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HomeMy WebLinkAboutResolution 3363-06-2006A Resolution NO 3363-06-2006 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 SUBSEQUENT 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 WHEREAS, pursuant to Code a Tax Abatement Policy is effective for two (2) years from the date of its adoption and WHEREAS, the City last adopted a tax abatement policy in 2004 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agreements entered into by the City to be effective from June 15 2006 through June 14 2008 unless earlier amended or repealed by a vote of at least three fourths (3/4) of the members of the City Council 3 THAT this Tax Abatement Policy as it may subsequently be amended will expressly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 during the period in which such Tax Abatement Policy is m effect APPROVED CITY COUP~9GIL ADOPTED~thiszl3th day of June 2006 t~~ ms's '~ AT:TE S Tr ~''`~~""~ `'" ,~~ f ~~' ., ^~-_ J ., ,~ r± ~: F w ...~.,, `~ # 1 M ~ 53 ~. .-- • ~~ - IF. ~~ Marty He~CI° City Secretary JUN 1 3 2006 ~~~~~ City Secretary of the City of Fort Worth, Texas City of Fort Worth General Tax Abatement Policy Effective June 15 2006 through June 14 2008 1. GENERAL PROVISIONS. 1.1. Purpose. Chapter 312 of the Texas Tax Code allows, but does not obligate or require, the City to grant a tax abatement on the value added to a particular property on account of a specific development project that meets the eligibility requirements set forth in this Policy In order for the Crty to participate In tax abatement, the City is required to establish guidelines and criteria governing tax abatement agreements. This Policy is Intended to set forth those guidelines and criteria for persons or entities Interested m receiving a tax abatement from the Clty Thls Policy shall expire on June 14 2008 1.2. General Eligibility Criteria. A tax abatement can only be granted to persons or entitles 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 m real property located m a tax abatement reinvestment zone. Although the City will consider all applications for tax abatement that meet the eligibility requirements set forth m this Policy rt Is especially interested in development projects that: • result m the creation of new full-time fobs for Fort Worth Residents and Central Crty Residents, and • are located m the Central Crty and • result m development with tittle or no additional cost to the City while producm~ 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~uality affordable housm~ and/or mixed income 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 in the real property if any and the increase in 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 Clty such persons or entities should seek professional and legal guidance, and may wish to consult with the appraisal district having jurisdiction over the property m question, as to whether their development projects will result m a taxable leasehold interest m the property and, If so the anticipated value of that leasehold interest. City of Fort Worth General Tax Abatement Policy Page 1 of 11 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 in a NEZ should refer to the NEZ Policy 1.3.3. Property Located in Tax Increment Reinvestment Zones ("TIFs"). The City Council has designated certain areas of the Clty 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 in a TIF should be advised that state law requires a TIF s board of directors and the governing bodies of all taxing jurisdictions 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 Crty 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. 2. DEFINITIONS. Capitalized terms used m this Policy but not defined elsewhere shall have the following meamngs. Abatement or Tax Abatement A full or partial exemption from ad valorem taxes on eligible taxable real and personal property located m a Reinvestment Zone for a specified period on the difference between (i) the amount of increase m the appraised value (as reflected on the certified tax roll of the appropriate county appraisal district) 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 district for the year prior to the date on which the Tax Abatement Agreement was executed) Abatement Benefit Term -The period of time specified in 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 City of Fort Worth General Tax Abatement Policy Page 2 of 11 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 m the square footage of a facility or facilities currently located m the City will be expanded. Capital Investment Only real property improvements such as, without limitation, new facilrtles 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 City 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 wrthm the Central City CommerciaUIndustrial Development Project - A development project in which a facility or facilrtles 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 m 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 City Residents. Fort Worth Certified M/WBE Company - A minority or woman-owned business that has a principal office located wrthm the corporate limits of the Crty and has received certification as either a minority business enterprise (MBE) or a woman business enterprise (WBE) by the North Central Texas Regional Certification Agency (NCTRCA) or the Texas Department of Transportation (TxDOT), Highway Division. Fort Worth Company - A business that has a principal office located within the corporate limits of the Crty Fort Worth Resident - An individual whose principal place of residence is at a location wrthm the corporate limits of the City Mixed-Use Development Project - A development project m which a facility or facilrtles 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 Crty Council to review and make recommendations as to Commitments proposed by an applicant for Tax City of Fort Worth General Tax Abatement Policy Page 3 of 11 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 M/WBEs. 