Chapter 312 of the Texas Tax Code authorizes cities to designate tax abatement reinvestment zones and to enter into Tax Abatement Agreements only after the city elects to become eligible to participate in tax abatement and adopts a Tax Abatement Policy that establishes guidelines and criteria governing its tax abatement program. A Tax Abatement Policy adopted by a city is effective for two years from the date of adoption. The City of Fort Worth's current General Tax Abatement Policy, which was adopted pursuant to Resolution No. 4322-05-2014 (M&C G-18204), will expire on June 21, 2016.
In October 2015, the City Manager created an advisory committee (IR No. 9806) with representatives from the business community, other economic development stakeholder groups and private citizens to gather input on the effectiveness of our incentive programs and discuss any revisions that should be considered. The review was led by the Economic Development Staff with participation from Staff from Planning and Development and Neighborhood Services. The committee met from November 2015 to May 2016 and the attached policy reflects the recommendations approved by the committee.
The new General Tax Abatement Policy contains the following changes from the existing General Tax Abatement Policy (Policy):
1. The current Policy requires a minimum capital investment of $250,000.00 within the Central City. The new General Tax Abatement Policy identifies six target areas: Urban Villages, High Priority Commercial Corridors, Transit-Oriented Development outside the Central City, Retail Eligible Target Areas, Other Central City, and Downtown. Each of the Targeted Area categories has a specific investment threshold unique to that category. All projects located within the Target Areas meeting the minimum investment thresholds outlined in the Policy will earn a negotiated base level tax abatement of up to 55 percent.
2. The current Policy requires a minimum capital investment of $5,000,000.00 outside the Central City. The new policy requires that all projects located in the Outside Target Areas make a minimum capital investment of $7,000,000.00 in order to receive a negotiated base level tax abatement of up to 40 percent.
3. In the new General Tax Abatement Policy, applicants in both the Target Areas and Outside Target Areas are eligible to earn additional incentives as outlined in the Incentives Enhancement section. Incentive Enhancement categories include: Fort Worth-Based M/WBE Construction Spending and Supply and Service Expenditures, Fort Worth-Based Construction Spending, Fort Worth-Based Supply and Service Expenditures, Jobs for Fort Worth Residents, Jobs for Central City Residents, Hourly Wages, Number of Net New Jobs, Target Industries, Transit Oriented Development, Public Open Spaces, Environmental Remediation, LEED Certification, Adaptive Reuse of an Existing Building, Corporate Citizenship, Talent Recruitment and Global Presence.
4. In the Target Areas, a maximum of 30 percent in additional incentives may be earned through the Incentive Enhancements, with no one project receiving more than 85 percent in Tax Abatement. In the Outside Target Areas, a maximum of 45 percent in additional incentive can be earned through the Incentive Enhancements, with no one project receiving more than 85 percent in Tax Abatement.
Once adopted, the proposed General Tax Abatement Policy will be effective from June 22, 2016 through June 21, 2018, unless amended or repealed by at least a three-fourths vote of the City Council. The General Tax Abatement Policy does not apply to tax abatement granted, pursuant to the City's Neighborhood Empowerment Zone (NEZ) Policy or the City's Relocation Incentives Policy.
This M&C does not request approval of a contract with a business entity. |
