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HomeMy WebLinkAboutOrdinance 11603ORDINANCE NO. 1 (1 ~~ ,~llA n ~ 44 AN ORDINANCE AMENDING CHAPTER 32, "TAXATION", OF THE CODE OF THE CITY OF FORT WORTH, TEXAS (1986), BY ADDING A NEW ARTICLE IV, WHICH AUTHORIZES CITY AD VALOREM TAX EXEMPTIONS FOR CERTAIN HISTORIC PROPERTY WHICH IS USED FOR MULTI-FAMILY RESIDENTIAL FACILITIES; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION IN PAMPHLET FORM; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS; SECTION 1. That Chapter 32, "Taxation", of the Code of the City of Fort Worth (1986), as amended, be and is hereby amended by adding the following new Article: ARTICLE IV. TAX EXEMPTION FOR CERTAIN HISTORIC PROPERTY Sec. 32-41. City Ad Valorem Tax Exemption for Certain Historic Property to be Rehabilitated or Restored for Multi-Family Residential Facilities. A. Purpose. The tax exemption provided for in this Section is adopted pursuant to the authority provided in Article 8, Section 1-f of the Texas Constitution and Section 11.24 of the Texas Property Tax Code. The purpose of this Section is to encourage the rehabilitation and restoration of certain historic properties to be used for multi-family residential facilities. B. Definitions. (1) APPRAISAL DISTRICT means the Tax Appraisal District in which historic property is located. (2) EXEMPTION means a tax exemption as described in this Section. (3) HISTORIC PROPERTY means a structure and land which are designated "HC" Overlay District pursuant to Section 26 of the Comprehensive Zoning Ordinance. (4) HISTORICALLY SIGNIFICANT SITE IN NEED OF TAX RELIEF TO ENCOURAGE ITS PRESERVATION means a structure and land determined to be eligible for an exemption under this Section. (5) OCCUPIED means resided in or used by an owner or tenant. (6) PRESERVATION means the act or process of applying measures to sustain the existing form, integrity, and material of a structure, and the existing form and vegetation cover of a site. It may include initial stabilization work, where necessary, as well as ongoing maintenance of the historic building materials. (7) REHABILITATION means the act or process of returning a property to a state of utility through repair or alteration which makes possible an efficient contemporary use while preserving those portions or features of the property which are significant to its historical, architectural, and cultural values. (8) RESTORATION means the act or process of accurately recovering the form and details of a property and its setting as it appeared at a particular period of time by means of the removal of later work or by the replacement of missing earlier work. (9) VALUE means the value of the structure and land as determined by the Appraisal District in accordance with the Texas Property Tax Code. (10 ) $5 MILLION COST OF IMPROVEMENT, as used in paragraph C(2), means money actually spent by the owner of the property prior to the owner's submission of a sworn statement of completion to the Landmarks Commission. C. Criteria for Tax Exemption. To be considered for tax exemption under this Section, a project must meet the following minimum criteria: (1) The property must be in Fort Worth Improvement District No. 1 or Fort Worth Improvement District No. 3, must be in a Historical and Cultural Overlay District and must be appropriately zoned for the proposed use. (2) The property must be in need of rehabilitation or restoration. The owner must agree to rehabilitate or restore the property by making improvements with a cost equal to or greater than fifty percent (50$) of the appraised value of the structure and land as shown on the records of the Appraisal District and such improvements must also cost at least $5 million. All rehabilitation or restoration of the property shall be performed in accordance with all City codes and ordinances including those which are applicable to historic structures. -2- (3) The City Council must find that the property is a historically significant site in need of tax relief to encourage its preservation pursuant to section 11.24 of the Texas Property Tax Code. The owner must provide economic justification for the tax exemption by showing that the project cannot be developed without an exemption. (4) When the rehabilitation or restoration is completed, the property must contain a structure which has a total leasable residential area equal to two-thirds of the total leasable square footage of the property (excluding motor vehicle parking). During the term of any tax exemption, the owner must continuously operate and maintain the property for retail and/or residential uses on the ground floor and for residential uses in the remainder of the structure (excluding motor vehicle parking), in compliance with applicable federal, state and local laws. (5 ) The first floor of the structure at street level may be used for residential purposes and for the retail trade and selected services shown below as Class I, II and