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HomeMy WebLinkAboutRES 061405-M - Renewal Econ Dev IncentivesRESOLUTION NO. 049 N1/1)s A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS APPROVING THE 2005 "CITY OF GEORGETOWN PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES;" AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Property Redevelopment and Tax Abatement Act (Chapter 312 of the Texas Tax Code, Vernon's Texas Codes Annotated (the "Act")) states that a taxing unit may not enter into a property tax abatement agreement unless the governing body has adopted a resolution stating that the taxing unit elects to become eligible to participate in a tax abatement (Tex. Tax Code 312.002(a)); and WHEREAS, in addition, the Act states that the governing body must establish guidelines and criteria governing tax abatement agreements, which guidelines are effective for a period of two (2) years (Tex. Tax Code 312.002(c)); and WHEREAS, on February 11, 2003, the City Council adopted guidelines and criteria governing tax abatement agreements as set forth in the "City of Georgetown Principles for Economic Development Incentives" (the "2003 Guidelines"); and WHEREAS, the 2003 Guidelines have expired and need to be renewed for anther two (2) year period; and WHEREAS, the 2003 Guidelines have been updated to reflect Georgetown's current economic conditions and outlook; and WHEREAS, the updated "CITY OF GEORGETOWN PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES" that are attached hereto as "Exhibit A" are hereby found to be consistent with and in compliance with Section 312.002 of the Texas Tax Code. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS: 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: Resolution No. ©iv /1©5 /77 Renewal of Economic Development Incentive Guidelines Page 1 of 3 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 m a sound and fiscally conservative manner. Section 2. The City Council hereby approves and adopts the "CITY OF GEORGETOWN PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES" that are attached hereto as "Exhibit A" and incorporated herein by reference for all purposes as if set forth in full. Section 3: Unless amended by the process and procedures set forth in Chapter 312 of the Texas Tax Code, the "CITY OF GEORGETOWN PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES" shall be in effect for a period of two (2) years from the effective date of this Resolution. Section 4. If any provision, section, subsection, sentence, clause or phrase of this Resolution, or the application of same to any person to set circumstances, is for any reason held to be unconstitutional, void or invalid, the validity of the remaining provisions of this Resolution or their application to other persons or set of circumstances shall not be affected thereby, it being the intent of the City Council in adopting this Resolution that no portion hereof or regulations connected herein shall become inoperative or fail by reason of any unconstitutionality, voidness or invalidity of any portion hereof, and all provisions of this Resolution are declared severable for that purpose. Section 5. It is hereby found, determined, and declared that a sufficient written notice of the date, hour, place and subject of the meeting of the City Council at which Resolution No ©b/'r©s—m Renewal of Economic Development Incentive Guidelines Page 2 of 3 this Resolution was adopted was posted at a place convenient and readily accessible at all times to the general public at the City Hall of the City for the time required by law preceding this meeting as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and that this meeting has been open to the public as required by law at all times during which this Resolution and the subject matter thereof have been discussed, considered, and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting hereof. Section 6: This Resolution and the attached "CITY OF GEORGETOWN PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES" shall be effective immediately upon passage. RESOLVED AND ADOPTED on the rt day of A'1'I EST Bye. Sandra Lee City Secretary Resolution No. 06; Jos,'ion — Renewal of Economic Development Incentive Guidelines Page 3 of 3 2005. CITY OF GEORGETOWN, TEXAS Cary N gin, Mayor City of Georgetown, Texas APPRO D AS TO FORM: By: Patricia Carls City Attorney PRINCIPLES FOR ECONOMIC DEVELOPMENT INCENTIVES INTRODUCTION Through an extensive community visioning and strategic planning process completed in 2002, the people of Georgetown established a set of economic development principles that are designed to guide the implementation of the community's business assistance and incentive programs These principles reflect a common vision to promote economic growth and diversity in Georgetown, while also preserving the community's historic heritage, uniqueness and superior quality of life. It is intended that these principles shall directly impact the implementation steps including, at a minimum, City policy, website marketing, the City's processes, and contractual agreements negotiated with companies. The purpose of these Principles is to help establish the official policy and procedures of the City of Georgetown, Texas for the granting of incentives used for economic development purposes, in accordance with the