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HomeMy WebLinkAboutResolution 3895-06-2010A Resolution NO 3895-06-2010 PROVIDING THAT THE CITY OF FORT WORTH ("CITY") ELECTS TO BE ELIGIBLE TO PARTICIPATE IN TAX ABATEMENT AUTHORIZED BY CHAPTER 312 OF THE TEXAS TAX CODE AND ESTABLISHING A TAX ABATEMENT POLICY GOVERNING CERTAIN TAX ABATEMENT AGREEMENTS WHEREAS, a municipality may enter into tax abatement agreements authorized by Chapter 312 of the Texas Tax Code (Code') only if the governing body of the municipality has previously adopted a resolution stating that the municipality elects to be eligible to participate m tax abatement and has established guidelines and criteria governing tax abatement agreements (`Tax .Abatement Policy") and ,r WHEREAS, pursuant to the Code a Tax Abatement Policy is effective for two (2) years from the date of its adoption and WHEREAS, the City Council s Tax Abatement Policy for all tax abatements other than those granted pursuant to the Neighborhood Empowerment Zone Policy (Resolution No 3742 OS 2009) or the Relocation Incentives Policy (Resolution No 3832 12 2009) expires on June 16 2010 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS 1 THAT the City hereby elects to be eligible to participate in tax abatement in accordance with Chapter 312 of the Code 2 THAT the City hereby adopts the Tax Abatement Policy attached hereto as Exhibit A which constitutes the guidelines criteria, and procedures governing tax abatement agreements entered into by the City (other than those granted pursuant to the Neighborhood Empowerment Zone Policy or the Relocation Incentives Policy) to be effective from June 17 2010 through June 16 2012 unless earlier amended or repealed by a vote of at least three-fourths (3/4) of the members of the City Council 3 THAT this Tax Abatement Policy as it may subsequently be amended will expressly govern all tax abatement agreements entered into by the City (other than those granted pursuant to the Neighborhood Empowerment Zone Policy or the Relocation Incentives Policy) during the period m which this Tax Abatement Policy is m effect ORT WORT ~~ RESOLUTION NO 3895 06-2010 ADOPTED this 22°d day of June 2010 ATTEST By Y Cit;ySecretary -~ ~~. ~-, , A ~• ~~` oRr~V I~ JUN' ~ ~~~~ ~-af ~t WoeW, Texo~t a ~ f~ ("~~~~~ 'a` RESOLUTION NO 3895-06-2010 CDBG Bl~gible Areas & Central ~~ty r8f27 ~' ~ ,~ _mm, r' 78i 9 ~t7 '~ A~Kf! ~ W~..yyy, . wM 0.K 3 /~~V~£F ~ eo 1 7fi1 5 ~`~. 6{t93 t ! ~, ~, . It 7 ~ ii ~7 ~ [ ~ "" ~ a~" s i ~ ,~ ~ c x® ?b71~ t ~ ~~x~ ;.a' i6Ci1~.. J ~ 7E~~a~'s , t ~ ~ i~73~" I e 76f?17 ~ ~ "°" ~ .71x133 ~ ~ [ 7 1. 7Si2~ ~ "' - ~ 7&'i3N ;~6C~tD as ~ ~ T,1,~3 ~ .._. 1 t6`JQ l'6~YU7 ~,. ~ 1 - 1 ~ I 4 ~ ~ ~ t 76a3G ~ _ ~ "CiUEr3 ~ t ~'6t?28. 0 1 2 4 6 8 I~ianning Department F4RT~ORTH. Mites 10/21/04 8K ~~. 1Z>~;SULU 1'lUN NU 3895-U6-2UlU City of Fort Worth General Tax Abatement Policy Effective June 22, 2010 through June 21 2012 1 GENERAL PROVISIONS. 1.1 Purpose. Chapter 312 of the Texas Tax Code allows, but does not obligate or require, the C>_ty to grant a tax abatement on the value added to a particular property on account of a specific development project that meets the ehgibihty requirements set forth in this Policy In order for the City to participate m tax abatement, the City is required to establish guidelines and cntena governing tax abatement agreements. This Pohcy is intended to set forth those guidelines and cntena for persons or entities interested m receiving a tax abatement from the City This Policy shall expire on June 21 2012 1.2. General Eligibility Criteria. A tax abatement can only be granted to persons or entities eligible for tax abatement pursuant to Section 312.204(a) of the Texas Tax Code, which persons or entities as of the effective date of this Policy are (i) the owner of taxable real property located m a tax abatement reinvestment zone; or (ii) the owner of a leasehold interest to real property located in a tax abatement reinvestment zone. Although the Crty will consider all applications for tax abatement that meet the eligibility requirements set forth m this Policy it is especially interested to development projects that: • result in the creation of new full-time fobs for Fort Worth Residents and Central City Residents, and • are located in the Central City and • result m development with little or no addttional cost to the City while producing a positive economic impact to the tax paying citizens of Fort Worth, and • have a positive impact on Fort Worth Companies and Fort Worth Certified M/WBE Companies, and • promotes quality affordable housing and/or mixed tncome development. 1.3. General Exclusions and Limitations. 