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HomeMy WebLinkAbout1990-0662939L NOTE: This ordinance has been amended /by ordiance 95-247. (Copy Attached) ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS ESTABLISHING AN ENTERPRISE ZONE (ENTERPRISE ZONE I) WITHIN THE LIMITS OF THE CITY OF DENTON AND THE EXTRATERRITORIAL JURISDICTION OF THE CITY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton, Texas desires to create the proper economic and social environment to induce the investment of private resources in productive business enterprises located in a severely distressed area of the City and its extraterritorial jurisdiction, and to provide employment to residents of such area; and, WHEREAS, certain conditions exist in such area which represent a threat to the health, safety, and welfare of the people in the area; and WHEREAS, the City hereby finds that the area of the City and County described in Exhibit "A" attached hereto (the "Zone") meets the criteria for designation as an enterprise zone under Section 4 of the Texas Enterprise Zone Act, Tex. Rev. Civ. Stat. Ann. art. 5109.7 (the "Act"), on the grounds that the Zone has a continuous boundary and is 9.11 square miles in total area and, among other conditions, the following conditions exist in the Zone which rep- resent a threat to the health, safety, and welfare of the Zone: A. The average unemployment in the proposed area dur- ing the most recent 12-month period for which data is available is at least one and one-half (1-1/2) times the local., state or national average for that period; and, B. The proposed area meets the following criteria: (i) the area was a low-income poverty area ac- cording to the most recent federal census; (ii) at least seventy percent (70%) of the resi- dents of the area have an income below eighty percent (80%) of the median income of the residents of the locality or state, whichever is lower; and WHEREAS, the City finds that it is in the best interest of the City to nominate the Zone as an enterprise zone pursuant to the Act; and, WHEREAS, the City hereby desires to designate the Zone a reinvestment zone for tax abatement purposes, as provided by Section 11 of the Act and Section 312.201 and Section 312.401 of the Texas Tax Code, as amended; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. The Zone meets the criteria for designation of an enterprise zone as set forth in Section 4 of the Act. SECTION II. The City hereby nominates the area described in Exhibit "A" as an enterprise zone, in accordance with the Act. SECTION III. The City hereby designates the zone an enter- prise zone and a reinvestment zone subject to the approval of the Texas Department of Commerce. SECTION IV. Upon approval by the Department, the Zone will be named "Denton Enterprise Zone I." SECTION V. The Zone shall take effect on the date of the negotiated agreement to be entered into by the City and the Department. The zone shall terminate seven (7) years thereafter or at an earlier time designated by subsequent resolution. SECTION VI. The City directs and designates the Mayor of the City of Denton as the City's authorized representative to act in all matters pertaining to the nomination and designation of the Zone as an enterprise zone and a reinvestment zone. SECTION VII. The City further directs and designates the Executive Director of Economic Development as liason for com- munication with the Department to oversee zone activities and communications with qualified businesses. SECTION VIII. That the City Council will provide certain tax incentives applicable to business enterprises in the zone which are not applicable throughout the City as follows: The City shall abate taxes on the increase in value of real and personal property improvements for new, expand- ing and modernizing basic industries, corporate office headquarters and distribution centers in a designated enterprise zone. The level of abatement shall be based upon the value of the improvements and personal property in accordance with the attached Exhibit "B". PAGE 2 SECTION IX. That a public hearing to consider this ordinance was held by the City Council on April 17, 1990. SECTION X. This ordinance will become effective immediately upon its passage and approval. PASSED AND APPROVED the day of , 1990. ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY PAGE 3 EXHIBIT "A" The general description of the area of the Enterprise Zone I is as follows: All that certain lot, tract or parcel of land lying and being situated in the County of Denton, State of Texas and being more particularly described as follows: BEGINNING at the intersection of the centerline of Jim Christal Road with the centerline of North Hickory Creek; THENCE in an easterly direction with the centerline of Jim Christal road to the centerline of the Dry Fork of Hickory Creek; 'THENCE with the meander of the Dry Fork of Hickory Creek to the intersection with a stream from the northeast (Stream DF-2 on FIRM maps); THENCE in a northeasterly direction with Stream DF-2 to the centerline of Jim Christal road; THENCE in an easterly direction with the centerline of Jim Christal Road and crossing the centerline of Interstate Highway IH-35 and continuing with the centerline of Scripture Street to a point in the centerline of Ponder Street; THENCE in a northeasterly direction with the centerline of Ponder Street to a point in the centerline of Congress Street; THENCE in an easterly direction with the centerline of Congress Street to a point in the centerline of Carroll Boulevard; THENCE in a southerly direction with the centerline of Carroll Boulevard to a point in the centerline of West Hickory Street; THENCE in a westerly direction with the centerline of West Hickory Street to a point in the centerline of Bernard Street; THENCE in a southerly direction with the centerline of Bernard Street to a point in the centerline of Eagle Drive; THENCE in a westerly direction with the centerline of Eagle Drive to a point in the centerline of Avenue D; THENCE in a northerly direction with the centerline of Avenue D to the centerline of Prairie Street; THENCE in a westerly direction with the centerline of Prairie Street to a point in the centerline of Avenue E; THENCE in a southerly direction with the centerline of Avenue E to a point where the eastward extension of the south boundary line of the Owsley Addition intersects the centerline of Avenue E; Zone I page 2 THENCE in a westerly direction with the south boundary line of the Owsley Addition to