Loading...
HomeMy WebLinkAboutResolution No. 09-019 CITY OF THE COLONY, TEXAS RESOLUTION NO. 09-019 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THE COLONY, TEXAS APPROVING A REVISED "THE COLONY ECONOMIC DEVELOPMENT CORPORA TION/CITY OF THE COLONY COMPREHENSIVE POLICY STATEMENT OF ECONOMIC DEVELOPMENT INCENTIVES" AND "THE CITY OF THE COLONY TAX ABATEMENT POLICY" AS ESTABLISHED BY RESOLUTION 90- 11 APPROVED BY THE CITY COUNCIL ON THE 2ND DAY OF APRIL, 1990; AND AMENDED BY RESOLUTION 93-26 ON THE 4TH OF OCTOBER, 1993 AND AMENDED AGAIN BY RESOLUTION 06-038 ON THE 17TH OF APRIL, 2006. 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. Section 2. The City of The Colony, Texas pursuant to Section 312.002 of the Tax Code (Eligibility of Taxing Unit to Participate in Tax Abatement), hereby adopts a revised "The Colony Economic Development Corporation/City of The Colony Comprehensive Policy Statement of Economic Development Incentives" and "City of The Colony Tax Abatement Policy", which are 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 incentive and tax abatement agreements. DULY PASSED AND APPROVED this 2"" day of March, 2009. Joh Dillard, Mayor Ci of The Colony ATTEST fJ ~ . JVV~J!- ~ kU ~~ ~ Chnstie Wilson, City cretary THE COLONY j; CJl:6NY ~ City by the Lake H{q/zl Pfarr. H{q/zl Timl' The Colony Economic Development Corporation/City of The Colony Comprehensive Policy Statement of Economic Development Incentives The Colony Business Relocation and Expansion Program The Colony wants to grow and develop a quality city in the Dallas/Fort Worth region. In order to encourage economic growth and expansion of the local economy the City of The Colony (the "City") and/or The Colony Economic Development Corporation (the "TCEDC") may provide economic incentives for qualified projects in accordance with this policy. The City and/or TCEDC will consider projects on a case-by-case basis. This individualized design of a total incentive package allows maximum flexibility in addressing the unique aspects of each applicant. Economic development incentives will be provided by contract with the applicant, and shall be subject to procedural and other requirements set forth in such contract as well as applicable federal, state and local law. Any person, organization or corporation desiring that the City and/or TCEDC consider providing economic development incentives shall be required to comply with the following guidelines. Nothing in these guidelines shall imply or suggest that the City or TCEDC is under any obligation to provide any economic development incentive to any applicant. The purpose of this policy is to establish guidelines for providing economic development incentives. Notwithstanding these guidelines the City and TCEDC retain the right to take any action allowed by law without the necessity of amending these guidelines. Tax Abatement Tax Abatement may be offered for improvements to real property and/or for business personal property. Tax abatements do not apply to land. Tax abatements for improvements to real property may be offered to an applicant that pursues the construction of a new or expanded facility to house the applicable project. The tax abatement will apply to the taxable value of the new or expanded improvements. Tax abatement for business personal property may be offered to an applicant that pursues the purchase or long-term lease of existing or new facilities. The tax abatement for business personal property will apply to the taxable value of the business personal property added to the facility after the execution of the tax abatement agreement. In order to qualify for City tax abatement, the project must meet all the criteria set forth in the City of The Colony policy statement for Tax Abatements (Exhibit A). Sales Tax Rebates The City collects 2% sales tax on any taxable retail sale made in the city limits. I % goes into the City's general fund and the remaining 1 % is divided equally between TCEDC and The Colony Revised 3-2-09 1 Community Development Corporation. The City may provide an economic development incentive consisting of annual grants based on a percentage of the sales and use tax received ("sales and use tax receipts") by the City from the sale of taxable items by the applicant consummated in the City. The City is authorized by Section 380.001, Texas Local Government Code to provide such grants. The TCEDC is authorized by the Development Corporation Act of 1979 to provide such grants but is limited with retail clients to utilizing the funds for infrastructure improvements and training. The applicant will be required to provide a sales tax certificate setting forth the applicant's collection of sales and use tax for the sale of taxable items consummated at the applicant's business location in the City, together with such supporting documentation as may be required by the City and/or the TCEDC. The City and the TCEDC will not be required to provide any grant for any period during the term of the agreement for which the City and the TCEDC have not received sales tax revenue from taxable sales by the applicant for such period. The minimum requirement to qualify for a sales tax rebate is a capital investment in the project of at least $1,000,000. Triple Freeport Tax Exemption The Triple Freeport Tax Exemption allows local governing bodies the option to exempt personal property consisting of goods, wares, merchandise or ores other than oil, natural gas and petroleum from property taxes. To