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INFORMAL REPORT TO CITY COUNCIL MEMBERS No.7509
To the Mayor and Members of the City Council February 12 , 1991
X
Subject: APPLICATION FOR TAX ABATEMENT FROM HAMSTRA
BUILDERS, IN
BACKGROUND:
The Office of Economic Development has received an application for tax
abatement which meets the current policy for Council consideration. As
you will recall , included among the amendments to the Fort Worth Tax
Abatement Policy adopted in October, 1990 , was the reduction of the amount
of the minimum capital investment in order to qualify for tax abatement
consideration.
The policy currently includes the following:
(a) If a business commits to hiring residents from an eligible
"inner-city" area for full-time permanent positions , the minimum
capital investment level is $500 ,000 .
(b) The state law prohibits tax abatement of existing tax base.
Abatement can be considered only for the increase in valuation
above the existing valuation of a particular property and for a
maximum term of 10 years . The amount and terms of the abatement
will be determined by factors such as the costs to the City, the
project 's increased valuation to the tax base, and the number and
types of new jobs and new or expanding local businesses resulting
from the project .
The tax abatement application from Hamstra Builders , Inc . is included as
Attachment "A" . It reports a project of approximately $2 million to be
located at the corner of Rosedale Street and St . Louis Avenue. Attach-
ment "B" shows a map and the current zoning of the area. This site is
in the eligible "inner-city" area as well as the South Enterprise Zone.
The project is the Veterans Administration Outpatient Medical Clinic,
which will be completed during 1991 . Employment reported in the
application is a total of 87 positions in year 1992 , composed of 77
transfers and 10 new hires . The application reports 30% of the
full -time positions will be held by Fort Worth residents .
The City' s Development Coordinator has reviewed the site plan and has
determined that all costs for this project will be the responsibility of
the developer , with no City participation.
The applicant advised the staff that the Veterans Administration will
lease this facility for a twenty-year period, however , this lease
arrangement is based solely on interior space. As such, there is no
incentive to add any amenities . The applicant initially proposed that
an abatement be granted which would allow for unspecified enhancements
to this facility . The staff negotiated with the applicant to include
specific items on a dollar-for-dollar basis . The proposed enhancements
include:
L ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
Pa
INFORMAL REPORT TO CITY COUNCIL MEMBERS No, 7509
To the Mayor and Members of the City Council February 12 , 1991
X
�bESaa�r,�
Subject: APPLICATION FOR TAX ABATEMENT FROM HAMSTRA
,6?3
BUILDERS, INC.
1 . Upgraded exterior security lighting $ 25 ,000
2 . Accent exterior brick work 115, 000
3 . Two feet high parapet wall 75, 000
4 . Canopies at the main and ambulance 32 , 150
entrances and over the dock area
to detailed description of these enhancements are included in this
report as Attachment "C" . )
RECOMMENDATION:
This project addresses the public goal of inner-city revitalization.
The staff has negotiated with the applicant an agreement that , if
approved, will result in an abatement equal to approximately 25% of the
cost of the enhancements as outlined in this report . The City's
participation through tax abatement would reflect as an exemption of 50%
of the value of the improvements until an amount of $61 , 876 is reached.
It is projected that this figure will be reached in the seventh year ,
therefore , the proposed agreement is for a seven year period.
The proposed agreement is consistent with both the City Council 's
approved abatement policy and inner-city revitalization philosophy and
the staff recommends its approval .
SUMMARY :
A. The enhancements listed in Attachment "C" should be provided by the
applicant who owns the building and who will realize a profit from
the enhancements if the property is ever sold. However , because of
the possible revitalization effects of this project on the
surrounding neighborhood, the City will consider the enhancements a
joint effort .
B. As a joint effort , the City will consider tax abatement for an
amount equal to one-fourth of the cost of the proposed enhancements ,
which is $61 , 876 . Staff recommends that no more than one-fourth of
the cost should be considered since at least four other taxing units
will have the opportunity to join in this agreement if they should
so desire once the agreement has been executed by the City of Fort
Worth.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
Page 3 of 3
INFORMAL REPORT TO CITY COUNCIL MEMBERS No7 °
.
OPP�o To the Mayor and Members of the City Council February 12 , 1991
4. A
a
raxA`' Subject; APPLICATION FOR TAX ABATEMENT FROM HAMSTRA
BUILDERS , INC.
