Page 26 - Hurst Budget FY21

The projects were determined to be financially beneficial through a comprehensive cost/benefit
analysis, which verified city projections of an annual net benefit to the city of approximately $7 million
dollars over a 20-year period. In addition, the city benefits from the expanded employment base of
around 3,000 jobs. Of primary importance, the project was deemed necessary to preserve the financial
integrity of the city's sales tax base. The mall area makes up approximately one third of the city’s sales
tax base. The North East Mall expansion with its generation of additional sales tax, and property tax
revenues, and its positive effect on the area's economy, is considered one of the city’s best
investments. Additionally, the city is currently working with Simon Property Group to plan the next major
redevelopment at North East Mall. They have established a vision to make North East Mall a new
generation “destination” as they develop plans to backfill the vacant space from the closure of Sears
and Nordstrom not renewing their lease. Malls similar to North East Mall typically have a 20-year life
cycle. The expiration of their economic development incentive coincides with that 20-year time frame.
We expect that additional incentives will be developed to ensure North East Mall’s continued success.
Simon Property Group continues to express their commitment to mall’s success here in Hurst. We are
optimistic that their interest in acquiring JC Penney underscores their commitment to North East Mall.
JC Penney recently completed a multi-million dollar renovation that aligns with Simons Property
Group’s vision for the mall. We have received anecdotal reports from the local mall manager that traffic
is starting to return as the shoppers adjust to the pandemic. To view a current lineup of mall stores,
please visit www.simon.com/mall/north-east-mall.

The city of Hurst has been successful in negotiating similar smaller-scale agreements with other
companies under the model made successful with Simon Property Group. All current agreements were
executed under chapter 380 of the Texas Local Government Code; however, chapter 312 agreements
are now also being considered. Chapter 312 agreements are for a shorter term and create a true tax
abatement rather than a revenue sharing agreement. Under legislative revenue caps affecting future
budget years, the city is forced to reevaluate use of our economic development tools. The city will
continue to entertain 380 agreements and consider future 312 agreements; however, we will be vigilant
to ensure the city does not share sales tax beyond what is required to provide basic services to the
project and does not transfer costs to our residential taxpayers. We will approach all economic
development negotiations considering return on investment and from a joint venture approach.

Infrastructure: In partnership with other agencies the city has completed important infrastructure
projects that have spurred additional private investments in the city. Perhaps the most visible example
is the partnership with the State of Texas for the reconstruction and widening of State Highway 183
that crosses the city of Hurst from its west to east boundaries. The city views this freeway as our “fifty-
yard line.” City staff worked diligently with the state and private developers to take advantage of the
freeway improvements and was recognized by TXDOT as implementing the most active
redevelopment plan of the five cities impacted. The state purchased right-of-way throughout the
highway corridor and many aging buildings were demolished to make room for the new highway. City
staff used this opportunity to replat existing property for new businesses to call home. Just north of the
highway where an apartment complex was condemned and demolished In-N-Out Burger, QT, Tropical
Smoothie Café, and Tiff’s Treats are all doing well. Just south of the freeway, a vacant “big box”
structure was demolished and restaurants moved into the space including an Outback Steakhouse and
a Jack in the Box. Target Super Center completed their remodel and Corner Bakery opened shortly
after. Development interest in the area still continues with a housing developer considering a location
along 183 near Target. Property values and sales tax revenue continue to benefit from the improved
highway and new businesses along the corridor. In addition to large scale projects with significant
economic impact, the city continues to focus on less visible projects that provide critical facilities for the
public. The city recently completed major waste water projects and incorporated a new innovative road
surface treatment called HA5. This product extends the useful life of our streets through the application
of a micro seal that reduces the impact of UV light and water intrusion. The city will continue to focus
on our infrastructure with particular emphasis on critical streets and drainage improvements and

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