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2004-065S:\Our DocumOnts\Ordinances\04~Fastenal Reinvestment Ord.doc AN ORDINANCE OF THE CITY OF DENTON, TEXAS DESIGNATING A CERTAIN AREA WITHIN THE CITY LIMITS OF DENTON AS REINVESTMENT ZONE NO. VII FOR COMMERCIAL/INDUSTRIAL TAX ABATEMENT; ESTABLISHING THE BOUNDARIES OF SUCH ZONE; MAKING FINDINGS REQUIRED IN ACCORDANCE WITH CHAPTERS 311 AND 312 OF THE TEXAS TAX CODE; ORDAINING OTHER MATTERS RELATING THERETO; PROVIDING A SEVERABILITY CLAUSE; PROVID- ING FOR REPEAL; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton, Texas ("City" or "Municipality') desires to promote the development or redevelopment of a certain contiguous geographic area within its corporate city limits and its jurisdiction by the creation of a reinvestment zone for commercial/industrial tax abatement, as authorized by Tex. Tax Code Ch. 312 (referred to as the "Property Redevelopment and Tax Abatement Act" or the "Act"); and WHEREAS, an industry or business known as Fastenal Company has requested tax abatement to construct a facility and build improvements within the area to be designated as Re- investment Zone VI; and WHEREAS, the City Council desires to create a proper economic and social environment to induce investment of private resources and productive business enterprises in this area of the City, which meets the criteria established under {}312.202 of the Act, and to expand primary em- ployment or to attract major investment; and WHEREAS, by resolution dated February 17, 2004, a public hearing before the City Council was called, set, and held at or after 6:30 p.m. on March 2, 2004, in the City Council Chambers of the City of Denton at 215 East McKinney Street in the City of Denton, such date being at least seven days after the date of publication of notice of such public heating and the receipt of written notices of such public hearing by the presiding officer of each taxing unit that includes in its boundaries real property that is to be included in the proposed reinvestment zone, in accordance with {}312.201 of the Act; and WHEREAS, such public hearing was held before the consideration and adoption of this ordinance; and WHEREAS, the City, at that hearing, invited any interested citizen or his representative to appear and offer testimony Or evidence for or against the creation of the reinvestment zone, the boundaries of the proposed reinvestment zone, whether all or part of the territory described in the notice calling the public hearing should be included in the proposed reinvestment zone, and the concept of tax abatement; and WHEREAS, in accordance with such public notice, all owners of property within the proposed reinvestment zone and all other taxing units and other interested persons were given the opportunity at such public hearing to protest the creation of the proposed reinvestment zone or the inclusion of their property in such reinvestment zone; and WHEREAS, on the 19th day of August, 2003, on or before the holding of the above- mentioned public hearing, the City Council passed Resolution No. 2003-021 establishing guide- lines and criteria goveming tax abatement agreements and stating that the City of Denton elects to become eligible to participate in tax abatement, in accordance with Tex. Tax Code §312.002and such Policy is now in effect and was in effect prior to the public hearing; and WHEREAS, at the public hearing proponents and opponents of the reinvestment zone of- fered evidence in favor and against all matters relating to the creation of the reinvestment zone, and, after hearing this testimony and evidence, the City Council deems it in the public interest to create this reinvestment zone; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the facts and recitations contained in the preamble of this ordinance are hereby found and declared to be tree and correct. SECTION 2. That for the purposes of this ordinance, the following terms and phrases shall have the following meanings ascribed to them: A. Improvements - Improvements shall include, for the purpose of establishing eligibility under the Act, any activity at the location, including, but not limited to, new construction, recon- struction, renovation and repairs. B. Taxable Real Property - Taxable real property shall be as defined in the Texas Property Tax Code and shall not include personal property as defined in the Code. C. Tangible Personal Property - Tangible Personal Property shall be defined as business per- sonal property, excluding inventory and supplies. D. Base Year - The base year for determining increased value shall be the taxable real property value assessed the year in which the Tax Abatement Agreement is executed. SECTION 3. That the City, through its City Council, after conducting the above- mentioned public hearing and having heard such evidence and testimony, makes the following findings and determinations based on the evidence and testimony presented to it: A. That the public hearing on the adoption of the reinvestment zone has been properly called, held, and conducted in accordance with §312.201 of the Act and all other applicable laws, and that notice of such hearing has been published as required by law and mailed to the pre- siding 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 as required by law; and Page 2 of 6 B. That prior to holding the public hearing, the City has adopted, by resolution, the guidelines and criteria governing tax abatement agreements by adopting a City of Denton Tax Abate- ment Policy, as amended, and the City has elected to participate in tax abatement; and C. That the City had jurisdiction to hold and conduct the public hearing on the creation of the proposed the reinvestment