HomeMy WebLinkAboutResolution 5039-01-2019A Resolution
NO. 5039-01-2019
ESTABLISHING AN ECONOMIC DEVELOPMENT PROGRAM
AUTHORIZED BY CHAPTER 380, TEXAS LOCAL GOVERNMENT CODE
WHEREAS, the City of Fort Worth (the "City") has established the Economic Development
Department to, among other things, administer programs that further the public purposes of development
and diversification of the City's economy, the elimination of unemployment and/or underemployment in
the City, and the development and expansion of commerce in the City; and
WHEREAS, in accordance with the 2018 Comprehensive Plan, adopted by the City Council
pursuant to Ordinance No. 23133-03-2018, and consistent with previous Comprehensive Plans, the City
has committed to use custom-designed incentives and partnership programs with private businesses on
a case-by-case analysis of individual projects to help ensure the growth and diversification of the local
economy; and
WHEREAS, Chapter 380 of the Texas Local Government Code authorizes the governing body
of a municipality to establish and provide for the administration of one or more programs for making loans
and grants of public money and providing personnel and services of the municipality to promote state or
local economic development and to stimulate business and commercial activity in the municipality (a
"Chapter 380 Economic Development Program"); and
WHEREAS, on January 30, 2001 the City Council adopted Resolution No. 2704 establishing a
Chapter 380 Economic Development Program for the City pursuant to which a private business or entity
would be eligible to receive benefits under the Chapter 380 Economic Development Program on a case-
by-case basis provided that the business or entity agreed to make verifiable infrastructure improvements
to real property in the City and committed to employment and other defined public benefits, as expanded
on March 10, 2009 pursuant to Resolution No. 3716; and
WHEREAS, Chapter 380 Economic Development Programs benefit the City by increasing the
range of incentives that the City can employ to promote the City's committed economic development
goals; and
WHEREAS, on December 12, 2017 the City Council accepted an Economic Development
Strategic Plan (M&C G-19192), which contained numerous recommendations for implementation by the
City in order for the City to more strategically focus on its economic development goals; and
WHEREAS, the City Council wishes to adopt a new, more detailed Chapter 380 Economic
Development Program to more closely align with the recommendations set forth in the Economic
Development Strategic Plan;
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, TEXAS:
1. THAT as authorized by Chapter 380, Texas Local Government Code, a Chapter 380
Economic Development Program is hereby established, to be governed by the Economic Development
Program Policy attached hereto as Exhibit "A", which constitutes the guidelines, criteria, and procedures
governing the City's provision of economic grants authorized by Chapter 380, Texas Local Government
Code.
2. THAT effective from and after adoption of this Resolution, this Economic Development
Program and Economic Development Program Policy will replace the Economic Development Program
previously established by Resolution No. 2704 and expanded by Resolution No. 3716-03-2009, both of
which Resolutions are hereby repealed, with the express understanding that any Economic Development
Program Agreements previously executed or authorized by the City Council will continue to be governed
under that previous Economic Development Program.
ADOPTED thi44— ay of January 2019.
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Mary J. �K*se), Citoy Secretar'�l
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EXHIBIT "A"
Economic Development Program Policy
City of Fort Worth
Economic Development Program Policy
for Grants Authorized by Chapter 380,
Texas Local Government Code
Effective January 29, 2019
1. GENERAL PROVISIONS.
1.1. Purpose
Chapter 380 of the Texas Local Government Code authorizes the City Council to
establish and provide for the administration of one or more programs, including programs for the
making of loans and grants of public money and providing personnel and services of the City, to
promote economic development. This Policy is intended to establish a program and set forth
guidelines and criteria for persons or entities interested in receiving economic development
program grants or loans (collectively, "380 Grants") from the City pursuant to Chapter 380 of
the Texas Local Government Code (the "Grant Program").
1.2. General Elittibility Criteria
The terms and conditions of any 380 Grant will be set forth in an Economic Development
Program Agreement that must be negotiated and executed by both the City and the applicant or
an affiliate of the applicant (an "Economic Development Program Agreement"). Although
the City will consider all applications for the 380 Grants that meet the eligibility requirements
set forth in the associated Policy, it is especially interested in supporting projects that are expected
to produce a meaningful impact on the City and its economy and that result in one or more of the
following:
• Growth of business activity, employment, or investment in one of the City's identified
Target Industries;
• Creation of high -wage jobs;
• Significant Investment;
• Growth of business activity, employment, or Investment in the Central Business District;
• Revitalization with likelihood of ancillary development in a key employment node or
specifically designated area of the city;
• Retention or expansion of an existing major employer; and
• Anchoring of a business expansion project with potential to generate additional supply
chain activity.
City of Fort Worth 380 Grant Policy
Page 1 of 16
2. DEFINITIONS
Capitalized terms used in this Policy but not defined elsewhere shall have the following
meanings:
380 Grant Term — The period of time specified in an Economic Development Program Agreement in
which a party may receive annual 380 Grants, not to exceed a total of fifteen (15) years.
