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RE 01-23-90.2 A RESOLUTION OF THE CITY OF COPPELL, TEXAS RESOLUTION NO. 012390.2 A RESOLUTION OF THE CITY OF COPPELL, TEXAS, ADOPTING GUIDELINES, CRITERIA AND PROCEDURE GOVERNING TAX ABATEMENT AGREEMENTS; STATING THE GENERAL PURPOSE AND OBJECTIVES; PROVIDING GUIDELINES AND CRITERIA FOR TAX ABATEMENT CONSIDERATION; ESTABLISHING A TAX ABATEMENT COMMITTEE; PROVIDING MINIMUM STANDARDS FOR TAX ABATEMENT CONSIDERATION; PROVIDING PROCEDURAL GUIDELINES FOR APPLICATION FOR TAX ABATEMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, enhancement of the local economy is in the best interest of the citizens of Coppell; and WHEREAS, the establishment of economic development incentives such as tax abatement may encourage enhancement of the local economy; and WHEREAS, the Governing Body of the City of Coppell desires to elect to become eligible to participate in tax abatement and to adopt criteria and guidelines governing tax abatement agreements, NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: Section 1 That the City of Coppell, Texas, hereby elects to become elegible to participate in tax abatement as authorized by the Property Redevelopment and Tax Act of the State of Texas. Section 2 That the COPPELL GUIDELINES, CRITERIA, AND PROCEDURE GOVERNING TAX ABATEMENT AGREEMENTS attached hereto as Exhibit "A", be, and the same is hereby adopted as the amended guidelines and criteria governing tax abatement agreements by the City of Coppell, Texas, and shall govern all tax abatement matters considered by the City from and after the effective date of this resolution. The City Council of the City of Coppell shall not enter into a Tax Abatement Agreement unless it finds that the terms of the agreement and the property subject to the agreement meet the applicable guidelines and criteria set herein adopted. Provided, however, any agreement executed pursuant to previously adopted guidelines and criteria shall be governed by the applicable guidelines and criteria in force and effect at the time of the execution of such agreement. The guidelines and criteria herein adopted shall be effective for two (2) years from the date of this resolution and during that period may be amended or repealed by a vote of three-fourths (3/4) of the members of the governing body of the City of Coppell, Texas. Section 3 The policy herein adopted shall, at the discretion of the City Council, be reviewed annually or from time to time as needed. Said policy is intended as a guide for use in developing tax abatement programs and agreements under the provisions of the Property Redevelopment and Tax Abatement Act of the State of Texas, and notwithstanding the policy herein established, the City Council of the City of Coppell retains the right to act within the provisions of such act without the necessity of amending the general policy herein adopted. Section 4 An application fee in the sum of $1,250.00 shall be paid by any applicant at the time of filing the "Application for Tax Abatement" provided for under the policy herein adopted. Section 5 This resolution shall become effective upon its passage as the law in such cases provides. DULY RF~OLYED AND ADOPTRD by the City Council of the City of Coppell, Texas, on the~=~day of ~(~ , 19~. THE CITY OF COPPELL, TEXAS ~ Mayor ~ ATTF~T: CR89-1027 CITY OF COPPELL, TEXAS GUIDELINES, CRITERIA, AND PROCEDURE GOVERNING TAX ABATEMENT AGREEMENTS General purpose and Objeetives The City of Coppell, Texas, is committed to the promotion of highly qualified development in all parts of the City; and to an ongoing improvement in the quality of life of its citizens. Insofar as these objectives are generally served by the enactment and expansion of the local economy, the City of Coppell will, on a ease by case basis, give consideration to providing tax abatement as a stimulation for economic development in Coppell. It shall be the policy of the City of Coppell that said consideration will be provided in accordance with the guidelines and criteria outlined in this document. Nothing herein shall imply or suggest that the City of Coppell is under any obligation to provide tax abatement to any applicant. All applicants shall be considered on a case by case basis. General Procedure Any request for tax abatement shall be reviewed by the Tax Abatement Committee, said Committee membership being comprised of one City of Coppell Council representative, who shall act as chairman, and two City of Coppe]l Economic Board representatives. The Committee may invite representatives from Coppell Independent School District, Dallas County or Denton County, to participate in the review of the tax abatement request. The Tax Abatement Committee shall serve as a recommending body to the Coppell City Council regarding whether economic development incentive should be offered in each individual case. The Committee's recommendation shall be based upon a subjective evaluation of the completed "Application for Tax Abatement." Guidelines and Criteria 1. Availability of Tax Abatement. Tax abatement shall be available for both new facilities and structures and for the expansion or modernization of existing facilities and structures. 2. Minimum Standards for Tax Abatement. To be considered eligible for a tax abatement, the property of a proposed reinvestment zone must be reasonably likely, as a result of the area being designated as a reinvestment zone, to contribute to the retention or expansion of primary employment or to attract major investment in the zone that would be a benefit to the property and that would contribute to the economic development of the City, and must meet at least two of the following criteria: A. Project involvas a minimum increase in property value of 300% for new project; 50% for expansion; or an investment of at least $1 million in taxable assets. B. Project makes a substantial contribution to redevelopment efforts or special area plans by enhancing either functional or visual characteristics, i.e., parking, circulation, facades, materials, signs, historic structures, etc. C. Project has high visibility, image impact, or is of a significantly higher level of development quality. D. Project is in an area which might not otherwise be developed because of constraints of topography, ownership patterns, site configuration, etc. E. Project can serve as a prototype and catalyst for other development of a higher standard. F. Project stimulates concentrations of employment and/or commercial activity. G. Project generates greater employment than would otherwise be achieved, i.e., commercial/industrial vs. residential or manufacturing vs. warehouse. Applicants must provide written narrative detailing how project meets these minimum standards. 3. Value of Incentives. The subjective criteria outlined in "Application for Tax Abatement" will be used by the Tax Abatement Committee in determining whether or not it is in the best interests of the affected taxing entities 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. Tax abatement may exempt from taxation a portion of the value of real property or of tangible personal property located on the rea] property, or both for a period not to exceed ten (10) years, subject to the rights of holders of outstanding bonds of the City, on condition that the owner of the property make specific improvements or repairs to the property. Once a determination has been made that a tax abatement should be offered, the value and term of the abatement will be determined by referencing the following table: Value of Years Percent Structure of of Added Abatement Abatement 0-$1,000,000 -0- -0- $1,000,001-$2,500,000 up to 5 years up to 25% over $2,500,001 up to 10 years up to 50% The agreement may provide for the exemption of real property in each year covered by the agreement only to the extent its value for that year exceeds its value for the year in which the agreement is executed. The agreement may provide for the exemption of taxable personal property located on the real property in each year covered by the agreement other than tangible personal property that was located on the real property at any time before the period covered by the agreement and other than inventory or supplies. -2- 4. Preliminary Application Steps. Any person, organization or corporation desiring that Coppell consider providing tax abatement to encourage location or expansion of operations within the City limits of Coppe]l shall be required to comply with the following procedural guidelines. Nothing within these guidelines shall imply or suggest that Coppell is under any obligation to provide tax abatement in any amount or value to any applicant. A. Applicant shall complete an "Application for Tax Abatement." B. Applicant shall address minimum standards outlined in the above section in letter format. C. Applicant shall prepare a plat showing the precise location of the property to be included in the reinvestment zone, all roadways within 500 feet of the site, and all existing land uses and zoning within 500 feet of the site. D. The property shall be described by metes and bounds. E. The applicant shall provide a list of the expected benefits to the City from the overall project to assist in determining the long term benefit to the City and its residents. F. The "Application for Tax Abatement" shall be complete and the original and four (4) copies submitted to the City Manager or his designate, City of Coppell, P.O. Box 478, Coppell, Texas 75019. G. An application fee of $1,250 is due and payable upon submittal of the application. 5. Review of Application. The Tax Abatement Committee shall review the application and meet with the applicant for the purpose of obtaining sufficient information relating to the application, the reinvestment zone, and the proposed Tax Abatement Agreement to permit the Committee to make a recommendation to the Coppell City Council. 6. Procedure Following Recommendation of Tax Abatement Committee. Upon recommendation from the Tax Abatement Committee, the City Council of the City of Coppell shall by consensus determine whether to proceed with the establishment of a proposed reinvestment zone and the development of a proposed Tax Abatement Agreement. 7. The Reinvestment Zone. A reinvestment zone is created by ordinance after public hearing. The ordinance designating the property as a reinvestment zone shall not be adopted until the City has held such a public hearing on the designation after notice of such hearing is published in the official newspaper of the City no later than the seventh day before the public hearing. Notice shall also be given to the applicant on or before the date of publication. The area shal! not be designated as a reinvestment zone until after such public hearing and determination by the City Council that the project is feasible and practical and would be of benefit to the land to be included in the zone and to the City after expiration of the Tax Abatement Agreement. The ordinance shall describe the area of the reinvestment zone by metes and bounds description. -3- 8. The Tax Abatement Agreement. The proposed Tax Abatement Agreement should be well developed prior to the public hearing and designation of the reinvestment zone so that interested persons appearing at the public hearing will have sufficient information