C. The proposed tax abatement agreement would specify that in exchange
for $247 ,151 of the specified expenditures (Attachment "C") , in
addition to the $1 , 995 ,000 of new structures and $135 , 356 of site
development , the applicant will receive a 50% tax abatement per year
on the value of the improvements (structures) , until the total
amount of abated taxes has met the $61 ,876 amount . Attachment "D"
shows this to be an abatement of 50% for approximately seven years .
( It should be noted that at the end of seven years of abatement , it
is estimated that the total amount of abated taxes would be
approximately $67 ,000 . ) Also stated in the contract would be a
commitment to hire Fort Worth residents, especially from the
"inner-city" , and to use Fort Worth businesses wherever possible .
The City Manager has received a resolution from the Historic Southside,
Inc . , in support of tax abatement for the Veterans Administration
Outpatient Clinic .
To begirt the process of considering the request for tax abatement , the
City Council should set a date for the public hearing to consider
establishing a reinvestment zone for tax abatement . Approval of the M&C
to set the hearing date would also direct staff to notify the public and
the affected taxing units of the City Council 's intention to enter into
a tax abatement agreement . A proposed tax abatement agreement outlining
staff ' s proposal could be developed for formal consideration and action
following the establishment of the reinvestment• ronpr.
David Ivory
City Manager
Attachments
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS --
ATTACHMENT "A"
GANDY MICHENER SWINDLE WHITAKER & PRATT
ATTORNEYS & COUNSELORS
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
3500 CITY CENTER TOWER It
301 COMMERCE STREET
FORT WORTH, TEXAS 76102-4135
(817) 335-4417 TELEX 75-1693
WRITER'S DIRECT DIAL NUMBER METRO (817) 429-6268 TELECOPY (817) 335-6935
878-0502
November 13, 1990
David Ivory
City Manager
City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76102
Re: Application for Tax Abatement
Dear David:
I am enclosing two (2) copies of an Application for Tax
Abatement for consideration and action by your office. The
Application has been prepared in accordance with the policy
statement for tax abatement for commercial and industrial projects
op` enacted by the City Council on October 16, 1990.
The project will be an out-patient medical clinic located
on the corner of East Rosedale Street and St. Louis Avenue which
will be owned by Hamstra Builders, Inc. and leased to the U.S.
Veterans Administration.
We are ready at any time to answer any questions that you
or your staff may have with respect to this Application and request
early consideration and approval.
Yours truly,
GANDY MICHENER SWINDLE
WHITAKER & PRATT
64:-: � 494�
George J. Barlow
GJB:dwc
Enclosure
cc: Hon. David Chappell
pool, Mr. Eric Carlson
APPLICATION FOR TAX ABATEMENT
CITY OF FORT WORTH, TEXAS
1. Property owner: HAMSTRA BUILDERS, INC.
Company or Project Name: VETERANS ADMINISTRATION OUTPATIENT
CLINIC
Mailing Address: Route 3, Box 25
Wheatfield, Indiana 46392
(Eric Carlson - Project Manager)
Telephone Number: (219) 956-3111
Company representative to be contacted:
Name and title: George J. Barlow, Attorney
Gandy Michener Swindle Whitaker & Pratt
Mailing Address: 3500 City Center Tower 11
301 commerce Street
Fort Worth, Texas 76102
Telephone Number: (817) 878-0502
2. Project Description and Location:
The project consists of an approximately 47,748 square
feet outpatient medical clinic on an approximately 2.85
acre site at the corner of East Rosedale Street and St.
Louis Avenue. The property owner will lease the facility
to the U.S. Veterans Administration who will operate the
clinic. The lease term is 20 years. The owner will be
responsible for all building operations, maintenance and
taxes and will develop the property as a long term
investment.
3. Brief Description of Activities to be Performed at This
Location. Include a Description of Products and/or Services:
The clinic will provide out-patient medical care to
qualified veterans residing in an 18 county area.
4. Date Projected for Occupancy of
Project/Initiation of Operations: September 4, 1991 AWA
-1-
O"k 5. Eligibility Criteria:
The project will be located in an eligible "inner city"
area, and will include a minimum capital investment in
excess of $500,000 (excluding land) . The business will
commit to hiring residents from eligible "inner city"
areas for full-time, permanent positions.