the centerline of Bonnie Brae Street; THENCE in a northerly direction with the centerline of Bonnie Brae Street to a point in the centerline of West Prairie Street; THENCE in a westerly direction with the centerline of West Prairie Street to a point in the baseline of Interstate Highway I35W; THENCE in a southerly direction with the baseline of I35-W to a point in the center of Hickory Creek; THENCE in an easterly and southerly direction with the meanders of Hickory Creek to a point in the east boundary line of the S. Pritchett Survey Abst. No. 1021; THENCE in a southerly direction with the east boundary line of the S. Pritchett survey line a distance of 1,500 feet to a point; THENCE in an easterly direction to the centerline of Bonnie Brae; THENCE in a southerly direction with the centerline of Bonnie Brae to the northwest corner of the J. Severe Survey Abst. No. 1164; THENCE in a easterly direction along the north boundary line of said survey to the centerline of the Union Pacific Railroad; THENCE in a southwesterly direction with the centerline of the Union Pacific Railroad to a point in the north line of the H. Hagood Survey A-517 Denton County, Texas; THENCE in a westerly direction with the north line of said Hagood Survey to its most northerly northwest corner; THENCE in a southerly direction with a westerly line of said Hagood Survey to a re-entrant corner of said survey; THENCE in a westerly direction with the center of Johnson Lane and continuing in a westerly direction to the baseline of IH-35W; THENCE in a southwesterly direction with the baseline of IH-35W a distance of 2000' to a point for a corner; THENCE in a northwesterly and a right angle to the previous course 1750' to a point for a corner; THENCE in a northeasterly direction parallel with and 1750' northwesterly from the baseline of IH-35W a distance of 2200' to a point for a corner; Zone I page 3 THENCE in a southeasterly direction with a 900 degree deflection to the right 1100' to a point for a corner; THENCE in a northeasterly direction parallel with the baseline of IH-35W a distance of 2600' to a point for a corner; THENCE in a northwesterly direction 1100' to a point for a corner; THENCE in a northeasterly direction parallel with the baseline of IH-35W to the centerline of John Paine road; THENCE in a northerly direction with the centerline of John Paine Road to the centerline of FM Highway 2449; THENCE in an easterly direction and a northerly direction with the centerline of FM 2449 and also the centerline of Underwood Road to the centerline of Hickory Creek; THENCE in a northwesterly direction and up the meanders of Hickory Creek and the meanders of North Hickory Creek to the POINT OF BEGINNING and containing 9.11 square miles. 2449k/3 EXHIBIT "B" DENTON POLICY FOR TAX ABATEMENT I. GENERAL PURPOSE AND OBJECTIVES The City of Denton (City), the Denton Independent School District (DISD) and Denton County are committed to the promotion of high quality development in all parts of the city and to an ongoing improvement in the quality of life for its citizens. Insofar as these objectives are generally served by the enhancement and expansion of the local economy, the City of Denton, DISD, and Denton County will, on a case -by -case basis, give consideration to providing tax abatement as a stimulation for economic development in Denton. It is the policy of the City and DISD that said consideration will be provided in accordance with the procedures and criteria outlined in this document. Nothing herein shall imply or suggest that the City, DISD or Denton County are under any obligation to provide tax abatement to any applicant. All applicants shall be considered on a case -by -case basis. Tax inducements, as described in this policy, will be considered for new, expanding and modernizing basic industries, corporate office headquarters and distribution centers. J -2- II. CRITERIA Any request for a tax abatement shall be reviewed by the Joint Committee on Tax Abatement, said Committee being comprised of two elected officials from each of the taxing entities involved. One additional staff person from each jurisdiction shall be appointed to serve as a nonvoting, ex officio member of the committee. The Joint Committee on Tax Abatement serves as a recommending body to the taxing entities regarding whether economic development incentives should be offered in each individual case. Their recommendation shall be based upon an evaluation of the following criteria which each applicant will be requested to address in narrative format: 1. History and Philosophy of the firm: a) Mature of products and geographic penetration. b) Financial statements for past five years or life of firm whichever is shorter. c) Chronology of plant openings, closings, & relocations over past 15 years. d) Record of mergers and financial restructuring during last five years. e) Record of employment and training provided for handicapped and chronically unemployed. 4790M (Rev. 04/26/90) - 3 - 2. Project Specifications: a) Provide plat of project including all roadways, land use and zoning within 500 feet of site. Legal description of site is required. b) Is the project a relocation or new facility to expand operations. If relocation, give current location. c) Project investment in real and personal property at the above site for each of the next ten years. d) Project permanent employment for next ten years resulting from the new investment. Indicate number of jobs that will be filled by people from outside the metroplex. Include estimated average annual salary on new jobs. e) What is the total current payroll and the projected payroll when project is completed. f) Describe employment training requirements including provisions for training handicapped and chronically unemployed if applicable. g) Project utility (gas, electricity, water, etc.) usage for each of next ten years. h) Estimate the infrastructure (streets, sewer, water, etc.) requirements necessary to operate the new facility. i) Estimate the annual operating budget for next ten years. j) Will the occupants of the project be owner or lessees? If lessees, are occupancy commitments already existing? k) Give the name, address, and telephone number of contact person. 3. The community impact of the project: a) Project the value of real and personal property that will be added to the tax rolls. b) Using current rates estimate the additional taxes that will be directly generated by the project without considering any proposed abatement for each of the affected taxing entities for each of the next ten years. c) For each taxing entity indicate the amount of tax abatement requested for each of next ten years. d) Estimate the increase in investment in other local businesses resulting from the project for the next ten years. 