Business Personal Property -- Any taxable tangible personal property other than inventory and supplies
that (i) is subject to ad valorem taxation by the City; (ii) is located on the property subject to an Economic
Development Program Agreement; (iii) is owned or leased by the party to the Economic Development
Program Agreement; and (iv) was not located in the City prior to the effective date of the Economic
Development Program Agreement.
Capital Investment - Expenditures for real property improvements such as, without limitation, new
facilities and structures, site improvements, infrastructure improvements, facility expansion, facility
modernization, and utility installation. Capital Investment does NOT include land acquisition costs or
the cost or value of any improvements existing on the property prior to the City Council's authorization
of execution of an Economic Development Program Agreement.
Catalytic Development — A development that meets the prerequisites set forth in Section 10.
Central Business District — A geographic area within the City, also referenced as Downtown, as defined
in the Fort Worth Comprehensive Plan.
Certified NMBE 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), D/FW
Minority Supplier Development Council (MSDC) or Women's Business Council — Southwest (WBC)
and (ii) has a Principal Office located within Tarrant, Dallas, Denton, Johnson, Parker or Wise Counties.
Comprehensive Plan - The City of Fort Worth's official guide for making decisions about growth and
development. The Plan is a summary of the goals, objectives, policies, strategies, programs, and projects
that will enable the city to achieve its mission of focusing on the future, working together to build strong
neighborhoods, develop a sound economy, and provide a safe community.
Designated Investment Zone —The geographic area within the City containing those census tracts (i)
that are eligible for community development block grants (CDBG), as defined and determined by the
United States Department of Housing and Urban Development (HUD), meaning that fifty-one percent
(51 %) or more of residents have low to moderate incomes and (ii) those census tracts that have a poverty
rate of 20% of higher, as shown in the map of Exhibit "A" of this Policy.
City of Fort Worth 380 Grant Policy
Page 2 of 16
Existing Business — A business that was operating within the corporate limits of the City prior to the
effective date of this Policy.
Innovation District — Geographic areas where leading-edge anchor institutions and companies cluster
and connect with start-ups, business incubators, and accelerators that are, physically compact, transit -
accessible, and technically -wired and offer mixed-use housing, office, and retail.
Investment — The aggregate of Capital Investment and Personal Property Investment.
Mega Project- A project meeting the prerequisites set forth in Section 8.
Mixed -Use Development Project — A development project in 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. In the event that all or any portion
of the residential space is rental (i.e. apartments), there must be at least fifty (50) units.
Personal Property Investment — The value of Business Personal Property installed on a development
site by a date certain, as determined solely by the appraisal district having jurisdiction over the
development site.
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 in question to clients in 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 of Tarrant, Dallas, Denton, Johnson, Parker and Wise Counties.
Qualified Expenses — Those expenses classified as qualified expenses under Internal Revenue Code
Section 41 (the Research and Experimentation Tax Credit) and any other expenses identified and agreed
to by the City in an Economic Development Program Agreement as direct expenses for utility patent
generation, technology commercialization, or spinoff incubation costs.
Salary — A cash payment or remuneration made to a full-time employee, including paid time off,
commissions, and non -discretionary bonuses. A Salary does not include any benefits, such as health
insurance or retirement contributions by the employer, reimbursements for employee expenses, or any
discretionary bonuses.
Target Industry — A business providing services in the sectors specifically identified in Section 4.
Technology Company — A company working in an industry with a high concentrations of workers in
STEM (Science, Technology, Engineering, and Mathematics) occupations, including, but not limited to,
design, prototype development and testing, preliminary manufacturing and product marketing.
City of Fort Worth 380 Grant Policy
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Transit Oriented Development - A Mixed -Use Development located within one-half mile of a
commuter rail line station and in which all buildings will be at least 3 stories in height.
3. ELIGIBILITY CRITERIA FOR GENERAL PROJECTS.
Unless a project meets one of the other minimum eligibility criteria set forth in Sections 4-13
below, in order to be considered for a 380 Grant, a project must commit to a minimum Investment of at
least $25 million and creation of new full-time jobs with certain minimum annual average employee
Salary levels. The amount of a 380 Grant will be based on a percentage of annual tax revenues that the
City receives in a particular year, including ad valorem taxes on real property, ad valorem taxes on
Business Personal Property, local sales taxes directly attributable to the project, or some combination
thereof. The table below establishes the maximum percentage of annual tax revenues on which 380
Grants to general projects may based, in correlation with minimum Investment and employment and
annual average employee Salary levels:
As reflected in this table, a general project that commits to annual average annual Salary levels of
less than $87,672 (but not less than $43,992) will be considered for 380 Grants only if the project commits
to higher minimum levels of Investment, but only at lower amounts, depending on the Salary commitments
that are made.
