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HomeMy WebLinkAboutResolution No. 93-26· " ORIGINAL CITY OF THE COLONY, TEXAS RESOLUTION A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS AMENDING GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS AS ESTABLISHED BY RESOLUTION 90-11 APPROVED BY THE CITY COUNCIL ON THE 2ND DAY OF APRIL, 1990; BY ADDING A REVERSIONARY CLAUSE WHEREAS, the enhancement of the local economy is in the best interest of the citizens of The Colony, Texas; and WHEREAS, offering certain economic development incentives may encourage prospective businesses and companies to locate in The Colony, Texas, or existing businesses and companies to expand; and WHEREAS, the establishment of specific criteria, guidelines and procedures are necessary to effectively and fairly administer the economic development incentives; and WHEREAS, State Law requires the adoption of criteria and guidelines governing the establishment of tax abatement agreements: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS: Section 1. That all of the above premises are found and determined to be true and correct and are incorporated into the body of this Resolution as if copied in their entirety. Section2. The City of The Colony, Texas, pursuant to the Property Redevelopment and Tax Abatement Act,(Article 1066f, Section 2A(a), Vernon's Texas Civil Statutes, as amended), hereby establishes the Comprehensive Policy Statement for Economic Development Incentives, which is attached hereto as Exhibit "A" and incorporated herein for all purposes. Section 3. The criteria and guidelines established within the Comprehensive Policy Statement for Economic Development Incentives, as it exists or may be amended, shall govern all tax abatement agreements. DULY PASSED AND APPROVED this 4¥~day of/_(~}~/-, 1993. William W. Manning, Mayor ~_ ATFEST: Patti A. Hicks, CMC/AAE, City Secretary APPROVED AS TO FORM: Pete Eckert, City Attorney ORIGINAL EXHIBIT "A" CITY OF THE COLONY POLICY STATEMENT FOR ECONOMIC DEVELOPMENT INCENTIVES I. GENERAL PURPOSE AND OBJECTIVES The City of The Colony 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 The Colony will, on a case-by-case basis, give consideration to providing tax abatement as a stimulation for economic development in The Colony. All applications for tax abatement must be for commercial and/or industrial improvements. Tax abatement applies to both new facilities and structures and for the expansion or modernization of existing facilities and structures. No type of residential developments will be considered for tax abatement. Tax abatement will not be ordinarily considered for projects which would be developed without such incentives unless it can be demonstrated that higher development standards or other development and community goals will be achieved through the use of the abatement. It is the policy of the City of The Colony that said consideration will be provided in accordance with the procedures and criteria outlined in this document. Nothing herein shall imply or suggest that the City of The Colony is under obligation to provide any incentive to any applicant. All applicants shall be considered on a case-by-case basis. II. MINIMUM STANDARDS FOR TAX ABATEMENT A. Project does not have any negative environmental impacts on the community (e.g.; significant pollution or hazardous waste). B. Project stimulates local employment and/or commercial activity which will benefit existing businesses and which will not compete with existing businesses to the extent of being a detriment to the local economy as a whole. C. Project will serve as a catalyst or magnet to attract or retain other high quality industrial/business development. 7 _:'_ III. CRITERIA FOR TAX ABATEMENT The minimum, objective and subjective criteria outlined in this policy will be used to determine whether it is in the best interest of the City to provide tax abatement to a particular applicant. The degree to which the specified project meets the purposes and objectives of the City, the relative impact of the project, and the value of other incentives will all be used to determine the total value and duration of the tax abatement provided to any applicant, subject to the following guidelines: No tax abatement will be granted in an amount which exceeds the estimated costs to the City for support of the project, nor will any abatement be for more than a maximum of 10 years in duration. As a general rule, no tax abatement will exceed 30% for 10 years. IV. OBJECTIVE CRITERIA A. How many jobs will be created by the project? B. What will be the average salary? C. How much annual payroll will be created by the project? D. What is the net tax base valuation (real and personal property) that will be added by the project? E. What is the projected annual sales tax that will be directly generated by the project? V. SUBJECTIVE CRITERIA In addition to the objective criteria for which specific values can be assigned, several additional considerations must be evaluated. The applicant must respond in written narrative format, with backup documentation/figures to those items listed below: A. What types and values of public improvements, if any, will be made by the applicant? B. To what extent will the project compliment and/or compete with existing businesses? Maximum Maximum Value of Years Percent 8 C. Does the project pose any negative environmental, operational, visual/image, style impacts? (i.e.; pollution, noise, traffic