I. Real Estate Council Development Professional Survey

The development survey was open to invited development professionals throughout Fort Worth and the greater Fort Worth area. (Exhibit A). Key feedback from city staff was to focus on respondents with significant experience both inside and outside Fort Worth and those familiar with the entirety of the development process. This highlighted those with the necessary perspective to make informed comment on Fort Worth relative to its competition and identify problem areas in the overall development process.

The online survey was conducted during the months of September and October 2022.

Respondents are those in commercial development and related consulting (24%), construction (23%), design (31%) and other related commercial developmentrelated professions (22%).

Eighty-one percent (81%) of respondents have been involved in three or more development projects in Fort Worth during the most recent 24-months and 74% of respondents have been involved in five or more development projects during the most recent 24-months.

When asked which development-related department has improved most in recent 24-months 82% of development professionals answered the Development Services Department.

When asked if interdepartmental cooperation across all development departments has improved, 68% answered no, or no and getting worse.

Section I Recommendations

1.

2.

Expand the overwhelmingly positive trajectory within the Development Services Department to all development related departments.

Instill a culture of problem solving across all departments and down to the customer interface level as is the norm in most cities.

Resolve city’s internal process conflicts between departments and remove the expectation that the customer will find a way to resolve them on their own.

II. Nine City Departments Responsible for Fort Worth Development Process

Often, the question is asked “Who is in charge of the commercial development process in Fort Worth?” It is often assumed that the answer is the Development Services Department. However, for virtually any significant development project in Fort Worth this is a highly incomplete assumption. In practice, nine (9) separate city departments are directly involved in the commercial development process:

The development functions in Fort Worth are highly decentralized, with the nine departments responsible for functions of the development process reporting to all five assistant city managers. (Exhibit B).

The issues created by the decentralized nature of the development process was acknowledged in a March 2020 memo from the City Manager’s Office addressing “Expectations for Development Services and Partner Departments”. The one-page memo asked all development departments to “Prioritize development review to meet or exceed service and timeframe expectations and share responsibility for team performance.” EXHIBIT D

Many common development process such as construction plan review (IPRC), zoning change, planning, building plans and others, require simultaneous multi-department reviews for a project to advance. Despite the March 2020 Expectations Memo, Development Services Department has limited or no influence on many critical development functions that can approve, delay or cancel a project. Therefore, today it is left with the customer to work with multiple departments simultaneously to facilitate required communication between the departments for their project to advance. At a minimum, the disconnected structure of the development functions leaves the experienced customer with an impression of a poorly organized city. Many new unfamiliar customers find themselves in a maze of bureaucracy incapable of generating resolutions

The survey data shows that Development Service Department’s improvement efforts over the last two years through numerous Business Process Improvements “BPI’s”, Lean/Six Sigma Process Improvements and many other efforts are bearing real fruit over the functions they oversee. However, the decentralized nature of the organization limits the effectiveness of these efforts.

Most concerning is this type of organization is leaving too many of the city’s brightest and hardest working employees burned out and disillusioned. Far too many of them have chosen to leave for other opportunities.

Based on Real Estate Council member feedback, further discussion of the Development Professional Survey highlighted earlier, and interaction with city staff through the Development Advisory Council, we respectfully offer the following recommendations, which we believe will drastically improve the development culture and atmosphere for both development customers and just as important, the city staff:

Section II Recommendations

The “Silos” need to finally come down and the “One Stop Shop” needs to finally happen. The city cannot continue to ask the customer to navigate these nine departments on their own. Unfortunately, the City Manager’s 2020 “Expectations Memo” has not been implemented. On that basis, we respectfully suggest that the next logical step take place. That is to place relevant partner department personnel responsible for commercial development under formal written operational control of the Development Services Department Director. These staff will need to maintain necessary ties to their partner department heads and access to their department’s resources. However, for daily operational control and workflow accountability they should be organized under Development Services. While this is a very significant request, it would bring Fort Worth into line with their competitors who offer customers a more straightforward process interfacing with a single development department.

Additionally, plan for these same employees who have development responsibilities to be on the same floor and in the nearest vicinity possible to the Development Services Department and to each other, in the new city hall.