4790M (Rev. 04/26/90) - 4 - e) Estimate the increased housing needs in the area resulting from the project for ten years. f) Estimate the increase in the tax rolls for each taxing entity for the next ten years. g) Estimate the infrastructure construction that would be required because of the growth resulting indirectly from the project. h) Provide the specific detail of any businesses/residents that will be displaced and assistance that will be available from the requesting entity. i) Estimate the increase in students by grade level resulting from the project including the multiplier effect (indirect growth) for the next ten years. Show the increase for each impacted school district. j) Provide description of any historically significant area included within the project's area. If any, give detail of how the historically significant area will be preserved. k) Provide information of any detrimental effect on existing businesses, recreational areas, and residential area. 1) Provide details of any benefit to an area of the community targeted for revitalization/redevelopment. 4790M (Rev. 04/26/90) - 5 - III. VALUE OF INCENTIVES The criteria outlined in Section II will be used by the Joint Committee on Tax Abatement in determining whether or not it is in the best interests of the affected taxing entities to recommend that tax abatement be offered to a particular facility. Specific considerations will include the degree to which the individual project furthers the goals and objectives of the community, as well as the relative impact of the project. New, expanding and modernizing businesses will be eligible for abatement if the minimum threshold, as described below, is met. Once a determination has been made that a tax abatement should be offered, the value and term of the abatement will be determined by referencing the following table: TABLE 1: Establishes maximum length of abatement according to assessed real property value of improvements and personal property. VALUE OF STRUCTURE MAXIMUM MAXIMUM AND PERSONAL PROPERTY YEARS OF PERCENT OF IN MILLIONS ABATEMENT ABATEMENT 100 10 25% 80 9 25% 65 8 25% 50 7 25% 35 6 25% 20 5 25% 15 4 25% 10 3 25% 5 2 25% 4790M (Rev. 04/26/90) -6- If an existing business is located within the boundaries of the participating jurisdictions and decides to expand or relocate within such boundaries, the actual value of the structure shall be multiplied by 125% prior to utilizing Table 1. If the expanding or relocating business is abandoning any property or improvements within the jurisdictions, the value of this abandoned property shall be subtracted from the new value figure prior to multiplying the value by 125%. The tax abatement shall not apply to any portion of the land value of the project. Applicants agreeing to extend infrastructure improvements (streets and utilities) to improve other industrial sites which can be marketed by the Chamber of Commerce Economic Development Director may be eligible for a greater tax benefit than those described above by utilizing tax increment financing procedures. The offering of such an inducement will be evaluated on a case -by -case basis dependent upon the applicant's ability to make available improved industrial sites. Preliminary Application IV. PROCEDURAL GUIDELINES Any person, organization or corporation desiring that the City or DISD consider providing tax abatement to encourage location or expansion of facilities within the limits of the jurisdictions shall be required to comply with the following procedural guidelines. 4790M (Rev. 04/26/90) - 7 - Nothing within these guidelines shall imply or suggest that either the City, or DISD, is under any obligation to provide tax abatement to any applicant. A • Applicant shall complete the attached "Application for Tax Abatement." " B. Applicant shall address all criteria outlined in Section II above in narrative form. C. Applicant shall prepare a map showing the precise location of the property and all roadways within 500 feet of the site. D. If the property is described by metes and bounds, a complete legal description shall be provided. E. Applicant shall complete all forms and information detailed in items A through D above and submit them to the City Manager, City of Denton, 215 E. McKinney, Denton, TX 76201. Application Review Steps F. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. 4790M (Rev. 04/26/90) G. The application will be distributed to the appropriate City and DISD departments for internal review and comments. Additional information . may be requested as needed. H. Copies of the complete application package and staff comments will be provided to the Joint Committee on Tax Abatement. Consideration of the Application I. The Joint Committee on Tax Abatement will consider the application at - a regular or called meeting(s). Additional information may be requested as needed. J. The recommendation of the Joint Committee on Tax Abatement will be forwarded, with all relevant materials, to the chief administrative office of each taxing entity. K. The City Council of Denton may consider a resolution calling a public hearing to consider establishment of a tax reinvestment zone. L. The City Council of Denton may hold the public hearing and determine whether the project is "feasible and practical and would be of benefit to the land to be included in the zone and municipality." Special consideration shall be given to policies noted in the Denton Development Plan when designating a tax reinvestment zone. 4790M (Rev. 04/26/90) - 9 - M. The City Council of Denton may consider adoption of an ordinance designating the area described in the legal description of the proposed project as a commercial/industrial tax abatement zone. N. The City Council may consider adoption of a resolution approving the terms and conditions of a contract between the City and the applicant governing the provision of the tax abatement and the commitments of the applicant. Should the commitments subsequently not be satisfied, the tax abatement shall be null and void, and all abated taxes shall be paid immediately to the City of Denton and all other taxing. jurisdictions participating in the tax abatement agreement. Provisions to this effect shall be incorporated into the agreement. 0. The governing bodies of the various taxing entities may consider ratification of and participation in the tax abatement agreement between the City of Denton and the applicant. Any tax abatement agreement will address various issues, including, but not limited to, the following: 1. General description of the project; 2. Amount of the tax abatement and percent of value to be abated each year; 4790M (Rev. 04/26/90) - 10 - 3. Method of calculating the value of the abatement; 4.. Duration of the abatement, termination date; including commencement date and 0 5. Legal description of the property; 6. Kind, number, location and timetable of planned improvements; 7. Specific terms and conditions to be met by applicant; 8. The proposed use of the facility and nature of construction; 9. Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment. Annual Evaluation Upon completion of construction, the Joint Committee on Tax Abatement shall annually evaluate each facility receiving abatement to insure compliance with the agreement and report possible violations of the agreement to the taxing entities. 4790M (Rev. 04/26/90) APPENDIX A • DEFINITIONS 0 A. "Abatement" means the full or partial exemption for ad valorem taxes of eligible properties in a reinvestment zone designated as such for economic development purposes. B. "Agreement" means a contractual agreement between a property owner and a taxing jurisdiction for the purpose of tax abatement. C. "Basic industries" are defined in the Denton Development Plan as those which produce goods or services at least 51% of which are directed to serve people outside of the City of Denton and are listed in the Standard Industrial Classification (SIC) of the Department of Commerce, except for groups 52-59 under retail trade. D. "Expansion" means the addition of buildings, structures, fixed machinery, or equipment for the purpose of increasing production capacity. E. "Facility" means property improvements completed or in the process of construction which together comprise an integral whole. 4790M (Rev. 04/26/90) - 2 - F. "Joint Committee on Tax Abatement" is a group of representatives from Denton County, the City of Denton, and the Denton Independent School District formed to study and evaluate any proposal regarding the offering of tax abatements within the community. The Committee will consist of two elected representatives from each governmental entity and one staff member from each entity. The staff members shall serve as nonvoting, ex officio members. G. "Modernization" means the replacement and upgrading of existing . facilities which increases the productive input or output, updates the technology, or substantially lowers the unit cost of operation, and extends the economic life of the facility. Modernization may result from the construction, alteration, or installation of buildings, structures, fixed machinery, or equipment. It shall not be for the purpose of reconditioning, refurbishing, repairing, or completion of deferred maintenance. H. "New facility" means a property previously undeveloped which is placed into service by means other than expansion or modernization. I. "Reinvestment Zone" is an area designated as such for the purpose of tax abatement as authorized by Subchapter B, Municipal Tax Abatement, Title 3, Local Taxation, Vernon's Texas Codes Annotated. 4790M (Rev. 04/26/90) -3- J. °Tax increment financing" is the use of some or all of increased property tax -* revenue resulting from the redevelopment of an area to finance development -related costs in that district. Tax increment financing divides tax revenue from the area into two categories. Taxes on the predevelopment value of the tax base (the tax increment base) are kept by each taxing body, while some or all of the taxes from the increased value of property resulting from redevelopment (the tax increment) are deposited by each jurisdiction in a tax increment fund. Money in the tax increment fund is used to repay TIF-backed bonds that are issued to finance public improvements in the redevelopment area. 4790M (Rev. 04/26/90) APPLICATION FOR TAX ABATEMENT 1. EROPERTY OWNER _ MAILING ADDRESS TELEPHONE NUMBER 0 2. PROPERTY OWNER'S REPRESENTATIVE MAILING ADDRESS TELEPHONE NUMBER M V PROPERTY ADDRESS PROPERTY LEGAL DESCRIPTION (PROVIDE ATTACHMENTS IF BY METES AND BOUNDS) LOCATED WITHIN: CITY OF DENTON D.I.S.D DENTON COUNTY 5. DESCRIPTION OF PROJECT: 6. DATE PROJECTED FOR OCCUPANCY OF PROJECT/INITIATION OF OPERATIONS: 7. NARRATIVE RESPONSE TO CRITERIA QUESTIONS IN SECTION II ATTACHED. YES NO COMMENTS: L�sIoslul E:\WPDOCS\ORD\REINVEST.ZON ORDINANCE NO. Jr' 7 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AMENDING ORDINANCE NO. 90-066 TO REESTABLISH A REINVESTMENT ZONE WITHIN ENTERPRISE ZONE I; THE BOUNDARIES OF THE ZONE BEING ESTAB- LISHED AS DESCRIBED IN THE BODY OF THIS ORDINANCE; THIS REINVEST- MENT ZONE BEING WITHIN THE CITY LIMITS OF THE CITY OF DENTON AND ITS EXTRATERRITORIAL JURISDICTION; DECLARING THE ELIGIBILITY OF THE ZONE FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT AND/OR RESIDENTIAL TAX ABATEMENT IN ACCORDANCE WITH CHAPTER 312 OF THE TAX CODE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on the 18th day of May, 1990, the City Council of the City of Denton, by Ordinance No. 90-066, created Enterprise Zone I and, in accordance with TEX. TAX CODE §312.2011 and TEX. GOV'T CODE §2303.507, the designation of this area as an enterprise zone con- stituted the designation of the area as a reinvestment zone under chapter 312 of the Tax Code, Subchapter B; and WHEREAS, the enterprise zone and reinvestment zone so desig- nated for tax abatement purposes took effect on June 21, 1990 and the reinvestment zone for tax abatement purposes expired on June 21, 1995, in accordance with TEX. TAX CODE §312.203; and WHEREAS, the City Council of the City of Denton, Texas desires to create the proper economic and social environment to induce the investment of private resources and productive business enterprises located in a severely distressed area of the City which is predomi- nately open or otherwise meets the criteria established under TEX. TAX CODE §312.202 and to expand primary employment or to attract major investment; and WHEREAS, certain conditions may exist in such area which represent a threat to the health, safety, or welfare of the people in the area; and WHEREAS, the City hereby finds that the area of the city and county described in Exhibit "A", attached hereto and made a part of this ordinance