their property tax rates (TEX. TAX CODE § 5.07(f)). Cities are required to use these to calculate the no-new-revenue tax rate and the voter-approval tax rate.
Is the City still required to hold two public hearings on the tax rate if the rate exceeds the no-new-revenue rate?No. Before SB2, when a city proposed a tax rate that exceeded the lower of the effective tax rate or the rollback rate, the city was required to hold two public hearings prior to adopting the tax rate. Due to the compressed timeframe for adopting a tax rate that exceeds the voter-approval rate, the drafters of SB2 eliminated one of the existing tax rate hearings. Under SB2, a city that adopts a rate exceeding the lower of the no-new-revenue tax rate or the voter-approval tax rate must only hold one public hearing (TEX. TAX CODE § 26.05(d)).
Does SB2 modify the procedure for approval of a tax rate that exceeds the voter-approval rate?Yes. Previously, any rate adopted that exceeded the 8 percent rollback rate triggered the ability of citizens to petition to hold an election to “roll back” the tax rate to the rollback rate. Generally speaking, SB2 requires a city to hold an automatic election (i.e., the bill eliminates the petition requirement) on the November uniform election date if it adopts a rate exceeding the 3.5 percent voter-approval rate (TEX. TAX CODE § 26.07). That said, some cities under 30,000 population are not subject to the automatic election requirement associated with adopting a rate exceeding the new voter-approval rate.
In the event of a triggered election, what happens if voters don’t approve a city tax rate exceeding the voter-approval rate?If voters do not approve the city’s adopted tax rate at a tax rate approval election, the city’s rate for the current tax year is set at the voter-approval tax rate (TEX. TAX CODE § 26.07(e)). If property owners pay their taxes using the originally adopted tax rate and the voters ultimately reject that rate at an election in November, the city must refund the difference between the amount of taxes paid and the amount of taxes due under the voter-approval tax rate.
What changes did SB2 make to how a city provides notice of its tax rate every year?Prior to the passage of SB2, most cities provided notice of their property tax rates pursuant to Local Government Code Section 140.010. That statute was repealed by SB2 and replaced with a few different mechanisms for providing notice of the city’s tax rate:
By August 7 or as soon thereafter as practicable, the designated officer or employee of a city must post notice on the city’s website, in the form prescribed by the comptroller, the following:(1) the no-new-revenue tax rate and the voter-approval tax rate, along with an explanation of how they were calculated;(2) the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding existing debt obligations; and(3) a schedule of the city’s debt obligations (TEX. TAX CODE § 26.04(e)).
New notice provisions for the public hearing on the tax rate, loosely based upon the tax rate notice located in Local Government Code Sec 140.010 that was repealed by SB2, are included in the bill. A different notice is required for each of the following scenarios:(1) the proposed tax rate exceeds the no-new-revenue tax rate and the voter-approval tax rate;(2) the proposed tax rate exceeds the no-new-revenue tax rate but does not exceed the voter-approval tax rate; and(3) the proposed tax rate does not exceed the no-new-revenue tax rate but exceeds the voter-approval tax rate; and(4) in a city with a population of less than 30,000 in which the de minimis tax rate exceeds the voter-approval tax rate, the proposed tax rate exceeds the voter-approval rate (Id. §§ 26.06(b-1) – (b-3), 26.063).
On March 8, 2019, the City entered into an agreement with Bayside Land Partners to acquire the 119-acre tract south of IH-30, including the marina, to enable its development with a future partner. Since that time, the City has been working with the Bayside parties, future development partners, and others to complete this acquisition by the 120-day closing date of July 8. Funding for this acquisition, including the earnest money, will be paid by that partner.
While significant progress has been made to date, all parties have agreed to extend the closing date to July 31, 2019 to finalize the multiple documents required for a transaction of this size and complexity.
“Rowlett remains steadfast in upholding our community’s vision for a destination entertainment district, a world-class marina, a resort and conference center and public amenities such as the Crystal Lagoon and show fountain,” said Mayor Tammy Dana-Bashian. “This is a one-of-a-kind property and we are committed to developing the unique destination that our citizens deserve.”
Why did the City sue Bayside?The City and the developer, Bayside, were at odds over the vision for the south tract of the Bayside Project. The south 119-acre parcel was designed to be a destination entertainment venue with world class amenities, including an eight-acre Crystal Lagoon, one-acre show fountain, 1.75 million square feet of commercial space that included mixed use entertainment, restaurants, office and retail, an open-style bench trolley, 45 acres of programmed parks, 4-miles of hike-and-bike trails, and a 500-room resort and conference center. Although both parties agreed to the original vision, in July 2018, Bayside proposed significant changes. After months of discussion, the City and Bayside reached an impasse on the vision. As a result, the City found it necessary to file litigation.
