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Home My WebLink AboutIR 7357 INFORMAL REPORT TO C" COUNCIL MEMBERS No 7357 Pg. 1 7fFoer� To the Mayor and Members of the City Council February 21, 1989 �xP y Subject: PROPOSED CRITERIA AND GUIDELINES FOR TAB ABATEKENT TO QUALIFYING DOWNTOWN RESIDENTIAL PROJECTS Backaround A preponderance of evidence, both measured and circumstantial , sug- gests ' that the vitality and stability of a city's central business district ("downtown") is substantially aided and abetted by the exis- tence of a stable residential community within or adjacent to down- town. For various reasons, residential housing in downtown Fort Worth has declined for several decades. As older housing decayed and was removed, comparatively little new housing has been added. Given the important role that the Central Business District serves in unifying, symbolizing, and integrating the diverse sections of the city, its preservation should be a goal of all of Fort Worth's citi- zens. Accepting that a healthy mix of residential housing is bene- ficial to the stability and vitality of the Central Business District, then enhancement of downtown housing opportunity should follow as a worthy citywide goal . At the February 7 , 1989, Work Session, the City Council discussed Informal Report 7348, Residential Development in Downtown Fort Worth. As outlined in that Informal Report, if tax abatement is a desired incentive for development of middle-income housing in the downtown, the following steps would need to be taken by the City Council : 1) Adopt guidelines and criteria (Resolution) . 2) Establish Reinvestment Zone (Public Hearing and Ordinance) . 3) Authorize Tax Abatement Agreement (Council Action) . Purpose of the Resolution Regarding Central Business District Residential Tax Abatement Program The purpose of the resolution is to indicate intent to provide incen- tives to the growth and development of downtown housing opportunity in Fort Worth. Recognizing the high levels of uncertainty and risk asso- ciated with housing investment in the downtown area, the general pub- lic of the City of Fort Worth, through its elected representatives, resolves to share in such risks by providing tax incentives to the owners and developers of residential properties who meet the require- ments of eligibility and agree to conform to regulations established to- implement this resolution. It is recommended that there be three incentive pr rs o#�.. � own housing: CITY SECRETARY 1. The existingprogram for histori it f f cant ,. structures. ��U,iT , . ISSUED BY THE CITY MANAGER FORT WORN,MAS INFORMAL REPORT TO C .' COUNCIL MEMBERS No. 7357 �- 2 coag' To the Magor and Members of the City Council February 21, 1989 Pq X y Subject: PROPOSED CRITERIA AND GUIDELINES FOR TAX ABATEKENT TO 107 QUALIFYING DOWNTOWN RESIDENTIAL PROJECTS 2. One for revitalization of existing structures in the Central Business District which are not historically significant. 3. A third program for new construction in the Central Business District. Incentive Program for Designated Historic Structures In 1988, the City Council. adopted Ordinance #10172 which established a 10-year "tax freeze" (exemption) for historically significant struc- tures which had an improvement value (building permit value) equal to or greater than 30% of the pre-renovation assessed value. Incentive Program for Revitalization of Other Structures in the Central Business District It is proposed that an incentive be adopted to encourage the revital- ization of existing structures in the Central Business District for a residential or mixed use. To be eligible for the exemption- of the tax valuation increase resulting from the renovation, the property must : 1. Involve an amount of new investment (per building permit value) that is equal to or greater than 50% of the appraised value of the property at the time of the tax abatement agreement as shown by records of the Tarrant Appraisal District (T.A.D. ) . 2. Have a zoning classification appropriate for residential or mixed use. 3. Conform to accepted urban design and architectural guide- lines for housing in downtown locations . The Planning Department Will review the project and make recommendations to the City Council for final action. 4. Be a structure that is appropriate for residential use, cap- able of meeting all city codes pertaining to residential structures. 5. Contain a structure which When completed has a total leas- able residential area equal to fifty-one pe - _ - - the total leasable square footage of the grope ty (e: ludi.a parking areas designed to serve the property) . 