HomeMy WebLinkAboutIR 10023 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10023
To the Mayor and Members of the City Council June 20, 2017
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SUBJECT: 2016 REVIEW YEAR RESULTS FOR INCENTIVE AGREEMENTS
1675
The purpose of this Informal Report is to provide a brief overview of the incentive compliance review
process for economic development incentive agreements and results for Tax Year 2016.
All companies with City incentive agreements must submit an annual report and supporting
documentation by February 1. The Internal Audit Department verifies construction documentation
for projects that are newly completed, and Economic Development Department staff review
documentation for the rest of the active agreements. The purpose of the review is to determine
compliance with each requirement of the agreement and calculate the percentage of taxes to be
abated or reimbursed to the company based on compliance achieved. This year staff reviewed
10 tax abatement and 34 economic development program (Chapter 380 Grant) agreements.
Results also include one relocation tax abatement.
Four of the Chapter 380 Grants involved project completions: GE Manufacturing and Dannon
expansions, and the new Galderma and Smith and Nephew facilities. Total capital investment for
GE and Galderma was $40.7 million. GE earned the entire 35% available by achieving its capital
investment goals. Galderma achieved approximately 40% out of the available 50% (with business
personal property investment amount pending) due to shortfalls in expected participation by Fort
Worth and Fort Worth MWBE companies. The percentage earned by Dannon and Smith and
Nephew will be determined when Business Personal Property valuations are released by TAD later
this year. Two additional projects will complete later this year: Clearfork and Waterside.
In addition to requirements for minimum dollar amounts of construction investment, incentive
agreements generally tie a portion of the possible incentive to the percent participation by Fort
Worth Businesses and Fort Worth MWBE's. Businesses with active agreements in 2016 have
provided millions in construction work to these companies:
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10023
To the Mayor and Members of the City Council June 20, 2017
P5;Tk$q
ter$o Page 2 of 3
�i
s SUBJECT: 2016 REVIEW YEAR RESULTS FOR INCENTIVE AGREEMENTS
1675
Cumulative Construction Participation
$454,440,440 $408,925,945
$400C)G0:00D $372,884,581
$350,004;440 $318,521,85❑
$340,D00,000
$250,DDO,OD4 $219,715,798
$244,444,440
$154,40g44D
$140,DDO,000
$50,DD0,000
$0
FW Business FW MWBE
Committed .Veriflec
Employment and business supply and service participation are key ongoing requirements for most
of the agreements. The results for these categories for Tax Year 2016 are shown as follows:
2016 Employment 2016 Business Supply and Service
24,400 _7.794 $144,40O,44D
$119,090,770
$124,400,44❑
15,ODD 12,377 $104,400,440
$84,400,DD4
10,44D
6,455 $60,0W=0
5,233
���'� $35,557,188
2,114 2,344
S,D04 $25,536,432 $25,544,984
$2014001444
❑ $0 —
Total Jobs FW Jobs Central City Jobs FW Business FW MWBE
■Committed ■Verified Committed Verified
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10023
To the Mayor and Members of the City Council June 20, 2017
P�Tk$q
ter$o Page 3 of 3
�i
s SUBJECT: 2016 REVIEW YEAR RESULTS FOR INCENTIVE AGREEMENTS
1675
Incentive agreements specify the type of taxes included in the grant or abatement amount, for
example, a company that brings both real property and sales tax to the City may only receive an
incentive payment of a portion of the sales tax. Businesses with active agreements in 2016
provided the following tax revenue to the City:
Taxes Collected from Companies with Incentive Agreements
Granted or
Paid Abated Net To City
Real and Business Personal Property
and Sales* $26,120,788 $11,331 ,310 $14,789,478
Hotel Occupancy Tax (7%+2%) $5,951 ,140 $3,754,518 $2,196,622
Total $32,071,928 $15,085,828 $16,986,100
*Sales Tax includes only companies for which their incentive is based on sales tax.
The City of Fort Worth's 2016 net assessed value — real and personal property — is $49.7 billion.
City property taxes received were an estimated $426.2 million, and sales taxes were an estimated
$204.1 million, for a total of$630.3 million. 2016 property taxes abated or reimbursed totaled $11.3
million, which is 1.8% of the City's total. In addition, $3.8 million in Hotel Occupancy Taxes was
reimbursed.
Total private investment for these projects is $2.2 billion, making the City's percent participation
including HOT 0.68%, and the private to public ratio 148:
If you have any questions concerning this information, please contact Robert Sturns, Economic
Development Director at 817-212-2663 or robert.sturns@fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS