1995-247 E: \WPDOCS \ORD\RE INVEST. ZON
ORDIN CE NO. 95''
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 EXTR3kTERRITORIAL JURISDICTION; DECLARING THE ELIGIBILITY OF THE
ZONE FOR COMMERCIAL/INDUSTRIALTAXABATEMENTAND/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 m~ng of th~-~, ity C~ouncil
of the City of Denton, Texas this the /~-Wday of ~ ,
199 ~--, at which meeting a quorum was present and which meeting was
held in accordance with the provisions of TEX. GOV'T CODE ANN.
§551.001, et seq. ~ ~
BO~ CASTLEBERRY, MAY~ ~
ATTEST:
/
JENNIFER WALTERS, CITY SECRETARY
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 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 1,250'; (2) westerly 550'; (3) southeasterly
500';(4) westerly 100'; (5) southwesterly 700'; (6) easterly
210'; (7) southerly 5,370'; (8) easterly 630'; (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
page
THENCE ~ an easterly direction with the centerline of Congress
Street 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;
;.'one I
page 3 ~ ,~
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 90° degre~
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 wilt be provided
in accordance with the procedures and criteria outlined ~ff~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. 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
chronicaily 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 rel(~cation or new faci~|ty 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 resuiting 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.
e) Estimate the increased housing needs in the area resulting from the
project for ten years.
f) Estimate the increase in the tax rolis 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 wili 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 historicaily 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.
l) Provide details of any benefit to an area of the community targeted for
revitalization/redevelopment.
III. VALUE OF INCENTIVES
The criteria outlined in Section II wili 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.
MAXIMUM MAXIMUM
VALUE OF STRUCTURE YEARS OF PERCENTAGE OF
AND PERSONAL PROPERTY 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%
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 avaiiable improved industrial sites.
Prellmlnn~] AppUcation
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 shali be required to comply with the foliowing procedurai guidelines.
Nothing within these guidelines shali 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.
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 practicai and would be of benefit to the
land to be included in the zone and municipality." Speciai 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.
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.
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:
1o 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;
§. 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 {acility and nature of nonstruction;
9. Contractual obligations in the event of default, violation of terms or
conditions, delinquent taxes, recapture, administration and assignment.
.~Innl]~l ~VSJ'~ tion
Upon completion of construction, the Joi~t 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.
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. ~Agi~ement~ means a contractual agreement between a property owner and a
taxing jurisdiction for the purpose of tax abatement.
C. ~Ba~ie industries" are defined in the Denton Development Plan as those which
produce goods or services at least 51% of which ar( directed to serve pecple
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. ~F_,xl~n~ion~ mealls the addition of buildings, structures, fixed machinery, or
equipment for the purpose of increasing production capacity.
E. ~Fao-ilityn 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 wlil 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. nModernization~ 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
completio~ 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.
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 in'~..},ement 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.
APPLICATION FOR TAX ABATEM~N~
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 w/thin: 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