HomeMy WebLinkAbout1344 11-10-1998ORDINANCE NO. 1344
AN ORDINANCE ADOPTING GUIDELINES AND CRITERIA
FOR GRANTING TAX ABATEMENT IN REINVESTMENT
ZONES CREATED IN THE CITY OF EULESS
WHEREAS, the future economic viability of the City of Euless depends
on the City's ability to attract new investment through the location of new industry
and the expansion and modernization of existing businesses; and
WHEREAS, the creation and retention of job opportunities that result
from new economic development is the highest civic priority; and
WHEREAS, the City of Euless must become and remain competitive
with other localities across the nation in the expansion of their existing industrial
base and the attraction of new commercial and industrial investment; and
WHEREAS, any tax incentives offered by the City of Euless should be
limited to those companies that create new wealth within the City; and
WHEREAS, no tax incentive offered by the City of Euless should
adversely affect the competitive position of existing companies operating in the
City; and
WHEREAS, effective September 1, 1987, Texas law requires counties
and municipalities, which elect to participate in tax abatement programs, to
establish guidelines and criteria governing the designation of reinvestment zones
and tax abatement program prior to granting any future tax abatement; and
NOW, THEREFORE BE IT RESOLVED, that the Euless City Council
does hereby elect to become eligible to participate in tax abatement, and does
further hereby adopt the attached "Guidelines and Criteria" for granting tax
abatement in reinvestment zones created within the City of Euless, Texas.
Section 1
DEFINITIONS
(a) "Abatement" means the full or partial exemption from ad valorem taxes of
certain improvements to real property in a reinvestment zone designated for
economic development purposes.
(b) "Agreement" means a contractual agreement between a property owner
and /or leasee and an eligible jurisdiction for the purposes of tax abatement.
(c) 'Base Year Value" means the assessed value of eligible property on January 1
preceding the execution of the agreement plus the agreed upon value of
eligible property improvements made after January 1 but before the execution
of the agreement.
(d) 'Deferred Maintenance" means improvements necessary for continued
operations which do not improve productivity or alter the process technology.
(e) "Economic Life" means the number of years a property improvement is
expected to be in service in a facility.
(f) "Eligible Jurisdiction" means the City of Euless, Tarrant County, or other
special tax districts that levy ad valorem taxes upon and provide services to
property located within a proposed or existing reinvestment zone.
(g) "Expansion" means the addition of buildings, structures, fixed machinery or
equipment for purposes of increasing production capacity.
(h) "Facility" means property improvements completed or in the process of
construction which together comprise an integral whole.
(i) "Manufacturing Facility" means building, structures, fixed machinery or
equipment, the primary purpose of which is or will be the manufacture of
tangible goods or materials, or the processing of such goods or materials by
physical or chemical change.
(j) "Modernization" means the upgrading of existing facilities, which increase
the productive input or output, updates the technology, or substantially lowers
the unit cost of the operation. Modernization may result from the
construction, alteration, or installation of buildings, structures, fixed
machinery or equipment. It shall not be for the purposes of reconditioning,
refurbishing, or repairing.
(k) "New Facility" means a property previously undeveloped, which is placed in
service by means other than, or in conjunction with, expansion or
modernization.
(1) "Other Basic Industry" means buildings or structures, including fixed
machinery and equipment not elsewhere described, used, or to be used, for
the production of products or services.
(m) "Regional Distribution Center Facility" means buildings and structures,
including fixed machinery and equipment, used, or to be used, primarily to
receive, store, service, or distribute goods or materials owned by the facility,
from which a majority of revenues generated by activity at the facility are
derived from outside Tarrant County.
(n) "Regional Entertainment/Tourism Facility" means buildings and structures,
including fixed machinery and equipment, used or to be used to provide
entertainment and/or tourism related services, from which a majority of
revenues generated by activity at the facility are derived from outside Tarrant
County.
(o) "Regional Retail Facility" means buildings and structures, including fixed
machinery and equipment, used, or to be used, to provide retail services from
which a majority of revenues generated by activity at the facility are derived
from outside Euless.