provisions of Texas' State Law. THE OPPORTUNITY Located along the IH-35 corridor, Georgetown became the fastest growing community within the second fastest growing county in Texas during the 1990's. In recent years, the community has experienced substantial growth in the retail sector, including multiple auto dealerships, a mixed -use commercial development and a major regional shopping mall. The City will soon be linked with the Austin -Bergstrom International Airport via State Highway 130 to the southeast and to other communities via the extension of Parmer Lane to the west. The City is in the path of rapid growth extending northward from Austin, which has already engulfed the nearest communities to our south and resulted in dramatic changes to those areas, both positive and negative in nature. Georgetown welcomes the expansion of economic opportunities, community wealth and living standards for its citizens, but is also concerned about the possible deterioration of our quality of life and loss of community identity Georgetown's location along one of the continent's most important international trade corridors and within one of the world's leading high-tech metropolitan areas makes it a prime location for new business investment and residential Incentive Principles I June 14, 2005 Rescep os- Ex ibi 19 growth. However, as Georgetown benefits from closer links to the Austin metropolitan economy, it must also contend with associated traffic and environmental impacts. It is not realistic for Georgetown to insulate itself from the regional economy or utility and transportation infrastructure. However, we can employ an economic development program that embraces our cultural and historical roots, while guiding us toward a local economy that is vibrant and resilient enough to withstand economic shocks. We must also continue to support the quality of life and environmental standards that make Georgetown special and that our community expects. Consequently, we have a responsibility to emphasize diversity as we expand our economic base, and to nurture and protect our unique historical identity and quality of life. We seek mutual participation by both companies and the community in the enjoyment of and preservation of quality of life and the city's identity. We seek a diversified tax base, one not dependent upon any single business or business sector. We will leverage our city -owned utility system and transportation infrastructure whenever we can to support our goals. This incentives statement is designed to embrace and manage the growth of Georgetown to meet these responsibilities. OBJECTIVES AND GOALS Georgetown will achieve its economic goals through cooperation and synergy with our regional partners, including the Greater Austin Chamber of Commerce and the Georgetown Chamber of Commerce We will coordmate recruitment opportunities with the Lower Colorado River Authority (LCRA), Texas Commission on Environmental Quality (TCEQ), Georgetown Transportation Enhancement Corporation (GTEC), the Texas Department of Transportation (TxDoT) and other regulatory and infrastructure providers. We will coordinate educational and workforce development opportunities with Southwestern University, the University of Texas System, the Austin Community College System, and other educational and research providers. The securing of private economic growth and development and the addition of new lobs within the area are important current and long-term objectives of the Incentive Principles 2 June 14, 2005 /es. ©erl'/©si-/n Exhth//4 City of Georgetown. To achieve this objective, the city of Georgetown has established economic development goals and objectives. Georgetown's economic development goals were derived from substantial citizen input, as well as extensive research and planning by the City of Georgetown economic development staff and the City's Economic Development Commission. These goals focus on achieving sustained economic development while simultaneously: • Preserving the historic heritage, uniqueness, small-town feel, and superior quality of life in the community. • Protecting the natural beauty and physical environment. ♦ Promoting viable educational opportunities to provide a dynamic workforce. ♦ Enhancing public/private cooperation to promote the historic downtown business district and tourism. • Maintaining one of the lowest city property tax rates in the region. • Developing economic strategies to benefit our citizens. • Broadening the diversity of our industrial/commercial business segments. ♦ Welcoming businesses desiring to move here, and being highly selective with the application of new business incentives. • Unifying our citizens behind common goals in economic development. • Defining and marketing specific attributes of our community to businesses. • Defining the processes and infrastructure needs of the city as a means of promoting the enticement of desirable new businesses and the retention of existing business. Additional information and detail about these Objectives and Goals can be found in the Economic Development Strategic Plan 2002 — 2004 adopted by the City of Georgetown in 2002 as recommended by the City's Economic Development Commission. This Plan and other relevant information is available on the City's economic development website at www.InvestGeorgetown.com. Incentive