Why is the City settling with Bayside?The City’s goal, first and foremost, has been to facilitate development of the land in a manner that optimizes its value to the citizens of Rowlett. Recognizing that litigation is very expensive, risky and time-consuming, the City’s strategy was to acquire the 119-acre parcel south of IH-30 and work with a future development partner that would share the City’s vision. Most pressing of all was a time-sensitive commitment from the State of Texas to take advantage of a state 10-year tax rebate program to help build the conference center. The value of those rebates was projected to be over $50 million. As a result, the settlement was deemed to be the best way to achieve the City’s goal.
What are the terms and conditions of the settlement?The City, through a future development partner, will acquire all the property south of IH-30 and the marina for the price of $37,013,000, and will then convey the land to that future development partner. The City has a 30-day due diligence period to provide a title commitment and review and either accept or reject existing agreements, review marina operating details, conduct inspections and tests, and other sale-related matters. Closing on the transfer of the land will occur by July 8, 2019. On closing, the lawsuit will be dismissed.
What is the schedule to close on the settlement?The 120-day deadline is July 8, 2019.
Who is the City’s future development partner?The City of Rowlett will not and does not intend to own nor develop the south tract or the marina. During the 120-day process the City will negotiate agreements with a future development partner. There are multiple documents that must be negotiated, developed and/or amended between the City and the Bayside parties and between the City and a future development partner. Once all of those agreements are complete, the City will publish its plans and name the new development partner.
Explain why the City is not disclosing the future development partner.While the City has a future development partner in mind, there are no development agreements in place. Those agreements will be negotiated during the next 120-days. Once that happens, the City will publish its plans and name the new development partner.
Who is paying for the land on the south side?Funding for the $37,013,000 acquisition price, including the $100,000 in earnest money, will be paid by a future development partner. The price represents a value negotiated between the City and Bayside.
Who will own the south part after this settlement is complete?The land and marina will be owned by a future development partner.
Will there be any changes to the south part as a result of this settlement?As with any journey, it is possible that there will be appropriate tweaks and adjustments along the way to accommodate the development of this project. What is important is that the City and its future development partner share the same vision of a destination entertainment venue with world class amenities.
How does this settlement impact the citizens of Rowlett?It ensures that the City’s original vision for this site is built. It also avoids costly litigation that could take 5 to 7 years to resolve and provides the opportunity to build the project now rather than some point in the future. It also benefits Rowlett by ensuring that future property and sales tax revenues from this project are not delayed indefinitely.
What are the sewer improvements included in the Settlement AgreementThe original vision for Bayside included approximately $12.5 million for offsite water and sewer improvements, $9.0 million of which was designated for the south part of Bayside and the remaining $3.4 million for the north part of Bayside. The cost of these improvements was to be paid by the Developer (Bayside) and reimbursed through the Tax Increment Reinvestment Zone #2 (TIRZ#2) from future property taxes collected from the Bayside development. The $6.8 million in sewer improvements included in the Settlement Agreement are from the projects designated for the south side. Therefore, the Settlement Agreement provides assurances to Bayside that those projects will be completed as envisioned by the City and/or its future development partner and Bayside will have no further responsibility for the improvements designated for the south parcel. This is part of the bifurcation process between the north and south tracts. The cost of the sewer improvements will be performed by the City and/or its future development partner and will be reimbursed from the property taxes of the TIRZ#2 as originally planned.
Explain “bifurcation”. How does it change our current deal with Bayside?Bifurcation is simply splitting or dividing the north tract from the south tract. Bayside is currently one 262-acre parcel owned by one developer. Bifurcating the north and the south means that the development of the north will be independent of the south and each property owner will be able to develop under the zoning and agreements specific to their parcels.
Will this transaction ensure we see our vision built?Yes. While projects evolve over time, we are confident that the critical elements of making this location a destination entertainment venue with world class amenities will be included.
Will the south tract still be called Bayside?No. Although the north tract will retain the Bayside name, the new development on the south tract will not; therefore, we are no longer referring to the south tract as Bayside. Once we close on the property at the end of the 120-days, the new name will be announced.
How does this deal affect leaseholders at the Marina?This deal will have little to no impact on the leaseholders at the Marina. Essentially, it means changing one landlord for another once the closing occurs. It is a common vision between the City and its future development partner to build a world class marina.
After nearly two months of negotiation, the City of Rowlett has reached an agreement with Bayside to acquire the property south of IH-30, including the marina, to enable its development with a future partner.
The agreement includes the acquisition of the 119-acre tract south of IH-30; assignment of the Crystal Lagoon license; and, transfer of the marina including rights to 1,005 boat slips. This agreement is a critical first step in a 120-day process during which multiple documents must be negotiated, developed and/or amended between the City and the Bayside parties and between the City and a future partner. Funding for this acquisition, including the earnest money, will be paid by that partner.