1.3.1. Lessees of Real Property A person or entity seeking tax abatement on real property that is leased from a third party should be advised that, pursuant to state law the City can only abate taxes on the increased value of the taxable leasehold interest to the real property tf any and the increase to value of taxable improvements and tangible personal property located on the real property and subject to the leasehold interest, if any Before applying for a tax abatement from the City such persons or entities should seek professional and legal guidance, and may wish to consult with the appraisal dtstrtct having ~unsdiction over the property in question, as to whether their development projects will result to a taxable leasehold interest in the property and, if so the anticipated value of that leasehold interest. City of Fort Worth General Tax Abatement Policy Paov 1 of 7 ~ IiL+'SULU'1'lUN NU 31395-U6-ZUlU 1.3.2. Property Located in Neighborhood Empowerment Zones ("NEZs"). The City Council has designated certain distressed areas of the City needing affordable housing, economic development and expanded public services as NEZs. Notwithstanding anything that may be interpreted to the contrary this Policy does not apply to property located m a NEZ. A person or entity seeking tax abatement on property owned or leased m a NEZ should refer to the Neighborhood Empowerment Zone Tax Abatement Policy adopted by the City Council pursuant to Resolution No 3742-OS-2009 1.3.3. Property Located in Tax Increment Reinvestment Zones ("TIFs"). The City Council has designated certain areas of the City as TIFs. This Policy does apply to property located in a TIF However a person or entity seeking tax abatement on property owned or leased m a TIF should be advised that state law requires a TIF s board of directors and the governing bodies of all taxing ~urisdichons contributing tax increment revenue to a TIF to approve a City tax abatement agreement on property located in that TIF before the agreement can take effect. 1.3.4. Property Located in Enterprise Zones. The State of Texas has designated certain areas of the City with high unemployment as enterprise zones. Various economic development incentives are available to owners of property located in enterprise zones. In accordance with state law all property located within an enterprise zone is automatically designated as a tax abatement reinvestment zone. However the City typically designates individual tax abatement reinvestment zone overlays when it wishes to grant tax abatements on property located m an enterprise zone. 1.3.5. Business Relocations Due to Maior Public Infrastructure Proiects. Pursuant to Resolution No 3832 12 2009 the City Council has approved a Relocation Incentives Policy (the `Relocation Policy") for qualifying businesses that are required to relocate due to a Mayor Public Infrastructure Project, as that term is defined in the Relocation Policy Tax abatement is one of the incentives authorized by the Relocation Policy Notwithstanding anything to the contrary herein, any tax abatement granted by the City under the Relocation Policy shall be governed solely by the terms of and m accordance with the Relocation Policy 2 DEFINITIONS. Capitalized terms used in this Policy but not defined elsewhere shall have the following meanings Abatement or Tax Abatement A full or partial exemption from ad valorem taxes on eligible taxable real and personal property located in a Reinvestment Zone for a specified period on the difference between (i) the amount of increase in the appraised value (as reflected on the certified tax roll of the City of Fort Worth General Tax Abatement Policy PaoP7nflZ 1tESULU"1'lUN NU 31395-06-2010 appropriate county appraisal distract} resulting from improvements begun after the execution of a written Tax Abatement Agreement and (ii) the appraised value of such real estate prior to execution of a written Tax Abatement Agreement (as reflected on the most recent certified tax roll of the appropriate county appraisal distract for the year prior to the date on which the Tax Abatement Agreement was executed) Abatement Benefit Term -The period of time specified m a Tax Abatement Agreement, but not to exceed ten (10) years, that the recipient of a tax abatement may receive the Abatement. Abatement Compliance Term -The period of time specified in a Tax Abatement Agreement during which the recipient of a tax abatement must comply with the provisions and conditions of the Tax Abatement Agreement and file an annual report with the City which outlines and documents the extent of the recipient's compliance with such provisions and conditions. Business Expansion Project - A project (i) m the square footage of a facility or facilities located m the City that will be expanded by an existing business or (ii) that will cause a vacant building or buildings located m the City to be redeveloped or reused, whether by an existing business or a new business. Capital Investment Only real property improvements such as, without hmrtation, new facilities and structures, site improvements, facility expansion, and facility modernization. Capital Investment does NOT include (i) land acquisition costs, (ii) any improvements existing on the property prior to execution of a Tax Abatement Agreement; or (iii) personal property such as, without limitation, machinery equipment, supplies and inventory Central City - A geographic area within the City defined by the Crty Council and shown m the map of Exhibit A of this Policy Central City Resident - An individual whose principle place of residence is at a location within the Central City CommerciaUIndustrial Development Project - A development project m which a facility or facilities will be constructed or renovated on property that is or