HomeMy WebLinkAbout029299 RES - 12/06/2011, Pagt, 1 of 2
Resolution amending the City of Corpus Christi Economic
Development Incentive Policies 2009 — 2011 to incorporate
provisions of the City's Guidelines and Criteria for Granting Tax
Abatements.
WHEREAS, on November 17, 2009, the City Council by Resolution 028424, adopted
the City of Corpus Christi Economic Development Incentive Policies 2009 — 2011
("Incentive Policies"), which incorporated the City's Guidelines and Criteria for Granting
Tax Abatement;
WHEREAS, the City's Incentive Policies need to updated to reflect the City's revised
Guidelines and Criteria for Granting Tax Abatement;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
CORPUS CHRISTI, TEXAS:
SECTION 1. The description of the Local Incentive for Tax Abatement in the Incentive
Policies is revised . A copy of the revised incentive policy is attached to and
incorporated into this resolution as Exhibit A.
ATTEST:
Armando Chapa
City Secretary
THE CITY OF CORPUS CHRISTI
Joe Ad e
Mayor
APPROVED: 5 day of Oc.,4 4.r , 2011.
R. Ji R ming
First sistant City ttorney
For City Attorney
Tax Abatement Incentive Policies — Amendment Resolution -- 10052011.docx
029299
INDEXED
Corpus Christi, Texas
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, 2011
The above resolution was passed by the following vote:
Joe Adame
Chris N. Adler
Larry R. Elizondo, Sr.
Kevin Kieschnick
Priscilla Leal
David Loeb
John E. Marez
Nelda Martinez
Mark Scott
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Tax Abatement Incentive policies -- Amendment Resolution -- 10052011.docx
029299
TAX ABATEMENT
Policy Description:
The Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax
Code, www.statutes.legis.state.tx.us/Docs/TX/pdf/TX.312.pdf, authorizes counties,
cities and school districts to provide property tax abatement for limited periods of time
as an inducement for the development or redevelopment of a property. The City of
Corpus Christi (City) would like to establish certain areas for particular emphasis in
offering enhanced temporary tax abatement for economic development such as -the
11, 13, 35, and 50, Texas Enterprise Zones, Downtown, Corpus Christi (North) Beach,
and Padre/Mustang Islands (other than areas within Tax Increment Reinvestment Zone
Number Two, City of Corpus Christi), and any other catalyst area identified by the City
Council. The City would like to provide enhanced temporary tax abatement for
economic development by locally -owned enterprises building new facilities or engaged
in modernization or expansion projects. The City Council reserves the right to waive or
modify this policy.
Eligibility Criteria:
o Authorized Facilities. A Facility generally may be eligible for abatement in
any area of the City if it is one of the following:
Basic Industrial, Manufacturing or Service Facility
Regional Distribution Center Facility
Regional Telecommunications/Data Processing Center Facility
Regional Visitor/Amusement Facility
Petrochemical Facility
A Facility located in the Renewal Community Texas Enterprise Zone,
Downtown or Corpus Christi (North) Beach, Padre/Mustang Islands (other
than areas within Tax Increment Reinvestment Zone Number Two, City of
Corpus Christi), or other catalyst areas identified by the City Council
additionally may be eligible if it is a Multi -Family Housing Facility, a Mixed -
Use Facility, or if it includes retail facilities, hotel accommodations, or any
other facilities as determined by the City Council on a case-by-case basis.
Abatement may be granted for a New Facility or for improvements to any
of the above existing facilities for the purpose of Modernization or
Expansion.
o Period of Abatement. Abatement may be granted effective with the
January 1 valuation date immediately following the date of execution of
the Agreement. Abatement may be allowed for a period of up to ten (10)
years.
Economic incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
Exhibit A
o Completion of Construction.
(1) The completion of construction will be deemed to occur upon the
earliest of the following events:
A. When a certificate of occupancy is issued for the Facility (if
the Facility is located within the City),
B. When commercial production of a product or provision of a
service is achieved at the Facility,
C. When the architect or engineer supervising construction
issues a certificate of substantial completion, or some similar
instrument, or
D. Two (2) years after the date of the Agreement.
(2) The above determination may be made by the City offering the
abatement, in its sole and absolute discretion, based upon the
above criteria and such other factors as the jurisdiction may deem
relevant. The determination of the completion of construction will
be conclusive, and any judicial review of such determination must
be governed by the substantial evidence rule.
o Abatement Percentage. Temporary property tax abatement may be
authorized for the development of a New Facility or Expansion or
Modernization that meets either qualification criteria of capital investment
or a qualification criteria based upon a combination of the number of new
lobs created plus average salary.