This agreement provides a path to achieve the City’s vision, including a destination entertainment district, a world-class marina, a resort and conference center and public amenities such as the Crystal Lagoon and show fountain.
“We have been steadfast in upholding our community’s vision,” said Mayor Tammy Dana-Bashian. “This is a one-of-a-kind property and we are excited to be moving forward in our commitment to develop the unique destination that our citizens deserve.”
The City will hold a Town Hall Meeting at 6:30 pm on Monday, March 18 at the Rowlett Community Centre to inform the public about the agreement and next steps.
Mayor Tammy Dana-Bashian's statement:"After nearly two months of negotiation, the City of Rowlett has reached an agreement with Bayside to acquire the property south of IH-30, including the marina, to enable its development with a future partner.
Our goal, first and foremost, has been to facilitate development of the land in a manner that optimizes its value to the citizens of Rowlett. This agreement gets us back on track toward this goal.
The agreement enables the City, in partnership with a future development partner, to acquire all of the land south of IH-30, separating it from the development on the north side. This provides a path to achieve the City’s vision, including a destination entertainment district, a world-class marina, a resort and conference center and public amenities such as the Crystal Lagoon and show fountain.
The agreement includes the acquisition of the 119-acre tract south of IH-30; assignment of the Crystal Lagoon license previously purchased by Bayside; and a transfer of the marina including rights to 1,005 boat slips. Over the next 120-days, multiple documents between the City and Bayside as well as between the City and a new development partner must be negotiated, formulated and/or amended. I want to be clear that this agreement is a crucial first step. It will take several months of work before we can close on the land. Some of the documents that need to be negotiated or amended include the tax increment reinvestment zone to split out the north and south tracts, an agreement with a new development partner, and a hotel/conference center agreement to optimize the ten-year state tax rebate program, not to mention approving a myriad of engineering design and construction plans.
We want the public to know that the City of Rowlett will not and does not intend to own nor develop the south tract or the marina. During this 120-day process the City will negotiate agreements with a new development partner who shares the City’s vision of an entertainment district with world-class amenities. Funding for this acquisition, including the earnest money, will be paid by that partner. The agreement provides the City a due diligence period prior to closing, and anything can happen during this time. The pending lawsuit between the City and Bayside will only be dismissed if the closing occurs.
We have been steadfast in upholding our community’s vision for this development. This is a one-of-a-kind property and we must get it right. We are excited to be moving forward in our commitment to develop the unique destination that our citizens deserve."
Following months of unsuccessful discussions and negotiations, the City of Rowlett (the “City”) has formally notified Bayside Land Partners LLC and Bayside District Partners LLC (the “Developer”) that they are in default of the Bayside development agreements and the City has filed a lawsuit in State District Court in Dallas County seeking relief as a result of the Developer’s actions. The City and Developer have been working in a public-private undertaking since 2015 to bring Bayside, a $1 billion mixed use development, to Rowlett and the Dallas/Fort Worth metroplex. The City and Developer entered into a series of development agreements to ensure the implementation of the Bayside vision. The 262-acre project envisions numerous features and amenities to make it a world-class destination. This includes an eight-acre Crystal Lagoon, one-acre show fountain, 1.75 million square feet of commercial space that includes mixed use entertainment, restaurants, office and retail, an open-style bench trolley, 45 acres of programmed parks, 4+ miles of hike-and-bike trails, and a 500-room resort and conference center.
In June of 2018, the City issued the Developer a pre-default notice and opportunity to fulfill its obligations to develop the property. Instead, during a special meeting of the Rowlett City Council held in July 2018, the Developer proposed significant changes to the original agreed-upon vision. Among them included eliminating the three most important differentiators and public attractions for Bayside: the eight-acre lagoon, one-acre show fountain, and the trolley. The new proposal also significantly reduced the entertainment, restaurant, and retail opportunities, and increased the amount of land area dedicated to residential uses. As such, the revised plan did not reflect the parameters set forth in the public-private partnership agreements.
On September 18, the Rowlett City Council voted to reject the Developer’s proposed revisions to the original plan. Since that time, the City and Developer have continued discussions about the future of the project; however, those conversations have been unproductive in reaching a solution.
The City and Developer have specific performance requirements that the parties have agreed to in a series of agreements. The Developer has made agreements and representations upon which the City relied in making strategic land use decisions, agreeing to economic development incentives, and approving requested density and types of structures. Because of this agreed-upon vision, the City has adopted a tax increment reinvestment zone to support the project; created two public improvement districts; and secured state tax support for a convention center.
The City of Rowlett is resolved that it will not settle for anything less than making Bayside a unique legacy project and world-class destination.
