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HomeMy WebLinkAboutRES 082807-S - Tax Abatement AgmtRESOLUTION NO Q1280 ?- s A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS ADOPTING "GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION," PROVIDING THAT ALL PROJECTS APPROVED PURSUANT TO THE POLICY ESTABLISHED BY PREVIOUS GUIDELINES SHALL CONTINUE TO BE GOVERNED THEREBY; PROVIDING THAT ALL PROJECTS HEREAFTER APPROVED SHALL BE GOVERNED BY THE POLICY HEREIN APPROVED; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Georgetown desires to promote economic development within the City of Georgetown; and WHEREAS, on February 11, 2003 and June 14, 2005 the City Council previously adopted provided certain economic development incentives to tax abatement and other incentives to encourage prospective businesses and companies to locate or expand in the area; and WHEREAS, the establishment of specific guidelines, criteria an procedures are necessary to effectively and fairly administer the provision of economic development incentives; and WHEREAS, state law provides as follows: § 312.002. ELIGIBILITY OF TAXING UNIT TO PARTICIPATE IN TAX ABATEMENT. (a) A taxing unit may not enter into a tax abatement agreement under this chapter and the governing body of a municipality or county may not designate an area as a reinvestment zone unless the governing body has established guidelines and criteria governing tax abatement agreements by the taxing unit and a resolution stating that the taxing unit elects to become eligible to participate in tax abatement. The guidelines applicable to property other than Resolution No. ©82/0 7 -S Adopting Tax Abatement Policy August 2007 property described by Section 312.211(a) must provide for the availability of tax abatement for both new facilities and structures and for the expansion or modernization of existing facilities and structures. (b) The governing body of a taxing unit may not enter into a tax abatement agreement under this chapter unless it finds that the terms of the agreement and the property subject to the agreement meet the applicable guidelines and criteria adopted by the governing body under this section. (c) The guidelines and criteria adopted under this section are effective for two years from the date adopted. During that period, the guidelines and criteria may be amended or repealed only by a vote of three -fourths of the members of the governing body. (d) The adoption of the guidelines and criteria by the governing body of a taxing unit does not: (1) limit the discretion of the governing body to decide whether to enter into a specific tax abatement agreement, (2) limit the discretion of the governing body to delegate to its employees the authority to determine whether or not the governing body should consider a particular application or request for tax abatement; or (3) create any property, contract, or other legal right in any person to have the governing body consider or grant a specific application or request for tax abatement. (e) The guidelines and criteria adopted by the commissioners court of a county may include a requirement that an application or request for tax abatement submitted to the county under this chapter must be accompanied by a reasonable application fee not to exceed $1,000. (f) On or after September 1, 2001, a school district may not enter into a tax abatement agreement under this chapter. (g) "Taxing unit" has the meaning assigned by Section 1.04, except that for a tax abatement agreement executed on or after September 1, 2001, the term does not include a school district that is subject to Chapter 42, Education Code, and that is organized primarily to provide general elementary and secondary public education. Resolution N o. CO' 2 8' 0 7- S Adopting Tax Abatement Policy August 2007 ; and WHEREAS, the City Council now desires to adopt the attached "GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION" which shall apply to projects hereinafter approved while continuing to give full force and effect to the previously approved Principles; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS, THAT: SECTION 1. The City Council finds and declares that the adoption of the "City of Georgetown Principles for Economic Development Incentives" is in conformance with the following Policy Statements in the City's Century Plan: 1.0 The community enjoys the benefits of well -planned land use in which conflicting needs are balanced. 9.0 Citizens and commercial goods move safely and efficiently throughout all parts of the City. 10.0 Georgetown's citizens and businesses enjoy an attractive community with a unique sense of place and a positive, identifiable image, at a cost which is consistent with other city social and economic priorities. 13.0 All municipal operations are conducted in an efficient business -like manner and sufficient financial resources for both current and future needs are provided. 