meets the requirements to be zoned for commercial or industrial use pursuant to the City's Zoning Ordinance. CDBG Eligible Area -Any census tract in which fifty-one percent (51 %) or more of the residents in that census tract have low to moderate incomes, as defined by the United States Department of Housing and Urban Development. Commitment An agreed upon amount and/or percentage related to the utilization of Fort Worth Companies and Fort Worth Certified M/WBE Companies for construction spending on a given project or for Supply and Service Expenditures and related to the hiring of Fort Worth Residents and Central Crty Residents. Fort Worth Certified M/WBE Company - A minority or woman-owned business that (i) has received certification as either a minority business enterprise (MBE), a woman business enterprise (WBE), or a disadvantaged business enterprise (DBE) by the North Central Texas Regional Certification Agency (NCTRCA), and (u) has a Principal Office located within the corporate hmrts of the City that provides the product or service for which credit is sought for purposes of a specific commitment set forth in a given Tax Abatement Agreement. City of Fort Worth General Tax Abatement Policy Paoa '~ of 1 ~ RESULU'11UN NU 31395-U6-2UlU Fort Worth Company - A business that has a Principal Office located within the corporate limits of the City that provides the product or service for which credit is sought for purposes of a specific commitment set forth m a given Tax Abatement Agreement. Fort Worth Resident - An individual whose principal place of residence is at a location within the corporate limits of the City Mixed-Use Development Project - A development project m which a facility or facilities will be constructed or renovated such that (i) at least twenty percent (20%) of the total gross floor area will be used as residential space and (ii) at least ten percent (10%) of the total gross floor area will be used for office, restaurant, entertainment and/or retail sales and service space. M/WBE Advisory Committee (MWBEAC) - A committee appointed by the Fort Worth City Council to review and make recommendations as to Commitments proposed by an applicant for Tax Abatement if any such Commitments contain less than a 25% expenditure with Fort Worth Certified M/WBE companies for construction spending and for Supply and Service Expenditures and to advise the City as to the availability of Fort Worth Certified MlWBEs. Principal Office - An office facility that is fully operational and has sufficient equipment, supplies, and personnel to provide the product or service of the business m question to clients m the City without significant reliance on the resources of another entity or affiliate or of an auxiliary facility of the business which is located outside the corporate limits of the City Reinvestment Zone - An area designated by the City as a tax abatement reinvestment zone m accordance with Chapter 312 of the Texas Tax Code. Residential Development Project - A development project m which a facility or facilities will be constructed or renovated as multi family living units on property that is or meets requirements to be zoned for multi family or mixed use pursuant to the City's Zoning Ordinance. Supply and Service Expenditures -Discretionary expenditures made as part of normal business operations on the real property subject to tax abatement, such as, by way of example only office supplies, ~amtorial supplies and professional services. Tax Abatement Agreement - A written Agreement that the recipient of a tax abatement must enter into with the City and that outlines the specific terms and conditions pertaining to and governing the tax abatement. 3. RESIDENTIAL DEVELOPMENT PROJECTS ELIGIBLE FOR TAX ABATEMENT To be eligible for tax abatement under this Policy a Residential Development Project must meet all of the criteria set forth m one of the following paragraphs. 3.1. (i) Be located m the Central City and (ii) Satisfy the Capital Investment and affordability criteria necessary for a Residential Development Project to be eligible for tax abatement under Section IILB of the NEZ Policy and (iii) Meet all of the Commitments set forth in Section 7 of this Policy (Standard Requirements for Residential Development Projects, Certain Commercial/ Industrial and Mixed-Use Development Projects), or City of Fort Worth General Tax Abatement Policy pa OP d of 1 Z KESULU 1'lUN NU 3t~95-U6-2UlU 3.2. (i) Be located in a CDBG Eligible Area, and (ii) Have a capital investment of at least $2 million, and (iii) Meet all of the Commitments set forth m Section 7 of this Policy (Standard Requirements for Residential Development Projects and Certain Commercial /Industrial and Mixed- Use Development Projects) or 3.3. (i) Be located outside of the Central City and (ii) Have a capital investment of at least $2 million, and (iii) Meet all of the Commitments set forth in Section 7 of this Policy (Standard Requirements for Residential Development Projects and Certain Commercial/Industrial and Mixed Use Development Projects) In addition, an applicant for a Residential Development Project tax abatement that includes, m whole or m part, the renovation of one or more existing structures shall provide, as part of the applicants Tax Abatement Application, a detailed description and the estimated costs of the renovations contemplated. 