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, ~anrtorlal supplies and professional services. Tax Abatement Agreement - A written Agreement that the recipient of a tax abatement must enter into with the Crty 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 In the Central Clty• and (ii) Satisfy the Capital Investment and affordability criteria necessary for a Residential Development Project to be eligible for tax abatement under the NEZ Policy and (iii) Meet all of the Commitments set forth m Section 7 of this Policy (Standard Requirements for Residential Development Projects, Certain Commercial/ Industrial and Mixed-Use Development Projects) or 3.2. (i) Be located in a CDBG Eligible Area, and (ii) Have a capital investment of at least $5 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 $5 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) In addition, an applicant for a Residential Development Project tax abatement 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. 4. COMMERCIAL/INDUSTRIAL DEVELOPMENT PROJECTS ELIGIBLE FOR TAX ABATEMENT City of Fort Worth General Tax Abatement Policy Page 4 of 11 To be eligible for tax abatement under this Policy a CommerciaUIndustrial Development Prod ect must meet all of the criteria set forth m one of the following paragraphs. 4.1. (i) Have a mimmum Capital Investment of $250 000• and (ii) Be located m the Central .City or on property immediately adjacent to the mayor thoroughfares which serve as boundaries to the Central Clty or within a CDBG Eligible Area, and (iii) 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 4.2. (i) Have a minimum Capital Investment of $10 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 may be 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 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. 5. MIXED-USE DEVELOPMENT PROJECTS ELIGIBLE FOR TAX ABATEMENT 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. 5.1. (i) Have a mimmum Capital Investment of $250 000• and (ii) Be located m the Central City or on property immediately adjacent to the mayor thoroughfares which serve as boundaries to the Central City or within CDBG Eligible Area, and (iii) 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 5.2. (i) Have a minimum Capital Investment of $10 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 5.3. (i) Have a mimmum 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 live/work/play opportunities with multi modal access, and, (iv) satisfy additional requirements that may be set forth by the City on a project-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. City of Fort Worth General Tax Abatement Policy Page 5 of 11 6. BUSINESS EXPANSION PROJECTS FOR EXISTING FORT WORTH BUSINESSES To be eligible for tax abatement under this Policy a Business Expansion Project must meet all of the criteria set forth m on the following paragraphs. 6.1 (i) Be located in 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 in 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 Crty and CDBG Eligible Area and (ii) Have been m business continuously for at least five years prior to the submission of an Application to the Crty 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. 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 meeting the requirements set forth in Sections 3 1 3.2 or 3.3 of this Policy a Commercial/Industrial Development Project meeting the requirements set forth m 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 Expansion Project meeting the requirements set forth m Sections 6 1 or 6.2 shall meet all of the following 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 Commitment will be agreed upon and set forth in 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 m the Tax Abatement Agreement; and City of Fort Worth General Tax Abatement Policy Page 6 of 11 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 M/WBE Advisory Committee to seek input and assistance prior to action by the City Council. The M/WBE Advisory Committee will provide the City Council with 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 All Commitments established pursuant to Sections 7 1 through 7 4 v~nll be agreed upon and set forth in the Tax Abatement Agreement and, if not met, will serve to reduce the value of Abatement m accordance with the specific terms and conditions of the Tax Abatement Agreement; and 7.6. Commit to file a plan with the Crty (within six weeks of Crty 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 Crty 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 M7WBE 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 8) 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 m its sole discretion, require aCommercial/Industrial Development Project meeting the criteria set forth m 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 Crty 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 m 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 m accordance with the degree to which the recipient meets the four (4) Commitments set forth m 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 m 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. City of Fort Worth General Tax Abatement Policy Page 7 of 11 9 TAX ABATEMENT IMPLEMENTATION The term of a tax abatement shall be negotiated on a case-by-case basis and spec>fied 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 m 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 follow>g calendar year as negotiated and set forth m 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 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 in 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 criteria 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 application fee. This application fee shall be $15 000 ("Application Fee") of which $13 000 will be credited to any permit, impact, inspection or other fee .paid by the applicant and required by the Crty directly m connection with the proposed project, as long as substantive construction on the project, as determined by the Crty 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. The remaining $2,000 is non-refundable and will be utilized 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 Commumty Development Department will evaluate an Application based on the perceived merit and value of the project, including, without limitation, the following criteria. City of Fort Worth General Tax Abatement Policy Page 8 of 11 • 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, and any other benefits, • Percentage of new~obs committed to Fort Worth Residents, • Percentage of new~obs