In general, the City of Fort Worth will consider the following lengths of time for 380 Grants for
general projects that are not otherwise covered in Sections 4-13:
Maximum Grant
Term
Minimum Investme
t Level and Corresponding Minimum Annual Average Salaries
Maximum Tax
5-7 years
$50+ Million or 250+ Jobs
Revenue
$70 Million
$55 Million $40 Million $25 Million
Percentage
Investment
Investment Investment Investment
20%
$43,992 - $58,551
30%
$58,552 - $73,111
$58,552 - $73,111
40%
$73,112 - $87,671
$73,112 - $87,671 J$73,112
50%
$87,672 or above
$87,672 or above 1 $87,672 or above 1 $87,672 or above
As reflected in this table, a general project that commits to annual average annual Salary levels of
less than $87,672 (but not less than $43,992) will be considered for 380 Grants only if the project commits
to higher minimum levels of Investment, but only at lower amounts, depending on the Salary commitments
that are made.
In general, the City of Fort Worth will consider the following lengths of time for 380 Grants for
general projects that are not otherwise covered in Sections 4-13:
Maximum Grant
Term
Parameters
3-5 years
Less than $50 Million Invested or Less than 250 Jobs
5-7 years
$50+ Million or 250+ Jobs
7-9 years
$75+ Million Invested or 350+ Jobs
10 years
$100+ Million Invested or 500+ 'obs
City of Fort Worth 380 Grant Policy
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4. ELIGIBILITY REQUIREMENTS FOR TARGET INDUSTRY PROJECTS.
The City is particularly interested in developing certain target industries (each defined herein as
a "Target Industry"), whose presence the City has determined especially will help strengthen and
diversify the City's economy:
Established Sectors
• Transportation and warehousing
• Manufacturing
• Healthcare
• Oil and gas
• Tourism
Emerging Sectors
• Transportation innovation
• Life sciences delivery and innovation
• Geotechnical engineering
• International business
• Corporate and regional headquarters
• Professional services
• Financial services
• Aerospace Manufacturing and design
In order to be considered for a 380 Grant, unless the applicant meets the criteria specified in
Section 5, a Target Industry project must commit to a minimum Investment of at least $25 million and
creation of new full-time jobs with certain minimum annual average employee Salary levels. The
amount of a 380 Grant will be based on a percentage of annual tax revenues that the City receives in a
particular year, including ad valorem taxes on real property, ad valorem taxes on Business Personal
Property, local sales taxes directly attributable to the project, or some combination thereof. The table
below establishes the maximum percentage of annual tax revenues on which 380 Grants to general
projects will be based, in correlation with minimum Investment and employment and annual average
employee Salary levels:
As reflected in this table, a general project that commits to annual average annual Salary levels of
less than $87,672 (but not less than $43,992) will be considered for 380 Grants only if the project commits
to higher minimum levels of Investment, but only at lower amounts, depending on the Salary commitments
that are made. The difference in the eligibility criteria between general projects under Section 3 and Target
Industry projects under this Section 4 is that the maximum 380 Grant amount available for Target Industry
projects is equal to 70% of the designated tax revenues instead of 50%.
City of Fort Worth 380 Grant Policy
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5. ELIGIBILITY REOUIREMENTS FOR CERTAIN TARGET INDUSTRY PROJECTS IN
THE CENTRAL BUSINESS DISTRICT.
Applicants in Target Industries that locate in the Central Business District (the "CBD TI
Businesses") are eligible to be considered for if i) the applicant agrees to maintain a minimum of 50
permanent full-time employees at the proposed site of business, ii) the Salaries associated with the positions
are a minimum of $54,876 annually, and iii) the project is that of an Existing Business or a relocation from
outside the Dallas -Fort Worth Metropolitan Statistical Area. If the CDB TI Business does not own the real
property on which the project will be located, the Economic Development Program Agreement may
include the owner of the property to be occupied by the CBD TI Business, but in all cases will include the
CBD TI Business as a party and be subject to certain performance commitments attributable to the CBD
TI Tenant.
If the CBD TI Business locates its project in an existing building in the Central Business District,
the maximum amount of the 380 Grants will equal:
Up to 80% of the CBD TI Business's incremental Business Personal Property taxes for a
maximum ofl 5 years; or
Up to 80% of the CBD TI Business's incremental real property taxes in a proportional share
to the amount of space within the building that is occupied by the CBD TI Business for up to
10 years.
If the CBD TI Business locates in a new building in the Central Business District for which a
building permit has not been obtained as of the date of the incentive application, the maximum amount
of the 380 Grants will equal:
Up to 80% of net new real property taxes (specifically excluding any Business Personal
Property taxes) in a proportional share to the amount of space within the building that is
occupied by the CBD TI Business for up to 15 years, subject to the following requirements:
o CBD TI Tenant must be a Fortune 1,000 or Inc. 5000 corporate or regional headquarters;
and
o A minimum of 100,000 sf must be occupied by the CBD TI Tenant; and
o The CBD Property must be new construction in order to house the CBD TI Tenant; and
o A minimum of $100 million must be invested in hard construction costs associated with
the new construction.
A CBD TI Business locating in a new building in the Central Business District will only be
eligible for 380 Grants if it meets all of the above -referenced criteria.. No other CBD TI Business will
be eligible for 380 Grants under this Section 5 unless it relocates to an existing building in the Central
Business District.