4. COMMERCIALlINDUSTRIAL DEVELOPMENT PROJECTS ELIGIBLE FOR TAX ABATEMENT To be eligible for tax abatement under this Policy a Commercial/Industrial Development Project must meet all of the criteria set forth m one of the following paragraphs. 4.1. (i) Have a minimum Capital Investment of $250 000• and (ii) Be located in the Central City or on property immediately adjacent to the mayor thoroughfares which serve as boundaries to the Central City or within a CDBG Eligible Area, and (iii) meet all of the Commitments of Section ? of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed-Use Development Projects, And Business Expansion Projects) or 4.2. (i) Have a minimum Cap>.tal Investment of $5 million, and (ii) meet all of the Commitments of Section 7 of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed Use Development Projects, And Business Expansion Projects) or 4.3. (i) Have a minimum Capital Investment of $100 million, and (ii) satisfy additional requirements that maybe set forth by the City on a project-specific basis. In addition, an applicant for tax abatement on a Commercial/Industrial Development Project that includes, m whole or in part, the renovation of one or more existing structures shall provide, as part of the applicant s Tax Abatement Application, a detailed description and the estimated costs of the renovations contemplated. 5. MIXED-USE DEVELOPMENT PROJECTS. To be eligible for tax abatement under this Policy a Mixed-Use Development Project must meet all of the criteria set forth in one of the following paragraphs City of Fort Worth General Tax Abatement Policy Paaa5nf12 RESULU 1'lUN NU 31195-U6-2UlU 5.1 (i) Have a minimum Capital Investment of $250 000• and (ii) Be located in the Central City or on property immediately adjacent to the major thoroughfares which serve as boundaries to the Central Crty or within CDBG Eligible Area, and (iii) meet all of the Commitments of Section ~ of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed-Use Development Projects, And Business Expansion Projects) or 5.2. (i) Have a minimum Capital Investment of $5 million, and (u) meet all of the Commitments of Section 7 of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed Use Development Projects, And Business Expansion Projects), or 5.3 (i) Have a minimum Capital Investment of $100 million, and (ii) consist of multiple land uses, whereby no single land use would comprise greater than 40% of the project's land area, and (iii) emphasize hvelworklplay opportunities with multi-modal access, and, (iv) satisfy additional requirements that maybe set forth by the City on aproject-specific basis. In addition, an applicant for tax abatement on a Mixed-Use Development Project that includes, m whole or m part, the renovation of one or more existing structures shall provide, as part of the applicant's Tax Abatement Application, a detailed description and the estimated costs of the renovations contemplated. 6. BUSINESS EXPANSION PROJECTS. To be eligible for tax abatement under this Policy a Business Expansion Project must meet all of the criteria set forth m one the following paragraphs. 6.1 (i) Be located m the Central City or a CDBG Eligible Area, and (ii} Have been in business continuously for at least six months prior to the submission of an Application to the City for Tax Abatement, and (iii) Have a total real and personal property investment of at least $250 000• and (iv) Meet all of the Commitments set forth m Section 7 of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed-Use Development Projects, And Business Expansion Projects) or 6.2 (i) Be located outside of the Central City and CDBG Eligible Area and (ii) Have been in business continuously for at least five years prior to the submission of an Application to the City for Tax Abatement, and (iii) Have a total real and personal property investment of at least $10 million (a minimum Capital Investment of $1 million) and (iv) Meet all of the Commitments set forth m Section 7 of this Policy (Standard Requirements For Residential Development Projects, Certain Commercial/Industrial Development Projects, Mixed-Use Development Projects, And Business Expansion Projects) improvements. City of Fort Worth General Tax Abatement Policy Papa (~ of 1 2 K~;SULU 1'lUN NU 31395-U6-2UlU 7 STANDARD REQUIREMENTS FOR RESIDENTIAL DEVELOPMENT PROJECTS, CERTAIN COMMERCIAL/INDUSTRIAL DEVELOPMENT PROJECTS, MIXED- USE DEVELOPMENT PROJECTS, AND BUSINESS EXPANSION PROJECTS. To be eligible for property tax abatement, a Residential Development Project meetmg the requ>rements set forth m Sections 3 1 3.2 or 3.3 of this Policy a Commercial/Industrial Development Project meeting the requirements set forth in Sections 4 1 and 4.2 of this Policy a Mixed Use Development Project meeting the requirements set forth in Sections 5 1 and 5.2 and a Business Expansa.on Project meetmg the requirements set forth m Sections 6 1 or 6.2 shall meet all of the follow>.ng requirements 71. Commit to provide full-time employment to a set number and/or a percentage of full time fobs offered on the real property where