be eligible, property must be transported out of the state within 175 days of acquisition, but it may first be assembled, stored, manufactured, processed or fabricated locally. All three taxing entities, the City, the Lewisville Independent School District and Denton County, offer the Triple Freeport Tax Exemption. Tax Increment Financing Zone (TIF) This incentive may be used to finance needed infrastructure improvements within a defined area (the "zone") to encourage development. It is similar to tax abatement; however, it can only be sponsored by a city. Once a city has initiated tax increment financing other taxing units may participate. School districts are not likely to participate in a TIP since the State Comptroller will not reduce taxable property value for school districts to reflect tax increment financing losses for zones that are created on or after September 1, 1999 for state school funding. As the improvements in the zone generate higher appraised values on real property in the zone, the tax revenue collected from the increase is then dedicated to a special fund to pay the cost of TIP projects. The cost of improvements is repaid by contribution of future tax revenue by each participating taxing unit that levies property taxes against the property. Each taxing unit may choose to participate in the TIP, and may choose to dedicate all, a portion or none of the tax revenue from the increases in property values in the zone to the TIP fund. Job Training The City of The Colony offers all training programs that are available to companies throughout Texas. These training programs include those offered through the Texas Workforce Commission. The Colony is located within a commuting distance of thirty-four (34) institutions of higher learning. Revised 3-2-09 2 Fast Track Permitting At the request of the applicant permitting time can be shortened if the project needs and justifies the reduced time frame. Development Fee Rebates The City may approve the waiver of all or a portion of certain permit and development fees and/or TCEDC may reimburse the applicant or directly pay all or a portion of certain permit and development fees. Infrastructure The City and/or the TCEDC may agree to participate in the cost of the extension, construction, or reconstruction of public infrastructure necessary for the development of a project. That infrastructure could include streets, waterlines, sewer lines, railroad lines, electric lines, phone lines, gas lines and/or fiber optic lines. For retail projects, TCEDC may fund the costs of infrastructure limited to: (i) streets and railroad spurs; (ii) water, sewer, electric and gas utilities; (iii) drainage and related improvements; and (iv) telecommunications and Internet improvements. Low Interest Loans The City and/or TCEDC may provide qualified applicants loans for project funding. StructurelBuilding The City may construct, or provide funding to construct a building or structure needed for the project. TCEDC may construct or provide funding to construct buildings or structures for industrial and manufacturing projects. Employee Training The City and/or TCEDC may provide funding for the applicant's employee training. (See "Job Training". ) Relocation Expenses The City and/or TCEDC will consider paying a qualified applicant's necessary and substantiated relocation expenses. Temporary Housing, Offices, or Travel Vehicles The City and/or TCEDC will consider paying the cost of temporary housing, offices, and travel vehicles for a qualified applicant's senior and middle management. Employee Recruitment Recruitment expenses may be reimbursed to a company by the City and/or TCEDC (for industrial and manufacturing projects) for the senior and middle management personnel for the project. Grants Cash grants may be available to a business locating in the City for the partial reimbursement of project development fees, broker fees, land/building acquisition closing costs and infrastructure. Revised 3-2-09 3 Capital Investment Except where otherwise stated in this document, the applicant must have a mInImum of $1,000,000 capital investment made by or through the project. Capital investment means the total capitalized cost to the applicant for the project. Experience The applicant shall have a minimum of at least three prior years of operation. The applicant must be able to provide at least three years of financial statements prepared by a certified public accountant. The principals and/or management of the business must be able to demonstrate at least five prior years of experience (individual not collective) in the business industry of the project. Application Procedure Any person or company requesting that the City and/or TCEDC provide an economIc development incentive shall comply with the following procedure: I. The applicant shall submit a completed written application for the requested incentive(s) utilizing the application outline provided by TCEDC attached to this policy as Exhibit B, and available at www.thecolonvedc.ore. 2. The applicant shall address all criteria set forth in this policy and the application. 3. The applicant shall: provide a plat, map or survey showing the location of the property and the proposed project, all streets, land uses and zoning within 500 feet of the site. 4. The applicant shall provide a legal description of the property; the name, address, phone number, fax number of the owner of the property; the tenants or proposed tenants, if any; and state whether the property is to be owner occupied or leased. 