City of Fort Worth 380 Grant Policy
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6. ELIGIBILITY REQUIREMENTS FOR RESEARCH AND DEVELOPMENT
PROJECTS.
Target Industry applicants are eligible to receive 3 80 Grants equal to a percentage of their Qualified
Expenses relating to ongoing research and development activities that take place in the City of Fort Worth.
Qualified Expenses outside the City of Fort Worth will not be considered.
380 Grants under this Section may be made for a period of up to 10 years equal to up to 50% of
Qualified Expenses reported for a given year. At no time will the amount of any 380 Grant exceed 35%
of annual real property and Business Personal Property taxes received by the City in the preceding year
from the subject property.
The maximum amount of each 380 Grant under this Section will be determined by the location
in which the Target Industry research and development project is located, as set forth in the table below:
Maximum Potential
R&D Reimbursement
Central Business District/ Innovation Equal to 50% of Taxes
District
Designated Investment Zones Equal to 35% of Taxes
Other Fort Worth Location Equal to 25% of Taxes
Notwithstanding Section 18.6 of this Policy, a Target Industry business receiving 380 Grants
pursuant to this Section 6 may assign, sell, or transfer its right to receive the 380 Grants to any party it
wishes, subject to execution of a written agreement between the City, the Target Industry business, and
the assignee party memorializing this arrangement. The Target Industry Business will still be required
to submit any reports and documentation required by the Economic Development Program Agreement
in order for the City to verify the amount of each 380 Grant. The amount of any transferred or assigned
380 Grant will be reduced by 5 percentage points to account for the City's additional administrative costs
in overseeing the program.
7. ELIGIBILITY REQUIREMENTS FOR EXISTING BUSINESS EXPANSION
PROJECTS.
The City wants to support the growth of business already located in the City. In order to be
considered for 380 Grants, an Existing Business expansion project that is not eligible for 380 Grants
elsewhere in this Policy must commit to a minimum Investment of at least S 10 million and creation of
at least 25 new full-time jobs with a minimum annual average employee Salary level of $43,992.
The amount of a 380 Grant under this Section will be based on a percentage of annual tax
revenues that the City receives in a particular year, including ad valorem taxes on real property, ad
City of Fort Worth 380 Grant Policy
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valorem taxes on Business Personal Property, local sales taxes directly attributable to the project, or
some combination thereof, not to exceed 85%.
8. ELIGIBILITY REOUIREMENTS FOR MEGA PROJECTS.
A "Mega Project" can be within any industry, however, the City of Fort Worth is especially
interested in Fortune 1,000, Fortune Global 500, or Inc. 5000 designated firms, pursing development or
redevelopment opportunities within the City. Projects granted this designation must commit to at least one
of the following (with the exception of data centers or other unique low employmenvEgh capital
investment projects which must have a minimum investment of $50 million):
Commits to a minimum Investment of at least $250 million; or
Commits to hire at least 1,500 full-time employees; or
Commits to a minimum annual payroll of at least $150 million.
The amount of a 380 Grant under this Section will be based on a percentage of annual tax
revenues that the City receives in a particular year, including ad valorem taxes on real property, ad
valorem taxes on Business Personal Property, local sales taxes directly attributable to the project, or
some combination thereof, not to exceed 85%.
9. ELIGIBILITY REOUIREMENTS FOR TECHNOLOGY COMPANY PROJECTS.
The City wishes to encourage and promote the development of technology businesses. In order to
be considered for 380 Grants, a Technology Company project must employ at least 5 individuals.
The maximum amount of any 380 Grant to a Technology Company will be:
• Up to 80% of net new real property taxes on owned or leased facilities for up to 5 years; or
• Up to 80% of net new Business Personal Property taxes for up to 5 years; or
• Up to $10,000 for each new full-time job in first three years of operation with annual
salary over $60,000.
City of Fort Worth 380 Grant Policy
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10. ELIGIBILITY REQUIREMENTS FOR CATALYTIC DEVELOPMENT PROJECTS.
A "Catalytic Development Project" is a business project that:
will be located within the Designated Investment Zone depicted in Exhibit "A";
commits to at least $5 million in Investment; and
complies with at least one of the following requirements:
o will be a Mixed -Use Development;
o will fill a gap, such as a grocery store in a food desert or a childcare facility, as
determined by City staff based on goals set forth in the City's then -current
Comprehensive Plan or other statistical data or relevant documentation;
o will be located along a commercial corridor or within an urban village, as identified
in the City's then -current Comprehensive Plan;
o Generates significant job opportunities in the area, as determined by City staff based
on then -current employment data; or
o Helps create a hub of entrepreneurial activity, positioning the City to attract
entrepreneurs and high-growth companies, as determined by City staff based on
goals and recommendations set forth in the City's Economic Development Strategic
Plan, the City's then -current Comprehensive Plan, or on other statistical data or
relevant documentation.
Notwithstanding the foregoing, a Mixed -Use Development that commits to at least $5
million in Investment and whose residential component comprises rental units (i.e. apartments) that
meet the affordable housing commitments set forth in Section 14.2 will be considered as a
"Catalytic Project" eligible for 380 Grants even if it is located outside of a Designated Improvement
Zone.