Pnnciples 3 June 14, 2005 Res. ©&,'s/©s- ` Exh; iet A INCENTIVES The City of Georgetown is dedicated to attracting and retaining quality firms that employ a highly skilled labor force and compensate their employees at or above the occupational median wage of the Austin MSA. The City has hired a Business Recruitment and Retention (BRR) contractor to help facilitate the City's economic development strategy and to work directly with candidate companies. This economic development strategy uses cooperative City/Business relationships to capitalize on Georgetown's superior quality of life, utility and transportation infrastructure and services to create advantages for business and for the Georgetown community We aim to use Georgetown's strengths to enhance the economic value to the private sector and to enhance the overall wealth of the community. These cooperative City/Business relationships will be based on: • The candidate firm concurring with the goals and objectives of Georgetown's economic development strategy. • A complete development plan presented by the candidate firm that clearly states investment, hiring plans, commitments, and long -duration financial performance guarantees. • Georgetown's agreement to help the candidate firm match its facilities needs to the City's Land Use Plan and Map, zoning requirements, transportation access and other City resource plans. • Georgetown's agreement to realistically consider each candidate firm's proposal based on its specific merits. Standard benefits are available to all businesses while some special benefits may be available to businesses that match the community's goals. • Georgetown's agreement to consider offering a candidate firm benefits, services and economic development incentives based on the candidate firm's development proposal, investment and hiring plans. Incentive Principles 4 June 14, 2005 s. 447/4/05- 6 Exhih,Y A ® Agreements subject to City/Business negotiation, EDC recommendation and City Council approval. Commitments to the City by the firm must be clearly stated and long -duration financial performance guarantees must be given with the proposal so that the community investment can be protected. AVAILABLE ASSISTANCE AND INCENTIVES The City will consider incentives after a business submits a full and complete application and provides any and all additional information as may be requested by the City. For qualified companies, the following categories of assistance or incentives may be available to new or expanding firms seeking to do business within the community: Utility and Transportation Infrastructures Special utility incentive: Georgetown Utility Systems (GUS), the municipally owned power and water supplier, has adopted electric rate policies that permit reduced rates for customer rate classifications or categories based upon load factors and the efficiency of the user. Agreements may be available to reduce utility rates based upon usage categories adopted. Special utility incentive: Georgetown Utility Systems has the capacity and flexibility to offer qualified companies infrastructure improvements and extensions at reduced cost. Such incentives may include improvements to curbs and gutters, street paving, water and sewer, electrical supply, and public lighting. Standard utility incentive: Georgetown's Unified Development Code has established high -quality construction standards for new development that occurs within City jurisdiction City development policy permits developments that are required to construct utihty improvements to recover a percentage of the utility construction cost from future developments that will connect to the utility improvements. Special infrastructure incentive: City voters have approved special sales tax funding for the Georgetown Transportation Enhancement Corp (GTEC). Funds may be available in certain growth corridors to finance roadway improvements for commercial/industrial development. Incentive Principles 5 June 14, 2005 Res. d /4/05Exh® I`7 4 Freeport Exemption: Businesses involved in the export of tangible property such as goods, wares, and merchandise may be eligible for the Freeport Exemption. This incentive is designed to exempt some or a company's entire inventory from property taxes. To be eligible, property must be assembled, stored, manufactured or fabricated locally and then exported out of the state within 175 days after the property was acquired or imported into the state. Facilitation of Permits: The City of Georgetown is eager to work with companies locating or expanding in the City with permit assistance so that the process is efficient and without last stage surprises. Business Planning and Market Analysis: The City's Economic Development Department and Business Recruitment and Retention contractor may be available to assist the company in assessing the impact of the firm's products or services in the local and regional economy. Sites and Building Inventory. The City (m cooperation with the Georgetown Chamber of Commerce) maintains a current inventory database of potential building sites and existing available buildings. Job Training Funds: The City of Georgetown will assist companies locating or expanding in Georgetown in securing state provided job training assistance. The State of Texas, through the Texas Workforce Commission, offers the Skills