(p) "Regional Service Facility" means buildings and structures, including fixed
machinery and equipment, used, or to be used, to provide a service, from
which a majority of revenues generated by activity at the facility are derived
from outside Tarrant County.
(q) "Reinvestment Zone - Municipality Designated" means any area which lies
within the taxing jurisdiction of the City of Euless and has been designated a
reinvestment zone for tax abatement purposes. It is the intent of the Euless
City Council to provide tax abatement within municipality designated
reinvestment zones as long as the municipality granted tax abatement is in
concert with the tax abatement guidelines contained herein.
(r) "Research Facility" means buildings and structures, including fixed
machinery and equipment, used, or to be used, primarily for research and
experimentation to improve or develop new tangible goods or materials, or to
improve or develop the production processes thereto.
Section 2
ABATEMENT AUTHORIZED
(a) Authorized Facility. A facility may be eligible for abatement if it is a:
- Manufacturing Facility,
- Research Facility,
- Regional Distribution Center Facility,
- Regional Service Facility,
- Regional Entertainment/Tourism Facility,
- Regional Retail Facility, or
- Other Basic Industry
(b) Authorized Date. A facility shall be eligible for tax abatement if it has applied for
such abatement prior to the commencement of construction, provided that such
facility meets the criteria granting tax abatement in reinvestment zones created in the
City of Euless pursuant to the guidelines and criteria adopted by the City Council.
(c) Creation of New Value. Abatement may only be granted for the additional value of
eligible property improvements made subsequent to and listed in an abatement
agreement between the City of Euless and the property owner and/or lessee, subject
to such limitations as the City Council may require.
(d) New and Existing Facilities. Abatement may be granted to new facilities and
improvements to existing facilities for purposes of modernization and expansion.
(e) Eligible Property. Abatement may be extended to the value of buildings, structures;
fixed machinery and equipment, site improvements, plus office spaces and related
fixed improvements necessary to the operation and administration of the facility.
(f) Ineligible Property. The following classes of property shall be fully taxable and
ineligible for abatement:
- Land,
- Inventories,
- Supplies,
- Furnishings or other forms of movable personal property,
- Vehicles, vessels, or aircraft,
- Deferred maintenance investments,
- Residential property,
- Property that is associated with any activity that is illegal under federal, state
or local law,
- Property owned or used by the State of Texas or its political subdivisions,
- Property owned by any organization which is owned, operated or directed by
a political subdivision of the State of Texas
(g) Leased Facilities. If an authorized facility eligible for tax abatement is leased, the
agreement shall be executed with both the lessor and the lessee.
(h) Value and Term of Abatement. Abatement shall be granted effective with the
January I valuation date immediately following the date of execution of the
agreement. The value and term of abatement on new eligible property shall be
determined as follows:
The value of the abatement may not exceed that indicated in Table A, based on the
investment by the business in eligible property described in Section 2(e) above. The
City Council, or its designated representative, shall work with the applicant, prior to
the execution of an abatement agreement, to determine the exact schedule for the
abatement.
Under no circumstances shall the value of the abatement exceed 100 percent of the
value of the eligible property in a single year, and the duration of an abatement
agreement shall not exceed 10 years or one -half (1/2) the economic life of the eligible
property, whichever is less.
(i) Economic Qualification. In order to be eligible to receive tax abatement, the
applicant must meet the following qualifications:
(1) For a new facility (with the exception of a regional retail facility) - be
reasonably expected to invest not less than one million dollars ($1,000,000) in
the facility (including both eligible and ineligible property) within three years
from the commencement of construction, and be expected to create
employment for not less than 10 persons associated with the production of
goods and services at the authorized facility on a full -time, permanent basis in
the City of Euless.
(2) For an expanded or modernized facility (excluding regional retail facilities) -
be reasonably expected to invest not less than one million dollars
($1,000,000) in the facility (including both eligible and ineligible property)
within three years from the commencement of construction, and be expected
to create or retain employment for not less than 10 persons associated with
the production of goods and services at the authorized facility on a full -time,
permanent basis in the City of Euless.