All Catalytic Projects will be eligible for consideration for 380 Grants. The amount of a
380 Grant under this Section will be based on a percentage of annual tax revenues that the City
receives in a particular year, including ad valorem taxes on real property, ad valorem taxes on
Business Personal Property, local sales taxes directly attributable to the project, or some
combination thereof, not to exceed 80%.
11. ELIGIBILITY REQUIREMENTS FOR TRANSIT ORIENTED DEVELOPMENTS.
The City encourages and supports the construction of Transit Oriented Developments. In order
to be considered for 380 Grants, a Transit Oriented Development project must commit to at least $5
million in Investment. The amount of a 380 Grant under this Section will be based on a percentage of
annual tax revenues that the City receives in a particular year, including ad valorem taxes on real
property, ad valorem taxes on Business Personal Property, local sales taxes directly attributable to the
project, or some combination thereof, not to exceed 50%, for a period of no more than 7 years.
City of Fort Worth 380 Grant Policy
Page 9 of 16
12. ELIGIBILITY FOR REDEVELOPMENT PROJECTS ON CENTRAL BUSINESS
DISTRICT SURFACE PARKING LOTS.
The City encourages and supports redevelopment of surface parking lots in the Central Business
District with buildings that will support compatible businesses in the Central Business District. In order
to be considered for 380 Grants, a project must redevelop a surface parking lot in the Central Business
District that occupies at least 30% of the area of the City block on which it is located. The amount of a
380 Grant under this Section will be based on a percentage of annual tax revenues that the City receives
in a particular year, including ad valorem taxes on real property, ad valorem taxes on Business Personal
Property, local sales taxes directly attributable to the project, or some combination thereof, not to exceed
40%, for a period of no more than 5 years; provided, however, that if the redevelopment project involves
two or more surface parking lots owned by unrelated parties, the maximum 380 Grant percentage
available for the project will be 45%.
13. ELIGIBILITY REQUIREMENTS FOR FULL SERVICE HOTELS.
The City will consider providing 380 Grant incentives to full-service hotel projects, including the
hotel portion of mixed-use projects.
The following matrix presents the minimum features required by the City of Fort Worth in order
for a full-service hotel project to be eligible for 380 Grants.
Hotel Full Service Ballroom* Size Meeting* Space Boardroom* Room Block
Rooms Restaurant Space Agreement
200 rooms Yes 6,000 sq. ft. 2,400 sq. ft. 500 sq. ft. Yes
250 rooms Yes 7,500 sq. ft. 4,000 sq. ft. 500 sq. ft. Yes
300 rooms Yes 10,000 sq. ft. 6,000 sq. ft. 500 sq. ft. Yes
* Hotel projects located within Fort Worth's Central Business District that are 12 stories or taller may qualify for
a reduction or reconfiguration of conference space requirements. To be eligible for such adjustments, the
developer must demonstrate that sufficient parking has been secured to serve the needs of the hotel,
whether through a shared parking agreement, provision of new parking, or) the installation of equipment or
infrastructure that supports the use of car sharing services or other shared transportation services.
The amount of a 380 Grant under this Section will be based on a percentage of annual tax
revenues that the City receives in a particular year, including ad valorem taxes on real property, ad
valorem taxes on Business Personal Property, local sales taxes directly attributable to the project, or
some combination thereof, not to exceed 80%.
City of Fort Worth 380 Grant Policy
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14. EMPLOYMENT DESIGNATED PROJECT FUND INCENTIVES.
From time to time, the City may have cash reserves designated to incentivize businesses that
commit to increase employment levels at Salary levels desired by the City. These cash reserves will be
utilized to make cash grants, either upfront or following attainment of certain performance metrics, or
loans.
All industries will be considered but strong consideration will be given the applicants that derive
the majority of its revenues from one of the following Target Industries (subject to additional requirements
outlined below):
Maximum Amount Per
New Position
Minimum Annual Wage
Rate
$1,000
$58,552 - $73,111
$1,500
$73,112 - $87,671
$2,000
$87,672 - $102,231
$2,500
$102,232 or above
Existing Businesses will only be eligible for 380 Grants under this Section if the City is able to
verify that they are receiving competing offers to relocate their operations outside of the City.
The following table reflects the maximum level of 380 Grants available to a qualifying business
based on the required minimum Salaries for net new full-time permanent jobs. All jobs must be filled
and maintained for a minimum of 3 years in order to qualify. Remedies for enforcement of this
requirement will be established in the Economic Development Program Grant Agreement.