III and as defined in the Standard Industrial Classification Manual. Retail and selected services are defined in the following sections of the Standard Industrial Classification Manual: Class I. Division G - Retail Trade (a) Major Group 53 (b) Major Group 54 (c) Major Group 56 (d) Major Group 57 (e) Major Group 58 (f) Major Group 59 - General Merchandise Stores - Food Stores - Apparel and Accessory Stores - Home Furniture, Furnishings, and Equipment Stores - Eating and Drinking Places - Miscellaneous Retail Class II. Division I - Services (a) Major Group 72 - Personal Services (b) Major Group ?8 - Motion Pictures Class III. Division E, Major Group 47, Industry Group 472 - Arrangement of Passenger Transportation (6) The City Council may give priority consideration to projects in which the owner by deed restriction reserves not less than twenty-five percent (25$) nor more than seventy-five percent (75$) of the property's residential -3- units for lease only to Low Income Tenants. "Low Income Tenants" shall mean those tenants whose household income is less than or equal to the Qualifying Income. "Qualifying Incomes" means: (a) for a four person household, the greater of 80$ of the median income most recently published by the United States Government for a four person household of the Project's Primary Metropolitan Statistical Area ("PMSA"), or 80$ of the 1994 PMSA median income for a four person household ($45,000.00) adjusted to reflect annual changes in the Consumer Price Index; (b) for households having less than four persons, an amount equal to the four person household Qualifying Income minus ten percent of that amount for each number of persons by which the household size is less than four; and (c) for a household of greater than four, an amount equal to the Qualifying Income for a four person household plus eight percent of the amount for each number of persons by which the household size is greater than four. (7) The property proposed for exemption must not have previously received a City tax exemption for a historic building or a City tax abatement for a commercial/industrial project or downtown residential project. (8) It is the policy of the City to encourage the use of disadvantaged business enterprises.. If a tax exemption is granted, the City may establish specific goals and objectives for the owner relative to the utilization of disadvantaged business enterprises and Fort Worth based firms and suppliers on the project prospective employment commitments for Fort Worth residents and other specific criteria as may be negotiated. (9) The criteria outlined above will be used to determine whatever or not it is in the best interests of the City to grant a tax exemption to a particular applicant. Nothing herein shall imply or suggest that the City Council is obligated to grant a tax exemption to any applicant. All qualified applicants shall be considered on a case-by-case basis. A tax exemption is not automatic and will be based on the goals and criteria of the City. -4- D. ~ (1) Application for a City tax exemption for historic property that is to be rehabilitated or restored for use as a multi-family residential facility shall be filed with the Historic Preservation Officer in the Department of Planning and Growth Management of the City of Fort Worth. A copy shall also be filed with the City Manager and shall be accompanied by a nonrefundable application fee of $1000.00. Each application shall be signed and sworn to by the owner of the property and shall: (a) State the legal description and the address of the property proposed for a tax exemption; (b) Provide proof that the applicant has title to the property proposed for exemption; (c) Include an affidavit by the owner describing the historical significance of the structure and its compliance with the requirements of this Section; (d) Provide proof that taxes or other assessments are not delinquent on the property; (e) Include a complete set of plans andjor documentation for the proposed rehabilitation; (f) Include a statement of projected costs for the rehabilitation or restoration including the percentage of such dollars that will be awarded to Fort Worth contractors and subcontractors; (g) Include a projection of the estimated construction time and predicted completion date; (h) Include a detailed statement of the proposed use of the property; (i) Include a detailed estimate of the costs and benefits to the City, employment and fiscal impact in the City, and community impact in the City; (j) Include projected total annual supplier and professional service contracts in terms of dollars and the projected percentages of each such category that will be awarded to Fort -5- Worth based companies during the term of the exemption; (k) Authorize members of the Landmarks Commission and officers of the City to visit and inspect the property in order to certify that the property is historically significant and in substantial need of City tax relief to