(3) For regional retail facilities - be reasonably expected to invest not less than
two million dollars ($2,000,000) in the facility (including both eligible and
ineligible property) within three years from the commencement of
construction, and be expected to create employment for not less than 10
persons associated with the production of goods and services at the authorized
facility on a full -time, permanent basis in the City of Euless.
(4) Two or more part -time, permanent employees totaling an average of not less
than 40 hours per week may be considered as one full -time, permanent
employee.
(5) Companies seeking to qualify for tax abatement on the basis of job retention
shall document that without the creation of reinvestment zone and /or tax
abatement, the company will either reduce or cease operations.
(6) The new construction, expansion or modernization shall not primarily have
the effect of transferring the facility from one part of the City of Euless to
another.
(7) The City may consider an application from the owner or lessee of real
property requesting abatement of real and/or personal property owned or
leased by a certified air carrier make specific real property improvements or
lease real property improvements for a term of 10 years or more.
(8) For an eligible development project to be considered for tax abatement, the
"Application for Tax Abatement" form must be completed and submitted to
the City Manager's Office.
(9) If requested, the applicant must provide evidence that there are no delinquent
property taxes due on the property.
(10) The tax abatement agreement shall limit the uses of property consistent with
the general purpose of encouraging development or redevelopment of the
zone during the period that property tax abatements are in effect.
(11) The owners of all projects receiving tax abatements shall properly maintain
the property to assure the long -term economic viability of the project.
(j) Taxability. From the execution of the abatement agreement to the end of the
agreement period, taxes shall be payable as follows:
(1) The value of ineligible property, as provided in Section 2(f) above, shall be
fiilly taxable,
(2) The base year value of existing eligible property, as determined each year,
shall be fully taxable, and
(3) The additional value of new eligible property shall be taxable in the manner
described in Section 2(h), above.
(k) Conflict of Interest. Property that is in a reinvestment zone and that is owned or
leased by a member of the governing body or the Planning and Zoning Commission
of the City of Euless shall be excluded from property tax abatement.
Section 3
APPLICATION
(a) Any present or potential owner of taxable property in Euless may request the creation
of a reinvestment zone and tax abatement by filing a written request with the Mayor
or his/her designated representative.
(b) The application (Exhibit "A ") shall consist of a completed application form
accompanied by the following:
(1) A general written description of the proposed use and the general nature and
extent of the modernization, expansion, or new improvements to be
undertaken
(2) A descriptive list of the improvements that will be a part of the facility
(3) A map and property description
(4) A time schedule for undertaking and completing the planned improvements
(5) Such financial and other information as deemed appropriate by the City
Council for purposes of evaluating the application
(c) Upon receipt of a completed application, the Mayor shall notify, in writing, the
presiding officer of the governing body of each affected jurisdiction. Before acting
upon the application, the City Council shall, through public hearing, afford the
applicant, designated representatives of any affected taxing jurisdiction, and the
general public opportunity to show cause why the abatement should or should not be
granted. Notice of the public hearing shall be clearly identified on a City Council
agenda to be posted in accordance with the Texas Property Redevelopment and Tax
Abatement Act and the Texas Open Meetings Act.
(d) After receipt of an application for creation of a reinvestment zone (if not in
reinvestment zone) and application for tax abatement, the City Council, or its
designee, shall prepare a feasibility study setting out the impact of the proposed
reinvestment zone and tax abatement. The feasibility study shall include, but not be
limited to, an estimate of the economic effect of the creation of the zone and the
abatement of taxes and the cost/benefit to the City and other affected jurisdictions.
(e) A request for a reinvestment zone for the purpose of tax abatement shall not be
granted if the City Council finds that the request for abatement was filed after the
commencement of construction, alternation, or installation of improvements related
to a proposed expansion, modernization or new facility authorized as eligible under
these guidelines.
(f) Variance. Request for variance from provisions of these guidelines may be made in
written form to the Mayor, or his/her designated representative, provided, however,
that the term and value of abatement described in Section 2(h) above, may not be
increased. Such request shall include a complete description of the circumstances
explaining why the applicant should be granted a variance. Approval of a request for
variance requires a three - fourths (3/4) vote of the governing body.
