HomeMy WebLinkAbout(0002) IR 10312 - 2018 Review Year Results for ED Incentive AgreementsINFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 19-10312
To the Mayor and Members of the City Council September 10, 2019
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SUBJECT: 2018 REVIEW YEAR RESULTS FOR ECONOMIC DEVELOPMENT
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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 2018.
All companies with City incentive agreements must submit an annual report and supporting documentation
by February 1st. 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 31 economic development program
(Chapter 380 Grant) agreements. Results also include one relocation tax abatement.
Two of the Chapter 380 Grants involved project completions: the expansion at Clearfork Development and
the Tanger Outlets construction. Total capital investment for Clearfork ($58.5 M) and for Tanger Outlets
($86.6 M) was approximately $145 million. Clearfork earned 68.71% out of the available 70% construction
incentive and Tanger Outlets earned 91.72% out of the available 100% construction incentive. In addition
to requirements for minimum dollar amounts of construction investment, incentive agreements generally tie
a portion of the possible incentive to participation by Fort Worth Businesses and Fort Worth MWBE's. Both
Clearfork and Tanger did not achieve the maximum construction incentive due to shortfalls in expected
participation by Fort Worth MWBE companies. However, the overall gap between expected MWBE
construction participation and actual performance was reduced by approximately 33% year over year, so
the trend is moving in a positive direction. It is anticipated that with the changes to the incentive policies
approved in 2019, that we will see a further strengthening of the MWBE construction participation over time.
For Tax Year 18, Fort Worth and Fort Worth MWBE's received over $180.0 M in construction spending from
economic development projects.
2018 Construction Participation
160000000 $145,063,516
140000000
120000000
100000000
80000000
60000000 $55,472,897
$46,227,414 $39,748,955
40000000
20000000
0.01 —
FW Business FW MWBE
Committed ■ Verified
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 19-10312
September 10, 2019
To the Mayor and Members of the City Council
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PION,
SUBJECT: 2018 REVIEW YEAR RESULTS FOR ECONOMIC DEVELOPMENT
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In addition to construction spending, employment and business supply and service participation are key
ongoing requirements for the economic development agreements. The results of these categories for Tax
Year 2018 are shown as follows:
16,000 2018 Employment 2018 Business Supply and Service
14,000 13,554
$120,000,000 $110,074,644
12,000 11,169
$100,000,000
10,000
8,000 $80,000,000
6,000 4,902 $60,000,000
$42,408,470
3799
4,000 $40,000,000 $26,639,381
2,000 1 097 1,434
$ 20, 000, 000 $10, 711, 202
0
0 $0
Total Jobs FW Jobs Central City Jobs FW Business FW MWBE
■ Committed ■ Verified ■ Committed ■ Verified
Businesses with active agreements in 2018 provided the following tax revenue to the City:
Taxes Collected from Companies with Incentive Agreements
Granted or
Levied Abated Net To City
Real and Business Personal Property and
Sales*
$40,386,976
$22,028,571
$18,358,405
Hotel Occupancy Tax 7%+2%
$4,373,910
$3,863,367
$510,543
Total
$44,760,887
$25,891,938
$18,868,949
*Sales Tax and HOT collections shown include only companies with an incentive based on sales tax or HOT
The City of Fort Worth's 2018 net assessed value — real and personal property — is $60.9 billion. City
property taxes received were an estimated $477.8 million, and sales taxes were an estimated at $231.9
million, for a total of $709.7 million in total taxes. For tax year 2018 property taxes abated or reimbursed
totaled just over $22.0 million, which represents 3.1 % of the City's total tax revenue. In addition, the City
collected $29.1 million of Hotel Occupancy Tax, of which $3.8 million or 13.3% was reimbursed.
The private investment leveraged by the economic development program totaled $3.5 billion, making the
City's total incentive participation 0.73%, resulting in a private to public investment ratio of 137:1.
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