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HomeMy WebLinkAboutR90-0182941L NOTE Replaced by Resolution No R2000-028 Rso .uION No. £¢o A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, ADOPTING A POLICY FOR TAX ABATEMENT FOR THE CITY; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the Caty Council desires to promote economic develop- ment wlthan Denton; and WHEREAS, providing tax abatement and other economic development ancent~ves wath~n the City and its extraterritorial jurisdiction w~ll l~kely contribute to the economic development of Denton by encouraging ma]or ~nvestment and the creation of lobs; and, WHEREAS, the Property Redevelopment and Tax Abatement act, Chapter 312 of the Texas Tax Code, allows a City to establash ars own crateraa for tax abatement; NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF DENTON: SECTION I. That the policies, guidelines and criteria found an the "Denton Policy for Tax Abatement" a copy of which as attached hereto and ancorporated here~n for all purposes as though recited verbatim, ~s in all th~ngs approved and adopted. SECTION II. That the C~ty of Denton elects to become eligible to participate an tax abatement. SECTION III. That pursuant to §312.002(c) of the Texas Tax code, the guidelines and crlter~a adopted here~n shall be effective for two years, during which per~od the guadellnes may be amended or repealed by a vote of three fourths of the members of the Council. SECTION IV. That th~s Resolution shall become effective im- mediately upon ~ts passage and approval. PASSED AND APPROVED thas the ~ day of __~___, 1990. ATTEST: JENNIFER WALTERSt CITY SECRETARY DEBRA A. DRAYOVlTCHt CITY ATTORNEY DENTON POLICY FOR TAX ABATEMENT ENERAL PURPOSE AND OB3ECTIVES The City of Denton (City), the Denton Independent School District OISO) and Denton County are committed to the promotion of hlgh quality development in all parts of the city and to an ongoing improvement tn the quality of life for 1ts cttlzens Insofar as these objectives are generally served by the enhancement and expansion of the local economy, the City of Oenton, OISO, and Denton County will, on a case-by-case basis, give consideration to providing tax abatement as a stimulation for economic development in Oenton It ts the policy of the City and DISO that said consideration will be provided in accordance with the procedures and criteria outltned in this document Nothlng herein shall imply or suggest that the City, DISD or Denton County are under any obligation to provide tax abatement to any applicant All appllcants shall be considered on a case-by-case basis Tax inducements, as described in thts policy, w111 be considered for new, expanding and modernlztng basic Industries, corporate office headquarters and distribution centers 2 - ZI. CRITERZA Any request for a tax abatement shall be reviewed by the ~oint 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) 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. 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 requtred b) Is the project a relocation or new facility to expand operations. If relocation, give current locatlon 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) Oescrlbe 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) Sire 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 Infornetion of any detrimental effect on existing businesses, recreational areas, and residential area l) Provide details of any benefit to an area of the community targeted for revitalization/redevelopment 4790H Rev. 04/26/90) 5 III. VALUE OF INCENTIVES The criteria outlined in Section II wtll be used by the 3oint 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 ABATENENT ABATENENT 100 lO 25% 80 g 25% 65 8 25% 50 7 25% 35 6 25% 20 5 25% 15 4 25% 10 3 25% 5 2 25% 4790N Rev. 04/26/90) 6 If an exlstlng 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 utllizlng Table 1. If the expanding or relocating business is abandoning any property or Improvements wlthln the jurlsdlctlons, the value of thls abandoned property shall be subtracted from the new value flgure prtor 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 Oevelopment 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 ADoltcation IV. PROCEDURAL 6UIDELINES Any person, organization or corporation desiring that the City or 01SD 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 OISO, 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 1! above ~n narrative form Applicantshallprepareamapshowingthepreciselocationofthepropertyandallroadwayswithin500feetofthesiteDIfthepropertyisdescribedbymetesandbounds, acompletelegaldescriptionshallbeprovided.EApplicantshallcompleteallformsandinformationdetailedinitemsAthrough0aboveandsubmitthemtotheCity Manager, CityofDenton, 215EMcKtnney, Denton, TX76201ADoltcatlon RevlevStepsFAllinformationintheapplicationpackagedetailedabovewillbereviewedfor 8- 6 The application will be distributed to the appropriate City and OISO departments for internal review and comments Additional information may be requested as needed H Coptes 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 a~ a regular or called meeting(s) Additional information may be requested as needed TherecommendationoftheJoint CommitteeonTaxAbatement will beforwarded, withallrelevantmaterials, to thechiefadministrativeofficeofeachtaxingentityKTheCityCouncilofOentonmayconsideraresolutioncallingapublichearingtoconsiderestablishmentofataxreinvestmentzoneLTheCityCouncilofDentonmayholdthepublichearinganddeterminewhethertheprojectis "feasibleandpracticalandwould beof 9- 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 The City Councll may conslder adoptlon of a resolutlon 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 a11 abated taxes shall be paid immediately to the City of Oenton 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 Any tax abatement agreement will address various issues, including, but not limited to, the following' 1. &eneral description of the project, 2. Amount of the tax abatement and percent of value to be abated each year, 4790H Rev 04/26/90) 10 - 3 Method of calculating the value of the abatement, 4 .Ouration of the abatement, including commencement date and termination date; 5 Legal description of the property, 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 3oint 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 4790H Rev. 04/26/90) ll - Transfer or Asstgnmnt A contra£t 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 47goM Rev 04/26/90) ApPEHDZX A DEFZ#ZTZO#S A "Abatement" means the full or parttal exemption for ad valorem taxes of eltglble properties In a relnvestment 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 lndustrles" are deflned in the Denton Development Plan as those whlch 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. O "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 Co~elttee on Tax Abatement" Is a group of representatives from Oent~n County, the City of Oenton, and the Oenton Independent School 01strlct 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. "Relnvestment 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 Tax increment flnanclng" is the use of some or a]l of increased property tax-revenue resulting from the redeve]opment 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. PROPERTY OWNER MAILING ADDRESS TELEPHONE NUMBER 4 2. PROPERTY OWNER'S REPRESENTATIVE MAILING ADDRESS TELEPHONE NUMBER 5. PROPERTY ADDRESS PROPERTY LEGAL DESCRIPTION PROVIDE ATTACHMENTS IF BY METES AND BOUNDS) q. LOCATED WITHIN: CITY OF DENTON D.I.S.D DENTON COUNTY S. DESCRIPTION OF PROJECT: 6. DATE PROJECTED FOR OCCUPANCY OF PROJECT/INITIATION OF OPERATIONS: 7. NARRATIVE RESPONSE TO CRITERIA QUESTIONS IN SECT[ON II ATTACHED. YES NO __ COMMENTS: q796M