15.0 The City manages its resources in a sound and fiscally conservative manner. SECTION 2: The City of Georgetown maintains its election to be eligible to participate in tax abatement and hereby adopts "GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION" applicable to tax abatements granted from this date forward. Resolution No. ©82707- -S Adopting Tax Abatement Policy August 2007 SECTION 3. The guidelines criteria and procedures established within the GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION shall expressly govern all subsequent tax abatement applications and agreements, as required by State law. Prior tax abatement agreements shall be governed by the policy in effect at the time of adoption. SECTION 4. A copy of the amended City of Georgetown GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION is attached hereto as Exhibit A and is incorporated herein for all intents and purposes. SECTION 5. This Resolution shall become effective immediately upon its passage and said policy established herein shall remain effective for two (2) years from the date of passage unless amended by three -fourths (3/4ths) vote of the City Council. PASSED AND APPROVED this the day of d`� 2007 at a regular meeting of the City Council of the City of Georgetown, exas. CITY OF GEORGETOWN Gary=Nelon, Mayor ATTEST: Sandra D Lee, City Secretary APPROVED AS TO FORM: Patricia E Carls, City Attorney Resolution No 01210 7 eS Adopting Tax Abatement Policy August 2007 Draft 8.21.07 GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS WITHIN THE CITY OF GEORGETOWN AND ITS EXTRATERRITORIAL JURISDICTION Adopted: August 28, 2007 GENERAL PURPOSE AND OBJECTIVES The City of Georgetown is dedicated to attracting:' and retaining high quality businesses, enhancing the quality of life of its citizens, and maintaining the vitality and heritage of the community. The expansion of the local economy through business investment and .job creation is essential to attaining these objectives. Therefore, the City of Georgetown has created a tax abatement policy to encourage community investment and targeted job growth. This policy is adopted pursuant to Chapter 312 of the Texas Tax Code, and is designed to be flexible in order to meet the unique needs of each company. Any tax abatements provided by the City will be provided according to the procedures and criteria outlined in this document and applicable state law. Nothing herein shall imply or suggest that the City of Georgetown is under any obligation to provide incentives to any company. All applications will be considered on a case -by -case basis. GUIDELINES AND CRITERIA To be eligible to receive tax abatement, the project must meet the following minimum requirements: a. Create or maintain at least five (5) jobs; b. Provide taxable property improvements by making a capital investment of at least 5500,000.00; Exhibit A to Resolution No. O 2to%S' Tax Abatement Policy Page 1 of 14 Draft 8.21.07 c. Comply with overall development goals and applicable ordinances of the City, including the City's Comprehensive Plan, Utility Master Plans, Downtown Master Plan (if applicable); Williams Drive Gateway Master Plan (if applicable); and any other plans, codes, and ordinances of the City; and d. Meet the criteria for designation of a reinvestment zone under the Texas Tax Code. In determining the level of incentives to be granted, consideration will be given to various factors considering the impact of the company on the local economy and quality of life for Georgetown citizens. These factors include but are not limited to the following: a. The company's inclusion in the list of industry sectors targeted by the City. These targeted industries include: national and regional. headquarters; professional service companies such as, educational, financial, and computer related; manufacturers, such as automotive suppliers, semiconductor equipment, computer and electronic components; research, development and testing companies; logistics and distribution companies; health care, medical services, and life sciences, military related suppliers or other industries as approved by the City Council; b. 1'he increase in property valuations surrounding the new or expanded facili The number of above average salaried positions created by the company;. The amount of time necessary to complete the project and create the jobs which are to be provided by the company; e. The environmental impact of the project; f. The type and value of any public improvements (e.g., water, wastewater, ` electric, etc) or public contributions made by the company; g. The types and costs of public improvements and services (e.g., water, wastewater, electric, etc) which will be required of the Ci h. Whether the project uses City utilities or other services and at what volumes or capacities; i. The impact of the project on traffic and local resources; j. The utilization of unemployed labor and under-utilized employee resources; c. 2 Exhibit A to Resolution No. arze ©7-S' Tax Abatement Policy Page 2 of 14 Draft 8.21.07 k. The degree to which the business improves the diversification of the local economy; 1. The degree to which the company carries out the goals and objectives of the City's various long term and short term plans; m. The potential of future facility and equipment expansions and/or improvements, primary job additions, and creation of new or expanded associated or ancillary businesses; n. The amount of local sales taxes to be generated by the company; o. The company's history of community involvement, and p. Other items to be determined by the City. The adoption of these guidelines and criteria do not: (1) limit the discretion of the Georgetown City Council to decide whether to enter into a specific tax abatement agreement; (2) limit the discretion of the Georgetown