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HomeMy WebLinkAboutResolution 2142A RESOLUTION CITY OF FORT WORTH COUNCIL RESOLUTION NO / °`~ WHEREAS, V T C.A. Tax Code Chapter 312 Property Redevelopment and Tax Abatement Act allows .cities to establish local guidelines and criteria for tax abatement agreements, and WHEREAS, the establishment of specific criteria, guidelines and procedures are necessary to effectively and fairly administer the provision of economic development incentives, and WHEREAS, State Law requires the adoption of criteria and guidelines governing the establishment of tax abatement agreements, and WHEREAS on March 21 1989 Resolution No 1401 was adopted declaring that the City of Fort Worth elects to become eligible to participate m tax abatement and established a Policy Statement mcludmg criteria and guidelines for tax abatement to qualified downtown residential projects, and WHEREAS, on August 1 1989 Resolution No 1452 was adopted to amend Resolution No 1401 to establish a Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects which included guidelines, criteria, and procedures governing tax abatement agreements to qualified commercial/industrial projects, and WHEREAS on June 26 1990 Resolution No 1543 was adopted to amend and restate, in its entirety the Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects which was adopted as Resolution No 1452 and WHEREAS on October 16, 1990 Resolution No 1678 was adopted to amend and restate, in its entirety the Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects which was adopted as Resolution No 1543 and WHEREAS on March 21 1992, Resolution No 1814 was adopted declaring that the City of Fort Worth elects •to become eligible to participate in residential property tax abatement and established a Policy Statement mcludmg criteria and guidelines for tax abatement to qualified downtown residential projects, and WHEREAS on December 8, 1992, Resolution No 1875 was adopted to amend and restate, in its entirety the Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects which was adopted as Resolution No 1678 and CITY OF FORT WORTH WHEREAS, on September 21 1993 Mayor & Council Commumcahon G-10335 was adopted to revise Exhibit A to Resolution No 1875 and adopt, m rts entirety a revised Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects, and WHEREAS, on July 18, 1995 Resolution No 2077 was adopted declaring that the City of Fort Worth elects to become eligible to participate in residential property tax abatement and established a Policy Statement including criteria and guidelines for tax abatement to qualified residential development projects, and WHEREAS, the City of Fort Worth s Policy Statement on Tax Abatement to Qualified Commercial/Industrial Projects expired on September 21 1995 and NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS SECTION I. THAT the Crty of Fort Worth does hereby elect to become eligible to participate in tax abatement. SECTION II. THAT the Crty of Fort Worth hereby establishes a Policy Statement on Tax Abatement for Qualified Development Projects, attached hereto as Exhibit A which Exhibit A is incorporated herein as if copied in its entirety and is approved, and whicli document contains and establishes guidelines, criteria and procedures governing tax abatement agreements. SECTION III. THAT the criteria and guidelines established within the Policy Statement on Tax Abatement for Qualified Development Projects shall expressly govern all subsequent tax abatement agreements, as required by State law SECTION IV THAT Resolution No 2077 is hereby repealed. SECTION V THAT this resolution shall take effect from and after rts final date of passage, and it is accordingly so ordered. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS, this day of ~ ~ , A.D 1995 APPRQV~ Mayor -. CITY C~UCl~ ~~~ xs ~~ c,ty s«xee~ry oc r~. ~+ty of F~rt'~Tix~Zb~3 ATTEST ~~' ~, ~. ~'Y ~ ~ ~ ~A ~+.r l~ 4r. ~ r_r~ ;; City Secretary r `~ J '~"~ i. ?~ i ~±;+ ylk ~ ,~ LYa? 4 APPROVED AS TO FORM AND LEGALITY ~-~- -- City Attorney uP"' ~`ExhibitA to the Resolution (M&C G-11389) CITY OF FORT WORTH POLICY STATEMENT TAX ABATEMENT FOR QUALIFYING DEVELOPMENT PROJECTS 2/13/96 GENERAL PURPOSE AND OBJECTIVES Certain types of investment result in the creation of new jobs, new income and provide for positive economic growth and inner-city economic stabilization which is beneficial to the City as a whole. The Crty of Fort Worth is committed to the promotion of high quality development in all parts of the City and improvement in the quality of life for its citizens. The City of Fort Worth will, on a case-by-case basis, give consideration to the granting of property tax incentives to eligible residential, commercial, and industrial development projects. It is the policy of the City of Fort Worth that consideration of eligible projects will be provided in accordance with the guidelines and criteria outlined in this document. Texas law authorazes the Crty of Fort Worth to grant tax abatement on the value added to a particular property by a specific development project which meets the economic goals and objectives of the Crty and the requirements of the statute (Vernon s