encourage its preservation; and (1) Provide any additional information to the Landmarks Commission and City Manager which is necessary in determining eligibility or which the owner deems relevant or useful. (2) Application review (a) Upon receipt of the sworn application, the Landmarks Commission shall make an investigation of the property and shall certify the facts to the City Manager within 30 days along with the Commission's documentation and comments regarding whether the application meets the criteria of this Section. (b) Upon receipt of the application and the documentation and comments of the Landmarks Commission, the City Manager shall review the application and forward it to the City Council with the Manager's recommendation as to whether or not it is in the City's best interest to offer a tax exemption to the applicant. If the City Manager recommends that a tax exemption be granted, the Manager shall also recommend the amount and period of time for the exemption, and any specific terms and conditions that should be met by the applicant. (3) Consideration of application After receiving the documentation and comments of the Landmarks Commission and the City Manager's recommendation, the City Council shall determine whether the application meets the criteria specified in this Section and whether it is in the City's best interest to grant a tax exemption to the applicant. (4) Consideration of tax exemption aareement If the City Council determines that an -6- exemption should be granted, the Council shall also approve the terms and conditions of a tax exemption agreement between the City and the property owner which, at a minimum, shall include the following provisions: (a) A general description of the project; (b) the amount of the tax exemption for each year; (c) the duration of the exemption; (d) the type, number, location and timetable of the planned improvements; (e) the proposed use of the property; (f) any specific terms and conditions of the tax exemption which are to be met by the owner; (q) audit and reporting requirements; (h) the owner's commitment to maintain the structure and land in accordance with the "Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings", applicable codes and ordinances of the City of Fort Worth, and the design guidelines for the structure for the duration of the City tax exemption; (i) the owner's commitments concerning the utilization of disadvantaged business enterprises and Fort Worth firms and suppliers, prospective employment for Fort Worth residents, and other specific commitments that have been negotiated; and (j) the owner's commitment to repay to the City all taxes previously exempted with interest if the owner is required to repay the taxes and interest for noncompliance with this Section as provided below. If the City Council determines that a tax exemption should be granted, the Council shall designate the property as a historically significant site entitled to a City tax exemption as provided herein, and the tax exemption agreement shall be signed. Only the historic structure and the land reasonably necessary for access and use thereof shall be granted an exemption. -7- -~ ...r -~---- ~.. (5) A tax exemption may be for a period of up to ten (10) years and shall begin on January 1 of the year following the year in which a certificate of occupancy is issued by the City for the project. A tax exemption may be for any percentage of the city taxes on the structure and land including the increase in value because of the rehabilitation or restoration of the property; provided, however, that no exemption shall be granted that reduces the annual City taxes on the property to less than the amount levied in the year immediately before the effective date of the exemption. If the project is not complete and a certificate of occupancy is not issued within three years after the tax exemption agreement is signed, the City Council has the right to cancel the exemption. The exemption shall apply only to City ad valorem taxes and not to assessments. A property owner who is granted an exemption as provided in this Section must pay assessments on the 100$ valuation of the property with no exemption for purposes of any assessments, including those for public improvement districts. (6) Concurrent Processinct of Certificate of Appropriateness. An application for tax exemption may be processed concurrently with an application for any certificate of appropriateness which may be required under Chapter 7, Article X of the Fort Worth City Code. (7) Verification of Completion. Upon completion of the rehabilitation or restoration of the property, the owner shall submit a sworn statement of completion to the Landmarks Commission acknowledging that the property has been rehabilitated or restored in accordance with the application for tax exemption. Such sworn statement shall be accompanied by written documentation showing that all required inspections of the work have been