for all purposes (the "Zone") meets the criteria for designation as a reinvestment zone under TEX. TAX CODE §312.202, and the Zone has a continuous boundary and is 9.11 square miles in total area, and conditions may exist in the Zone which represent a threat to the health, safety, or welfare of citizens living within the Zone and to the City as a whole; and WHEREAS, prior to the adoption of this ordinance, on the 19th day of December, 1994, the City Council held a public hearing on the designation of this area as a reinvestment zone for tax abate- ment and the City Council hereby finds that at least seven (7) days prior to the date of the hearing, notice of the hearing was pub- lished in the Denton Record -Chronicle, a newspaper having general circulation in the municipality and this notice was also delivered in writing to the presiding officer of the governing body of each taxing unit that includes in its boundaries real property that is to be included in the proposed reinvestment zone; and WHEREAS, the City finds it is in the public interest to designate this Zone as a reinvestment zone for tax abatement purposes, pursuant to chapter 312 of the Texas Tax Code; and WHEREAS, the City hereby desires to designate the Zone a reinvestment zone for tax abatement purposes, as provided by TEX. TAX CODE §§312.201, as amended; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the findings and recitations set out in the preambles to this ordinance are found to be true and correct, and they are hereby adopted by the City Council and made a part of this ordinance for all purposes. SECTION II. That the City Council finds, after the public hearing, that the improvements sought are feasible and practicable and would be a benefit to the land to be included in the Zone and to the City of Denton after the expiration of any tax abatement agreement entered into under TEX. TAX CODE §312.204, and that the Zone meets the criteria for the designation of a reinvestment zone for commercial, industrial, and/or residential tax abatement purposes as set forth in TEX. TAX CODE §312.202 as follows: A. The area is predominately open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impairs or arrests the sound growth of the City of Denton; and B. The area is reasonably likely, as a result of the designation, to contribute to the retention or expansion of primary employment or to attract major investment in the Zone that would be a benefit to the property that would contribute to the economic development of the City. SECTION III. That the City hereby designates the area described in Exhibit "A" as a reinvestment zone, under chapter 312 of the Tax Code and in accordance with chapter 312. SECTION IV. That the Zone shall take effect on the effective date of this ordinance and shall expire five (5) years after the date of the designation or on December 19, 2000. The Zone may be earlier terminated by an amending ordinance, or may be renewed for a period not to exceed five (5) years, or for any period then allowable by applicable law. PAGE 2 SECTION V. The City directs and designates the Mayor of the City of Denton as the City's authorized representative to act in all matters pertaining to the designation of the Zone as a re- investment zone for tax abatement purposes. SECTION VI. The City further directs and designates the Executive Director of Economic Development as liaison for communi- cation with regard to all matters pertaining to the reinvestment zone, including, without limitation, the development of a tax abatement policy and for communication with the other taxing entities and their designees within the Zone. SECTION VII. That the City Council hereby elects to become eligible to participate in tax abatement and the City Council will provide certain tax incentives applicable to business enterprises in the Zone which are not applicable throughout the City as follows: The City shall abate taxes on the increase in value of real and personal property improvements for new, expand- ed, and modernizing basic industries, corporate office headquarters, and distribution centers in the designated reinvestment zone. The level of abatement shall be based on the rate of improvements and personal property in ac- cordance with the tax abatement policy set forth in the guidelines and criteria of attached Exhibit "B", which exhibit is made a part of this ordinance as if written word for word herein. SECTION VIII. That this ordinance amends those provisions of Ordinance No. 90-066 which pertain to the establishment of a reinvestment zone for tax abatement purposes within Enterprise Zone I, but save and except as amended hereby, the remaining provisions of Ordinance No. 90-066 shall remain in full force and effect. SECTION IX. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED at a regular meeting of of the City of Denton, Texas this the �{'�day 199 5, at which meeting a quorum was present and held in accordance with the provisions of TEX. §551.001, et seq. ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: ' PAGE 3 the-{"ity ouncil of �? , which meeting was GOV'T CODE ANN. 0 • EXHIBIT "A" The general description of the area of the Enterprise Zone I is as follows: All that certain lot, tract or parcel of land lying and being situated in the County of Denton, State of Texas and being more particularly described as follows: BEGINNING at the intersection of the centerline of Jim Christal Road with the centerline of North Hickory Creek; THENCE in an easterly direction with the centerline of Jim Christal road to the centerline of the Dry Fork of Hickory Creek; THENCE with the meander of the Dry Fork of Hickory Creek to the intersection with a westerly line of the Clear Zone of the City of Denton Municipal Airport; THENCE with the westerly line of said Clear Zone the following nine courses and distances: (1) southeasterly 1,2501; (2) westerly 550'; (3) southeasterly 500';(4) westerly 1000; (5) southwesterly 7001; (6) easterly 2101; (7) southerly 51370'; (8) easterly 6301; (9) southerly 260' to the intersection of the west line of said Clear Zone with the north floodplain line of Hickory Creek as shown on FIRM MAP Community Panel number 4801940015D; THENCE down the said north floodplain line of Hickory Creek to the intersection with the southerly city limit line; THENCE easterly 250' to an angle point in said city limits line; THENCE in a northerly direction with the easterly line of said city limit and Clear Zone the following six courses and distances; (1) northerly 