Case No. DC-19-00146 in the 134th District Court, Dallas County.
Bayside South Plan Differences:As has been discussed since July 2018 when Bayside proposed changes to the approved vision for Bayside South, the City Council rejected those proposed changes in September 2018 based on Bayside eliminating the three most important differentiators and public attractions: the eight-acre Crystal Lagoon, one-acre show fountain and the trolley. In addition, Bayside proposed changes to dramatically reduce by nearly 55 percent the amount of restaurant, retail and entertainment destination use from 510,600 square feet down to 280,500 square feet and dramatically increase the amount of land area in Bayside South dedicated to residential uses from 29 acres to 50 acres.
Bayside North and South Development Status January 2019:The developments currently under construction on the North side are no longer owned by Bayside as they sold the land to third parties for development. Bayside North consists of approximately 142 acres of which 113 acres are designated for residential uses and 29 acres designated for commercial and open space. Bayside North approved development plans include 1,067 multifamily units, 217 single family lots, 139 townhomes, 150,000 square feet of retail and 100,000 square feet for a limited service hotel. Currently constructed or under development is 864 multifamily units and 104 single family lots. At this time, no commercial development has been permitted for construction; however, the City is currently reviewing plans for the limited service hotel being proposed in Bayside North.
Can the City of Rowlett withhold Certificates of Occupancy (CO) for developments on the North side?The developments currently under construction on the North side are no longer owned by Bayside as they sold the land to third parties for development. Not issuing COs to third parties creates litigation risk to the City.Bayside South consists of approximately 119 acres of which 29.89 acres are designated for residential uses and 89.17 acres designated for commercial and open space. Bayside South approved residential development plans include 1,553 urban multifamily units, 300 condominium units and 242 townhomes. Bayside South approved commercial and open space development plans include 2,030,600 square feet of commercial space consisting of 510,600 square feet of restaurant retail and entertainment destination space; 415,000 square feet of Class A office space; 300,000 square feet of medical office space; 530,000 square feet of Resort/Conference Center (500 rooms); 175,000 square feet for two limited service hotels (250 rooms); 100,000 square feet of marina showroom/service; eight-acre Crystal Lagoon; one-acre show fountain; an open-style bench trolley; 45 acres of programmed parks and 4+ miles of hike-and-bike trails. At this time, there has been no development plans submitted or permitted for construction in Bayside South except for a grading permit to stockpile dirt on a portion of the site.
What is the status of Bayside?The City of Rowlett and Bayside Land Partners LLC have been working in partnership over the last several years to bring Bayside, a $1 billion mixed use development to Rowlett and the Dallas/Fort Worth metroplex. This 262-acre project has numerous features and amenities to make it a world-class destination. This includes an eight-acre Crystal Lagoon, one-acre show fountain, mixed use entertainment, restaurants, office and retail, an open-style bench trolley, 45 acres of programmed parks, 4+ miles of hike-and-bike trails, and a 500-room resort and conference center. On July 26, Bayside Land Partners presented a plan that differs significantly from the agreed-upon vision for the Bayside development. The new proposal eliminates the three most important differentiators and public attractions for Bayside: the eight-acre lagoon, one-acre show fountain, and the trolley. The new proposal also significantly reduces the entertainment, restaurant, and retail opportunities, and increases the amount of land area dedicated to residential uses. As such, the revised plan does not reflect the parameters set forth in the public-private partnership.
After working with Bayside Land Partners LLC and their new development team over the course of the past year, the parties have reached an incurable impasse on the plan to implement the vision for Bayside. As a result, on September 18, the Rowlett City Council voted to reject Bayside Land Partners proposed revisions to the original plan.
“We are disappointed that we have reached this impasse,” says Mayor Tammy Dana-Bashian. “The Rowlett City Council is resolved that it will not settle for anything less than making Bayside a unique legacy project and world-class destination. The success of this project is too important for our community’s future.”
City of Rowlett / Bayside Land Partners Joint Statement:Recognizing the strategic importance of the Bayside project to our community and to the region, the City of Rowlett and Bayside Land Partners are in conversations to determine the right path forward. While both parties want the best long-term investment for the community, we have alternate views on how to achieve that goal. These conversations may lead to a dissolution of our partnership or some other solution. We will continue to keep Rowlett citizens informed of our conversations and decisions as they are made. Bayside is a $1 billion mixed use development - a legacy project with the potential to attract new visitors, residents and tenants, both regionally and nationally, and we must get it right.