performed by the Department of Development and, where applicable, that a Certificate of Occupancy has been issued for the site. The Commission, upon receipt of the sworn statement of completion, but no later than 30 days thereafter, shall make an investigation of the property and shall verify that the rehabilitation or restoration of the property has been completed as required by the Commission. If verification of completion is deemed unfavorable, the owner shall be required to complete the rehabilitation or restoration in order to secure the tax -8- exemption provided for herein. If the verification of completion is favorable, the Commission shall notify the Chief Appraiser of the Appraisal District and the City Tax Assessor-Collector in writing of compliance. Thereafter, the Tax Assessor-Collector shall provide the property with the City tax exemption provided herein. The exemption shall commence on January 1 of the year following the year in which a certificate of occupancy is issued by the City for the project. (8) .Inspection financial verification and evaluation. (a) The City reserves the right to review and verify the owner's financial statements prior to granting a tax exemption and to review the financial condition of the project during the term of the exemption. The City also reserves the right for a representative to inspect the project during the term of the exemption and to verify the information provided in the tax exemption agreement. Provisions to this effect shall be incorporated in the agreement. (b) Upon completion of the project, the City Manager may annually (or such other times deemed appropriate by the City) evaluate the project to insure compliance with the tax exemption agreement and report possible violations of the agreement to the City Council. (c) Any individual or entity receiving a tax exemption from the City shall provide information in the manner described in the tax exemption agreement, including but not limited to the following: (i) The number and dollar amounts of all contracts and subcontracts awarded on the project, specifying which companies are Fort Worth entities. (To be provided quarterly.) (ii) The total number of employees of the owner, their total salaries, the number of employees who reside in Fort Worth and their gross salaries. These jobs shall be reported in job classifications appropriate to the employees. (To be provided annually.) (iii)The gross dollars spent on supplier and -9- professional service contracts, broken down to demonstrate the amounts by contract awarded and performed by Fort Worth individuals and entities. (To be provided semi-annually.) (iv) The dollar amount of contracts awarded to Disadvantaged Business Enterprises (DBE). (To be provided annually.) (v) If the dollars or percentages do not equal the original or City Council approved modified projections, the owner receiving the exemption shall state the explanation for the failure to meet the projection, together with a recommended course of rectification. (d) It is the policy of the City that an agreed upon percentage of the employees of owners receiving an exemption shall reside in Fort Worth. At the end of each City fiscal year, the owner shall submit a certified list of employees with their addresses to the City Manger's Office. Zf the percentage is below that agreed upon for the prior year, the exemption may be lowered for the next year on a pro rata basis. A separate calculation may occur yearly. (9) Monitoring system. The status of property that is receiving a tax exemption under this Section will be monitored by the City Manager and the Historic Preservation Officer in conjunction with City Inspectors on an annual basis during the period of the tax exemption. The purpose of such monitoring is to ensure continued compliance with terms of the tax exemption agreement, the "Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings" and the guidelines for the structure and site. Property owners will be notified in writing of any violations noted by the City Manager and the Historic Preservation Officer. If satisfactory corrective measures are not undertaken within the time specified in written notification of violations, the City Manager and/or Landmarks Commission shall initiate procedures to terminate the tax exemption and require payment of the City taxes and interest. D. Recapture (1) If the City Manager or the Landmarks Commission has reason to believe that property which is receiving a tax -10- exemption under this Section has been altered or totally or partially destroyed by the willful act or negligence of its owner or his representative during the period of the tax exemption, or if there is reason to believe that the terms of the tax exemption agreement are not being met, the City Manager shall immediately cause the matter to be scheduled for the earliest possible consideration by the City Council, which shall be no later than 30 days after the alleged alteration or destruction, or failure to comply with the tax exemption agreement, has been noted. If, after giving notice and a hearing to the owner, the City Council determines that the property has been totally or partially destroyed or altered by the willful act or negligence of the owner or his representative, or that the terms of the tax exemption agreement have not been met, the owner shall immediately repay to the City all of the City tax revenues that were not paid because of the exemption plus interest thereon calculated at an annual rate of 7$. (2) Any taxes and interest which are required to be repaid shall constitute a lien against the property. (3) Where property that is receiving a tax exemption under this Section is totally or partly destroyed or altered by other than the wilful act or negligence of the owner or his representative, the owner shall, within 30 days, pursuant to Chapter 7, Article X of the Fort Worth City Code, apply for a Certificate of Appropriateness to authorize demolition or relocation when repair is not feasible, or apply for a Certificate of Appropriateness to authorize reconstruction of the historically significant site in accordance with the "Secretary of the Interior's Standards for Rehabilitation and Guidelines for Rehabilitating Historic Buildings", the construction codes of the City of Fort Worth and the design guidelines for the structure. For good cause shown by the property owner, the Landmarks Commission is authorized to extend the time for filing of the application. The determination of whether reconstruction is feasible or demolition should be allowed shall be made by the Landmarks Commission in accordance with the Certificate of Appropriateness criteria and procedures set forth in Chapter X, Article 7 of the Fort Worth City Code. In cases where a Certificate of Appropriateness is issued for demolition or relocation as provided in this Paragraph because renovation is not feasible, repayment of the tax revenues and interest is not required. (4) Notwithstanding the foregoing paragraphs, if the City Council and the owner mutually determine that the development or use of the property or the contemplated rehabilitation or renovation is no longer appropriate or -11- feasible or that a higher or better use is feasible, the tax exemption agreement may be terminated by a document signed by the owner and the City, the period of the exemption shall expire as of the effective date of the termination, there shall be no recapture of the amounts previously exempted, and neither party shall have any further rights or obligations with respect to the exemption. E. Public Safety Hazards. Nothing contained in this Section authority of the Building Official or the the Code Enforcement Division to take a~ Section 7-416 of the Fort Worth City structures or property which constitute hazard. shall limit the Superintendent of ~tion pursuant to Code concerning a public safety F. Transferability of tax exemt~tion and recording of agreement. (1) Any tax exemption shall vest in the property owner and shall be assignable to each new owner of the property, upon the City Council's reasonable approval based upon the credit worthiness and financial ability of the new owner to assume all of the property owner's obligations under the tax exemption agreement; provided, however, that the assignee must actually assume in writing all of the property owner's obligations under the agreement. (2) A property may receive a tax exemption under this Section only once. (3) A copy of the Landmarks Commission's verification and the tax exemption agreement shall be filed by the property owner in the deed records of the county where the property is located. The terms of the agreement shall run with the land and shall bind the property owner and the property owner's heirs, successors and assigns. Proof of such filing shall be presented by the property owner to the Historic Preservation Officer. SECTION 2. This ordinance shall be cumulative of all provisions of ordinances and of the Code of the City Fort Worth, Texas (1986), as amended, except where the provisions of this ordinance are in direct conflict with the provisions of such ordinances and such -12- Code, in which event conflicting provisions of such ordinances and such Code are hereby repealed. SECTION 3. It is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses and phrases of this ordinance are severable, and, if any phrase, clause, sentence, paragraph or section of this ordinance shall be declared unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs, and sections of this ordinance, since the same would have been enacted by the City Council without the incorporation in this ordinance of any such unconstitutional phrase, clause, sentence, paragraph or section. SECTION 4. The City Secretary of the City of Fort Worth, Texas, is hereby authorized to publish this ordinance in pamphlet form for general distribution among the public, and the operative provisions of this ordinance as so published shall be admissible in evidence in all courts without further proof than the production thereof, as provided in Chapter XXV, Section 3, of the Charter of the City of Fort Worth, Texas. SECTION 5. This ordinance shall be in full force and effect from and after its passage and publication as required by law, and it is so ordained. -13- APPROVED AS TO FORM AND LEGALITY: City Attorney Date : F ~ ~ ~ 1/ ADOPTED : (~~ ~ ~/ / `~ EFFECTIVE: `~'~~ b r ~7' -14- City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 06/21 /94 G1O697 12TAX 1 of 2 SUBJECT ADOPTION OF ORDINANCE AUTHORIZING AD VALOREM TAX EXEMPTIONS ON CERTAIN HISTORIC PROPERTY RECOMMENDATION It is recommended that the City Council adopt the attached ordinance that would authorize the City Council to grant an ad valorem tax exemption on certain historic property DISCUSSION A developer has plans to rehabilitate or restore the Blackstone Hotel and Electric Building for multi-family residential uses The developer has requested that the City Council adopt an ordinance which would permit the exem-ption of ad valorem taxes on the structures and land due to their historic character State law permits such an exemption under certain conditions City Council was briefed concerning this proposal at the Pre-council session on June 14, 1994 The attached ordinance would authorize the City Council to grant an ad valorem tax exemption on certain historic property which meets the following criteria The property must be in Improvement District No 1 or Improvement District No 3, must be in a Historic and Cultural Overlay District and must have appropriate zoning 2 The property must be in need of rehabilitation or restoration and the owner must perform the work at a cost of at least 50% of the TAD appraised value 3 The City Council must find that the property is historic property in need of tax relief to preserve it under Section 1 1 24 of the Texas Property Tax Code 4 At least two-thirds of the total leasable square footage of the property must be for residential use (excluding parking facilities) 5 The street level floor of the property may be used for certain retail and commercial purposes 6 The City Council may give priority to projects where the owner by deed restriction reserves not less than 25% nor more than 75% of the property for "Low Income Tenants" 7 The property must not have previously received a City historic tax exemption or a City Tax abatement 8 The property owner must provide economic justification for the tax exemption by showing that the development is notfinancially feasible without the exemption a s~ Printed on recycled paper City of Fort Worth, Texas Mayor and Council Communication DATE REFERENCE NUMBER LOG NAME PAGE 06/21 /94 G10697 12TAX 2 of 2 susJECT ADOPTION OF ORDINANCE AUTHORIZING AD VALOREM TAX EXEMPTIONS ON CERTAIN HISTORIC PROPERTY 9 The owner must submit a plan to comply with the City's DBE poilcy with respect to the project The owner must also submit pertinent information. concerning the use of Fort Worth firms and suppliers and any prospective employment information, if applicable, as part of the application for tax exemption The City Council may require that other specific commitments be negotiated concerning the owner's commitments 10 The owner must enter into a tax exemption agreement with the City which will specifically outline the requirements, conditions and audit requirements which are applicable to the exemption 1 1 The City Council reserves the right to grant exemptions on a case-by-case basis for specific projects Tax exemptions, will in no way- be automatic and the Council will not be obligated to grant them 12 The granting of a tax exemption by the City Council will not exempt the property from other levies such as Improvement District assessments Adoption of the attached ordinance authorizes the City Council to grant exemptions but does not exempt any property Before an exemption is granted, the Council will be required to review a tax exemption application for the specific and to approve a tax exemption agreement for the specific project If Council adopts the attached ordinance, it is anticipated that tax exemption applications and agreements for the Blackstone Hotel and Electric Building will be scheduled for Council consideration at the June 28, 1994 meeting FISCAL INFORMATION/CERTIFICATION The Director of Fiscal Services certifies that adoption of the attached ordinance does not require the expenditure of any City funds, however, when the City Council grants tax exemptions it will cause a corresponding reduction in City tax revenues CB.I Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY Office by' (to) APP ROVED Boh Terrell 6116 Originating Department Head: r ~' 1 1 CDUN~iL i~ +ILVL~ Wade Adkins 7623 (from) JU~ 2g 1994 For Additional ]nformation ~~~ J Contact CL(1~~~fJ f Nte ( w Wade Adkins 7623 ~ ~ ry o Of gppt Wostlt, ~°exaa a~~~ ~-~aEilail~~ ~'~(3~ a~~ Printed on recycled paper