City Council to delegate to its employees the authority to determine whether or not the Georgetown City Council should consider a particular application or, request for tax abatement; or (3) create a property, contract, or other legal right for any person to have the Georgetown City Council consider or grant a specific application or request for tax abatement. APPLICATION REQUIREMENTS Persons or entities seeking tax abatements should begin by contacting the Georgetown Economic Development Department who will facilitate the application process.. The following information will be needed to complete an application. Additional information may also be requested. a. A plat showing the precise location of the property, all roadways within 500 feet of the property, the zoning classification of the property, and all existing land uses on the property. If the property is not platted, then a metes and bounds description of the property may be substituted for the plat. b. Company history, including financial history; c. NAICS code for the business to be located on the property, with a description of the type of products produced by the company; d. A brief description of the type and cost of the improvements to be made to the property; e. Estimated date for commencement of construction of improvements on the property; 3 Exhibit A to Resolution No. 0 ge77—JS Tax Abatement Policy Page 3 of 14 Draft 8.21.07 f. Estimated date for commencement of production or business operations on the property; g. Approximate square feet of facility to be constructed on the property; h. Estimated economic life of the facility constructed on the property, and any personal property to be placed in the facility on the property; i. Estimated average annual salary and benefits per type of worker to be working on the property; j. Estimated inveslntent to be made by the company in land, improvements, equipment; furniture and fixtures;;and inventory. k. Whether the property is to be leased or owned; 1. Whether the improvements to be made on the property are feasible and would benefit the area after the expiration of any tax abatement agreement, m. Estimate the base year value of property for which a tax: abatement is requested as of January 1 of the year of ;the execution of the tax abatement agreement. SCHEDULE OF TAX ABATEMENT In addition to the factors identified in the Guidelines and Criteria, and the information submitted in response to the Application Requirements, the initial calculation as to the percentage, length, and amount of tax abatement that may be provided to a company; shall be based on the amount of new capital inveslntent and number of new jobs, using the following matrix: TAX ABATE ENT GUIDELINE Numberof Jobs > 175 150 125 100 75 50 25 0 $0 $1M $3M CAPITAL INVESTMENT $5M > $5M 4 Exhibit A to Resolution No. all z0 ©7"S Tax Abatement Policy Page 4 of 14 Draft 8.21.07 ate matrix above generally represents the starting point in determining potential tax abatements. From this grid, the City will negotiate the future tax abatement offers: A. Maximum 5 Year tax abatement, 50% highest allowable abatement in any one year. B. Maximum 5 year tax abatement, 100% highest allowable abatement in any one year. 7 to 10 year maximum abatement, 100% abatement allowable no more than 2 years. The foregoing are general guidelines and may be adjusted by City Council on a case by case basis. ELEMENTS OF TAX A:TE 'ENT AGREEMENT The tax abatement must be conditioned on the property owner making specific improvements or repairs to the property, and only the increase in the value of the property may be exempted. The real property's current value may not be exempted. The current value of real property is the taxable value of the real property and of any fixed improvements as of January 1 of the year in which the tax abatement agreement is executed. For example, consider a business that has a property site valued at $500,000 as of January. 1 of the year of the tax abatement agreement. If the business agrees to significantly enlarge the facility, resulting in its valuation increasing to S800,000, the City may abate from taxation up to 5300,000 of the property value (the portion of the value that exceeds the base value of S500,000.) The tax abatement agreement may also abate all or part of the value of tangible personal property, (including inventory or supplies) that is brought onto the site after the execution of the tax abatement agreement. Under state law, the City may not abate the value of personal property that was already located on the real property at any time before the period covered by the tax abatement agreement. The abatement for personal property cannot be for a term that exceeds 10 years. At the meeting to consider approval of the tax abatement agreement, the governing body of the City must make a findmg that the terms of the agreement and the property subject to the agreement meet these guidelines and criteria. 