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Resolution 93-11 & RESOLUTION NO. fJJ -/1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS, ADOPTING GUIDELINES FOR THE GRANTING OF TAX ABATEMENT AS AN ECONOMIC DEVELOPMENT INCENTIVE WHEREAS, the City Council of the City of Wylie is anxious to encourage economic development within and around the corporate boundaries of the City, and WHEREAS, the City Council of the City of Wylie finds that tax abatement is a workable incentive for the encouragement of economic development, and WHEREAS, the City Council finds that participation by other taxing entities is crucial to the success of any economic development incentive program NOW THEREFORE BE IT RESOLVED by the City Council of the City of Wylie, Texas that: SECTION 1. The City Council does hereby accept and adopt the tax abatement guidelines attached hereto as Exhibit "All and incorporated herein. SECTION 2. The guidelines shall remain in effect for a period of two years from the date of their adoption or until amended by the City Council of the City of Wylie. SECTION 3. The City Council of the City of Wylie does hereby encourage the Wylie I.S.D., Collin County, and the Collin County Community College District to consider establishing economic development guidelines and to cooperate with the City of Wylie in the development of comprehensive incentives. DULY PASSED AND APPROVED this the 13th day of July, 1993. , ~! iI{~ AmS f Economic Development Incentives I. Purpose and Objective The City of Wylie is committed to the promotion of quality development in all parts of the city and to an ongoing improvement in the quality of life for it's residents. In so far as these objectives are generally served by the enhancement and expansion of the local economy. The City of Wylie will, on a case by case basis, give consideration to providing incentives as a stimulation for economic development in Wylie. Nothing herein shall imply or suggest that the City of Wylie is under obligation to provide any incentive to any applicant. All applications shall be considered on a case by case basis. II. Criteria for Economic Development Incentives: The following threshold criteria shall be used to determine whether any Economic Development Incentives shall be granted to new projects: 1.) The proposed project must create at least ten (10) or more jobs by the end of the abatement period. 2.) The proposed project must provide for an invest taxable assets within three (3) years from the commencement of construction. 3.) The project must meet all relevant zoning requirements. 4.) Generally to be eligible, a project must consist of an industrial, commercial, or warehouse use. In addition to the minimum requirements stated above, the following subjective criteria shall be considered prior to granting any economic development incentive. 5.) Is the project consistent with the comprehensive plan with or of the City of Wylie? 6.) What types and costs of public improvements and services (sewer main extensions, streets, alleys, etc.) will be required of the City? What types and values of public improvements if any will be made by the applicant? The City of Wylie recognizes the importance of expansion of the existing business as a key element in the economic development of the City. Therefore, different criteria for incentive eligibility have been developed for business expansion. In or eligible for abatement, an expanding business must meet the following criteria: 1.) The project must create ten (10) or more jobs by the end abatement period. 2.} The project must result in an addition of $500,000 in assessed value within the first year of the abatement. 3.) The project must also meet the criteria as stated previously in this section. III. Types of Incentives It is the intent of the City of Wylie to evaluate the offering of economic development incentives on a case by case basis. This individualized design of a total incentive package is intended to allow a maximum flexibility in addressing the unique concerns of each applicant while enabling the City to better respond to the changing needs of the community. Below is a chart which reflects the percentage amount to be abated: MAXIMUM TAX ABATEMENT NEWLY CREATED VALUE OVER 5 YEAR PERIOD $3 million + 400% $2 million - $2,999,999 300% $1 million - $1,999,999 200% EXPANDED VALUE $2.5 million + 400% $1,500,000 - $2,499,999 300% $500,000 - $1,499,999 200% Abatements may be granted for terms from two to five (2 - 5) years but may be extended to the limits as specified by state law. Abatements of greater than five (5) years may be considered, only if it can be clearly demonstrated that it is economically beneficial to the City to do SQ. Abatement periods in excess of five (5) years must be approved by a three-quarter vote of the full City Council. The above chart reflects the maximum tax incentive to be eligible for over a period not to exceed five (5) years. No applicant may take a percentage greater than 100% in any given year. For example, the qualified applicant may choose to take the 200% abatement over a two (2) year period at 100% each year; or may extend it to 50% each year for four (4) years. The same method would apply to the 300% and 400% abatement. Please keep in mind that the percentages stated on the right are the maximum amounts. IV. Application Procedures Any person applying for Economic Development Incentives will be required to comply with several application procedures. Once the application has been completed, the application will be forwarded to the joint committee on economic development incentives consisting of elected officials from each of the taxing entities. V. Recapture The City of Wylie will have very specific performance standards that will be measured to ensure that the qualified applicant is adhering to the guidelines, as set forth, and the Economic Development Incentive Policy. In the event that the company or individual fails to keep current on ad-valorem or other taxes. or violates the terms and conditions of the abatement agreement in any fashion; the City of Wylie will have the option along with the other taxing entities, to recoup any tax monies that were abated. VI. Assignment The abatement may be transferred and assigned by the holder to a new owner or lessee of the same facility upon approval of the City Council; subject to the financial capacity of the assignee and provided that all conditions and obligations in the abatement agreement are guaranteed by the execution of a new contractual agreement with the City of Wylie. VII. Sunset Provisions The guidelines and criteria are affective upon the date of their adoption and will remain in force for two (2) years. At which time all reinvestment zones and tax abatement contracts created pursuant to its provisions, will be reviewed by the City Council of Wylie to determine whether the goals of the abatement program has been achieved. Based upon that review, the guidelines and criteria may be modified, renewed or eliminated. VIII. Note In order for Wylie to have a successful Economic Development Incentive Policy, the City of Wylie must receive cooperation from the other taxing entities, i.e., Wylie ISO, Collin County and Collin County Community College District. Should more than one (1) entity grant tax abatements, it would be my recommendation that a joint committee on tax abatement be established consisting of two (2) elected officials from each of the taxing units to review and consider each applicant.