What is Bayside?In May, 2015, the City of Rowlett and its development partner, Donahue Development (now operating as Bayside Land Partners), closed on the former Elgin B. Robertson Park, acquiring the property from the City of Dallas. Since that time, the City of Rowlett has been working with Bayside Land Partners to realize the vision for Bayside, a unique 262-acre, $1 billion mixed-use waterfront development unlike any other in the DFW area. This vision has the power to turn Rowlett into a resort destination, both for permanent residents as well as day and short-stay visitors.
In particular, the eight-acre Crystal Lagoon and show fountain will differentiate Rowlett from other high-end communities in the area that are primarily anchored by golf courses. The lagoon will feature two beaches and will be the first in the United States with a one-acre show fountain, which will serve as an exclusive landmark for the City of Rowlett, the DFW area and the State of Texas.
An open-style battery-operated bench trolley adds another dimension to the Bayside experience, serving as another key differentiator and incentive for engaging in the City’s attractions.
Other Bayside attractions include:
The total build-out is expected to be completed over eight to ten years and will include 1.75 million square feet of commercial space and 3,000 residential units. Bayside is projected to add nearly $1 billion in new taxable value, resulting in nearly $150 million in revenue from property, sales and hotel occupancy taxes over the next twenty years.
Who are the Bayside Land Partners?Ownership of Bayside Land Partners consists of members of the Kruse family from Grapevine, Texas and the Wilks family from Cisco, Texas. The project manager is Tom D’Alesandro of Blake-Field (Chicago) and Dan Leverett from Place (Houston). Bayside has hired several notable architects including Sasaki (Boston), Lake Flato (San Antonio) and Ten Eyck Landscape Architects (Austin). The team has previously worked on projects such as Reston Town Center in Reston, Virginia and The Woodlands Town Center & Waterway Square in The Woodlands, Texas.
How is the City of Rowlett involved in Bayside?Bayside is a true public-private partnership. In a traditional development, the City’s involvement is limited to zoning the property, providing utility services, and making inspections. In this project, however, the City of Rowlett and Bayside Land Partners committed to a vision and are obligated to executing that vision and realizing the parameters established in 2015. The City facilitated the purchase of the property from the City of Dallas, annexed the property into the municipal boundary, rezoned the property with Form Based Code, created a Tax Increment Reinvestment Zone (TIRZ), approved a public improvement district, drove a change in state law to qualify Rowlett for a ten-year tax refund from the State of Texas for a new conference center, and championed new development on I30 to support the region’s growth and this project.
How do these proposed changes impact our community?Eliminating these attractions from the Bayside experience is certain to impact the tourism and demand for a 500-room resort, as well as current and future local entertainment venues and restaurants. Without major attractions, there will be a considerable reduction in visitors and a loss in tax revenue, particularly sales taxes.
Did the City approve the proposed changes?No. the City Council voted on September 18, 2018 to deny the proposed changes. Any changes to the vision requires City approval.
What are the incentives provided by the City?Incentives includes the creation of a Tax-increment Reinvestment Zone (TIRZ) to help mitigate extraordinary development challenges and remove barriers to development. These challenges included the costs associated with improvements to Interstate 30 and Dalrock, earthwork and construction of sea walls on the south side, offsite utility improvements, and parks, trails, public art and monuments. In order to accommodate these challenges, the TIRZ provides a contribution rate of 50% of all property taxes collected for a period of twenty years for a total of $75.9 million. During this same twenty-year time period, the City of Rowlett expects to generate $149.5 million in property taxes, sales taxes and hotel occupancy taxes. Upon full build-out (about 10 years), City taxes are expected to be approximately $8.0 million annually, net of the TIRZ contribution, or equivalent to 25 cents on the tax rate.
Why would the City participate in a public-private partnership of this kind?The City has been interested in this site for many years. It is a “legacy” project that can help ensure Rowlett’s future by providing tax base, jobs and amenities unlikely to occur anywhere else in the city limits. It also meets a number of guidelines in the City’s comprehensive master plan, Realize Rowlett 2020 as follows:
Has the Crystal Lagoon been scrapped?No. Any changes to the approved vision will require City approval.
What are the allowable uses of the Lagoon?The Crystal Lagoon was always envisioned to be one of the key attractions and differentiators to establish Bayside as a world class destination. The design of the Crystal Lagoon accommodates multiple uses including public water sports and recreational activities and amenities; private beach areas for the resort and conference center and condominium owners and guests; and the one-acre show fountain. It is important to the City that the general public have access to the lagoon.
What is a Public Improvement District?A Public Improvement District (PID) is a special assessment area created at the request of the developer in the district to fund higher quality or special improvements and services within a designated area. Property owners pay a supplemental assessment in addition to their taxes, which is used to pay off the public funds provided to the developer for project costs associated with the property development, such as water, sewer, drainage, roads, parks, police, fire, libraries and other development enhancements.