5 Exhibit A to Resolution No. 0 !J ©7ss Tax Abatement Policy Page 5 of 14 Draft 8.21.07 In accordance with Section 312.205of the Tax Code, the tax abatement agreement must: • include a list of the kind, number and location of all proposed improvements to the property; • provide access to and authorize inspection of the property by the City to ensure compliance with the agreement; • limit the use of the property consistent with the City's development goals; • provide for recapturing property tax revenues that are lost if the owner fails to make the improvements as provided by the: agreement; • include each term that was agreed upon with the property owner and require the owner to annually certify compliance with the terms of the agreement to each City; and • allow the City to cancel or modify the agreement at any time if the property owner fails to comply with the terms of the agreement; and • provide for the recapture of all or a portion of property tax revenue lost as a result of the agreement if the owner of the property fails to create all or a portion of the number of new jobs provided by the agreement, if the appraised value of the property subject to the agreement does not attain a value specified in the agreement, or if ;the owner fails to meet any other performance criteria provided by the agreement, and payment of a penalty or interest, or both, on that recaptured property tax revenue. The City Council may also incorporate any other desired provisions that may be beneficial to the City. Such other terms and conditions include, but are not limited to, the following improvements or repairs by the municipality to streets, sidewalks, and utility services or facilities associated with the property, except that the agreement may not provide for lower charges or rates than are made for other services or properties of a similar character; • an economic feasibility study, including a detailed list of estimated improvement costs, a description of the methods of financing all estimated costs, and the time when related costs or monetary obligations are to be incurred; • a map showing existing uses and conditions of real property in the reinvestment zone; • a map showing proposed improvements and uses in the reinvestment zone; and • proposed changes of zoning ordinances, the master plan, the map, building codes, and city ordinances. 6 Exhibit A to Resolution No. "fax Abatement Policy Page 6 of 14 ©St 7a.45 Draft 8.21.07 APPROVAL PROCESS The statutes governing tax abatements and setting forth the process are located in Chapter 312 of the Texas Tax Code. The process is summarized below. Step One: The City must adopt a resolution indicating its intent to participate in a tax abatement for a particular company. Step Two: Tax abatement guidelines and criteria must <have, been adopted by the City. Step Three: After holding a public hearing and providing notice, the City must designate an area as a "reinvestment zone" by ordinance. The designation of the reinvestment zone must be preceded by a public hearing. Seven days' written notice of the hearing must be given to the presiding officer of each of the "other taxing units that have taxing jurisdiction over real property within the zone. Notice of the hearing must also be published at leastseven days before the hearing in a newspaper of general circulation in the city. At the public hearing on the reinvestment zone, the City Council must make several findings. First, the City Council must find that the improvements sought are feasible and would be of benefit to the zone after the expiration of the agreement. Second, the City Council must find that the zone meets one of the applicable criteria for reinvestment zones. (The criterion usually cited is that the designation of the zone is reasonably likely to contribute to the retention or expansion of primary employment or to attract major investmentto the zone.) Any interested person is entitled to speak and >present evidence for or against the designation of a reinvestment zone at the public hearing. The zone must be contiguous and must include some portion of the earth's surface. If the zone designation is approved, the designation lasts for five years and may be renewed for successive periods of up to five years, if the City Council so approves. The term of a tax abatement agreement may continue for up to ten years, even if the reinvestment zone is not renewed after the initial five-year term. 7 Exhibit A to Resolution No. 0/2 O7.-45 Tax Abatement Policy Page 7 of 14 Draft 8.21.07 Step Four: At least seven days before the City grants a tax abatement, it must deliver written notice of its intent to enter into the agreement to the presiding officer of each of the other taxing units in which the property is located. The notice must include a copy of the proposed tax abatement agreement. Step Five: Step Six: The City Council must approve the agreement by a majority vote of its governing body at its regularly scheduled, meeting. Upon approval of the agreement by the governing body, the agreement is executed in the same manner as other contracts entered into by the applicable City. The other taxing units enter into an abatement agreement or choose not to provide an abatement. The City's Economic Development Department will make every effort, to coordinate with Williamson County on the terms and conditions of the tax abatement agreement; however, the County may or may not approve tax abatements for the company. The City of Georgetown may enter into a tax abatement agreement with a person, organization, or corporation that has followed the application process and meets the guidelines and criteria described above. The City Council may also forward the incentives request to the appropriate entity, such as, the 4A and 4B Sales Tax Corporations, for negotiation and creation of an incentives agreement available from those entities. 