5. The applicant shall describe in detail the proposed project and the type of economic development incentive(s) requested. 6. The application shall be submitted in triplicate copies to TCEDC in care of the Director of Economic Development, 6800 Main Street, The Colony, TX 75056. 7. The application will be reviewed initially by TCEDC Director of Economic Development then, if found to be complete and in order, the application shall move into the negotiations step of the incentive process (see Negotiation Process below). After completion of the negotiations process the Director shall make a recommendation to TCEDC Board of Directors, and when necessary to the City Council. If necessary the application will be distributed to the applicable departments of the City for review and comment. Additional information related to the application and the project may be requested by TCEDC and/or City. Failure to timely submit any additionally requested information will cause the application to be rejected and will be deemed withdrawn by the applicant without further action by TCEDC and/or the City. 8. The City Council will, when necessary, consider TCEDC recommendation and the requested incentive pursuant to this policy. 9. The City Council will conduct public hearings when required by law. 10. When necessary under this policy the City Council will, at a regular meeting and when allowed by law at a special meeting, consider the approval of an economic development incentive agreement. Revised 3-2-09 4 II. Information submitted by the applicant regarding the requested incentive is confidential to the extent allowed by law. Impact Analysis The City and/or TCEDC reserves the right to perform an economic impact analysis for any project to determine the impact the project will have on the City. This analysis will be made before an incentive is offered to the applicant. Negotiation Process The initial contact and preliminary discussions relating to available incentives is to be between the authorized representatives of the applicant and the Director of Economic Development for the City (or his /her appointee). All negotiations for Economic Development Incentives shall be between the authorized representative(s) of the applicant and the Economic Development Director and anyone (I) or more of the following: President of The Colony Economic Development Corporation (4A) Member(s) of The Colony Economic Development Corporation Board (4A) City Council Members Member of The Colony Community Development Corporation Board (4B) City Manager All negotiated projects will first be reviewed by TCEDC Board of Directors who will then, if appropriate, make recommendation to The Colony City Council. TCEDC Board and/or City Council's decision shall be based upon an evaluation of the criteria that each applicant has addressed in narrative format in their application. An incentive package with an aggregate value of $100,000 or less and not containing a Tax Abatement may be approved by TCEDC Board without the involvement of City Council. An incentive package with a value greater than $100,000 and/or containing a Tax Abatement will require approval by City Council. If it is necessary for City Council to take action on the application 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 Mayor to execute a contract with the applicant governing the provision of the incentives. If the application can be approved solely by TCEDC Board then this application will be discussed in Executive Session by the Board and approved in open session by a majority vote. Revised 3-2-09 5 EXHIBIT "A" City of The Colony Tax Abatement Policy I. General Purpose And Objectives The City of The Colony (the "City") 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 will, on a case-by-case basis, give consideration to providing tax abatement as stimulation for economic development in the City. 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 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 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 business and which will not compete with existing businesses to the extent of being a detriment to the local economy as a whole. C. The project should have a minimum capital investment of three million dollars ($3,000,000). D. Project will serve as a catalyst or magnet to attract or retain other high quality industriallbusiness development. 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 Revised 3-2-09 6 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. No tax abatement will be granted in an amount which exceeds the estimated costs to the City for support of the project. In compliance with state law no abatement will be for more than a maximum of 10 years in duration. IV. Objective Criteria In order for a tax abatement application to be considered the following must be addressed in written format by the applicant using "The Colony Economic Development Corporation/City of The Colony Application for Economic Development Incentives" attached to this policy as Exhibit B and available at www.thecolonyedc.org: A. Number of jobs that will be created by the project. B. Average salary detailed by skilled, unskilled and management positions. C. Total annual payroll created by the project. D. The net tax base valuation (real and personal property) that will be added by the project. E. 