Tax Code Ann. Section 312.001 et. seq ). As mandated by state law, this policy applies to the owners of real property It is not the policy of the City of Fort Worth to grant property tax abatement to any development project for which a building permit has been previously issued by the City's Department of Development. Nothing in the policy shall be construed as an obligation by the City of Fort Worth to approve any tax abatement application. Although all applications which meet the eligibility criteria (Section III.) of this policy statement will be reviewed, rt is the objective of the Crty of Fort Worth to encourage applications from projects that: (a) are located m enterprise zones or other designated target areas, or (b) result m a development with little or no additional cost to the City or (c) result in 1,000 or more new jobs, with a commitment to hire Fort Worth and inner city residents. II DEFINITIONS Abatement" means the full or partial exemption from ad valorem taxes on eligible properties for a period of up to ten years and an amount of up to 100% of the increase in appraised value (as reflected on the certified tax roll of the appropriate county appraisal distract) resulting from improvements begun after the execution of the tax abatement agreement. Eligible properties • must be located in a reinvestment zone. `Reinvestment Zone is an area designated as such by the Crty of Fort Worth or State of Texas in accordance with the Texas Property Redevelopment and Tax Abatement Act, Sections 312.001 through 312.209 of the Tax Code. `Residential Development Project" is a development project which proposes to construct or renovate multi family residential living units on property that is (or meets the requirements to be) zoned multi family as defined by the City of Fort Worth Zoning Ordinance. `Fort Worth Company" is a business which has a principal office located wrtlun the city limits of Fort Worth. `Minority Business Enterprise (MBE) and Women Business Enterprise (WBE)" is a minority or women owned business that has received certification as either a MBE or WBE by either the North Texas Regional Certification Agency (NTRCA) or the Texas Department of Transportation (TxDOT), Highway Division. `Capital Investment" includes only real property improvements such as new facilities and structures, site improvements, facility expansion, and facility modernization. Capital investment does NOT include land acquisition costs and/or any existing improvements, or personal property (such as machinery equipment, and/or supplies and inventory) `Facility Expansion is a new permanent real property improvement such as a building or buildings constructed to provide additional square footage to accommodate increased space requirements of a Fort Worth company `Facility Modernization is a new permanent real property improvement under taken to provide • increased productivity for a new or existing Fort Worth company `Supply and Service Expenses" are discretionary expenses incurred dunng the normal maintenance and operation activities of a business. III ELIG161LITY CRITERIA A. RESIDENTIAL PROJECT ELIGIBILITY A residential development project is eligible for property tax abatement if: 1 The project is located in any of the following census tracts• 1002.02, 1010 1011 1016, 1017 1018 1019 (partial), 1025 1028 (partial), 1029 1030 1031 1033 1035 1036 O1 1037 O1 1038, 1040 1041 (partial) (see Map- Exhibrt A'), AND 2. a. The project will construct or renovate no less than 50 residential living amts of which no less than 20% shall be affordable (as defined by the U S. Department of Housing and Urban Development) to persons with incomes at or below 80% of median family income; OR b The project has a m~mmum capital investment of $5 million • (excluding acquisition costs for land and any existing improvements) 2 III ELIGIBILITY CRITERIA B. COMMERCIAL/INDUSTRIAL ELIGIBILITY 1 New Projects In order to be eligible for property tax abatement, a new commercial/industrial development project must satisfy one of the following three criteria. a. Upon completion will have a minimum capital mvestment of $10 million and commits to hire an agreed upon percentage of residents from an eligible inner city census tract (as identified on Exhibit A ') for full time employment. OR b Is located in the `inner city" (as identified on Exhibit A') or property immediately adjacent to the mayor thoroughfares which serve as boundaries to any of these inner city census tracts and commits to hire an agreed upon percentage of residents from an eligible inner city census tract (as identified on Exhibit A ') for full time employment. OR c. Is located outside of the inner city" has a minimum capital investment of less than $10 million, and commits to hire an agreed upon percentage of residents from an eligible inner city census tract • (as identified on Exhibit A') for full time employment. 2. Existing Business Expansion and/or Modernization In order to be eligible for property tax abatement, a facility expansion and/or modernization by an existing commerciaUindustrial business a. Upon completion will have a minimum capital investment of $10 million. OR b Must result in increased employment for which the business commits to hire and retain an agreed upon percentage of residents from an eligible inner city census tract (as identified on Exhibit A') for new full time positions, AND c. Must have a minimum capital mvestment of (1) $500 000, OR {2) an amount equal to or greater than 25% of the appraised value, as certified by the appropriate appraisal district, of real property improvements on the property for the year in which the abatement is requested. C. PROOF TESTS 1. Building Permits No tax abatement will be granted to any development project which has applied for or received a building permit from the City s Department of Development. 3- 2. Evidence of Need for Tax Abatement • The applicant must provide evidence to substantiate and justify the tax abatement request including (but not limited to) an analysis demonstrating the tax abatement is necessary for the financial viability of the project. IV ABATEMENT GUIDELINES The tax abatement agreement must provide that the applicant: (1) Hire Fort Worth residents for an agreed upon percentage (at least 25%) of new full time fobs to be created and make a good faith effort to hire 100% Fort Worth residents for all new fobs created as a result of the abatement, (2) Commit to hire an agreed upon percentage of Fort Worth residents from an eligible inner city census tract (as identified on Exhibit A') for all new jobs created as a result of the project. The agreed upon percentage shall be determined by negotiation. (3) Utilize Fort Worth companies for an agreed upon percentage of the total costs for construction and Supply and Service Contracts, and (4) Utilize Minority and Women owned Business Enterprises (M&WBEs) for an agreed upon percentage of the total costs for construction and supply and service contracts in the manner provided m the City of Fort Worth s Minority and Women Business Enterprise ordinance. In addition to the above, the abatement must comply with the following guidelines. • A. State law prohibits abatement of taxes levied on inventory supplies or the existing tax base. City policy is not to abate taxes on personal property located within Fort Worth prior to the date of the tax abatement agreement. B Unless otherwise specified m the agreement, the amount of the taxes to be abated shall in no event exceed the amount of the capital investment (as specified in the application) multiplied by the City's tax rate m effect for the year in which the calculation is made. C In certain cases, the City may consider a tax abatement application from the owner of real properly who serves as a landlord or lessor for a development project which meets the eligibility criteria of this section. D The City may consider an application from the owner or lessee of real property requesting abatement of real and or personal property owned or leased by a certificated air carrier on the condition that the certificated air carrier make specific real property improvements or lease real property improvements for a term of 10 years or more. E. For an eligible development project to be considered for tax abatement, the Application for Tax Abatement" form must be completed and submitted to the Office of Economic Development. -4- F An application fee must accompany the application. The fee is calculated at the lesser of (i) 1 % of the project capital investment,, or (ii} $15 000 • If construction on the project is begun on the site specified in the application within a one (1) year period from the application submittal date (with or without a tax abatement), this fee shall be credited to any permit, impact, inspection or any other lawful fee required by the City of Fort Worth. If the project is not constructed on the site specified in the application or if construction takes place at the specified site more than one (1) yeaz after the application submittal date, the application fee shall not be refunded or otherwise credited. G If requested, the applicant must provide evidence that there are no delinquent property taxes due on the property on which the development project is to occur H. The tax abatement agreement shall limit the uses of property consistent with the general purpose of encouraging development or redevelopment of the zone during the period that property tax abatements are in effect. I. Tax abatement may only be granted for projects located in a reinvestment or enterprise zone. For eligible projects not currently located in such a zone, the City Council may choose to so designate the applicant's property in order to allow for a tax abatement. J The owners of all prod ects receiving tax abatement shall properly maintain the property to assure the long term economic viability of the project. V PROCEDURAL STEPS Each request for property tax abatement shall be processed according to the following procedural guidelines. A. Application Submission. Provided that the project meets the criteria detailed m Section III of this policy the Applicant must complete and submit a City of Fort Worth Application For Tax Abatement" form (with required attachments) and pay the appropriate application fee. B Application Review and Evaluation The Economic Development Office will review the application for accuracy and completeness. Once complete, the application will be evaluated based on. 1 Types of new jobs created, including respective wage rates, and employee benefits packages such as health insurance, day caze provisions, retirement package(s), transportation assistance, and any other 2. Percent of new~obs committed to Fort Worth residents. 