700'; (2) easterly 100'; (3) northerly 6,500'; (4) northwesterly 350'; (5) westerly 50'; (6) northeasterly 850' to the intersection with the centerline of the Dry Fork of Hickory Creek; THENCE with the meanders of the Dry Fork of Hickory Creek to the intersection with a stream from the northeast (Stream DF-2 on FIRM maps); THENCE in a northeasterly direction with Stream DF-2 to the centerline of Jim Christal road; THENCE in an easterly direction with the centerline of Jim Christal Road and crossing the centerline of Interstate Highway IH-35 and continuing with the centerline of Scripture Street to a point in the centerline of Ponder Street; THENCE in a northeasterly direction with the centerline of Ponder Street to a point in the centerline of Congress Street; Zone I page 2 THENCE in an easterly direction with the centerline of Congress Street to a point in the centerline of Carroll Boulevard; THENCE in a southerly direction with the centerline of Carroll Boulevard to a point in the centerline of West Hickory Street; THENCE in a westerly direction with the centerline of West Hickory Street to a point in the centerline of Bernard Street; THENCE in a southerly direction with the centerline of Bernard Street to a point in the centerline of Eagle Drive; THENCE in a westerly direction with the centerline of Eagle Drive to a point in the centerline of Avenue D; THENCE in a northerly direction with the centerline of Avenue D to the centerline of Prairie Street; THENCE in a westerly direction with the centerline of Prairie Street to a point in the centerline of Avenue E; THENCE in a southerly direction with the centerline of Avenue E to a point where the eastward extension of the south boundary line of the Owsley Addition intersects the centerline of Avenue E; THENCE in a westerly direction with the south boundary line of the Owsley Addition to the centerline of Bonnie Brae Street; THENCE in a northerly direction with the centerline of Bonnie Brae Street to a point in the centerline of West Prairie Street; THENCE in a westerly direction with the centerline of West Prairie Street to a point in the baseline of Interstate Highway I35W; THENCE in a southerly direction with the baseline of I35-W to a point in the center of Hickory Creek; THENCE in an easterly and southerly direction with the meanders of Hickory Creek to a point in the east boundary line of the S. Pritchett Survey Abst. No. 1021; THENCE in a southerly direction with the east boundary line of the S. Pritchett survey line a distance of 1,500 feet to a point; THENCE in an easterly direction to the centerline of Bonnie Brae; THENCE in a southerly direction with the centerline of Bonnie Brae to the northwest corner of the J. Severe Survey Abst. No. 1164; THENCE in a easterly direction along the north boundary line of said survey to the centerline of the Union Pacific Railroad; Lone I page 3 to '00 THENCE in a southwesterly direction with the centerline of the Union Pacific Railroad to a point in the north line of the H. Hagood Survey A-517 Denton County, Texas; THENCE in a westerly direction with the north line of said Hagood Survey to its most northerly northwest corner; THENCE in a southerly direction with a westerly line of said Hagood Survey to a re-entrant corner of said survey; THENCE in a westerly direction with the center of Johnson Lane and continuing in a westerly direction to the baseline of IH-35W; THENCE in a southwesterly direction with the baseline of IH-35W a distance of 2000' to a point for a corner; THENCE in a northwesterly and a right angle to the previous course 1750' to a point for a corner; THENCE in a northeasterly direction parallel with and 1750' northwesterly from the baseline of IH-35W a distance of 2200' to a point for a corner; THENCE in a southeasterly direction with a 900 degree deflection to the right 1100' to a point for a corner; THENCE in a northeasterly direction parallel with the baseline of IH-35W a distance of 2600' to a point for a corner; THENCE in a northwesterly direction 1100' to a point for a corner; THENCE in a northeasterly direction parallel with the baseline of IH-35W to the centerline of John Paine road; THENCE in a northerly direction with the centerline of John Paine Road to the centerline of FM Highway 2449; THENCE in an easterly direction and a northerly direction with the centerline of FM 2449 and also the centerline of Underwood Road to the centerline of Hickory Creek; THENCE in a northwesterly direction and up the meanders of Hickory Creek and the meanders of North Hickory Creek to the POINT OF BEGINNING and containing 10.31 square miles of which 1.20 square miles lies within roads and floodways for a net of 9.11 square miles. 2449k/3 EXHIBIT "B" DENTON POLICY FOR TAX ABATEMENT I. GENERAL PURPOSE AND OBJECTIVES The City of Denton (City), the Denton Independent School District (DISD) and Denton County are committed to the promotion of high quality development in all parts of the city and to an ongoing improvement in the quality of life for its citizens. Insofar as these objectives are generally served by the enhancement and expansion of the local economy, the City of Denton, DISD, and Denton County, will on a case -by -case basis, give consideration to providing tax abatement as a stimulation for economic development in Denton. It is the policy of the City and DISD that said consideration will be provided in accordance with the procedures and criteria outlined in this document. Nothing herein shall imply or suggest that the City, DISD or Denton County are under any obligation to provide tax abatement to any applicant. All applicants shall be considered on a case -by -case basis. Tax inducements, as described in this policy, will be considered for new, expanding and modernizing basic industries, corporate office headquarters and distribution centers. II. CRITERIA Any request for a tax abatement shall be reviewed by the Joint Committee on Tax Abatement, said Committee being comprised of two elected officials from each of the taxing entities involved. One additional staff person from each jurisdiction shall be appointed to serve as a nonvoting, ex officio member of the committee. The Joint Committee on Tax Abatement serves as a recommending body to the taxing entities regarding whether economic development incentives should be offered in each individual case. Their recommendation shall be based upon an evaluation of the following criteria which each applicant will be requested to address in narrative format: 1 1. History and Philosophy of the firm: a) Nature of products and geographic penetration. b) Financial statements for past five years or life of firm whichever is shorter. c) Chronology of plant openings, closings, & relocations over past 15 years. d) Record of mergers and financial restructuring during last five years. e) Record of employment and training provided for handicapped and chronically unemployed. 