zone, pursuant to chapter 312 of the Act; and D. That the boundaries of the reinvestment zone shall be the area described in the metes and bounds description attached hereto as Exhibit "A" and as shown on the diagram as the area outlined in red attached hereto as Exhibit "B" and being approximately 43.653 acres at or near the intersection of Airport Road and Corbin Road in the corporate limits of the City of Denton, Texas, such Exhibits "A" and "B" being incorporated and made a part of this ordi- nance as if written word for word herein; and E. That the creation of the reinvestment zone for commercial/industrial tax abatement with the improvements expected to be developed by Fastenal Company would be of benefit to the City and to the land to be included in the zone, with the boundaries as described in Exhibit "A," after the expiration of the tax abatement agreement entered into under {}312.204 of the Act, and the improvements sought are feasible and practical; and That the reinvestnaent zone as defined in Exhibit "A" and shown on Exhibit "B" meets the criteria for the creation ofa reinvestment zone, as set forth in {}312.202 of the Act, since it 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 and that would contribute to the economic development of the Municipality;" and G. That the reinvestment zone as defined in Exhibit "A" and shown on Exhibit "B" meets the criteria for the creation of a reinvestment zone as set forth in the Denton Policy for Tax Abatement and the expected improvements in the boundaries of the zone are expected to en- hance significantly the value of all taxable real property and tangible personal property lo- cated within the reinvestment zone. SECTION 4. That pursuant to {}312.201 of the Act, the City, through its City Council, hereby creates a reinvestment zone for commemial/industrial tax abatement encompassing only the area described by the metes and bounds description in Exhibit "A" attached hereto and as shown on Exhibit "B" attached hereto and such reinvestment zone is hereby designated and shall hereinafter be designated as Reinvestment Zone No. VII, City of Denton, Texas. SECTION 5. That Reinvestment Zone No. VII shall be effective as of January 1, 2007, and shall terminate five years from that date, on December 31, 2012, unless extended for an ad- ditional five-year term or unless earlier terminated by action of the City Council in accordance with {}312.203 of the Act. SECTION 6. That to be eligible for tax abatement, a commercial/industrial project shall: Page 3 of 6 A. Be located wholly within the zone established herein; B. Meet the requirements of the Denton Tax Abatement Policy; C. Not include property that is owned or leased by a member of the City Council of the City of Denton, or by a member of the Planning & Zoning Commission; D. Conform to the requirements of the City's zoning ordinance and all other applicable laws and regulations; and E. Have and maintain all land located within the designated zone, appraised at market value for tax purposes. SECTION 7. That written tax abatement agreements with property owners located within the zone shall provide the terms regarding duration of exemption and share of taxable real property and/or tangible personal property located on the real property for taxation as approved hereunder, as shown below: A. Duration of exemption from two years to ten years depending on the value of the structures and real property in accordance with the Denton Tax Abatement Policy, beginning with and including January 1, 2007; and B. Share of taxes abated - in the maximum of 35% of taxes on the total value of appraised real property improvements and tangible personal property as more particularly described in the Tax Abatement Agreement between the City of Denton and Fastenal Company, which are added, provided, however, nothing herein shall prevent any other taxing unit that includes in its boundaries real property that is included in the reinvestment zone from entering into a tax abatement agreement with a different share of taxes abated on the total value of appraised improvements which are added, in accordance with the requirements of chapter 312 of the Act. SECTION 8. That any written agreements authorized under this ordinance must include provisions for: A. Listing the kind, number, and location of all proposed improvements of the property; B. Access to and authorizing the inspection of the property by municipal employees to ensure that the improvements or repairs are made in accordance with the specifications and condi- tions of the agreements; C. Limiting the uses of the property, consistent with the general purpose of encouraging devel- opment or redevelopment of the zone during the per/od that property tax exemptions are in effect; Page 4 of 6 D. Recapturing of property tax revenues lost as a result of the agreement if the owner of the property fails to make the improvements or repairs as provided by the agreement; E. Containing each term agreed to by the owner of the property; F. Requiring the owner of the property to certify annually to the governing body of each taxing unit that the owner is in compliance with each apphcable term of the agreement; G. Providing that the governing body of the municipality may cancel or modify the agreement if the property owner fails to comply with the agreement; H. Contain any additional terms and conditions which the City Council deems are necessary, in accordance with §312.205 of the Act, and that are negotiated with the owner of the property. Provided, however, nothing herein shall prevent other taxing units, who include in their boundaries real property within the reinvestment zone, from negotiating terms and conditions that are