3 Percent of new jobs committed to Fort Worth `Inner City" residents. s- 4 Percent of construction contracts committed to a. Fort Worth based firms, and b Minority and Women owned Business Enterprises (MBEs and WBEs). 5 Percent of supply and service contract expenses committed to a: Fort Worth based firms, and b. Minority and Women owned Business Enterprises (MBEs and WBEs). 6 The project's increase m the value of the tax base. 7 Costs to the Crty (such as infrastructure participation, etc.) 8 Other items which may be negotiated by the City and the applicant. Based upon the outcome of the evaluation, the Economic Development Office may present the application to the City Councils Expanding Economic Opportunities Committee. C Consideration by Council Committee Should the Economic Development Office present the application to the City Council s Expanding Economic Opportunities Committee, the Committee will consider the application at an open meeting. The Committee may• (1) Approve the application. Staff will then incorporate the application into a tax abatement agreement which will be sent to the City Council with the • Committee s recommendation to approve the agreement; or (2) Request modifications to the application. Economic Development staff will discuss the suggested modifications with the applicant and then, if the requested modifications are made, resubmit the modified application to the Committee for consideration, or (3) Deny the application. The applicant may appeal the Committee s finding by requesting the City Council to (a) disregard the Committee s finding and (b) instruct city staff to incorporate the application into a tax abatement agreement for future consideration by the City Council. D Consideration. by the City Council The City Council retains sole authority to approve or deny any tax abatement agreement and is under no obligation to approve any tax abatement application or tax abatement agreement. The City of Fort Worth is under no obligation to provide tax abatement in any amount or value to any applicant. E. Effective Date for Approved Agreements All tax abatements approved by the City Council will become effective on January t of the year follov~nng the year m which a Certificate of Occupancy (CO) is issued for the quahfymg development project (unless otherwise specified m the tax abatement agreement) Unless otherwise specified in the agreement, taxes levied during the construction of the project shall be due and payable. -6- VI RECAPTURE If the terms of the tax abatement agreement are not met, the City Council has the right to cancel or amend the abatement agreement. In the event of cancellation, the recapture of abated taxes shall be limited to the year(s) in which the default occurred or continued. VII INSPECTION AND FINANCIAL VERIFICATION The terms of the agreement shall include the City of Fort Worth s right to (i) review and verify the applicant's financial statements in each year during the life of the agreement prior to granting a tax abatement m any given year (2) conduct an on site inspection of the project m each year during the life of the abatement to verify compliance with the terms of the tax abatement agreement. VIII EVALUATION Upon completion of construction of the facilities, the City shall no less than annually evaluate each project receiving abatement to insure compliance with the terms of the agreement. Any incidents ofnon-compliance will be reported to all affected taxing amts. On or before March 31St of every year during the life of the agreement, any individual or entity receiving a tax abatement from the City of Fort Worth shall provide information and documentation which details the property owner's compliance with the terms of the respective agreement and shall certify that the owner is in compliance with each applicable term of the agreement. Failure to report this information and to provide the required certification by the above deadline shall result in any taxes,abated in the prior year being due and payable. IX. EFFECT OF SALE, ASSIGNMENT OR LEASE OF PROPERTY No tax abatement rights may be sold, assigned or leased unless otherwise specified m the tax abatement agreement. Any sale, assignment or lease of the property which is not permitted in the tax abatement agreement results in cancellation of the agreement and recapture of any taxes abated after the date on which an unspecified assignment occurred. • ',~ _, , ~~- ~~ _ , ~,l „~ ~' Ioos oI~`- ~ ~~'t 1 t.:.. 1050.01 L'I 1 INNER CITY ` ~ ELIGIBLE ~~~~ ~ ~~- CENSUS AREAS LEGEND ~ \\\\ Reside tial Ta Abatement Eligible Census Areas tip. _ 1; ~ Comme Ice l!/Ind st Ial Ta Abateme t Eligible Ce s s Areas f ' }"i ' \,~."~,' Com a ical/I d strial 3 ll ~`- ~~~~~~~, Reside teal Ta Abateme t _ ~ ~ ,_. Eligible Ce s s Areas ~" '~~NORT ~ )101 00 e 1 ...~~. +,m 13. \._ 1 1r -~J u