HomeMy WebLinkAboutRES 1995-012 �.�
RESOLUTION NO. 95-t z
�� A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS RENEWING THE DEVELOPMENT
INCENTIVE POLICY AND CRITERIA FOR GRANTING TAX
ABATEMENTS AND DECLARING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine is committed to the promotion of high quality
development in all parts of the City and to an ongoing improvement in the quality of
life for its citizens; and
WHEREAS, these objectives are generally served by the enhancement and
expansion of the local economy; and
WHEREAS, tax abatement is one of the principal means by which the public
sector and the private sector can forge a partnership to promote real economic growth
within a community; and
WHEREAS, any development incentives and tax abatements offered must be
'"�'�" strictly limited in application to those new and existing industries that bring new
wealth to the community; and
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WHEREAS, the Property Redevelopment and Tax Abatement Act (the Act),
Chapter 312 of the Texas Tax Code, authorizes taxing jurisdictions to provide property
tax abatement for limited periods of time as an inducement for the development or
redevelopment of a property; and
WHEREAS, effective September 1, 1987, the Act requires eligible taxing
jurisdictions to establish guidelines and criteria to determine eligibility for tax
abatement agreements prior to granting any future tax abatement, said guidelines and
criteria to be unchanged for a two year period unless amended by three-fourths vote.
� NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF GRAPEVINE,
TEXAS that these guidelines and criteria for tax abatement be renewed:
Section 1 . General Purpose and Objectives
A The City of Grapevine is committed to the promotion of high quality development in
all parts of the city and to an ongoing improvement in the quality of life for its
citizens. Insofar as these objectives are generally served by the enhancement and
,��, expansion of the local economy, the City of Grapevine will, on a case-by-case basis,
give consideration to providing tax abatement as a stimulation for economic
development in Grapevine. It is the policy of the City of Grapevine that said
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consideration will be provided in accordance with the guidelines and criteria outlined
in this document. Nothing herein shall imply or suggest that the City of Grapevine is
under any obligation to provide tax abatement to any applicant. All applicants shall
„�� be considered on a case-by-case basis, and the decision to approve or deny tax
abatement shall be at the discretion of the City Council. Tax abatements are granted
to the owners of the real property. Special terms and conditions may be set in the
agreement governing each specific tax abatement.
Section 2. Definitions
A. "Abatement" means the partial exemption for ad valorem taxes of
eligible properties in a reinvestment zone designated as such for
economic development purposes.
B. "Agreement" means a contractual agreement between a property owner
and a taxing jurisdiction for the purpose of tax abatement.
C. "Base Year Value" means the assessed value of the applicant's property
located in a designated reinvestment zone on January 1 of the year of
the execution of the agreement (plus the agreed upon value of property
improvements made after January 1 but before execution of the
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agreement.)
D. "Economic Life" means the number of years a property improvement is
� expected to be in service in a facility. Provided, however, in no event
shall the number of years exceed the depreciation allowance specified in
the Federal Internal Revenue Service Code.
E. "Expansion" means the addition of buildings, structures, fixed
machinery, or equipment for the purpose of increasing production
capacity.
F. "Facility" means property improvements completed or in the process of
construction which together comprise an integral whole.
G. "Modernization" means the replacement and upgrading of existing
facilities which increase the productive input or output, updates the
technology, or substantially lowers the unit cost of operation, and
extends the economic life of the facility. Modernization may result from
the construction, alteration, or installation of buildings, structures, fixed
machinery, or equipment. It shall not be for the purpose of
reconditioning, refurbishing, repairing, or completion of deferred
�; .� maintenance.
H. "New facility" means a property previously undeveloped which is placed
��, into service by means other than expansion or modernization.
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i. "Reinvestment Zone" is an area designated as such for the purpose of
tax abatement as authorized by the Act.
„� Section 3. Abatement Authorized
A. Authorized Facilities: Tax abatement may be granted for new facilities
and for expansion or modernization of existing facilities. The economic
life of a facility or improvements must exceed the life of the abatement
agreement.
B. Eligible Propertv: Tax abatement may be applied to improvements to real
property and personal property to the extent allowed by state law.