The Rowlett PID for Bayside South totals $36.5 million and includes funding for roadway improvements, utilities, and public open space and amenities. Public open space and amenities include trails, parks, distinctive lighting, signs, pedestrian malls, public art, and a multi-acre lagoon. A separate agreement between the City and Bayside requires the lagoon to be eight-acres.
Who pays the assessments for a Public Improvement District?The assessments of a public improvement district are paid by the owners of the property or the developers until the property is sold. Rowlett taxpayers are not responsible for the payment of those assessments. Rowlett’s responsibility is limited to establishing the assessments each year and billing the property owners.
When did the developer submit their change to the approved vision?Since 2013, the City has been actively involved in the Bayside project. The City spent two years negotiating with the City of Dallas and Donahue Development to acquire the 262-acre property.
In May, 2015, the City and its development partner, Donahue Development (now operating as Bayside Land Partners), closed on the former Elgin B. Robertson Park, acquiring the property from the City of Dallas. Funding for the property totaling $31.8 million was paid by the developer. No City taxes were used.
In April 2015, the City and Bayside Land Partners entered into a development agreement establishing the vision. From May 2015 until September 2017, City staff and Bayside worked on formalizing plans, including creating important amenities believed to make the project successful and provide a regional, multi-state draw. The most significant amenities of that vision were the crystal lagoon, show fountain and trolley. These were amenities originally identified by the developer as part of their research and design. Bayside hired a series of highly qualified consultants to do the financial analysis to confirm the feasibility of these amenities. The City relied upon this information, this analysis laid the foundation to support the $36.5 public improvement district on Bayside South.
Also, during this period, the City of Rowlett and Bayside Land Partners entered into a series of contractual agreements regarding the public improvement district and the construction of a conference center. Each of these agreements commit both Rowlett and Bayside to the approved vision including the amenities outlined previously in this document.
On September 28, 2017, Bayside notified the City of Rowlett that they were evaluating their management team structure. On October 10, 2017, Bayside notified the City of Rowlett that they had hired Tom D’Alesandro of Blakefield Development as the new Development Manager of Bayside. Since that time, City staff have met on a number of occasions with Bayside ownership, Tom D’Alesandro and a new slate of consultants hired by Bayside. While Bayside’s new consulting team raised concerns regarding the sizing of the condo towers, the operating cost of the lagoon and the viability of the show fountain, Bayside continued to assure the City that they were committed to the approved vision. Over the course of the last ten months, the City continuously requested supporting details, information and phasing schedules related to the completion of the approved vision for Bayside South.
The City of Rowlett did not see a comprehensive proposal of the changes to the approved vision until July 10, 2018. City staff, at the Mayor’s direction, immediately called an Executive Session to brief the City Council at the first available opportunity on July 17th. The City Council was told at that time that Bayside had requested to share their proposed vision with the entire City Council. The Council agreed and called a special work session that was held on July 26th.
What is the original estimate for the completion of Bayside?In 2015, when the original vision was established, the developer believed that Bayside would have an 8-10 year build-out.
Watch the July 27 Special City Council MeetingJuly 27, 2018 News Release - City Council Receives Bayside Land Partners PresentationMarch 8, 2019 News Release - City of Rowlett Reaches Settlement with Bayside
Over 10 years ago, the City Council made a decision to redo Main Street from an asphalt road to concrete. Through a grant and other funding mechanisms, the clock tower, monuments and landscaping were added in an effort to add character to our downtown area. Although some felt this project was not of value, today, the clock tower has become a popular destination for photos and nothing says “Rowlett” quite like it!
This investment and the Realize Rowlett 2020 plan are key reasons downtown development has progressed. Bankhead Brewing is a great example of the type of new business that located in our downtown simply because of this plan! The Library now makes its home at the Village, and more restaurants and retail establishments will also be locating downtown as well, providing different and unique choices for dining and shopping. Many of the same features downtown (i.e. street lights, trees and sidewalks) will be carried through into the surrounding neighborhoods as well, creating a synergistic flow to our Village.
The DFW area is growing at a rapid pace, so it was imperative the City properly planned, attracting the best type of development to bring real value to our downtown. The Village project/concept was a result of many years of planning, much citizen input and finding the right developer to carry out the vision! In fact, the goal was to find a developer willing to match what was downtown and help to create the downtown our citizens have long desired. And the sign brings "identity" and character to the area (like the water tower and clock tower), and adds a flavor of nostalgia to the buildings!
The Village features live/work units. Simply put, the first floor units are designed so small businesses can occupy them and not pay commercial rents, making them affordable. So, if you were an accountant, attorney, therapist, or just a very small office with a few employees you can rent one of these offices essentially giving your business a "Main Street address" and not pay commercial rates. Then add accessibility to the DART rail, which helps bring clients/customers into the downtown area!