Development Fund to finance customized job training for local businesses that is provided by public community and technical colleges. Capital Grants and Loans: The State of Texas offers a number of grant and loan programs designed to provide companies with vanous capital access and expenditure assistance. The City of Georgetown will work with locating or expanding companies to apply for and secure this assistance. The programs include: Texas Capital Access Fund Infrastructure Grant Program Real Estate Development Program Industrial Revenue Bonds: The State of Texas Industrial Revenue Bond Program is designed to provide tax-exempt financing to finance land and depreciable property for eligible industrial or manufacturing projects. The Development Corporation Act allows cities, counties, conservation and reclamation districts to form non-profit industrial development corporations or authorities on their behalf. The purpose is to issue taxable and tax-exempt bonds for eligible projects Incentive Pnnciples 6 June 14, 2005 cs. o4nitos- Exhi6:1-A in their jurisdictions. The industrial development corporation acts as a conduit through which all monies are channeled. Generally, all debt services on the bonds are paid by the business under the terms of a lease, sale, or loan agreement. As such, it does not constitute a debt or obligation of the governmental unit, the industrial development corporation, or the State of Texas. Revolving Loan Funds: The Williamson County and City of Georgetown revolving loan funds may be available to manufacturing, research and other primary employer firms that meet our community priorities and create or retain specified numbers of jobs in the City or County. Tax Increment Financing (TIF): Tax increment financing is a tax reinvestment tool that allows local governments to publicly fund needed structural improvements and enhanced infrastructure within a defined area. TIFs work by allowing taxing entities to repay the costs of improvements into a designated area, with the future tax revenues generated by increasing property taxes. Texas Leverage Fund: The Texas Leverage Fund is an added source of financing for communities that have passed the economic development sales tax (such as Georgetown). Funds can be loaned (at favorable interest rates) directly to the local Industrial Development Corporation (IDC) to finance eligible projects Sales taxes pledged by the IDC need only be sufficient to cover project annual debt service. The maximum loan amount is generally 4 to 5 times the IDC annual sales tax revenue. Enterprise Zones: The City of Georgetown and Williamson County are allowed by the state to have vanous enterprise zones that provide tax abatement, sales tax refunds, franchise tax refunds, training funds, attractive financing programs, and other special incentives for firms investing in the zones. Special Downtown Redevelopment District: Tax reductions and funding assistance may be available for investments in or near our historic town square. Foreign Trade Zone: Foreign trade zones (FTZs) are sites in or near a U.S. Customs port of entry where foreign and domestic merchandise is generally considered to be in international trade. Goods can be brought into a zone without formal Customs entry or without incurring Customs duties or excise taxes unless and until they are imported into the United States. Texas Manufacturing Assistance Centers: TMAC exists to enhance the competitive position of the state's manufacturing sector. Manufacturing Incentive Pnnciples 7 June 14, 2005 Res o&'sV©s-r? Exh.',6: M specialists work with small to medium-sized manufacturers, providing technical support and implementing best business practices. Typical areas covered include cost management, productivity improvements, environmental assistance, software systems selection and application and e-commerce decisions. Tax abatement programs on real or personal property: The City of Georgetown may offer tax abatements for commercial or industrial new business construction, or facility expansion, as well as business personal property tax associated with real property. City abatements are granted through an approved contract with the Georgetown City Council. Similar abatements may be available from Williamson County. After City qualification, the City will assist in seeking agreement with the County taxing authorities. Community based amenities facilitated. Relocation assistance for key personnel ♦ Special banking and mortgage assistance o Job fairs to attract employees o Residential real estate assistance ♦ Community orientation, introduction and tours s Spouse employment assistance o Welcome and announcement/press conference coordination o Identification of business support services STANDARDS FOR DETERMINING BENEFITS The City will grant incentives only upon a clearly articulated, direct economic benefit that advances its economic development goals, including the creation of additional jobs and the stimulation of additional private investment. The economic benefit will be determined initially by the performance of a cost -benefit analysis. In determining the amount and term of an incentive to be granted, and in performing a cost -benefit analysis, consideration shall be given to various factors, including but not limited to the following: a. Whether the business increases property valuations or employment; b. Whether there will be increases in tax revenue resulting from the new or expanded business including gains in property tax during and after the incentive period and new sales tax revenue to the area; c. The overall payroll contribution the business makes toward the earnings and disposable income within the community; d. Whether above average salaried positions are created by the business; e. Whether the business utilizes unemployed labor and under-utilized employee resources; f. The degree to which the business improves the diversification of the local economy; Incentive Principles 8 June 14, 2005 es ate as -in Exhibit 4 g. Whether the market for the products or services of the business is outside the community, brings new money to the area, and thereby aids in the regionalization of the Williamson County area; h. The potential of the business having additional future expansions, adding lobs, and new or expanded development of associated or ancillary businesses; i. Whether a business beneficially impacts secondarily on the economy creating new businesses and jobs; j. Whether a business directly or indirectly adds expense to local units of government and stresses valuable public resources; k. The degree to which a business is directly subsidized by tax paying residents as a result of the loss of tax revenue during an incentive period; or 1. Other items to be determined by the City. INCENTIVE PROPOSALS In order for the City of Georgetown to evaluate the scope and extent of possible economic development incentives that may be considered, a prospective firm seeking incentives should first consider meeting with the City staff and/or the BRR contractor to gain a complete understanding of City goals and policies. The firm may submit a proposal to the City outlining the matches between the City's economic development goals and the expansion plans for the firm. The possible matches should be clearly described for all community Goals A through K (Section 2) and the firm's plans for each of these goals. The prospective firm may outline the forms of assistance it seeks from the City while demonstrating the benefit to the City for providing these incentives. Through a negotiation process the City, the EDC, and the prospective firm may reach agreement that would be translated into a required contract. This contract would require public disclosure of the dollar amounts of any public sector incentives offered, and it would be structured to protect the interests of both the City and the prospective firm. The contract would then be presented to the City Council for final approval. The City has taken precautions to streamline this process so that the overall negotiation and approval can be accomplished in a minimum amount of time. Incentive Principles 9 June 14, 2005 es. Dep/5/05-4 Exhi 411 A The BRR contractor may be of particular benefit in protecting the confidentiality of competitive information from a prospective firm. The City seeks mutually beneficial outcomes from these negotiations and will work confidentially with firms who do not wish to have their name and their plans before the public during early negotiation stages. The City strives to make the process efficient and predictable with no end -stage surprises. It is the intent of the City to avoid participation in "bidding wars" between Central Texas cities or local areas competing for the relocation of an existing Central Texas business through attempts to offer the largest incentive or public inducement. We believe that this is detrimental to the state's economy and the public interest This policy does not preclude the providing of information to businesses that inquire about the City or are seeking an expansion rather than relocation. It also does not preclude the granting of an incentive in those situations where (2) the business has already made a decision to relocate or expand, or (b) the business is seriously considering moving out of the Central Texas Region or State. NOTICE AND MEETING No incentive shall be granted by the City prior to a public disclosure of such incentive in an open hearing thereon. 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. Notice of the public disclosure shall be published at least 72 hours prior to the hearing in the official City newspaper, giving the time and place. The hearing may be held at a regular or special meeting of the City. SUMMARY Georgetown is open for business. To protect and to achieve the community's goals the City is prepared to consider any form of economic incentive or business assistance that is generally available in Texas and approved by the Texas Attorney General as appropriate for commitment of taxpayer assets. After rapid Incent►ve Principles 10 June 14, 2005 ices. ©le/4!©s- but careful review of the proposals from qualified companies, the City will endeavor to negotiate mutually beneficial agreements with suitable firms to help them thrive in the economic and community strengths of Georgetown. Companies are encouraged to explore the possible move or expansion of the firm to Georgetown. For more infoimation about assistance with business planning, please contact the City of Georgetown Economic Development Department at (512) 930-3546 or E- mail Mark Thomas at mthomas@georgetowntx.org. Incentive Principles June 14,2005 es. 41p/5/4S 11