to speak and present evidence for or against designation of the area as a reinvestment zone. Prior to the public hearing on the reinvestment zone, the agreement should be fully executed by the applicant so as to constitute an offer which by its terms will remain open for acceptance by the City for a specific period of time to permit the City to hold the public hearing on the reinvestment zone prior to officially accepting the offer. The purpose of this procedure is to permit persons attending the public hearing to have information concerning the improvements to be made by the applicant prior to designation of the reinvestment zone and provide the City with the option of accepting the offer or temporarily rejecting the officer so as to leave the agreement open for modification based upon matters presented at the public hearing. A. The Tax Abatement Agreement must: (1) List the kind, number, and location of all proposed improvement of the property; (2) Provide access to and authorize inspection of the property by City employees to ensure that the improvements or repairs are made according to the specifications and conditions of the agreement; (3) Limit the use of the property consistent with the general purpose of encouraging development or redevelopment of the zone during the period that the property tax abatements are in effect; and (4) Provide for recapturing property tax revenue lost as a result of the agreement if the owner of the property fails to make the improvements or repairs as provided by the agreement. B. The Tax Abatement Agreement may include, at the option of the City Council of the City of Coppell provisions for: (1) Improvements for repairs by the City 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; (2) An economic feasibility study, including a detailed list of estimated improvement costs, a description of the method of financing all estimated costs, and the time when related costs or monetary obligations are to be incurred; (3) A map showing existing uses and conditions of rea] property in the reinvestment zone; (4) A map showing proposed improvements and uses in the reinvestment zone; and (5) Proposed changes to zoning ordinances, the master plan, the map, building codes, and city ordinances. -4- C. The City Council of the City of Coppell shall not enter into a Tax Abatement Agreement unless it finds that the terms of the agreement and the property subject to the agreement meet the applicable guidelines and criteria set forth herein. Provided, however, any agreement executed pursuant to previously adopted guidelines and criteria shall be governed by the applicable guidelines and criteria in force and effect at the time of the execution of such agreement. The guidelines and criteria set forth herein shall be effective for two (2) years from the date adopted and during that period may be amended or repealed by a vote of three-fourths (3/4) of the members of the governing body of the City of Coppell, Texas. 9. Tax Abatement Subject to Discretion of City Council The adoption of these guidelines and criteria by the governing body of the City of Coppe11, Texas, shall not: A. Limit the discretion of the governing body to decide whether to enter into a specific Tax Abatement Agreement; B. Limit the discretion of the governing body to delegate to its employees or to the Tax Abatement Committee authority to determine whether or not the governing body should consider a particular application or request for tax abatement; or C. 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. 10. Confidentiality of Proprietary Information. Information that is provided to the City in connection with an application or request for tax abatement that describes the specific processes or business activities to be conducted or the equipment or other property to be located on the property for which tax abatement is sought may be considered confidential at the discretion of the City Council of the City of Coppell and not subject to public disclosure until such time as a Tax Abatement Agreement is executed. Provided, however, upon execution of the conditional agreement by the applicant as above mentioned, the City Council may elect to disclose such information as it deems necessary to provide persons attending the public hearing on the designation of the reinvestment zone to be heard on the question of whether the improvements sought are feasible and practical and would be a benefit to the land to be included in the reinvestment zone and to the municipality after the expiration of the agreement. Information in the custody of the City after the agreement is fully executed by both parties shall no longer be confidential. This provision concerning confidentiality of proprietory information is pursuant to the provisions of Section 312.003 of the Tax Code, as amended by Senate Bill No. 1312, Acts of the 71st Legislature, Regular Session, 1989. -5- 11. Reports to State. Upon designation of a reinvestment zone or the execution of a Tax Abatement Agreement, the City shall deliver to the Texas Department of Commerce and to the State Property Tax Board, before Apri! 1 of the year following the year in which the zone is designated or the agreement is executed, a report providing the following information: A. For a reinvestment zone, a general description of the zone, including its size, the type of property located in it, and its duration; and B. For a Tax Abatement Agreement, the parties to the agreement, a genera] description of the property and the improvements or repairs to be made under the agreement, the portion of the property to be exempted, and the duration of the agreement. Exhibit "A" CR89-1027 -6-