6. EM-210Yment—Im2act
A. Construction Employment Estimates:
Start: Month/Year December 1, 1990
Completion Date: May 30, 1991
Number of construction Jobs: is
Estimated Construction Payroll: $1,200,000.00
Percentage of Construction Dollars
to be Spent With Fort Worth Based
Contractors or Sub-Contractors $1, 065,183.00
00111k (Applicant will meet or exceed 50% expenditure of
construction dollars with Fort Worth-based companies. )
Estimate of Contract Dollars to DBE
(Disadvantaged Business Enterprises) $ 426,073.00
B. Permanent Employment Estimates:
Current Employment at This Location
(If Applicable) : None
Estimated Number of New Jobs Created by This
Project and Estimated Percentage of Permanent
Full-Time Jobs to be Held by Fort Worth Residents*:
At Start/Opening New Hires 10 Transfers 77
In Year 1992 Percentage 304
5 Years After Opening: New Hires 7 Transfers 1
(10% projected increase) In Year 1997 Percentage 334
10 Years After Opening: New Hires 7 Transfers 1
(10% projected increase) In Year 2002 Percentage 354
C. Estimated Annual Payroll - Permanent Employment:
-2-
Existing Jobs (If Applicable) : $ -0-
New Jobs $3,100,000.00 in Year two
Total Annual Payroll $3,100,000.00 in Year two
(with stable employment expected for twenty years of
operation of clinic. )
*Each application will be reviewed on its merits. However, absent
extraordinary circumstances, a minimum of 25% of the employees
SHOULD be Fort Worth residents. Company shall report annually and
a pro rata reduction of the abatement MAY occur if the percentage
is not met.
D. Types of Jobs/Job Titles
Physicians-12 Physical Therapists-2
Nurses-16 Social Workers-3
Medical Technologists-2 Dietician-1
Office & Clerical-25 Pharmacists-7
Administration-14 Computer Specialist-1
Radiology Tech.-3 Building Engineer-1
7. Project Impact
A. Existing Value (per Tarrant Appraisal District) :
1. Land $ 378,582
2. Improvements $ -0-
3. Personal Property $ -0-
B. Estimated Total Cost of Project:
1. Site Development $ 135,366
2. Structures $1,995,000
3. Personal Property $3,747,000
($647,000 of personal property subject to tax to be acquired
and installed by applicant; the remainder to be owned by the
government operator)
C. Estimated revenue per year for first five years subject
to sales tax.
1. First Year $ 9,700.00
2. Second Year $10,000.00
-3-
poll, 3. Third Year $10, 300.00
4. Fourth Year $10,600.00
5. Fifth Year $11,000.00
8. Describe Any Off-Site Infrastructure Requirements:
Water: The site is located on an existing water line; no
improvements needed.
Sanitary Sewer: No additional requirements
Streets: Located at the corner of St. Louis and Rosedale;
existing streets are satisfactory.
Storm Sewer: No additional requirements.
Other: None
9. Is Property Zoned Appropriately? Yes X No
Current Zoning G
001bk Required Zoning G
10. Is Property Platted? Yes X No
Will Replatting be Necessary? Yes X (in progress)
11. Impact on Local Business (When Project is Fully Operational) :
A. Annual value of total supplier and services contracts:
$1,400,000.00
B. Annual value of supplier and services contracts for Fort
Worth businesses:
$ >25%
C. Annual value of contract dollars to DBE:
$ >20%
12. Describe any other direct benefits to the City of Fort Werth
as a result of this project (e.g. , sales tax revenue) .
-4-
The project will anchor redevelopment of distressed
properties east of Hemphill and will be a significant
enhancement to the Hemphill Corridor by creating a new,
independent medical complex within the medical district.
Equipment and furnishings valued at $3.1 million will be
installed, with Fort Worth businesses a prime source.
45,000 patients will visit the clinic in the first year,
many accompanied by family members, who will patronize
local businesses. Full-time maintenance and security
contracts with Fort Worth firms will be let. Location
of the project on existing public transportation routes
will increase transit utilization and revenues.
13 . Environmental Impacts, If any, created by the project:
No negative Environmental Impacts
14. Justification for Tax Abatement Request (Attach documentation
to substantiate and more fully describe the Justification for
this request. Include the amount of the abatement requested
and show how it will contribute to the financial viability of
the project) .
