1990-067 ORDINANCE
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS
ESTABLISHING AN ENTERPRISE ZONE (ENTERPRISE ZONE II) 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 7.31 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 t2-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 II."
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 public hearings to consider this
ordinance was held by the City Council on April 17, 1990 and
May 1, 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
BY: (~~~//j ~
APPRC~ED AS TO LEGAL FORM:
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
PAGE 3
Exhibit "A"
The general description of the area of the Enterprise Zone II 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 point of intersection of the baseline of
Interstate Highway IH-35 with the north line of the A. White
Survey A-1406, Denton County Texas;
THENCE in an Easterly direction with the north line of said White
Survey to the centerline of Bonnie Brae Street;
~HENCE in a southerly direction with the center line of Bonnie
Brae Street approximately 1800' to a point for a corner;
THENCE in an easterly direction to the east boundary line of the
J. Collard Survey A-297 Denton County, Texas;
THENCE in a southerly direction with the east boundary line of
said Collard Survey to the center line of Riney Road;
THENCE in a westerly direction with the centerline of Riney Road
to the centerline of State Highway 77;
THENCE in a southeasterly direction with the centerline of
Highway 77 and in a southerly direction with the centerline of
North Elm street to the centerline of Hickory Street;
?HENCE in a westerly direction with the centerline of West
Hickory street to the centerline of Bernard street;
£HENCE in a southerly direction with the centerline of Bernard
street to the centerline of Collins street;
THENCE in an easterly direction with the centerline of Collins
street to the centerline of Carroll Boulevard;
THENCE in a southerly direction with the centerline of Carroll
Boulevard and also with the centerline of Ft. Worth Drive to the
baseline of Interstate Highway 1-35E;
THENCE in a southeasterly direction with the baseline of IH-35E
to the centerline of Dallas Drive;
THENCE in a northwesterly direction with the centerline of Dallas
Drive to the centerline of Shady Oaks Drive;
THENCE in a northeasterly direction with the centerline of Shady
Oaks Drive to the centerline of the M.K. & T. Railroad;
Zone II
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THENCE in a southeasterly direction with the centerline of the
M.K. & T. Railroad to the centerline of Mayhill Road;
THENCE northerly direction with the centerline of Mayhill Road to
the centerline of State Highway FM 426;
THENCE in a westerly direction with the centerline of State
Highway FM 426 to the centerline of Loop 288;
THENCE in a northerly direction with the centerline of Loop 288
to the centerline of Highway 380;
THENCE in an easterly direction with the centerline of State
Highway 380 to a point lying north of the most westerly northeast
corner of a tract described in deed recorded in Volume 1783,
Page 780 of the Real Property Record of Denton County, Texas;
THENCE in a southerly direction passing the most northerly
northeast corner of said tract to a re-entry corner of said tract;
THENCE in an easterly direction along the southerly north
boundary line of said tract passing its most easterly northeast
corner and continuing to the centerline of Trinity Road;
THENCE in a southerly direction with the centerline of Trinity
Road 900' to a point for a corner;
THENCE west to a point in the west boundary line of said tract to
a point for a corner;
THENCE north along the west boundary line of said tract, passing
the northwest corner of said tract and crossing to the centerline
of State Highway 380;
THENCE in a southwesterly direction with the centerline of
Highway 380 to the centerline of Geesling Road;
THENCE in a northerly direction with the centerline of Geesling
Road to the centerline of the Fishtrap Road;
THENCE in a westerly direction with the centerline of Fishtrap
Road to the centerline of the Union Pacific Railroad;
THENCE in a southwesterly direction with the centerline of the
Union Pacific Railroad to the centerline of Cooper Creek Road;
THENCE in a southerly direction with the centerline of Cooper
Creek Road to a point lying west from the northwest corner of a
tract described in a deed recorded in Volume 1918 Page 596 Real
Property Records of Denton County, Texas;
THENCE in an easterly direction along the north boundary line of
said tract passing its northeast corner and continuing to the
northeast corner of a tract described in deed recorded in
Volume 604, Page 351 Deed records of Denton County, Texas;
Zone II
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THENCE in a southerly direction along the east boundary line of
the past mentioned tract to the centerline of State Highway 380;
THENCE in a westerly direction with the centerline of State
Highway 380 to the centerline of State Highway Loop 288;
THENCE in a southerly direction with the centerline of Loop 288
to the westerly extension of the southerly north line of a tract
recorded in Volume 636, Page 261 of the Deed Records of Denton
County, Texas;
THENCE in an easterly direction along the southerly north