2. Project Specifications: a) Provide plat of project including all roadways, land use and zoning within 500 feet of site. Legal description of site is required. b) Is the project a relocation or new facility to expand operations. If relocation, give current location. c) Project investment in real and personal property at the above site for each of the next ten years. d) Project permanent employment for next ten years resulting from the new investment. Indicate number of jobs that will be filled by people from outside the metroplex. Include estimated average annual salary on new jobs. e) What is the total current payroll and the projected payroll when project is completed. f) Describe employment training requirements including provisions for training handicapped and chronically unemployed if applicable. g) Project utility (gas, electricity, water, etc.) usage for each of next ten years. h) Estimate the infrastructure (streets, sewer, water, etc. ) requirements necessary to operate the new facility. i) Estimate the annual operating budget for next ten years. j) Will the occupants of the project be owner or lessees? If lessees, are occupancy commitments already existing? k) Give the name, address, and telephone number of contact person. 3. The community impact of the project: a) Project the value of real and personal property that will be added to the tax rolls. K, b) Using current rates estimate the additional taxes that will be directly generated by the project without considering any proposed abatement for each of the affected taxing entities for each of the next ten years. c) For each taxing entity indicate the amount of tax abatement requested for each of next ten years. d) Estimate the increase in investment in other local businesses resulting from the project for the next ten years. e) Estimate the increased housing needs in the area resulting from the project for ten years. f) Estimate the increase in the tax rolls for each taxing entity for the next ten years. g) Estimate the infrastructure construction that would be required because of the growth resulting indirectly from the project. h) Provide the specific detail of any businesses/residents that will be displaced and assistance that will be available from the requesting entity. i) Estimate the increase in students by grade level resulting from the project including the multiplier effect (indirect growth) for the next ten years. Show the increase for each impacted school district. j) Provide description of any historically significant area included within the project's area. If any, give detail of how the historically significant area will be preserved. k) Provide information of any detrimental effect on existing businesses, recreational areas, and residential area. 1) Provide details of any benefit to an area of the community targeted for revitalization / redevelopment. IIl. VALUE OF INCENTIVES The criteria outlined in Section II will be used by the Joint Committee on Tax Abatement in determining whether or not it is in the best interests of the affected taxing entities to recommend that tax abatement be offered to a particular facility. Specific considerations will include the degree to which the individual project furthers the goals and objectives of the community, as well as the relative impact of the project. New, expanding and modernizing businesses will be eligible for abatement if the minimum threshold, as described below, is met. 3 Once a determination has been made that a tax abatement should be offered, the value and term of the abatement will be determined by referencing the foiivwing table: TABLE 1: Establishes maximum length of abatement according to assessed real property value of improvements and personal property. VALUE OF STRUCTURE AND PERSONAL PROPERTY MAXIMUM YEARS OF ABATEMENT MAXIMUM PERCENTAGE OF ABATEMENT 100 10 25% 80 9 25% 65 8 25% 50 9 25% 35 6 25% 20 5 25% 15 4 25% 10 3 25% 5 2 25% If an existing business is located within the boundaries of the participating jurisdictions and decides to expand or relocate within such boundaries, the actual value of the structure shall be multiplied by 125% prior to utilizing Table 1. If the expanding or relocating business is abandoning any property or improvements within the jurisdictions, the value of this abandoned property shall be subtracted from the new value figure prior to multiplying the value by 125%. The tax abatement shall not apply to any portion of the land value of the project. Applicants agreeing to extend infrastructure improvements (streets and utilities) to improve other industrial sites which can be marketed by the Chamber of Commerce Economic Development Director may be eligible for a greater tax benefit than those described above by utilizing tax increment financing procedures. The offering of such an inducement will be evaluated on a case -by -case basis dependent upon the applicant's ability to make available improved industrial sites. 4 Preliminary Application IV. PROCEDURAL GUIDELINES Any person, organization or corporation desiring that the City or DISD consider providing tax abatement to encourage location or expansion of facilities within the limits of the jurisdictions shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that either the City, or DISD, is under any obligation to provide tax abatement to any applicant. A. Applicant shall complete the attached "Application for Tax Abatement." B . Applicant shall address all criteria outlined in Section II above in narrative form. C . Applicant shall prepare a map showing the precise location of the property and all roadways within 500 feet of the site. D. If the property is described by metes and bounds, a complete legal description shall be provided. E. Applicant shall complete all forms and information detailed in items A through D above and submit them to the City Manager, City of Denton, 215 E. McKinney, Denton, TX 76201. Application Review Steps F. All information in the application package detailed above will be reviewed for completeness and accuracy. Additional information may be requested as needed. G. The application will be distributed to the appropriate City and DISD departments for internal review and comments. Additional information may be requested as needed. H . Copies of the complete application package and staff comments will be provided to the Joint Committee on Tax Abatement. 