congestion, etc.) D. What is the financial and operating stability capacity, corporate image, and outlook of the applicant? How long in business? E. Is the applicant willing to commit to a definite construction/completion schedule for the project and to define exactly what will be built? (i.e.; what will be on the tax roll and when) F. Is the project a relocation/consolidation from elsewhere, or the start-up of a totally new operation? VI. TYPES OF INCENTIVES AVAILABLE It is the policy of the City of The Colony to customize the provisions of economic development incentives on a case-by-case basis. This individualized design of a total incentive package is intended to allow maximum flexibility in addressing the unique concerns of each applicant while enabling the City to better respond to the changing needs of the community. Consideration will be given to providing any type of economic development incentive not prohibited by State or Federal law including but not limited to: tax abatement, tax increment financing, and no-cash =value benefits, as well as participation in infrastructure and waiver of fees. The provision of any incentive will be subject to the procedural and other requirements outlined in this document as well as those mandated by State or Federal law, and by other actions of the City Council of the City of The Colony. VII. VALUE OF INCENTIVE PROVIDED The subjective criteria outlined in Section V will be used by the City Council in determining whether or not it is in the best interests of the City to recommend that tax abatement be offered to a particular applicant. Specific considerations will include the degree to which the individual project furthers the goals and objectives of the community, as well as the relative impact of the project. Once a determination has been made that a tax abatement would be offered, the value and term of the abatement will be determined by referencing the following table: 9 Structure/Personal Property of of Added Abatement Abatement $125,000,000 10 30% 110,000,000 9 30% 95,000,000 8 30% 80,000,000 7 30% 65,000,000 6 30% 50,000,000 5 30% 25,000,000 4 30% 15,000,000 3 30% 3,000,000 2 30% In order to attract businesses requiring a lower structure value than noted on the references table, the City Council, at its discretion, may, on a case-by-case basis, recommend an abatement which may not specifically comply with the referenced values and terms. VIII. PROCEDURAL GUIDELINES Any person, organization or corporation desiring that the City of The Colony consider providing economic development incentives to encourage location or expansion within the city limits of The Colony shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that the City of The Colony is under obligation to provide any incentive to any applicant. Disclosure of the terms to be presented to a person, organization or corporation desiring economic development incentives, and that qualifies for such incentives, shall be made to the full Council in a Closed Door Session, before the terms are presented to the person, organization or corporation making the request. Preliminary_ Application Steps A. Applicant should complete the following attached forms: 1. Application for Economic Development Incentive 2. Economic Development Incentive Objective Criteria Worksheet. B. Applicant should address all subjective criteria listed in Section V above in letter format. 10 C. Applicant should provide a plat showing the precise location of the property, all roadways within 500 feet of the site, and all existing zoning and land uses within 500 feet of the site. D. A complete legal description shall be provided. E. Applicant should complete all forms and information detailed in Items A through D above and submit to the City Manager. Application Review Steps F. All information submitted as detailed above will be reviewed for completeness, accuracy and the rationale for projections made. Additional information may be requested as needed. G. The application will be distributed to the appropriate departments for internal review and comments. Additional information may be requested as needed. H. The application will be reviewed in light of the criteria for considering economic development. I. Copies of the complete application package will be provided to the other appropriate taxing entities. Consideration of the Application J. City Council will discuss the application and all staff comments at a regular work session. If needed, a City Council Committee will be appointed to meet with the applicant. K. At a subsequent regular City Council meeting all necessary legal documents will be considered for approval following evaluation of all relevant staff and City Council Committee recommendations and reports. L. If the economic development incentive under consideration is tax abatement, additional steps, including a public hearing, must be incorporated into the process. These procedures are mandated by State law and are detailed in the Property Redevelopment and Tax Abatement Act (Article 1066f, Vernon's Texas Civil Statutes). 