different from any municipal tax abatement agreement, so long as the mandatory terms and conditions required by §312.205 of the Act are included. SECTION 9. That the City Council further directs and designates the City Manager and the Director of Economic Development as liaisons for communication with regard to all matters pertaining to the Zone, including, without limitation, the development of the amendment of the current Denton Tax Abatement Policy if necessary, the negotiation of tax abatement agreements with industries, commemial enterprises, and other businesses eligible for tax abatement under the Tax Abatement Policy and for communication with other taxing entities and the Economic De- velopment Partnership Board. SECTION 10. That all ordinances or parts of ordinances in force when the provisions of this ordinance became effective which are inconsistent or in conflict with the terms or provisions contained in this ordinance are hereby repealed to the extent of any such conflict. SECTION 11. That if any section, paragraph, clause, or provision in this ordinance, or application thereof to any person or circumstance is held invalid or unenforceable, the invalidity or unenforceabihty of such section, paragraph, clause, or provision shall not affect any of the re- ma'ming portions of this ordinance. SECTION 12. It is hereby found, determined, and declared that a sufficient written no- rice of the date, place, hour, and subject of the meeting of the City Council at which this ordi- nance was adopted was posted and placed and conveniently accessible at all times to the general public at the City Hall of the City for the time required by law, preceding this meeting, as re- quired by the Open Meetings Act, Tex. Gov't Code Ch. 551, and that this meeting was open to the public as required by law at all times during which this ordinance and the subject matter thereof has been discussed, considered, and formally acted upon. The City Council further rati- fies, approves, and confirms such written notice and contents posting thereof. The City Council further finds that a quorum was present at such meeting. Page 5 of 6 SECTION 13. That the contents of the notice of public heating, which hearing was held before the City Council and before the passage of this ordinance on March 2, 2004, the publica- tion of said notice is hereby ratified, approved, and confirmed. SECTION 14. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the ~5;~/~ day of ~~ ,2004. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FOI~: BY: ~ '~ ?1 Page 6 of 6 Exhibit A Tract A Property Description Being a tract of land situated in the WILLIAM NEIEL, SURVEY ABSTRACT No. 970, Denton County, Texas and being:a portio0 ol~that certain tract of land described in deed to John Dee Appleby; Trustee, as recorded'in Volume 2549, Page'277 of the Real Property Records of Denton County, Texas, :being more particularly described by metes and bounds as follows: BEGINNhNIG. ata 3/8 inch ir.on rod fo~md at the S0utheast comer of said Appleby Tract, being the Northeast comer of the J. W. HARDING SURVEY, ABSTRACT No. 1658, and the Northerly most Southeast comer of said WILLIAM NEILL SURVEY, lying in the approximate centerline of C0rbin Road; THENCE N 89 degrees' 16 minutes 51 seconds W. along the South boundary line of said Appteby Tract at 25.94 feet passing a 8.inch creosote post~,and continuing generally with a barbed wire fence in all a total distance of 1462.22 feet to.a ~A inch iron rod set; THENCE N 00 degrees'24 minutes 1 I seconds W, 750.57..feet departing said boundary line to a 6" wood post found at the,Southwest comer ora tract of land described in deed to J. Newton Rayzor. as recorded in Volume d 796, Page 601 of the Real Property Records of Denton County, Texas lying in North boundary line of said Appleby Tract; TItENCE S 89 degrees 17 minutes 48 seconds. E, along the common boundary line between said Appleby Tract and said Rayzor Tract:at 1'426.49 feet passing a 5/8 inch capped iron rod found, and cominuing in all a:total.distance,.of 1456.55 feet to a ½ inch iron rod found at the Northeast comer of saidAppleby Tract being the Southeast comer of said Rayzor Tract. and lying in the'approximate centerline of aforesaid Corbin Road; DtENCE S 00 degrees 01 minuies:56 seconds E, 751.02.feet along the East boundary line of said ApplebyTract With the approximate centerline of said Corbin Road to the PLACE OF BEGINNING, Containing 25,,153 acres 0;095,649 square feet) of land, more or less. and Tract B Property Description Being a part of the William NeilI Survey, Abstract No. 970 and a part of said 20 acre tract and more particularly described as tbllows: BEGINNING at a point in the south line of the Fame.to Market Highway No. 1515. said point being 1886 feet South 89 degrees 20 minutes East and 90 feet South of the Southwest Comer of FiRST TRACT above described, and being 45 feet South of the Northwest comer of said 20 acre tract; TH ENCE East along the South line of said Highway, 1457.2 feet to point in the East line of said Ncill Survey 45 leer South of the Northeast comer of said 20 acre ~ract; THENCE South along thc East line of said tract:and survey 552.83 feet to the Southeast comer of said 20 acre tract; THENCE West 1457.2 .feet to.the.Southwest corner of said 20 acre tract; THENCE North 552183 feet.to, the place of beginning~and containing 18.5 acres of land, more or less. Being the same property as set. out in:Warranty Deed dated November 4, 1955. executed by Jimmie Underwood. a feme sole, et al toJ'. Newton Rayzor. recorded in Volume 417, Page 3997 Deed Records, Denton County, Texas. -fotal of both tracts containing 43.653 acres, more or less. EXHIBIT B Proposed Fastenal Site fl'