the Development is located, to Central City Residents, which Commitment will be agreed upon and set forth in the Tax Abatement Agreement; and 7.2. Commit to provide full-time employment to a set number and/or a percentage of full time fobs offered on the real property where the Development is located,. to Fort Worth Residents, which Comm>tment will be agreed upon and set forth m the Tax Abatement Agreement; and 7.3. Commit to spend a set amount or percentage of total construction costs and annual Supply and Service Expenses with Fort Worth Companies, which Commitment will be agreed upon and set forth >.n the Tax Abatement Agreement; and 7.4 Commit to spend a set amount or percentage of total construction costs and annual Supply and Service Expenditures with Fort Worth Certified M/WBE Companies. Any Commitment below 25% of the total construction costs and of the annual Supply and Service Expenses will require an applicant for Abatement to meet with the City of Fort Worth s 1VI/WBE Advisory Committee to seek input and assistance prior to action by the City Council. The MlWBE Advisory Committee will provide the City Council w>_th a recommendation related to the utilization of Fort Worth Certified M/WBEs. The M/WBE Advisory Committee s recommendation, if different from the Commitment made by the applicant for Abatement, will be non-binding, but should be taken under advisement by the Crty Council 7.5 For Residential Development Projects and Mixed Use Development Projects that include rental residential units, commit to a set number or percentage of total rental residential units that must be set aside exclusively for lease to qualifying households whose adjusted incomes do not exceed the then-current eighty percent (80%) income limits established by the United States Department of Housing and Urban Development ("HUD") for the Fort Worth-Arlington, TX HUD Metro FMR (fair market rents) Area at rents that are affordable to such households, as defined by HUD 7.6 For Residential Development Projects and Mixed-Use Development Projects that include rental residential units, commit to a set number or percentage of total rental residential units that must be fully handicap accessible. 7 7 All Commitments established pursuant to Sections 7 1 through 7.5 will be agreed upon and set forth m the Tax Abatement Agreement and, if not met, will serve to reduce the value of Abatement in accordance with the specific terms and conditions of the Tax Abatement Agreement; and City of Fort Worth General Tax Abatement Policy PaoP'7 of 1 ~ It1JSULU'1'lUN NU 3895-U6-2UlU 7.8. Commit to file a plan with the City (within six weeks of City Council approval of the Tax Abatement Agreement) as to how the Commitments for use of Fort Worth Certified M/WBE Companies will be attained and, m order to demonstrate compliance with that plan, (i) to file monthly reports with the City and the Minority and Women Business Enterprise Advisory Committee throughout the construction phase of any improvements required by the Tax Abatement Agreement reflecting then-current expenditures made with Fort Worth Certified M/WBE Companies, (ii) list the name of a contact person that will have knowledge of the construction phase of the project, and (iii) from the start of the First Compliance Auditing Year (as defined m Section 9) until expiration of the Tax Abatement Agreement, to file quarterly reports with the City reflecting then-current expenditures made with Fort Worth Certified M/WBE Companies. The City Council may in its sole discretion, require aCommercial/Industrial Development Project meeting the criteria set forth in Section 4.3 of this Policy and a Mixed Use Development Project meeting the criteria set forth m Section 5 3 of this Policy to satisfy some, all or none of the requirements set forth m this Section 7 8. TAX ABATEMENT CALCULATION All Tax Abatement Agreements shall require the recipient to construct or cause construction of specific improvements on the real property that is subject to the abatement. Failure to construct these specific improvements at the minimum Capital Investment expenditure and by the deadline established m the Tax Abatement Agreement shall give the City the right to terminate the Tax Abatement Agreement. The amount of a particular tax abatement shall be negotiated on a case-by-case basis and specifically set forth in the Tax Abatement Agreement. The calculation of tax abatement for a Commercial/Industrial Project that meets the requirements of Section 4.3 of this Policy or for aMixed- Use Development Project that meets the requirements of Section 5.3 of this Policy shall be negotiated on a case-by-case basis and governed solely by the terms and conditions of the Tax Abatement Agreement. The calculation of tax abatement for any other project shall be negotiated on a case-by case basis, but shall be governed directly in accordance with the degree to which the recipient meets the four (4) Commitments set forth in Sections 7 1 7.2, 7 3 and 7 4 of this Policy which will be outlined m the Tax Abatement Agreement. A Tax Abatement Agreement may establish a base abatement that is (i) reduced in accordance with the recipient's failure to meet one or more of such Commitments or (ii) increased m accordance with the recipient s meeting and/or exceeding one or more of such Commitments. 