11 IX. EXECUTION OF AGREEMENTS Should the City Council determine that it is in the best interests of the City of The Colony to provide economic development incentives to a particular applicant, a resolution shall be adopted declaring that under the guidelines and criteria established herein, the application is eligible for economic development incentives. The resolution shall further authorize the City Manager to execute a contract with the applicant governing the provision of the incentives. Any agreement so adopted must include at least the following specific items: Description of the type of incentive provided Amount of the incentive Method for calculating the value of the incentive Duration of the incentive Legal description of the property Type, number and location of planned improvements X. CONFIDENTIALITY OF PROPRIETARY INFORMATION Information that is provided to the City of The Colony in connection with an application or request for tax abatement in accordance with the above criteria and guidelines and which describes the specific process or business activities to be conducted or equipment or other property to be located on the property for which the tax abatement is sought is confidential and not subject to public disclosure until the tax abatement agreement is executed. The information in the custody of the City of The Colony after the agreement is executed is not confidential. XI. EVENT OF DEFAULT During the abatement period covered by this agreement, the City may declare a default hereunder by the Owner if the Owner fails to commence construction of the new facility described herein within two (2) years from the date this agreement is executed, fails to construct the facility as described, or refuses or neglects to comply with any of the terms of this agreement, or if any representation mae by the owner in this Agreement is false or misleading in any material respect or the constructed facility fails to meet the economic qualifications of Section II for granting tax abatement. 12 Should the City determine the Owner to be in default of this agreement, the City shall notify the Owner in writing prior to the end of the abatement period, and if such default is not cured within sixty (60) days from the date of such notice ("Cure Period"), then this agreement may be terminated; provided, however, that in the case of a default that for causes beyond owner's reasonable control cannot with due diligence be cured within such sixty-day period, the Cure Period shall be deemed extended if Owner (1) shall immediately, upon receipt of such notice, advise the City of Owner's intention to institute all steps necessary to cure such default, and (2) shall institute and thereafter prosecute to completion with reasonable dispatch all steps necessary to cure same. In the event the Owner allows its ad valorem taxes owed the City to become delinquent and fails to timely and properly follow the legal procedures for their protest and/or contest, or if the Owner violates any of the terms and conditions of this Agreement and fails to cure during the Cure Period, this Agreement may then be terminated and all taxes previously abated by virtue of this agreement will be recaptured and paid within sixty (60) days of the termination. In the event the facility contemplated herein is completed and begins producing product or service but subsequently discontinues producing product or service for any reason excepting fire, explosion or other casualty, accident or natural disaster, for a period of one year during the abatement period, then this agreement shall terminate. In the event of termination pursuant to the provisions of this paragraph, the abatement of the taxes for the calendar year during which the facility no longer produces shall terminate, but there shall be no recapture of prior years' taxes abated by virtue of the agreement. The taxes otherwise abated for the calendar year during which the facility no longer produces shall be paid to the City prior to the delinquency date for such year; provided, however, that in no event shall Owner be required to pay such taxes within less than sixty (60) days of the termination. 13 Application for Economic Development Incentives 1. Name of Property Owner: Mailing Address: Telephone Number: 2. Name of Property Owner's Representative or Contact Person for this project: Mailing Addresb: Telephone Number: 3. Property Address: 4. Legal Description of P~operty to be Developed: (Provide attachment if by metes and bounds) 5. Is the Property Locat~ in: City of The Colony ETJ? [] Lewisville Independent School District [] Other School District? If so, please indicate: 6. Briefly Describe the P~oposed Project: 1 7. Approximately How Many Square Feet will be Utilized fo~ Structure: 8. Type and value of incentive requested: 9. Description of any undesirable environmental pollution which may be created by your company (including, but not limitec to, air, noise, water, or sewer pollution). Please Return Completed Application To: City of The Colony Attention: City Manager 5151 North Colony Blvd. The Colony TX 75056 (214) 625-1756 Application for Economic Development Incentives Page -2- 2 ECONOMIC DEVELOPMENT INCENTIVES OBJECTIVES CRITERIA WORKSHEET A. How many existing jobs will be brought to The Colony (i.e., job transfers)? B. How many new jobs will be brought to The Colony (i.e., new hires in the local community)? C. How much local annual payroll will be created? D. How much are your projected annual retail sales of taxable goods and services? $ x 1% = ~__ E-1. How much real property is being transferred from Ag Production Value to Market Value on the property tax rolls? $ E-2. What is the estimated value of new buildings to be constructed? $ E-3. What is the estimated value of personal property (furniture, fixtures and equipment) to be added to the tax roll? 3