How does the Village of Rowlett affect downtown parking? The Village of Rowlett is just one many planned developments within downtown, the City is taking a strategic and global look at the entire 250+ acre downtown area. Parking management downtown is an ongoing concern that will continue to be addressed as development occurs through the city initiated Downtown Parking Management Plan. Currently, the Village of Rowlett has not only met parking requirements, but provided a surplus of 13 spaces in addition to pre-construction conditions. The Village of Rowlett is also providing publicly accessible, on street parking in the spaces along Main Street and north of Dennis St., as well as on a portion of Southridge north of the leasing building.
Village of Rowlett
1. Why does the City have so many liquor stores? In May 2015, residents voted to approve the sale of alcohol in Rowlett. As with any business selecting where to locate, the establishment of liquor stores is market driven. They locate in Rowlett because their research has determined that the business can be supported.
2. Can the City limit the amount of liquor stores we have in Rowlett? The City may NOT, according to State law, discriminate against or treat these businesses any differently than others wishing to locate here. The City CAN, and has, adopted the Texas Alcoholic Beverage Commission regulations regarding distance requirements related to churches, hospitals and schools. The City has also adopted an Ordinance allowing these businesses to request a variance from the distance requirement.
1. Why isn’t my street/alley fixed? How do I find out where my street/alley ranks?The City assesses and rates each street and alley every four years. You can contact the Public Works Department at 972-412-6287 to see where your street and alley ranks. Or you can visit the link below to view the street ranking and top worst 50 alleys.
2. My street was included in the 2015 bond election. Why isn’t it completed?The City is working diligently to deliver the 2015 Bond Program. The goal is to begin all street projects by the Spring of 2018. Updates to the CIP Bond Program can be accessed at www.rowlett.com/CIPinfo. Street Ranking and Top 50 Worst Alleys
1. When are you going to develop the park by my house? A real focus of the City of Rowlett is to improve those existing parks first and ensure there are maintenance plans in place to keep them in excellent condition. Once this has been done, Council will prioritize what undeveloped parks are developed.
2. When will the City of Rowlett build a community dog park? We have one: Scentral Bark, Rowlett’s first off-leash dog park! A $20,000+ donation from the Sachse Park Pals was gratefully approved and accepted at a December, 2017 City Council Meeting, and funded this long-desired community amenity. The dog park opened in March, 2018 in Herfurth Park, and includes both large and small dog areas,
3. Parks, Recreation and Trail Master Plan This plan, approved by the City Council in January 2018, outlines new goals and strategies for Parks and Open Space, Recreation and Trails. 4. When will you start working on Trails? The Parks, Recreation and Trail Master Plan will outline priority one, two and three trails. We will begin making the connections as soon as the plan is adopted by City Council. One of the first connections we will complete is the trail at Scenic Point Park – connecting the end of the trail behind Terra Lago to Scenic Dr.
Timeline:In 2012, Rowlett partnered with la terra studios to develop a Scenic Point Park Master Plan. In May 2012, City Council held a special work session to discuss this Master Plan. In August 2013, City Council approved this Master Plan.
In September 2013, City Council approved awarding a bid to York Bridge Concepts to construct the wooden bridge and lookout.
In 2014, the City partnered with Terra Lago to complete Phase II, which would include a grand staircase, parking and 660 linear feet of trail. Future expansion will complete the additional phases of the park.
Phase I: Master Planning, Boardwalk, Easements - Approximately $785,000 - Funded through Cash CIP - status: open
Phase II: Grand Staircase, partial trail completion - Approximately $500,000 - Funded through a partnership with Terra Lago - status: anticipated to open no later than March 31, 2018
Phase III: Trail & Trail Head, overlook, kayak/canoe launch, terraced seating, playground, nature trail, wetland, wetland bridge, pavilion, boardwalk, pier, parking, signage/branding. Status: future funding for Phase III will depend on partnerships, sponsorships or future CIP funding opportunities.
In 2017, in an effort to enhance the already popular offerings for our community’s senior citizens, the department hired a full time parks and recreation programmer and added seven new senior fitness programs. At the time, the programs were offered at no charge to gauge interest and allow everyone to try the classes. In order to remain sustainable, PARD has implemented fees for SOME senior programming at a rate of $1.25 per class (seniors are still receiving a discounted rate, Youth and Adult programming ranges from $4 to $8 per class). This will allow us to ensure we have great instructors and facilities. And, as participants are aware, there are already many senior programs for which a small fee is charged to support the sustainability goal. These include trips, luncheons, some instructional classes and some exercise programs such as Senior Stretch.