9 TAX ABATEMENT IMPLEMENTATION The term of a tax abatement shall be negotiated on a case-by-case basis and specified in the Tax Abatement Agreement. The City will audit and determine the recipient's compliance with the terms and conditions of the Tax Abatement Agreement for a full calendar year prior to the first year m which the tax abatement is available (the "First Compliance Auditing Year") The Compliance Auditing Year shall either be the full calendar year in which a final certificate of occupancy is issued for the improvements required by the Tax Abatement Agreement for the real property subject to abatement or the following calendar year as negotiated and set forth in the Tax Abatement Agreement. The first tax abatement will be available to the recipient for the tax year following the Compliance Auditing Year In other words, the degree to which the recipient meets the Commitments set forth in the Tax Abatement Agreement will determine the percentage of taxes abated for the following tax year The City will continue to audit and determine the recipient's compliance with the terms and City of Fort Worth General Tax Abatement Policy Pa OP R of 1 ~ RESULU'1'lUN NU 31395-06-ZU10 conditions of the Tax Abatement Agreement for each subsequent calendar year which findings shall govern the percentage of taxes abated for the following tax year until expiration of the Tax Abatement Agreement. 10 TAX ABATEMENT APPLICATION PROCEDURES. Each tax abatement application shall be processed m accordance with the following standards and procedures. 10 1 Submission of Application. If a given development project qualifies for tax abatement pursuant to the eligibility cntena detailed m Section 4 Section 5 Section 6, or Section 7 of this Policy as the case may be, an applicant for tax abatement must complete and submit a City of Fort Worth Tax Abatement Application (with required attachments) (the "Application") An Application can be obtained from and should be submitted to the City's Economic and Community Development Department. In order to be complete, the Application must include documentation that there are no delinquent property taxes due for the property on which the development project is to occur 10.2. Application Fee. Upon submission of the Application, an applicant must also pay an apphcahon fee. This application fee shall be $5 000 ("Application Fee") of which $3 000 will be credited to any permit, impact, inspection or other fee paid by the applicant and required by the City directly in connection with the proposed project, as long as substantive construction on the project, as determined by the City m its sole and reasonable discretion, has been undertaken on the property specified m the Application within one (1) year following the date of its submission. If any Application Fee funds are remaining after the development project covered in the Application has received a final Certificate of Occupancy (CO) from the City the applicant must submit a letter to the director of the City's Economic and Community Development Department requesting a refund of the remaining funds. The request must be made within three (3) months from the date of the final CO. Application fees remaining after the development project covered in the Application has received a final CO will become the property of the City and will not be eligible for refund, even if a final CO was issued, if the applicant does not submit the wntten request for refund as required by this Section. The remammg $2,000 of the Application Fee is non-refundable and will be uhhzed for City staff expenses associated with processing the Application and fees associated with legal notice requirements. 10.3 Application Review and Evaluation. The Economic and Community Development Department will review an Application for accuracy and completeness. Once complete, the Economic and Community Development Department will evaluate an Application based on the perceived meat and value of the project, including, without limitation, the following cntena. City of Port Worth General Tax Abatement Policy PaOP Q of 1'3 1t~:SULU 1'lUN NU 3!395-U6-ZU10 • Types and number of new fobs created, including respective wage rates, and employee benefits packages such as health insurance, day care provisions, retirement packages, transportation assistance, employer-sponsored training and education, any other benefits and whether all benefits are offered on an equal and non-discriminatory basis to all employees, • Percentage of new fobs committed to Fort Worth Residents, • Percentage of new fobs committed to Central City Residents, • Percent of construction contracts committed to (i) Fort Worth Companies and (ii) Fort Worth Certified M1WBE Companies, • Percentage of Supply and Service Contract expenses committed to (i) Fort Worth Companies and (u) Fort Worth Certified 1VI/WBE Companies, Financial viability of the project; • 'The project's reasonably projected increase m the value of the tax base; • Costs to the City (such as infrastructure participation, etc.) • Remediation of an existing environmental problem on the real property • Whether the project