Maximum Amount Per
New Position
Minimum Annual
Salary
$1,000
$58,552 - $73,111
$1,500
$73,112 - $87,671
$2,000
$8-7,67-2 - $102,231
$2,500
$102,232 or above
City of Fort Worth 380 Grant Policy
Page 1 I of 16
15. ADDITIONAL ECONOMIC DEVELOPMENT PROGRAM REQUIREMENTS.
15.1 Commitment for Utilization of Certified M/WBE Companies.
All projects receiving 380 Grants must make a commitment to utilize Certified M/WBE
Companies for a minimum of 15% of all construction costs (both hard and soft) associated with
the project. Failure to meet the goal will result in a reduction in the calculation of the maximum
380 Grant each by 10 percentage points.
15.2. Affordable Housing Commitment for Mixed -Use Development Proiects.
All Mixed -Use Development Projects subject to an Economic Development Program
Agreement that contain rental residential units must make a commitment to provide affordable
housing as follows:
• At least 10% of all rental residential units 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 HUD at rents that are
affordable to such households.
• At least 10% of all rental residential units must be set aside exclusively for lease
to qualifying households whose adjusted incomes do not exceed the then -current
sixty percent (60%) income limits established by HUD at rents that are affordable
to such households.
16. ECONOMIC DEVELOPMENT PROGRAM CALCULATION.
16.1. Improvements Required.
All Economic Development Program Agreements shall require the recipient to construct
or cause construction of specific improvements on the real property that is subject to the 380
Grant. Failure to construct these specific improvements at the minimum Capital Investment
expenditure and by the deadline established in the Economic Development Program Agreement
will constitute an event of default and give the City the right to terminate the Economic
Development Program Agreement.
16.2. Percentage and Amount.
Although this Policy establishes the maximum calculations for 380 Grants that may be
available for a particular type of project, the specific amount of a particular Economic
City of Fort Worth 380 Grant Policy
Page 12 of 16
Development Program Agreement shall be negotiated on a case-by-case basis and the amount of
the 380 Grants may be less than the maximum amounts specified in this Policy, based on the
review criteria set forth in Section 18.3. The calculation of Economic Development Program for
any project that meets the requirements of this Policy shall be negotiated on a case-by-case basis
and governed solely by the terms and conditions of the Economic Development Program
Agreement.
17. ECONOMIC DEVELOPMENT PROGRAM IMPLEMENTATION
17.1. Term.
Although this Policy establishes the maximum term of Economic Development Program
Agreements that may be available to certain types of projects, the actual term of any particular
Economic Development Program Agreement shall be negotiated on a case-by-case basis and may
be less than the maximum available term specified in this Policy, based on the review criteria set
forth in Section 18.3.
17.2. Compliance.
Unless otherwise provided in the Economic Development Program Agreement, the City
will review and determine the recipient's compliance with the terms and conditions of the
Economic Development Program Agreement for a full calendar year prior to the first year in
which the first 380 Grant will be payable (the "First Compliance Review Year"). The
Compliance Review Year shall either be the full calendar year in which a final certificate of
occupancy is issued for the improvements required by the Economic Development Program
Agreement (or if a certificate of occupancy is not required for some or all of the improvements,
then such other written confirmation of completion of such improvements) for the real property
and Business Personal Property investment required by the Economic Development Program
Agreement or the following calendar year, as negotiated and set forth in the Economic
Development Program Agreement. The first 380 Grant will be paid in the calendar year
following the Compliance Review Year. In other words, the degree to which the recipient meets
the commitments set forth in the Economic Development Program Agreement will determine the
amount of the 380 Grant payable in the following year. The City will continue to review and
determine the recipient's compliance with the terms and conditions of the Economic
Development Program Agreement for each subsequent calendar year, which findings shall
govern the amount of each subsequent 380 Grant, until expiration of the Economic Development
Program Agreement.
City of Fort Worth 380 Grant Policy
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18. ECONOMIC DEVELOPMENT PROGRAM APPLICATION PROCEDURES
Each 380 Grant application shall be processed in accordance with the following standards and
procedures:
18.1. Submission of Application
If a given development project qualifies for 380 Grants pursuant to the eligibility criteria
detailed in of this Policy, an applicant must complete and submit a City of Fort Worth Economic
Development Program Application (with required attachments) (the "Application"). An
Application can be obtained from and should be submitted to the City's Economic 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.
In addition, projects that include, in whole or in part, the renovation of one or more existing
structures shall provide, as part of the applicant's Economic Development Program Application,
a detailed description and the estimated costs of the renovations contemplated.
18.2. Application Fee
Upon submission of the Application, an applicant must also pay an application 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 in its sole and reasonable discretion, has been undertaken on the property
specified in 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 been completed in accordance with the Economic Development Program
Agreement, the applicant must submit a letter to the director of the City's Economic
Development Department requesting a refund of the remaining funds. The request must be made
within ninety (90) days following the date of the project's completion date. Any Application
fees remaining after ninety (90) days following the project's completion date will become the
property of the City and will not be eligible for. The remaining $2,000 of the Application Fee is
non-refundable and will be utilized for City staff expenses associated with processing the
Application and fees associated with legal notice requirements.
18.3. Application Review and Evaluation
The Economic Development Department will review an Application for accuracy and
completeness. Once complete, the Economic 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 380 Grant Policy
Page 14 of 16
• Types and number of new jobs created, including: respective Salaries, 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;
• Percent of construction contracts committed to (i) Fort Worth Companies and (ii)
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.);
• Remediation of an existing environmental problem on the real property;
• Type of industry and activities associated at the project site;
• If the company is foreign owned and/or includes capital investment sources from outside
the United States;
• Other items that the City may determine to be relevant with respect to the project.