3l Please note that a greater amount of new investment im peed-ed un this program than is offered in the existing program foe hi-stori6af% significant structures. ISSUED BY THE CITY MANAGER FORT WORTH TEXAS - INFORMAL REPORT TO C. COUNCIL MEMBERS No. 757 R9 3 yet fOBr� To the Mayor and Members of the City Council February 21, 1989 y Subject: PROPOSED CRITERIA AND GUIDELINES FOR TAX ABATEMENT TO QUALIFYING DOWNTOWN RESIDENTIAL PROJECTS Incentive Procram for New Construction of Housinc in the Central Business District For new construction of structures which will contain residential units, the value of the property for tax assessment purposes will be "frozen" at the Tarrant Appraisal District valuation at the time of project approval . The exemption for the new development will apply for a period of ten (10) years after completion of the project . The date of the project completion will be the date of the certificate of occupancy. To be eligible for the tax valuation exemption provided above, the project must : 1. Be a property appropriately zoned for residential or mixed use. 2. Meet all appropriate city code requirements . 3. Conform to accepted architectural and urban design criteria for central business district residential use. The Planning Department will review the project and make recommendations to the City Council . This recommendation will be a part of the information used by City Council to approve or deny a request for a tax abatement agreement. 4. Enhance property values and complement other land uses in the downtown. 5. Contain a structure(s) which when completed has a total leasable residential area equal to two-thirds of the total leasable square footage of the property (excluding areas reserved for parking expressly to serve the property) . If there are retail uses which encompass the first floor at street level , a bonus is awarded which permits the percentage of the residential to be reduced to 60%. Proposed Reinvestment Zone Following the adoption of guidelines and criteria, a Reinvestment Zone would be proposed and a public hearing held by the City Council . it is recommended that the boundaries of the downtown public improvement district be used for the boundaries of the Reinvestment Zone (see At- tachment "A") . The property owners within the boundaries of a public improvement district assess themselves in order to provide a higher level of services without creating a greater tax burde owners outside the district. However, all the citizens bf 'Vott K0ti benefit from the higher level of services since it provides dl'cli things as cleaner streets and sidewalks in the Central Bifsiftets Dispfi trict and downtown festivals. ISSUED BY THE CITY MANAGER j FbT M�bRfill, . �— INFORMAL REPORT TO 1Z; COUNCIL MEMBERS ¢, No. 7357 ft,4 M,,It T t At0 f�iOAT To the Mayor and Members of the City Council February 21, 1989 f = -XN.y. Subject: PROPOSED CRITERIA AND GUIDELINES FOR TAS ABATEMENT TO "T' QUALIFYING DOWNTOWN RESIDENTIAL PROJECTS Please note that tax abatement applies only to property taxes and not to assessments. It is the City Attorney's opinion that the property owner who is granted a tax abatement on the increased valuation under this program would pay the assessment on 100% valuation of his/her property with no abatement of valuation for purposes of any assessments, including those for the public improvement district . Effect on Other Taxing Entities If the City of Fort Worth grants a tax abatement, that abatement ap- plies to all taxing entities except the county and school districts. Counties and school districts have the option to agree to the same abatement or to not participate in the abatement, but they cannot offer an abatement different from the municipality's abatement for property within that city's boundaries. Economic Impact Property values will increase, not stagnate or decrease. The new development or the renovation/revitalization project will generate taxes subsequent to the period of abatement which will be the direct economic benefit to the city, as well as increased city utility revenues throughout the period of abatement and subsequent years . The incentive program should result in new construction and renovation activity which will mean new jobs created and increased disposable income within the community. By targeting this program to the Central Business District, the existing infrastructure is used rather than creating the expense of new or additional infrastructure. Subsecuent Action If City Council desires to proceed with this program as proposed, a resolution expressing the City Council 's intent to participate in tax abatement and the criteria and guidelines as outlined above will be prepared for Council action. A public hearing date will be estab- lished by Council action and notice given according to state statutes. Also, a letter for the Mayor's signature will be prepared by staff to send to all affected taxing entities in order to inform those entities of the City Council 's desire to participate in this program, the proposed guidelines and criteria and opportunities for the input and involvement of those entities. OFFICIAL RECORD FCITY SE"RETARY Dovg as WHarman City Manager IT f ISSUED BY THE CITY MANAGER Fbif WORTH, TEXAS -- M LAD t d 1 ■