will be able to obtain General Leadership in Energy and Environmental Design (LEED) certification, International Organization for Standardization (ISO) Standard 14001 certification, American Institute of Architects (AIA) or ASTM International sustainability standards, or will otherwise comply with similar sustainable building and management processes acceptable to the City and • For residential projects, the number or percentage of units reserved as affordable housing for persons with incomes at or below eighty percent (80%) of median family income based on family size (as established and defined by the United States Department of Housing and Urban Development) • Other items that the City may determine to be relevant with respect to the project. Based upon the outcome of the evaluation, the Housing and Economic Development Department will present the Application to the City Councils Housing and Economic Development Committee. In an extraordinary circumstance, the Housing and Economic Development Department may elect to present the Application to the full City Council without initial input from the Housing and Economic Development Committee. 10.4. Consideration by Council Committee. The City Council s Housing and Economic Development Committee will consider the Application m an open meeting or if circumstances dictate and the law allows, a closed meeting. The Committee may either (i) recommend approval of the Application, in which case City staff will incorporate the terms of the Application into a Tax Abatement Agreement for City of Fort Worth General Tax Abatement Policy ha OP 111 of 1 2 Kl/SULU 1'lUN NU 32195-U6-2UlU subsequent consa.derahon by the full City Council with the Housing and Economic Development Committees recommendation to approve the Agreement; (li) request modifications to the Application, m which case Housing and Economic Development Department staff will discuss the suggested modifications with the applicant and, if the requested modifications are made, resubmit the modified Application to the Housing and Economic Development Committee or directly to the City Council for consideration, or (iii) deny to recommend consideration of the Application by the full City Council. 10.5. Consideration b the Ci Council. A Tax Abatement Agreement will only be considered by the City Council if the applicant has first executed the Tax Abatement Agreement. The City Council retains sole authority to approve or deny any Tax Abatement Agreement and is under no obhgahon to approve any Application or Tax Abatement Agreement. 11 GENERAL POLICIES AND REQUIREMENTS. Notwithstanding anything that may be interpreted to the contrary herein, the following general terms and conditions shall govern this Policy 11 1 A tax abatement shall not be granted for any development project in which a building permit application has been filed with the City's Planning and Development Department. In addition, the City will not abate taxes on the value of real or personal property for any period of lime prior to the year of execution of a Tax Abatement Agreement with the City 11.2. The applicant for a tax abatement must provide evidence to the City that demonstrates that a tax abatement is necessary for the financial viability of the development project proposed. 11.3. In accordance with state law the City will not abate taxes levied on inventory supplies or the existing tax base. 114. An applicant for tax abatement shall provide wage rates, employee benefit information for all positions of employment to be located in any facility covered by the Application. 11.5. Unless otherwise specified m the Tax Abatement Agreement, the amount of real property taxes to be abated m a given year shall not exceed one hundred fifty percent (150%) of the amount of the minimum Capital Investment expenditure required by the Tax Abatement Agreement for improvements to the real property subject to abatement multiplied by the City's tax rate in effect for that same year and the amount of personal property taxes to be abated in a given year shall not exceed one hundred fifty percent (150%) of the minimum value of personal property required by the Tax Abatement Agreement to be located on the real property if any subject to abatement multiplied by the City's tax rate in effect for that same year 11.6. The owner of real property for which a Tax Abatement has been granted shall properly maintain the property to assure the long-term economic viability of the project. In addition, >f a citation or citations for City Code violations are issued against a project while a Tax Abatement Agreement is m effect, the amount of the tax abatement benefit will be subject to reduction, as provided m the Tax Abatement Agreement. City of Fort Worth General Tax Abatement Policy pa OP 1 1 of 1'2 K~:SULU'1'lUN NU 3895-06-2010 117 If the recipient of a tax abatement breaches any of the terms or conditions of the Tax Abatement Agreement and fails to cure such breach to accordance with the Tax Abatement Agreement, the City shall have the right to terminate the Tax Abatement Agreement. In this event, the recipient will be required to pay the City any property taxes that were abated pursuant to the Tax Abatement Agreement pnor to its termination. 