18.4. Consideration by the City Council
The City Council retains sole authority to approve or deny any Economic Development
Program Agreement and is under no obligation to approve any Application or Economic
Development Program Agreement.
19. GENERAL POLICIES AND REQUIREMENTS
Notwithstanding anything that may be interpreted to the contrary herein, the following general
terms and conditions shall govern this Policy:
19.1. An Economic Development Program Agreement 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.
19.2. The applicant for an Economic Development Program Agreement must provide evidence
to the City that demonstrates that 380 Grants are necessary for the financial viability of the
development project proposed.
City of Fort Worth 380 Grant Policy
Page 15 of 16
19.3. An applicant for the Economic Development Program shall provide Salary and employee
benefit information for all positions of employment to be located in any facility covered by the
Application as well as a copy of the applicant's written non-discrimination policy applicable to
the applicant's employees.
19.4. If the recipient of an Economic Development Program Agreement breaches any of the
terms or conditions of the Economic Development Program Agreement and fails to cure such
breach in accordance with the Economic Development Program Agreement, the City shall have
the right to terminate the Economic Development Program Agreement.
19.5. As part of the consideration under all Economic Development Program 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 project and the amount of any 380 Grant that
may be payable in any given year; and (ii) conduct an on-site inspection of the development
project in order to verify compliance with the terms and conditions of the Economic Development
Program Agreement.
19.6. The recipient of 380 Grants may sell, assign, transfer, or otherwise convey any of its
rights under an Economic Development Program Agreement to an affiliate of the recipient, as
defined in the Economic Development Program Agreement, provided that the City, the assignor,
and the assignee each execute a document acceptable to the City that outlines the roles and
responsibilities of the parties in that event. Otherwise, a recipient of 380 Grants may not sell,
assign, transfer or otherwise convey its rights under an Economic Development Program
Agreement unless specifically approved by the City Council. A sale, assignment, lease, transfer
or conveyance of the real property that is subject to and which is not permitted by the Economic
Development Program Agreement shall constitute a breach of the Economic Development
Program Agreement and may result in termination of the Economic Development Program
Agreement. For additional information about this Economic Development Program Policy,
contact the City of Fort Worth's Economic Development Department using the information
below:
City of Fort Worth
Economic Development
1150 South Freeway
Fort Worth, Texas 76104
817-392-60211 www.fortworthtexas.gov/ecodev
City of Fort Worth 380 Grant Policy
Page 16 of 16
City of Fort Worth, Texas
Mayor and Council Communication
CQ NCIL_ACTION: Approved on,1129/2Q1. %Aeslol
DATE: Tuesday, January 29, 2019
LOG NAME: 17EDPAPOLICY2019
REFERENCE NO.: G-19463
SUBJECT:
Adopt Resolution Establishing an Economic Development Program Authorized by Chapter 380 of the
Texas Local Government Code and Adopt New Economic Development Program Policy (ALL COUNCIL
DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council adopt the attached Resolution establishing an Economic
Development Program and a new Economic Development Program Policy, including guidelines and
criteria governing certain economic development loans and grants made by the City of Fort Worth, as
authorized by Chapter 380 of the Texas Local Government Code.
DISCUSSION:
Chapter 380 of the Texas Local Government Code authorizes the governing body of a municipality to
establish and provide for the administration of one or more programs for making loans and grants of public
money and providing personnel and services of the municipality to promote state or local economic
development and to stimulate business and commercial activity in the municipality (a "Chapter 380
Economic Development Program"). The City of Fort Worth first established a Chapter 380 Economic
Development Program on January 30, 2001 pursuant to Resolution No. 2704, which was continued and
expanded on March 10, 2009 pursuant to Resolution No. 3716-03-2009.
On December 12, 2017, the City Council accepted the Economic Development Strategic Plan (M&C G-
19192). As part of the Economic Development Strategic Planning process, it was evident that the current
tools and resources available in the City of Fort Worth needed to be reconsidered. Feedback from the
stakeholders highlighted that the incentives available in Fort Worth were not competitive, and the
anecdotal statements were supported by research completed and incorporated into the Economic
Development Strategic Plan (Plan) by TIP Strategies.
While statements about incentives are peppered throughout the Plan, they are specifically addressed in
recommendation 4.2: Create new incentive tools to encourage business growth within target industries
and to facilitate development and redevelopment in designated districts.
Economic Development staff researched incentive policies from across the country for examples and best
practices associated with the specific recommendations. Special attention was paid to other Texas
communities, particular those within the DFW Metro and other large cities, as well as the eight domestic
benchmark communities.
The Plan also highlighted some local best practices and staff reviewed those programs. These reviews
often included discussions with economic development colleagues to ensure an understanding of the
program.
Logname: 17EDPAPOLICY2019 Page 1 of 4
Staff was specifically seeking details on key thresholds — minimum investment levels, wage criteria, and
number of job requirements — while also seeking unique opportunities to further support opportunities that
are uniquely Fort Worth, all while being cognizant of stakeholder feedback and the Plan
recommendations.