C. Minimum Capital Investment: In order to be eligible for tax abatement,
the projected increase in applicant's taxable real property value in a
designated reinvestment zone must exceed $5,000,000 (five million
dollars) for new construction.
D. Value of Abatement: Authorized facilities may be granted abatement on
all or a portion of the increased taxable value of eligible property over the
base year value for a period up to 10 (ten) years.
'�'�" Once a determination has been made that a tax abatement should be offered,
the value and term of the abatement will be determined by referencing the
� following table:
Value of Structure Years of Percent of
Added Abatement Abatement
$125,000,000 10 25%
1 10,000,000 09 25%
95,000,000 08 25%
80,000,000 07 25%
65,000,000 06 25%
50,000,000 05 25%
35,000,000 03 25%
20,000,000 03 20%
5,000,000 03 20%
E. Criteria:
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1 . Any request for tax abatement shall be reviewed by the Grapevine
City Council, who will determine whether or not it is in the best
�„ interest of the City of Grapevine to recommend that a tax
abatement be offered to that particular applicant.
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2. Their recommendation shall be based upon a subjective evaluation
of the following criteria, which each applicant will be requested to
address in narrative format:
� a. The amount of real and personal property value added to
the tax rolls.
b. The impact on existing businesses and/or office facilities.
c. The impact on infrastructure construction requirements.
d. Number and type of jobs brought to Grapevine.
e. Environmental impact, if any, created by the project.
f. Compatibility with the City's Master Plan.
g. Sales tax revenue, if any.
Section 4. Application and Procedural Guidelines
A. Preliminarv Application Steps: Any person, organization or corporation
'""`� meeting the abatement guidelines may request tax abatement by filing
a written application with the City Manager of the City of Grapevine in
� conformance with the following procedural guidelines:
1 . Applicant shall complete the "Application for Tax Abatement"
(attached hereto and made a part hereof as Exhibit "A"). The
application shall require such financial and other information as
may be deemed appropriate for evaluating the financial capacity
and other factors of the applicant.
2. Applicant shall prepare a descriptive list of the improvements for
which abatement is requested. This list shall include the kind,
number and location of all proposed improvements of the
property.
3. Applicant shall prepare a plat or map showing the precise location
of the property, location of proposed improvements, all roadways
within 500' (five hundred feet) of the site, and all existing land
�,,,_„� uses and zoning within 500' (five hundred feet) of the site.
4. Applicant shall address all criteria outlined in Section 4, in letter
,,,�,n,,, fo rm at.
RES. NO. 95-12 4
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5. Appiicant shall prepare a time schedule for undertaking and
completing the planned improvements.
„�, 6. Applicant shall provide a tax certificate verifying that no taxes are
past due on applicant's property located within the proposed
reinvestment zone.
B. Notification to Governmental Bodies: Upon receipt of a completed
application, the City Manager shall forward copies of the application to
the governing bodies having taxing authority over the property covered
by the application.
C. Application Review Steps: Upon receipt of a completed application, the
City Manager shall distribute copies of the application to the appropriate
City departments for internal review and comments. The City Manager
may request additional information as needed to determine applicant's
eligibility for tax abatement according to Section III.
Section 5. Consideration of the Application
A. The City Council will consider the application at a regular or called
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meeting(s). Additional information may be requested as needed.
B. The City Council may consider a resolution calling a public hearing to
� consider establishment of a tax reinvestment zone.
C. The City Council may hold the public hearing and determine whether the
project is "feasible and practical and would be of benefit for the land to
be included in the zone and municipality."
D. The City Council may consider adoption of an ordinance designating the
area described in the legal description of the proposed project as a
commercial/industrial tax abatement zone.
E. The City Council may consider adoption of a resolution approving the
terms and conditions of a contract between the City and the applicant
governing the provision of the tax abatement.
Section 6. Agreement
A. Contents of Tax Abatement: The tax abatement agreement with the
�., � owners of the facility shall include:
1 . The estimated value to be subject to abatement.
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RES. N0. 95-12 5
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2. The percentage of value to be abated each year as provided in
Section 3.
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3. The commencement date and termination date of the agreement.
4. The proposed use of the facility, nature of construction, time
schedule, map property description, and improvements list, as
provided in the application.