11.8. As part of the consideration under all Tax Abatement Agreements, the City shall have, without limitation, the right to (i) review and verify the applicant's financial statements and records related to the development protect and the abatement m each year during the term of the Tax Abatement Agreement pnor to the granting of a tax abatement m any given year and (ii) conduct an on-site inspection of the development project in each year during the term of the Tax Abatement to verify compliance with the terms and conditions of the Tax Abatement Agreement. Any incidents of non-compliance will be reported to all taxing units with jurisdiction over the real property subject to abatement. 11.9 The recipient of a tax abatement may not sell, assign, transfer or otherwise convey its rights under a Tax Abatement Agreement unless otherwise specified m the Tax Abatement Agreement. A sale, assignment, lease, transfer or conveyance of the real property that is subject to the abatement and which is not permitted by the Tax Abatement Agreement shall constitute a breach of the Tax Abatement Agreement and may result m termination of the Tax Abatement Agreement and recapture of any taxes abated after the date on which the breach occurred. For additional information about this Tax Abatement Policy contact the City of Fort Worth s Economic and Community Development Department using the mformahon below City of Fort Worth Housing & Economic Development Department 1000 Throckmorton Street Fort Worth, Texas 76102 (817) 392-6103 htt~.//fortworth ogL v.or > ecodev/ City of Fort Worth General Tax Abatement Policy Paoa17nf12 1Z~:SULU 1'lUN NU 3895-U6-2UlU Exhibit "A" Map of Central City ('ihi of Fnrh Wnrfh (Ian Pral Tav AhatPm not Pnlirv City of Fort Worth, Texas Mayor and Council Communication COUNCfL ACTION. Approved on 6!22/2010 -Res. N©..3895-06-2010 DATE Tuesday June 22 2010 LOG NAME 17TAPOLICY2010 REFERENCE NO G-16964 SUBJECT Adopt a Resolution Stating that the City of Fort Worth Elects to be Eligible to Participate in Tax Abatement Authorized by Chapter 312 of the Texas Code and Adopt a Tax Abatement Policy RECOMMENDATION It is recommended that the City Council 1 Adopt the attached resolution stating that the City elects to be eligible to participate in property tax abatement pursuant to the Texas Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax Code as amended and 2. Establish a Tax Abatement Policy including guidelines and criteria governing certain property tax abatements granted by the City of Fort Worth (Exhibit A to the Resolution) DISCUSSION Chapter 312 of the Texas Tax Code authorizes cities to designate tax abatement reinvestment zones and to enter into tax abatement agreements only after the city elects to become eligible to participate in tax abatement and adopts a Tax Abatement Policy that establishes guidelines and criteria governing its tax abatement program A Tax Abatement Policy adopted by a city is effective for two years from the date of adoption The City of Fort Worth's last Tax Abatement Policy was adopted on June 16 2008 The Housing and Economic Development Committee has recommended that the proposed Tax Abatement Policy be presented to the City Council for consideration The proposed Tax Abatement Policy has been updated to . Reduce threshold on capital investment from $10 0 M to $5 0 M for Commercial/Industrial Mixed- Use and Business Expansion projects . Reduce threshold on capital investment from $5 0 M to $2 0 M on residential projects eligible for abatement; . For multi-family residential and mixed-use projects applicant will commit to a set number or certain percentage of handicap accessible units, . Reduce the application fee from $15 000 00 to $5 000 00 with a minimum $2 000 00 being non- refundable . Favorable consideration will be given to applicants for tax abatement that provide equal benefits for all employees . Consideration for an additional 10 percent abatement for a Leadership in Energy and Environmental Design (LEED) certified project or a project that otherwise complies with similar sustainable building and management processes acceptable to the City (project would have to actually get the certification); . Revise the definition of a business expansion project to include the redevelopment of vacant Logname• 17TAPOLICY2010 Page 1 of 2 facilities and . Clean-up language regarding the name of the Council Committee evaluating the tax abatement request. Once adopted the proposed Tax Abatement Policy will be effective from June 17 2010 through June 16 2012 unless amended or repealed by at least athree-fourths vote of the City Council The attached Tax Abatement Policy does not apply to tax abatements granted pursuant to the City's Neighborhood Empowerment Zone (NEZ) Policy or the City's Relocation Incentives Policy FISCAL INFORMATION /CERTIFICATION The Financial Management Services Director certifies that this action will have no material effect on City funds FUND CENTERS TO Fund/Account/Centers FROM Fund/Account/Centers CERTIFICATIONS Submitted for City Manager's Office bv: Tom Higgins (6192) Originating Department Head. Jay Chapa (5804) Additional Information Contact: Robert Sturns (8003) Logname. 17TAPOLICY2010 Page 2 of 2