Section 4
PUBLIC HEARING
(a) Should an affected jurisdiction be able to show cause in the public hearing why the
grant of abatement will have a substantial adverse effect on its bonds, tax revenue,
service capacity or the provision of services, that showing shall be reason for the City
to deny any designation of the reinvestment zone, the granting of abatement, or both.
(b) Neither a reinvestment zone nor an abatement agreement shall be authorized if it is
determined that:
(1) There would be a substantial adverse effect on the provision of government
services or tax base,
(2) The applicant has insufficient financial capacity,
(3) Planned or potential use of the property would constitute a hazard to public
safety, health or morals, or
(4) Planned or potential use of the property would violate other codes or laws.
Section .5
AGREEMENT
(a) After approval, the City shall formally execute an agreement with the owner of the
facility and/or lessee, which shall include the following:
(1) Estimated value to be abated and the base year value,
(2) Percent of value to be abated each year as provided for in Section 2(h), above,
(3) The commencement and termination dates of the abatement,
(4) The proposed use of the facility, nature of the construction, time schedule for
construction and commencement of operations, map, property description,
and improvements as listed in the application under Section 3(b), above,
(5) Contractual obligations in the event of default, violation of terms and
conditions, delinquent taxes, recapture, administration and assignment as
provided for in Sections 2(a), 2(g), 2(h), 6, 7 and 8, or other provisions that
may be required for uniformity or by state law, and
(6) Amount of investment in, and average number of jobs associated with, the
facility during the abatement period.
(b) Such agreement shall normally be executed within 60 days after applicant has
forwarded all necessary information and documentation for evaluation of the
application to the City.
Section 6
DENIAL OF ABATEMENT
(a) All eligible applications for tax abatement shall be considered on a case -by -case basis
and, except for the instances set forth in Section 6(b) herein, the decision to approve
or deny tax abatement shall be made at the discretion of the City Council in
accordance with the City of Euless Policy Statement for Tax Abatement.
(b) Provided, however, neither a reinvestment zone nor abatement agreement may be
authorized if it is determined that:
(1) There would be an adverse impact on the provision of government service or
tax base,
(2) The applicant has insufficient financial capacity to complete the project,
(3) Planned or potential use of the property would constitute a hazard to public
safety or health; or
(4) Violation of other codes or laws exists.
(c) Nothing herein shall imply or suggest that the City of Euless is under any obligation
or duty to provide tax abatement to any eligible applicant, or that any applicant has an
entitlement to tax abatement, except as may be determined on a case -by -case basis by
the City Council_
Section 7
RECAPTURE
(a) In the event that the facility is completed and begins producing goods and/or services,
but subsequently discontinues such production for any reason excepting fire,
explosion, or other casualty or accident or natural disaster for a period of one year
during the abatement period, then the agreement shall terminate and so shall the
abatement of taxes for all prior years, and such recaptured taxes shall be paid to the
City within sixty (60) days from the date of termination.
(b) Should the City determine that the company or individual is in default according to
the terms and conditions of the abatement agreement, the City shall notify the
company or individual, in writing, at the address stated in the agreement, and if such
non - compliance is not resolved within sixty (60) days from the date of such notice,
then the agreement shall be terminated.
(c) In the event that the company or individual:
(1) Allows its ad valorem taxes owed the City or other affected jurisdiction to
become delinquent and fails to timely and properly follow the legal
procedures for their protest and /or contest, or
(2) Violates any of the terms and conditions of the abatement agreement and fails
to resolve such violations within sixty (60) days from the date of written
notice of such violations,
the agreement then may be terminated and all taxes previously abated by virtue of the
agreement will be recaptured and paid within sixty (60) days of the termination.
Section 8
ADMINISTRATION
(a) The Chief Appraiser of the County shall, as a normal consequence of his duties,
annually determine an assessment of the real and personal property comprising the
reinvestment zone. Each year, the company or individual receiving abatement shall
furnish the assessor with such information as may be necessary for the abatement,
including the number of new or retained employees associated with the facility. Once
the value has been established, the Chief Appraiser shall notify the affected
jurisdictions, which levy taxes, of the amount of the assessment.