The granting of a full tax abatement for ten years will
increase the financial viability of the project, which
has been impacted by soil conditions requiring extra
foundation work. Benefits to the city will include
increased exterior lighting, first class exterior
details, resembling the higher quality buildings in the
area, and enhanced landscaping. These improvements will
enhance redevelopment in the immediate area of the
project. A proforma financial analysis of the project
will be found in an attachment to this application.
15. Financial Information - Attach a copy of the latest audited
financial statements or, in the case of a new project, a
business plan.
The application for tax abatement is submitted with the
acknowledgment that additional certified financial
information may be required. It is further understood
and acknowledged that the City Council of the City of
Fort Worth encourages the use of local consultants,
construction firms and suppliers (with special emphasis
given to disadvantaged business enterprises) and that,
if approved, the final abatement agreement will require
-AN
use of local firms when possible in conjunction with this
project.
HAMSTRA BUIIMERSf INC.
By:
Authorizea Signature
Ire,-
Date
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EXHIBIT "All
BEING 2.85 acres of land located in Lot A-1, Block 2, FIELDS-WELCH
ADDITION to the City of Fort Worth, Tarrant County, Texas,
according to the plat recorded in volume 388-155, Page 88 of the
Plat Records of Tarrant County, Texas. Said 2.85 acres of land
being more particularly described by metes and bounds, as follows:
BEGINNING at an "X" out in concrete at the Southeast corner of said
Lot A-1, being the intersection of the North right-of-way line of
Rosedale Street (an 80 foot wide right-of-way) with the West right-
of-way line of St. Louis Avenue (a 60 foot wide right-of-way) ;
THENCE S 88 degrees 59 ' 54" W 207.01 feet along the North right-
of-way line of said Rosedale Street to a 1/2" iron rod;
THENCE N 00 degrees 13 ' 39" E 599.71 feet along a line 207.01 feet
West of and parallel to the West right-of-way line of aforesaid St.
Louis Avenue to a 1/211 iron rod;
THENCE N 89 degrees 59' 5411 E 207.01 feet to a 1/2" iron rod in the
West right-of-way line of said St. Louis Avenue;
THENCE S 00 degrees 13 ' 3911 W 599.71 feet along the West right-
of-way line of said St. Louis avenue to THE PLACE OF BEGINNING,
containing 2.85 acres (124.145 square feet) of land.
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ATTACHMENT "C"
SCHEDULE OF TAX ABATEMENT REVENUES AND EXPENDITURES
OP111
Tax Abatement Revenues
Year City Taxes Abated
1 $24,715.00
2 24,715.00
3 24,715.00
4 24,715.00
5 24,715.00
6 24,715.00
7 24,715. 00
8 24,715.00
9 24,715.00
10 24,715. 00
TOTAL $247, 150. 00
Amount of tax abated based on City of Fort Worth tax rate of
$.89/$100.00 valuation against improvements subject to abatement
valued at $2,777,000, with full abatement for ten years and no
changes in tax rate or valuation.
Tax Abatement Expenditures
First Year $247, 151. 00
Breakdown
1. Parapet wall 75,000. 00
Exterior walls will be raised above each height of about
21 which will then give the building a flat look from all
sides. This additional wall height will serve as an
equipment screen to hide all the roof top units.
2. Brick $115, 000. 00
The entire exterior walls, including parapet walls, will
be brick veneer. There will be definite indentations at
the corners and at door openings to create an
architectural looking effect similar to the surrounding
buildings. Also different brick treatment will be done
including soldier course run around the perimeter of the
building.
3 . Canopies $ 32, 150.00
The canopy at the main entry, ambulance entrance, and at
dock area will be constructed and finished with a drywall
stucco system. This feature will be a very good
enhancement to the brick veneer building.
4 . Exterior $ 25,000.00
The exterior lighting of the facility and the parking
area will be installed with a higher foot candle level
than normal. The parking lot will be lit with high
pressure sodium lights on aluminum pole standards. The
entire exterior walls of the building (on all four sides)
will be lit up during dark hours. This will enable a
higher security level for the facility and parking area.
Recent soil borings have indicated that extensive sitework
preparation will have to be done because of adverse soil
conditions. The work will involve excavation of existing soil
approximately 3 feet in depth and backfilled with select material.
Concrete caissons will need to be installed to a depth of 15 feet.
The select material will then need to be lime treated. This
additional work on the site prep was not anticipated.
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