UPDATE (4/16/13): Flower Mound officials voted 5-0 Monday to express support for the creation of a Municipal Management District (MMD) at The River Walk at Central Park project.
MMD’s are special districts created through the state that are self-governed and can provide infrastructure and other services through the issuance of tax exempt bonds, special assessments, property taxes and impact fees.
“The MMD option is moot until approved by the State of Texas and then the town and the applicant can work on getting more information and details for everyone to thoroughly review,” said council member Steve Dixon.
“If the state does take action, I was encouraged to hear the applicant (Centurion American) will perform a market feasibility study and will host town hall style meetings to meet with Flower Mound residents to answer all questions and have a two way conversation on the subject- which is in addition to town public hearings.”
Read more below.
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Flower Mound officials announced Friday that Centurion American, the developer of the mixed-use The River Walk at Central Park project, has requested that the town express support for the creation of a Municipal Management District (MMD).
MMD’s are special districts created through the state that are self-governed and can provide infrastructure and other services through the issuance of tax exempt bonds, special assessments, property taxes and impact fees.
The River Walk at Central Park is expected to include retail shops, restaurants, entertainment venues, an amphitheater, hotel, an office building, townhomes and apartments.
The town council will discuss Centurion’s request at their meeting this Monday night.
The following letter explaining the developer’s request was posted Friday by Flower Mound Town Manager Jimmy Stathatos:
Centurion American Acquisitions, the company that has the 107 acres of land commonly referred to as the Riverwalk under contract, has requested that the Town express support for the creation of a Municipal Management District (MMD). Initially, the developer had expressed interest in creating a Public Improvement District (PID). However, the Town informed them that the Town Council cannot authorize PIDs. They must be approved by the voters.
The Town cannot independently create an MMD. The Town must support its creation in order to have a State Representative submit a bill to the Texas House of Representatives. If the State approves the creation of the Riverwalk MMD #1, the Town then must approve a development agreement explicitly consenting to the creation of the MMD.
Basically, the Town was requested to consider supporting the creation of a Municipal Management District. The Riverwalk property was only placed under contract within the past two weeks. Since the Texas Legislature ha s to create this MMD and their legislative session ends at the end of May, this is the only Town Council meeting in which the item could have been discussed. If the Town wou ld have waited until the May 6 Council meeting, there would not have been enough time for the bill to be considered by the Legislature. As discussed, the Riverwalk MMD #1 has several hurdles to clear before it is officially approved. The Town will continue to scrutinize the concept. We have alr eady been researching other MMD s to possibly learn from their successes and failures. Whether it’s EB-5 funding or a Municipal Management District, I think it’s critical that we consider any economic development tool that potentially helps provide the quality economic development that residents have requested. Even if the Texas Legislature approves the bill creating the Riverwalk MMD #1, the Town may determine that it’s not a good fit for our community. However, if we don’t take the first step (considering a Resolution), then we won’t even have a chance to determine whether or not this mechanism could add value to the Town.
Important facts about Municipal Management Districts:
· They help promote, develop, encourage, and maintain employment, economic development, commerce, transportation, housing, tourism, recreation, arts, safety, and public welfare.
· The Town Council must approve any bond issuances.
· Unlike with typical Public Improvement Districts, any debt a Municipal Management District issues is not Town debt and does not impact the Town’s bonding capacity.
· The bond proceeds provide a funding source for constructing public infrastructure.
· The only property owners that pay an assessment are the future owners that purchase property within the specific Riverwalk MMD #1 territory. Thus, the developer and property owners that are benefiting from the improvements are the ones that are paying for them.
· State law requires the Town Council to appoint the initial Board of Directors
· State law authorizes the Town to dissolve the MMD by approving a Resolution.
Frequently Asked Questions:
If the Town Council approves the proposed Resolution at Monday night’s Town Council meeting, does the Riverwalk Municipal Management District #1 automatically go into effect?
No. If the Town Council approves the Resolution, it simply allows the Texas Legislature to consider creating the MMD. If they do approve it, the Town Council will not approve the Riverwalk MMD #1 unless they are satisfied with the final development agreement.
If the Riverwalk MMD #1 is approved, will it impact the approved zoning requirements for the Riverwalk project?
No. An MMD does not have any bearing on the zoning requirements. In fact, the current owner has publicly stated that they would like to decrease the residential density for the Riverwalk. The Town still has to approve their plans.
If approved, can the Riverwalk MMD #1 start borrowing money for whatever projects they desire?
No. As mentioned, the Town Council has to explicitly authorize the MMD to issue any debt. If the Town feels that the financing plans are not acceptable, they do not have to approve them.
Would a new MMD raise taxes for any Flower Mound residents?
No. The only financial impact will be on the developer, businesses and residents that live within the Riverwalk MMD’s territory. In fact, the Town Council has made sure that any possible MMD could only create assessments and not taxes.
Would an MMD have any impact on Town services, such as Police and Fire?
No. The Town would still provide service s to the entire Town. Some MMD’s have been authorized to provide certain services in a Town’s Extra-Territorial Jurisdiction (ETJ). However, the Town of Flower Mound does not have an ETJ.
If anyone has any questions, please feel free to contact me at [email protected].
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