5 Consideration of the Application I. The Joint Committee on Tax Abatement will consider the application at a regular or called meeting(s). Additional information may be requested as needed. J. The recommendation of the Joint Committee on Tax Abatement will be forwarded, with all relevant materials, to the chief administrative office of each taxing entity. K . The City Council of Denton may consider a resolution calling a public hearing to consider establishment of a tax reinvestment zone. L. The City Council of Denton may hold the public hearing and determine whether the project is "feasible and practical and would be of benefit to the land to be included in the zone and municipality." Special consideration shall be given to policies noted in the Denton Development Plan when designating a tax reinvestment zone. M. The City Council of Denton may consider adoption of an ordinance designating the area described in the legal description of the proposed project as a commercial/industrial tax abatement zone. IV. The City Council may consider adoption of a resolution approving the terms and conditions of a contract between the City and the applicant governing the provision of the tax abatement and the commitments of the applicant. Should the commitments subsequently not be satisfied, the tax abatement shall be null and void, and all abated taxes shall be paid immediately to the City of Denton and all other taxing jurisdictions participating in the tax abatement agreement. Provisions to this effect shall be incorporated into the agreement. O. The governing bodies of the various taxing entities may consider ratification of and participation in the tax abatement agreement between the City of Denton and the applicant. 6 Any tax abatement agreement will address various issues, including, but not limited to, the following: 1. General description of the project; 2. Amount of the tax abatement and percent of value to be abated each year; 3. Method of calculating the value of the abatement; 4. Duration of the abatement, including commencement date and termination date; 5. Legal description cof the property; 6. Kind, number, location and timetable of planned improvements; 7. Specific terms and conditions to be met by applicant; 8. The proposed use of the facility and nature of nonstruction; 9. Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment. Annual Evaluation Upon completion of construction, the Joint Committee on Tax Abatement shall annually evaluate each facility receiving abatement to insure compliance with the agreement and report possible violations of the agreement to the taxing entities. Transfer or Assignment A contract for tax abatement may be transferred or assigned by the original applicant to a new owner upon the approval of the various taxing jurisdictions after such a recommendation is made by the Joint Committee on Tax Abatement. 7 APPENDIX A Definitions A. "Abatement" means the full or partial exemption for ad valorem taxes of eligible properties in a reinvestment zone designated as such for economic development purposes. B . "Agreement" means a contractual agreement between a property owner and a taxing jurisdiction for the purpose of tax abatement. C . "Basic industries" are defined in the Denton Development Plan as those which produce goods or services at least 51% of which ar( directed to serve perple outside of the City of Denton and are listed in the Standard Industrial Classification (SIC) of the Department of Commerce, except for groups 52-59 under retail trade. D. "Expansion" means the addition of buildings, structures, fixed machinery, or equipment for the purpose of increasing production capacity. E. "Facility" means property improvements completed or in the process of construction which together comprise an integral whole. F . "Joint Committee on Tax Abatement" is a group of representatives from Denton County, the City of Denton, and the Denton Independent School District formed to study and evaluate any proposal regarding the offering of tax abatements within the community. The Committee will consist of two elected representatives from each governmental entity and one staff member from each entity. The staff members shall serve as nonvoting, ex officio members. G . "Modernization" means the replacement and upgrading of existing facilities which increases the productive input or output, updates the technology, or substantially lowers the unit cost of operation, and extends the economic life of the facility. Modernization may result from the construction, alteration, or 1 H. I. J. installation of buildings, structures, fixed machinery, or equipment. It Shall not be for the purpose of reconditioning, refurbishing, repairing, or completion of deferred maintenance. "New facility" means a property previously undeveloped which is placed into service by means other than expansion or modernization. "Reinvestment Zone" is an area designated as such for the purpose of tax abatement as authorized by Subchapter B, Municipal Tax Abatement, Title 3, Local Taxation, Vernon's Texas Codes Annotated. "Tax increment financing" is the use of some or all of increased property tax revenue resulting from the redevelopment of an area to finance develoament-related costs in that district. Tax in`rement financing divides tax revenue from the area into two categories. Taxes on the predevelopment value of the tax base (the tax increment base) are kept by each taxing body, while some or all of the taxes from the increased value of property resulting from redevelopment (the tax increment) are deposited by each jurisdiction in a tax increment fund. Money in the tax increment fund is used to repay TIF-backed bonds that are issued to finance public improvements in the redevelopment area. 2 APPLICATION FOR TAX ABATEKKNT 1. Property Owner Mailing Address _ Telephone Number 2. Property Owner's Representative Mailing Address Telephone Number 3. Property Address _ Property Legal Description (Provide attachments if by metes and bounds) 4. Located within: City of Denton D.I.S.D Denton County 5. Description of Project: 6. Date projected for occupancy of project/initiation of operations: 7. Narrative response to criteria questions in Section II attached. Yes _ No _ Comments: TAAPLI