Staff also considered the best practices associated with economic and community development incentives
and those particularly focused on responsible incentive practices, inclusive incentives, and transparent
incentive practices. Staff met with a variety of local professionals to discuss specific concepts, garner
feedback, and get a sense for potential opportunities and challenges associated with specific proposals.
Finally, staff met with a stakeholder group to review the final drafts of all incentive proposals and their
recommendation are being presented for consideration.
The new Economic Development Program Policy contains the following key provisions:
1. The new Policy is focused on city-wide opportunities; however, additional incentives are available in
three target areas: Designated Investment Zone; Transit Oriented Development; and the Central
Business District.
2. The new Policy outlines several targeted opportunities with minimum investment thresholds, as follows:
a) General and Target Industry Projects: $25.0 Million
b) Target Industry Projects in the Central Business District: $100.0 Million if new construction
c) Research and Development: No minimum investment
d) Existing Business Expansion Projects: $10.0 Million
e) Mega Projects: $250.0 Million if it does not meet the total payroll of $150.0 Million or the 1,500 full-time
employee threshold (with the exception of data centers or other unique low employment/high capital
investment projects which must have a minimum investment of $50 million)
f) Technology Companies: No minimum investment
g) Catalytic Development Project: $5.0 Million
h) Transit Oriented Development: $5.0 Million
i) Redevelopment Projects on Central Business District Surface Parking Lots: No minimum investment
j) Full Service Hotels: No minimum investment
3. The new Policy proposes the minimum annual average employee salary as $43,992.00, which is 80%
of the City Median Household Income. Exceptions to the minimum annual average employee salary of
$43,992.00 are as follows:
a) Target Industry Projects in the Central Business District: $54,876.00 annually
b) Research and Development: No minimum salary
c) Mega Projects: Must have a total payroll of $150.0 Million if do not meet the $250.0 Investment Level
or the 1,500 full-time employee threshold
d) Technology Companies: No minimum salary
e) Catalytic Development Project: No minimum salary
f) Transit Oriented Development: No minimum salary
g) Redevelopment Projects on Central Business District Surface Parking Lots: No minimum salary
h) Full Service Hotels: No minimum salary
4. The new Policy has maximum incentive levels are capped at the following levels:
a) General Projects: 50% pending wage and investment levels
b) Target Industry Projects: 70% pending wage and investment levels
c) Target Industry Projects in the Central Business District: 80%
d) Research and Development: 50% if located in the Central Business District or an Innovation District;
Logname: 17EDPAPOLICY2019 Page 2 of 4
35% if in the Designated Investment Zone; and 25% for all other Fort Worth locations
e) Existing Business Expansion Projects: 85%
f) Mega Projects: 85%
g) Technology Companies: 80%
h) Catalytic Development Project: 80%
i) Transit Oriented Development: 50%
j) Redevelopment Projects on Central Business District Surface Parking Lots: 45%
k) Full Service Hotels: 80%
5. The new Policy states that the Incentive Benefit Term may not exceed fifteen (15) years, with the
following exceptions:
a) Target Industry Projects in the Central Business District: Ten (10) years for incremental real property
taxes in an existing building
b) Technology Companies: Five (5) Years
c) Transit Oriented Development: Seven (7) Years
d) Redevelopment Projects on Central Business District Surface Parking Lots: Five (5) Years
6. The new Policy requires that all projects subject to an Economic Development Program Agreement
must make a commitment to utilize Certified M/WBE Companies for all construction costs associated with
the project. The applicant must work with the City's Office of Business Diversity to establish a project goal
for the development. In order to qualify for an economic development grant, the applicant will be required
to demonstrate that it has met the Certified M/WBE Company goal established for the project or that it
sufficiently made a good -faith effort to meet the goal. Failure to meet the goal or to establish that a
sufficient good -faith effort to meet the goal was made will result in a reduction of the overall percentage of
the grant available by 10 percentage points.
7. The new Policy requires that all Mixed -Use Development Projects subject to an Economic
Development Program Agreement that contain rental residential units were required to make a
commitment to provide affordable housing.
Once adopted, the proposed Economic Development Program Policy will be effective January 29, 2019,
and will replace the previous Chapter 380 Economic Development Program adopted pursuant to
Resolution Nos. 2704 and 3716-03-2009.
This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that approval of this Policy will have no material effect on the Fiscal Year
2019 Budget. While no current year impact is anticipated from this action, any effect on expenditures and
revenues will be budgeted in future fiscal years and will be included in the long term forecast.
FUND IDENTIFIERS (FIDs):
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Logname: 17EDPAPOLICY2019 Page 3 of 4
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Logname: 17EDPAPOLICY2019 Page 3 of 4
Submitted for City Manager's Office by:
Originating Department Head:
Additional Information Contact:
Susan Alanis (8180)
Robert Sturns (2663)
Brenda Hicks -Sorensen (2606)
Logname: 17EDPAPOLICY2019 Page 4 of 4