HomeMy WebLinkAboutIR 9263 INFORMAL REPORT TO CITY COUNCIL MEMBERS No.
To the Mayor and Members of the City Council June 22, 2010
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a
x SUBJECT: TAX ABATEMENT BENEFIT REDUCTION FOR BLACKSTONE
HOTEL AND FORT WORTH VILLAS BY THE LAKE.
Purpose:
The purpose of this Informal Report is to inform City Council of two items related to tax abatement
agreement compliance that will be on the City Council meeting agenda for action on July 13, 2010.
Background:
The City of Fort Worth has two Tax Abatement Agreements without automatic adjustment schedules that
assign abatement percentages; these are generally called Non-Performance Specific Agreements. The
agreements require the City to check compliance annually and then take action to adjust the percentage of
abatement if necessary based on the company's performance. The Housing & Economic Development
Department and the Internal Audit Department have developed a system of checking compliance on an
annual basis on all of the City's tax incentive agreements that complies with the City's Tax Abatement
Policy.
Recommendation:
^. The Audit of 2009 performance for all incentive agreements was recently completed and two Non-
Performance Specific Agreements failed to meet certain commitments. Consequently, the Housing and
Economic Development Department is recommending to the Council that the amount of abatement be
adjusted to meet the level of compliance under the audit. Both of these agreements will expire at the end
of 2010 and there are no other Non Performance Specific Agreements currently operating in the City of
Fort Worth.
In accordance with the Housing and Economic Development Department's standard formula applied to all
Non-Performance Specific Tax Abatement Agreements, staff will be recommending to the City Council
that the Fort Worth Villas by the Lake, LP abatement percentage be reduced from 75 percent to 73.60
percent and that Blackstone Hotel Partners, LP abatement percentage be reduced from 100 percent to
92.08 percent. Because these are Non-Performance Specific Agreements, the City Council must take
action to set the appropriate abatement level for the year. After this year, this process will no longer be
required since all existing and future agreements are performance specific and provide for the level of
abatement by contract.
If you have any questions or need additional information, please contact Jay Chapa, Director of Housing &
Economic Development at 817-392-5804.
Dale A. Fisseler, P.E.
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS