Opinion: Ferguson says shopping center deal good for Lewisville

Date 2015/10/26 3:10:00 | Topic: Blogs and Columns


Architect's rendering of Lewisville West shopping center revamp. (Courtesy GFR Architects)

By Neil Ferguson
Lewisville Mayor Pro Tem


Economic development initiatives are a vital tool of the City of Lewisville when it comes to attracting and retaining quality businesses, and ensuring commercial properties present a desirable impression of our city. But they are multifaceted, and can be misunderstood. That sometimes resulting in rumors, often on social media. One such rumor now circulating concerns the Lewisville West Shopping Center (LWSC) at Fox and I-I35 in Lewisville, which recently got a fresh face.


To begin with, at no time did the city pay anyone for any of the renovations -- not for materials, or labor or any other part of the improvements to the center. However, the property owner did invest over $5M of their own money to do their makeover.


The city did allow LWSC a rebate on 1% of sales tax collected ONLY for those construction purchases made here in Lewisville that were fully documented with receipts, and fully verified with the State Comptroller’s Office as taxable Lewisville sales. That directly provided $3.5M in local economic benefit to Lewisville businesses rather than some other city.

LWSC still had to pay for police, fire and parks sales taxes on all local expenses. For the city, it meant the same base sales tax had construction purchases been made elsewhere, while helping the local economy and local businesses by $3.5M and still collecting the fire, police and parks city sales tax portions.

The other offer made by the city to LWSC allowed the property tax portion on buildings (property "improvements" ONLY, NOT the land or ANY Business Personal Property -- that is, "BPP": fixtures, equipment, etc. owned by tenants) to stay the same as they were before renovations for a fixed period of time. That encouraged renovation over continued decline, while still collecting the same property tax on improvements before they declined even further and continuing to collect any increases on land or BPP values.

In 2013, before renovations, LWSC buildings were valued at $2.06M. The makeover was completed in early 2014. A year later in 2015, the revitalized buildings are valued at $5.55M. Without renovation, the value of the buildings would have continued their downward slide.

The result was the city got an even better deal than letting LWSC sit while tax values on those buildings fell, halted this center’s continue to decline and drop in taxable value, and turned around what was an eyesore at a gateway location on I-35 while growing the future taxable value.

Had it not been for the make-over, Starbucks said flatly they would not even consider opening at LWSC. Today, they have visibly added more to the activity at LWSC, and created new jobs. Likewise, the overall occupancy has increased, creating additional new businesses and jobs.

As a result, sales tax collections at LWSC in 2013 before improvements that had averaged $7,120/month now average $9,985/month from 2014 to September 2015. That is a 40+% increase after renovation. Even with consideration for the economy, that jump mostly came from more businesses making far more money in the local economy than before. And it is sales tax money collected and used by the city to pay for services without increasing the 20% slice of your total residence tax bill that goes to the city (80% of your property tax bill goes to schools and the county, not the city).

The result is a significant increase in sales tax collections at LWSC, businesses making more money locally, and letting sales tax money continue to help keep our local city property taxes one of the lowest in the DFW area. And unlike your property tax bill that is paid for by Lewisville residents, between 50% and 70% of all sales taxes in Lewisville are paid by nonresidents -- people who work here or travel to or through here and shop, but live elsewhere -- all helping create additional savings to residents.

Yet another benefit: In the last year, new and expanded businesses have added more than $1M in additional taxable Business Personal Property at LWSC. There is no rebate on any BPP in the LWSC incentives, so that has already created even more taxable income to offset property taxes, and further helps keep property taxes low. All of this added BBP tax collection additionally benefits LISD and the county with their 80% share of collections.

The initiatives the City Council approved at LWSC have created a broad array of solid returns for many, and will continue to do so for years to come. That was no surprise to the council. We thought this through carefully with the knowledge and support of city staff, and anticipated these benefits coming if we took the right action, all without spending money on a private enterprise.

Expect the same insight and wisdom that drove each of these smart initiatives, turning around Lewisville West Shopping Center, giving significant and verifiable benefit to our community, to continue at work with approval and management of the new bond issuance authority. I support the November bond package. It will make this city even better as we move forwards towards our 2025 anniversary.




This article comes from The Lewisville Texan Journal
http://archive.lewisvilletexan.org/xoops

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