6.

Schedule standing regular continuous improvement meetings with all staff involved in reviews workflows. Expand the proven third-party lean process improvements and BPI’s to include the larger multi-department reviews. This will serve not only to improve processes and bring accountability but will help all staff better understand how their roles and responsibilities affect the ability of their colleagues to solve problems as a team.

7.

Invest in proven customer service training annually for all city personnel involved in the development process. Ordinances should be enforced not as brick wall, but as a problem to be corrected.

8.

Semi-annually, the City Manager should host a two-hour forum attended by all development personnel at the City of Fort Worth and the commercial real estate community to discuss and resolve targeted items selected by the City Manager, the city Development Advisory Committee, and the Real Estate Council. Subsequent meetings should chart progress on the items resolved.

9.

Invest Heavily in HR Retention efforts to ensure the highest performing staff are supported and promoted to create the next generation of leaders to promote the cultural shift towards problem solving. Provide more opportunities to advance within leaving existing departments. Employees should not have continuously move to other departments or leave the City to advance their careers. Years of knowledge and competency are continuously leaving departments to move internally or externally to other cities.

10.

While not reflected in the City’s original Org Chart, REC felt it critical to point out the legal department controls many aspects of the contracts and agreements necessary to develop in Fort Worth. While previously consulted on nonstandard situations, they have now become thoroughly entrenched in the standard project workflow. Their mindset is one of extreme "what if" risk thinking and their practicality level is so low no private company could survive under their guidance. Significant resources should be invested in improving all aspects of their important input as the current process is too slow to be practical.

III. City of Fort Worth Financially Benefits from High-Performing Development Process

With a high-performing real estate development process, the financial benefits accrue year after year both to the real estate profession and to the City of Fort Worth. In 2021, Commercial Development added approximately $650 Million in appraised valued to Fort Worth’s portion of Tarrant County’s tax rolls. Allowing for a modest 3% appreciation, these projects represent $ $334,534,790.43 in tax revenue to the City Fort Worth over their IRS 39-year life.

In the fall of 2022, the Real Estate Council commissioned a financial impact analysis to estimate the financial impact of delayed or deferred projects in terms of fee revenue, tax revenue and lost economic activity due to potential inefficiencies (Exhibit C). The analysis performed by Highland Market Research, with input from City staff, examined Development Services Department statistics from January through September 2022, to conservatively estimate the financial implications of development delays.

While there are several findings in the analysis, we shall focus on three.

Section III Conclusions

1.

Based on a 10-week development process delay impacting 19% of the projects in process (316), with an estimated total value of $496.7 million (based on average valuation for all commercial projects from January – September 2022), the City of Fort Worth realizes an estimated delay or deferral of $1.428 million over the 10-week period (see Addendum A, Table 10).

2.

Using the same 10-week development process delay impacting 19% of the projects in process, the delayed or deferred development fees paid to the city is estimated at approximately $600,000 (see Addendum A, Table 12).

3.

As interest rates climb and the time value of money widens, an efficient city real estate development process financially benefits our municipal government and the private sector. For both, time is money.

IV. Final Conclusions

The Real Estate Council of Greater Fort Worth appreciates the progress made by city officials, the Development Services Department, and the leadership of Assistant City Manager Dana Burghdoff and Department Director D.J. Harrell. The collective efforts at City Hall have led to process improvements in many areas and an overall upward trajectory as proven in the latest survey.

As previously stated, it is critically important to note the City of Fort Worth commercial development process is under the purview of 9 separate city departments. Eight other City departments are involved beyond Development Services. And when city department silos lead to a disjointed (at times highly disjointed) process, inefficiencies lead to delays that cost both the city and the private sector, time and money.

The Real Estate Council leadership has diligently listened, studied, and thoughtfully considered the eight recommendations set forth. We believe the recommendations should be aggressively pursued by City leaders at all levels, in 2023. Perfection is not our goal and is unrealistic. A high-performing City development process based on a culture of problem solving and resolving the city’s internal process conflicts between departments for the customer is achievable.