committed to Central Clty Residents, • Percent of construction contracts committed to (i) Fort Worth Companies and (ii) Fort Worth Certified M/WBE Companies, • Percentage of Supply and Service Contract expenses committed to (i) Fort Worth Companies and (ii) Fort Worth Certified M/WBE Companies, • Financial viability of the project; • The project's reasonably projected increase In the value of the tax base• • Costs to the City (such as infrastructure participation, etc ) • Remedlatlon of an existing environmental problem on the real property • The gender ethnic background and length of employment of each member of the applicant's board of directors, governing body or upper management, as requested by the Crty and • For residential projects, 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 Economic and Community Development Office will present the Application to the City Councils Central City Revrtahzation and Economic Development Committee. In an extraordinary circumstance, the Economic and Community Development Department may elect to present the Application to the full City Council without initial input from the Central Crty Revitalization and Economic Development Committee. 10.4. Consideration by Council Committee. The City Council s Central Crty Revitalization 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, m which case City staff will incorporate the terms of the Application into a Tax Abatement Agreement for subsequent consideration by the full City Council with the Central City of Fort Worth General Tax Abatement Policy Page 9 of 11 City Revitalization and Economic Development Committee s recommendation to approve the Agreement; (ii) request modifications to the Application, m which case Economic Development Office staff will discuss the suggested modifications with the applicant and, if the requested modifications are made, resubmit the modified Application to the Central City Revitalization and Economic Development Committee for consideration, or (iii) deny to recommend consideration of the Application by the full City Council. 10.5. Consideration by the City 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 obligation 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 Development Department. In addition, the Crty will not abate taxes on the value of real or personal property for any period of time 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. 11 4. An applicant for tax abatement shall provide wage rates, employee benefit information for all positions of employment to be located m any facility covered by the Application. 11.5. Unless otherwise specified in the Tax Abatement Agreement, the amount of real property taxes to be abated in a given year shall not exceed one hundred fifty percent (150%) of the amount of the mimmum 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 m 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 mimmum 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, if 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 Page 10 of 11 11.7 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 m accordance with the Tax Abatement Agreement, the Clty 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 hmrtatlon, the right to (i) review and verify the applicant's financial statements and records related to the development project and the abatement In each year during the term of the Tax Abatement Agreement prior 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 comphance with the terms and conditions of the Tax Abatement Agreement. Any incidents of non-comphance will be reported to all taxing units with ~unsdlctlon 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 In 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 Clty of Fort Worths Economic & Community Development Department using the information below Crty of Fort Worth Economic & Community Development Department 1000 Throckmorton Street Fort Worth, Texas 76102 (817) 392-6103 http.//fortworth og v.or~/ecodev/ FORT WORTH City of Fort Worth General Tax Abatement Policy Page 11 of 11 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION Approved on 6/13/2006 Resolution No 3363-06-2006 CONTINUED FROM A PREVIOUS WEEK DATE Tuesday May 23 2006 LOG NAME 17TAPOLICY REFERENCE NO G 15213 SUBJECT Adopt Resolution Stating that the City of Fort Worth Elects to be Eligible to Participate in Tax Abatement and Adoption of a Tax Abatement Policy RECOMMENDATION It is recommended that the City Council adopt the attached resolution which 1 States that the City elects to be eligible to participate in property tax abatement pursuant to the Texas Property Redevelopment and Tax Abatement Act, Tax Code Sections 312 001 through 312.211 as amended and 2 Establishes a Tax Abatement Policy including guidelines and criteria governing property tax abatements for the City of Fort Worth (Exhibit A to the Resolution) DISCUSSION 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's last Tax Abatement Policy was adopted on June 15 2004 The Central City Revitalization and Economic Development Committee of the City Council has recommended that the proposed Tax Abatement Policy be presented to the entire City Council for consideration The proposed Tax Abatement Policy has been updated to define the terms `Business Expansion Project, Commitment" and `M/WBE Advisory Committee remove reference to a specific percentage of affordable housing units for residential projects although each applicant for tax abatement on a residential project must address affordable housing reduce the minimum capital investment requirement for Central City projects to $250 000' include consideration for existing Fort Worth businesses that are expanding clarify the role of the M/WBE Advisory Committee and allocate a portion of the application fee for legal notices Once adopted the proposed Tax Abatement Policy will be effective June 15 2006 through June 14 2008 FISCAL INFORMATION/CERTIFICATION Logname 17TAPOLICY Page 1 of 2 The Finance Director certifies that this action will have no material effect on City funds. TO Fund/AccountlCenters FROM Fund/AccountlCenters Submitted for City Manager's Office b~ Dale Fisseler (6140) Originating Department Head. Tom Higgins (6192) Additional Information Contact: Ardina Washington (8003) Logname• 17TAPOLICY Page 2 of 2