(b) The agreement shall stipulate that employees and/or designated representatives of the
City will have access to the property during the term of the abatement agreement to
inspect the facility to determine if the company or individual is in compliance with
the terms and conditions of the abatement agreement. All inspections will be made
only after notification of not less than twenty -four (24) hours and will only be
conducted in such manner as not to unreasonably interfere with the construction
and/or operation of the facility. All inspections will be made with one or more
representatives of the company or individuals present and in accordance with the
company's safety standards.
(c) Upon completion of construction, the City shall annually evaluate each facility
receiving abatement to ensure compliance with the agreement and report possible
violations to the City Council and City Attorney.
(d) All proprietary information required by the City for purposes of monitoring
compliance by a company with the terms and conditions of an abatement agreement
should be considered confidential.
Section 9
ASSIGNMENT
(a) Abatement may be transferred and assigned by the holder to a new owner or lessee of
the same facility upon the approval of the City Council subject to the financial
capacity of the assignee and provided that all conditions and obligations in the
abatement agreement are guaranteed by the execution of a new contractual agreement
with the City of Euless.
(b) The expiration date of the new contractual agreement shall not exceed the termination
date of the abatement agreement with the original owner and/or lessee.
(c) No assignment or transfer shall be approved if the parties to the existing agreement,
the new owner or new lessee are liable to the City of Euless or any affected taxing
jurisdiction for outstanding taxes or other obligations.
Section 10
SEVERABILITY AND LIMITATION
In the event that any section, clause, sentence, paragraph or any part of these Guidelines and
Criteria shall, for any reason, be adjudged by any court of competent jurisdiction to be
invalid such invalidity shall not affect, impair, or invalidate the remainder of these Guidelines
and Criteria.
Section 1I
SUNSET PROVISION
(a) The "Guidelines and Criteria" are effective upon the date of their adoption and will
remain in force for two years, at which time all reinvestment zones (reinvestment
zone 5 years) and tax abatement contracts created pursuant to its provisions will be
reviewed by the City Council of Euless to determine whether the goals of the
abatement program have been achieved. Based upon that review, the "Guidelines and
Criteria" may be modified, renewed or eliminated.
(b) This policy is mutually exclusive of existing Industrial District Contracts and owners
of real property in areas deserving of special attention as agreed by the affected
jurisdictions.
(c) Prior to the date of review, as defined above, the "Guidelines and Criteria" may be
modified by a three - fourths (314) vote of the City Council, as provided for in the
Texas Property Redevelopment and Tax Abatement Act.
Section 12
TABLE A
TERM AND VALUE OF ABATEMENT SCHEDULE & POLICY
It more than $5,UUU,000 in newly created value is generated per year the council may
authorize an additional property tax abatement percentage to any of the amounts listed above.
ADOPTED, at a regular meeting of the Euless City Council on the 10th day of
November 1998, by a vote of 6 ayes, 0 nays, and 0 abstentions.
APPROVED:
• Mayor
ATTEST:
usan Crim CM , City Secretary
Exhibit "A"
The City of Euless
Tax Abatement Application
About the application...
The Tax Abatement Application provides the City with specific information on the
project. The information requested in the application is designed to address the
criteria developed within the City of Euless Tax Abatement Policy. The information
serves as the basis for fiscal analysis and overall project evaluation. This evaluation
is provided to Council Members and serves as a source document during City
Council deliberations.
The application and the agreement...
Specific information from the application (like value of new investment) is
incorporated into the Abatement Agreement. Since the agreement is a binding
contract it is important that each question on the application be answered in full, and
as realistically as possible. Put simply, the application is part of the process from
start to finish so you will want to make sure you are comfortable with the contents.
When is the application final...?
The answer to this question is very simple: When you tell us, "It's Final." It is not
uncommon for a property owner(s) to submit numerous applications as drafts for
information and evaluative purpose only. As conversations continue, the property
owner will submit a finalized version of the application that includes all of the
commitments agreed to during the discussions.
What about confidentiality...?
