Title
Ordinance - An Ordinance of the City of Mansfield, Texas, Calling a Special Election to Submit Two (2) Ballot Propositions to the Eligible Voters of the City of Mansfield, Texas, Pursuant to Sections 504.152, 505.152, and 505.202 of the Texas Local Government Code Authorizing the Type A Economic Development Sales Tax to be Used for Type B Economic Development Purposes; Providing for the Form of Ballot; Making Provisions for the Conduct of the Election and Other Provisions Relating Thereto; Providing a Severability Clause; and Providing for an Effective Date
Requested Action
Approval of the Ordinance calling a Special Election on May 6.
Recommendation
Staff recommends approval of the ordinance
Description/History
Over the last year, staff has been working on several major projects across the City which include entertainment and destination style venues. In order to attract the highest and best owners/operators within these major attractions, the City will likely need to bridge various gaps in the market. Since its inception in Mansfield in 1997, the Type A (formally known as the 4A) fund collects 1/2 cent of sales tax when taxable purchases are made within Mansfield. Type A EDCs are typically created to fund industrial development projects such as business infrastructure, manufacturing and research and development, which has been true for Mansfield. In order to utilize these funds for other economic development purposes that many cities in the metroplex have access to, the Type B sales tax is used. These are typically called Community Development Corporations. The Type B corporation in Mansfield was established in 1992 as a Park Facilities Development Corporation and thus strictly authorized for Park Facilities Development.
In fiscal year 2023, the revenues projected in the Type A fund are expected to be around $9,000,000. While some of these funds pay for ongoing economic development projects like Klein Tools, Straumann, and debt service for infrastructure improvements, there could be available funds to attract major retail, restaurant and entertainment venues if the uses were approved by the voters. With the current State requirements in place for Type A sales tax uses, we are limited in how we can incentivize entertainment, tourists and other recreational projects, however, the State of Texas does allow for voters to approve expanding their Type A sales tax to also allow Type B uses. This is the purpose for Proposition #1:
“Shall the Mansfield Economic Development Corporation be authorized to use previously approved collections of its sales and use tax, including all amounts already collected, for projects related to recreational or community facilities, including but not limited to, land, buildings, equipment, facilities and improvements found by the board of directors to be required or suitable for use for professional and amateur sports, including children’s sports, entertainment, tourist, convention, public park purposes and events, auditoriums, amphitheaters, parks and park facilities, open space improvements, related store, restaurant, concession, automobile parking facilities, related transportation facilities, related roads, streets, water and sewer facilities, other related improvements that enhance these projects, any other projects or improvements found by the corporation’s board of directors to promote new or expanded business development, and maintenance and operating costs associated with any of the above detailed projects?”
If this proposition were to pass in May, the City would have access to funds the EDC already collected, as well as all future collections, for use on Type B eligible projects, which are listed in the proposition above. It is very important to note that approval of this proposition is not authorization of a new nor increase of the existing approved sales tax collection the voters approved in 1997. This simply expands the City's uses for its existing Type A sales tax collections to not only everything that is eligible today, but also for those recreational, entertainment and restaurant type uses going forward.
Likewise, over the last year, staff has worked with a professional sports ownership group that has included their multiple sports and teams in the planning stages for a major commercial mixed-use development at Lone Star and 360, just south of Big League Dreams. In this development, it is contemplated to include a multi-purpose stadium for professional uses, along with concerts, festivals, and other major events. Additionally, a mix of other uses, similar to Clear Fork in Fort Worth, or Legacy West in Plano, is contemplated around the sports venue. In order to use Type A sales tax for a venue like this, the citizens must hold a separate vote for a "sports venue project" that can include all of the major retail, restaurants, and entertainment uses within the same development as the sports venue. This is the purpose of Proposition #2:
"Shall the Mansfield Economic Development Corporation be authorized to use previously approved collections of its sales and use tax, including all amounts already collected, for a professional multi-sport venue and related infrastructure as defined in Chapter 334.001 of the Texas Local Government Code, and maintenance and operating costs associated with the project?"
If this proposition were to pass in May, the City would have access to existing and future funds for use on this development and its major components. Like the first proposition, if passed, the Type A uses of today would remain eligible going forward.
Justification
The election will allow the residents of Mansfield to approve Type A sales taxes for more flexible uses.
Prepared By
Jason Moore, Executive Director, Mansfield Economic Development Corporation