5. The contractual obligations in the event of default, delinquent
taxes, or recapture, as provided in these guidelines or other
provisions that may be required for uniformity or by state law.
6. The amount of capital investment and minimum number of jobs
created by the project.
7. Reporting requirements, including periodic capital investment
reports during construction and periodic manpower reports from
applicant's personnel officer confirming the number of additional
employees added and retained as a result of the capital
investment.
�" " 8. Applicant shall warrant that the information provided to the taxing
jurisdictions are "true and correct" and that any materially false or
� misleading information that is provided on the application or in any
periodic report to the taxing jurisdictions may be grounds for the
termination of the existing tax abatement and possible liability for
recapture of past taxes normally due.
B. Additional Fees: Any additional fees incurred by governmental bodies
in preparation of tax abatement agreements will be paid by the
applicant upon execution of the agreement.
Section 7. Taxabilitv
From the execution of the abatement agreement to the end of the agreement period,
taxes shall be payable as follows:
A. The value of ineligible property shall be fully taxed.
B. The base year value of existing eligible property shall be fully taxable.
�, . C. The additional value of new and existing eligible property shall be taxed
in the manner and for the period provided for in the abatement
agreement; and
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D. The additional value of new eligible property shall be fully taxable at the
� end of the abatement period.
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Section 8. Recapture
Should the terms of the agreement not be satisfied, the tax abatement shall be subject
to cancellation as provided in the tax abatement agreement, and all abated taxes shall
be paid to the City of Grapevine and all other taxing jurisdictions participating in the
tax abatement agreement as provided by law. If a project granted a tax abatement
ceases to operate or is no longer in conformance with this policy statement, the tax
abatement agreement shall not be in effect for the period of time during which the
project is not operating or is not in conformance.
Section 9. Administration
A. Access to Facilitv: The agreement shall stipulate that employees and/or
designated representatives of the taxing jurisdictions will have access to
the facility during the term of the agreement to inspect the facility to
determine if the terms and conditions of the agreement are being met.
All inspections shall be conducted in a manner as to not unreasonably
interfere with the construction and/or operation of the facility; provided
however, the City may conduct "spot" inspections requiring no advance
'""�' notification to applicant. All inspections will be made with one or more
representatives of the company or individual, and in accordance with its
� safety standards.
B. Annual Evaluation: Upon completion of construction, the eligible
jurisdiction individually or in conjunction with other affected jurisdictions,
shall annually evaluate each facility receiving abatement to ensure
compliance with the agreement and report possible violations of the
agreement.
C. Transfer or Assignment: A contract for tax abatement may be
transferred or assigned by the original applicant to a new owner upon
the approval of the City Council of the City of Grapevine.
Section 10. Effective Date
These guidelines and criteria adopted herein shall be effective from the date of
passage and remain effective for 2 (two years) from such date of adoption, unless
otherwise amended or repealed by a 3/4 (three-fourths) vote of the City Council.
� » PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS, on this the 2nd day of MaX , 1995.
RES. NO. 95-12 7
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APPROVED:
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William D. Tate
Mayor
ATTEST:
Linda uff
City Secretary
APPROVED AS TO FORM:
�=�•
� ry �.---''
Assistan ity Attorney
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RES. NO. 95-12 $
Exhibit "A" to Res. 95-12
Page 1 of 1
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"EXHIBIT A"
APPLICATION FOR TAX ABATEMENT
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This application should be filed with the City Manager's office of the City of
Grapevine.
1 . Applicant/Property OwnPr
Mailing Addre�G
TelephonP
2. Applicant's/Representat���P
Mailing Addre�s -_
TelephonP
3. Property Addre��
Property Legal Descriptinn
(Provide attachment if by metes and bounds)
� 4. Description of Project, please include the following:
�''' 1 . The amount of real and personal property value added to the tax
rolls.
2. The impact on existing businesses and/or office facilities?
3. Impact on infrastructure construction cost to the City.
4. Number and type of jobs brought to Grapevine.
5. Environmental impact, if any, created by the project.
6. Compatibility with the City's Master Plan.
7. Estimated annual sales tax, if any.
5. Tax Abatement Requested:
% of eligible property for years.
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