Section 312.403 of the Texas Tax Code makes confidential information provided to
the City as a part of this application that describes the specific processes or business
activities to be conducted or other property to be located on the property for which
tax abatement is sought. Such information may not be subject to public disclosure
until the tax abatement agreement is executed. The City is subject to disclosing most
records and documents upon request under the Public Information Act. Accordingly,
please clearly indicate and mark any proprietary information, trade secrets or other
matters you consider confidential information in your application.
Ordinance No. 1344, Exhibit "A"
City of Euless
Tax Abatement Application
City of Euless
City Manager's Office
201 N. Ector Drive
Euless, Texas 76039
(817) 685 -1420
(817) 685 -1416 Fax
Ordinance No. 1344, Exhibit "A ", Page 2
APPLICATION FOR TAX ABATEMENT
This Application should be filed with the City Manager's Office, City of Euless, 201 N. Ector
Drive, Euless, Texas 76039 -3595. For more information please call (817) 685 -1420.
1.) Applicant/Property Owner
Mailing Address:
Telephone Number:
Fax Number:
2.) Applicant's Representative:
Mailing Address:
Telephone Number:
Fax Number:
3.) Property Address:
Property Legal Address:
• Attach a copy of Deed (or Surveyor's notes) detailing property notes
• Metes and Bounds Description
• Attach map of project including all roadways, land use and zoning within 500 feet
of site
4.) Brief Description of project:
Ordinance No. 1344, Exhibit "A ", Page 3
5.) Currant Value: Attach a copy of latest property tax statement from 'Tarrant County
Appraisal District (include both Real and Personal Property).
6.) Increased Value - Estimate 'Total Cost of Project:
a.) Structures $ c.) Site Development $
b.) Personal Property $ d.) Other Improvements
Briefly describe these investments (i.e. building square footage, types of Personal
Property, type of site development planned for this location, and other improvements):
7.) For each taxing entity indicate the amount of 'Tax Abatement requested.
City % for years
School District % for years
County % for years
8.) Give a brief description of the activities to be performed at this location; including a
description of products to be produced and/or services to be provided:
Ordinance No. 1344, Exhibit "A ", Page 4
9.) Project Construction Phase:
A. Estimate percentage of project development and construction dollars to be spent
with area based contractors and sub - contractors %
B. Construction Employment Estimates:
I. Start (Month/Year):
2. Completion Date (MontliNear):
3. Number of Construction Jobs:
4. Estimate Total Construction Payroll:
C. Describe any Off -Site Infrastructure Requirements:
Water:
Sanitary Sewer:
Streets:
Drainage:
Phone:
Gas:
EIectricity:
Other:
Ordinance No. 1344, Exhibit "A ", Page 5
10.) Types of jobs created (list the job titles and number of positions in each category that
will be employed at the facility; provide average wage for each category.):
11.) Estimate annual utility usage for project:
Water $
Sewer $
Gas $
Electricity $
12.) Describe any other direct benefits to the City of Euless as a result of this project (e.g.
sales tax revenue, related project elements.)
13.) Current Zoning:
Zoning required for proposed project:
Anticipated Variances:
Is property platted: Yes No
Will Replatting be necessary Yes No
14.) Financial Information: Attach a copy of the latest audited financial statement or, in
the case of a new project, a business plan.
This Tax Abatement Application is submitted with the acknowledgement
that additional certified financial information maybe required.
Authorized Signature Title Date
Ordinance No. 1344, Exhibit "A ", Page 6
APPLICATION FOR CREATION OF A
REINVESTMENT ZONE
This Application should be filed with the City Manager's Office, City of Euless, 201 N. Ector
Drive, Euless, Texas 76039 -3595. For more information please call (817) 685 -1420.
1.) Applicant/Property Owner
Mailing Address:
Telephone Number:
Fax Number:
2.) Applicant's Representative:
Mailing Address:
Telephone Number:
Fax Number:
3.) Property Address:
Property Legal Address:
• Attach a copy of Deed (or Surveyor's notes) detailing property notes
• Metes and Bounds Description
• Attach map of project including all roadways, land use and zoning within 500 feet
of site
4.) Brief Description of project location:
Ordinance No. 1344, Exhibit "A ", Page 7