(1) The capital investment qualification criteria is as follows:
Added Value from
Capital Investment
Abatement Level
$2,000,000 to $10,000,000
Level 1
$10,000,001 to $50,000,000
Level 2
$50,000,001 to $150,000,000
Level 3
$150,000,001 to $500,000,000
Level 4
Over $500,000,000
Level 5
2
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
The qualification for abatement by capital investment shall be
based upon the added value of Eligible Property as reflected on the
tax rolls by the Nueces County Appraisal District.
(2) The combination of new jobs and salary criteria is as follows:
(3)
Provided that, obtaining temporary tax abatement based solely on
the creation of such new jobs shall be further conditioned on the
requirement for the improvement or repair of property in order to
meet the minimum requirements of the Act.
Any New Facility, Expansion, Modernization that is located within
a Texas Enterprise Zone, Downtown,
Corpus Christi (North) Beach or Padre/Mustang Island (other than
areas within Tax Increment Reinvestment Zone Number Two, City
of Corpus Christi), and any other catalyst area identified by the City
Council or that is a Locally -Owned Facility shall be increased by
one level above the standards set forth above, with a minimum
level of 3 for any such project. Further, if a Facility qualifies under
both criteria, the Facility will be increased by one level above the
higher level of qualification.
(4) Any New Facility, Expansion, Modernization that will utilize the
Leadership in Energy and Environmental Design (LEED) Green
Building Rating System may be increased at least one level above
the qualifying level for abatement.
(5)
Abatement for a small business facility providing Added Value of at
least $250,000 may be considered within the
a Texas Enterprise Zone, Downtown, Corpus Christi (North) Beach
or Padre/Mustang Island (other than areas within Tax Increment
Reinvestment Zone Number Two, City of Corpus Christi), and any
other catalyst area identified by the City Council or as a Locally -
Owned Facility by the City Council on a case-by-case basis.
3
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
Average Salary
Up to $50,000
Average Salary
$50,001 to $70,000
Average Salary
Over $70,000
20 to 99 New Jobs
Level 1
Level 2
Level 3
100 to 199 New
Jobs
Level 2
Level 3
Level 4
200 or more New
Jobs
Level 3
Level 4
Level 5
(3)
Provided that, obtaining temporary tax abatement based solely on
the creation of such new jobs shall be further conditioned on the
requirement for the improvement or repair of property in order to
meet the minimum requirements of the Act.
Any New Facility, Expansion, Modernization that is located within
a Texas Enterprise Zone, Downtown,
Corpus Christi (North) Beach or Padre/Mustang Island (other than
areas within Tax Increment Reinvestment Zone Number Two, City
of Corpus Christi), and any other catalyst area identified by the City
Council or that is a Locally -Owned Facility shall be increased by
one level above the standards set forth above, with a minimum
level of 3 for any such project. Further, if a Facility qualifies under
both criteria, the Facility will be increased by one level above the
higher level of qualification.
(4) Any New Facility, Expansion, Modernization that will utilize the
Leadership in Energy and Environmental Design (LEED) Green
Building Rating System may be increased at least one level above
the qualifying level for abatement.
(5)
Abatement for a small business facility providing Added Value of at
least $250,000 may be considered within the
a Texas Enterprise Zone, Downtown, Corpus Christi (North) Beach
or Padre/Mustang Island (other than areas within Tax Increment
Reinvestment Zone Number Two, City of Corpus Christi), and any
other catalyst area identified by the City Council or as a Locally -
Owned Facility by the City Council on a case-by-case basis.
3
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
(6) Upon compliance with the above criteria, the percentage of tax
abated may be in accordance with the following schedule, with
100% abatement in each case during the construction period of up
to two years:
Year
Level 1
Level 2
Level 3
Level 4
Levels
Year 1*
100%
100%
100%
100%
100%
Year 2*
100%
100%
100%
100%
100%
Year 3
100%
100%
100%
100%
100%
Year4
75%
100%
100%
100%
100%
Year 5
50%
75%
100%
100%
100%
Year 6
25%
50%
75%
100%
100%
Year 7
25%
50%
75%
100%
Year 8
25%
50%
75%
Year 9
25%
50%
Year 10
25%
*Includes the The -period of construction, which may extend up to two
years.
(7)
The percentage of abatement provided each year under the
Agreement shall be based upon the information provided as of
January 1 of each year after the completion of construction;
provided that, for a project that completes construction after June
30 the calculation date shall commence on January 1 of the second
year after completion of construction.
A. For projects qualifying based on capital expenditures
creating Added Value, the percentage shall be determined
based on the Added Value established for that year (the
actual amount of abatement may vary from year to year
based upon property valuations and employment levels).
B. For projects qualifying based on the number of new jobs and
average salary, the percentage shall be determined based
on the employment information provided.