boundary line to the re-entrant corner of said tract;
THENCE in a northerly direction to the northerly northwest corner
of said tract;
THENCE in an easterly direction to the centerline of Mayhill Road;
THENCE in a southerly direction with the centerline of Mayhill
Road to the south line of said tract;
THENCE in a westerly direction with the south line of said tract
to the centerline of Loop 288;
THENCE in a southerly direction to the centerline of FM 426;
THENCE in a westerly direction to the centerline of Ruddell
Street;
THENCE in a northerly direction with the centerline of Ruddell
Street to the centerline of the Union Pacific Railroad;
THENCE in a southwesterly direction with the centerline of the
Union Pacific Railroad to the centerline of Sycamore Street;
THENCE in a westerly direction with the centerline of Sycamore
Street to the centerline of Elm street;
THENCE in a northerly and westerly direction with the centerline
of Elm street and the centerline of Highway 77 to the centerline
of Bonnie Brae Street;
THENCE in a southerly direction with the centerline of Bonnie
Brae street to an eastward extension of the centerline of
Westgate Drive;
THENCE in a westerly direction with the extension of the
centerline of Westgate Drive and to the baseline of Interstate
IH 35;
Zone II
page 4
THENCE in a northerly direction with the baseline of I.H.-35 to
the westerly extension of a tract described in deed recorded in
Volume 604, Page 656 of the deed records of Denton County, Texas;
THENCE in an easterly direction along the south boundary line of
said tract to the southeast corner of said tract;
THENCE in a northerly direction along the east boundary line of
said tract to the centerline of Highway 77;
THENCE in a northwesterly direction along the centerline of State
Highway 77 to the baseline of Interstate Highway 35;
THENCE in a northerly direction with the baseline of Interstate
Highway 35 to the POINT OF BEGINNING and containing 7.31 square
miles.
2449k/5
EXHIBIT "B"
DENTON POLICY FOR
TAX ABATEMENT
I. GENERAL PURPOSE AND OBgECTIVES ~
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 aEe
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.
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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
chronically unemployed.
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2. Project Specifications:
a) Provide plat of project including all roadways, land use and
zoning within SO0 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
]essees, are occupancy commitments a]ready existing?
k) Give the name, address, and telephone number of contact person.
3. The community impact of the project:
a) Project the va]ue of real and personal property that will be
added to the tax ro]]s.
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.
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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.
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.
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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 l: 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%
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If an extsttng business is located within the boundaries of the participating
jurlsdlctions 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.
Prelimtnar~ 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.
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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 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.
O. 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 info~tion in the application package detailed above will be
reviewed for completeness and accuracy. Additional information may
be requested as needed.
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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
The Joint Committee on Tax Abatement will consider the application at
a regular or called meeting(s). Additional information may be
requested as needed.
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.
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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:
1. General description of the project;
2. Amount of the tax abatement and percent of value to be abated each
year;
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3. Method of calculating the value of the abatement;
4. Duration of the abatement, including commencement date and
termination date;
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;
g. 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
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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 Oevelopment 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.
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.
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F. '2oint 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.
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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
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APPLICAT[ON FOR TAX ABATEMENT
1. PROPERTY OWNER
MAILING ADDRESS
TELEPHONE NUMBER
PROPERTY OWNER'S REPRESENTATIVE
MAILING ADDRESS
TELEPHONE NUMBER
3. 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:
Q796M