Mercer Crossing assessments hold steady

Property owners in Mercer Crossing will see minimal changes to their annual infrastructure assessments as the $44.4 million development project nears completion, city officials said Tuesday, Oct. 21.

The Farmers Branch City Council unanimously approved the annual service and assessment plan for the Mercer Crossing Public Improvement District, a financing mechanism that allows property owners to repay infrastructure costs over time. Most homeowners will see differences measured in dollars rather than significant increases, with many benefiting from an expanded tax credit.

"The main reason why we wanted to put it here as opposed to consent is this is an annual thing," Council Member David Reid said. "I want to make sure that the residents in that area got a feel for the dollars that we're talking about."

The district was created in February 2017 to stimulate economic growth by allowing developer Centurion American to finance public improvements including roads, water lines and other infrastructure. Property owners repay those costs through annual assessments rather than requiring the city to fund the improvements upfront.

Jay Patel, finance director for the city, introduced the item and turned the presentation over to Mark Pfirrman, vice president with MuniCap, the district administrator.

Pfirrman told council members the infrastructure benefits all properties within the development, including single family residential, commercial and multifamily properties.

"All the single family residential has been platted. The commercial space is up and running," Pfirrman said. "So we don't expect too many changes at this point in time for this infrastructure."

The budget shows property owners paying more toward principal this year with less going toward interest, a sign the debt is being paid down. 

A key benefit for property owners comes through a Taxable Increment Reinvestment Zone (TIRZ) credit, which returns a portion of city property taxes to offset assessment costs.

"The city is contributing a portion of the City of Farmers Branch property taxes collected from each property as an offset to their PID [Public Improvement District] annual installment the following year," Pfirrman said. "We took 40% of that increment and applied it as a credit."

Pfirrman said property owners should see more predictable assessments going forward as the development matures, noting that early fluctuations occurred when vacant lots became completed homes.

The district also includes a separate infrastructure project for 69 townhome lots that replaced an originally planned amphitheater and about 40,000 square feet of commercial space. Those improvements have been completed.

Reid emphasized the distinction for residents, "Just so folks know that the single family homes are not impacted by the townhomes."

"Correct. No impact at all," Pfirrman said. "That townhome site reimbursement agreement obligation is solely paid by those 69 townhome lots."

The council reconvened after executive session to table one item until Nov. 4 and approve a budget amendment to add a full-time position. Members also approved a letter of intent for an economic development project, authorizing the city manager to continue negotiations.

The meeting adjourned at 10:55 p.m.