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. Using "The Colony Economic Development Corporation/City of The Colony Application for Economic Development Incentives" attached to this policy as Exhibit B and available at www.thecolonyedc.org the applicant must respond to the following in written narrative format, with backup documentation: A. Explain the types and values of public improvements, if any, which will be made by the appl icant. B. Explain to what extent the project will compliment and/or compete with existing businesses. C. If the project poses any negative environmental, operational, visual/image, style impacts (i.e.; pollution, noise, traffic congestion, etc.) provide details. D. Provide information including at least five years financial and operating history of the company. E. The applicant must indicate whether or not they are 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. State in the application whether the project is a relocation/consolidation from elsewhere, or the start-up of a totally new operation. VI. Value Of Tax Abatement Provided The objective criteria and subjective criteria outlined in Sections IV and V will be used by the City Council in determining whether or not it is in the best interests of the Revised 3-2-09 7 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. VII. Procedural Guidelines Any person, organization or corporation desiring that the City 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 is under obligation to provide any incentive to any applicant. A. Application Steps: To apply for a tax abatement complete "The Colony Economic Development Corporation/City of The Colony Application for Economic Development Incentives attached to this policy as Exhibit B and located at www.thecolonvedc.org. The application must be submitted to The Colony Economic Development Corporation (the "TCEDC") care of the Director of Economic Development (the "Director"). B. Application Review Steps 1. All information submitted as detailed above will be reviewed by the Director for completeness, accuracy and the rationale for projections made. Additional information may be requested as needed. 2. If applicable, the application will be distributed to the appropriate departments for internal review and comments. Additional information may be requested as needed. 3. The application will be reviewed In light of the criteria for considering economic development. 4. If necessary copies of the complete application package may be provided to the other appropriate taxing entities. C. Consideration of the Application I. After review by the Director of Economic Development the application will be reviewed by a team consisting of, but not limited to, the Director, City Manager and at least one member of City Council. If needed, this team will meet with the applicant to negotiate final terms of the abatement. 2. In a closed door session at a regular City Council meeting all necessary legal documents will be considered for approval following evaluation of all relevant staff and review team recommendations and reports. 3. For a 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 I 066f, Vernon's Texas Civil Statues). Revised 3-2-09 8 VIII. Execution Of Agreements Should the City Council determine that it is in the best interests of the City a tax abatement to a particular applicant, a resolution shall be adopted declaring that under the guidelines and criteria established herein, the application is eligible for an economic development incentive in the form of a tax abatement. The resolution shall further authorize the Mayor 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: A. Amount of the incentive B. Method for calculating the value of the incentive C. Duration of the incentive D. Legal description of the property E. Type, number and location of planned improvements IX. Confidentiality Of Proprietary Information Information that is provided to TCEDC 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 TCEDC after the agreement is executed will be treated as confidential to the extent allowed by law. X. Event Of Default During the incentive period covered by the incentive agreement, subject to Force Majeure, the City may declare a default hereunder by the applicant if the applicant fails to commence construction of the new facility for which incentives are offered within two (2) years from the date this agreement is executed, fails to construct the facility as described, refuses or neglects to comply with any of the terms of this agreement, or if any representation made by the applicant in this Agreement is false or misleading in any material respect or the constructed facility fails to meet the criteria of the agreement. Should the City determine the applicant to be in default of this agreement, the City shall notify the applicant in writing prior to the end of the agreement 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 applicant's reasonable control cannot with due diligence be cured within such sixty-day period, the Cure Period shall be deemed Revised 3-2-09 9 extended if applicant (I) shall immediately, upon receipt of such notice, advise the City of applicant'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 applicant 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 applicant violates any of the terms and conditions of the 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. Revised 3-2-09 10 EXHIBIT "B" THE COLONY ECONOMIC DEVELOPMENT CORPORATION/CITY OF THE COLONY APPLICATION FOR ECONOMIC DEVELOPMENT INCENTIVES Applicants for economic development incentives must submit