1he City will work diligently to protect the confidentiality of the company during the negotiation process consistent with state law. The final agreement, however, will require public disclosure of the company name and dollar amounts of most public sector incentives offered. No incentive shall be granted by the City prior to a public disclosure of such incentive in an open hearing All participants both public and private are required to disclose any conflict of interest, relationship, and/or any compensation received for services provided in facilitation of any incentive. 8 Exhibit A to Resolution No. Tax Abatement Policy Page 8 of 14 APPLICATION FOR TAX ABATEMENT City of Georgetown, Texas Date of Application: GENERAL INFORMATION 1. Full Business Name. 2. NAICS Sector: 3. Contact Person: Mailing Address: Telephone Number: E-Mail Address: Agent (if any): Mailing Address: Telephone Number: E-Mail Address: Company history, including financial history (attach separate sheets if necessary) City of Georgetown, Texas Tax Abatement Application Page 1 of b Adopted: August 28, 2007 Exhibit A to Resolution No. 'Fax Abatement Policy Page 9 of 14 0828o7-S DESCRIPTION OF PROPERTY 6. Property Legal Description: Lot Block Subdivision: Attach copy of plat showing the precise location of the property, all roadways within 500 feet of the property and all existing land uses on the property. If property is not platted, attach metes and bounds description and sketch of property, and diagram showing all roadways within 500 feet of the property and all existing land uses on the property. 7. Current Zoning Classification: 8. Requested Re -Zoning (if applicable): 9. Utility Services Currently Available? a. Water (yes or no) Provider: b. Wastewater (yes or no) Provider: c. Electric: (yes or no) Provider: 10. The base year value of property for which a tax abatement is requested as of January 1 of the year preceding the year of the execution of the tax abatement agreement. a. Real Property Base Year Value: b. Improvements Base Year Value: c. Personal Property Base Year Value: City of Georgetown, Texas Tax Abatement Application Page 2 of 6 Adopted: August 28, 2007 Exhibit A to Resolution No. C Z€ ©l -5 Tax Abatement Policy Page 10 of 14 DESCRIPTION OF PROJECT AND CAPITAL INVESTMENT 11. NAICS Code (for the project): 12. This project is: ( ) A New Plant ( ) An Expansion ( ) A Modernization 13. If Modernization or Expansion: Estimated economic life of existing plant years Added economic life from modernization years 14. Type of Products to be Produced or Services to be Provided: 15. Total Square Footage of Existing Facility/Improvements: 16. Brief description of the type of improvements to be made to the Property: 17. Total Square Feet: 18. Estimated Cost: 19. Estimated Economic Life of Facility to be Constructed on the Property: 20. Estimated Cost of Personal Property to be Used/Installed on the Property: a. Furniture: b. Fixtures: c. Equipment: d. Inventory: 21. Estimated economic life of personal property to be Used/Installed on the Property: a. Furniture: City of Georgetown, Texas Tax Abatement Application Page 3 of 6 Adopted: August 28, 2007 Exhibit A to Resolution No Tax Abatement Policy Page 11 of 14 082102-5 b. Fixtures: c. Equipment: d. Inventory: 22. Type and estimated cost of public infrastructure to be constructed by the applicant to serve the Project on the Property a. Type: Estimated Cost: b. Type: Estimated Cost: c. Type: Estimated Cost: d. Type: Estimated Cost: 23. Type and estimated cost of public infrastructure that applicant may request the City to provide to serve the Project on the Property: a. Type: Estimated Cost: b. Type: Estimated Cost: c. Type: Estimated Cost: d. Type: Estimated Cost: 24. Estimated date for commencement of construction of improvements on the property: 25. Estimated date for commencement of production or business operations on the property: 26. The estimated number and average salary of construction jobs to be generated by the Project: 27. the estimated amount of local sales taxes to be generated by the company (per year over the life of the project): 28. A brief description of the company's history of community involvement: City of Georgetown, Texas Tax Abatement Application Page 4 of 6 Adopted: August 28, 2007 Exhibit A to Resolution No. Ocr 2i ©/ " J Tax Abatement Policy Page 12 of 14 JOB INFORMATION 29. Total number of new jobs to be created: 30. Estimated schedule for creation of new jobs (number per calendar year): Number of Jobs New (N) or Retained (R) Year 31. Schedule for Average annual salary and benefits per type of worker to be working on the property: Type of Job Number of Jobs Salary Benefits City of Georgetown, Texas Tax Abatement Application Page 5of6 Adopted: August 28, 2007 Exhibit A to Resolution No. 0 Tax Abatement Policy Page 13of14 REQUESTED ABATEMENT % of real/personal % of real/personal % of real/personal % of real/personal % of real/personal (circle one or both) (circle one or both) (circle one or both) (circle one or both) (circle one or both) property for year 1. property for year 2. property for year 3. property for year 4. property for year 5. City of Georgetown, Texas Tax Abatement Application Page 6 of 6 Adopted: August 28, 2007 Exhibit A to Resolution No. t 28"O Tax Abatement Policy Page 14of14