This does not mean every senior program will have a fee – for example, Bingo, Coffee and Donuts, Bridge, Texas Hold ‘Em, Senior Health Checks and Table Games will continue to be offered at no charge. Core fitness programming will still be offered at no charge – PACE, Senior Fitness Fun, SAIL and Get Energized with Jill. Due to extremely high enrollment numbers, participants will now need to pre-register for these programs though!
Going forward, fees will be assigned to senior programming based on the type of program and the expenses related to the program. This structure is outlined in the Master Fee Schedule approved by City Council. All areas of programming follow the same structure including preschool to adult programming and athletic programming.
2. When will we get a Senior Center in Rowlett?During Fiscal Year 2017 the City of Rowlett conducted a Senior Center Feasibility Study at the request of the Senior Advisory Board. It was decided the best location for a senior center facility was as an attachment to the Rowlett Community Centre. The price tag for the facility is approximately $7 million dollars. The Community Investment Advisory Board will request funding for the design of the facility as part of the 2018 CIP Bond election.
Initial funding for the project will come from the Governor’s Community Achievement Awards $250,000 grant, awarded to Keep Rowlett Beautiful in 2014 by Keep Texas Beautiful. Subsequent funding will be provided through TxDOT’s Green Ribbon program. Together, the Governor's Community Achievement Award and Green Ribbon Project will provide over $2.1 million in funding to Rowlett. No matching funds are required from the City of Rowlett with this project, and TxDOT provides the administration and management.
Phase 1 of the project began at the far west city limit and extends to Applebee’s. Phase 2 runs from Chiesa to Heritage Parkway on the east end of SH66 and is anticipated to begin in February 2018. The areas specifically over Lake Ray Hubbard are not included due to necessary environmental approvals, but will be part of future projects. Plant selections include Liriope, Pennisetium Grass, Gulf Muhly, Flame Acanthus, Russian Sage, Coreopsis, Blue Grama, Upright Rosemary, Autumn Sage and similar plantings. Trees include High Rise Live Oaks, Texas Redbuds and Crape Myrtles.
Entryway features will be placed on SH66 at Dexham on the west end of Rowlett and at Heritage Parkway to the east. The features have been designed by la terra studio and will encompass a large wall with a “ROWLETT” designation on one side. There are additional environmental approvals the entryway features must go through, so their installation will be the final components of the project.
View the TXDOT (funding and managing the project) and la terra studios (landscape architects) City Council Work Session presentation from April 18, 2017, Item 3C on the Agenda at the link below. TxDot/la terra studios presentation
The Library is now open on the ground floor in the Village development. Transitioning the Library from its temporary location at 5702 Rowlett Road to Downtown was always been part of the Village of Rowlett development plan. The agreement with the Village is to house the Library for five years, with an option to renew for an additional two years.
What’s the City going to do with the 5702 Rowlett Road facility?The building has been repurposed for the Community Development and Economic Development Departments.
Why can’t it stay open as a library branch?The building’s proximity to downtown makes this less feasible, as it would require additional staffing and operational costs to do so. Branch libraries are more frequently seen in larger population centers that are further spread out geographically.
Prior to this adoption, outside of the 1997 Code for the Abatement of Dangerous Buildings, the City did not have a means to address certain property maintenance issues/concerns. As the City continues to age and progress with continued growth and development, we needed a means to address these aging and deteriorating properties. The adoption of the IPMC will now allow all properties (residential- owner occupied and rental, multi family, and commercial) to be held to specified property maintenance standards all across Rowlett.
Subsequently, we have implemented a Rental Housing Standards Program to ensure minimum housing standards for the protection and safety of the occupants of all rental homes, both single family and multifamily.
All single-family and duplex homes are required to be registered annually and multi-family complexes are required to be licensed annually. Single family registration fees are $50 per year and multi-family is $12/unit/year. Forms are available on the Rental Housing web page or at the Community Development Office located at 3901 Main St. Rowlett, TX 75088. Forms may be mailed in or brought in person. There is no "online" option at this time.
To report a complaint concerning a rental residence, please call Environmental Health at 972 412 6125 option #9 or email email@example.com. More Info...
What is a Housing Finance Corporation? Why do we have a Housing Finance Corporation? What does the Housing Finance Corporation do? Does the City fund the HFC? A Housing Finance Corporation (HFC) is a public, non-profit corporation organized under Chapter 394 of the Texas Local Government Code. HFCs essentially provide a means to finance affordable residential development for local governments. Rowlett City Council voted to approve incorporation of the Rowlett HFC on July 11, 2017. The Rowlett HFC promotes residential ownership and development through the financing of projects and programs that are of long term economic benefit to the city and its residents. HFCs are standalone corporations. Although they perform essential governmental functions, they are not directly funded through the city’s coffers. HFCs may issue debt (through the sale of bonds), but the debt is not directly tied to the city and does not affect the city’s bond capacity or rating.