(8) During the period of construction of the Facility and extending until
the first calculation date provided above, the Owner may receive an
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
abatement percentage based upon the criteria set forth in the
Owner's application for abatement approved by the governing body
of the City. The construction period may last up to two years.
A. Economic Qualification. In order to be eligible for tax abatement, the
planned improvement:
(1)
Must create no later than the January 1 following the completion of
construction and maintain throughout the remainder of the term of
the Agreement, the required number of permanent full-time jobs in
the City of Corpus Christi; or
(2) Must be determined by the City Council not to adversely affect
competition in the local market with established local businesses in
a manner that exceeds the economic benefit of the project.
o Compliance Requirements.
(1) Creation of New Value. Abatement may only be granted for the
additional value of eligible property improvements made subject to
and listed in an Agreement between the City and the property
owner and ground lessor (if applicable), subject to such limitations
as said jurisdiction may require. The economic life of the
improvements must exceed the term of the Agreement.
(2) Eligible Property. Abatement may be extended to the value of the
improvements to real property, including buildings, structures, fixed
or movable machinery and equipment (excluding motor vehicles,
vessels and aircraft), and site improvements, plus office space and
related improvements necessary to the operation and
administration of the Facility together with appreciation in land
values for projects in the Renewal Community, Downtown or
Corpus Christi (North) Beach and any other catalyst area identified
by the City Council.
(3)
Ineligible Property. The following types of property are fully taxable
and ineligible for abatement: inventories; supplies; vehicles;
vessels; aircraft; deferred maintenance; improvements for the
transmission of electrical energy not wholly consumed by a New
Facility, Modernization or Expansion; or improvements to real
property which have an economic life of less than 15 years; unless
any of the above types of property are specifically authorized by the
City.
(4) Taxability. From the execution of the Agreement to the end of the
abatement period, taxes will be payable as follows:
A. The value of Ineligible Property is fully taxable;
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Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
B. The Base Year Value of existing Eligible Property as
determined each year is fully taxable;
C. The Added Value of new Eligible Property is taxable in the
manner described above; and
D. The Added Value of new property not related to the "New
Facility" is fully taxable.
(6) Environmental and Worker Safety Qualifications. In determining
whether to grant a tax abatement, consideration will be given to
compliance with all state and federal laws designed to protect
human health, welfare, and the environment ("environmental laws")
that are applicable to facilities in the State of Texas owned or
operated by the owner of the facility or lessee, its parent,
subsidiaries and, if a joint venture or partnership, to every member
of the joint venture or partnership ("applicants"). Consideration
may also be given to compliance with environmental and worker
safety laws by applicants at other facilities within the United States.
(6) Tax Increment Reinvestment Zones (TIRZ). Projects located within
a TIRZ must be evaluated to determine how any Tax Abatement
will impact the zone and the zone's financing plan.
How to Apply:
o Written Application. Any present or potential owner of taxable property
may request tax abatement by filing a written application with the City
Manager of the City, if such property is within the City limits.
o Contents of Application. The application shall consist of a completed
application form accompanied by: a general description of the new
improvements to be undertaken; a descriptive list of the improvements for
which abatement is requested; a list of the kind, number and location of all
proposed improvements of the property; a map and property description;
and a time schedule for undertaking and completing the proposed
improvements. In the case of a Modernization or Expansion project, a
statement of the assessed value of the Facility, separately stated for real
and personal property, must be given for the tax year immediately
preceding the application. The application form may require such financial
and other information as the City deems appropriate for evaluating the
financial capacity of the City and other relevant factors of the applicant.
Please contact the City of Corpus Christi's Economic Development Office at (361) 826-
3850 to request the application or visit www.cctexas.com/economicdevelopment to
download the application.
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx
The City shall not grant any incentive unless the business submits a full and complete
application and provides additional information as may be requested.
The accuracy of the information in the application is the sole responsibility of the
applicant. Upon request, the applicant shall provide supporting documentation. Any
misstatement of or error in fact may render an application null and void and may be
cause for repeal of any ordinance adopted in reliance of said information.
If it is determined that the application meets these guidelines, a full and financial
programmatic review will be conducted. This review may be done by City Staff, an
outside agency or consultant and will ensure conformance with these guidelines.
An application fee is based on a sliding scale and can be viewed on pg. 90 in the fee
schedule. The fee must be paid in the form of a check or money order and made
payable to the City of Corpus Christi, Texas.
Additional Resources:
Development Services
www.cctexas.comldevelopmentservices
Corpus Christi Regional Economic Development Corporation
www.ccredc.com
Economic Incentive Policies -- Tax Abatement 2009-2011 rjr 10032011.docx