a complete application to the Board of Directors of The Colony Economic Development Corporation (the "TCEDC). Applicant should demonstrate how the project satisfies The City of the Colony (the "City") economic development incentive objectives and requirements. The following is provided as a format for your application. You are encouraged to submit your information on a separate document. Please provide the following information: Name of Applicant (including titld Company Name 1 Company Address (Street, City, State & Zip Code) Applicant's Phone AND Fax Number Applicant's address if other than Company address Email Address Website address NAICS Code Project Address Name of Property Owner (If different from Applicant) Property Owner's Address (If different from Company) Property Owner's Phone Number (If different from Applicant) Date of Application A. Proiect I. Tell us about your project. Give specifics as to property size, building square footage, utility requirements, traffic flow on and off the property, truck traffic (if applicable), etc. I Please provide this information at the top of each page of your application. Revised 3-2-09 11 2. What will you be doing in The Colony? Is your company community oriented? How do you anticipate your company interfacing with our community? 3. Will the building(s) be owner occupied? If the facility is to be leased, who are, or will be the primary tenants? B. Emplovment Impact I. How many full and part-time jobs will be brought to The Colony in the 1 st year, 3rd year, and 5th year following the opening of your facility? Please break down the total for each time period by the number of full time and part time employees and the number of transfers versus the number of new jobs. 2. 3. C. 1. 2. 3. 4. 5. 6. D. I. 2. 3. E. What types of jobs will be created (i.e. professional, skilled, unskilled)? What will be your company's total annual payroll in The Colony at the end of the 1st year, 3rd year, and 5th year following the opening of your facility? Fiscal Impact What will be the taxable value of the real and personal property added to the tax rolls? How much direct sales tax will be generated in The Colony during your I S\ 3rd, and 5th year of operation? How much real property is being transferred from Ag Value to Market Value on the property tax rolls? Will this project affect existing businesses and/or office facilities? If yes, please explain the positive and negative impact. What infrastructure additions or improvements will be required? What is the annual projected operating budget of the project or facility? Community Impact What effect would the project have on the housing market? What environmental impact, if any, will be created by the project (included, but not limited to, air, noise, water, or sewer pollution)? How compatible is the project with the City's Comprehensive Plan? Incentives What assistance do you want from TCEDC (see The Colony Economic Development Corporation/City of The Colony Comprehensive Policy Statement of Economic Development Incentives)? Please be specific as to why you believe your project qualifies for each incentive requested. Include the value of each incentive. Revised 3-2-09 12 F. Comoany/Manaeement Information Please include the following with your application: I. Business Plan 2. Resume for each principal in your company and anyone in a management position (if different) 3. Financial statements prepared by a certified public accountant for the three years immediately preceding the application. 4. Corporate resolution evidencing the legal name of your company and the name of the officer(s) authorized to negotiate contracts for your company. 5. Three sets of literature on your company (annual reports, brochures, news releases, etc.) 6. Legal description, and map or plat of the location of the project 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. By submitting an application for an incentive the applicant certifies that the company, or a branch, division, or department of the company, does not and will not knowingly employ an undocumented worker, and that if, after receiving a public subsidy, the company, or a branch, division, or department of the company, is convicted of a violation under 8 U.S.C. Section I 324a(f), the company agrees to repay the amount of the public subsidy with interest, at the rate and according to the other terms provided by an agreement under Texas Government Code, Section 2264.053, not later than the 120th day after the date the City, or The Colony Economic Development Corporation notifies the company of the violation. VALUE OF INCENTIVES The Colony Economic Development Negotiations Team will use the information you provide in determining whether or not it is in the best interest of the affected taxing entities to recommend that incentives 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. Each applicant is considered on a case-by-case basis. APPLICATION SUBMISSION INSTRUCTIONS: All incentive applications must be submitted in triplicate on 8 1/2 X 11 paper, in a three-ring notebook or stapled in the upper left hand corner. Exhibits may exceed 8112 x 11 but must be fan-folded to the 81/2 x 11 size. (The City and/or TCEDC reserve the right to request the applicant provide additional copies of the application.) Please address the application information to Thomas A. Terrall, Jr., Director of Economic Development, The Colony Economic Development Corporation, 6800 Main Street, The Colony, Texas 75056 Revised 3-2-09 13